Document:

Exhibit 10.1

    Exhibit
      10.1

    
      

    

    AMENDMENT
      TO EMPLOYMENT AGREEMENT

    

    VINEYARD
      NATIONAL BANCORP, VINEYARD BANK AND

    

    NORMAN
      ANTONIO MORALES

    

    Adopted
      and Approved on September 29, 2006

    Effective
      date: October 1, 2006

     

      WHEREAS,
      an
      Employment Agreement (referred to as “Employment Agreement”), was made effective
      on October 1, 2003 between Vineyard Bank, a national banking
      association(referred to as “Bank”), Vineyard National Bancorp, a California
      corporation (referred to as “Bancorp”), and Norman Antonio Morales (referred to
      as “Morales”); and

    

    WHEREAS,
      the term of said Employment Agreement has automatically extended to December
      31,
      2007, 2008 and 2009, because the Boards of Directors of the Bank and Bancorp
      did
      not elect not to renew the term by giving written notice to Morales by September
      1, 2004, 2005 and 2006, respectively; and

    

    WHEREAS,
      the parties wish to amend the Employment Agreement;

    

    NOW,
      THEREFORE, the parties hereby amend the Employment Agreement as
      follows:

    

    
      	1.  	
              Paragraph
                5 shall be amended in its entirety, to read as
                follows:

            

    

    

    5.
      Salary.
      Effective January 1, 2006, Morales shall receive a base salary of four hundred
      seventy-five thousand dollars ($475,000.00) per year, payable in equal monthly
      installments during the term of his employment. This shall remain as Morales’
base salary until it is increased in the sole discretion of the Boards of
      Directors of the Bank and Bancorp, which shall review said salary at the end
      of
      every calendar year and render a decision by January 31 of the following
      calendar year whether to increase said salary. These Boards may not, however,
      decrease said salary, other than as part of an across-the-board salary decrease
      that affects substantially all the executives and/or employees of the Bank
      and
      Bancorp. The Bank and Bancorp shall allocate Morales’ annual salary expense
      between them, in their sole discretion.

    

    
      	2.  	
              Paragraph
                6 shall be amended in its entirety, to read as
                follows:

            

    

    

    6.
      Incentive
      Bonus.
      For
      calendar years 2007 and 2008, the Bancorp shall determine an incentive bonus
      to
      Morales, on the terms described hereinafter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      computation of this incentive bonus shall be based on Morales’ accrued base
      salary for the applicable calendar year, subject to a maximum of one hundred
      twenty percent (120%) of said accrued base salary. Any incentive bonus payable
      shall be paid to Morales no later than fifteen (15) days after the Bancorp’s
      receipt of the audited financial statements for the year in question but within
      the time period to be deductible in the prior year. This incentive bonus shall
      be based on measurements of the Bancorp’s performance for the calendar year in
      question, with such measurements of the Bancorp’s annual performance for the two
      years mentioned to be as follows: the Return on Common Equity shall be the
      return on average common equity for the year, and the EPS Growth shall be the
      earnings per share on a fully diluted basis, in accordance with the schedule
      below:

    

      
        	
                Return
                  on Common Equity

              	
                 

              	
                Bonus
                  as % of Accrued Salary

              	
                 

              	
                EPS
                  Growth

              	
                 

              	
                Bonus
                  as % of Accrued Salary

              
	
                12%

              	
                 

              	
                0.0%

              	
                 

              	
                10%

              	
                 

              	
                0%

              
	
                13%

              	
                 

              	
                7.5%

              	
                 

              	
                11%

              	
                 

              	
                6%

              
	
                14%

              	
                 

              	
                15.0%

              	
                 

              	
                12%

              	
                 

              	
                12%

              
	
                15%

              	
                 

              	
                22.5%

              	
                 

              	
                13%

              	
                 

              	
                18%

              
	
                16%

              	
                 

              	
                30.0%

              	
                 

              	
                14%

              	
                 

              	
                24%

              
	
                17%

              	
                 

              	
                37.5%

              	
                 

              	
                15%

              	
                 

              	
                30%

              
	
                18%

              	
                 

              	
                45.0%

              	
                 

              	
                16%

              	
                 

              	
                36%

              
	
                19%

              	
                 

              	
                52.5%

              	
                 

              	
                17%

              	
                 

              	
                42%

              
	
                20%

              	
                 

              	
                60.0%

              	
                 

              	
                18%

              	
                 

              	
                48%

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                19%

              	
                 

              	
                54%

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                20%

              	
                 

              	
                60%

              

      

       

    

    The
      Boards shall interpolate between the minimum and maximum percentages shown
      hereinabove. 

    

    3.
      Paragraph 10 shall be amended in its entirety, to read as follows:

    

    10.  Stock
      Options.
      Effective two (2) days after the next public release of Bancorp earnings which
      occurs on or after the date of execution of this agreement and on the tenth
      (10th) day after the release of the Bancorp’s audited financial statements for
      2006, 2007 and for 2008 so long as Morales is employed by the Bank on said
      day,
      the Boards shall grant Morales incentive stock options to buy fifty thousand
      (50,000) shares of common stock of the Bancorp, with the purchase price of
      each
      such share being one hundred percent (100%) of the fair market value (“FMV”) of
      a share of Bancorp common stock on the date of the option grant (unless
      otherwise determined by the Bancorp, FMV shall be the closing price of a share
      of stock on the date of option grant), with the term of each such option being
      four (4) years from the date of option grant, and with said options not becoming
      vested until the third (3rd) anniversary of the date of option grant, and then
      being one hundred percent (100%) vested. Except as provided hereinabove or
      hereinafter, the terms and conditions of the 2006 Stock Option Plan of Vineyard
      National Bancorp shall apply to such option grants for all conditions and
      events.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    4.
      Paragraph 13 shall be amended only to increase the automobile allowance to
      fifteen hundred dollars ($1,500) per month.

    

    IN
      WITNESS WHEREOF, the parties have executed this Employment
      Agreement.

    

    VINEYARD
      BANK, a national banking association

    

    Dated: September
      29, 2006       
      Dated:
      September 29, 2006

    

    

    By: ______/s/
      Frank S. Alvarez  ______ 
      __/s/ Norman A. Morales__________

    FRANK
      S.
      ALVAREZ  
      NORMAN
      ANTONIO MORALES

    Chairman
      of the Board

    1260
      Corona Pointe Court

    c/o
      Corporate Services

    Corona,
      California 92879

     

    

    Dated:
      September 29, 2006

    

    

    By: __/s/
      Charles L. Keagle__________

    CHARLES
      L. KEAGLE

    Vice
      Chairman

    

    

    VINEYARD
      NATIONAL BANCORP, a California corporation

    

    Dated:
      September 29, 2006   Dated:
      September 29, 2006

    

    

    By: _____/s/
      Frank S. Alvarez  ___  
      ___/s/ Charles L. Keagle_______ 

    FRANK
      S.
      ALVAREZ  
      CHARLES
      L. KEAGLE

    Chairman
      of the Board  
      Vice
      Chairman  

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      Morales
        Executive Compensation Agreement

      Addenda
        Schedule - 2006 Base Salary and Incentive Schedule

      Amendment
        dated September 29, 2006

      

      

      Base
        Salary:  $ 475,000

      

      

        
          	
                  Return
                    on Average

                	 	 	 	 	 
	
                  Bancorp
                    Equity

                	 	
                  Incentive
                    Payout %

                	 	
                  Incentive
                    Payout

                	 
	
                  0
                    -11%

                	 	 	
                  0%

                	
                   

                	
                  $

                	
                  -

                	 
	
                  12.0
                    -12.9%

                	 	 	
                  14%

                	
                   

                	
                  $

                	
                  66,500

                	 
	
                  13.0
                    -13.9%

                	 	 	
                  20%

                	
                   

                	
                  $

                	
                  95,000

                	 
	
                  14.0
                    -14.9%

                	 	 	
                  25%

                	
                   

                	
                  $

                	
                  118,750

                	 
	
                  15.0
                    -15.9%

                	 	 	
                  30%

                	
                   

                	
                  $

                	
                  142,500

                	 
	
                  16.0
                    -16.9%

                	 	 	
                  40%

                	
                   

                	
                  $

                	
                  190,000

                	 
	
                  17.0
                    -17.9%

                	 	 	
                  50%

                	
                   

                	
                  $

                	
                  237,500

                	 
	
                  18.0
                    -18.9%

                	 	 	
                  65%

                	
                   

                	
                  $

                	
                  308,750

                	 
	
                  19.0
                    -19.9%

                	 	 	
                  80%

                	
                   

                	
                  $

                	
                  380,000

                	 
	
                  20.0
                    -20.9%

                	 	 	
                  95%

                	
                   

                	
                  $

                	
                  451,250

                	 
	
                  21.0
                    +

                	 	 	
                  100%

                	
                   

                	
                  $

                	
                  475,000Exhibit 10.1 CEO Employement Agreement

    Exhibit
      10.1

    
 

    EMPLOYMENT
      AGREEMENT

     

    This
      AGREEMENT (this “Agreement”) is made as of October 1, 2006 (the “Effective
      Date”), by
      and
      between Allion Healthcare, Inc., a corporation with its headquarters located
      at
      1660 Walt Whitman Road, Melville, New York 11747 (the “Employer”), and Michael
      P. Moran (the “Executive”). 

     

    WHEREAS,
      the Employer and the Executive desire to enter into an agreement to reflect
      the
      Executive’s duties and responsibilities and to provide for the Executive’s
      employment by the Employer upon the terms and conditions set forth herein;
      and

     

    WHEREAS,
      the Executive has agreed to certain confidentiality, non-competition and
      non-solicitation covenants contained hereunder, in consideration of the
      additional benefits provided to the Executive under this Agreement;

     

    NOW
      THEREFORE, in consideration of the mutual covenants contained in this Agreement,
      and intending to be legally bound, the Employer and the Executive agree as
      follows:

     

    1. Employment.
      The
      Employer agrees to employ the Executive and the Executive agrees to be employed
      by the Employer on the terms and conditions set forth in this
      Agreement.

     

    2. Capacity.
      The
      Executive shall serve the Employer as its Chief Executive Officer, President
      and
      Chairman of the Board. The Executive shall also serve the Employer in such
      other
      or additional offices as the Executive may reasonably be requested to serve
      by
      the Board of Directors of the Company (the “Board of Directors”). In such
      capacity or capacities, the Executive shall perform such services and duties
      in
      connection with the business, affairs and operations of the Employer, consistent
      with such positions, as may be assigned or delegated to the Executive from
      time
      to time by or under the authority of the Board of Directors.

     

    3. Term.
      Subject
      to the provisions of Section 6, the term of employment pursuant to this
      Agreement (the “Term”) shall commence on the Effective Date and terminate on the
      first anniversary of the Effective Date; provided that the Term shall
      automatically be renewed for successive periods of one (1) year unless either
      party gives written notice to the other party, at least ninety (90) days prior
      to the end date of the then Term, of that party’s intent not to renew this
      Agreement.

     

    4. Compensation
      and Benefits.
      The
      compensation and benefits payable to the Executive during the Term shall be
      as
      follows:

     

    (a) Salary.
      For all
      services rendered by the Executive under this Agreement, the Employer shall
      pay
      the Executive a salary (“Salary”) at the annual rate of three hundred fifty
      thousand dollars ($350,000.00) per annum, subject to increases from
      time
      to time in the sole discretion of the Compensation Committee of the Board of
      Directors (the
      “Compensation Committee”). Salary shall be payable in periodic installments in
      accordance with the Employer’s usual practice for its senior
      executives.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Bonus.
      The
      Executive may be awarded performance bonuses on an annual basis, commencing
      with
      a bonus that may be awarded for the 2006 calendar year, as determined by the
      Board of Directors or the Compensation Committee in the sole discretion of
      the
      Board of Directors or Compensation Committee, respectively; provided, however,
      that the bonus for any such year shall not exceed forty percent (40%) of Salary
      for such year.

     

    (c)
       Stock
      Options.
      The
      Executive has been issued options to purchase shares of common stock of the
      Employer in accordance with the Employer’s stock option plan and the Executive’s
      stock option agreement thereunder.

     

    (d) Regular
      Benefits.
      The
      Executive shall also be entitled to participate in any employee benefit plans,
      medical insurance plans, life insurance plans, disability income plans,
      retirement plans, vacation plans, expense reimbursement plans and other benefit
      plans which the Employer may from time to time have in effect for all or most
      of
      its senior executives. Such participation shall be subject to the terms of
      the
      applicable plan documents, generally applicable policies of the Employer,
      applicable law and the discretion of the Board of Directors, the Compensation
      Committee or any administrative or other committee provided for in or
      contemplated by any such plan. Nothing contained in this Agreement shall be
      construed to create any obligation on the part of the Employer to establish
      any
      such plan or to maintain the effectiveness of any such plan which may be in
      effect from time to time.

     

    (e) Automobile.
      The
      Employer shall provide the Executive with an automobile allowance of $800 per
      month to compensate the Executive for expenses related to the use of an
      automobile and reasonable business-related expenses associated with such
      automobile and its maintenance and operation.

     

    (f) Taxation
      of Payment and Benefits.
      The
      Employer shall undertake to make deductions, withholdings and tax reports with
      respect to payments and benefits under this Agreement to the extent that it
      reasonably and in good faith believes that it is required to make such
      deductions, withholdings and tax reports. Payments under this Agreement shall
      be
      in amounts net of any such deductions or withholdings. Nothing in this Agreement
      shall be construed to require the Employer to make any payments to compensate
      the Executive for any adverse tax effect associated with any payments or
      benefits or for any deduction or withholding from any payment or
      benefit.

     

    (g) Exclusivity
      of Salary and Benefits.
      The
      Executive shall not be entitled to any payments or benefits other than those
      provided under this Agreement.

    

    5. Extent
      of Service.
      During
      the Term, the Executive shall, subject to the direction and supervision of
      the
      Board of Directors, devote the Executive’s full business time, best efforts and
      business judgment, skill and knowledge to the advancement of the Employer’s
      interests and to the discharge of the Executive’s duties and responsibilities
      under this Agreement. The Executive shall not engage in any other business
      activity, except as may be approved by the Board of Directors; provided that
      nothing in this Agreement shall be construed as preventing the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Executive
      from (a) investing the Executive’s assets in any company or other entity in a
      manner not prohibited by Section 8(d), or (b) engaging in religious, charitable
      or other community or non-profit activities that, in the case of (a) or (b)
      above, do not in any way impair the Executive’s ability to fulfill the
      Executive’s duties and responsibilities under this Agreement.

     

    

    6. Termination
      and Termination Benefits.
      Notwithstanding any other provision of this Agreement, (i) the Employer may
      terminate the Executive’s employment hereunder at any time with or without Cause
      (as defined in Section 7(a)) at its election; (ii) the Executive may terminate
      the Executive’s employment hereunder at any time with or without Good Reason (as
      defined in Section 7(b)) at the Executive’s election; (iii) Executive’s
      employment hereunder shall automatically terminate upon the Executive’s death;
      and (iv) the Executive’s employment shall terminate upon the Executive’s
      disability as provided in Section 6(c). The date of termination of the
      Executive’s employment hereunder, whether upon scheduled termination of the then
      Term, termination by either the Employer or the Executive as provided in this
      Agreement, or by reason of the Executive’s death or disability, is the
“Termination Date.” Any termination of employment hereunder shall be effective
      upon the date of scheduled termination of the then Term, the date of receipt
      by
      the non-terminating party of a notice of termination from the terminating party
      with or without Cause (in the case of a termination by the Employer) or with
      or
      without Good Reason (in the case of a termination by the Executive), the date
      of
      death, or after the onset of disability as provided in Section 6(c), as the
      case
      may be; provided that, in the case of a termination by the Employer, the
      Employer may specify in the notice of termination a later termination date
      (which date shall be no later than thirty (30) days after the date of such
      notice of termination). The amounts payable to the Executive and other benefits
      provided to the Executive under this Section 6 shall be referred to as
“Termination Benefits”.

     

    (a) Termination
      by the Employer for Cause, by the Executive without Good Reason, Death, or
      notice of nonrenewal by the Executive.
      If the
      Employer terminates the Executive’s employment for Cause, if the Executive
      terminates his employment with the Employer without Good Reason, or if the
      Executive provides the Employer with notice of non-renewal as provided in
      Section 3, the Executive shall be entitled to:

     

    (i) accrued
      but unpaid Salary through the Termination Date;

     

    (ii) cash
      in
      lieu of any accrued but unused vacation through the Termination Date; and

     

    (iii) any
      benefits accrued or payable to the Executive under the Employer’s benefit plans
      (in accordance with the terms of such benefit plans).

     

    Upon
      payment or provision of (i) through (iii) above (collectively, the “Accrued
      Benefits”), the Employer shall have no further obligations to the Executive
      under this Agreement.

     

    (b) Termination
      by the Executive for Good Reason, by the Employer Without Cause, or by notice
      of
      nonrenewal by the Employer.
      If the
      Executive terminates his employment with the Employer for Good Reason or if
      the
      Employer terminates the Executive’s employment with the Employer without Cause,
      the Executive shall be entitled to:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i) the
      Accrued Benefits;

     

    (ii) continuation
      of Salary, at the rate in effect on the Termination Date, that would have been
      paid to the Executive, as if there had been no termination described in this
      Section 6(b), through the expiration of the then Term, payable according to
      the
      normal payroll policies of the Employer for senior executives;

     

    (iii)
       $350,000,
      payable in a lump sum within five (5) business days after the Termination Date;
      and

     

    (iv) continuation
      of group health plan benefits to the extent authorized by and consistent with
      29
      U.S.C. § 1161 et seq. (commonly known as “COBRA”), with the cost of the regular
      premium for such benefits shared in the same relative proportion by the Employer
      and the Executive as in effect on the Termination Date, provided that the
      Executive’s entitlements under this clause (iv) shall terminate as of the date
      of commencement of eligibility for health insurance pursuant to other employment
      or self-employment.

     

    Notwithstanding
      the foregoing, nothing in this Section 6(b) shall be construed to affect the
      Executive’s right to receive COBRA continuation entirely at the Executive’s own
      cost to the extent that the Executive may continue to be entitled to COBRA
      continuation after the Executive’s right to cost sharing under Section 6(b)(iii)
      ceases. The Executive shall be obligated to give prompt notice of the date
      of
      commencement of any employment or self-employment and shall respond promptly
      to
      any reasonable inquiries concerning any employment or self-employment in which
      the Executive engages during the Termination Benefits Period.

     

    (c) Disability.
      If the
      Executive shall be physically or mentally disabled so as to be unable to perform
      substantially all of the essential functions of the Executive’s then existing
      position or positions under this Agreement with or without reasonable
      accommodation, the Board of Directors may remove the Executive from any
      responsibilities and/or reassign the Executive to another position with the
      Employer for the remainder of the Term or during the period of such disability.
      Notwithstanding any such removal or reassignment, the Executive shall continue
      to be employed by the Employer and continue to receive Salary (less any
      disability pay or sick pay benefits to which the Executive may be entitled
      under
      the Employer’s plans and policies) and other compensation and benefits under
      Section 4 of this Agreement (except to the extent that the Executive may be
      ineligible for one or more such benefits under applicable plan terms) until
      the
      earlier of (i) the date that is six (6) months after the onset of the disability
      and (ii) the termination of the then Term, at which time this Agreement shall
      terminate and the Executive shall be entitled only to those Termination Benefits
      set forth in Section 6(a). If any question shall arise as to whether during
      any
      period the Executive is disabled so as to be unable to perform substantially
      all
      of the essential functions of the Executive’s then existing position or
      positions with or without reasonable accommodation, the Executive may, and
      at
      the request of the Employer shall, submit to the Employer a certification in
      reasonable detail by a physician selected by the Employer to whom the Executive
      or the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Executive’s
      guardian has no reasonable objection as to whether the Executive is so disabled
      or how long such disability is expected to continue, and such certification
      shall for the purposes of this Agreement be conclusive of the issue. The
      Executive shall cooperate with any reasonable request of the physician in
      connection with such certification. If such question shall arise and the
      Executive shall fail to submit such certification, the Employer’s determination
      of such issue shall be binding on the Executive. Nothing in this Section 6(c)
      shall be construed to waive the Executive’s rights, if any, under existing law
      including, without limitation, the Family and Medical Leave Act of 1993, 29
      U.S.C. §2601 et
      seq. and
      the
      Americans with Disabilities Act, 42 U.S.C. §12101 et
      seq.

     

     

    7. Definitions.
      For
      purposes of this Agreement, the following terms shall have the following
      meanings:

    

    (a) “Cause”
      shall mean (i) the failure of the Executive to perform the Executive’s duties
      for the Employer in accordance with Section 2 above, including without
      limitation, the Executive’s failure to follow the directives of the Board of
      Directors, consistent with Section 2, or any other material breach by the
      Executive of this Agreement, provided that the Employer gives notice of such
      breach to the Executive in writing and such breach remains uncured for thirty
      (30) days following the date such notice is given; (ii) the Executive’s breach
      of any obligation of the Executive under Section 8; (iii) any act by the
      Executive of fraud or theft; (iv) a conviction by a court of competent
      jurisdiction that the Executive is guilty of a felony, or a misdemeanor
      involving moral turpitude, deceit, dishonesty or fraud, or a plea of nolo
      contendere thereto; or (v) engaging in reckless behavior (the failure to use
      even the slightest amount of care) or willful misconduct by the Executive with
      respect to the Employer or its business or assets that has had or is reasonably
      likely to have a material adverse effect on the Employer or its business or
      assets. No act or omission by the Executive reasonably believed to be in or
      not
      adverse to the interests of the Employer shall constitute Cause. For purposes
      of
      this Agreement, the Executive shall not be deemed to have been terminated for
      Cause unless and until there shall has been delivered to the Executive a copy
      of
      a resolution, duly adopted by the Board of Directors, stating that, in the
      good
      faith opinion of the Board of Directors, Cause exists and specifying the
      particulars thereof in reasonable detail. Before adopting any such resolution,
      the Board of Directors shall offer the Executive, upon reasonable prior written
      notice (which need not exceed five business days), an opportunity for him,
      together with his counsel, to be heard by the Board of Directors.

     

    (b) “Good
      Reason” shall mean the occurrence of any of the events described below that
      continues for, and for which the Employer has not cured within, thirty (30)
      days
      after written notice thereof to the Employer from the Executive:

    

    (i) Any
      material or significant adverse change in the nature or scope of the
      authorities, powers, functions, responsibilities or duties of the
      Executive;

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii) Any
      reduction in the amount of the Executive’s compensation or benefits as set forth
      in Section 4 of this Agreement;

    

    (iii) Any
      material loss of title or office;

    

    (iv) Any
      material breach by the Employer or their successors of any other provision
      of
      this Agreement;

    

    (v) The
      relocation of the offices at which the Executive is principally employed as
      of
      the Effective Date to a location not in Nassau or Suffolk counties, which
      relocation is not approved by the Executive;

    

    (vi) The
      failure to permit the Executive to adopt or implement procedures or policies
      required or advisable for legal or regulatory reasons, other interference with
      the Executive’s compliance with legal obligations; or

    

    (vii) A
      Change
      in Control (as defined in Section 4(c) below), provided that the Executive
      has
      given the Employer notice of his termination for Good Reason within thirty
      (30)
      days after such Change in Control.

    

    (c) “Change
      in Control” shall mean the occurrence of one or more of the following
      events:

     

    (i) any
      “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”)) becomes a “beneficial
      owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange
      Act) (other than the Employer, any trustee or other fiduciary holding securities
      under an employee benefit plan of the Employer, or any corporation owned,
      directly or indirectly, by the stockholders of the Employer, in substantially
      the same proportions as their ownership of stock of the Employer), directly
      or
      indirectly, of securities of the Employer, representing fifty percent (50%)
      or
      more of the combined voting power of the Employer’s then outstanding securities;
      or

     

    (ii) persons
      who, as of the Effective Date, constituted the Employer’s Board of Directors
      (the “Incumbent Board”) cease for any reason including, without limitation, as a
      result of a tender offer, proxy contest, merger or similar transaction, to
      constitute at least a majority of the Board of Directors, provided that any
      person becoming a director of the Employer subsequent to the Effective Date
      whose election was approved by at least a majority of the directors then
      comprising the Incumbent Board shall, for purposes of this Section 7(c), be
      considered a member of the Incumbent Board; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (iii) the
      stockholders of the Employer approve a merger or consolidation of the Employer
      with any other corporation or other entity, other than (1) a merger or
      consolidation which would result in the voting securities of the Employer
      outstanding immediately prior thereto continuing to represent (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity) more than fifty percent (50%) of the combined voting power
      of
      the voting securities of the Employer or such surviving entity outstanding
      immediately after such merger or consolidation or (2) a merger or consolidation
      effected to implement a recapitalization of the Employer (or similar
      transaction) in which no “person” (as hereinabove defined) acquires more than
      fifty percent (50%) of the combined voting power of the Employer’s then
      outstanding securities; or

     

    (iv) the
      stockholders of the Employer approve a plan of complete liquidation of the
      Employer or an agreement for the sale or disposition by the Employer of all
      or
      substantially all of the Employer’s assets.

     

     

    8. Confidential
      Information, Noncompetition and Cooperation.

     

    (a) Confidential
      Information.
      As used
      in this Agreement, “Confidential Information” means nonpublic (not as a result
      of Executive’s wrongful disclosure) information belonging to the Employer which
      is of value to the Employer in the course of conducting its business and the
      disclosure of which could result in a competitive or other disadvantage to
      the
      Employer. Confidential Information includes, without limitation, financial
      information, reports, and forecasts; inventions, improvements and other
      intellectual property, trade secrets, know-how, designs, processes or formulae,
      software, market or sales information or plans, customer lists; and business
      plans, prospects, strategies and opportunities (such as possible acquisitions
      or
      dispositions of businesses or facilities) which have been discussed or
      considered by the management of the Employer. Confidential Information includes
      information developed by the Executive in the course of the Executive’s
      employment by the Employer, as well as other information to which the Executive
      may have access in connection with the Executive’s employment. Confidential
      Information also includes the confidential information of others with which
      the
      Employer has a business relationship. Notwithstanding the foregoing,
      Confidential Information does not include information in the public domain,
      unless due to breach of the Executive’s duties under Section 8(b).

     

    (b) Confidentiality.
      The
      Executive understands and agrees that the Executive’s employment creates a
      relationship of confidence and trust between the Executive and the Employer
      with
      respect to all Confidential Information. At all times, both during the
      Executive’s employment with the Employer and after its termination, the
      Executive will keep in confidence and trust all such Confidential Information,
      and will not use or disclose any such Confidential Information without the
      written consent of the Employer, except as may be necessary in the ordinary
      course of performing the Executive’s duties to the Employer.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) Documents.
      Records. etc.
      All
      documents, records, data, apparatus, equipment and other physical property,
      whether or not pertaining to Confidential Information, which are furnished
      to
      the Executive by the Employer or are produced by the Executive in connection
      with the Executive’s employment will be and remain the sole property of the
      Employer. The Executive will return to the Employer all such materials and
      property as and when requested by the Employer. In any event, the Executive
      will
      return all such materials and property immediately upon termination of the
      Executive’s employment for any reason. The Executive will not retain with the
      Executive any such material or property or any copies thereof after such
      termination.

     

    (d) Noncompetition
      and Nonsolicitation.
      During
      Executive’s employment with the Employer and for one (1) year thereafter, the
      Executive (i) will not, directly or indirectly, whether as owner, partner,
      shareholder, consultant, agent, employee, co-venturer or otherwise, engage,
      participate, assist or invest in any Competing Business (as hereinafter
      defined), (ii) will refrain from directly or indirectly employing, attempting
      to
      employ, recruiting or otherwise soliciting, inducing or influencing any person
      to leave employment with the Employer (other than terminations of employment
      of
      subordinate employees undertaken in the course of the Executive’s employment
      with the Employer); and (iii) will refrain from soliciting or encouraging any
      customer or supplier to terminate or otherwise modify adversely its business
      relationship with the Employer. The Executive understands that the restrictions
      set forth in this Section 8 are intended to protect the Employer’s interest in
      its Confidential Information and established employee, customer and supplier
      relationships and goodwill, and agrees that such restrictions are reasonable
      and
      appropriate for this purpose. For purposes of this Agreement, the term
“Competing Business” shall
      mean a business which consists of operating specialty HIV pharmacies anywhere
      within the United States. Notwithstanding the foregoing, the Executive may
      own
      up to one percent (1%) of the outstanding stock of a publicly-held corporation
      which constitutes or is affiliated with a Competing Business. The Employer
      may
      extend the period of noncompetition and nonsolicitation for an additional period
      not exceeding one (1) year, provided that it extends and pays Termination
      Benefits to the Executive for the duration of the extension. Notwithstanding
      the
      foregoing, the Executive’s obligations under Section 8(d)(i) shall terminate and
      be of no further force or effect upon termination of the Executive’s Employment
      under any of the circumstances described in Section 6(b).

     

    (e) Third-Party
      Agreements and Rights.
      The
      Executive hereby confirms that the Executive is not bound by the terms of any
      agreement with any previous employer or other party which restricts in any
      way
      the Executive’s use or disclosure of information or the Executive’s engagement
      in any business. The Executive represents to the Employer that the Executive’s
      execution of this Agreement, the Executive’s employment with the Employer and
      the performance of the Executive’s proposed duties for the Employer will not
      violate any obligations the Executive may have to any such previous employer
      or
      other party. In the Executive’s work for the Employer, the Executive will not
      disclose or make use of any information in violation of any agreements with
      or
      rights of any such previous employer or other party, and the Executive will
      not
      bring to the premises of the Employer any copies or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    other
      tangible embodiments of non-public information belonging to or obtained from
      any
      such previous employment or other party.

     

    (f) Litigation
      and Regulatory Cooperation.
      During
      and after the Executive’s employment, the Executive shall cooperate fully with
      the Employer in the defense or prosecution of any claims or actions now in
      existence or which may be brought in the future against or on behalf of the
      Employer which relate to events or occurrences that transpired while the
      Executive was employed by the Employer. The Executive’s full cooperation in
      connection with such claims or actions shall include, but not be limited to,
      being available to meet with counsel to prepare for discovery or trial and
      to
      act as a witness on behalf of the Employer at mutually-convenient times. During
      and after the Executive’s employment, the Executive also shall cooperate fully
      with the Employer in connection with any investigation or review of any federal,
      state or local regulatory authority as any such investigation or review relates
      to events or occurrences that transpired while the Executive was employed by
      the
      Employer. The Employer shall reimburse the Executive for any reasonable
      out-of-pocket expenses incurred in connection with the Executive’s performance
      of obligations pursuant to this Section 8(f).

     

    (g) Injunction.
      The
      Executive agrees that it would be difficult to measure any damages caused to
      the
      Employer which might result from any breach by the Executive of the promises
      set
      forth in this Section 8, and that in any event money damages would be an
      inadequate remedy for any such breach. Accordingly, subject to Section 8 of
      this
      Agreement, the Executive agrees that if the Executive breaches, or threatens
      to
      breach, any portion of this Agreement, the Employer shall be entitled, in
      addition to all other remedies that it may have, to an injunction or other
      appropriate equitable relief to restrain any such breach without showing or
      proving any actual damage to the Employer.

    

    (h)
      Definition
      of Employer.
      For
      purposes of this Section 8, “Employer” shall include Allion Healthcare, Inc. and
      each of its subsidiaries.

    

    9. Arbitration
      of Disputes.
      Any
      controversy or claim arising out of or relating to this Agreement or the breach
      thereof or otherwise arising out of the Executive’s employment or the
      termination of that employment (including, without limitation, any claims of
      unlawful employment discrimination whether based on age or otherwise) shall,
      to
      the fullest extent permitted by law, be settled by arbitration under the
      auspices of the American Arbitration Association (“AAA”) in New York, New York
      in accordance with the Employment Arbitration and Mediation Procedures of the
      AAA, including, but not limited to, the rules and procedures applicable to
      the
      selection of arbitrators. In the event that any person or entity other than
      the
      Executive or the Employer may be a party with regard to any such controversy
      or
      claim, such controversy or claim shall be submitted to arbitration subject
      to
      such other person or entity’s agreement. Judgment upon the award rendered by the
      arbitrator may be entered in any court having jurisdiction thereof. This Section
      9 shall be specifically enforceable. Notwithstanding the foregoing, this Section
      9 shall not preclude either party from pursuing a court action for the sole
      purpose of obtaining a temporary restraining order or a preliminary injunction
      in circumstances in which such relief is appropriate; provided that any other
      relief shall be pursued through an arbitration proceeding pursuant to this
      Section 9.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10. Consent
      to Jurisdiction.
      To the
      extent that any court action is permitted consistent with or to enforce Section
      8 of this Agreement, the parties hereby consent to the jurisdiction of the
      Supreme Court of the State of New York, Suffolk County, and the United States
      District Court for the Eastern District of New York. Accordingly, with respect
      to any such court action, the Executive (a) submits to the personal jurisdiction
      of such courts; (b) consents to service of process; and (c) waives any other
      requirement (whether imposed by statute, rule of court, or otherwise) with
      respect to personal jurisdiction or service of process.

     

    11. Integration.
      This
      Agreement constitutes the entire agreement between the parties with respect
      to
      the subject matter hereof and supersedes all prior agreements between the
      parties with respect to any related subject matter.

     

    12. Assignment;
      Successors and Assigns; etc.
      Neither
      the Employer nor the Executive may make any assignment of this Agreement or
      any
      interest herein, by operation of law or otherwise, without the prior written
      consent of the other party; provided that the Employer may assign its rights
      under this Agreement without the consent of the Executive in the event that
      the
      Employer shall effect a reorganization, consolidate with or merge into any
      other
      corporation, partnership, organization or other entity, or transfer all or
      substantially all of its properties or assets to any other corporation,
      partnership, organization or other entity. This Agreement shall inure to the
      benefit of and be binding upon the Employer and the Executive, their respective
      successors, executors, administrators, heirs and permitted assigns.

     

    13. Enforceability.
      If any
      portion or provision of this Agreement (including, without limitation, any
      portion or provision of any section of this Agreement) shall to any extent
      be
      declared illegal or unenforceable by a court of competent jurisdiction, then
      the
      remainder of this Agreement, or the application of such portion or provision
      in
      circumstances other than those as to which it is so declared illegal or
      unenforceable, shall not be affected thereby, and each portion and provision
      of
      this Agreement shall be valid and enforceable to the fullest extent permitted
      by
      law.

     

    14. Waiver.
      No
      waiver of any provision hereof shall be effective unless made in writing and
      signed by the waiving party. The failure of any party to require the performance
      of any term or obligation of this Agreement, or the waiver by any party of
      any
      breach of this Agreement, shall not prevent any subsequent enforcement of such
      term or obligation or be deemed a waiver of any subsequent breach.

     

    15. Notices.
      Any
      notices, requests, demands and other communications provided for by this
      Agreement shall be sufficient if in writing and delivered in person or sent
      by a
      nationally-recognized overnight courier service or by registered or certified
      mail, postage prepaid, return receipt requested, to the Executive at the last
      address the Executive has filed in writing with the Employer or, in the case
      of
      the Employer, at its main offices, attention of the Chairman of the Board of
      Directors, and shall be effective on the date of delivery in person or by
      courier or three (3) days after the date mailed.

     

    16. Amendment.
      This
      Agreement may be amended or modified only by a written instrument signed by
      the
      Executive and by a duly authorized representative of the Employer.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    17. Construction.
      This
      Agreement has been drafted and reviewed jointly by the parties, and no
      presumption of construction as to the drafting of this Agreement shall be
      applied against or in favor of any party. 

     

    18. Governing
      Law.
      This is
      a New York contract and shall be construed under and be governed in all respects
      by the laws of the State of New York, without giving effect to the conflict
      of
      laws principles of New York. With respect to any disputes concerning federal
      law, such disputes shall be determined in accordance with the law as it would
      be
      interpreted and applied by the United States Court of Appeals for the Second
      Circuit.

     

    19.
      Indemnification.
      The
      provisions of Article VII (Indemnification) of the Second Amended and Restated
      By Laws dated June 24, 2002 of the Employer as in effect on the date hereof
      are
      deemed incorporated herein by reference and any amendment to such By Laws after
      the date hereof shall not be incorporated by reference herein if the effect
      thereof is to reduce the rights conferred on the Executive.

    

    20. Legal
      Fees. The
      parties acknowledge that the Employer has reimbursed the Executive for legal
      fees incurred in connection with the preparation of this Agreement and has
      no
      further obligation in connection therewith. If there is an arbitration or court
      proceeding between the Executive and the Employer in connection with Executive’s
      enforcement of the terms of this Agreement and it has been determined in such
      arbitration or proceeding that the Executive has substantially prevailed in
      such
      arbitration or proceeding, the Employer shall reimburse the Executive’s
      reasonable fees and expenses incurred in connection with such arbitration or
      proceeding in an amount not to exceed $100,000.

    

    21.
      Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed and delivered shall be taken to be an original; but such counterparts
      shall together constitute one and the same document.

    

    IN
      WITNESS WHEREOF, this Agreement has been executed by the Employer, by its duly
      authorized officer, and by the Executive, as of the Effective Date.

    

      

      

                  __/s/
        Michael P.
        Moran_____________       ALLION
        HEALTHCARE, INC.

              Michael
        P.
        Moran     

      

                  By:
        __/s/ James G.
        Spencer___________________________

                  Name: James
        G.
        Spencer

                                                          Title:
        Chief Financial Officer

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