Exhibit 10.30

[Execution Copy]

MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

(Class A-2 Units and Class B Units)

THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this “Agreement”) by and between
Apria Holdings LLC, a Delaware limited liability company (the “Company”), and
the individual named on the Executive Master Signature Page hereto (“Executive”)
is made as of the date set forth on such Executive Master Signature Page.

WHEREAS, on the terms and subject to the conditions hereof, Executive desires to
subscribe for and acquire from the Company, and the Company desires to issue and
provide to Executive, the Company’s Class A-2 Units and Class B Units (the
“Units”), in each case in the amount set forth on Executive’s Master Signature
Page, as hereinafter set forth; and

WHEREAS, this Agreement is one of several agreements being entered into by the
Company or its Subsidiaries with certain persons who are or will be key
employees or advisors of the Company or one or more Affiliates (collectively
with Executive, the “Management Investors”) as part of a management equity
purchase plan designed to comply with Regulation D or Rule 701, as applicable,
promulgated under the Securities Act (as defined below);

NOW, THEREFORE, in order to implement the foregoing and in consideration of the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows:

 

1. Definitions.

1.1 Affiliate. An “Affiliate” of, or Person “Affiliated” with, a specified
Person shall mean a Person that directly, or indirectly through one or more
intermediaries or contractual counterparties, controls or is controlled by, or
is under common control with, the Person specified.

1.2 Agreement. The term “Agreement” shall have the meaning set forth in the
preface.

1.3 Blackstone. The term “Blackstone” means Blackstone Capital Partners V L.P.
and its Affiliates.

1.4 Board. The “Board” shall mean the Company’s Board of Directors.

 

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1.5 Cause. The term “Cause” shall have the meaning assigned such term in
Executive’s employment agreement (the “Employment Agreement”) with Apria
Healthcare Group Inc. (“Apria”) dated as of the date hereof.

1.6 Change of Control. The term “Change of Control” shall have the meaning set
forth in the LLC Agreement.

1.7 Closing. The term “Closing” shall have the meaning set forth in Section 2.2.

1.8 Closing Date. The term “Closing Date” shall have the meaning set forth in
Section 2.2.

1.9 Company. The term “Company” shall have the meaning set forth in the preface.

1.10 Constructive Termination. The term “Constructive Termination” shall have
the meaning assigned such term in the Employment Agreement.

1.11 Cost. The term “Cost” shall mean the price per Unit paid by Executive, if
any, as proportionately adjusted for all subsequent distributions of Units and
other recapitalizations and less the amount of any distributions (excluding tax
distributions) made with respect to the Units pursuant to the Company’s
organizational documents; provided that “Cost” may not be less than zero.

1.12 Disability. The term “Disability” shall have the meaning assigned such term
in the Employment Agreement.

1.13 Employee and Employment. The term “employee” shall mean, without any
inference as to negate Executive’s status as a member of the Company for all
purposes hereunder (subject to the terms hereof) and for federal and other tax
purposes, any employee (as defined in accordance with the regulations and
revenue rulings then applicable under Section 3401(c) of the Internal Revenue
Code of 1986, as amended) of the Company or any of its Subsidiaries, and the
term “employment” shall include service as a part- or full-time employee or
board member to the Company or any of its Subsidiaries.

1.14 Executive. The term “Executive” shall have the meaning set forth in the
preface.

 

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1.15 Executive’s Group. The term “Executive’s Group” shall have the meaning set
forth in Section 4.1(a).

1.16 Fair Market Value. The term “Fair Market Value” used in connection with the
value of Units shall mean (a) if there is a public market for the equity of the
Company or Apria on the applicable date, the value for the Units shall be
implied by the average of the high and low closing bid prices of such equity
during the last 10 trading days on the stock exchange on which the equity is
principally trading or (b) if there is no public market for the equity on such
date, the value for the Units shall be determined in good faith by the Board
after consultation with the Chief Executive Officer and Chief Financial Officer
of Apria, in either case assuming, for purposes of determining Fair Market
Value, application of the distribution and dissolution provisions contained in
Sections 4.4 and 5.2(b) of the LLC Agreement.

1.17 Financing Default. The term “Financing Default” shall mean an event which
would constitute (or with notice or lapse of time or both would constitute) an
event of default under any of the financing documents of the Company or its
Affiliates from time to time (collectively, the “Financing Agreements”) and any
restrictive financial covenants contained in the organizational documents of the
Company or its Affiliates.

1.18 LLC Agreement. The term “LLC Agreement” shall have the meaning set forth in
the Securityholders Agreement.

1.19 Management Investors. The term “Management Investors” shall have the
meaning set forth in the preface.

1.20 Permitted Transferee. The term “Permitted Transferee” means any Person to
whom Executive transfers Units in accordance with the Securityholders Agreement
(other than the Sponsor and the Company and their respective Affiliates and
except for transfers pursuant to a Public Offering).

1.21 Person. The term “Person” shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

1.22 Public Offering. The term “Public Offering” shall have the meaning set
forth in the Securityholders Agreement.

 

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1.23 Restrictive Covenant Violation. The term “Restrictive Covenant Violation”
shall mean Executive’s material breach of any section in Appendix A hereto.

1.24 Securities Act. The term “Securities Act” shall mean the Securities Act of
1933, as amended, and all rules and regulations promulgated thereunder, as the
same may be amended from time to time.

1.25 Securityholders Agreement. The term “Securityholders Agreement” shall mean
the Amended and Restated Securityholders Agreement dated as of April 8, 2010
among the Sponsor, one or more Management Investors and the Company, as it may
be amended or supplemented thereafter from time to time.

1.26 Sponsor. The term “Sponsor” means Blackstone.

1.27 Subsidiary. The term “Subsidiary” means any corporation, limited liability
company, partnership or other entity with respect to which another specified
entity has the power to vote or direct the voting of sufficient securities to
elect directors (or comparable authorized persons of such entity) having a
majority of the voting power of the board of directors (or comparable governing
body) of such entity.

1.28 Termination Date. The term “Termination Date” means the date upon which
Executive’s employment with the Company and its Subsidiaries is terminated.

1.29 Unvested Units. The term “Unvested Units” means, with respect to
Executive’s Class B Units, the number of such Units that are not “Vested Units”.

1.30 Vested Units. The term “Vested Units” shall mean all of Executive’s
Class A-2 Units and the number of Class B Units that are vested and
nonforfeitable. With respect to Executive’s Class B Units, the number of such
Units that are Vested Units is determined in accordance with Schedule I attached
hereto. With respect to Executive’s Class A-2 Units, all such Units will be
fully vested upon issuance.

 

2. Subscription for and Grant of Units.

2.1 Issuance of Units. Pursuant to the terms and subject to the conditions set
forth in this Agreement, Executive hereby subscribes for and agrees to acquire,
and the Company hereby agrees to issue

 

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to Executive on the Closing Date (except as provided in this paragraph below),
the number and classes of “Initial Class A-2 Units” and “Class B Units” set
forth on Executive’s Master Signature Page in exchange (a) in the case of the
Class A-2 Units, for the cash purchase price set forth on Executive’s Master
Signature Page and (b) in the case of the Class B Units, for services performed
for the Company and its Subsidiaries by Executive. Furthermore, for a period of
six months following the Closing Date, Executive shall have the right, but not
the obligation, to subscribe for and agree to acquire, and the Company hereby
agrees to issue to Executive upon written notice from Executive of his election
to purchase, an additional number of Class A-2 Units, up to the number of
“Additional Class A-2 Units” set forth on Executive’s Master Signature Page, in
exchange for the cash purchase price per Unit set forth on the Executive’s
Master Signature Page. The Class A-2 Units and Class B Units shall be subject to
the following terms:

(a) Catchup for Class A-2 Units. Notwithstanding anything to the contrary in the
LLC Agreement, Executive’s distributions in respect of each Class A-2 Unit in
excess of $1.00 per Class A-2 Unit shall be foregone and shall instead be
distributed in respect of other Units until such time as the cumulative foregone
distributions in respect of each such Class A-2 Unit equals $0.10 (the “Delayed
Amount Per Class A-2 Unit”). Once the Delayed Amount Per Class A-2 Unit has been
foregone, Executive shall then be entitled to receive 100% of all subsequent
distributions to holders of Units until Executive shall have received
distributions in respect of this sentence per Unit equal to the Delayed Amount
Per Class A-2 Unit. Thereafter, Executive shall be entitled to receive
distributions in connection with each Class A-2 Unit calculated in the same
manner as other Class A-2 Units. The intent of the foregoing exclusion is to
ensure that the Executive’s Class A-2 Units do not participate in a distribution
of any profits or increase in the value of the Company created prior to the
Closing Date to the extent exceeding Executive’s $1.00 per Class A-2 Unit
capital contribution (except and until distributions in excess of such $1.00
exceed $0.10 per Class A-2 Unit distributable to current Class A-2 Unitholders
other than Executive), such that the interests in excess of the Executive’s
capital contribution on the Class A-2 Units qualify as “profits interests” on
the date of the conversion under applicable tax laws.

(b) Catchup for Class B Units. Notwithstanding anything to the contrary in the
LLC Agreement, Executive’s initial distributions in respect of each Class B Unit
(whether or not then vested) shall be foregone and shall instead be distributed
in respect of other Units until such time as the cumulative foregone
distributions in respect of each such Class B Unit equals $0.10 (the “Delayed
Amount Per Class B Unit”). Once the Delayed Amount Per Class B Unit has been
foregone, Executive shall then be entitled to receive 100% of all subsequent
distributions to holders of Units until Executive shall have received
distributions in respect of this sentence per Unit equal to the Delayed Amount
Per Class B Unit. Thereafter, Executive shall be entitled to receive
distributions in connection with each Class B Unit calculated in the same manner
as other Class B Units. The intent of the foregoing exclusion is to ensure that
the Class B Units do not participate in a distribution of any profits or
increase in the value of the Company created prior to the Closing Date, such
that the Class B Units qualify as “profits interests” on the date of the
conversion under applicable tax laws.

 

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(c) Preemptive Rights.

(i) Notwithstanding anything to the contrary in the Securityholders Agreement,
at any time that the Company (after the Closing Date and prior to the first
Public Offering or any Termination Date) proposes to issue or sell to any Person
any common membership units (“Common Equity”) or other equity securities or any
securities convertible into or exchangeable for any such common membership units
or other equity securities (other than: (i) in connection with any Public
Offering (or any restructuring related to a Public Offering), (ii) pursuant to
any present or future employee, officer or director benefit plan or program of
or assumed by the Company or any of its Subsidiaries, (iii) as consideration in
any merger, consolidation, acquisition for stock, business combination or any
similar extraordinary transaction or (iv) the issuance of Common Equity or other
equity securities as a dividend or distribution to all or substantially all
holders of Common Equity or other equity securities, or a subdivision or
combination of Common Equity or other equity securities or a reclassification of
(or similar action with respect to) Common Equity or other equity securities
into a greater or lesser number of Common Equity or other equity securities
available to all holders of the applicable class of Common Equity), Executive at
such time shall be afforded the opportunity to acquire from the Company for the
same price (net of any underwriting discounts or sales commissions) and on the
same terms as such Common Equity or other equity securities are proposed to be
offered (or, to the extent such Common Equity or other equity securities are
offered for consideration (or the exercise price of which is to be paid in
consideration) other than cash, the cash equivalent thereof) an amount of Common
Equity or other equity securities up to the aggregate amount of Common Equity or
other equity securities to be offered or sold multiplied by Executive’s
percentage ownership interest in the Class A Units.

(ii) If the Company or any of its Subsidiaries proposes to offer or sell Common
Equity or other equity securities that are subject to this Section 2.1(c), the
Company shall give Executive written notice (a “Subscription Notice”) of its
intention, describing the type of such Common Equity or other equity securities,
price (or range of prices), anticipated amount of such Common Equity or other
equity securities, timing, and other terms upon which the Company proposes to
issue or sell the same. Executive shall have 10 days from the date of receipt of
a Subscription Notice to notify the Company in writing (a “Participation
Notice”) that he intends to exercise his rights provided in this Section 2.1(c)
and the amount of such Common Equity or other equity securities Executive
desires to purchase, which amount may not exceed the maximum amount calculated
pursuant to Section 2.1(c). Such Participation Notice shall constitute a
nonbinding indication of interest of Executive to purchase the amount of such
Common Equity or other equity securities so specified at the price and other
terms set forth in the Company’s notice to Executive. The failure of Executive
to respond within such 10-day period shall be deemed to be a waiver of
Executive’s rights under this Section 2.1(c) only with respect to the offering
described in the applicable Subscription Notice.

(iii) If Executive exercises his rights provided in this Section 2.1(c), the
closing of the purchase of the Common Equity or other equity securities with
respect to which such right has been exercised shall take place no less than 15
days and no later than 180 days after the giving of the Participation Notice,
which period of time shall be extended for a maximum of 60 days in order to
comply with applicable laws and

 

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regulations (including receipt of any applicable regulatory approvals). The
Company and Executive will use commercially reasonable efforts to secure on a
timely basis any regulatory approvals or other consents, and to comply with any
law or regulation necessary in connection with the issuance, sale and purchase
of, such Common Equity or other equity securities.

(iv) Notwithstanding the foregoing provisions of this Section 2.1(c), the Board
may cause the Company to proceed with any issuance or sale of Common Equity or
other equity securities prior to having complied with such foregoing provisions;
provided that the Company will subsequently comply with the other provisions of
this Section 2.1(c) subsequent to such issuances on a prompt basis.

(d) Public Offering.

(i) Without limiting the generality of Section 2.10 of the LLC Agreement, in
connection with a Public Offering, the Company will offer to Executive the
opportunity to effect a Class B Exchange; provided that the equity securities in
to which the Class B Units are exchanged will remain subject to the terms and
conditions hereof (including, for the avoidance of doubt, Section 4.2 and the
vesting terms hereunder).

(ii) Notwithstanding anything to the contrary in the Securityholders Agreement
or the LLC Agreement: (A) upon the date that is 180 calendar days after the
Company’s first Public Offering, all restrictions on Transfers (as defined in
the Securityholders Agreement) of Units shall expire with respect to all of
Executive’s Vested Units, including any and all Units acquired by Executive
subsequent to the Closing Date (provided that such Units shall be exchanged into
common equity of the issuer in such Public Offering prior to any such Transfer);
and (B) immediately upon the Company’s first Public Offering, all rights of
first refusal upon any Transfers (as defined in the Securityholders Agreement)
of Units, shall expire with respect to all of Executive’s Units, including any
and all Units acquired by Executive subsequent to the Closing Date.

2.2 The Closing. The closing (the “Closing”) of the grant of Units hereunder
shall take place on December 5, 2012. The date of the Closing shall be the
“Closing Date”.

2.3 Section 83(b) Election. Within 10 days after the Closing, Executive shall
provide the Company with a copy of a completed election under Section 83(b) of
the Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder in the form of Exhibit A to Executive’s Master Signature Page.
Executive shall timely (within 30 days of the Closing) file (via certified mail,
return receipt requested) such election with the Internal Revenue Service and
shall thereafter notify the Company it has made such timely filing. Executive
should consult his tax advisor regarding the consequences of a Section 83(b)
election, as well as the receipt, vesting, holding and sale of Units.

 

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2.4 Closing Conditions. Notwithstanding anything in this Agreement to the
contrary, the Company shall be under no obligation to issue, grant to Executive
any Units unless (i) Executive is an employee of, or consultant to, the Company
or one of its Subsidiaries on the Closing Date; (ii) the representations of
Executive contained in Section 3 hereof are true and correct in all material
respects as of the Closing Date and (iii) Executive is not in breach of any
agreement, obligation or covenant herein required to be performed or observed by
Executive on or prior to the Closing Date.

 

3. Investment Representations and Covenants of Executive.

3.1 Units Unregistered. Executive acknowledges and represents that Executive has
been advised by the Company that:

(a) the offer and sale of the Units have not been registered under the
Securities Act;

(b) the Units must be held indefinitely and Executive must continue to bear the
economic risk of the investment in the Units unless the offer and sale of such
Units are subsequently registered under the Securities Act and all applicable
state securities laws or an exemption from such registration is available (or as
otherwise provided in the Securityholders Agreement);

(c) there is no established market for the Units and it is not anticipated that
there will be any public market for the Units in the foreseeable future;

(d) a restrictive legend in the form set forth below and the legends set forth
in Section 7.3(a) and (b) of the Securityholders Agreement shall be placed on
the certificates, if any, representing the Units:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A MANAGEMENT UNITS
SUBSCRIPTION AGREEMENT WITH THE ISSUER, AS AMENDED AND MODIFIED FROM TIME TO
TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE ISSUER’S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE”; and

(e) a notation shall be made in the appropriate records of the Company
indicating that the Units are subject to restrictions on transfer and, if the
Company should at some time in the future engage the services of a securities
transfer agent, appropriate stop-transfer instructions will be issued to such
transfer agent with respect to the Units.

3.2 Additional Investment Representations. Executive represents and warrants
that:

(a) Executive’s financial situation is such that Executive can afford to bear
the economic risk of holding the Units for an indefinite period of time, has
adequate means for providing for Executive’s current needs and personal
contingencies, and can afford to suffer a complete loss of Executive’s
investment in the Units;

 

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(b) Executive’s knowledge and experience in financial and business matters are
such that Executive is capable of evaluating the merits and risks of the
investment in the Units;

(c) Executive understands that the Units are a speculative investment which
involves a high degree of risk of loss of Executive’s investment therein, there
are substantial restrictions on the transferability of the Units and, on the
Closing Date and for an indefinite period following the Closing, there will be
no public market for the Units and, accordingly, it may not be possible for
Executive to liquidate Executive’s investment in case of emergency, if at all;

(d) the terms of this Agreement provide that if under certain circumstances
Executive ceases to be an employee of the Company or its Subsidiaries, the
Company and its Affiliates have the right to repurchase the Units at a price
which may, under certain circumstances, be less than the Fair Market Value
thereof;

(e) Executive understands and has taken cognizance of all the risk factors
related to the purchase of the Units and, other than as set forth in this
Agreement, no representations or warranties have been made to Executive or
Executive’s representatives concerning the Units or the Company or their
prospects or other matters;

(f) Executive has been given the opportunity to examine all documents and to ask
questions of, and to receive answers from, the Company and its representatives
concerning the Company and its Subsidiaries, the Securityholders Agreement, the
Company’s organizational documents and the terms and conditions of the purchase
of the Units and to obtain any additional information which Executive deems
necessary;

(g) to the best of Executive actual knowledge, all information which Executive
has provided to the Company and the Company’s representatives concerning
Executive and Executive’s financial position is complete and correct as of the
date of this Agreement; and

(h) Executive is or is not an “accredited investor” within the meaning of Rule
501(a) under the Securities Act, as indicated on Executive’s Master Signature
Page.

3.3 Other Representations. Executive acknowledges that Blackstone and its
Affiliates may, from time to time, provide services to the Company and its
Affiliates for which a fee will be paid by the Company or its Affiliates,
including an annual monitoring/advisory fee.

 

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4. Certain Sales and Forfeitures Upon Termination of Employment; Variations to
Securityholders Agreement.

4.1 Put Option.

(a) Prior to the occurrence of the initial Public Offering, if Executive’s
employment with the Company and its Subsidiaries terminates due to the death of
Executive or is terminated by the Company or any of its Subsidiaries as a result
of the Disability of Executive, Executive and Executive’s Permitted Transferees
(hereinafter sometimes collectively referred to as the “Executive’s Group”)
shall have the right, subject to the provisions of Section 5 hereof, for 180
days following the date that is 210 days after the Termination Date, to sell to
the Company (the “Put Right”), and the Company shall be required to purchase
(subject to the provisions of Section 5 hereof), on one occasion from each
member of Executive’s Group, all (but not less than all) of the number of Vested
Units then held by Executive’s Group that equals all Vested Units collectively
held by Executive’s Group at a price per Unit equal to the Fair Market Value of
such Units (measured as of the date that the relevant election to purchase such
Units is delivered (the “Valuation Date”)). In order to exercise its rights with
respect to the Vested Units pursuant to this Section 4.1(a), Executive’s Group
shall also be required to simultaneously exercise any similar rights it may have
with respect to any other units of the Company held by Executive’s Group in
accordance with the terms of the agreements pursuant to which such other units
were acquired from the Company.

(b) If Executive’s Group desires to exercise the Put Right, the members of
Executive’s Group shall send one written notice to the Company setting forth
such members’ intention to collectively sell all of their Vested Units pursuant
to Section 4.1(a), which notice shall include the signature of each member of
Executive’s Group. Subject to the provisions of Section 5.1, the closing of the
purchase shall take place at the principal office of the Company on a date
specified by the Company no later than the 45th day after the giving of such
notice.

4.2 Call Options.

(a) If (1) Executive’s employment with the Company and its Subsidiaries is
terminated for any reason (whether by the Company or Executive, or as a result
of death or Disability), (2) a Restrictive Covenant Violation occurs or
(3) Executive engages in a Competitive Activity (as defined in Section 6 of this
Agreement) not constituting a Restrictive Covenant Violation without the consent
of the Board, then the Company shall have the right, (x) for 210 days following
the relevant event described in clause (1), (2) or (3) (or, in the case of
clause (2) or (3) only, the date on which the Board has actual knowledge (or
reasonably should have knowledge) thereof) or (y) if applicable, to avoid
adverse accounting treatment, for 210 days after the date that is six months and
one day after the date on which Executive became vested in the applicable Units,
to purchase (the “Call Option”), and each member of Executive’s Group shall be
required to sell to the Company, any or all Vested Units then held by such
member of Executive’s Group (it being understood that if Units of any class
subject to repurchase hereunder may be repurchased at different prices, the
Company may elect to repurchase only the portion of the Units of such class
subject to repurchase hereunder at the lower price); provided that the Class A-2
Units shall not be subject to a Call Option except in the circumstances
described below in clause (i) or clause (iv). The purchase price per Unit under
the Call Option shall be determined as follows:

(i) Termination with Cause or Restrictive Covenant Violation; Voluntary
Resignation when Grounds for Cause Exist. If Executive’s employment with the
Company and its Subsidiaries is terminated (x) by the Company or any of its
Subsidiaries

 

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with Cause, (y) by Executive at a time when grounds exist for Cause, regardless
of any notice, cure or waiting period thereunder, or (z) in the event of a
Restrictive Covenant Violation, the purchase price per Unit will be lesser of
(1) the Fair Market Value thereof (measured as of the Valuation Date) and
(2) Cost (provided that, in the case of the Class A 2 Units under clause
(x) above, the purchase price per Unit will be the Fair Market Value thereof
(measured as of the Valuation Date)).

(ii) Death or Disability; Termination without Cause; Resignation for
Constructive Termination. If Executive’s employment with the Company and its
Subsidiaries is terminated (w) by the Company or any of its Subsidiaries as a
result of the Disability of Executive, (x) due to the death of Executive, (y) by
the Company without Cause or (z) by Executive as a result of a Constructive
Termination, the purchase price per Unit will be the Fair Market Value thereof
(measured as of the Valuation Date);

(iii) Voluntary Resignation. If Executive’s employment with the Company and its
Subsidiaries is terminated by Executive (other than as a result of a
Constructive Termination) at a time when grounds do not exist for Cause, the
purchase price per Unit will be:

(A) if such termination occurs on or before the second anniversary of the
Closing Date, the lesser of (A) Fair Market Value thereof (measured as of the
Valuation Date) and (B) Cost; or

(B) if such termination occurs after the second anniversary of the Closing Date,
the Fair Market Value thereof; and

(iv) Competitive Activity. In the event Executive engages in a Competitive
Activity not constituting a Restrictive Covenant Violation without the consent
of the Board, the purchase price per Unit will be the Fair Market Value thereof
(measured as of the Valuation Date).

The Call Option in respect of Vested Units shall expire upon the occurrence of a
Public Offering.

(b) If Executive’s employment with the Company and its Subsidiaries is
terminated for any reason, all Unvested Units (excluding, for the avoidance of
doubt, the Class A-2 Units) will be forfeited (or, to the extent a forfeiture is
not permissible under applicable law for any reason, the Unvested Units shall be
subject to the Call Option in Section 4.2(a) with the purchase price per
Unvested Unit equal to the lesser of (A) Fair Market Value thereof (measured as
of the Valuation Date) and (B) Cost). Such Call Option shall apply without
regard to whether a Public Offering has occurred.

(c) If the Company desires to exercise its Call Option pursuant to this
Section 4.2, the Company shall send written notice to each member of Executive’s
Group of its intention to purchase Units, specifying the number of Units to be
purchased (the “Call Notice”). Subject to the provisions of Section 5, the
closing of the purchase shall take place at the principal office of the Company
on a date specified by the Company no later than the 30th day after the giving
of the Call Notice.

(d) Notwithstanding the foregoing, if the Company elects not to exercise its
Call Option pursuant to this Section 4.2, the Sponsor may elect to purchase such
Units at any time on the same terms and conditions set forth in this Section 4.2
by providing written notice to each member of Executive’s Group of its intention
to purchase Units.

 

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4.3 Obligation to Sell Several. If there is more than one member of Executive’s
Group, the failure of any one member thereof to perform its obligations
hereunder shall not excuse or affect the obligations of any other member
thereof, and the closing of the purchases from such other members by the Company
shall not excuse, or constitute a waiver of its rights against, the defaulting
member.

 

5. Certain Limitations on the Company’s Obligations to Purchase Units.

5.1 Prohibition of Purchases. Notwithstanding anything to the contrary contained
herein, the Company shall not be obligated to purchase any Units at any time
pursuant to Section 4, regardless of whether it has delivered a notice of its
election to purchase any such Units, to the extent that the purchase of such
Units or the payment to the Company or one of its Subsidiaries of a cash
dividend or distribution by a Subsidiary of the Company that is necessary to
fund such purchase (together with any other purchases of Units pursuant to
Section 4 or pursuant to similar provisions in agreements with other employees
of the Company and its Subsidiaries of which the Company has at such time been
given or has given notice and together with cash dividends and distributions
necessary to fund such other purchases) would result in a violation of any law,
statute, rule, regulation, policy, order, writ, injunction, decree or judgment
promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its Subsidiaries or
any of its or their property. The Company shall, within fifteen days of learning
of any such fact, so notify the members of Executive’s Group that it is not
obligated to purchase Units hereunder.

5.2 Payment for Units. If at any time the Company elects or is required to
purchase any Units pursuant to Section 4, the Company shall pay the purchase
price for the Units it purchases (i) first, by the cancellation of any
indebtedness, if any, owing from Executive to the Company or any of its
Subsidiaries (which indebtedness shall be applied pro rata against the proceeds
receivable by each member of Executive’s Group receiving consideration in such
repurchase) and (ii) then, by the Company’s delivery of a check or wire transfer
of immediately available funds for the remainder of the purchase price, if any,
against delivery of the certificates or other instruments, if any, representing
the Units so purchased, duly endorsed; provided that if (x) any of the
conditions set forth in Section 5.1 exists or (y) such purchase of Units would
result in a Financing Default, in each case which prohibits such cash payment
(either directly or indirectly as a result of the prohibition of a related cash
dividend or distribution) (each a “Cash Payment Restriction”), the portion of
the cash payment so prohibited may be made, to the extent such payment is not
prohibited, by the Company’s delivery of a junior subordinated promissory note
(which shall be subordinated and subject in right of payment to the prior
payment of any debt

 

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outstanding under the senior Financing Agreements and any modifications,
renewals, extensions, replacements and refunding of all such indebtedness of the
Company (a “Junior Subordinated Note”) in a principal amount equal to the
balance of the purchase price, payable within ten days after the Cash Payment
Restriction no longer exists, and bearing interest payable (and compounded to
the extent not so paid) as of the last day of each year at the interest rate
payable under the senior financing credit facilities of the Company or its
Subsidiaries (as applicable) from time to time, and all such accrued and unpaid
interest payable on the date of the payment of principal (or, if applicable, the
last installment of principal), with payments to be applied in the order of:
(A) first to any enforcement costs incurred by Executive or Executive’s Group,
(B) second to interest and (C) third to principal. The Company shall have the
right set forth in clause (i) of the first sentence of this Section 5.2 whether
or not the member of Executive’s Group selling such Units is an obligor of the
Company. The principal of, and accrued interest on, any such Junior Subordinated
Note may be prepaid in whole or in part at any time at the option of the
Company. To the extent that the Company is prohibited from paying accrued
interest, that is required to be paid on any Junior Subordinated Note prior to
maturity, due to the existence of any Cash Payment Restriction, such interest
shall be cumulated, compounded calendar quarterly, and accrued until and to the
extent that such Cash Payment Restriction no longer exists, at which time such
accrued interest shall be immediately paid. Notwithstanding any other provision
in this Agreement, the Company may elect to pay the purchase price hereunder in
shares or other equity securities of one of its direct or indirect Subsidiaries
with a fair market value equal to the applicable purchase price, provided that
such Subsidiary promptly offers to repurchase such shares or other equity
securities for cash equal to the applicable purchase price or a Junior
Subordinated Note (if otherwise permissible hereunder) with a principal amount
equal to the applicable purchase price.

5.3 Repayment of Proceeds. In the event the Company terminates Executive for
Cause or Executive resigns at a time when grounds for Cause exist (and the
Company discovers no later than 30 calendar days after such resignation that
grounds existed for Cause at the time thereof and notifies Executive of such
fact during 30-day period), then Executive shall be required to pay to the
Company, within 10 business days’ of the Company’s request to Executive
therefor, an amount equal to the excess, if any, of (A) the aggregate after-tax
proceeds (taking into account all amounts of tax that would be recoverable upon
a claim of loss for payment of such proceeds in the year of repayment) Executive
received upon the sale or other disposition of, or distributions in respect of,
Executive’s Class B Units over (B) the aggregate Cost of such Units. The
foregoing shall not apply in respect to any event that occurs after a Public
Offering if Executive was employed by the Company at the time of the Public
Offering.

 

6. Restrictive Covenant Violation; Competitive Activity.

(a) Executive acknowledges and recognizes the highly competitive nature of the
businesses of the Company and its Affiliates and accordingly agrees, in his
capacity as an investor and equityholder in the Company and its Affiliates, to
the provisions of Appendix A to this Agreement. Executive acknowledges and
agrees that the Company’s remedies at law for a

 

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breach of any of the provisions of Appendix A would be inadequate and the
Company would suffer irreparable damages as a result of such breach. In
recognition of this fact, Executive agrees that, in the event of such a breach,
in addition to any remedies at law, the Company, without posting any bond, shall
be entitled to cease making any payments or providing any benefit otherwise
required by this Agreement and obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be available.

(b) Executive shall be deemed to have engaged in “Competitive Activity” if,
after the Restricted Period (as defined in Appendix A), Executive accepts an
employment or consulting relationship (or acquires any financial interest in),
directly or indirectly, with a Direct Competitor of the Company. For the
purposes of the foregoing, a “Direct Competitor” means any entity that is in
direct competition with the business of the Company and which derives at least
20% of its revenue from engaging in the business of home respiratory therapy,
home infusion therapy, and home medical equipment that is competitive with the
Company and its Subsidiaries within the United States. For the avoidance of
doubt, any conduct that constitutes Competitive Activity but not a Restrictive
Covenant Violation shall not be prohibited hereby, but instead shall serve to
provide that the Call Option may be exercised pursuant to Section 4.2 hereof.

 

7. Miscellaneous.

7.1 Transfers. Prior to the transfer of Units to a Permitted Transferee,
Executive shall deliver to the Company a written agreement of the proposed
transferee (a) evidencing such Person’s undertaking to be bound by the terms of
this Agreement and (b) acknowledging that the Units transferred to such Person
will continue to be Units for purposes of this Agreement in the hands of such
Person. Any transfer or attempted transfer of Units in violation of any
provision of this Agreement or the Securityholders Agreement shall be void, and
the Company shall not record such transfer on its books or treat any purported
transferee of such Units as the owner of such Units for any purpose.

7.2 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to
Units, to any and all securities of the Company or any successor or assign of
the Company (whether by merger, consolidation, sale of assets or otherwise)
which may be issued in respect of, in exchange for, or in substitution of the
Units, by reason of any dividend payable in units, issuance of units,
combination, recapitalization, reclassification, merger, consolidation or
otherwise.

7.3 Executive’s Employment by the Company. Nothing contained in this Agreement
shall be deemed to obligate the Company or any Subsidiary of the Company to
employ Executive in any capacity whatsoever or to prohibit or restrict the
Company (or any such Subsidiary) from terminating the employment of Executive at
any time or for any reason whatsoever, with or without Cause.

 

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7.4 Cooperation. Executive agrees to cooperate with the Company in taking action
reasonably necessary to consummate the transactions contemplated by this
Agreement.

7.5 Binding Effect. The provisions of this Agreement shall be binding upon and
accrue to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that no Permitted
Transferee shall derive any rights under this Agreement unless and until such
Permitted Transferee has executed and delivered to the Company a valid
undertaking and becomes bound by the terms of this Agreement; and provided
further that the Sponsor is a third party beneficiary of this Agreement and
shall have the right to enforce the provisions hereof.

7.6 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

7.7 Governing Law; Jurisdiction. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed therein. Any suit, action or
proceeding with respect to this Agreement, or any judgment entered by any court
in respect of any thereof, shall be brought in any court of competent
jurisdiction in the State of New York or the State of Delaware, and each of the
Company and the members of Executive’s Group hereby submits to the exclusive
jurisdiction of such courts for the purpose of any such suit, action, proceeding
or judgment. Each of the members of Executive’s Group and the Company hereby
irrevocably waives (i) any objections which it may now or hereafter have to the
laying of the venue of any suit, action or proceeding arising out of or relating
to this Agreement brought in any court of competent jurisdiction in the State of
Delaware or the State of New York, (ii) any claim that any such suit, action or
proceeding brought in any such court has been brought in any inconvenient forum
and (iii) any right to a jury trial.

7.8 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered by hand or overnight
courier or three postal delivery days after it has been mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below in this Agreement, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.

(a) If to the Company:

Apria Holdings LLC

c/o Apria Healthcare Group Inc.

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: General Counsel

 

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with a copy (which shall not constitute notice) to:

The Blackstone Group

345 Park Avenue

New York, NY 10154

Attention: Neil P. Simpkins

and

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017-3954

Attention: Gregory T. Grogan

If to Executive:

To the most recent address of Executive set forth in the personnel records of
the Company.

with a copy (which shall not constitute notice) to:

Finck & Dadras LLP

100 Spear Street, Suite 700

San Francisco, CA 94105

Attention: Kevin W. Finck

7.9 Integration. This Agreement and the documents referred to herein (including
referred to on the Executive Master Signature Page) or delivered pursuant hereto
which form a part hereof contain the entire understanding of the parties with
respect to the subject matter hereof and thereof. There are no restrictions,
agreements, promises, representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth
herein and therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

7.10 Counterparts. This Agreement may be executed in separate counterparts, and
by different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

 

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7.11 Injunctive Relief. The Company, Executive and Executive’s Permitted
Transferees each acknowledges and agrees that a violation of any of the terms of
this Agreement will cause the Company, Executive or Executive’s Permitted
Transferees, as the case may be, irreparable injury for which adequate remedy at
law is not available. Accordingly, it is agreed that the Company, Executive or
Executive’s Permitted Transferees may seek an injunction, restraining order or
other equitable relief to prevent breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof in any court of
competent jurisdiction in the United States or any state thereof, in addition to
any other remedy to which it may be entitled at law or equity.

7.12 Rights Cumulative; Waiver. The rights and remedies of Executive and the
Company under this Agreement shall be cumulative and not exclusive of any rights
or remedies which either would otherwise have hereunder or at law or in equity
or by statute, and no failure or delay by either party in exercising any right
or remedy shall impair any such right or remedy or operate as a waiver of such
right or remedy, nor shall any single or partial exercise of any power or right
preclude such party’s other or further exercise or the exercise of any other
power or right. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any preceding or
succeeding breach and no failure by either party to exercise any right or
privilege hereunder shall be deemed a waiver of such party’s rights or
privileges hereunder or shall be deemed a waiver of such party’s rights to
exercise the same at any subsequent time or times hereunder.

7.13 Inconsistent Terms Superseded. The Company and Executive further agree that
all terms and conditions of this Agreement shall control over and supersede any
and all inconsistent terms and/or conditions of the Securityholders Agreement,
the LLC Agreement, and/or any other agreement to which the Company and/or
Executive is/are a party that relates to the subject matter hereof.

*    *    *    *    *

 

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*    *    *    *    *

This Subscription Agreement between the Company and the Executive named on the
Executive Master Signature Page hereto is dated and executed as of the date set
forth on such Executive Master Signature Page.

*    *    *    *    *

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SCHEDULE I

Vesting

All Class B Units initially will be Unvested Units. Subject to Executive’s
continued employment on each vesting date, Class B Units will become Vested
Units as follows:

 

  •  

20% of the Class B Units will become Vested Units the first anniversary of the
Closing Date; and

 

  •  

an incremental 5% of the Class B Units will become Vested Units on each
succeeding three-month period thereafter for four years;

Notwithstanding the foregoing, immediately prior to, and following, the
occurrence (prior to the Termination Date) of a Change of Control in which
Blackstone ceases to control (directly, or indirectly through one or more
intermediaries or contractual counterparties) the entity that employs Executive,
all of the Class B Units that are Unvested Units shall become Vested Units.

Any Unvested Units on a Termination Date shall be immediately forfeited by
Executive (or, to the extent a forfeiture is not permissible, such Unvested
Units shall be subject to the Call Option in Section 4.2(a) with the purchase
price per Unvested Unit equal to the lesser of (A) Fair Market Value thereof
(measured as of the Valuation Date) and (B) Cost).

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Appendix A

Restrictive Covenants

 

1. Non-Competition.

(a) Executive acknowledges and recognizes the highly competitive nature of the
businesses of the Company and its affiliates and accordingly agrees as follows:

(i) Executive will not, within twenty-four months following the termination of
Executive’s employment with Company or its subsidiaries (the “Post-Termination
Period”) or during the period of Executive’s employment with the Company or its
subsidiaries (collectively with the Post-Termination Period, the “Restricted
Period”), accept an employment or consulting relationship (or own or have any
financial interest in), directly or indirectly, with any entity which derives at
least 10% of its revenue from engaging in the business of home respiratory
therapy, home infusion therapy, and home medical equipment that is competitive
with the Company and its Subsidiaries within the United States (a “Competitive
Business”).

(ii) During the Restricted Period, Executive will not initiate or respond to
communications with any of the employees of the Company or its subsidiaries who
earned annually $50,000 or more as a Company or subsidiary employee during the
twelve-month period prior to the termination of such employee’s employment with
the Company or subsidiary, for the purpose of soliciting such employee, or
facilitating the hiring of any such employee, to work for any other business,
individual, partnership, firm, corporation, or other entity.

(iii) During the Restricted Period, Executive will not influence or attempt to
influence customers of the Company or its subsidiaries or any of its present or
future subsidiaries or affiliates, either directly or indirectly, to divert
their business to any individual, partnership, firm, corporation or other entity
then in competition with the business of the Company or any subsidiary or
affiliate of the Company.

(iv) During the Restricted Period, Executive will not, other than as required by
law or by order of a court or other competent authority, make or publish, or
cause any other person to make or publish, any statement that is disparaging or
that reflects negatively upon the Company or its affiliates, or that is or
reasonably would be expected to be damaging to the reputation of the Company or
any subsidiary or affiliate of the Company.

Notwithstanding anything to the contrary in this Agreement, Executive may,
directly or indirectly own, solely as an investment, securities of any person
engaged in a Competitive Business which are publicly traded on a national or
regional stock exchange or on the over-the-counter market if Executive (i) is
not a controlling person of, or a member of a group which controls, such person
and (ii) does not, directly or indirectly, own 5% or more of any class of
securities of such person.

 

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(b) It is expressly understood and agreed that although Executive and the
Company consider the restrictions contained in this Appendix A to be reasonable,
if a final judicial determination is made by a court of competent jurisdiction,
that the time or territory or any other restriction contained in this Appendix A
is an unenforceable restriction against Executive, the provisions of this
Appendix A shall not be rendered void but shall be deemed amended to apply as to
such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this Agreement
is unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

(c) The period of time during which the provisions of this Appendix A shall be
in effect shall be extended by the length of time during which Executive is in
breach of the terms hereof as determined by any court of competent jurisdiction
on the Company’s application for injunctive relief.

 

2. Confidentiality.

(a) Executive will not at any time (whether during or after Executive’s
employment with the Company) (x) retain or use for the benefit, purposes or
account of Executive or any other person; or (y) disclose, divulge, reveal,
communicate, share, transfer or provide access to any person outside the Company
(other than its professional advisers who are bound by confidentiality
obligations), any non-public, proprietary or confidential information —
including without limitation trade secrets, know-how, research and development,
software, databases, inventions, processes, formulae, technology, designs and
other intellectual property, information concerning finances, investments,
profits, pricing, costs, products, services, vendors, customers, clients,
partners, investors, personnel, compensation, recruiting, training, advertising,
sales, marketing, promotions, government and regulatory activities and approvals
— concerning the past, current or future business, activities and operations of
the Company, its subsidiaries or affiliates and/or any third party that has
disclosed or provided any of same to the Company on a confidential basis
(“Confidential Information”) without the prior written authorization of the
Board.

(b) “Confidential Information” shall not include any information that is (a) a
matter of public knowledge; (b) is independently developed by a person not a
party to this Agreement without the use, directly or indirectly, of Company
information; (c) was in Executive’s possession prior to providing services for
the Company, provided that said information was not obtained from the Company;
(d) is information of a general nature that could reasonably be acquired by
Executive if employed by a similar business as Company; (e) is obtained by
Executive from a third party not subject to any confidentiality obligation to
the Company; or (f) is required to be disclosed by law or the order of any court
or governmental

 

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agency, or in any litigation or similar proceeding; provided that prior to
making any such required disclosure, Executive shall notify the Company in
sufficient time to permit the Company to seek an appropriate protective order.

(c) Except as required by law, Executive will not disclose to anyone, other than
Executive’s immediate family and legal or financial advisors, the existence or
contents of this Agreement; provided, that Executive may disclose to any
prospective future employer the notice provisions of this Appendix A provided
they agree to maintain the confidentiality of such terms.

(d) Upon termination of Executive’s employment with the Company for any reason,
Executive shall (x) cease and not thereafter commence use of any Confidential
Information or intellectual property (including without limitation, any patent,
invention, copyright, trade secret, trademark, trade name, logo, domain name or
other source indicator) owned or used by the Company, its subsidiaries or
affiliates; (y) immediately destroy, delete, or return to the Company, at the
Company’s option, all originals and copies in any form or medium (including
memoranda, books, papers, plans, computer files, letters and other data) in
Executive’s possession or control (including any of the foregoing stored or
located in Executive’s office, home, laptop or other computer, whether or not
Company property) that contain Confidential Information or otherwise relate to
the business of the Company, its affiliates and subsidiaries, except that
Executive may retain only those portions of any personal notes, notebooks and
diaries that do not contain any Confidential Information and Executive’s rolodex
(or other physical or electronic address book); and (z) fully cooperate with the
Company regarding the delivery or destruction of any other Confidential
Information not within Executive’s possession or control of which Executive is
or becomes aware. Notwithstanding the foregoing, Executive may retain
Executive’s rolodex and similar address books. To the extent that Executive is
provided with a cell phone number by the Company during employment, the Company
shall cooperate with Executive in transferring such cell phone number to
Executive’s individual name following termination.

(e) The provisions of Appendix A shall survive the termination of Executive’s
employment for any reason.

 

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