Document:

EXHIBIT 10.22

(MULTICURRENCY-CROSS BORDER)

                                      ISDA
               International swaps & Derivatives Association Inc.

                                MASTER AGREEMENT

                          dated as of December 3, 2002

                   CREDIT LYONNAIS NEW YORK BRANCH ("PARTY A")

                                       and

                     APRIA HEALTHCARE GROUP INC. ("PARTY B")

have entered and/or anticipate  entering into one or more  transactions  (each a
"Transaction")  that are or will be  governed by this  Master  Agreement,  which
includes the schedule (the  'Schedule"),  and the documents and other confirming
evidence (each a "Confirmation")  exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows:-

1.   INTERPRETATION

(a)  DEFINITIONS.  The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

(b)  INCONSISTENCY. In the event of any inconsistency  between the provisions of
the Schedule and the other  provisions  of this Master  Agreement,  the Schedule
will prevail.  In the event of any  inconsistency  between the provisions of any
Confirmation   and  this  Master  Agreement   (including  the  Schedule),   such
Confirmation will prevail for the purpose of the relevant Transaction.

(c)  SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the  parties  (collectively  referred to as this  "Agreement"),  and the parties
would not otherwise enter into any Transactions.

2.   OBLIGATIONS

(a)  GENERAL CONDITIONS.

     (i) Each  party  will make  each  payment  or  delivery  specified  in each
     Confirmation  to be made by it,  subject  to the other  provisions  of this
     Agreement.

     (ii) Payments  under this  Agreement will be made on the due date for value
     on  that  date  in the  place  of the  account  specified  in the  relevant
     Confirmation   or  otherwise   pursuant  to  this   Agreement,   in  freely
     transferable funds and in the manner customary for payments in the required
     currency. Where settlement is by delivery (that is, other than by payment),
     such  delivery  will be made  for  receipt  on the due  date in the  manner
     customary for the relevant  obligation  unless  otherwise  specified in the
     relevant Confirmation or elsewhere in this Agreement.

     (iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
     the  condition  precedent  that no Event of Default or  Potential  Event of
     Default with respect to the other party has occurred and is continuing, (2)
     the condition  precedent that no Early  Termination  Date in respect of the
     relevant  Transaction has occurred or been  effectively  designated and (3)
     each other applicable condition precedent specified in this Agreement.

(b)  CHANGE OF  ACCOUNT.  Either  party may change its  account  for receiving a
payment  or  delivery  by giving  notice to the other  party at least five Local
Business Days prior to the  scheduled  date for the payment or delivery to which
such change  applies unless such other party gives timely notice of a reasonable
objection to such change.

(c)  NETTING. If on any date amounts would otherwise be payable:-

     (i) in the same currency; and

     (ii) in respect of the same Transaction,

by each party to the other,  then, on such date, each party's obligation to make
payment of any such amount will be  automatically  satisfied and discharged and,
if the  aggregate  amount that would  otherwise  have been  payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party,  replaced by an  obligation  upon the party by whom the larger  aggregate
amount  would  have been  payable  to pay to the other  party the  excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more  Transactions  that a net amount
will be  determined  in respect of all  amounts  payable on the same date in the
same  currency  in  respect of such  Transactions,  regardless  of whether  such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation  by specifying  that  subparagraph  (ii) above
will not apply to the Transactions  identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such  Transactions from such date). This election may
be  made  separately  for  different  groups  of  Transactions  and  will  apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.

(d)  DEDUCTION OR WITHHOLDING FOR TAX.

     (i) GROSS-UP.  All payments  under this  Agreement will be made without any
     deduction or withholding for or on account of any Tax unless such deduction
     or  withholding  is  required  by any  applicable  law,  as modified by the
     practice of any relevant governmental revenue authority, then in effect. If
     a party is so required to deduct or withhold, then that party ("X") will:-

          (1) promptly notify the other party ("Y") of such requirement;

          (2) pay to the  relevant  authorities  the full amount  required to be
          deducted  or  withheld  (including  the  full  amount  required  to be
          deducted or withheld from any  additional  amount paid by X to Y under
          this Section 2(d)) promptly upon the earlier of determining  that such
          deduction or  withholding  is required or  receiving  notice that such
          amount has been assessed against Y;

          (3) promptly  forward to Y an official  receipt (or a certified copy),
          or other  documentation  reasonably  acceptable to Y,  evidencing such
          payment to such authorities; and

          (4) if such Tax is an Indemnifiable  Tax, pay to Y, in addition to the
          payment to which Y is otherwise  entitled under this  Agreement,  such
          additional  amount  as is  necessary  to  ensure  that the net  amount
          actually received by Y (free and clear of Indemnifiable Taxes, whether
          assessed  against  X or Y) will  equal  the full  amount Y would  have
          received had no such deduction or withholding been required.  However,
          X will not be required to pay any additional amount to Y to the extent
          that it would not be required to be paid but for:-

               (A) the  failure  by Y to comply  with or perform  any  agreement
               contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

               (B) the failure of a representation made by Y pursuant to Section
               3(f) to be accurate and true unless such  failure  would not have
               occurred but for (I) any action taken by a taxing  authority,  or
               brought  in a court of  competent  jurisdiction,  on or after the
               date on  which a  Transaction  is  entered  into  (regardless  of
               whether  such action is taken or brought  with respect to a party
               to this Agreement) or (II) a Change in Tax Law.

     (ii) LIABILITY. If:-

          (1) X is required by any  applicable  law, as modified by the practice
          of any relevant governmental revenue authority,  to make any deduction
          or  withholding  in respect of which X would not be required to pay an
          additional amount to Y under Section 2(d)(i)(4);

          (2) X does not so deduct or withhold; and

          (3) a liability  resulting from such Tax is assessed  directly against
          X,

     then,  except to the extent Y has satisfied or then satisfies the liability
     resulting  from  such  Tax,  Y will  promptly  pay to X the  amount of such
     liability (including any related liability for interest,  but including any
     related  liability  for  penalties  only if Y has failed to comply  with or
     perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e)  DEFAULT INTEREST;  OTHER  AMOUNTS.  Prior to the  occurrence  or  effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment  obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after  judgment) on the overdue  amount to the other party on
demand in the same  currency as such  overdue  amount,  for the period from (and
including)  the  original  due date for payment to (but  excluding)  the date of
actual  payment,  at the Default  Rate.  Such interest will be calculated on the
basis of daily  compounding and the actual number of days elapsed.  If, prior to
the occurrence or effective  designation of an Early Termination Date in respect
of  the  relevant  Transaction,  a  party  defaults  in the  performance  of any
obligation  required to be settled by  delivery,  it will  compensate  the other
party on demand if and to the extent  provided for in the relevant  Confirmation
or elsewhere in this Agreement.

3.   REPRESENTATIONS

Each party represents to the other party (which  representations  will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the  representations in Section 3(f), at all times until the
termination of this Agreement) that:-

(a)  BASIC REPRESENTATIONS.

     (i) STATUS. It is duly organised and validly existing under the laws of the
     jurisdiction of its  organisation or  incorporation  and, if relevant under
     such laws, in good standing;

     (ii)  POWERS.  It has the power to  execute  this  Agreement  and any other
     documentation relating to this Agreement to which it is a party, to deliver
     this Agreement and any other documentation  relating to this Agreement that
     it is required by this Agreement to deliver and to perform its  obligations
     under this  Agreement and any  obligations  it has under any Credit Support
     Document  to which it is a party  and has  taken  all  necessary  action to
     authorise such execution, delivery and performance;

     (iii) NO VIOLATION OR CONFLICT. Such execution, delivery and performance do
     not violate or conflict with any law applicable to it, any provision of its
     constitutional  documents,  any  order or  judgment  of any  court or other
     agency  of  government  applicable  to it or  any  of  its  assets  or  any
     contractual restriction binding on or affecting it or any of its assets;

     (iv)  CONSENTS.  All  governmental  and other consents that are required to
     have been  obtained  by it with  respect  to this  Agreement  or any Credit
     Support  Document to which it is a party have been obtained and are in full
     force and effect and all conditions of any such consents have been complied
     with; and

     (v)  OBLIGATIONS  BINDING.  Its  obligations  under this  Agreement and any
     Credit Support Document to which it is a party constitute its legal,  valid
     and binding  obligations,  enforceable in accordance with their  respective
     terms  (subject  to  applicable  bankruptcy,  reorganisation,   insolvency,
     moratorium  or similar  laws  affecting  creditors'  rights  generally  and
     subject,  as  to  enforceability,   to  equitable   principles  of  general
     application (regardless of whether enforcement is sought in a proceeding in
     equity or at law)).

(b)  ABSENCE OF  CERTAIN  EVENTS. No  Event of  Default or  Potential  Event of
Default or, to its knowledge, Termination  Event with respect to it has occurred
and is continuing  and no such  event or  circumstance  would  occur as a result
of its entering into or performing its  obligations  under this Agreement or any
Credit Support Document to which it is a party.

(c)  ABSENCE  OF  LITIGATION. There  is  not  pending  or,  to  its   knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court,  tribunal,  governmental  body,  agency or
official or any arbitrator  that is  likely to  affect the legality, validity or
enforceability against it of this  Agreement or any Credit  Support  Document to
which  it is a party  or its  ability to  perform  its  obligations  under  this
Agreement  or such Credit Support Document.

(d)  ACCURACY OF  SPECIFIED  INFORMATION.  All  applicable  information  that is
furnished in writing by or on behalf of it to the other party and is  identified
for the purpose of this  Section  3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e)  PAYER TAX REPRESENTATION. Each representation  specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f)  PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.

4.   AGREEMENTS

Each party  agrees with the other that,  so long as either party has or may have
any  obligation  under this  Agreement or under any Credit  Support  Document to
which it is a party:-

(a)  FURNISH  SPECIFIED  INFORMATION. It will  deliver to the other party or, in
certain  cases under  subparagraph  (iii) below,  to such  government  or taxing
authority as the other party reasonably directs:-

     (i) any forms,  documents or certificates relating to taxation specified in
     the Schedule or any Confirmation;

     (ii) any other documents specified in the Schedule or any Confirmation; and

     (iii) upon reasonable demand by such other party, any form or document that
     may be required or  reasonably  requested in writing in order to allow such
     other party or its Credit  Support  Provider  to make a payment  under this
     Agreement or any applicable  Credit Support  Document without any deduction
     or  withholding  for or on  account  of any Tax or with such  deduction  or
     withholding  at a reduced  rate (so long as the  completion,  execution  or
     submission  of such form or document  would not  materially  prejudice  the
     legal or commercial position of the party in receipt of such demand),  with
     any  such  form or  document  to be  accurate  and  completed  in a  manner
     reasonably  satisfactory  to such other party and to be executed  and to be
     delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such  Confirmation  or, if
none is specified, as soon as reasonably practicable.

(b)  MAINTAIN  AUTHORISATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any  governmental  or other authority that
are required to be obtained by it with  respect to this  Agreement or any Credit
Support  Document to which it is a party and will use all reasonable  efforts to
obtain any that may become necessary in the future.

(c)  COMPLY WITH  LAWS.  It will  comply  in  all  material  respects  with  all
applicable  laws and  orders to which it may be  subject if failure so to comply
would  materially  impair  its  ability to perform  its  obligations  under this
Agreement or any Credit Support Document to which it is a party.

(d)  TAX AGREEMENT. It will give notice of any failure of a representation  made
by it under  Section 3(f) to be accurate and true promptly upon learning of such
failure.

(e)  PAYMENT  OF STAMP TAX.  Subject  to  Section  11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or  performance of this
Agreement by a jurisdiction in which it is incorporated,  organised, managed and
controlled,  or  considered  to have its  seat,  or in which a branch  or office
through which it is acting for the purpose of this Agreement is located  ("Stamp
Tax  Jurisdiction")  and will  indemnify  the other party  against any Stamp Tax
levied  or  imposed  upon the other  party or in  respect  of the other  party's
execution or performance  of this  Agreement by any such Stamp Tax  Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.

5.   EVENTS OF DEFAULT AND TERMINATION EVENTS

(a)  EVENTS OF DEFAULT. The  occurrence at  any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:-

     (i) FAILURE TO PAY OR DELIVER.  Failure by the party to make, when due, any
     payment  under this  Agreement or delivery  under  Section  2(a)(i) or 2(e)
     required to be made by it if such  failure is not remedied on or before the
     third  Local  Business  Day after  notice of such  failure  is given to the
     party;

     (ii)  BREACH OF  AGREEMENT.  Failure by the party to comply with or perform
     any agreement or  obligation  (other than an obligation to make any payment
     under this Agreement or delivery  under Section  2(a)(i) or 2(e) or to give
     notice of a Termination  Event or any agreement or obligation under Section
     4(a)(i),  4(a)(iii) or 4(d)) to be complied  with or performed by the party
     in  accordance  with this  Agreement  if such failure is not remedied on or
     before  the  thirtieth  day after  notice of such  failure  is given to the
     party;

     (iii) CREDIT SUPPORT DEFAULT.

          (1) Failure by the party or any Credit Support  Provider of such party
          to comply with or perform any  agreement or  obligation to be complied
          with or performed by it in accordance with any Credit Support Document
          if such failure is continuing  after any  applicable  grace period has
          elapsed;

          (2) the expiration or  termination of such Credit Support  Document or
          the failing or ceasing of such Credit  Support  Document to be in full
          force and effect for the  purpose of this  Agreement  (in either  case
          other than in accordance with its terms) prior to the  satisfaction of
          all  obligations  of such party under each  Transaction  to which such
          Credit Support  Document  relates  without the written  consent of the
          other party; or

          (3) the party or such Credit Support Provider  disaffirms,  disclaims,
          repudiates or rejects, in whole or in part, or challenges the validity
          of, such Credit Support Document;

     (iv) MISREPRESENTATION. A representation (other than a representation under
     Section  3(e) or (f))  made or  repeated  or  deemed  to have  been made or
     repeated by the party or any Credit Support  Provider of such party in this
     Agreement or any Credit Support  Document  proves to have been incorrect or
     misleading in any material  respect when made or repeated or deemed to have
     been made or repeated;

     (v) DEFAULT UNDER  SPECIFIED  TRANSACTION.  The party,  any Credit  Support
     Provider of such party or any applicable Specified Entity of such party (1)
     defaults  under a Specified  Transaction  and,  after giving  effect to any
     applicable notice  requirement or grace period,  there occurs a liquidation
     of, an acceleration of obligations  under, or an early termination of, that
     Specified Transaction,  (2) defaults, after giving effect to any applicable
     notice  requirement or grace period,  in making any payment or delivery due
     on the last payment,  delivery or exchange date of, or any payment on early
     termination of, a Specified  Transaction (or such default  continues for at
     least  three  Local  Business  Days  if  there  is  no  applicable   notice
     requirement or grace period) or (3)  disaffirms,  disclaims,  repudiates or
     rejects,  in whole or in part, a Specified  Transaction  (or such action is
     taken by any person or entity  appointed  or empowered to operate it or act
     on its behalf);

     (vi) CROSS  DEFAULT.  If "Cross  Default" is  specified  in the Schedule as
     applying to the party, the occurrence or existence of (1) a default,  event
     of default or other  similar  condition  or event  (however  described)  in
     respect of such  party,  any Credit  Support  Provider of such party or any
     applicable  Specified  Entity of such party under one or more agreements or
     instruments relating to Specified Indebtedness of any of them (individually
     or  collectively)  in an aggregate  amount of not less than the  applicable
     Threshold  Amount (as specified in the Schedule) which has resulted in such
     Specified  Indebtedness becoming, or becoming capable at such time of being
     declared,  due and payable under such agreements or instruments,  before it
     would  otherwise  have been due and payable or (2) a default by such party,
     such Credit Support  Provider or such  Specified  Entity  (individually  or
     collectively)  in making one or more payments on the due date thereof in an
     aggregate  amount of not less than the  applicable  Threshold  Amount under
     such  agreements or  instruments  (after  giving  effect to any  applicable
     notice requirement or grace period);

     (vii)  BANKRUPTCY.  The party, any Credit Support Provider of such party or
     any applicable Specified Entity of such party:-

          (1) is dissolved (other than pursuant to a consolidation, amalgamation
          or  merger);  (2) becomes  insolvent  or is unable to pay its debts or
          fails or admits in writing its inability generally to pay its debts as
          they  become  due;  (3) makes a  general  assignment,  arrangement  or
          composition  with or for the benefit of its creditors;  (4) institutes
          or has  instituted  against  it a  proceeding  seeking a  judgment  of
          insolvency or  bankruptcy or any other relief under any  bankruptcy or
          insolvency law or other similar law affecting  creditors' rights, or a
          petition is presented for its winding-up or  liquidation,  and, in the
          case of any  such  proceeding  or  petition  instituted  or  presented
          against it, such  proceeding  or petition (A) results in a judgment of
          insolvency  or  bankruptcy  or the entry of an order for relief or the
          making of an order for its  winding-up  or  liquidation  or (B) is not
          dismissed,  discharged,  stayed or  restrained  in each case within 30
          days of the institution or presentation  thereof; (5) has a resolution
          passed for its winding-up,  official  management or liquidation (other
          than pursuant to a consolidation,  amalgamation or merger);  (6) seeks
          or becomes subject to the appointment of an administrator, provisional
          liquidator, conservator, receiver, trustee, custodian or other similar
          of official for it or for all or substantially all its assets; (7) has
          a secured party take possession of all or substantially all its assets
          or has a distress, execution, attachment, sequestration or other legal
          process  levied,  enforced or sued on or against all or  substantially
          all its assets and such secured  party  maintains  possession,  or any
          such process is not dismissed,  discharged,  stayed or restrained,  in
          each case within 30 days  thereafter;  (8) causes or is subject to any
          event  with  respect  to it which,  under the  applicable  laws of any
          jurisdiction,  has an analogous  effect to any of the events specified
          in  clauses  (1) to  (7)  (inclusive);  or (9)  takes  any  action  in
          furtherance  of,  or  indicating  its  consent  to,  approval  of,  or
          acquiescence in, any of the foregoing acts; or

     (viii) MERGER WITHOUT ASSUMPTION.  The party or any Credit Support Provider
     of such party  consolidates or amalgamates with, or merges with or into, or
     transfers all or  substantially  all its assets to,  another entity and, at
     the time of such consolidation, amalgamation, merger or transfer:-

          (1) the resulting,  surviving or transferee entity fails to assume all
          the  obligations of such party or such Credit  Support  Provider under
          this  Agreement  or any  Credit  Support  Document  to which it or its
          predecessor  was a  party  by  operation  of  law  or  pursuant  to an
          agreement   reasonably   satisfactory  to  the  other  party  to  this
          Agreement; or

          (2) the  benefits  of any  Credit  Support  Document  fail  to  extend
          (without  the consent of the other party) to the  performance  by such
          resulting,  surviving or transferee  entity of its  obligations  under
          this Agreement.

(b)  TERMINATION  EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event  specified  below  constitutes  an  Illegality if the
event is specified  in (i) below,  a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below,  and,
if  specified  to be  applicable,  a Credit  Event  Upon  Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:-

     (i)  ILLEGALITY.  Due to the adoption of, or any change in, any  applicable
     law after the date on which a  Transaction  is entered  into, or due to the
     promulgation  of,  or any  change  in,  the  interpretation  by any  court,
     tribunal  or  regulatory  authority  with  competent  jurisdiction  of  any
     applicable law after such date, it becomes unlawful (other than as a result
     of a breach by the party of Section 4(b)) for such party (which will be the
     Affected Party):-

          (1) to perform any absolute or contingent obligation to make a payment
          or  delivery  or to receive a payment or  delivery  in respect of such
          Transaction  or to comply with any other  material  provision  of this
          Agreement relating to such Transaction; or

          (2) to perform,  or for any Credit  Support  Provider of such party to
          perform,  any contingent or other  obligation which the party (or such
          Credit  Support  Provider)  has  under  any  Credit  Support  Document
          relating to such Transaction;

     (ii) TAX  EVENT.  Due to (x) any  action  taken by a taxing  authority,  or
     brought in a court of competent jurisdiction, on or after the date on which
     a Transaction  is entered into  (regardless of whether such action is taken
     or brought  with respect to a party to this  Agreement)  or (y) a Change in
     Tax Law, the party (which will be the Affected  Party) will,  or there is a
     substantial  likelihood  that it  will,  on the next  succeeding  Scheduled
     Payment Date (1) be required to pay to the other party an additional amount
     in respect of an  Indemnifiable  Tax under  Section  2(d)(i)(4)  (except in
     respect of interest under Section 2(e),  6(d)(ii) or 6(e)) or (2) receive a
     payment  from which an amount is required to be deducted or withheld for or
     on account of a Tax  (except in respect of  interest  under  Section  2(e),
     6(d)(ii)  or 6(e))  and no  additional  amount  is  required  to be paid in
     respect  of such Tax  under  Section  2(d)(i)(4)  (other  than by reason of
     Section 2(d)(i)(4)(A) or (B));

     (iii) TAX EVENT UPON MERGER.  The party (the "Burdened  Party") on the next
     succeeding  Scheduled  Payment  Date will  either (l) be required to pay an
     additional  amount  in  respect  of  an  Indemnifiable  Tax  under  Section
     2(d)(i)(4)  (except in respect of interest under Section 2(e),  6(d)(ii) or
     6(e)) or (2)  receive a payment  from which an amount has been  deducted or
     withheld for or on account of any Indemnifiable Tax in respect of which the
     other party is not  required  to pay an  additional  amount  (other than by
     reason of Section  2(d)(i)(4)(A)  or (B)),  in either case as a result of a
     party  consolidating  or  amalgamating  with,  or merging with or into,  or
     transferring all or substantially  all its assets to, another entity (which
     will be the Affected  Party) where such action does not constitute an event
     described in Section 5(a)(viii);

     (iv) CREDIT EVENT UPON MERGER.  If "Credit  Event Upon Merger" is specified
     in the  Schedule  as applying to the party,  such party  ("X"),  any Credit
     Support Provider of X or any applicable  Specified Entity of X consolidates
     or  amalgamates  with,  or  merges  with  or  into,  or  transfers  all  or
     substantially  all its assets to,  another  entity and such action does not
     constitute   an   event   described   in   Section   5(a)(viii)   but   the
     creditworthiness  of the  resulting,  surviving  or  transferee  entity  is
     materially  weaker  than that of X, such  Credit  Support  Provider or such
     Specified  Entity,  as the case may be,  immediately  prior to such  action
     (and, in such event, X or its successor or transferee, as appropriate, will
     be the Affected Party); or

     (v) ADDITIONAL TERMINATION EVENT. If any "Additional  Termination Event" is
     specified in the Schedule or any  Confirmation as applying,  the occurrence
     of such event (and, in such event,  the Affected Party or Affected  Parties
     shall be as specified for such Additional Termination Event in the Schedule
     or such Confirmation).

(c)  EVENT OF DEFAULT AND  ILLEGALITY. If an event or  circumstance  which would
otherwise  constitute  or give rise to an Event of Default also  constitutes  an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.

6.   EARLY TERMINATION

(a)  RIGHT TO TERMINATE FOLLOWING  EVENT OF DEFAULT.  If at any time an Event of
Default  with  respect to a party (the  "Defaulting  Party") has occurred and is
then continuing,  the other party (the "Non-defaulting  Party") may, by not more
than 20 days notice to the  Defaulting  Party  specifying  the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions.  If, however,
"Automatic  Early  Termination"  is  specified  in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur  immediately  upon the  occurrence  with  respect to such party of an
Event of Default  specified in Section  5(a)(vii)(1),  (3),  (5), (6) or, to the
extent  analogous  thereto,  (8), and as of the time  immediately  preceding the
institution  of the  relevant  proceeding  or the  presentation  of the relevant
petition upon the  occurrence  with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b)  RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.

     (i) NOTICE. If a Termination Event occurs, an Affected Party will, promptly
     upon becoming aware of it, notify the other party, specifying the nature of
     that  Termination  Event and each Affected  Transaction  and will also give
     such other  information about that Termination Event as the other party may
     reasonably require.

     (ii) TRANSFER TO AVOID  TERMINATION  EVENT.  If either an Illegality  under
     Section  5(b)(i)(1)  or a Tax Event  occurs and there is only one  Affected
     Party,  or if a Tax Event Upon Merger occurs and the Burdened  Party is the
     Affected  Party,  the Affected  Party will,  as a condition to its right to
     designate  an  Early  Termination  Date  under  Section  6(b)(iv),  use all
     reasonable  efforts  (which  will not  require  such party to incur a loss,
     excluding immaterial, incidental expenses) to transfer within 20 days after
     it gives notice under Section 6(b)(i) all its rights and obligations  under
     this  Agreement in respect of the Affected  Transactions  to another of its
     Offices or Affiliates so that such Termination Event ceases to exist.

     If the  Affected  Party is not able to make  such a  transfer  it will give
     notice  to the  other  party  to that  effect  within  such 20 day  period,
     whereupon  the other party may effect such a transfer  within 30 days after
     the notice is given under Section 6(b)(i).

     Any such transfer by a party under this Section 6(b)(ii) will be subject to
     and conditional  upon the prior written  consent of the other party,  which
     consent  will not be withheld if such other  party's  policies in effect at
     such time would permit it to enter into transactions with the transferee on
     the terms proposed.

     (iii) TWO AFFECTED PARTIES.  If an Illegality under Section 5(b)(i)(1) or a
     Tax Event  occurs and there are two Affected  Parties,  each party will use
     all  reasonable  efforts to reach  agreement  within 30 days  after  notice
     thereof is given under Section 6(b)(i) on action to avoid that  Termination
     Event.

     (iv) RIGHT TO TERMINATE. If:-

          (l) a transfer  under Section  6(b)(ii) or an agreement  under Section
          6(b)(iii),  as the case may be, has not been  effected with respect to
          all Affected Transactions within 30 days after an Affected Party gives
          notice under Section 6(b)(i); or

          (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger
          or an Additional  Termination Event occurs, or a Tax Event Upon Merger
          occurs and the Burdened Party is not the Affected Party,

          either party in the case of an  Illegality,  the Burdened Party in the
          case of a Tax Event Upon Merger,  any Affected  Party in the case of a
          Tax Event or an Additional Termination Event if there is more than one
          Affected  Party,  or the party which is not the Affected  Party in the
          case of a Credit Event Upon Merger or an Additional  Termination Event
          if there is only one  Affected  Party  may,  by not more  than 20 days
          notice to the other party and provided  that the relevant  Termination
          Event is then  continuing,  designate a day not  earlier  than the day
          such notice is  effective as an Early  Termination  Date in respect of
          all Affected Transactions.

(c)  EFFECT OF DESIGNATION.

     (i) If notice  designating an Early Termination Date is given under Section
     6(a)  or  (b),  the  Early  Termination  Date  will  occur  on the  date so
     designated,  whether or not the  relevant  Event of Default or  Termination
     Event is then continuing.

     (ii) Upon the occurrence or effective  designation of an Early  Termination
     Date, no further  payments or deliveries  under Section  2(a)(i) or 2(e) in
     respect of the  Terminated  Transactions  will be required to be made,  but
     without prejudice to the other provisions of this Agreement. The amount, if
     any,  payable in respect of an Early  Termination  Date shall be determined
     pursuant to Section 6(e).

(d)  CALCULATIONS.

     (i)  STATEMENT.  On or as  soon as  reasonably  practicable  following  the
     occurrence  of  an  Early  Termination  Date,  each  party  will  make  the
     calculations  on its part,  if any,  contemplated  by Section 6(e) and will
     provide to the other party a statement (1) showing,  in reasonable  detail,
     such  calculations  (including  all relevant  quotations and specifying any
     amount  payable under Section 6(e)) and (2) giving  details of the relevant
     account to which any amount  payable to it is to be paid. In the absence of
     written confirmation from the source of a quotation obtained in determining
     a Market Quotation,  the records of the party obtaining such quotation will
     be conclusive evidence of the existence and accuracy of such quotation.

     (ii)  PAYMENT  DATE.  An amount  calculated  as being due in respect of any
     Early  Termination  Date under Section 6(e) will be payable on the day that
     notice  of the  amount  payable  is  effective  (in the  case  of an  Early
     Termination  Date which is  designated or occurs as a result of an Event of
     Default) and on the day which is two Local  Business  Days after the day on
     which notice of the amount  payable is  effective  (in the case of an Early
     Termination  Date which is designated as a result of a Termination  Event).
     Such  amount  will be paid  together  with (to the extent  permitted  under
     applicable law) interest  thereon (before as well as after judgment) in the
     Termination  Currency,  from (and including) the relevant Early Termination
     Date to (but  excluding)  the date such amount is paid,  at the  Applicable
     Rate.  Such interest  will be calculated on the basis of daily  compounding
     and the actual number of days elapsed.

(e)  PAYMENTS ON EARLY  TERMINATION.  If an Early  Termination  Date occurs, the
following  provisions shall apply based on the parties' election in the Schedule
of a payment measure,  either "Market Quotation or "Loss", and a payment method,
either the  "First  Method"  or the  "Second  Method".  If the  parties  fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that 'Market Quotation" or the "Second Method", as the case may be, shall apply.
The  amount,  if any,  payable  in  respect  of an  Early  Termination  Date and
determined pursuant to this Section will be subject to any Set-off.

     (i) EVENTS OF DEFAULT.  If the Early Termination Date results from an Event
     of Default:-

          (1) FIRST METHOD AND MARKET QUOTATION.  If the First Method and Market
          Quotation apply,  the Defaulting Party will pay to the  Non-defaulting
          Party  the  excess,  if a  positive  number,  of  (A)  the  sum of the
          Settlement Amount (determined by the Non-defaulting  Party) in respect
          of the Terminated Transactions and the Termination Currency Equivalent
          of the Unpaid Amounts owing to the  Non-defaulting  Party over (B) the
          Termination  Currency  Equivalent  of the Unpaid  Amounts owing to the
          Defaulting Party.

          (2) FIRST  METHOD AND LOSS.  If the First  Method and Loss apply,  the
          Defaulting Party will pay to the  Non-defaulting  Party, if a positive
          number, the Non-defaulting Party's Loss in respect of this Agreement.

          (3)  SECOND  METHOD  AND MARKET  QUOTATION.  If the Second  Method and
          Market Quotation apply, an amount will be payable equal to (A) the sum
          of the Settlement Amount (determined by the  Non-defaulting  Party) in
          respect of the Terminated  Transactions  and the Termination  Currency
          Equivalent  of the Unpaid  Amounts owing to the  Non-defaulting  Party
          less (B) the  Termination  Currency  Equivalent of the Unpaid  Amounts
          owing to the Defaulting  Party.  If that amount is a positive  number,
          the Defaulting Party will pay it to the Non-defaulting Party; if it is
          a negative  number,  the  Non-defaulting  Party will pay the  absolute
          value of that amount to the Defaulting Party.

          (4) SECOND METHOD AND LOSS.  If the Second  Method and Loss apply,  an
          amount will be payable  equal to the  Non-defaulting  Party's  Loss in
          respect of this Agreement.  If that amount is a positive  number,  the
          Defaulting Party will pay it to the  Non-defaulting  Party; if it is a
          negative number, the Non-defaulting  Party will pay the absolute value
          of that amount to the Defaulting Party.

     (ii)  TERMINATION  EVENTS.  If the Early  Termination  Date  results from a
     Termination Event:-

          (1) ONE AFFECTED  PARTY.  If there is one Affected  Party,  the amount
          payable will be determined in accordance with Section  6(e)(i)(3),  if
          Market  Quotation  applies,  or Section  6(e)(i)(4),  if Loss applies,
          except that, in either case, references to the Defaulting Party and to
          the  Non-defaulting  Party  will be  deemed  to be  references  to the
          Affected  Party  and  the  party  which  is not  the  Affected  Party,
          respectively, and, if Loss applies and fewer than all the Transactions
          are being  terminated,  Loss  shall be  calculated  in  respect of all
          Terminated Transactions.

          (2) TWO AFFECTED PARTIES. If there are two Affected Parties:-

               (A) if Market  Quotation  applies,  each party will  determine  a
               Settlement Amount in respect of the Terminated Transactions,  and
               an amount will be payable equal to (I) the sum of (a) one-half of
               the difference  between the  Settlement  Amount of the party with
               the higher  Settlement  Amount ("X") and the Settlement Amount of
               the party  with the  lower  Settlement  Amount  ("Y") and (b) the
               Termination  Currency Equivalent of the Unpaid Amounts owing to X
               less  (II) the  Termination  Currency  Equivalent  of the  Unpaid
               Amounts owing to Y; and

               (B) if Loss  applies,  each  party  will  determine  its  Loss in
               respect of this Agreement (or, if fewer than all the Transactions
               are being terminated,  in respect of all Terminated Transactions)
               and an amount will be payable equal to one-half of the difference
               between  the Loss of the party with the higher Loss ("X") and the
               Loss of the party with the lower Loss ("Y").

     If the amount payable is a positive  number, Y will pay it to X; if it is a
     negative number, X will pay the absolute value of that amount to Y.

     (iii)  ADJUSTMENT  FOR  BANKRUPTCY.   In   circumstances   where  an  Early
     Termination Date occurs because  "Automatic Early  Termination"  applies in
     respect of a party,  the amount  determined under this Section 6(e) will be
     subject to such  adjustments  as are  appropriate  and  permitted by law to
     reflect  any  payments or  deliveries  made by one party to the other under
     this  Agreement  (and  retained by such other party) during the period from
     the  relevant  Early  Termination  Date to the date for payment  determined
     under Section 6(d)(ii).

     (iv)  PRE-ESTIMATE.  The parties agree that if Market Quotation  applies an
     amount recoverable under this Section 6(e) is a reasonable  pre-estimate of
     loss and not a penalty.  Such amount is payable for the loss of bargain and
     the loss of  protection  against  future  risks  and  except  as  otherwise
     provided in this  Agreement  neither  party will be entitled to recover any
     additional damages as a consequence of such losses.

7.   TRANSFER

Subject  to  Section  6(b)(ii),  neither  this  Agreement  nor any  interest  or
obligation  in or under this  Agreement  may be  transferred  (whether by way of
security or otherwise) by either party without the prior written  consent of the
other party, except that:-

(a)  a  party  may  make  such  a  transfer  of  this  Agreement  pursuant  to a
consolidation  or amalgamation  with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b)  a party may make such a transfer  of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8.   CONTRACTUAL CURRENCY

(a)  PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant  currency  specified in this  Agreement for that payment
(the  "Contractual  Currency").  To the extent  permitted by applicable law, any
obligation to make payments  under this  Agreement in the  Contractual  Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual  Currency,  except to the extent such  tender  results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in  converting  the  currency  so  tendered  into the  Contractual
Currency,  of the full amount in the Contractual Currency of all amounts payable
in respect of this  Agreement.  If for any reason the amount in the  Contractual
Currency  so  received  falls  short of the amount in the  Contractual  Currency
payable in respect of this  Agreement,  the party  required  to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the  Contractual  Currency as may be necessary to  compensate  for the
shortfall.  If for any reason the amount in the Contractual Currency so received
exceeds  the  amount in the  Contractual  Currency  payable  in  respect of this
Agreement,  the party  receiving the payment will refund  promptly the amount of
such excess.

(b)  JUDGMENTS.  To the extent  permitted by applicable  law, if any judgment or
order  expressed in a currency other than the  Contractual  Currency is rendered
(i) for the payment of any amount owing in respect of this  Agreement,  (ii) for
the payment of any amount  relating to any early  termination in respect of this
Agreement  or (iii) in respect of a judgment  or order of another  court for the
payment  of any  amount  described  in (i) or  (ii)  above,  the  party  seeking
recovery,  after recovery in full of the aggregate amount to which such party is
entitled  pursuant  to the  judgment  or  order,  will be  entitled  to  receive
immediately  from the other party the amount of any shortfall of the Contractual
Currency  received  by such  party as a  consequence  of sums paid in such other
currency  and  will  refund  promptly  to the  other  party  any  excess  of the
Contractual  Currency  received by such party as a  consequence  of sums paid in
such other  currency if such shortfall or such excess arises or results from any
variation  between  the rate of exchange  at which the  Contractual  Currency is
converted  into the  currency of the  judgment or order for the purposes of such
judgment or order and the rate of  exchange at which such party is able,  acting
in a reasonable  manner and in good faith in  converting  the currency  received
into the Contractual  Currency,  to purchase the  Contractual  Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange  payable in connection  with the purchase of or conversion  into the
Contractual Currency.

(c)  SEPARATE  INDEMNITIES. To the extent  permitted by  applicable  law,  these
indemnities  constitute  separate  and  independent  obligations  from the other
obligations in this  Agreement,  will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof  being  made for any other  sums  payable  in  respect of this
Agreement.

(d)  EVIDENCE OF LOSS. For the purpose of this Section 8, it will be  sufficient
for a party to  demonstrate  that it would  have  suffered  a loss had an actual
exchange or purchase been made.

9.   MISCELLANEOUS

(a)  ENTIRE  AGREEMENT.  This  Agreement constitutes  the entire  agreement  and
understanding  of the parties with respect to its subject  matter and supersedes
all oral communication and prior writings with respect thereto.

(b)  AMENDMENTS.  No  amendment,  modification  or  waiver  in  respect  of this
Agreement will be effective unless in writing  (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

(c)  SURVIVAL  OF  OBLIGATIONS.  Without  prejudice  to Sections  2(a)(iii)  and
6(c)(ii),  the  obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d)  REMEDIES  CUMULATIVE.  Except as  provided in this  Agreement,  the rights,
powers,  remedies and  privileges  provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e)  COUNTERPARTS AND CONFIRMATIONS.

     (i) This Agreement (and each amendment,  modification and waiver in respect
     of it)  may  be  executed  and  delivered  in  counterparts  (including  by
     facsimile transmission), each of which will be deemed an original.

     (ii) The parties  intend  that they are legally  bound by the terms of each
     Transaction  from the moment they agree to those terms  (whether  orally or
     otherwise). A Confirmation shall be entered into as soon as practicable and
     may be executed  and  delivered  in  counterparts  (including  by facsimile
     transmission)  or be created by an exchange of telexes or by an exchange of
     electronic messages on an electronic  messaging system,  which in each case
     will be  sufficient  for all purposes to evidence a binding  supplement  to
     this  Agreement.  The  parties  will  specify  therein or  through  another
     effective  means that any such  counterpart,  telex or  electronic  message
     constitutes a Confirmation.

(f)  NO WAIVER OF RIGHTS. A failure or delay in exercising  any right,  power or
privilege  in respect of this  Agreement  will not be  presumed  to operate as a
waiver,  and a single or partial exercise of any right,  power or privilege will
not be presumed to preclude any subsequent or further  exercise,  of that right,
power or privilege or the exercise of any other right, power or privilege.

(g)  HEADINGS.  The  headings  used in this  Agreement  are for  convenience  of
reference  only and are not to affect  the  construction  of or to be taken into
consideration in interpreting this Agreement.

10.  OFFICES; MULTIBRANCH PARTIES

(a)  If Section 10(a) is specified in the Schedule as applying,  each party that
enters into a  Transaction  through an Office other than its head or home office
represents to the other party that,  notwithstanding the place of booking office
or jurisdiction of  incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office.  This  representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.

(b)  Neither  party may change the Office  through  which it makes and  receives
payments  or  deliveries  for the  purpose of a  Transaction  without  the prior
written consent of the other party.

(c)  If a party  is  specified  as a  Multibranch  Party  in the  Schedule, such
Multibranch  Party  may  make and  receive  payments  or  deliveries  under  any
Transaction  through any Office listed in the Schedule,  and the Office  through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.

11.  EXPENSES

A Defaulting Party will, on demand,  indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses,  including legal fees and
Stamp  Tax,  incurred  by such  other  party by  reason of the  enforcement  and
protection of its rights under this Agreement or any Credit Support  Document to
which the Defaulting  Party is a party or by reason of the early  termination of
any Transaction, including, but not limited to, costs of collection.

12.      NOTICES

(a)  EFFECTIVENESS.  Any  notice  or  other  communication  in  respect  of this
Agreement  may be given in any manner set forth below  (except  that a notice or
other  communication  under  Section  5 or 6  may  not  be  given  by  facsimile
transmission  or  electronic  messaging  system) to the  address or number or in
accordance  with the  electronic  messaging  system  details  provided  (see the
Schedule) and will be deemed effective as indicated:-

     (i) if in writing and delivered in person or by courier,  on the date it is
     delivered;

     (ii) if sent by telex, on the date the recipient's answerback is received;

     (iii) if sent by facsimile  transmission,  on the date that transmission is
     received by a  responsible  employee of the  recipient  in legible form (it
     being  agreed that the burden of proving  receipt will be on the sender and
     will  not  be met  by a  transmission  report  generated  by  the  sender's
     facsimile machine);

     (iv) if sent by certified or registered mail (airrnail, if overseas) or the
     equivalent (return receipt  requested),  on the date that mail is delivered
     or its delivery is attempted; or

     (v) if sent by electronic  messaging  system,  on the date that  electronic
     message is received,

unless the date of that  delivery (or attempted  delivery) or that  receipt,  as
applicable,  is not a Local Business Day or that  communication is delivered (or
attempted) or received,  as  applicable,  after the close of business on a Local
Business  Day,  in which  case  that  communication  shall be  deemed  given and
effective on the first following day that is a Local Business Day.

(b)  CHANGE OF  ADDRESSES.  Either  party may by notice to the other  change the
address,  telex or facsimile  number or electronic  messaging  system details at
which notices or other communications are to be given to it.

13.  GOVERNING LAW AND JURISDICTION

(a)  GOVERNING  LAW.  This  Agreement  will  be  governed  by and  construed  in
accordance with the law specified in the Schedule.

(b)  JURISDICTION. With respect to any suit,  action or proceedings  relating to
this Agreement ("Proceedings"), each party irrevocably:-

     (i) submits to the jurisdiction of the English courts, if this Agreement is
     expressed  to  be  governed  by  English  law,  or  to  the   non-exclusive
     jurisdiction  of the courts of the State of New York and the United  States
     District  Court  located in the Borough of Manhattan  in New York City,  if
     this  Agreement is expressed to be governed by the laws of the State of New
     York; and

     (ii)  waives any  objection  which it may have at any time to the laying of
     venue of any Proceedings  brought in any such court,  waives any claim that
     such  Proceedings  have been brought in an  inconvenient  forum and further
     waives the right to object,  with  respect to such  Proceedings,  that such
     court does not have any jurisdiction over such party.

Nothing in this Agreement  precludes  either party from bringing  Proceedings in
any other jurisdiction  (outside,  if this Agreement is expressed to be governed
by English law, the Contracting  States, as defined in Section 1(3) of the Civil
Jurisdiction  and  Judgments  Act  1982  or  any   modification,   extension  or
re-enactment  thereof  for the time  being in force)  nor will the  bringing  of
Proceedings  in  any  one  or  more  jurisdictions   preclude  the  bringing  of
Proceedings in any other jurisdiction.

(c)  SERVICE OF PROCESS. Each party  irrevocably  appoints the Process Agent (if
any) specified  opposite its name in the Schedule to receive,  for it and on its
behalf,  service of process in any  Proceedings.  If for any reason any  party's
Process  Agent is unable to act as such,  such  party will  promptly  notify the
other party and within 30 days appoint a substitute  process agent acceptable to
the other party. The parties  irrevocably consent to service of process given in
the manner  provided for notices in Section 12.  Nothing in this  Agreement will
affect the right of either party to serve process in any other manner  permitted
by law.

(d)  WAIVER OF IMMUNITIES. Each party irrevocably  waives, to the fullest extent
permitted by applicable  law, with respect to itself and its revenues and assets
(irrespective  of their use or  intended  use),  all  immunity on the grounds of
sovereignty or other similar  grounds from (i) suit,  (ii)  jurisdiction  of any
court, (iii) relief by way of injunction,  order for specific performance or for
recovery of property,  (iv)  attachment of its assets  (whether  before or after
judgment)  and (v) execution or  enforcement  of any judgment to which it or its
revenues or assets might  otherwise be entitled in any Proceedings in the courts
of  any  jurisdiction  and  irrevocably  agrees,  to  the  extent  permitted  by
applicable law, that it will not claim any such immunity in any Proceedings.

14.  DEFINITIONS

As used in this Agreement:-

"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).

"AFFECTED PARTY" has the meaning specified in Section 5(b).

"AFFECTED  TRANSACTIONS"  means  (a)  with  respect  to  any  Termination  Event
consisting  of  an  Illegality,   Tax  Event  or  Tax  Event  Upon  Merger,  all
Transactions  affected by the occurrence of such Termination  Event and (b) with
respect to any other Termination Event, all Transactions.

"AFFILIATE"  means,  subject to the  Schedule,  in relation  to any person,  any
entity  controlled,  directly  or  indirectly,  by the  person,  any entity that
controls,  directly  or  indirectly,  the  person  or  any  entity  directly  or
indirectly under common control with the person. For this purpose,  "control" of
any entity or person  means  ownership  of a majority of the voting power of the
entity or person.

"APPLICABLE RATE" means:-

(a)  in respect of obligations  payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b)  in respect of an  obligation to pay an amount under  Section 6(e) of either
party from and after the date  (determined in accordance with Section  6(d)(ii))
on which that amount is payable, the Default Rate;

(c)  in respect of all other obligations  payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting  Party, the Non-default
Rate; and

(d)  in all other cases, the Termination Rate.

"BURDENED PARTY" has the meaning specified in Section 5(b).

"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation  of any  law)  that  occurs  on or after  the  date on which  the
relevant Transaction is entered into.

"CONSENT"  includes  a  consent,  approval,  action,  authorisation,  exemption,
notice, filing, registration or exchange control consent.

"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).

"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.

"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.

"DEFAULT  RATE"  means a rate per  annum  equal to the  cost  (without  proof or
evidence of any actual  cost) to the relevant  payee (as  certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

"DEFAULTING PARTY" has the meaning specified in Section 6(a).

"EARLY  TERMINATION  DATE" means the date  determined in accordance with Section
6(a) or 6(b)(iv).

"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"ILLEGALITY" has the meaning specified in Section 5(b).

"INDEMNIFIABLE  TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation  authority  imposing such
Tax and the  recipient  of such  payment or a person  related to such  recipient
(including,  without  limitation,  a connection  arising from such  recipient or
related person being or having been a citizen or resident of such  jurisdiction,
or being or having been organised,  present or engaged in a trade or business in
such  jurisdiction,  or having or having had a permanent  establishment or fixed
place of business in such  jurisdiction,  but  excluding  a  connection  arising
solely  from such  recipient  or  related  person  having  executed,  delivered,
performed  its  obligations  or  received a payment  under,  or  enforced,  this
Agreement or a Credit Support Document).

"LAW" includes any treaty, law, rule or regulation (as modified,  in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"LAWFUL" and "UNLAWFUL" will be construed accordingly.

"LOCAL BUSINESS DAY" means,  subject to the Schedule,  a day on which commercial
banks are open for business  (including dealings in foreign exchange and foreign
currency  deposits) (a) in relation to any obligation under Section 2(a)(i),  in
the place(s) specified in the relevant Confirmation or, if not so specified,  as
otherwise agreed by the parties in writing or determined  pursuant to provisions
contained, or incorporated by reference,  in this Agreement,  (b) in relation to
any other  payment,  in the place where the relevant  account is located and, if
different,  in the principal  financial  centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication,  including notice
contemplated  under Section  5(a)(i),  in the city  specified in the address for
notice  provided by the recipient and, in the case of a notice  contemplated  by
Section  2(b),  in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"LOSS"  means,  with  respect  to  this  Agreement  or  one or  more  Terminated
Transactions,  as the  case  may  be,  and a  party,  the  Termination  Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case  expressed as a negative  number)
in connection  with this  Agreement or that  Terminated  Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the  election of such party but without  duplication,  loss or
cost  incurred  as a  result  of  its  terminating,  liquidating,  obtaining  or
reestablishing any hedge or related trading position (or any gain resulting from
any of them).  Loss  includes  losses  and costs (or  gains) in  respect  of any
payment or delivery  required to have been made (assuming  satisfaction  of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid  duplication,  if Section 6(e)(i)(1) or (3)
or  6(e)(ii)(2)(A)  applies.  Loss does not  include a  party's  legal  fees and
out-of-pocket  expenses referred to under Section 11. A party will determine its
Loss as of the relevant  Early  Termination  Date, or, if that is not reasonably
practicable,  as of the earliest date thereafter as is reasonably practicable. A
party  may (but need not)  determine  its Loss by  reference  to  quotations  of
relevant  rates or  prices  from one or more  leading  dealers  in the  relevant
markets.

"MARKET  QUOTATION" means,  with respect to one or more Terminated  Transactions
and a party  making  the  determination,  an amount  determined  on the basis of
quotations from Reference  Market-makers.  Each quotation will be for an amount,
if any, that would be paid to such party  (expressed as a negative number) or by
such party  (expressed as a positive  number) in  consideration  of an agreement
between such party  (taking into account any existing  Credit  Support  Document
with  respect  to the  obligations  of such  party)  and the  quoting  Reference
Market-maker to enter into a transaction (the  "Replacement  Transaction")  that
would have the effect of  preserving  for such party the economic  equivalent of
any payment or delivery  (whether  the  underlying  obligation  was  absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such  Terminated  Transaction
or group of Terminated  Transactions  that would,  but for the occurrence of the
relevant Early  Termination  Date,  have been required after that date. For this
purpose,  Unpaid  Amounts in respect of the  Terminated  Transaction or group of
Terminated Transactions are to be excluded but, without limitation,  any payment
or delivery that would, but for the relevant Early  Termination  Date, have been
required (assuming  satisfaction of each applicable  condition  precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such  documentation  as such party and the Reference  Market-maker
may, in good faith,  agree.  The party making the  determination  (or its agent)
will request each Reference  Market-maker to provide its quotation to the extent
reasonably  practicable as of the same day and time (without regard to different
time zones) on or as soon as  reasonably  practicable  after the relevant  Early
Termination  Date.  The day and  time as of  which  those  quotations  are to be
obtained  will  be  selected  in  good  faith  by the  party  obliged  to make a
determination  under  Section  6(e),  and,  if each party is so  obliged,  after
consultation  with the other.  If more than three  quotations are provided,  the
Market  Quotation will be the arithmetic mean of the quotations,  without regard
to the quotations  having the highest and lowest  values.  If exactly three such
quotations are provided,  the Market  Quotation will be the quotation  remaining
after disregarding the highest and lowest quotations.  For this purpose, if more
than one quotation has the same highest value or lowest value,  then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be  deemed  that  the  Market  Quotation  in  respect  of  such  Terminated
Transaction or group of Terminated Transactions cannot be determined.

"NON-DEFAULT  RATE" means a rate per annum equal to the cost  (without  proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).

"OFFICE" means a branch or office of a party,  which may be such party's head or
home office.

"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"REFERENCE  MARKET-MAKERS"  means four leading  dealers in the  relevant  market
selected  by the party  determining  a Market  Quotation  in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an  extension  of credit  and (b) to the  extent  practicable,  from  among such
dealers having an office in the same city.

"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its  seat,  (b) where an Office  through  which the party is acting  for
purposes of this  Agreement  is located,  (c) in which the party  executes  this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"SCHEDULED  PAYMENT  DATE"  means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"SET-OFF" means set-off, offset,  combination of accounts, right of retention or
withholding  or  similar  right or  requirement  to which the payer of an amount
under Section 6 is entitled or subject  (whether  arising under this  Agreement,
another contract,  applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"SETTLEMENT AMOUNT" means, with respect to a  party and  any  Early  Termination
Date, the sum of:-

(a)  the Termination  Currency  Equivalent  of the  Market  Quotations  (whether
positive or negative)  for each  Terminated  Transaction  or group of Terminated
Transactions for which a Market Quotation is determined; and

(b)  such party's Loss (whether positive  or  negative and without  reference to
any Unpaid  Amounts)for each  Terminated  Transaction  or  group  of  Terminated
Transactions  for which a Market Quotation cannot be determined or would not (in
the  reasonable  belief  of  the  party  making  the  determination)  produce  a
commercially reasonable result.

"SPECIFIED ENTITY" has the meaning specified in the Schedule.

"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"SPECIFIED  TRANSACTION"  means,  subject to the Schedule,  (a) any  transaction
(including an agreement with respect thereto) now existing or hereafter  entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable  Specified  Entity of such party) and the other party to
this  Agreement  (or any Credit  Support  Provider  of such  other  party or any
applicable  Specified  Entity  of  such  other  party)  which  is  a  rate  swap
transaction,  basis swap,  forward rate transaction,  commodity swap,  commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option,  foreign  exchange  transaction,  cap  transaction,  floor
transaction, collar transaction, currency swap transaction,  cross-currency rate
swap transaction,  currency option or any other similar  transaction  (including
any option with respect to any of these  transactions),  (b) any  combination of
these  transactions  and (c) any other  transaction  identified  as a  Specified
Transaction in this Agreement or the relevant confirmation.

"STAMP TAX" means any stamp, registration, documentation or similar tax.

"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest,  penalties and additions thereto) that is
imposed by any  government  or other taxing  authority in respect of any payment
under this Agreement other than a stamp, registration,  documentation or similar
tax.

"TAX EVENT" has the meaning specified in Section 5(b).

"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).

"TERMINATED  TRANSACTIONS"  means with respect to any Early Termination Date (a)
if resulting  from a Termination  Event,  all Affected  Transactions  and (b) if
resulting from an Event of Default,  all Transactions (in either case) in effect
immediately  before  the  effectiveness  of the  notice  designating  that Early
Termination  Date (or, if "Automatic  Early  Termination"  applies,  immediately
before that Early Termination Date).

"TERMINATION CURRENCY" has the meaning specified in the Schedule.

"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination  Currency,  such Termination  Currency amount and, in respect of
any amount  denominated in a currency other than the  Termination  Currency (the
"Other  Currency"),  the amount in the  Termination  Currency  determined by the
party  making the  relevant  determination  as being  required to purchase  such
amount of such Other Currency as at the relevant Early  Termination Date, or, if
the relevant Market  Quotation or Loss (as the case may be), is determined as of
a later date, that later date,  with the Termination  Currency at the rate equal
to the spot exchange rate of the foreign  exchange  agent  (selected as provided
below) for the purchase of such Other Currency with the Termination  Currency at
or about  11:00  a.m.  (in the  city in which  such  foreign  exchange  agent is
located) on such date as would be customary for the determination of such a rate
for the  purchase  of such  Other  Currency  for  value  on the  relevant  Early
Termination  Date or that later date.  The foreign  exchange agent will, if only
one party is obliged to make a determination  under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

"TERMINATION EVENT" means an Illegality,  a Tax Event or a Tax Event Upon Merger
or, if specified to be  applicable,  a Credit Event Upon Merger or an Additional
Termination Event.

"TERMINATION  RATE" means a rate per annum equal to the  arithmetic  mean of the
cost (without  proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"UNPAID AMOUNTS" owing to any party means,  with respect to an Early Termination
Date,  the  aggregate  of (a) in respect  of all  Terminated  Transactions,  the
amounts that became  payable (or that would have become  payable but for Section
2(a)(iii))  to such  party  under  Section  2(a)(i)  on or prior  to such  Early
Termination  Date and which remain unpaid as at such Early  Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii))  required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market  value of that which was (or would have been)  required to be
delivered  as of the  originally  scheduled  date  for  delivery,  in each  case
together with (to the extent  permitted under  applicable law) interest,  in the
currency  of such  amounts,  from  (and  including)  the date  such  amounts  or
obligations  were or would have been  required to have been paid or performed to
(but  excluding)  such Early  Termination  Date, at the  Applicable  Rate.  Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed.  The fair market value of any obligation referred
to in clause (b) above shall be  reasonably  determined  by the party obliged to
make the  determination  under Section 6(e) or, if each party is so obliged,  it
shall be the average of the Termination  Currency Equivalents of the fair market
values reasonably determined by both parties.

<PAGE>

IN WITNESS  WHEREOF the parties have executed  this  document on the  respective
dates  specified  below with effect from the date specified on the first page of
this document.

CREDIT LYONNAIS NEW YORK BRANCH             APRIA HEALTHCARE GROUP INC.

( Party A)                                  (Party B)

By: /s/ ROBIN MOSER                         By: /s/ JAMES E. BAKER
    ----------------------------                --------------------------------
    Name:  Robin Moser                          Name:  James E. Baker
    Title: Senior Vice President                Title: Chief Financial Officer
           & Treasurer                          Date:  January 14, 2003
    Date:  January 13, 2003EXHIBIT 10.23
                                    SCHEDULE
                                     TO THE
                                MASTER AGREEMENT

                          dated as of December 3, 2002

                                     between

                   CREDIT LYONNAIS NEW YORK BRANCH ("PARTY A")
       the New York Branch of Credit Lyonnais S.A., a banking corporation
         organized and existing under the laws of the Republic of France

                                       and

                     APRIA HEALTHCARE GROUP INC. ("PARTY B")
  a corporation organized and existing under the laws of the State of Delaware

PART 1. TERMINATION PROVISIONS

(a)     "SPECIFIED ENTITY" means in relation to Party A for the purpose of:

         Section 5(a)(v),       None
         Section 5(a)(vi),      None
         Section 5(a)(vii),     None
         Section 5(b)(iv),      None

                       and in relation to Party B for the purpose of:

         Section 5(a)(v),       None
         Section 5(a)(vi),      None
         Section 5(a)(vii),     None
         Section 5(b)(iv),      None.

(b)      "SPECIFIED  TRANSACTION"  will have the meaning specified in Section 14
         of this Agreement.

(c)      The "CROSS  DEFAULT"  provisions of Section  5(a)(vi) of this Agreement
         will apply to both parties,  but shall exclude any payment default that
         results solely from wire transfer  difficulties or an error or omission
         of an administrative or operational nature (so long as sufficient funds
         are available to the relevant party on the relevant date),  but only if
         payment  is  made  within  three  Business  Days  after  such  transfer
         difficulties  have been  corrected  or the error or  omission  has been
         discovered.

         If such provisions apply:

         "SPECIFIED  INDEBTEDNESS" will have the meaning specified in Section 14
         of this  Agreement,  except  that  such  term  shall  not  include  any
         obligation  in respect of deposits  received in the ordinary  course of
         Party A's banking business.

         "THRESHOLD AMOUNT" means for Party A USD 10,000,000 and for Party B USD
         5,000,000 (or its  equivalent in any other  currency,  currency unit or
         combination thereof).

(d)      "TERMINATION CURRENCY" means United States Dollars.

(e)      The "CREDIT EVENT UPON MERGER"  provisions of Section  5(b)(iv) of this
         Agreement will apply to Party A and to Party B.

(f)      The  "AUTOMATIC  EARLY  TERMINATION"  provision of Section 6(a) of this
         Agreement will not apply to Party A and will not apply to Party B.

(g)      PAYMENTS ON EARLY TERMINATION.  For the purpose of Section 6(e) of this
         Agreement:

              (i)  Market  Quotation will apply.
              (ii) The Second Method will apply.

(h)      ADDITIONAL TERMINATION EVENT will apply to Party B. The following event
         shall constitute Additional Termination Events and Party B shall be the
         Affected Party:

         In the  event  that the  Credit  Agreement  is paid in  full,  amended,
         assigned or transferred  and this Agreement is no longer secured by the
         Collateral  Documents,  as such term is defined in the Credit Agreement
         and/or this  Agreement is no longer one of the Guaranty  Obligations as
         such term is defined in the Credit Agreement.

(i)      ADDITIONAL  EVENT OF DEFAULT.  The  occurrence  of any of the following
         shall constitute an additional  "Event of Default"  pursuant to Section
         5(a) of the Agreement with respect to Party B:

         Any  Events of  Default  as such term is  defined  in  Section 9 of the
         Credit  Agreement shall occur and be continuing.  For purposes  hereof,
         "Credit  Agreement"  shall mean the Third  Amended and Restated  Credit
         Agreement  dated as of June 7, 2002 among Party B, as Borrower  certain
         of its Subsidiaries,  as Guarantors,  the Lenders  identified  therein,
         Bank of  America,  N.A.,  as Agent and Party A, The Bank of Nova Scotia
         and Fleet National Bank, as Co-Syndication Agents,  arranged by Banc of
         America  Securities LLC, as sole Lead Arranger and sole Book Manager as
         such Credit Agreement may be amended or supplemented from time to time.

PART 2.  TAX REPRESENTATIONS

(a)      PAYER  REPRESENTATIONS.   For  the  purpose  of  Section  3(e) of  this
         Agreement,  each of  Party  A and  Party  B  represents  that it is not
         required by any  applicable  law,  as  modified by the  practice of any
         relevant  governmental revenue authority,  of any Relevant Jurisdiction
         to make any deduction or withholding  for or on account of any Tax from
         any payment (other than interest  under Section 2(e),  6(d)(ii) or 6(e)
         of this  Agreement)  to be made by it to the  other  party  under  this
         Agreement.  In  making  this  representation,  it may  rely  on(i)  the
         accuracy  of any  representation  made by the other  party  pursuant to
         Section 3(f) of this Agreement;  (ii) the satisfaction of the agreement
         of the other party  contained  in Section  4(a)(i) or 4(a)(iii) of this
         Agreement and the accuracy and  effectiveness of any document  provided
         by the other party  pursuant to Section  4(a)(i) or  4(a)(iii)  of this
         Agreement;  and (iii) the  satisfaction  of the  agreement of the other
         party  contained in Section 4(d) of this Agreement;  provided,  that it
         shall not be a breach of this  representation  where reliance is placed
         on clause  (ii) and the other party does not deliver a form or document
         under  Section  4(a)(iii)  of this  Agreement  by  reason  of  material
         prejudice to its legal or commercial position.

(b)      PAYEE REPRESENTATIONS

         (i) Party A /Payee Tax Representation.  For the purpose of Section 3(f)
         of this Agreement,  Party A represents that each payment received or to
         be received by it in connection with this Agreement will be effectively
         connected  with its conduct of a trade or business in the United States
         of America.

         (ii) Party B/ Payee Tax Representation. For the purpose of Section 3(f)
         of  this  Agreement,  Party  B  represents  that  it  is  a corporation
         organized  and  existing  under  the laws of the  State of  Delaware.

PART 3.  AGREEMENT TO DELIVER DOCUMENTS

         For the purpose of Sections 4(a)(i) and (ii) of this Agreement:

         Other documents to be delivered are:
<TABLE>

<S>                   <C>                                                 <C>                  <C>
                                                                                                  COVERED BY
  PARTY REQUIRED TO                                                        DATE BY WHICH         SECTION 3(D)
  DELIVER DOCUMENT    FORM/DOCUMENT/CERTIFICATE                            TO BE DELIVERED      REPRESENTATION
  -----------------   -------------------------------------------------   -------------------   --------------
                      Certified  copies of  all  documents  evidencing    Upon  execution  of         Yes
  Party B             necessary  corporate  or  partnership  or  other    Agreement
                      authorizations and approvals with respect to the
                      execution, delivery and performance by the party
                      or any Credit Support Provider of this Agreement,
                      each  Confirmation  and  any  applicable  Credit
                      Support Document.
  -----------------   -------------------------------------------------   -------------------   --------------
                      A certificate  of an  authorized  officer of  the   Upon  execution  of         Yes
  Party A and         party or  Credit  Support Provider  in respect of   Agreement
  Party B             such  party, if any,  certifying the  names, true
                      signatures  and authority of  the officers of the
                      party signing  this Agreement, each  Confirmation
                      and any applicable Credit Support Document.

  -----------------   -------------------------------------------------   --------------------   --------------
  Party B             Legal opinion substantially in the form of Exhibit  Upon  execution  of          No
                      I attached hereto.                                  this Agreement

 -----------------    -------------------------------------------------   --------------------   --------------
  Party B             The Credit Support Documents                        Already provided             No
                                                                          by Party B under
                                                                          the Credit Agreement.
</TABLE>

PART 4.  MISCELLANEOUS

(a)      ADDRESSES  FOR  NOTICES.  For  the  purpose of  Section  12(a) of  this
         Agreement:

         Address for notices or communications to Party A:

         Address:  1301 Avenue of the Americas, New York, New York 10019
         Attention:  Treasury Department
         Telex No.:  62410   Answerback:  CREDW
         Telephone No:  (212) 261-7310
         Facsimile No.:  (212) 459-3167

         Address for notices or communications to Party B

         Address:  Apria Healthcare Group Inc.
                   26220 Enterprise Court
                   Lake Forest, California 92630
         Attention:  Alicia Price
         Telephone No.: 949-639-2488
         Facsimile No:  949-639-6040

(b)      PROCESS  AGENT.  For the  purpose of Section  13(c) of this  Agreement,
         Party B appoints as its Process Agent: Registered Mail.

(c)      OFFICES.  The  provisions  of  Section  10(a) will apply to Party A and
         Party B.

(d)      MULTIBRANCH PARTY. For the purpose of Section 10(c), (i) Party A is not
         a Multibranch Party, and (ii) Party B is not a Multibranch Party.

(e)      CALCULATION AGENT. The Calculation Agent shall be Party A.

(f)      CREDIT  SUPPORT  DOCUMENT.  The Credit  Support  Document in respect of
         Party A is None and in respect of Party B: The Collateral  Documents as
         such term is defined in the Credit Agreement.

(g)      CREDIT SUPPORT PROVIDER. Credit Support Provider means: (i) in relation
         to Party A: None;  (ii) in  relation to Party B: each  Subsidiary  that
         acts as Guarantor as such terms are defined in the Credit Agreement

(h)      GOVERNING  LAW.  THIS  AGREEMENT  WILL BE GOVERNED BY AND  CONSTRUED IN
         ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

(i)      NETTING  OF  PAYMENTS.  Subparagraph  (ii)  of  Section  2(c)  of  this
         Agreement will not apply to any Transaction.

(j)      "AFFILIATE"  will have the  meaning  specified  in  Section  14 of this
         Agreement,  except that for purposes of Section 3(c), "Affiliate" means
         with respect to Party A, any entity controlled,  directly or indirectly
         by Party A. For this  purpose,  "control of a majority of person" means
         ownership of a majority of the voting power of the entity or person.

PART 5.  OTHER PROVISIONS

(a)      PROCEDURES  FOR  ENTERING  INTO  TRANSACTIONS.  With  respect  to  each
         Transaction  entered into pursuant to this Agreement,  Party A will, on
         or promptly after the Trade Date thereof (by mail, telex, telecopier or
         other  electronic   means),   send  Party  B  a  Confirmation  of  each
         Transaction  between  them on the  standard  form used by Party A or in
         such other form as is mutually agreed upon by the parties. Party B will
         promptly thereafter accept the terms thereof by executing and returning
         to  Party  A an  executed  copy  or  request  the  correction  of  such
         Confirmation. If Party B fails to accept or dispute the Confirmation in
         the manner set forth  above  within  three  Local  Business  Days after
         receipt from Party A, such failure  shall  constitute  its agreement to
         the  terms  of the  Transaction  set out in such  Confirmation,  absent
         manifest error,  and the requirement of this Agreement that the parties
         exchange  Confirmations shall for all purposes be deemed satisfied by a
         Confirmation sent and an agreement deemed given as provided herein.

(b)      DEFINITIONS.  Unless  otherwise  specified  in  a   Confirmation,  this
         Agreement and each Transaction  between the parties shall be subject to
         the 2000 ISDA Definitions (the "2000  Definitions") the 1998 Supplement
         to  the  ISDA  1991  Definitions,  the  1998  FX and  Currency  Options
         Definitions (the "FX Definitions") and the 1996 ISDA Equity Derivatives
         Definitions (the "Equity Derivatives  Definitions"),  each as published
         by the International  Swap and Derivatives  Association,  Inc. ("ISDA")
         without reference to any amendment  subsequent to the date hereof.  For
         these purposes,  (i) all references in the 2000  Definitions and Equity
         Derivatives  Definitions to a "Swap  Transaction" and all references in
         the FX Definitions  to an FX  Transaction  or Currency  Option shall be
         deemed to apply to each  Transaction  under this Agreement and (ii) all
         references  in the 2000  Definitions  to a Business Day shall be deemed
         references to a Local Business Day under this Agreement. The provisions
         of the 2000 Definitions and Equity Derivatives  Definitions relating to
         Market  Disruption  Events and Adjustments to Indices and Extraordinary
         Events  Affecting  Shares  (and their  effects as well) will apply to a
         Transaction  under this Agreement  only to the extent not  inconsistent
         with the provisions of the applicable Confirmation. In the event of any
         inconsistency between the 2000 Definitions and the FX Definitions,  the
         FX  Definitions  will prevail with  respect to an FX  Transaction  or a
         Currency  Option.  In  the  event  of  any  inconsistency  between  the
         provisions of this Agreement, the 2000 Definitions,  the FX Definitions
         and  the  Equity  Derivatives  Definitions,   the  provisions  of  this
         Agreement will prevail. Any definition incorporated into a Confirmation
         shall  prevail  over  the  provisions  of  this  Agreement,   the  2000
         Definitions, the FX Definitions and the Equity Derivatives Definitions.

(c)      INDEMNIFIABLE  TAX. For purposes of Section 14 of this  Agreement,  the
         following shall be added at the end of the definition of "Indemnifiable
         Tax":

         "Notwithstanding the foregoing,  "Indemnifiable Tax" also means any Tax
         imposed  in respect of  payment  under  this  Agreement  by reason of a
         Change in Tax Law by a  government  or taxing  authority  of a Relevant
         Jurisdiction with respect to the party making such payment,  unless the
         other  party is  incorporated,  organized,  managed and  controlled  or
         considered  to have its seat in such  jurisdiction,  or is  acting  for
         purposes  of this  Agreement  through a branch  office  located in such
         jurisdiction."

(d)      ADDITIONAL  AGREEMENT.  For  purposes  of  Section  4(a)(iii)  of  this
         Agreement,  the  following  shall  be  added  immediately  prior to the
         existing  text:  "upon  learning that such form or document is required
         or".

(e)      RIGHT OF SET-OFF. Any  amount (the "Early Termination Amount")  payable
         to one  party (the  "Payee")  by  the other  party (the  "Payer") under
         Section 6(e),  in  circumstances  where there is (i) a Defaulting Party
         or (ii) one Affected Party in the case where a Termination  Event under
         Section 5(b) (iv) has occurred,  will, at the option of the party ("X")
         other than the Defaulting  Party or the  Affected  Party  (and  without
         prior notice to the Defaulting Party or the Affected party), be reduced
         by its set-off  against any  amount(s)  (the "Other  Agreement Amount")
         payable (whether at such  time or in  the future or upon the occurrence
         of  a  contingency) by  the  Payee to  the Payer  (irrespective  of the
         currency, place of payment or booking  office of the  obligation) under
         any other agreement(s) between the Payee and the Payer or instrument(s)
         or undertaking(s) issued  or executed  by one party to, or in favor of,
         the other party,  except as  otherwise  specified in those agreement(s)
         instruments(s),  or  undertaking(s) or separately  agreed  between  the
         Payer and the Payee (and the Other Agreement Amount  will be discharged
         promptly  and  in  all   respects  to  the  extent  it is  so set-off).
         X will  give  notice to  the other  party of any  set-off  so effected.

         For this  purpose,  either  the Early  Termination  Amount or the Other
         Agreement  Amount  (or the  relevant  portion of such  amounts)  may be
         converted by X into the currency in which the other is  denominated  at
         the rate of  exchange  at which such party  would be able,  acting in a
         reasonable manner and in good faith, to purchase the relevant amount of
         such currency.

         If an obligation is  unascertained,  X may in good faith  estimate that
         obligation  and  set-off  in respect  of the  estimate,  subject to the
         relevant  party   accounting  to  the  other  when  the  obligation  is
         ascertained.

         Nothing  herein shall be effective to create a charge or other security
         interest.  This provision shall be without prejudice and in addition to
         any right of set-off,  combination of accounts,  lien or other right to
         which any party is at any time otherwise entitled (whether by operation
         of law, contract or otherwise).

(f)      ESCROW.  If  either  party in  its  reasonable  judgment  determines at
         any time that there has been a material  adverse  change that is likely
         to affect the other  party's  ability to perform  its  ensuing  payment
         obligation in connection with a Transaction or  Transactions  involving
         payments  due from  each of the  parties  on the same day in  different
         currencies,  the party that has  formed  that  judgment  may notify the
         other  that  the  payments  due on that  day in  connection  with  that
         Transaction or those  Transactions are to be made in escrow, to a major
         commercial  bank  selected  by that  party in good  faith  and that has
         offices in the cities in which both payments are to be made. If such an
         election is made, each party shall make the payment due from it on that
         day by deposit  into escrow with that escrow  agent,  for value on that
         day, with  irrevocable  instructions  (i) to release the payment to the
         intended payee upon receipt by the escrow agent of the required counter
         payment  due from that  payee on the same day in  connection  with that
         Transaction accompanied by irrevocable instructions to the same effect,
         or (ii) if the required deposit in escrow of the counter payment due is
         not so made on the same  day,  for value on that  day,  to  return  the
         payment  deposited in escrow to the party that made the escrow deposit.
         The party that  elects to have  payments  made in escrow  shall pay the
         costs of the  escrow  arrangements  and  cause  those  arrangements  to
         provide  that  the  escrow  agent  will  pay  interest  on each  amount
         deposited in escrow with it in either of the relevant cities,  for each
         day such  amount  remains  in escrow  past 5:00 p.m.  local time in the
         city, at the same rate per annum, and calculated in the same way, as it
         would pay on overnight deposits placed with it in the relevant currency
         and city for value on such day.  The  escrow  arrangements  shall  also
         provide that such  interest on any amount in escrow shall be payable to
         the intended  payee of that amount,  provided that it has deposited the
         counter  payment due from it into escrow as  contemplated  herein,  and
         that,  if it has not done so,  such  interest  shall be  payable to the
         other party.

(g)      JURY TRIAL. Each party hereby waives its respective right to jury trial
         with respect to any litigation  arising under,  or in connection  with,
         this Agreement or any Transaction.

(h)      REPRESENTATIONS.  Section  3 is  hereby  amended  by  adding at the end
         thereof the following Subparagraphs (g), (h), and (i):

         (g) LINE OF  BUSINESS.  It has entered into this  Agreement  (including
         each  Transaction  evidenced  hereby) in  conjunction  with its line of
         business (including financial intermediation services) or the financing
         of its business.

         (h) ELIGIBLE CONTRACT PARTICIPANT. It constitutes an "eligible Contract
         participant" as such term is defined in Section 1a(12) of the Commodity
         Exchange Act (2000)

         (i) RELATIONSHIP  BETWEEN  PARTIES.  Each  party   will  be  deemed  to
         represent  to the  other  party on the date on which it  enters  into a
         Transaction  that (absent  written  agreement  between the parties that
         expressly  imposes  affirmative  obligations  to the  contrary for that
         Transaction):

             (a) NON-  RELIANCE.  It is acting for its own  account,  and it has
             made its own independent  decisions to enter into that  Transaction
             and as to whether that  Transaction is appropriate or proper for it
             based upon its own judgment  and upon advice from such  advisers as
             it has deemed  necessary.  It is not  relying on any  communication
             (written or oral) of the other party as  investment  advice or as a
             recommendation to enter into that Transaction;  it being understood
             that  information  and  explanations   related  to  the  terms  and
             conditions  of a  Transaction  shall not be  considered  investment
             advice  or a  recommendation  to enter  into that  Transaction.  No
             communication (written or oral) received from the other party shall
             be  deemed  to be an  assurance  or  guarantee  as to the  expected
             results of that Transaction.

             (b)  ASSESSMENT AND  UNDERSTANDING.  It is capable of assessing the
             merits  of  and   understanding  (on  its  own  behalf  or  through
             independent  professional advice), and understands and accepts, the
             terms, conditions and risks of that Transaction. It is also capable
             of assuming, and assumes, the risks of that Transaction.

             (c) STATUS OF PARTIES. The other party is not acting as a fiduciary
             for or an adviser to it in respect of that Transaction.

(i)      MONITORING AND RECORDING.  Each party (i) consents to the monitoring or
         recording, at any time and from time to time, by the other party of any
         and all  communications  between  officers or employees of the parties,
         (ii) waives any further notice of such  monitoring or recording,  (iii)
         agrees to notify its officers  and  employees  of such  monitoring  and
         recording, and (iv) agrees that any such recordings may be submitted in
         evidence to any court or in any proceeding relating to this Agreement.

(j)      SEVERABILITY.  In the event any one or more of the provisions contained
         in this Agreement should be held invalid,  illegal, or unenforceable in
         any respect, the validity, legality and enforceability of the remaining
         provisions  contained  herein  shall  not in any  way  be  affected  or
         impaired   thereby.   The  parties  shall   endeavor,   in  good  faith
         negotiations,   to  replace  the  invalid,   illegal  or  unenforceable
         provisions with valid  provisions the economic effect of which comes as
         close as  possible  to that of the  invalid,  illegal or  unenforceable
         provisions.

(k)      SCOPE OF AGREEMENT. Notwithstanding anything contained in the Agreement
         to the  contrary,  upon  the  effectiveness  of the  Agreement  (unless
         otherwise  agreed  to in  writing  by the  parties)  (i) any  Specified
         Transaction  then  outstanding  and  (ii)  any  Specified   Transaction
         subsequently  entered into by the parties shall be  "Transactions"  for
         purposes of and be subject to,  governed by and construed in accordance
         with the terms of this Agreement and each related confirmation shall be
         a  "Confirmation"  for  purposes  of, and be read and  construed as one
         with, this Agreement.

(l)      PARI PASSU.  Party B's obligations under this Agreement shall rank pari
         passu with the obligations of Party B under the Credit Agreement.

(m)      This  Agreement  shall deem to be a Hedging  Agreement  as such term is
         defined in the Credit Agreement.

<PAGE>

Please confirm your agreement to the terms of the foregoing  Schedule by signing
below.

CREDIT LYONNAIS NEW YORK BRANCH

By: /s/ ROBIN MOSER
    ------------------------------------
Name:  Robin Moser
Title: Senior Vice President & Treasurer

APRIA HEALTHCARE GROUP INC.

By: /s/ JAMES E. BAKER
    -------------------------------------
Name:  James E. Baker
Title: Chief Financial Officer
<PAGE>

                                                                   EXHIBIT I

[Letterhead of Counsel for the Party B]

Re:  Master Agreement, dated as of _____________, 2002
     (the "Agreement"), between Credit Lyonnais
     New York Branch ("Party  A") and ____________
     (the "Party B")

Dear Sirs:

     I am an attorney admitted to practice in ____________ and am counsel to the
Party B, and as such am generally familiar with its affairs. I have examined the
Agreement and such other records and instruments as I deemed advisable.

     Based upon the foregoing,  and having regard for legal considerations which
I deem relevant, I am of the opinion that:

     The Party B is duly  organized and validly  existing  under the laws of the
jurisdiction of its  organization or  incorporation  and, if relevant under such
laws, in good standing.

     The Party B has the power (a) to execute  and deliver  the  Agreement,  any
other  required  documentation  relating to the Agreement and any Credit Support
Document to which it is a party,  and (b) to perform its  obligations  under the
Agreement and any obligations it has under any Credit Support  Document to which
it is a party,  and has taken all necessary  action to authorize such execution,
delivery and performance.

     Such  execution,  delivery and  performance do not violate or conflict with
any  law  applicable  to the  Party  B,  any  provision  of  its  constitutional
documents,  any order or  judgment  of any court or other  agency of  government
applicable to it or any of its assets or any contractual  restriction binding on
or affecting the Party B.

     All governmental and other consents that are required to have been obtained
by it with respect to the Agreement or any Credit Support  Document to which the
Party B is a party  have been  obtained  and are in full force and effect and it
has complied with all conditions of any such consents.

     The  obligations  of the Party B under the Agreement and any Credit Support
Document  to  which  it is a party  constitute  its  legal,  valid  and  binding
obligations,  enforceable in accordance with their  respective terms (subject as
to  enforceability  to  applicable   bankruptcy,   reorganization,   insolvency,
moratorium  or  similar  laws  affecting  creditors'  rights  generally  and  to
equitable  principles of general application  (regardless of whether enforcement
is sought in a proceeding in equity or at law)).

                               Very truly yours,

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