EXHIBIT 10.3

AMENDED AND RESTATEDEMPLOYMENT AGREEMENT

This
Amended and Restated Employment Agreement (the Agreement) is entered into by
and between Apria Healthcare Group Inc. (the Company) and Lawrence
M. Higby (the Executive) effective as of May 5, 2006.

I.    
          EMPLOYMENT.

The
Company hereby employs the Executive and the Executive hereby accepts such employment,
upon the terms and conditions hereinafter set forth. The term of the employment will
continue until the termination of the Executives employment by reason of his written
resignation, termination by the Company for any reason by written notice of termination,
or death. The Executives employment may be terminated at any time by written notice
from the Executive to the Company or from the Company to the Executive, in the manner
provided in Section XVIII hereof.

II.    
          DUTIES.

A.       
          The Executive shall serve during the course of his employment as the
          Chief Executive Officer of the Company, reporting to the Board of Directors.
          The Executive shall be the senior executive officer of the Company, with the
          authority to supervise and direct the other officers and employees of the
          Company, and with authority from time to time to delegate to other officers such
          executive and other powers with duties as he shall deem appropriate, subject in
          all respects to the authority of the Board.

B.       
          The Executive agrees to devote substantially all of his time, energy and ability
          to the business of the Company. Nothing herein shall prevent the Executive, upon
          approval of the Board of Directors of the Company, from serving as a director or
          trustee of other corporations or businesses which are not in competition with
          the business of the Company or in competition with any present or future
          affiliate of the Company. Nothing herein shall prevent the Executive from
          investing in real estate for his own account or from becoming a partner or a
          stockholder in any corporation, partnership or other venture not in competition
          with the business of the Company or in competition with any present or future
          affiliate of the Company.

III.    
          COMPENSATION.

A.       
          Salary. The Company will pay to the Executive a base salary at the rate
          of $755,000 per year. Such salary shall be payable in periodic installments in
          accordance with the Companys customary practices. Amounts payable shall be
          reduced by standard withholdings and other authorized deductions. The
          Executives salary may be increased from time to time at the discretion of
          the Companys Board of Directors or its Compensation Committee. Annual
          increases, if granted, will normally be effective as of January 1 of each year.

B.       
          Annual Bonus, Incentive, Savings and Retirement Plans. The Executive
          shall be entitled to participate in all annual bonus, incentive, savings and
          retirement plans, practices, policies and programs applicable generally to other
          executives of the Company, including without limitation the Companys the
          Executive Bonus Planand the Companys 401(k) Savings Plan. The
          parties to this Agreement recognize that such plans may be amended and/or
          terminated by the Company at any time without the consent of the Executive in
          accordance with the terms of such plans.

C.       
          Welfare Benefit Plans. The Executive and/or his family, as the case may
          be, shall be eligible for participation in and shall receive all benefits under
          welfare benefit plans, practices, policies and programs provided by the Company
          (including, without limitation, medical, prescription, dental, disability,
          salary continuance, group life, accidental death and travel accident insurance
          plans and programs) to the extent applicable generally to other executives of
          the Company. The Company reserves the right to modify, suspend or discontinue
          any and all of the above plans, practices, policies and programs at any time
          without recourse by the Executive so long as such action is taken generally with
          respect to other similarly situated peer executivesand does not single
          out the Executive.

D.       
          Expenses. The Executive shall be entitled to receive prompt reimbursement
          for all reasonable employment expenses incurred by him in accordance with the
          policies, practices and procedures as in effect generally with respect to other
          executivesof the Company.

E.       
          Fringe Benefits. The Executive shall be entitled to fringe benefits,
          including without limitation (i) reasonable travel and entertainment expenses of
          the Executives spouse, on an actually incurred basis when necessary in
          connection with participation in Company events, and (ii) such other benefits in
          accordance with the plans, practices, programs and policies as may be in effect
          generally with respect to other executives of the Company.

F.       
          Vacation. The Executive shall be entitled to four weeks of paid vacation
          annually, to be available and prorated monthly during the term of this Agreement
          and otherwise to be consistent with the vacation policy and practice applicable
          to other executives of the Company.

IV.    
          TERMINATION.

A.       
  Death or Disability. The Executives employment shall terminate
  automatically upon the Executives death. If the Company determines in good
  faith that the Disability of the Executive has occurred (pursuant to the
  definition of Disability set forth below), it may give to the Executive written
  notice in accordance with Section XVIII of its intention to terminate the
  Executives employment. In such event, the Executives employment with
  the Company shall terminate effective on the 30th day after receipt of such
  notice by the Executive, provided that, within the 30 days after such receipt,
  the Executive shall not have returned to full-time performance of his duties.
  For purposes of this Agreement, Disability shall mean a physical or
  mental impairment which substantially limits a major life activity of the
  Executive and which renders the Executive unable to perform the essential
  functions of his position, even with reasonable accommodation which does not
  impose an undue hardship on the Company. The Company reserves the right, in good
  faith, to make the determination of Disability under this Agreement based upon
  information supplied by the Executive and/or his medical personnel, as well as
  information from medical personnel (or others) selected by the Company or its
  insurers.

B.       
    Cause. The Company may terminate the Executives employment for
   Cause. For purposes of this Agreement (except as set forth below),
   Cause shall mean that the Company, acting in good faith based upon
   the information then known to the Company, determines that the Executive has (i)
   engaged in or committed willful misconduct; (ii) engaged in or committed theft,
   fraud or other illegal conduct; (iii) refused or demonstrated an unwillingness
   to substantially perform his duties for a 30-day period after written demand for
   substantial performance that refers to this paragraph and is delivered by the
   Company that specifically identifies the manner in which the Company believes
   the Executive has not substantially performed his duties; (iv) refused or
   demonstrated an unwillingness to reasonably cooperate in good faith with any
   Company or government investigation or provide testimony therein (other than
   such failure resulting from the Executives disability); (v) engaged in or
   committed insubordination; (vi) engaged in or committed any willful act that is
   likely to and which does in fact have the effect of injuring the reputation or
   business of the Company; (vii) willfully violated his fiduciary duty or his duty
   of loyalty to the Company or the Companys Code of Ethical Business Conduct
   in any material respect; (viii) used alcohol or drugs (other than drugs
   prescribed to the Executive by a physician and used by the Executive for their
   intended purpose for which they had been prescribed) in a manner which
   materially and repeatedly interferes with the performance of his duties
   hereunder or which has the effect of materially injuring the reputation or
   business of the Company; or (ix) engaged in or committed a material breach
   of this Agreement for a 30-day period after written notification is delivered by
   the Company that specifically refers to this paragraph and identifies the manner
   in which the Company believes the Executive has materially breached this
   Agreement. For purposes of this paragraph, no act, or failure to act, on the
   Executives part shall be considered willful unless done or omitted to be
   done, by him not in good faith or without reasonable belief that his action or
   omission was in the best interest of the Company. Notwithstanding anything
   herein to the contrary, for purposes of any termination of employment that
   occurs within the period that (i) begins with the first to occur of
   (1) the initial public announcement of a Specified Change of Control (as
   defined below), or (2) the 90th day preceding a Specified Change of Control
   and (ii) ends two years following such Specified Change of Control,
   Cause shall instead mean only the occurrence of either or both of
   the following: (A) the Executives conviction for committing an act of
   fraud, embezzlement, theft, or other act constituting a felony (other than
   traffic related offenses or as a result of vicarious liability); or (B) the
   willful engaging by the Executive in misconduct that is significantly injurious
   to the Company. Notwithstanding the foregoing, the Executive shall not be deemed
   to have been terminated for Cause without delivery to the Executive of a notice
   of termination signed by the Companys Chairman of the Board stating that
   the Board of Directors of the Company has determined that the Executive has
   engaged in or committed conduct of the nature described in this paragraph, and
   specifying the particulars thereof in detail.

C.       
 Other than Cause or Death or Disability. The Executive or the Company may
   terminate the Executives employment at any time, without Cause, by giving
   the other party to this Agreement at least 30 days advance written notice of
   such termination, subject to the provisions of this Agreement.

D.       
 Obligations of the Company Upon Termination.

1.       
   Death or Disability. If the Executives employment is terminated by
   reason of the Executives death or Disability, this Agreement shall
   terminate without further obligations to the Executive or his legal
   representatives under this Agreement, other than for (a) payment of the sum of
   (i) the Executives base salary through the date of termination of
   employment to the extent not theretofore paid, plus (ii) any earned vacation
   pay, to the extent not theretofore paid (the sum of the amounts described in
   clauses (i) and (ii) shall be hereinafter referred to as the Accrued
   Obligations), which shall be paid to the Executive or his estate or
   beneficiary, as applicable, in a lump sum in cash within 30 days of the date of
   termination of employment; and (b) payment to the Executive or his estate or
   beneficiary, as applicable, any amounts due pursuant to the terms of any
   applicable welfare benefit plans.

2.       
  Cause. If the Executives employment is terminated by the Company
   for Cause, this Agreement shall terminate without further obligations to the
   Executive other than for the timely payment of the Accrued Obligations. If it is
   subsequently determined that the Company did not have Cause for termination
   under this Section IV-D-2, then the Companys decision to terminate shall
   be deemed to have been made under Section IV-D-3 and the amounts payable
   thereunder shall be the only amounts the Executive may receive for his
   termination.

3.       
   Other than Cause or Death or Disability.

|(a) |  | If, during the term of this Agreement, (i) the Company terminates the
                    Executives employment for other than Cause or death or Disability, or (ii)
                    the Executive terminates his employment hereunder with Good Reason (as defined
                    below), the Executives employment shall terminate and the Executive shall
                    be entitled to receive the following:
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | the Accrued Obligations (as defined in Section IV-D-1) as of the date of
               termination of employment; and
|--- |  | ----------------------------------------------------------------------------------------------------------------------

|(ii) |  | in exchange for the post-termination covenants provided in the Nondisclosure and
               Noncompetition Agreement attached hereto as Exhibit A (the
               Nondisclosure Agreement), the payments described in
               Section 3(b) of the Nondisclosure Agreement. Nothing in this Section
               IV-D-3(a) shall be deemed to create a presumption concerning the reason for the
               termination of the Executives employment.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Any
payment made pursuant to this Section IV-D-3(a) shall be reduced by all amounts required
to be withheld by applicable law, and shall only be made in exchange for a valid release
of all claims the Executive may have against the Company in the form attached hereto as
Exhibit B (which may be modified only to the extent necessary to reflect developments
in applicable law that would jeopardize enforceability of such release unless the
modifications are not made). Such payment shall constitute the sole and entire obligation
of the Company to provide any compensation or benefits to the Executive upon termination,
except for obligations under the Companys 401(k) Savings Plan, obligations pursuant
to the terms of any outstanding stock option agreements, the Companys obligation to
provide the benefits required by Section IV-D-3(c) below, and the Companys
obligations to make payments required to be made under any other incentive compensation
plan.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | The term Good Reason means (except as set forth below):
|--- |  | ---------------------------------------------------------

|(i) |  | the Executives annual base salary is reduced, except for a general
               one-time across-the board salary reduction not exceeding ten percent
               (10%) which is imposed simultaneously on all executive officers of the Company;
               or
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | the Company requires the Executive to be based at an office location which will
               result in an increase of more than thirty (30) miles in the Executives
               one-way commute; or
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) |  | if the Companys Board of Directors does not permit the Executive to
               continue to serve as the Chief Executive Officer with the responsibilities as
               described in Section II-A or another mutually acceptable senior executive
               position; or
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iv) |  | there shall occur a Change of Control of the Company and, at any
               time concurrent with or during the six-month period following such Change of
               Control, the Executive shall have sent to the Chairman of the Companys
               Board of Directors a written notice terminating his employment on a date
               specified in said notice. For purposes of this Agreement, the term Change
               of Control shall mean the occurrence of one of the following:
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) |  | 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 1934 Act) is,
               becomes or enters a contract to become, the beneficial owner, as
               such term is used in Rule 13d-3 promulgated under the 1934 Act, directly or
               indirectly, of securities representing twenty-five percent (25%) or more of the
               voting common stock of the Company;
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | all or substantially all of the business or assets of the Company are disposed
               of, or a contract is entered to dispose of all of the business of the Company
               pursuant to a merger, consolidation other transaction in which (a) the Company
               is not the surviving parent company or (b) the stockholders of the Company prior
               to the transaction do not continue to own at least sixty percent (60%) of the
               surviving parent company in substantially the same proportions as their
               ownership immediately prior to such transaction; or
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | the Company is materially or completely liquidated; or
|--- |  | ------------------------------------------------------

|(4) |  | any person (other than the Company) purchases any common stock of the Company in
               a tender or exchange offer with the intent, expressed or implied, of purchasing
               or otherwise acquiring control of the Company;
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | provided,
however, that Good Reason under the above clauses (i), (ii) and (iii)
shall cease to exist for an event on the 60th day following the earlier of the
Companys written notice of the change to the Executive or the Executives
becoming aware thereof, unless the Executive has given the Company written notice of
his/her objection thereto prior to such date.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Notwithstanding
anything herein to the contrary, for purposes of any termination of employment that occurs
within the period that (i) begins with the first to occur of (1) the initial
public announcement of a Specified Change of Control (as defined below), or (2) the
90th day preceding a Specified Change of Control and (ii) ends two years following
such Specified Change of Control, Good Reason shall instead mean, without the
Executives express written consent, the occurrence of any one or more of the
following:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | a material reduction in the nature, status or scope of the Executives
               authorities, duties, and/or responsibilities, (when such authorities, duties,
               and/or responsibilities are viewed in the aggregate) from their level in effect
               on the day immediately prior to the Specified Change of Control (provided,
               however, that neither of (A) a change in the Executives reporting
               relationships, nor (B) an adjustment in the nature of the Executives
               duties and responsibilities that in either case does not remove from him the
               authority with respect to the Companys functional area, employees or
               products and services that the Executive had immediately prior to such change or
               adjustment shall constitute Good Reason);
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | a reduction in the Executives base salary from its highest level in effect
               at any point in the three months preceding the Specified Change of Control or a
               significant reduction in the Executives aggregate incentive opportunities
               under the Companys short and/or long-term incentive programs, as such
               opportunities exist immediately prior to the Specified Change of Control;
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) |  | the failure of the Company to maintain the Executives relative level of
               coverage and accruals (as compared to other Company executives) under the
               Companys employee benefit and/or retirement plans, policies, practices, or
               arrangements in which the Executive participates immediately prior the Specified
               Change of Control (both in terms of the amount of benefits provided, and amounts
               accrued) (for this purpose, the Company may eliminate and/or modify existing
               programs and coverage levels without the Executives consent; provided,
               however, that the Executives level of coverage under all such programs
               must be at least as great as is provided to executives who have the same or
               lesser levels of reporting responsibilities within the Companys
               organization);
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iv) |  | the Executive is informed by the Company that his or her principal place of
               employment for the Company will be relocated to a location that will result in
               an increase of more than thirty (30) miles in the Executives one-way
               commute (as compared to the Executives one-way commute prior to the Change
               in Control);
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(v) |  | the Companys Board of Directors not permitting the Executive to continue
               to serve as the Chief Executive Officer with the responsibilities as described
               in Section II-A or another mutually acceptable senior executive position; or
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(vi) |  | at any time concurrent with or during the six-month period following the
               Specified Change of Control, the Executive sending to the Chairman of the
               Companys Board of Directors a written notice terminating his employment on
               a date specified in said notice.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
purposes of this Agreement, the term a Specified Change of Control shall be
any Change of Control that is specifically designated, in writing, by the Board of
Directors of the Company or Compensation Committee thereof prior to the consummation of
the Change of Control to be a Specified Change of Control.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)       

                     In the event of any termination of the Executives employment pursuant to
                    Section IV-D-3(a), the Company shall, for a period of one year following the
                    termination date, provide the Executive with appropriate office space in a
                    furnished office suite, including reasonable secretarial, telephone, copying and
                    delivery services. The Company shall not be required to spend more than a total
                    of $50,000 to provide this benefit to the Executive.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)       

                     In the event the Executive initiates arbitration pursuant to Section VI to
                    enforce his rights to any payments under this Section IV-D-3 (including but not
                    limited to payments under the Nondisclosure Agreement), or the Company seeks to
                    withhold or reduce any such payments for any reason, then:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | the burden of proving that the Executive is not entitled to such payments shall
               be on the Company;
|--- |  | -----------------------------------------------------------------------------------------------------------------

|(ii) |  | the Company shall pay all expenses incurred by the Executive in prosecuting or
               defending any such proceeding as they are incurred by the Executive in advance
               of the final disposition of such dispute, together with any tax liability
               incurred by the Executive in connection with the receipt of such amounts;
               provided, however, that the payment of such expenses incurred in
               advance of the final disposition of such proceeding shall be made only upon
               delivery to the Company of an undertaking, by or on behalf of the Executive, to
               repay all amounts so advanced to the extent the arbitrator in such proceeding so
               determines as provided in Section VI; and
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) |  | all such payments required under this Agreement (including but not limited to
               payments under the Nondisclosure Agreement) shall continue to be made on the
               dates provided herein without any offsets, claims or charges of any kind
               whatsoever being asserted by the Company, except in the event a final
               determination pursuant to the arbitration provisions of Section VI has been
               rendered and such determination provides that the Company is entitled to assert
               any such offset, claim or charge against the Executive.
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)       

                     No Mitigation or Offset. Notwithstanding anything herein to the
                    contrary, the amount of any payment or benefit provided for in this Section
                    IV-D-3 shall not be reduced, offset or subject to recovery by the Company or any
                    of its subsidiaries or affiliates by reason of any compensation earned by the
                    Executive as the result of employment by another employer after the
                    Executives employment with the Company terminates for any reason. In
                    addition, the Executive shall be under no obligation to seek other employment or
                    to take any other actions to mitigate the amounts payable under this Section
                    IV-D-3.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4.       
          Exclusive Remedy. The Executive agrees that the payments contemplated by
          this Agreement shall constitute the exclusive and sole remedy for any
          termination of his employment and the Executive covenants not to assert or
          pursue any other remedies, at law or in equity, with respect to any termination
          of employment.

V.    
          CERTAIN MODIFICATIONS TO NONDISCLOSURE AGREEMENT.

The
Nondisclosure Agreement provides for certain payments to the Executive if the Executive
agrees to refrain from taking certain actions within a specified period following a
termination of employment, including accepting an employment or consulting relationship
with a principal competitor of the Company. The Company and the Executive may, from time
to time (but no more often than once during any six (6)-month period and no later than the
occurrence of a Change of Control), propose to add or delete one or more names of
principal competitors to or from, as applicable, those identified in the Nondisclosure
Agreement by giving notice to the other party as specified in Section XVIII. Such addition
or deletion shall be made if such entity becomes or ceases to be, as applicable, a
principal competitor of the Company, provided that there shall be no more than three (3)
principal competitors of the Company identified on the Nondisclosure Agreement at any
given time. If no objection to such proposal is made within ten (10) business days
following the giving of notice thereof, such proposal shall be deemed accepted and the
Nondisclosure Agreement shall be modified accordingly. Any dispute concerning the
operation of this Section V shall be resolved in the manner specified in Section VI
hereof.

VI.    
ARBITRATION.

Any
dispute or controversy arising under or in connection with this Agreement or the
Executives employment by the Company shall be settled exclusively by arbitration,
conducted before a single neutral arbitrator in accordance with the American Arbitration
Associations National Rules for Resolution of Employment Disputes as then in effect.
Such arbitration shall be conducted in Orange County, California, and the arbitrator shall
be a resident of Orange County, California or of a county contiguous to Orange County,
California. Judgment may be entered on the arbitrators award in any court having
jurisdiction; provided, however, that the Company shall be entitled to seek a restraining
order or injunction in any court of competent jurisdiction to prevent any continuation of
any violation of the provisions of the Nondisclosure Agreement and the Executive hereby
consents that such restraining order or injunction may be granted without the necessity of
the Companys posting any bond, and provided, further, that the Executive shall be
entitled to seek specific performance of his right to be paid until the date of employment
termination during the pendency of any dispute or controversy arising under or in
connection with this Agreement. Any arbitration proceeding pertaining to this Agreement
shall be consolidated with any arbitration proceeding pertaining to the Nondisclosure
Agreement. The arbitrators order shall specify, based on the outcome of the
arbitration, whether the Executive shall repay any of the Executives expenses
theretofore paid by the Company pursuant to Section IV-D-3(d)(ii). The fees and expenses
of the arbitrator shall be borne by the Company.

VII.    
          REFRAINING FROM UNFAIR COMPETITION.

A.       
          Concurrently herewith, the Executive is entering into the Nondisclosure
          Agreement.

B.       
          The Company and the Executive hereby agree that the terms of the Nondisclosure
          Agreement are incorporated into this Agreement by this reference, and shall be a
          part hereof.

VIII.    
          EXCISE TAX.

A.       
  In the event that any amount or benefit that may be paid or otherwise provided
 to or in respect of the Executive by or on behalf of the Company or any
 affiliate, whether pursuant to this Agreement or otherwise (collectively,
 Covered Payments), is or may become subject to the tax imposed under
 Section 4999 of the Internal Revenue Code of 1986, as amended (the
 Code) (or any successor provision or any comparable provision of
 state, local or foreign law) (Excise Tax), the Company will pay to
 the Executive a Reimbursement Amount equal to the total of: (A) any
 Excise Tax on the Covered Payments, plus (B) any Federal, state, and local
 income taxes, employment and excise taxes (including the Excise Tax) on the
 Reimbursement Amount, plus (C) the product of any deductions disallowed for
 Federal, state or local income tax purposes because of the inclusion of the
 Reimbursement Amount in the Executives income multiplied by the
 Executives combined Federal, state, and local income tax rate for the
 calendar year in which the Reimbursement Amount is includible in the
 Executives taxable income, plus (D) any interest, penalties or additions
 to tax imposed under applicable law in connection with the Excise Tax or the
 Reimbursement Amount, plus (E) any reasonable out-of-pocket costs incurred by
 the Executive in connection with any of the foregoing. For purposes of this
 Section VIII-A, the Executive will be deemed to pay (1) Federal income
 taxes at the highest applicable marginal rate of Federal income taxation
 applicable to individuals for the calendar year in which the Reimbursement
 Amount is includible in the Executives taxable income and (2) any
 applicable state and local income taxes at the highest applicable marginal rate
 of taxation applicable to individuals for the calendar year in which such
 Reimbursement Amount is includible in the Executives taxable income, net
 of the maximum reduction in Federal income taxes which could be obtained from
 the deduction of such state or local taxes if paid in such year (determined
 without regard to limitations on deductions based upon the amount of the
 Executives adjusted gross income). Except to the extent provided in
 Section VIII-C below, this provision is intended to put Employee in the same
 position as Employee would have been had no Excise Tax been imposed upon or
 incurred as a result of any Payment.

B.       
 The payment of a Reimbursement Amount under this Section VIII shall not be
 conditioned upon the Executives termination of employment.

C.       
  Notwithstanding the foregoing provisions of this Section VIII-A, if the Company
 determines that, absent this sentence, the Executive is entitled to a
 Reimbursement Amount, but that the portion of the Covered Payments that would be
 treated as parachute payments under Code Section 280G (Covered
 Parachute Payments) does not exceed 103% of the greatest amount of Covered
 Parachute Payments that could be paid to the Executive such that the receipt of
 such Covered Parachute Payments would not give rise to any Excise Tax (the
 Safe Harbor Amount), then no Reimbursement Amount shall be paid to
 the Executive (unless for any reason the Executive is determined to be subject
 to the Excise Tax after application of the balance of this sentence, in which
 case the full Reimbursement Amount shall be paid), and the Covered Parachute
 Payments payable under this Agreement shall be reduced so that the Covered
 Parachute Payments, in the aggregate, are reduced to the Safe Harbor Amount. For
 purposes of reducing the Covered Parachute Payments to the Safe Harbor Amount,
 only amounts payable under this Agreement shall be reduced. If the reduction of
 the amounts payable under this Agreement would not result in a reduction of the
 Covered Parachute Payments to the Safe Harbor Amount, no amounts payable under
 this Agreement or otherwise shall be reduced pursuant to this Section VIII-C.
 The Company shall notify the Executive of any intent to reduce the amount of any
 Covered Payments in accordance with this Section VIII-C (which notice, if
 practicable, shall be given prior to the occurrence of an event that would give
 rise to a Covered Parachute Payment), and the Executive shall have the right to
 designate which of the Covered Payments shall be reduced and to what extent,
 provided that the Executive may not so elect to the extent that, in the
 determination of counsel to the Company, such election would cause the Executive
 to be subject to the Excise Tax.

D.       
  The determination of whether an event described in Code
 Section 280G(b)(2)(A)(i) has occurred, the amount of any Reimbursement
 Amount and/or the amounts described in Section VIII-C above shall be made
 initially by an accounting firm selected by the Compensation Committee of the
 Board of Directors (as constituted prior to the occurrence of any Change of
 Control), or, if no such firm is selected, by the independent compensation
 consulting firm retained by the Compensation Committee prior to any Change of
 Control to provide consulting advice to the Compensation Committee;
 provided, however, that nothing herein shall limit the
 Executives right to payment of the Reimbursement Amount in the event it is
 determined that any of such initial determinations was incorrect.

E.       
The Executive shall promptly notify the Company in writing of any claim by any
 taxing authority that, if successful, would require the payment by the Company
 of a Reimbursement Amount; provided, however, that failure by the
 Executive to give such notice promptly shall not result in a waiver or
 forfeiture of any of the Executives rights under this Section VIII
 except to the extent of actual damages suffered by the Company as a result of
 such failure. If the Company notifies the Executive in writing within 15 days
 after receiving such notice that it desires to contest such claim (and
 demonstrates to the reasonable satisfaction of the Executive its ability to pay
 any resulting Reimbursement Amount), the Executive shall:

1.       
 give the Company any information reasonably requested by the Company relating to
 such claim;

2.       
 take such action in connection with contesting such claim as the Company shall
 reasonably request in writing from time to time, including, without limitation,
 accepting legal representation with respect to such claim by an attorney
 selected by the Company that is reasonably acceptable to the Executive;

3.       
 cooperate with the Company in good faith in order effectively to contest such
 claim; and

4.       
 permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Companys
actions do not unreasonably interfere with or prejudice the Executives disputes with
the taxing authority as to other issues; and provided, further, that the
Company shall bear and pay on an after-tax and as-incurred basis, all attorneys fees,
costs and expenses (including additional interest, penalties and additions to tax)
incurred in connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax and as-incurred basis, for all resulting taxes (including,
without limitation, income and excise taxes), interest, penalties and additions to tax.

IX.    
          FUNDING UPON SPECIFIED CHANGE OF CONTROL.

A.       
          Immediately prior to the occurrence of a Specified Change of Control, the
          Company shall fund, to the extent it has not done so, a sum equal to the present
          value on the date of the Specified Change of Control of any amounts that are or
          would reasonably be expected to become payable to the Executive under the
          provisions of Sections IV, VIII and X hereof (including a good faith estimate of
          expenses of the trust in the event that the Company does not timely pay such
          expenses) and Section 3(b) of the Nondisclosure Agreement, which in any
          event shall be no less than 125% of such present value (determined using an
          interest rate equal to the short-term applicable federal rate (with annual
          compounding) established under Section 1274(d) of the Code for the month in
          which the Specified Change of Control), by establishing and irrevocably funding
          a trust for the benefit of the Executive. In addition, immediately prior to the
          occurrence of a Specified Change of Control, the Company shall contribute to the
          trust established under this Section IX, to the extent it has not done so, a
          number of shares of common stock of the Company equal to the total number of
          shares subject to all outstanding awards (whether vested or unvested) of stock
          options, restricted stock purchase rights and restricted stock units held by the
          Executive as of immediately prior to the Specified Change of Control. The
          trustee of such trust shall be instructed to pay out any such amounts as and to
          the extent such amounts become payable in accordance with the terms of this
          Agreement and the agreements documenting the terms of the Executives
          outstanding stock awards.

B.       
          The trust established under this Section IX shall be a grantor trust described
          in Section 671 of the Code. The Company shall be solely responsible for and
          shall directly pay all fees and expenses of the trust; provided, however, in the
          event that the Company does not pay all of the fees and expenses of the trust,
          the trustee shall have the authority to pay such fees from the assets of the
          trust.

C.       
          Any payments of compensation, severance or other benefits by the trust
          established pursuant to this Section IX shall, to the extent thereof, discharge
          the Companys obligation to pay compensation, pension, severance and other
          benefits hereunder, it being the intent of the Company that assets in such trust
          be held for the purpose of discharging any obligation of the Company to pay
          compensation, severance and other benefits under this Agreement and all equity
          compensation agreements between the Company and the Executive under such
          circumstances in which such trust is in effect.

D.       
          The trust established under this Section IX shall not terminate until the date
          on which all payments and benefits to be funded out of the trust have been
          satisfied and discharged in full. Upon termination of the trust any assets
          remaining in the trust shall be returned to the Company.

X.    
          EFFECT OF SECTION 409A OF THE CODE.

Notwithstanding
anything to the contrary in this Agreement or the Nondisclosure Agreement, if the Company
determines (a) that on the date the Executives employment with the Company
terminates or at such other time that the Company determines to be relevant, the Executive
is a specified employee (as such term is defined under Section 409A) of the
Company and (b) that any payments to be provided to the Executive pursuant to this
Agreement and/or the Nondisclosure Agreement are or may become subject to the additional
tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under
Section 409A of the Code (Section 409A Taxes) if provided at the time
otherwise required under this Agreement then (i) such payments shall be delayed until
the date that is six months after date of the Executives separation from
service (as such term is defined under Section 409A of the Code) with the Company,
or such shorter period that, as determined by the Company, is sufficient to avoid the
imposition of Section 409A Taxes (the Payment Delay Period) and (ii) such
payments shall be increased by an amount equal to interest on such payments for the
Payments Delay Period at a rate equal to the prime rate in effect as of the date the
payment was first due plus one point (for this purpose, the prime rate will be based on
the rate published from time to time in The Wall Street Journal).

XII.    
          SUCCESSORS.

A.       
          This Agreement is personal to the Executive and shall not, without the prior
          written consent of the Company, be assignable by the Executive.

B.       
          This Agreement shall inure to the benefit of and be binding upon the Company,
          its subsidiaries and its successors and assigns and any such subsidiary,
          successor or assignee shall be deemed substituted for the Company under the
          terms of this Agreement for all purposes. As used herein, successor
          and assignee shall include any person, firm, corporation or other
          business entity which at any time, whether by purchase, merger or otherwise,
          directly or indirectly acquires the stock of the Company or to which the Company
          assigns this Agreement by operation of law or otherwise.

XII.    
          WAIVER.

No
waiver of any breach of any term or provision of this Agreement shall be construed to be,
nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding
unless in writing and signed by the party waiving the breach.

XIII.    
          MODIFICATION.

This
Agreement may not be amended or modified other than by a written agreement executed by the
Executive and the Companys Chairman of the Board of Directors, or if the Executive
is the Chairman of the Board, any such written agreement shall be executed by the
Executive and the Chairman of the Corporate Governance and Nominating Committee of the
Board.

XIV.    
          SAVINGS CLAUSE.

The
provisions of this Agreement are severable and in the event that a court of competent
jurisdiction determines that any provision of this Agreement is in violation of any law or
public policy, in whole or in part, only the portions of this Agreement that violate such
law or public policy shall be stricken. All portions of this Agreement that do not violate
any statute or public policy shall not be affected thereby and shall continue in full
force and effect. Further, any court order striking any portion of this Agreement shall
modify the stricken terms as narrowly as possible to give as much effect as possible to
the intentions of the parties under this Agreement.

XV. COMPLETE AGREEMENT.

This
Agreement constitutes and contains the entire agreement and final understanding concerning
the Executives employment with the Company and the other subject matters addressed
herein between the parties. It is intended by the parties as a complete and exclusive
statement of the terms of their agreement from and after the date hereof. It supersedes
and replaces all prior negotiations and all agreements proposed or otherwise, whether
written or oral, concerning the subject matter hereof, including without limitation the
Executives Employment Agreements dated November 7, 1997, January 26, 1998, February
27, 1999, December 7, 2000, and February 12, 2002 except that (i) such prior agreements
shall remain in effect with respect to the time periods prior to the date hereof during
which such agreements were in effect, and (ii) any reference in the Executives stock
option agreements with the Company to the term Good Reason as defined in such
agreements shall be deemed to refer to Good Reason as defined in this
Agreement. Any representation, promise or agreement not specifically included in this
Agreement shall not be binding upon or enforceable against either party. This is a fully
integrated agreement.

XVI.    
          GOVERNING LAW.

This
Agreement shall be deemed to have been executed and delivered within the State of
California and the rights and obligations of the parties hereunder shall be construed and
enforced in accordance with, and governed by, by the laws of the State of California
without regard to principles of conflict of laws.

XVII.    
          CONSTRUCTION.

In any
construction to be made of this Agreement, the same shall not be construed against any
party on the basis that the party was the drafter. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect.

XVIII.    
          COMMUNICATIONS.

All notices,
requests, demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand or by courier, or if mailed by
registered or certified mail, postage prepaid, addressed to the Executive at 218 Via Lido
Nord, Newport Beach, California 92663 or addressed to the Company at 26220 Enterprise
Court, Lake Forest, California 92630, Attention: Chairman of the Board, with a copy to the
Senior Vice President and General Counsel, and with a copy to the Senior Vice President,
Human Resources; provided, however, that if the Executive is the Chairman of the Board,
such communication shall be sent to the Chairman of the Corporate Governance and
Nominating Committee of the Board (together with such copies to the Senior Vice President
and General Counsel and the Senior Vice President, Human Resources). Either party may
change the address at which notice shall be given by written notice given in the above
manner.

XIX.    
          EXECUTION.

This
Agreement may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.
Xerographic copies of such signed counterparts may be used in lieu of the originals for
any purpose.

XX.    
          LEGAL COUNSEL.

The
Executive and the Company recognize that this is a legally binding contract and
acknowledge and agree that they have had the opportunity to consult with legal counsel of
their choice.

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
above written.

|APRIA HEALTHCARE GROUP INC.
By ____________________________  
        
David L. Goldsmith
        
Chairman | THE EXECUTIVE
By ____________________________  
        
Lawrence M. Higby
|----------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------

---

EXHIBIT A

NONDISCLOSURE AND
NONCOMPETITION AGREEMENT

This
Nondisclosure and Noncompetition Agreement (this Agreement) is dated as of the
5th day of May, 2006 by and between Lawrence M. Higby (the
Executive) and Apria Healthcare Group Inc. (the Company).

RECITALS

WHEREAS,
concurrently herewith, the Executive is entering into an Amended and Restated Employment
Agreement with the Company dated as of the 5th day of May, 2006 (the Employment
Agreement);

WHEREAS,
the Employment Agreement provides that this Agreement shall be incorporated by reference
into and become a part of the Employment Agreement; and

WHEREAS,
the Executive and the Company hereby intend to enter into certain agreements pertaining to
confidentiality and their obligations to perform and refrain from performing certain acts
prior to and following the termination of the Executives employment with the
Company, and for the Company to pay consideration to the Executive in exchange for the
agreement by the Executive to take and refrain from taking certain actions following such
termination of employment.

AGREEMENT

1.       
          Acknowledgements by the Executive. The Executive acknowledges that:

(a)       
          In carrying out his duties and responsibilities under the Employment Agreement
          and his predecessor employment agreement with the Company, the Executive is a
          member of the Companys senior executive management and participates in
          formulating and implementing business plans and policies that are and will
          continue to be essential to the Companys competitive success;

(b)       
          These activities require relationships of trust and confidence between the
          Executive and the Companys other officers and the Companys
          directors;

(c)       
          The Executive, in the performance of his duties on behalf of the Company, has
          had and will have access to, has received and will receive, and was entrusted
          and will be entrusted with confidential information, including but not limited
          to systems technology, field operations, reimbursement, development, marketing,
          organizational, financial, management, administrative, clinical, customer,
          distribution and sales information, data, specifications and processes owned by
          the Company or its agents or consultants, or used presently or at any time in
          the future in the course of its business that is not otherwise part of the
          public domain (collectively, the Confidential Material). All such
          Confidential Material is considered secret and was and will be made available to
          the Executive in confidence;

(d)       
          The sale or unauthorized use or disclosure of any of the Companys
          Confidential Material by any means whatsoever and at any time before, during or
          after the Executives employment with the Company shall constitute unfair
          competition;

(e)       
          The Executives employment with a competitor of the Company within a
          reasonable time following the termination of his employment with the Company
          would create a substantial likelihood that the Executive would inevitably
          disclose or use, to the detriment of the Company, such Confidential Information,
          and that it is essential to the Companys legitimate business interests and
          also to free and fair competition in the industry within which the Company does
          business, to protect the Companys Confidential Material from disclosure;
          and

(f)       
          The risk of inevitable disclosure is particularly applicable to any such
          employment by the Executive in a similar senior position with those competitors
          of the Company that are similar in operation, service, missions and markets to
          the Company (Principal Competitors), and that as of the date of this
          Agreement the Principal Competitors are: Lincare Holdings, Inc.; Rotech
          Healthcare, Inc.; American HomePatient, Inc.; Pacific Pulmonary Services
          Corporation; LifeCare Solutions, Inc.; or the home healthcare business of Air
          Products & Chemicals, Inc. or Praxair, Inc. and their parent, affiliated and
          subsidiary companies.

2.       
          Nondisclosure and Noncompetition Agreement. The Executive hereby
          acknowledges, represents, warrants and covenants that:

(a)       
          Except in the performance of duties on behalf of the Company, the Executive
          shall not, directly or indirectly for any reason whatsoever, disclose or use any
          such Confidential Material, unless such Confidential Material ceases (through no
          fault of the Executives) to be confidential because it has become part of
          the public domain. All records, files, drawings, documents, notes, disks,
          diskettes, tapes, magnetic media, photographs, equipment and other tangible
          items, wherever located, relating in any way to the Confidential Material or
          otherwise to the Companys business, which the Executive prepares, uses or
          encounters during the course of his employment, shall be and remain the
          Companys sole and exclusive property and shall be included in the
          Confidential Material. Upon termination of the Employment Agreement by any
          means, or whenever requested by the Company, the Executive shall promptly
          deliver to the Company any and all of the Confidential Material, not previously
          delivered to the Company, that may be or at any previous time has been in the
          Executives possession or under the Executives control;

(b)       
          The Executive agrees that he shall not engage in unfair competition either
          during the time employed by the Company or any time thereafter;

(c)       
          The Executive will not, within one year following the termination of his
          employment with the Company (the Post-Termination Period), accept an
          employment or consulting relationship, directly or indirectly, with any entity
          engaged in the business of home respiratory therapy, home infusion therapy, and
          home medical equipment, within the United States. Without limiting the
          generality of the foregoing, during the Post-Termination Period, the Executive
          has not accepted and will not accept any employment or consulting relationship
          with any Principal Competitor;

(d)       
          During the term of his employment and during the Post-Termination Period, the
          Executive will not initiate or respond to communications with any of the
          Companys employees who earned annually $50,000 or more as a Company
          employee during six-month period prior to the termination of such
          employees employment with the Company, 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; and

(e)       
          During the term of his employment and during the Post-Termination Period, the
          Executive will not influence or attempt to influence customers of the Company 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.

(f)       
          During the Post-Termination Period, (i) the 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 that is or
          reasonably would be expected to be damaging to the reputation of the Company,
          (ii) the Company will use its best efforts to 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 Executive, or that is or reasonably would be
          expected to be damaging to the reputation of the Executive.

3.       
          Agreement to Compensate the Executive.

(a)       
          The parties agree that the Executive will be adequately compensated under the
          Employment Agreement, without regard to this Section 3, for the representations
          and warranties set forth above and for the covenants that the Executive has
          agreed herein to perform prior to the date of the Executives termination
          of employment.

(b)       
          The parties further agree that, if the Executives employment is terminated
          under either of the circumstances described in Section IV-D-3(a) of the
          Employment Agreement, the Executive shall be entitled to the receive payments
          that in the aggregate equal the Post-Termination Payment (as defined below), it
          being understood that (i) such payments are intended to compensate the Executive
          fully for the performance of the covenants of the Executive during the
          Post-Termination Period provided in Section 2 above, and (ii) the Executive is
          not entitled to receive any payments under this Section 3 in the event the
          Executives employment is terminated other than under one of the
          circumstance described in Section IV-D-3(a) of the Employment Agreement.

As used herein, the term Post-Termination
Payment shall mean an amount equal to three (3) times the sum of: (i) the
Executives annual base salary in effect on such date, plus (ii) the average of the
annual bonuses with respect to the Companys two (2) most recently completed fiscal
years, if any, determined to be payable and/or paid to the Executive under the
Companys the Executive Bonus Plan (or comparable bonus plan) prior to such notice of
termination, plus (iii) an amount determined by the Company in its sole discretion to be
equal to the annual cost for the Executive of obtaining medical, dental and vision
insurance under COBRA, which amount is hereby initially estimated to be $20,000.

(c)       
          Timing of Payment. The Post-Termination Payment payable to the Executive
          pursuant to Section 3(b) above shall be divided into twenty-six (26) equal
          installments and paid bi-weekly over the fifty-two (52)-week period beginning,
          subject to Section X of the Employment Agreement, on the third (3rd) business
          day after termination of the Executives employment with the Company.

4.       
          Miscellaneous.

(a)       
          Arbitration. Any dispute or controversy arising under or in connection
          with this Agreement or the Executives employment by the Company shall be
          settled exclusively by arbitration, conducted before a single neutral arbitrator
          in accordance with the American Arbitration Associations National Rules
          for Resolution of Employment Disputes as then in effect. Such arbitration shall
          be conducted in Orange County, California, and the arbitrator shall be a
          resident of Orange County, California or of a county contiguous to Orange
          County, California. Judgment may be entered on the arbitrators award in
          any court having jurisdiction; provided, however, that the Company shall be
          entitled to seek a restraining order or injunction in any court of competent
          jurisdiction to prevent any continuation of any violation of the provisions of
          Section 2 of this Agreement and the Executive hereby consents that such
          restraining order or injunction may be granted without the necessity of the
          Companys posting any bond, and provided, further, that the Executive shall
          be entitled to seek specific performance of his right to be paid until the date
          of employment termination during the pendency of any dispute or controversy
          arising under or in connection with this Agreement. Any arbitration proceeding
          pertaining to this Agreement shall be consolidated with any arbitration
          proceeding pertaining to the Employment Agreement. The arbitrators order
          shall specify, based on the outcome of the arbitration, whether the Executive
          shall repay any of the Executives expenses theretofore paid by the Company
          pursuant to Section IV-D-3(d)(ii) of the Employment Agreement. The fees and
          expenses of the arbitrator shall be borne by the Company.

(b)       
          Successors.

(i)       
          This Agreement is personal to the Executive and shall not, without the prior
          written consent of the Company, be assignable by the Executive.

(ii)       
          This Agreement shall inure to the benefit of and be binding upon the Company,
          its subsidiaries and its successors and assigns and any such subsidiary,
          successor or assignee shall be deemed substituted for the Company under the
          terms of this Agreement for all purposes. As used herein, successor
          and assignee shall include any person, firm, corporation or other
          business entity which at any time, whether by purchase, merger or otherwise,
          directly or indirectly acquires the stock of the Company or to which the Company
          assigns this Agreement by operation of law or otherwise.

(c)       
          Waiver. No waiver of any breach of any term or provision of this
          Agreement shall be construed to be, nor shall be, a waiver of any other breach
          of this Agreement. No waiver shall be binding unless in writing and signed by
          the party waiving the breach.

(d)       
          Modification. This Agreement may not be amended or modified other than by
          a written agreement executed by the Executive and the Companys Chairman of
          the Board of Directors, or if the Executive is the Chairman of the Board, any
          such written agreement shall be executed by the Executive and the Chairman of
          the Corporate Governance and Nominating Committee of the Board.

(e)       
          Savings Clause. If any provision of this Agreement or the application
          thereof is held invalid, such invalidity shall not affect any other provisions
          or applications of the Agreement which can be given effect without the invalid
          provisions or applications and, to this end, the provisions of this Agreement
          are declared to be severable.

(f)       
          Complete Agreement. This Agreement and the Employment Agreement
          constitute and contain the entire agreement and final understanding concerning
          the Executives employment with the Company and the other subject matters
          addressed herein between the parties. This Agreement and the Employment
          Agreement are intended by the parties as a complete and exclusive statement of
          the terms of their agreement. They supersede and replace all prior negotiations
          and all agreements proposed or otherwise, whether written or oral, concerning
          the subject matter hereof. Any representation, promise or agreement not
          specifically included in this Agreement or the Employment Agreement shall not be
          binding upon or enforceable against either party. This Agreement, together with
          the Employment Agreement, constitute a fully integrated agreement.

(g)       
          Governing Law. This Agreement shall be deemed to have been executed and
          delivered within the State of California and the rights and obligations of the
          parties hereunder shall be construed and enforced in accordance with, and
          governed by, by the laws of the State of California without regard to principles
          of conflict of laws.

(h)       
          Construction. In any construction to be made of this Agreement, the same
          shall not be construed against any party on the basis that the party was the
          drafter. The captions of this Agreement are not part of the provisions hereof
          and shall have no force or effect.

(i)       
          Communications. All notices, requests, demands and other communications
          hereunder shall be in writing and shall be deemed to have been duly given if
          delivered by hand or by courier, or if mailed by registered or certified mail,
          postage prepaid, addressed to the Executive at 218 Via Lido Nord, Newport Beach,
          California 92663, or addressed to the Company at 26220 Enterprise Court, Lake
          Forest, CA 92630, Attention: Senior Vice President and General Counsel, with a
          copy to the attention of the Senior Vice President, Human Resources. Either
          party may change the address at which notice shall be given by written notice
          given in the above manner.

(j)       
          Execution. This Agreement may be executed in one or more counterparts,
          each of which shall be deemed an original, but all of which together shall
          constitute one and the same instrument. Xerographic copies of such signed
          counterparts may be used in lieu of the originals for any purpose.

(k)       
          Legal Counsel. The Executive and the Company recognize that this is a
          legally binding contract and acknowledge and agree that they have each had the
          opportunity to consult with legal counsel of their choice.

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
above written.

|APRIA HEALTHCARE GROUP INC.
By ____________________________  
        
David L. Goldsmith
        
Chairman | THE EXECUTIVE
By ____________________________  
        
Lawrence M. Higby
|----------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------

---

EXHIBIT B

GENERAL RELEASE

THIS
GENERAL RELEASE (this Release) is made as of the ___ day of
__________, 20___, by and between Lawrence M. Higby, an individual
(Executive), and Apria Healthcare Group Inc., a Delaware corporation
(Apria). In consideration of the payments and benefits to be provided
to Executive pursuant to that certain Amended and Restated Employment Agreement,
effective as of May 5, 2006, to which Executive and Apria are parties (the Severance
Agreement), the sufficiency of which is acknowledged hereby, Executive and Apria
agree as follows:

1.       
          Neither this Release nor anything in this Release shall be construed to be or
          shall be admissible in any proceeding as evidence of an admission by Apria or
          Executive of any violation of Aprias policies or procedures, or state or
          federal laws or regulations. This Release may be introduced, however, in any
          proceeding to enforce the Release. Such introduction shall be pursuant to an
          order protecting its confidentiality.

2.       
          Except for (i) those obligations created by or arising out of this Release, (ii)
          any rights Executive may have under stock option agreements with Apria and any
          retirement, 401(k), or similar benefit plans of Apria, and (iii) the continuing
          right to indemnification as provided by applicable law or in Aprias bylaws
          and articles of incorporation in connection with acts, suits or proceedings by
          reason of the fact that he was an officer or employee of Apria where the basis
          of the claims against him consists of acts or omissions taken or made in such
          capacity, Executive on behalf of himself, his descendants, dependents, heirs,
          executors, administrators, assigns, and successors, and each of them, hereby
          covenants not to sue and fully releases and discharges Apria, and its
          predecessors, subsidiaries and affiliates, past and present, and each of them,
          as well as its and their trustees, directors, officers, agents, attorneys,
          insurers, employees, stockholders, representatives, assigns, and successors,
          past and present, and each of them, hereinafter together and collectively
          (including Apria) referred to as the Apria Releasees, with
          respect to and from any and all claims, wages, demands, rights, liens,
          agreements, contracts, covenants, actions, suits, causes of action, obligations,
          debts, costs, expenses, attorneys fees, damages, judgments, orders and
          liabilities of whatever kind or nature in law, equity or otherwise, whether now
          known or unknown, suspected or unsuspected, and whether or not concealed or
          hidden, which he now owns or holds or he has at any time heretofore owned or
          held as against the Apria Releasees, arising out of or in any way connected with
          his employment relationship with any Apria Releasee, or his voluntary
          resignation from employment with the Apria Releasees or any other transactions,
          occurrences, actions, omissions, claims, losses, damages or injuries whatsoever,
          known or unknown, suspected or unsuspected, resulting from any act or omission
          by or on the part of any Apria Releasee committed or omitted prior to the date
          of this Release, including, without limiting the generality of the foregoing,
          any claim under Title VII of the Civil Rights Act of 1964, the Age
          Discrimination in Employment Act, the Americans with Disabilities Act, the
          Family and Medical Leave Act of 1993, the Fair Employment Practices Act, the
          Equal Pay Laws, the Workers Compensation Act, the Family and Medical Leave
          Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the
          United States Code, the Employee Retirement Income Security Act of 1974, the
          California Fair Employment and Housing Act, the California Labor Code, the state
          and federal Worker Adjustment and Retraining Notification Act, the California
          Business and Professions Code, or any common law or statutory claim for fraud,
          wrongful termination, violation of public policy or defamation, or any claim for
          compensation, severance pay, bonus, sick leave, holiday pay, vacation pay, life
          insurance, health or medical insurance or any other fringe benefit,
          workers compensation or disability.

Except
for those obligations created by or arising out of this Release, and except as provided
below, Apria on behalf of itself and the Apria Releasees (to the extent the matter in
question arises on the basis of their relationship to Apria) hereby acknowledges full and
complete satisfaction of and releases and discharges, and covenants not to sue, Executive
from and with respect to any and all claims, agreements, obligations, losses, damages,
injuries, demands and causes of action, known or unknown, suspected or unsuspected,
whether or not concealed or hidden, arising out of or in any way connected with
Executives employment relationship with any Apria Releasee or his voluntary
resignation from employment with the Apria Releasees, or any other transactions,
occurrences, actions, omissions, claims, losses, damages or injuries whatsoever, known or
unknown, suspected or unsuspected, which Apria now owns or holds or has at any time
heretofore owned or held as against Executive.

3.       
          It is the intention of Apria and Executive in executing this Release that the
          same shall be effective as a bar to each and every claim, demand and cause of
          action hereinabove specified. In furtherance of this intention, Apria and
          Executive hereby expressly waive any and all rights and benefits conferred upon
          them by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and
          expressly consent that this Release shall be given full force and effect
          according to each and all of its express terms and provisions, including those
          related to unknown and unsuspected claims, demands and causes of action, if any,
          as well as those relating to any other claims, demands and causes of action
          hereinabove specified. SECTION 1542 provides:

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.

Apria
and Executive, and each of them, acknowledge that either may hereafter discover claims or
facts in addition to or different from those which either or both of them now knows or
believes to exist with respect to the subject matter of this Release and which, if known
or suspected at the time of executing this Release, may have materially affected this
settlement. Nevertheless, Apria and Executive each hereby waive any right, claim or cause
of action that might arise as a result of such different or additional claims or facts.
Apria and Executive each acknowledge that it or he understands the significance and
consequence of such release and such specific waiver of SECTION 1542.

4.       
          The terms and conditions of this Release shall remain confidential as between
          the parties and professional advisers to the parties and neither of them shall
          disclose them to any other person, except as provided herein or as required by
          the rules and regulations of the Securities and Exchange Commission
          (SEC) or as otherwise may be required by law or court order. Without
          limiting the generality of the foregoing, neither Apria nor Executive will
          respond to or in any way participate in or contribute to any public discussion
          concerning, or in any way relating to, the execution of this Release or the
          events which led to its execution. Except as provided above with respect to SEC
          rules and regulations or as otherwise may be required by law or court order, if
          inquiry is made of Apria concerning any of the claims released by this Release
          or relating to Executives employment with Apria, Apria shall provide to
          third parties Executives dates of employment with Apria and its
          predecessors and his job titles during such employment, in accordance with the
          normal practices of Aprias human resources department.

5.       
          Executive expressly acknowledges and agrees that, by entering into this Release,
          he is waiving any and all rights or claims that may have arisen under the Age
          Discrimination in Employment Act of 1967, as amended, which have arisen on or
          before the date of execution of this Release. Executive further expressly
          acknowledges that:

a.       
          He is hereby advised in writing by this Release to consult with an attorney
          before signing this Release;

b.       
          He was given a copy of this Release on _______________, and informed that he had
          21 days within which to consider the Release, although he is free to accept this
          Release anytime within that 21-day period and

c.       
          He was informed that he has seven days following the date of his execution of
          this Release in which to revoke the Release, which revocation may be effected by
          means of a written notice sent to the General Counsel of Apria at Aprias
          corporate headquarters.

d.       
          Apria and Executive agree that this Release will not become effective or
          enforceable until the seven-day revocation period has expired without his having
          revoked this Release.

6.       
          Apria and Executive each warrant and represent that neither has heretofore
          assigned or transferred to any person not a party to this Release any released
          matter or any part or portion thereof and each shall defend, indemnify and hold
          harmless the other from and against any claim (including the payment of
          attorneys fees and costs actually incurred whether or not litigation is
          commenced) based on or in connection with or arising out of any such assignment
          or transfer made, purported or claimed.

7.       
          Apria and Executive acknowledge that any employment or contractual relationship
          between them (including with any other Apria Releasee) will terminate on
          _______________, that they have no further employment or contractual
          relationship except as may arise out of this Release and that Executive waives
          any right or claim to reinstatement as an employee of any Apria Releasee and
          will not seek employment in the future with Apria, unless by mutual consent.

8.       
          This Release shall be incorporated into and made a part of the Severance
          Agreement as of the date hereof. This Release together with the Severance
          Agreement sets forth the entire agreement and understanding between the parties
          as to the subject matter hereof and supersedes all prior and contemporaneous
          oral and written discussions, agreements and understandings of any kind or
          nature. This Release shall inure to the benefit of and be binding upon the
          parties hereto and their respective permitted successors and assigns. This
          Release does not, however, affect Executives rights under any Apria
          retirement, 401(k), or similar benefit plan. This Release also does not modify
          the provisions of any of Executives stock options, restricted stock
          purchase rights or restricted stock units.

9.       
          If any provision of this Release or the application thereof is held invalid, the
          invalidity shall not affect the other provisions or applications of this Release
          which can be given effect without the invalid provisions or applications and to
          this end the provisions of this Release are declared to be severable.

10.       
          This Release has been executed and delivered by Executive within the State of
          California, and the rights and obligations of the parties hereunder shall be
          construed and enforced in accordance with, and governed by, the laws of the
          State of California without regard to principles of conflict of laws.

11.       
          This Release may be executed in counterparts, and each counterpart, when
          executed, shall have the efficacy of a signed original. Photographic copies of
          such signed counterparts may be used in lieu of the originals for any purpose.

12.       
          Any dispute or controversy between Executive on the one hand, and Apria (or any
          other Apria Releasee), on the other hand, in any way arising out of, related to,
          or connected with this Release or the subject matter hereof, or otherwise in any
          way arising out of, related to, or connected with Executives employment
          with any Apria Releasee or the termination of Executives employment with
          any Apria Releasee, shall be submitted for resolution by arbitration in
          accordance with the provisions of the Severance Agreement. APRIA AND EXECUTIVE
          ACKNOWLEDGE, UNDERSTAND AND AGREE THAT IN THE EVENT OF A DISPUTE UNDER THIS
          RELEASE, EACH PARTY HAS WAIVED ANY RIGHT TO A JURY TRIAL AND A JUDICIAL
          RESOLUTION OF THE DISPUTE.

13.       
          No waiver of any breach of any term or provision of this Release shall be
          construed to be, or shall be, a waiver of any other breach of this Release. No
          waiver shall be binding unless in writing and signed by the party waiving the
          breach.

14.       
          In entering this Release, the parties represent that they have relied upon the
          advice of their attorneys, who are attorneys of their own choice, and that they
          have read the Release and have had the opportunity to have the Release explained
          to them by their attorneys, and that those terms are fully understood and
          voluntarily accepted by them.

15.       
          All parties agree to cooperate fully and to execute any and all supplementary
          documents and to take all additional actions that may be necessary or
          appropriate to give full force to the terms and intent of this Release and which
          are not inconsistent with its terms.

16.       
          Executive hereby declares as follows:

I,
Lawrence M. Higby, hereby acknowledge that I was given 21 days to consider the foregoing
Release and voluntarily chose to sign the Release prior to the expiration of the 21-day
period.

I
have read the foregoing Release and I accept and agree to the provisions it contains and
hereby execute it voluntarily with full understanding of its consequences.

I
declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.

[signature page follows]

---

IN
WITNESS WHEREOF, the undersigned have executed and delivered this Release this ___ day of
__________, 20__.

| | ____________________________  
Executive
APRIA HEALTHCARE GROUP INC.
By ____________________________  
        
[Name]
        
[Title]
| | ---------------------------------------------------------------------------------------------------------------------------------------