EXHIBIT 10.7B
 ashurst
     Without Prejudice
Subject to Contract




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THIS AGREEMENT
 BETWEEN:
 (1)
    
    ALLIED HEALTHCARE GROUP LIMITED(No. 1689856) whose registered office is at Medicare House,
Stone Business Park, Brooms Road Stone, Staffordshire ST15 OTL (the Company); and
 (2)
    
    DAVID MOFFATTwhose address is 2 Lawrence Gardens, Mill Hill, London NW7 4JT (the
Executive).
 THE PARTIES AGREE AS FOLLOWS:
 1.
    
    DEFINITIONSIn this agreement the following terms shall have the meanings set out below:Group Company means AHI Inc, the Company, their holding companies or any
subsidiary undertaking or associated company of AHI Inc, the Company (as defined in
section 435 of the Insolvency Act 1986) or their holding companies; andLeaving Date means 30 September 2008 or at an earlier date as agreed between the
parties.2.
    
    CESSATION OF EMPLOYMENT AND DIRECTORSHIPS2.1
    
    The Executive accepts and confirms the cessation of his employment (and the completion of his
notice period) with the Company and any other Group Companies with effect from the Leaving
Date and his service agreement with the Company dated 31 July 2006 (the Service Agreement)
shall have no further effect thereafter save in respect of clauses 13, 16 and 19 which the
parties agree shall survive termination of his employment.2.2
    
    From the date of this agreement to the Leaving Date (the Interim Period) the Executive
shall:
 (a)
    
    continue to be bound by the terms of his Service Agreement;(b)
    
    continue to serve as the Chief Financial Officer of Allied Healthcare
International Inc. (AHI Inc);(c)
    
    assist AHI Inc as requested in training and carrying out a hand over of his
responsibilities to his successor; and(d)
    
    be permitted to schedule interviews with prospective employers during normal
business hours, provided such time away from work does not unduly interfere with the
Executives duties and is consistent with the needs of the business.
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2.3
    
    The Executive shall receive his salary and contractual benefits (subject to the normal PAYE
deductions including national insurance) up to and including the Leaving Date in the normal
way, but not any payments in respect of bonus or commission.2.4
    
    The Executive:
 (a)
    
    has resigned from his directorship with the Company, AHI Inc and from all other
offices which he holds with the Company or any other Group Companies with effect from
the Leaving Date. The Executive shall execute the letter of resignation attached at
Schedule 2 to confirm his resignation;(b)
    
    warrants that he does not hold any trusteeships or any qualifying or nominee
shareholdings as a result of his employment by the Company; and(c)
    
    shall execute such further documents and do such further things as may in the
opinion of the Company be necessary to give full effect to clauses 2.4(a) and (b)
above.
 3.
    
    PAYMENTS3.1
    
    By way of compensation for the termination of the Executives employment and without
admission of liability and subject to all the conditions in clause 4 below being fulfilled (or
being waived in writing by the Company), the Company shall:
 (a)
    
    pay to the Executive a bonus payment in the sum of £57,000 (FIFTY SEVEN
THOUSAND POUNDS). This sum shall be paid following receipt by the Executive of a form
P45 and within 14 days following the later of the Termination Date and the date on
which the Company receives a copy of this letter executed by the Executive and the
letter in Schedule 1 signed by his adviser. Provided a form P45 has been issued before
the payment is made, basic rate income tax will be deducted;(b)
    
    contribute up to £1,000 (ONE THOUSAND POUNDS) plus VAT but inclusive of any
disbursements towards the reasonable legal fees incurred by the Executive in obtaining
advice only in respect of the cessation of his employment. This payment shall be made
directly to his legal advisers following receipt of their invoice addressed to the
Executive but marked payable by the Company in accordance with the extra-statutory
concession A81; and(c)
    
    (provided that any third party provider of the relevant equipment is willing to
transfer ownership of the equipment) transfer ownership to the Executive of his Company
printer and laptop from the Leaving Date (which the Company considers to have a fair
market value of £917.04 (NINE HUNDRED AND SEVENTEEN POUNDS FOUR PENCE)), but excluding,
for the avoidance of doubt, any software. The Executive will be responsible for any
income tax or employees national insurance contributions due in respect of this. The
Executive will be responsible for all claims, costs, rights or expenses incurred in
connection
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4.
    
    CONDITIONS TO PAYMENTS4.1
    
    The payments and benefits referred to in clauses 3 above (the Settlement) shall be subject
to and conditional upon:
 (a)
    
    receipt by the Company of a copy of this agreement signed by the Executive and
the letter in Schedule 1 signed by his adviser; and(b)
    
    the Executives compliance in full with his obligations as set out in his
Service Agreement and this agreement, including for the avoidance of doubt his
obligations at clause 5 below.
 5.
    
    WAIVER OF CLAIMS5.1
    
    The Executive agrees that he has carefully considered all the facts and circumstances
relating to his office and employment and their cessation and accepts the Settlement and other
terms of this agreement in full and final settlement of:
 (a)
    
    the following particular claims or complaints against any Group Company or and
any of their Executives, officers, shareholders, agents or consultants:
 (i)
    
    all claims for damages for breach of contract including, but
not limited to, in relation to the payment of a bonus for the financial year
2007-2008, the payment of the £75,000 bonus due on 1 January 2009 disclosed in
the Companys filings with the United States Securities and Exchange Commission
and any and all bonus payments or other incentive awards for any previous years
in which the Executive was employed by the Company or any Group Company;(ii)
    
    unfair dismissal claims under the Employment Rights Act 1996;(iii)
    
    claims in relation to redundancy under the Employment Rights
Act 1996;(iv)
    
    equal pay claims under the Equal Pay Act 1970; and(v)
    
    claims for discrimination or victimization on the following
grounds: age under the Employment Equality (Age) Regulations; sex under the Sex
Discrimination Act 1975; religion or belief under the Employment Equality
(Religion or Belief) Regulations 2003; disability under the Disability
Discrimination Act 1995; race or national origin under the Race Relations Act
1976; or sexual orientation under the Employment Equality (Sexual Orientation)
Regulations 2003;(vi)
    
    claims for unlawful deductions from wages under the Employment
Rights Act 1996;
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(vii)
    
    claims under the Trade Union and Labour Relations
(Consolidation) Act 1992;(viii)
    
    claims for harassment under the Protection from Harassment Act 1997;(ix)
    
    claims that he has been dismissed or has otherwise suffered a
detriment for making a qualifying and protected disclosure for the purposes of
section 47B of the Employment Rights Act 1996;(x)
    
    claims in relation to the right to be accompanied under the
Employment Relations Act 1999 (as amended);(xi)
    
    a claim for compensation under section 13 of the Data
Protection Act 1998;
 (b)
    
    any other claims and rights of action whatsoever past and future and howsoever
arising (whether under contract, common law, statute, tort, European Union law or
otherwise) whether in the United Kingdom, the United States of America or any other
country or jurisdiction elsewhere in the world and whether contemplated or not which he
has or may have against any Group Company or its or their Executives, officers, agents
or consultants arising out of his employment or its cessation and any other matter
whatsoever and he irrevocably waives any such claims or rights of action which he now
has or may become aware of hereafter. The Company and the Executive both acknowledge
that there are or may be claims and rights which are not contemplated (whether on the
facts known to the parties or on the law as it is known) at the date of this agreement
by the parties or either of them but that the waiver contained in this paragraph waives
and releases any and all such claims and rights.
 5.2
    
    The Settlement does not extend to any personal injury claims of which the Executive is
unaware as at signing this agreement and any claims for pension rights accrued up to the
Leaving Date.6.
    
    WARRANTIES6.1
    
    The Executive warrants that:
 (a)
    
    he has no claims against the Company or any Group Company or their Executives
or officers other than those set out in clauses 5.1(a), and (b);(b)
    
    he has not done or omitted to do any act which had the Company been aware of
it, would have entitled it to dismiss him summarily without notice or compensation;(c)
    
    by the Leaving Date he will return to the Company in good condition and without
modification all documents, software, books, credit or charge cards and any other
property including all copies thereof belonging to or relating to the business or
affairs of any of the Group Companies or any officer, employee, shareholder, customer,
supplier or agent of the Company or any Group Company (except for
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(d)
    
    except as set out in this agreement, there are no sums owed to him or any
arrangements under which a sum could become due by the Company or any Group Company to
him including any payments under any bonus, incentive, commission, share option or
similar scheme and that neither the Company nor any Group Company nor the trustees of
any such scheme is or shall be liable to make any payment or provide him with any
shares or other benefits under any such scheme.
 6.2
    
    The Executive acknowledges that the Company is relying on the warranties in this agreement
including at clause 6.1 above in entering into this agreement.7.
    
    INDEPENDENT LEGAL ADVICE7.1
    
    The Executive warrants that:
 (a)
    
    having received independent legal advice from Richard Turner of Pinsent Masons,
a qualified lawyer, he has raised all and any claims, complaints or potential
proceedings that he may have arising out of the termination of his employment on the
Leaving Date, namely those claims listed in clause 5.1(a) and (b);(b)
    
    he has received independent legal advice from Richard Turner as to the terms
and effect of this agreement;(c)
    
    the solicitor who advised him holds (and held at the time the advice was given)
a current practising certificate issued by Solicitors Regulatory Authority;(d)
    
    there is (and was at the time the advice was given) a contract of insurance or
an indemnity provided for members of a profession or professional body covering the
risk of a claim by the Executive in respect of any loss arising in consequence of the
advice;(e)
    
    he has received satisfactory evidence of the above facts;(f)
    
    neither Richard Turner nor Pinsent Masons acted for any Group Company in
relation to the termination of the Executives employment with the Company or this
agreement; and(g)
    
    Richard Turner shall provide the Company with a letter in the form set out in
Schedule 1.
 7.2
    
    The conditions regulating compromise agreements contained in section 77 of the Sex
Discrimination Act 1975; section 72 of the Race Relations Act 1976, section 288(2B) of the
Trade Union and Labour Relations (Consolidation) Act 1992, Schedule 3A of the Disability
Discrimination Act 1995, section 203 of the Employment Rights Act 1996,
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Regulation 35(2) of the Working Time Regulations 1998, section 49 of the National Minimum
Wage Act 1998, Regulation 41(3) of the Transnational Information and Consultation of
Executives Regulations 1999, Regulation 9 of the Part-time Workers (Prevention of Less
Favourable Treatment) Regulations 2000, Regulation 10 of the Fixed-term Executives
(Prevention of Less Favourable Treatment) Regulations 2002, Schedule 4 of the Employment
Equality (Religion or Belief) Regulations 2003, Schedule 4 of the Employment Equality
(Sexual Orientation) Regulations 2003, Schedule 5 of the Employment Equality (Age)
Regulations 2006, Regulation 40(4) of the Information and Consultation of Executives
Regulations 2004, the Data Protection Act 1998 and the Protection from Harassment Act 1997
have therefore been satisfied.8.
    
    MISCELLANEOUS8.1
    
    Once executed by both parties this agreement will form an open and binding agreement
notwithstanding the fact that the front sheet is marked without prejudice and subject to
contract.8.2
    
    The Contracts (Rights of Third Parties) Act 1999 shall only apply to this agreement in
relation to any Group Company. No person other than the parties to this agreement and any
Group Company and the directors of any Group Company shall have any rights under it and it
will not be enforceable by any person other than those parties. The consent of any third party
shall not be required for the variation or termination of this agreement, even if that
variation or termination affects the benefit or benefits conferred on any third party.8.3
    
    If any provision or part of a provision of this agreement shall be or become void or
unenforceable for any reason, this shall not affect the validity of that provision or any
remaining provisions of this agreement in this or any other jurisdiction and the provision may
be severable and if any provision would be treated as valid and effective if part of the
wording was deleted, it shall apply with such modifications as necessary to make it valid and
effective.8.4
    
    The terms of this agreement including the documents set out in the Schedules hereto contain
the entire understanding between the Executive and the Company and any Group Company with
respect to the subject matter of this agreement and supersede and abrogate all (if any) other
agreements, arrangements or understandings in such respect which shall be deemed terminated by
mutual consent.8.5
    
    This agreement (and any dispute, controversy, proceedings or claim of whatever nature arising
out of or in any way relating to this agreement or its formation) shall be governed by and
construed in accordance with English law, and each party submits to the exclusive jurisdiction
of the English courts in relation to any claim or matter arising under this agreement.
 IN WITNESS
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Signed by
    
    ) /s/ David MoffattDavid Moffatt
    
    )In the presence of:
    
    )Witness signature:
    
    /s/ Paul WestonWitness name:
    
    Paul WestonWitness address:
    
    illegibleWitness occupation:
    
    Chartered Accountant
 name of signatory  Allied Healthcare Group
Limited
 Signature:
    
    /s/ Sandy Young1st October 2008
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