Exhibit 2.1
 CONFIDENTIAL
EXECUTION COPY
    Agreement and Plan of Merger
 among
 Apria Healthcare Group Inc.,
 Sky Acquisition LLC
 and
 Sky Merger Sub Corporation
 Dated as of June 18, 2008




---



##### 



TABLE OF CONTENTS
 PageARTICLE I DEFINITIONS
    
    
    1Section 1.1
    
    Usage
    
    
    1Section 1.2
    
    Certain Definitions
    
    
    1ARTICLE II THE MERGER
    
    
    10Section 2.1
    
    The Merger
    
    
    10Section 2.2
    
    Effective Time
    
    
    10Section 2.3
    
    Closing of the Merger
    
    
    10Section 2.4
    
    Effects of the Merger
    
    
    11Section 2.5
    
    Certificate of Incorporation and Bylaws
    
    
    11Section 2.6
    
    Board of Directors of the Surviving Corporation
    
    
    11Section 2.7
    
    Officers of the Surviving Corporation
    
    
    11Section 2.8
    
    Subsequent Actions
    
    
    11Section 2.9
    
    Conversion of Capital Stock
    
    
    12Section 2.10
    
    Exchange of Certificates
    
    
    12Section 2.11
    
    Stock Options
    
    
    15Section 2.12
    
    Appraisal Rights
    
    
    15Section 2.13
    
    Withholding Rights
    
    
    16Section 2.14
    
    Adjustments
    
    
    16ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
    
    
    16Section 3.1
    
    Organization and Standing
    
    
    16Section 3.2
    
    Subsidiaries
    
    
    17Section 3.3
    
    Authorization
    
    
    17Section 3.4
    
    Capitalization
    
    
    18Section 3.5
    
    Non-contravention; Required Consents
    
    
    19Section 3.6
    
    SEC Reports
    
    
    20Section 3.7
    
    Financial Statements
    
    
    20Section 3.8
    
    Proxy Statementve
    
    
    21Section 3.9
    
    No Undisclosed Liabilities
    
    
    21
 i




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##### 



TABLE
OF CONTENTS (continued)
 PageSection 3.10
    
    Absence of Certain Changes
    
    
    21Section 3.11
    
    Material Contracts
    
    
    22Section 3.12
    
    Compliance with Laws
    
    
    24Section 3.13
    
    Litigation
    
    
    24Section 3.14
    
    Taxes
    
    
    24Section 3.15
    
    Environmental Matters
    
    
    25Section 3.16
    
    Employee Benefit Plans
    
    
    26Section 3.17
    
    Labor Matters
    
    
    27Section 3.18
    
    Real Property
    
    
    28Section 3.19
    
    Assets; Personal Property
    
    
    28Section 3.20
    
    Intellectual Property
    
    
    28Section 3.21
    
    Insurance
    
    
    29Section 3.22
    
    Related Party Transactions
    
    
    30Section 3.23
    
    Vote Required
    
    
    30Section 3.24
    
    Brokers
    
    
    30Section 3.25
    
    Opinion of Financial Advisor
    
    
    30Section 3.26
    
    Takeover Laws
    
    
    30Section 3.27
    
    Health Care Matters
    
    
    30Section 3.28
    
    Disclaimer of Other Representations and Warranties
    
    
    32ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB
    
    
    32Section 4.1
    
    Organization
    
    
    32Section 4.2
    
    Authorization
    
    
    33Section 4.3
    
    Non-contravention; Required Consents
    
    
    33Section 4.4
    
    Information
    
    
    34Section 4.5
    
    Merger Sub; No Prior Activities
    
    
    34Section 4.6
    
    Compliance with Law
    
    
    34Section 4.7
    
    Litigation
    
    
    34Section 4.8
    
    Financing
    
    
    34Section 4.9
    
    Guarantee
    
    
    35
 ii




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##### 



TABLE
OF CONTENTS (continued)
 PageSection 4.10
    
    Solvency.
    
    
    35Section 4.11
    
    Ownership of Company Capital Stock
    
    
    36Section 4.12
    
    Brokers
    
    
    36Section 4.13
    
    No Additional Representations;
Disclaimer Regarding Estimates and Projections
    
    
    36ARTICLE V COVENANTS
    
    
    37Section 5.1
    
    Conduct of Business by the Company
    
    
    37Section 5.2
    
    Company Stockholders Meeting; Proxy Statement
    
    
    41Section 5.3
    
    Acquisition Proposals
    
    
    42Section 5.4
    
    Transfer Taxes
    
    
    44Section 5.5
    
    Access to Information
    
    
    45Section 5.6
    
    Governmental Filings
    
    
    45Section 5.7
    
    Approvals and Consents
    
    
    47Section 5.8
    
    Public Announcements
    
    
    47Section 5.9
    
    Indemnification; Insurance
    
    
    47Section 5.10
    
    Notification of Certain Matters
    
    
    48Section 5.11
    
    Obligations of Merger Sub; Voting of Shares
    
    
    49Section 5.12
    
    Reasonable Efforts
    
    
    49Section 5.13
    
    Rule 16b-3
    
    
    49Section 5.14
    
    Director Resignations
    
    
    49Section 5.15
    
    Employment and Employee Benefits Matters; Other Plans
    
    
    49Section 5.16
    
    Financing Efforts
    
    
    50Section 5.17
    
    Certain Employment and Severance Agreements
    
    
    54ARTICLE VI CONDITIONS TO THE MERGER
    
    
    54Section 6.1
    
    Conditions to Each Partys Obligations to Effect the Merger
    
    
    54Section 6.2
    
    Conditions to the Obligations of the Company
    
    
    54Section 6.3
    
    Conditions to the Obligations of Buyer and Merger Sub
    
    
    55ARTICLE VII TERMINATION
    
    
    55Section 7.1
    
    Termination
    
    
    55
 iii




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##### 



TABLE
OF CONTENTS (continued)
 PageSection 7.2
    
    Effect of Termination
    
    
    57ARTICLE VIII MISCELLANEOUS
    
    
    59Section 8.1
    
    Nonsurvival of Representations and Warranties
    
    
    59Section 8.2
    
    Notices
    
    
    59Section 8.3
    
    Expenses
    
    
    60Section 8.4
    
    Disclosure Generally
    
    
    60Section 8.5
    
    Personal Liability
    
    
    60Section 8.6
    
    Amendment
    
    
    60Section 8.7
    
    Extension; Waiver
    
    
    60Section 8.8
    
    Binding Effect; Assignment
    
    
    61Section 8.9
    
    Governing Law
    
    
    61Section 8.10
    
    Jurisdiction
    
    
    61Section 8.11
    
    Specific Performance
    
    
    61Section 8.12
    
    Severability
    
    
    62Section 8.13
    
    Descriptive Headings
    
    
    62Section 8.14
    
    Counterparts
    
    
    62Section 8.15
    
    Entire Agreement
    
    
    62Section 8.16
    
    Facsimile Signature
    
    
    62Section 8.17
    
    No Presumption Against Drafting Party
    
    
    62
 iv




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##### 



TABLE OF DEFINED TERMS
 Term
    
    SectionAcceptable Confidentiality Agreement
    
    Section 1.2Acquisition Proposal
    
    Section 1.2Adverse Recommendation Change
    
    Section 5.3(c)Affiliate
    
    Section 1.2Agreement
    
    PreambleAlternative Acquisition Agreement
    
    Section 5.3(c)Antitrust Authority
    
    Section 5.6(b)Antitrust Prohibition
    
    Section 5.6(b)Balance Sheet
    
    Section 1.2Board of Directors
    
    Section 1.2Business Day
    
    Section 1.2Buyer
    
    PreambleBuyer Liability Limitation
    
    Section 7.2(d)Buyer Material Adverse Effect
    
    Section 1.2CCA
    
    Section 3.27(b)Certificate of Merger
    
    Section 2.2Certificates
    
    Section 2.10(b)Charter
    
    Section 2.5Closing
    
    Section 2.3Closing Date
    
    Section 2.3Code
    
    Section 1.2Commitment Letters
    
    Section 4.8Company
    
    PreambleCompany Disclosure Schedule
    
    Article IIICompany Employee
    
    Section 3.16(a)Company Material Adverse Effect
    
    Section 1.2Company Securities
    
    Section 3.4(b)Company Stockholders Meeting
    
    Section 5.2(b)Confidentiality Agreement
    
    Section 5.5(c)Consent
    
    Section 3.5(b)Continuing Employees
    
    Section 5.15(a)Contract
    
    Section 1.2Convertible Notes
    
    Section 1.2Credit Agreement
    
    Section 1.2Debt Commitment Letter
    
    Section 4.8Debt Financing
    
    Section 4.8DGCL
    
    Section 1.2Disclosed Conditions
    
    Section 4.8Dissenting Shares
    
    Section 2.12Effective Time
    
    Section 2.2Employee Plan
    
    Section 3.16(a)
 v




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##### 



TABLE OF DEFINED TERMS (continued)
 Term
    
    SectionEnvironmental Law
    
    Section 1.2Equity Commitment Letter
    
    Section 4.8Equity Financing
    
    Section 4.8ERISA
    
    Section 1.2ERISA Affiliate
    
    Section 3.16(a)Exchange Act
    
    Section 1.2Excluded Party
    
    Section 1.2FD&C Act
    
    Section 1.2Federal False Claims Act
    
    Section 1.2Federal Fraud Statutes
    
    Section 1.2Financing
    
    Section 4.8GAAP
    
    Section 1.2Governmental Entity
    
    Section 1.2Hazardous Substance
    
    Section 1.2Health Care Laws
    
    Section 1.2Health Insurance Portability and Accountability Act of 1996
    
    Section 1.2HSR Act
    
    Section 1.2Indemnified Persons
    
    Section 5.9(a)Intellectual Property
    
    Section 1.2knowledge of the Company
    
    Section 1.2Laws
    
    Section 1.2Leased Real Property
    
    Section 3.18(b)Leases
    
    Section 3.18(b)Legal Proceeding
    
    Section 1.2Lender
    
    Section 4.8Letter of Transmittal
    
    Section 2.10(b)Liabilities
    
    Section 1.2Lien
    
    Section 1.2Limited Guarantee
    
    Section 4.9Marketing Period
    
    Section 5.16(a)Material Contracts
    
    Section 3.11(a)Merger
    
    RecitalsMerger Sub
    
    PreambleNotice of Superior Proposal
    
    Section 5.3(d)OIG
    
    Section 3.27(b)Option Agreement
    
    Section 2.10(c)Option Consideration
    
    Section 2.11(a)Order
    
    Section 1.2Outside Date
    
    Section 7.1(b)(i)Paying Agent
    
    Section 2.10(a)Payment Fund
    
    Section 2.10(a)Per Common Share Amount
    
    Section 1.2Permits
    
    Section 3.27(c)
 vi




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##### 



TABLE OF DEFINED TERMS (continued)
 Term
    
    SectionPermitted Encumbrances
    
    Section 1.2Person
    
    Section 1.2Present Fair Saleable Value
    
    Section 4.10(c)Prior Service
    
    Section 5.15(b)Programs
    
    Section 3.27(d)Proxy Statement
    
    Section 3.8Registered Intellectual Property
    
    Section 1.2Representatives
    
    Section 5.3(a)Required Financial Information
    
    Section 5.16(b)Reverse Termination Fee
    
    Section 7.2(b)(iv)Sarbanes-Oxley Act
    
    Section 1.2SEC
    
    Section 1.2SEC Reports
    
    Section 3.6Securities Act
    
    Section 1.2Shares
    
    Section 1.2Short Term Liquidity Facility
    
    Section 1.2Significant Subsidiaries
    
    Section 3.1Solicitation Period End-Date
    
    Section 5.3(a)Solvency
    
    Section 4.10(b)Solvent
    
    Section 4.10(b)Sponsor
    
    Section 4.8Stark Statute
    
    Section 1.2Stock Option Plans
    
    Section 1.2Stock Options
    
    Section 1.2Stockholder Approval
    
    Section 3.3Subsidiary
    
    Section 1.2Superior Proposal
    
    Section 1.2Surviving Corporation
    
    RecitalsTax Returns
    
    Section 1.2Taxes
    
    Section 1.2Termination Fee
    
    Section 7.2(b)(i)Third Party
    
    Section 1.2Treasury Shares
    
    Section 1.2WARN
    
    Section 5.1(r)
 vii




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##### 



AGREEMENT AND PLAN OF MERGER
 Agreement Company Buyer Merger Sub
 RECITALS
 Merger Surviving Corporation
    ARTICLE I
DEFINITIONS
 Section 1.1 Usage Article Section
 Section 1.2 Certain Definitions Section 1.2
 Acceptable Confidentiality Agreement




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##### 



provided Section 5.3
 Acquisition Proposal
 Adverse Recommendation Change Section
5.3(c)
 Affiliate
 Agreement
 Alternative Acquisition Agreement Section
5.3(c)
 Antitrust Authority Section 5.6(b)
 Antitrust Prohibition Section 5.6(b)
 Balance Sheet
 Board of Directors
 Business Day
 Buyer
 Buyer Liability Limitation Section 7.2(d).
 2




---



##### 



Buyer Material Adverse Effect
 CCA Section 3.27(b)
 Certificate of Merger Section 2.2
 Certificates Section 2.10(b)
 Charter Section 2.5
 Closing Section 2.3
 Closing Date Section 2.3
 Code
 Commitment Letters Section 4.8
 Company
 Company Disclosure Schedule Article III
 Company Employee Section 3.16(a)
 Company Material Adverse Effect Sections 3.5 Section 3.5 Section 5.7
 3




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##### 



Company Securities Section 3.4(b)
 Company Stockholders Meeting Section
5.2(b)
 Confidentiality Agreement Section 5.5(c)
 Consent Section 3.5(b)
 Continuing Employees Section 5.15(a)
 Contract
 Convertible Notes
 Credit Agreement
 Debt Commitment Letter Section 4.8
 Debt Financing Section 4.8
 DGCL
 Disclosed Conditions Section 4.8
 Dissenting Shares Section 2.12
 Effective Time Section 2.2
 Employee Plan Section 3.16(a)
 Environmental Law et seq. et
 4




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##### 



seq. et seq. et seq. et seq.
 Equity Commitment Letter Section 4.8
 Equity Financing Section 4.8
 ERISA
 ERISA Affiliate Section 3.16(a)
 Exchange Act
 Excluded Party
 Financing Section 4.8
 GAAP
 Governmental Entity
 Hazardous Substance
 Health Care Laws FD&C Act Federal Fraud
Statutes
 5




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##### 



Stark Statute Federal False Claims Act Health Insurance Portability and Accountability Act of 1996
 HSR Act
 Indemnified Persons Section 5.9(a)
 Intellectual Property
 knowledge of the Company
 Laws
 Leased Real Property Section 3.18(b)
 Leases Section 3.18(b)
 6




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##### 



Legal Proceeding
 Lender Section 4.8
 Letter of Transmittal Section 2.10(b)
 Liabilities
 Lien
 Limited Guarantee Section 4.9
 Marketing Period Section 5.16(a)
 Material Contracts Section 3.11(a)
 Merger
 Merger Sub
 Notice of Superior Proposal Section 5.3(d)
 OIG Section 3.27(b)
 Option Agreement Section 2.10(c)
 Option Consideration Section 2.11(a)
 Order
 Outside Date Section 7.1(b)(i)
 Paying Agent Section 2.10(a)
 Payment Fund Section 2.10(a)
 Per Common Share Amount
 Permits Section 3.27(c)
 Permitted Encumbrances
 7




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##### 



Person
 Present Fair Saleable Value Section
4.10(c)
 Prior Service Section 5.15(b)
 Programs Section 3.27(d)
 Proxy Statement Section 3.8(a)
 Registered Intellectual Property
 Representatives Section 5.3(a)
 Required Financial Information Section
5.16(b)
 Reverse Termination Fee Section 7.2(b)(iv)
 Sarbanes-Oxley Act
 SEC
 SEC Reports Section 3.6
 Securities Act
 8




---



##### 



Shares
 Short Term Liquidity Facility
 Significant Subsidiaries Section 3.1
 Solicitation Period End-Date Section
5.3(a)
 Solvent Solvency Section 4.10(b)
 Sponsor Section 4.8
 Stock Option Plans
 Stock Options
 Stockholder Approval Section 3.3
 Subsidiary
 Superior Proposal
 Surviving Corporation
 Tax Returns
 9




---



##### 



Taxes
 Termination Fee Section 7.2(b)(i)
 Third Party
 Treasury Shares
 WARN Section 5.1(r)
 ARTICLE II
THE MERGER
 Section 2.1 The Merger
 Section 2.2 Effective Time Certificate of Merger Effective
Time
 Section 2.3 Closing of the Merger Section 7.1 Closing Closing Date provided however
 10




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##### 



Article VI
 Section 2.4 Effects of the Merger
 Section 2.5 Certificate of Incorporation and Bylaws Charter
 Section 2.6 Board of Directors of the Surviving Corporation
 Section 2.7 Officers of the Surviving Corporation
 Section 2.8 Subsequent Actions
 11




---



##### 



Section 2.9 Conversion of Capital Stock
 Shares Section 2.10
 Capital Stock of Merger Sub
 Cancellation of Treasury Shares; Buyer and Merger Sub Owned Stock
 Cancellation and Retirement of Shares Section
2.9(c) Section 2.9(c) Section
2.10
 Section 2.10 Exchange of Certificates.
 Paying Agent Paying Agent Section 2.9 Payment Fund
 12




---



##### 



Exchange Procedures for Shares Certificates Letter of Transmittal Section 2.13
 Exchange Procedures for Stock Options Option Agreement Section 2.11(a) Section 2.11(a)
 No Further Ownership Rights in Company Capital Stock Section 2.10
 13




---



##### 



Section 2.10
 Unregistered Transfer of Capital Stock
 Lost Certificates
 Investment of Payment Fund
 Termination of Payment Fund Section 2.11
 14




---



##### 



No Liability
 Section 2.11 Stock Options
 Option
Consideration
 Section 2.11
  Section 2.12 Appraisal Rights Dissenting Shares
 15




---



##### 



provided however Section
2.9(a)
 Section 2.13 Withholding Rights
 Section 2.14 Adjustments
 ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 Company Disclosure Schedule Section
8.4
 Section 3.1 Organization and Standing Significant Subsidiaries
 16




---



##### 



Section 3.2 Subsidiaries.
 Section 3.2(a) of the Company Disclosure Schedule Section 3.2(a) of the Company Disclosure Schedule
 Section 3.2(b) of the Company
Disclosure Schedule
 Section 3.2(c) of the Company Disclosure Schedule
 Section 3.3 Authorization
 17




---



##### 



Stockholder
Approval
 Section 3.4 Capitalization.
 Section 3.4(b) of the Company Disclosure Schedule
 Section 3.4 Section 3.4(b) of the Company Disclosure Schedule Company Securities
 18




---



##### 



Section 3.4(b) the Company Disclosure
Schedule
 Section 3.4(c) of the Company Disclosure Schedule
 Section 3.5 Non-contravention; Required Consents.
 Section
3.5(a)(ii) of the Company Disclosure Schedule Section 3.5(b)
 Consent
 19




---



##### 



Section
3.5(b) of the Company Disclosure Schedule
 Section 3.6 SEC Reports Section 3.6 of the Company Disclosure Schedule SEC Reports
 Section 3.7 Financial Statements
 20




---



##### 



Section 3.8 Proxy Statement. Proxy Statement Section 4.4
 Section 3.9 No Undisclosed Liabilities Section 3.9 of the Company Disclosure
Schedule
 Section 3.10 Absence of Certain Changes Section 5.1 Section 6.3(ii)
 21




---



##### 



Section 3.10(d) of the Company Disclosure Schedule
 Section 5.1
 Section 3.11 Material Contracts
 Section 3.11 of the Company Disclosure Schedule Material Contracts
      22




---



##### 



Section 3.22 of the Company Disclosure
Schedule
   23




---



##### 



Section 3.12 Compliance with Laws Section 3.12 of the Company
Disclosure Schedule Section 3.12 Section 3.6 Section 3.8 Section 3.14 Section 3.15 Section 3.16 Section 3.27
 Section 3.13 Litigation. Section 3.13 of the Company Disclosure
Schedule Section 3.13 of the
Company Disclosure Schedule
 Section 3.14 Taxes. Section 3.14 of the Company Disclosure
Schedule
    24




---



##### 



Section 3.15 Environmental Matters.
 25




---



##### 



Section 3.16 Employee Benefit Plans.
 Section 3.16(a) of the Company Disclosure Schedule Employee Plan Company Employee ERISA
Affiliate
  26




---



##### 



Section 3.17 Labor Matters. Section 3.17 of the Company Disclosure
Schedule
 27




---



##### 



Section 3.18 Real Property.
 Owned Real Property
 Leased Real Property Section 3.18 of the Company Disclosure
Schedule Leases Leased Real Property
 Section 3.19 Assets; Personal Property. Section 3.19 of the
Company Disclosure Schedule
 Section 3.20 Intellectual Property.
  28




---



##### 



Section 3.20 of the Company Disclosure
Schedule Section 3.20 of the Company Disclosure Schedule Section 3.20 of the Company Disclosure Schedule
    Section 3.21 Insurance. Section 3.21 of the Company Disclosure Schedule
 29




---



##### 



Section 3.22 Related Party Transactions. Section 3.22 of the
Company Disclosure Schedule
 Section 3.23 Vote Required.
 Section 3.24 Brokers.
 Section 3.25 Opinion of Financial Advisor.
 Section 3.26 Takeover Laws.
 Section 3.27 Health Care Matters. Section 3.27 of the Companys
Disclosure Schedule
 30




---



##### 



CCA OIG
 Permits
 Programs
  31




---



##### 



Section 3.27 of the Company Disclosure Schedule
  Section 3.28 Disclaimer of Other Representations and Warranties. Article III Section 6.3
 ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUB
  Section 4.1 Organization.
 32




---



##### 



Section 4.2 Authorization.
 Section 4.3 Non-contravention; Required Consents.
 Section 4.3(b)
  33




---



##### 



Section 4.4 Information.
 Section 4.5 Merger Sub; No Prior Activities.
 Section 4.6 Compliance with Law.
 Section 4.7 Litigation.
 Section 4.8 Financing. Equity Commitment Letter Sponsor Equity
Financing Debt Commitment Letter Commitment Letters Lender Lenders Debt Financing Financing
 34




---



##### 



Disclosed Conditions Section 3.4 Section 3.5(a)(ii) of the Company
Disclosure Schedule
 Section 4.9 Guarantee. Limited
Guarantee
 Section 4.10 Solvency.
  35




---



##### 



Solvent Solvency
 Present Fair Saleable Value
 Section 4.11 Ownership of Company Capital Stock.
 Section 4.12 Brokers.
 Section 4.13 No Additional Representations; Disclaimer Regarding Estimates and Projections.
 36




---



##### 



Section 6.3
 ARTICLE V
COVENANTS
 Section 5.1 Conduct of Business by the Company. Section 5.1 of the Company Disclosure Schedule Article VII Section 5.1 of the Company Disclosure Schedule
  Section 3.4(b) of
the Company Disclosure Schedule
  37




---



##### 



Section 5.1
  Section 5.1(g) of the Company
Disclosure Schedule
 Section 5.1 of the Company Disclosure Schedule
 38




---



##### 



Section 5.1 of the Company Disclosure Schedule provided
   39




---



##### 



WARN
    40




---



##### 



Section 5.2 Company Stockholders Meeting; Proxy Statement.
 provided that
 Company Stockholders Meeting Section 5.3 Section 5.3
 41




---



##### 



Section 5.3 Acquisition Proposals.
 Solicitation Period
End-Date Representatives provided
 Section 5.3 Section 5.3(c) Article VII, provided however Section 5.3(b) Section 5.3(c) provided that
 42




---



##### 



Section 5.3(b)
 Section 5.3(c) Section
5.3(c) Adverse Recommendation Change Alternative Acquisition Agreement Sections 5.3(d) 7.2
 Section 5.3(b) Section 5.3(c) Notice
of Superior Proposal
 43




---



##### 



Section
5.3(d)
 Section 5.3 provided that Section 5.3(c) Section 5.3(c) Section
7.1(d)(i) Section 5.3(e)
 Article VII
 Section 5.4 Transfer Taxes.
 44




---



##### 



Section 5.5 Access to Information.
 provided
 Section 5.5
 Confidentiality Agreement
 Section 5.6 Governmental Filings.
  45




---



##### 



Section 5.6(a)
 Antitrust Authority Antitrust
Prohibition
  46




---



##### 



Section 5.6(c) Section 5.6
 Section 5.7 Approvals and Consents. Section 5.6 (b) Section 3.5(b) of the Company Disclosure Schedule Section 3.5(b)
 Section 5.8 Public Announcements.
 Section 5.9 Indemnification; Insurance.
 Indemnified Persons
 47




---



##### 



Section 5.9 Section 5.9 Section 5.9 Section 5.9
 provided that Section 5.9(b)
 Section 5.9
 Section 5.10 Notification of Certain Matters. Article VI provided however Section 5.10
 48




---



##### 



Section 5.11 Obligations of Merger Sub; Voting of Shares.
 Section 5.12 Reasonable Efforts.
 Section 5.13 Rule 16b-3.
 Section 5.14 Director Resignations.
 Section 5.15 Employment and Employee Benefits Matters; Other Plans.
 Continuing Employees provided however
 49




---



##### 



Prior Service
 Section 5.15
 Section 5.16 Financing Efforts.
  50




---



##### 



Marketing
Period Section 5.16(b) Section 6.1 Section 6.3 Section 6.1 Section 6.3
 51




---



##### 



Section 4.10 provided however
 52




---



##### 



Required Financial Information provided further
 53




---



##### 



Section 5.17 Certain Employment and Severance Agreements.
 ARTICLE VI
CONDITIONS TO THE MERGER
 Section 6.1 Conditions to Each Partys Obligations to Effect the Merger.
    Section 6.2 Conditions to the Obligations of the Company.
 54




---



##### 



Section 6.3 Conditions to the Obligations of Buyer and Merger Sub.
 ARTICLE VII
TERMINATION
 Section 7.1 Termination.
   Outside Date provided Section
7.1(b)(i)
  55




---



##### 



provided Section
7.1(b)(ii)(B)
   Section 5.3(c) Section 7.2(b)(ii) Section 7.2(b)
 Section 6.1 Section 6.2
 Section 6.1 Section 6.2
   Section 6.1 Section 6.3
  56




---



##### 



Section
6.1 Section 6.3
 Section 7.1 Section 7.1(a) Section 8.2
 Section 7.2 Effect of Termination.
 Section 7.1 Section
7.2(b) Section 7.2(d) Section 7.2 Section 5.5(c) Article VIII Section 7.1
  Section 7.1(b)(iii) Section 7.1(d)(ii) Section 7.1(d)(iii) Termination Fee provided Section 7.2(b)(i) Section
7.1(b)(iii) Section 7.2(b)(iii)
 Section 7.1(c)(i) Section
7.1(d)(i) Section 7.1(c)(i) Section 7.1(d)(i)
 Section 7.1(b)(iii) Section
7.1(b)(iii
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Section 7.1(c)(ii) Section 7.1(c)(iii) Section 7.2(a) Reverse Termination Fee
 provided however Sections 7.1(c)(i) 7.1(d)(i) Section 5.3
  Section 7.1(b)(iii) Section 7.1(c)(i) Section
7.1(d)(i)
  Section 7.2(a)(ii) Section 7.2(b)(iv) Buyer
Liability Limitation
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##### 



ARTICLE VIII
MISCELLANEOUS
 Section 8.1 Nonsurvival of Representations and Warranties. Section 8.1
 Section 8.2 Notices.
 if to Buyer or Merger Sub to:
    
    Sky Acquisition LLC
c/o The Blackstone Group
345 Park Avenue
New York, New York 10154
Attention: Neil P. Simpkins
Facsimile: (212) 583-5712with copies (which shall not 
constitute notice) to:
    
    Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: William R. Dougherty
Facsimile: (212) 455-2502if to the Company to:
    
    Apria Healthcare Group Inc.
26220 Enterprise Court
Lake Forest, California 92630
Attention: General Counsel
Facsimile: (949) 639-4332with a copy (which shall not 
constitute notice) to:
    
    Gibson Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, CA 90071
Attention: Jeffrey A. Le Sage, Esq.
Facsimile: (213) 229-6504
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Munger, Tolles & Olson LLP
355 South Grand Avenue
Los Angeles, CA 90071-1560
Attention: Robert E. Denham, Esq.
Facsimile: (213) 683-5104
 Section 8.3 Expenses.
 Section 8.4 Disclosure Generally. Section 5.1 of the Company
Disclosure Schedule
 Section 8.5 Personal Liability.
 Section 8.6 Amendment. provided however
 Section 8.7 Extension; Waiver. Section 8.6 Section 7.2(d) Section 8.11
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Section 8.8 Binding Effect; Assignment. Sections 2.10(i) 5.9 Section 8.8 provided provided further
 Section 8.9 Governing Law.
 Section 8.10 Jurisdiction. Section 8.2 Section
8.10 Section 8.10
 Section 8.11 Specific Performance.
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##### 



Section 7.1 Section 7.2(d)
 Section 8.12 Severability.
 Section 8.13 Descriptive Headings.
 Section 8.14 Counterparts.
 Section 8.15 Entire Agreement.
 Section 8.16 Facsimile Signature.
 Section 8.17 No Presumption Against Drafting Party.
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##### 



SKY ACQUISITION LLCBy:
    /s/  Neil P. SimpkinsName:
    Neil P. SimpkinsTitle:
    PresidentSKY MERGER SUB CORPORATIONBy:
    /s/  Neil P. SimpkinsName:
    Neil P. SimpkinsTitle:
    PresidentAPRIA HEALTHCARE GROUP INC.By:
    /s/  Lawrence M. HigbyName:
    Lawrence M. HigbyTitle:
    Chief Executive Officer