Document:

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                                                                   Exhibit 10.20

                               RIVER HOLDING CORP.

                             STOCK OPTION AGREEMENT

          THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered
into as of ______ ___, _____, by and between River Holding Corp., a Delaware
corporation (the "Company"), and ____________ ("Optionee") pursuant to the
Company's 2001 Stock Option Plan (the "Plan"). All capitalized terms not
otherwise defined herein shall have the meanings set forth in the Plan.

          In consideration of the covenants hereinafter set forth, and pursuant
to the authority granted to the Option Committee (as defined in the Plan) by the
Board of Directors of the Company, the parties agree as follows:

          1. Option; Number of Shares; Price. The Company hereby grants to
Optionee the right (the "Option") to purchase up to a maximum of _______ shares
(the "Shares") of the common stock of the Company ("Common Stock"), at a
purchase price of $_____ per share (the "Option Price"), to be paid in
accordance with Section 6 hereof. The Option and the right to purchase all or
any portion of the Shares is subject to the terms and conditions stated in this
Agreement and in the Plan, including, without limitation, the provisions of
Sections 4 and 11 of the Plan under which the Option shall be subject to
modification and Sections 11(b), 15 and 16 of the Plan and Sections 3 and 4
hereof pursuant to which the Option is subject to acceleration and/or
termination. It is intended that the Option [WILL/WILL NOT] qualify for
treatment as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").

          2. Exercisability. Subject to Section 3 below, the Shares covered by
the Option shall become exercisable as provided on Schedule A.

          3. Term of Agreement. Optionee's right to exercise the Option shall
terminate on the first of the following:

             (a) termination pursuant to Section 2 hereof or to Section 11,
Section 15 or Section 16 of the Plan;

             (b) April 8, 2006;

             (c) 45 days after the date of termination of Optionee's employment
or other relationship with the Company and all of the Subsidiaries, unless such
termination results from Optionee's death or disability (within the meaning of
Section 22(e)(3) of the Code) or Optionee dies within 30 days after the date of
termination (other than for Cause) of Optionee's employment or other
relationship with the Company and all of the Subsidiaries;

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                                                                   Exhibit 10.20

             (d) 180 days after the date of termination of Optionee's employment
or other relationship with the Company and all of the Subsidiaries, if such
termination results from Optionee's death or disability (within the meaning of
Section 22(e)(3) of the Code) or Optionee dies within 30 days after the date of
termination (other than for Cause) of Optionee's employment or other
relationship with the Company and all of the Subsidiaries; or

             (e) on the date of termination of Optionee's employment or other
relationship with the Company and all of the Subsidiaries, if such termination
was for Cause. As used herein, "Cause" shall mean (i) Optionee's conviction of,
or the entry of a pleading of guilty or nolo contendre by Optionee to, a felony
or a crime involving moral turpitude, (ii) Optionee's material failure to
perform his duties required under his employment or other relationship, material
failure to comply with the Company's and/or a direct or indirect subsidiary's (a
"Subsidiary's") standard policies and procedures generally applicable to
employees, or failure to comply with any provision of any employment agreement
after having received written notice from the Company and/or a Subsidiary
identifying such failure and after having received an opportunity of at least
ten (10) days in which to cure the failure so identified by the Company and/or a
Subsidiary if such failure is susceptible to cure, (iii) a willful act by
Optionee as a result of which he receives an improper personal benefit at the
expense of the Company and/or a Subsidiary, (iv) an act of fraud or dishonesty
committed by Optionee against the Company and/or a Subsidiary, or (v) any other
misconduct by Optionee that is materially injurious to the business or
reputation of the Company and/or a Subsidiary.

          4. Termination of Employment or Other Relationship. The termination
for any reason of Optionee's employment or other relationship with the Company
and all of the Subsidiaries shall not accelerate the time at which the Option
shall become exercisable or affect the number of Shares with respect to which
the Option may be exercised. The Option may only be exercised with respect to
that number of Shares which could have been purchased under the Option had the
Option been exercised by Optionee on the date of such termination.

          5. Death of Optionee; No Assignment. The rights of Optionee under this
Agreement may not be assigned or transferred except by will or by the laws of
descent or distribution, and may be exercised during the lifetime of Optionee
only by such Optionee; provided, however, that in the event of disability
(within the meaning of Section 22(e)(3) of the Code) of Optionee, a designee of
Optionee, or if Optionee has not designated anyone, his or her legal
representative, may exercise the Option on behalf of Optionee (provided the
Option would have been exercisable by Optionee) until the right to exercise the
Option expires pursuant to Section 3 hereof. If Optionee should die while
engaged in an employment or other relationship with the Company and/or any
Subsidiary or within 30 days of the termination of such relationship, and
provided the Option shall have become exercisable, in whole or in part, pursuant
to Section 2 hereof, Optionee's designee, legal representative, legatee, or the
person who acquired the right to exercise the Option by reason of the death of
Optionee (individually, a "Successor") shall succeed to Optionee's rights under
this Agreement. After the death of Optionee, only a Successor may exercise the
Option. Any attempt to

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                                                                   Exhibit 10.20

sell, pledge, assign, hypothecate, transfer or otherwise dispose of the Option
or any rights in respect thereof in contravention of this Agreement or the Plan
shall be void.

          6. Exercise of Option. On or after the times at which, and to the
extent that, the Option has become exercisable in accordance with Section 2
hereof and until termination of the Option in accordance with Section 3 hereof,
the Option may be exercised by Optionee (or such other person specified in
Section 5 hereof) upon delivery of the following to the Company at its principal
executive offices:

             (a) a written notice of exercise in the form attached hereto as
Exhibit A which identifies this Agreement and states the whole number of Shares
(which may not be less than 100, or all of the Shares if less than 100 Shares
then remain covered by the Option) then being purchased;

             (b) a check, cash or any combination thereof in the amount of the
aggregate Option Price for the number of Shares specified in the notice of
exercise (or payment of the aggregate Option Price in such other form of lawful
consideration as the Option Committee may approve from time to time under the
provisions of Section 8 of the Plan including the surrender of Shares on a
cashless exercise involving a broker);

             (c) a check or cash in the amount reasonably requested by the
Company to satisfy the Company's withholding obligations under federal, state or
other applicable tax laws with respect to the taxable income, if any, recognized
by Optionee in connection with the exercise, in whole or in part, of the Option
(unless the Company and Optionee shall have made other arrangements for
deductions or withholding from Optionee's wages, bonus or other income paid to
Optionee by the Company or any Subsidiary, provided any arrangement set forth in
this parenthetical shall satisfy the requirements of applicable tax laws); and

             (d) a written representation and undertaking in such form and
substance as the Company may require, setting forth the investment intent of
Optionee, or a Successor, as the case may be, and such other agreements,
representations and undertakings as described in the Plan including an
acknowledgment that Optionee has reviewed the memorandum regarding Section 83(b)
of the Internal Revenue Code of 1986, as amended, attached hereto as Exhibit B.

          7. Restriction on Transfer of Shares Acquired Upon Exercise of Option.

             (a) Except as otherwise provided in paragraph (b) below and subject
to Section 8, Optionee may not sell, transfer, assign, pledge, hypothecate or
otherwise dispose of (collectively, "Transfer") any of the Shares acquired upon
exercise of the Option prior to the earlier of April 8, 2003 or an Initial
Public Offering (as defined below). In connection with any public offering
Optionee agrees to execute a lock up agreement (for up to 180 days) covering the
Shares in the form required by the Company. Any purported Transfer or Transfers
(including involuntary Transfers initiated by operation of legal process), of
any of the Shares or any right, title or interest therein, except in strict
compliance with the terms and conditions of this Agreement, shall be null and
void.

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                                                                   Exhibit 10.20

The term "Initial Public Offering" shall mean an underwritten public offering
which results in gross proceeds to the Company in excess of $25 million from the
sale of Common Stock.

             (b) Optionee may, at any time, Transfer any or all of the Shares:
(i) inter vivos to Optionee's spouse or issue, or to a trust for their or
Optionee's benefit, or (ii) upon Optionee's death, to any person in accordance
with the laws of descent and/or testamentary distribution (such persons are
collectively referred to herein as "Permitted Transferees"). Notwithstanding the
foregoing in this Section 7(b), Shares shall not be Transferred pursuant to this
Section 7(b) until the Permitted Transferee executes a valid undertaking, in
form and substance satisfactory to the Company and the FS Entities (as defined
below) to the effect that the Permitted Transferee and the Shares so Transferred
shall thereafter remain subject to all of the provisions of this Agreement
(including the Repurchase Option (as defined in Section 10 hereof)), as though
the Permitted Transferee were a party to this Agreement, bound in every respect
in the same way as Optionee.

          8. Right of First Refusal. At any time on or after April 8, 2003,
Optionee may Transfer for cash any or all of the Shares to any third party
subject to the provisions of this Section 8 and Section 14(b). Prior to any such
proposed Transfer, Optionee shall first give written notice (the "Notice") to
the Company specifying (i) Optionee's bona fide intention to sell such Shares;
(ii) the name(s) and address(es) of the proposed Transferees; (iii) the number
of Shares Optionee proposes to Transfer (the "Offered Shares"); (iv) the price
for which Optionee proposes to Transfer the Offered Shares (the "First Refusal
Price"); and (v) all other material terms and conditions of the proposed
Transfer. Within 15 days of receipt of the Notice, the Company (or its
nominee(s) or assignee(s)) may elect to purchase any or all of the Offered
Shares at the price and on the terms and conditions set forth in the Notice by
delivery of written notice of such election to Optionee, specifying a day, which
shall not be more than 30 days after such notice is delivered, on or before
which Optionee shall surrender (if Optionee has not already done so) the
certificate or certificates representing the Offered Shares (with a stock
assignment or stock assignments duly endorsed in blank for Transfer) at the
principal office of the Company. Within 30 days after delivery of such notice to
Optionee, the Company (or its nominee(s) or assignee(s)) shall deliver to
Optionee a check, payable to Optionee, in the amount of the purchase price of
the Offered Shares. If Optionee fails to so surrender such certificate or
certificates on or before such date, from and after such date the Offered Shares
shall be deemed to be no longer outstanding, and Optionee shall cease to be a
stockholder with respect to such Shares and shall have no rights with respect
thereto except only the right to receive payment of the First Refusal Price,
without interest, upon surrender of the certificate or certificates therefor
(duly endorsed in blank for Transfer). If the Company or its nominee(s) or
assignee(s) do not elect to purchase all of the Offered Shares, Optionee shall
be entitled to Transfer the remaining portion of the Offered Shares to the
Transferee(s) named in the Notice at the price specified in the Notice or at a
higher price and on the terms and conditions set forth in the Notice; provided,
however, that such Transfer must be consummated within 90 days from the date of
the Notice. Any proposed Transfer after such 90-day period may be made only by
again complying with the procedures set forth in this Section 8. The right of
first refusal provided for in this Section 8 shall terminate upon an Initial
Public Offering.

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                                                                   Exhibit 10.20

          9.  Drag Along Right. If FS Equity Partners III, L.P., a Delaware
limited partnership, FS Equity Partners International, L.P., a Delaware limited
partnership, and FS Equity Partners IV, L.P., a Delaware limited partnership
(collectively, the "FS Entities"), find a third party buyer for all the Shares
of Common Stock of the Company held by it (whether such sale is by way of
purchase, exchange, merger or other form of transaction), then at the request of
the Company or the FS Entities, Optionee shall sell all of his or her Options
and/or Shares on the same terms and conditions as apply to the sale by the FS
Entities of the Common Stock (in the case of Options, deducting the Option Price
from the consideration to be received for shares of Common Stock; if the Option
Price is greater than the consideration to be received, then such Options shall
be canceled without any payment to Optionee); provided however, that if such
buyer is a party other than a corporation whose common stock is publicly-traded,
Optionee shall not be required to accept consideration other than cash.

          10. Repurchase Option.

              (a) In the event that Optionee's employment or other relationship
with the Company and all of its Subsidiaries terminates for any reason
(including, without limitation, by reason of Optionee's death, disability,
retirement, voluntary resignation or dismissal by the Company or any of its
Subsidiaries, with or without Cause), the Company shall have the option (the
"Repurchase Option") to purchase from Optionee all or any portion of the Shares
acquired by Optionee upon exercise of the Option for a period of six (6) months
after the effective date of such termination (the "Termination Date"); provided
that such period shall be extended to the six-month anniversary of the date on
which Optionee purchased any Shares pursuant to the Option after the Termination
Date. The Repurchase Option shall be exercised by the Company by delivery to
Optionee, within the period specified above, of a written notice specifying (a)
the number of Shares to be purchased and (b) a day, which shall not be more than
30 days after the date such notice is delivered, on or before which Optionee
shall surrender the certificate or certificates representing the Shares to be
purchased pursuant to the Repurchase Option (duly endorsed in blank for
Transfer) at the principal office of the Company in exchange for a check,
payable to Optionee in the amount equal to check in the amount of the Repurchase
Price, calculated as provided in this Section 10, for all Shares to be
purchased. If Optionee fails to surrender the certificate or certificates
evidencing the Shares on or before such date, from and after such date the
Shares which the Company elected to repurchase shall be deemed to be no longer
outstanding, and Optionee shall cease to be a stockholder with respect to such
Shares and shall have no rights with respect thereto except only the right to
receive payment of the Repurchase Price, without interest, upon surrender of the
certificate or certificates therefor (with a stock assignment or stock
assignments duly endorsed in blank for Transfer). The Repurchase Option provided
for in this Section 10 shall terminate upon an Initial Public Offering.

              (b) The purchase price (the "Repurchase Price") for each Share to
be purchased pursuant to the Repurchase Option shall be equal to (i) the Fair
Market Value (as defined below), in

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                                                                   Exhibit 10.20

the event Optionee's employment or other relationship with the Company and all
of its Subsidiaries terminates by reason of Optionee's death or disability, (ii)
the greater of the Option Price or the Fair Market Value, in the event such
employment or other relationship is terminated by the Company or any of its
Subsidiaries without Cause or by Optionee in the event of a Qualifying
Resignation (as defined below), (iii) in the event such employment or other
relationship is terminated by Optionee's resignation, other than a Qualifying
Resignation, the greater of the Option Price or 50% of the Fair Market Value, or
(iv) in the event such employment or other relationship is terminated for Cause,
the greater of the Option Price or Book Value. As used herein, (i) the "Fair
Market Value" shall be the fair market value of a Share as of the date of
repurchase by the Company, (ii) the "Book Value" shall be equal to the Option
Price (subject to adjustment as set forth below) plus the net income or minus
the net loss per Share for all shares of Common Stock from the date of this
Agreement to the end of the fiscal quarter immediately preceding the Termination
Date, in each case, as determined by the Board of Directors of the Company,
acting in good faith, which determination shall be final and binding, and (iii)
"Qualifying Resignation" shall mean a resignation by Optionee within 60 days
after any of the following: (A) a change of Optionee's duties and
responsibilities which cause Optionee's position to be one of materially lesser
responsibility and scope; or (B) a reduction in Optionee's base salary.

             (c) If between the Termination Date and the date on which a
repurchase pursuant the Repurchase Option is made there is any distribution of
stock or other securities of the Company or any successor or assign of the
Company which is made in respect of, in exchange for or in substitution of the
Shares by reason of any split, reverse split, combination, recapitalization,
reclassification, merger, consolidation or otherwise, then (i) all of the Shares
to be purchased pursuant to the Repurchase Option shall participate in such
transaction and (ii) the Repurchase Price for the Shares to be purchased
pursuant to the Repurchase Option shall be adjusted appropriately to reflect the
transaction.

         11. Certain Reorganizations. In addition to the obligations of Optionee
to sell the Shares and/or Options pursuant to Section 9 above, Optionee hereby
agrees to exchange or otherwise transfer his Shares and/or Options, in the same
manner as the FS Entities transfer Common Stock in transactions contemplated by
Section 7.4 of that certain Shareholders Agreement dated April 7, 1998 among the
Company, Hudson Respiratory Care, Inc. ("Hudson RCI") and certain other
signatories thereto (the "Shareholders Agreement"). Optionee hereby consents to
any sale, transfer, reorganization, exchange, merger, combination, liquidation
or dissolution or other form of transaction described in Section 9 or as
contemplated by Section 7.4 of the Shareholders Agreement and agrees to execute
such agreements, powers of attorney, voting proxies or other documents and
instruments as may be necessary or desirable to consummate such sale, transfer,
reorganization, exchange, merger, combination or other form of transaction.
Optionee further agrees to timely take such other actions as the Company or the
FS Entities may reasonably request in connection with the approval of the
consummation of such sale, transfer, reorganization, exchange, merger,
combination or other form of transaction, including voting as a stockholder to
approve any such sale, transfer,

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                                                                   Exhibit 10.20

reorganization, exchange, merger, combination or other form of transaction and
waiving any appraisal rights that Optionee may have in connection therewith.

         12. Binding on Transferees. The obligations of Optionee pursuant to
Sections 8, 9, 10 and 11 hereof shall be binding on any transferee of any of the
Options or the Shares (except a transferee of Shares in a Public Market Sale (as
defined below)) and any transfer of any of the Options or Shares shall be void
unless a written commitment to be bound by such provisions from such transferee
is delivered to the Company and the FS Entities prior to any transfer. The
obligations of Optionee pursuant to Sections 8, 9, 10 and 11 hereof shall apply
to any securities received in substitution or exchange for the Options or the
Shares, including (without limitation) pursuant to Section 11 of the Plan. A
"Public Market Sale" shall mean any sale of shares of Common Stock into the
public market after an Initial Public Offering, which is made pursuant to Rule
144 promulgated under the Act or pursuant to a registration statement filed with
and declared effective by the Securities and Exchange Commission and shall not
include a negotiated private sale transaction or other disposition of shares of
Common Stock.

         13. Tag Along Right. If the FS Entities find a third-party buyer, other
than a permitted transferee of the FS Entities (as defined in the Shareholders
Agreement), for all or part of the Common Stock held by the FS Entities (whether
such sale is by way of purchase, exchange, merger or other form of transaction),
Optionee shall have the right to sell, on the terms set forth in a written
notice (the "Offering Notice") delivered by the FS Entities to Optionee
describing the terms of the proposed sale (including the minimum sale price for
the shares that the FS Entities plan to sell), that amount of his or her Shares
which constitute the same percentage of his or her Shares as the proportionate
percentage of Common Stock sold by the FS Entities. Such right shall be
exercisable by delivering written notice to the FS Entities within 15 days after
receipt of the Offering Notice. Failure to exercise such right within such
15-day period shall be regarded as a waiver of such right. The obligations of
the FS Entities under this Section 13 shall terminate upon an Initial Public
Offering. The transactions contemplated by Section 7.4 of the Shareholders
Agreement shall not give rise to any rights of Optionee under this Section 13.

         14. Representations and Warranties of Optionee.

             (a) Optionee represents and warrants that the Shares to be
purchased pursuant to the Option will be acquired by Optionee for Optionee's
personal account, for investment purposes only, and not with a view to the
distribution, resale or other disposition thereof. Optionee represents that he
or she has a preexisting personal or business relationship with the Company or
one or more of its officers or directors, or by reason of Optionee's business or
financial experience Optionee has the capacity to protect his or her own
interests in connection with the grant of the Option and the purchase of the
Shares.

             (b) Optionee acknowledges that the Company may issue Shares upon
the exercise of the Option without registering such Common Stock under the
Securities Act on the basis of

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                                                                   Exhibit 10.20

certain exemptions from such registration requirement. Accordingly, Optionee
agrees that Optionee's exercise of the Option may be expressly conditioned upon
Optionee's delivery to the Company of such representations and undertakings as
the Company may reasonably require in order to secure the availability of such
exemptions, including a representation that Optionee is acquiring the Shares for
investment and not with a present intention of selling or otherwise disposing of
such Shares. Optionee acknowledges that, because Shares received upon exercise
of an Option may be unregistered, Optionee may be required to hold the Shares
indefinitely unless they are subsequently registered for resale under the
Securities Act or an exemption from such registration is available.

                  (c) Optionee acknowledges receipt of this Agreement granting
the Option, and the Plan, and understands that all rights and liabilities
connected with the Option are set forth herein and in the Plan.

          15. No Rights as Stockholder. Optionee shall have no rights as a
stockholder of any shares of Common Stock covered by the Option until the date
an entry evidencing such ownership is made in the stock transfer books of the
Company (the "Exercise Date"). Except as may be provided under Section 11 of the
Plan, the Company will make no adjustment for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to the Exercise Date.

          16. Limitation of Company's Liability for Nonissuance. The inability
of the Company to obtain, from any regulatory body having jurisdiction,
registration, qualification or other necessary authorization, or the
unavailability of an exemption from registration or qualification obligation
deemed by the Company's counsel to be necessary for the lawful issuance and sale
of any shares of its Common Stock hereunder and under the Plan shall suspend the
Company's obligation to permit the exercise of any affected Option or to issue
any Shares thereupon and shall relieve the Company of any liability in respect
of the nonissuance or sale of such Shares as to which such requisite authority
or exemption shall not have been obtained. In no event shall the Company be
required to register or qualify the sale of any shares hereunder under any state
or federal securities statute in order to permit the exercise of the Option in
the absence of an available exemption. In the event that exercisability of the
Option is suspended as provided in this section, the term thereof shall be
extended until the thirtieth (30th) day after the Company shall have given
notice to Optionee that the Option may be exercised in accordance with the
provisions hereof.

          17. This Agreement Subject to Plan. This Agreement is made under the
provisions of the Plan and shall be interpreted in a manner consistent with it.
To the extent that any provision in this Agreement is inconsistent with the
Plan, the provisions of the Plan shall control. A copy of the Plan is available
to Optionee at the Company's principal executive offices upon request and
without charge. The good faith interpretation of the Committee of any provision
of the Plan, the Option or this Agreement, and any determination with respect
thereto or hereto by the Option Committee, shall be final, conclusive and
binding on all parties.

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                                                                   Exhibit 10.20

          18. Restrictive Legends. Optionee hereby acknowledges that federal
securities laws and the securities laws of the state in which Optionee resides
or is employed may require the placement of certain restrictive legends upon the
Shares issued upon exercise of the Option, and Optionee hereby consents to the
placing of any such legends upon certificates evidencing the Shares as the
Company, or its counsel, may reasonably deem necessary; provided, however, that
any such legend shall be removed when no longer applicable. Any and all
certificates now or hereafter issued evidencing the Shares shall have endorsed
upon them legends substantially as follows:

          THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY
          MAY NOT BE OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
          REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY
          APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY
          TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

          THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
          RESTRICTIONS UPON TRANSFER AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
          PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT IN ACCORDANCE
          WITH THE TERMS AND CONDITIONS OF THAT CERTAIN OPTION AGREEMENT BY AND
          BETWEEN RIVER HOLDING CORP. AND THE ORIGINAL PURCHASER HEREOF, A COPY
          OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF
          THE COMPANY.

          19. Notices. All notices, requests and other communications hereunder
shall be in writing and, if given by telegram, telecopy or telex, shall be
deemed to have been validly served, given or delivered when sent, if given by
personal delivery, shall be deemed to have been validly served, given or
delivered upon actual delivery and, if mailed, shall be deemed to have been
validly served, given or delivered three business days after deposit in the
United States mails, as registered or certified mail, with proper postage
prepaid and addressed to the party or parties to be notified, at the following
addresses (or such other address(es) as a party may designate for itself by like
notice):

              If to the Company:

                       River Holding Corp.
                       27711 Diaz Road
                       P.O. Box 9020
                       Temecula, California  92589
                       Attention:  President

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                                                                   Exhibit 10.20

              If to the FS Entities:

                       c/o Freeman Spogli & Co. LLC
                       11100 Santa Monica Boulevard, Suite 1900
                       Los Angeles, California 90025

              If to Optionee, at the address appearing on the signature page
hereof.

          20. Not an Employment or Other Agreement. Nothing contained in this
Agreement shall confer, intend to confer or imply any rights to an employment or
other relationship or rights to a continued employment by, or rights to any
other relationship with, the Company and/or any Subsidiary in favor of Optionee
or limit the ability of the Company and/or any Subsidiary to terminate, with or
without cause, in its sole and absolute discretion, the employment of, or other
relationship with, Optionee, subject to the terms of any written employment or
other agreement to which Optionee is a party.

          21. Governing Law. This Agreement shall be construed under and
governed by the laws of the State of California without regard to the conflict
of law provisions thereof.

          22. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and both of which together shall be
deemed one Agreement.

          23. Amendments; Further Assurances. This Agreement may be amended
only by a written agreement executed by both of the parties hereto and the FS
Entities. Each party hereto agrees to perform any further acts and execute and
deliver any documents which may be reasonably necessary to carry out the intent
of this Agreement.

          24. Recapitalizations or Exchanges Affecting the Company's Capital.
The provisions of this Agreement shall apply to any and all stock or other
securities of the Company or any successor or assign of the Company, which may
be issued in respect of, in exchange for or in substitution of, the Shares by
reason of any split, reverse split, recapitalization, reclassification,
combination, merger, consolidation or otherwise, including as contemplated by
Section 7.4 of the Shareholders Agreement, and such Shares or other securities
shall be encompassed within the term "Shares" for purposes of this Agreement.

          25. Disclosure. The Company shall have no duty or obligation to
affirmatively disclose to Optionee, and Optionee shall have no right to be
advised of, any material information regarding the Company or any Subsidiaries
at any time prior to, upon or in connection with the Company's purchase of the
Shares under this Agreement.

          26. Successors and Assigns. The Company may assign with absolute
discretion any or all of its rights and/or obligations and/or delegate any of
its duties under this Agreement to any of its

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                                                                   Exhibit 10.20

affiliates, successors and/or assigns and this Agreement shall inure to the
benefit of, and be binding upon, such respective affiliates, successors and/or
assigns of the Company in the same manner and to the same extent as if such
affiliates, successors and/or assigns were original parties hereto. Without
limiting the foregoing, the Company may assign the Repurchase Option and/or the
right of first refusal provided for in Sections 8 and 10 of this Agreement,
respectively, to any nominee, affiliate, successor and/or assign. The FS
Entities may assign their rights under Sections 9, 11 and 13 to any of their
respective permitted transferees (as defined in the Shareholders Agreement) or
to a purchaser of shares of Common Stock then owned by the FS Entities. Optionee
may not assign any or all of his or her rights and/or obligations and/or
delegate any or all of his or her duties under this Agreement without the prior
written consent of the Company and the FS Entities.

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<PAGE>

                                                                   Exhibit 10.20

          IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement as of the date first above written.

                                             THE COMPANY:

                                             RIVER HOLDING CORP.

                                             By:
                                                  ______________________________
                                                  Name:  _______________________
                                                  Title: _______________________

                                             OPTIONEE:

                                             ADDRESS:

                                       12

<PAGE>

                                                                   Exhibit 10.20

                                   Schedule A

                           SCHEDULE OF EXERCISABILITY

              _________ Shares of Common Stock subject to the Option shall
become exercisable as follows:

                  % of Option Exercisable            Date Exercisable

                                       13

<PAGE>

                                                                   Exhibit 10.20

                                    EXHIBIT A

                               RIVER HOLDING CORP.

                            NOTICE OF OPTION EXERCISE

                                                            _____________, 200__

RIVER HOLDING CORP.
Attention: Corporate Secretary

          9.  Exercise of Option. Effective as of today, I hereby elect to
purchase __________ shares of Common Stock (the "Shares") of River Holding Corp.
(the "Company") pursuant to the stock option (the "Option") granted to me by the
Stock Option Agreement dated for reference purposes ___________________________,
and pursuant to the Company's 2001 Stock Option Plan (the "Plan"). The exercise
price of the Option is $____________ per share and, accordingly, I have
delivered to the Company my check in the amount of $_____________________
representing the aggregate exercise price for the Shares.

          10. Investment Representations. I am aware of the Company's business
affairs and financial condition and I have acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Shares. I am acquiring the Shares for investment for my own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"). I acknowledge and understand that the Shares constitute "restricted
securities" under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of my investment intent
as expressed herein. I further understand that the Shares must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. I further acknowledge and
understand that the Company is under no obligation to register the Shares.

          11. Other. I acknowledge that I have received, read and understand the
Stock Option Agreement and the Plan and I agree to abide by and be bound by the
terms and conditions of both the Stock Option Agreement and the Plan. I
understand and agree that the Company shall cause restrictive legends to be
placed upon the certificates(s) evidencing ownership of the Shares as may be
required by the Company or by state or federal securities laws.

                                            ____________________________________
                                            (Signature of Exercising Optionee)<PAGE>

                                                                   Exhibit 10.21

                         RECEIVABLES PURCHASE AGREEMENT

     This Receivables Purchase Agreement (this "Agreement") is made as of the
14th day of May, 2002 (the "Effective Date") by and between Hudson Respiratory
Care Inc., a California corporation ("Seller"), and HRC Holding Inc., a Delaware
corporation ("Purchaser").

                                 R E C I T A L S

     A.   Seller has an interest in certain intercompany receivables identified
on Schedule A hereto in the aggregate face amount of $8,000,000 (the
"Receivables").

     B.   Seller desires to sell the Receivables to Purchaser, and Purchaser
desires to purchase such Receivables, on the terms and subject to the conditions
of this Agreement.

                                A G R E E M E N T

     In consideration of the foregoing recitals and the respective covenants and
agreements contained herein, the parties agree as follows:

                                    ARTICLE 1
                                PURCHASE AND SALE

     1.1  Sale and Purchase of the Receivables. Seller hereby sells, conveys,
transfers, assigns and delivers to Purchaser without recourse, representation or
warranty by Seller, and Purchaser hereby purchases from Seller, all of Seller's
right, title and interest in and to the Receivables, free and clear of any lien,
pledge, charge, easement, security interest, deed of trust, mortgage,
right-of-way, encroachment or encumbrance.

     1.2  Consideration. The consideration for the sale and transfer of the
Receivables (the "Purchase Price"), shall be $8,000,000, which consideration is
being paid to Seller by Purchaser concurrently herewith.

                                    ARTICLE 2
                            COVENANTS AND AGREEMENTS

     2.1  Further Assurances. Seller agrees and covenants to execute,
acknowledge and deliver any further deeds, assignments, conveyances and other
assurances, documents and instruments of transfer, reasonably requested by
Purchaser, and will take any other action consistent with the terms of this
Agreement that may reasonably be requested by Purchaser, for the purpose of
assigning, transferring, granting, conveying and confirming to Purchaser, or
reducing to possession, the Receivables pursuant to this Agreement. Seller
further agrees that it shall transfer to Purchaser any funds received by Seller
in connection with such Receivables.

<PAGE>

                                                                   Exhibit 10.21

     2.2  Expenses; Transfer Taxes. Each of the parties shall pay all costs and
expenses incurred by it or on its behalf in connection with this Agreement and
the transactions contemplated hereby. Seller shall pay any transfer or stamp
taxes, charges, fees, levies or other assessments imposed by reason of the
transactions contemplated hereby.

                                    ARTICLE 3
                            MISCELLANEOUS PROVISIONS

     3.1  Entire Agreement. This Agreement constitutes the full and entire
agreement and understanding between the parties with regard to the subject
matter of this Agreement. All prior and contemporaneous agreements, covenants,
representations and warranties, express or implied, oral and written, of the
parties with regard to the subject matter of this Agreement are superseded by
this Agreement.

     3.2  Governing Law. The validity, construction, and performance of this
Agreement, and any action, claim, suit, litigation, proceeding, arbitration or
mediation arising out of or relating to this Agreement shall be governed by the
Laws of the State of California, without regard to the Laws of the State of
California as to choice or conflict of Laws.

     3.3  Successors and Assigns. Each of the terms, provisions, and obligations
of this Agreement shall be binding upon, shall inure to the benefit of, and
shall be enforceable by the parties and their respective legal representatives,
successors and permitted assigns.

     3.4  Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been given or made if in
writing and delivered personally or sent by registered or express mail (postage
prepaid) or by telecopier to the parties at the following addresses and
facsimile numbers:

          if to Purchaser to:

                HRC Holding Inc.
                27111 Diaz Road
                P.O. Box 9020
                Temecula, California 92589-9020
                Facsimile: (909) 676-1578

          if to Seller to:

                Hudson Respiratory Care Inc.
                27111 Diaz Road
                P.O. Box 9020
                Temecula, CA 92589-9020
                Facsimile: (909) 676-1578

<PAGE>

                                                                   Exhibit 10.21

<PAGE>

     IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date first set forth above.

SELLER:                                   PURCHASER:

HUDSON RESPIRATORY CARE INC.,             HRC HOLDING INC.,
a California corporation                  a Delaware corporation

By:_____________________________          By:__________________________________
   Name:                                     Name:
   Title:                                    Title:

<PAGE>

                          ACKNOWLEDGEMENT OF ASSIGNMENT

     Pursuant to that certain Receivables Purchase Agreement, dated as of May
14, 2002 (the "Purchase Agreement"), by and between Hudson Respiratory Care
Inc., a California corporation ("Hudson") and HRC Holding Inc., a Delaware
corporation ("HRC"), the undersigned each acknowledge and agree to the
assignment of the Receivables (as defined in the Purchase Agreement) to HRC as
provided in the Purchase Agreement. Each of the undersigned hereby agree to make
only to HRC or a party designated by HRC all future payments on such
Receivables.

ACKNOWLEDGED AND AGREED:

Hudson RCI AB

By: _____________________________
    Name:
    Its:

Hudson RCI GmbH

By: _____________________________
    Name:
    Its:

Kiewclass (M) Sdn. Bhd

By: _____________________________
    Name:
    Its:

Hudson RCI (UK) Holdings Limited

By: _____________________________
    Name:
    Its:

Gibeck, Inc.

By: _____________________________
    Name:
    Its:

<PAGE>

                                   Schedule A

List of intercompany receivables purchased:

Accounts Receivable from:

Hudson AB account # 2634                             $4,148,613.24
Hudson AB account # 2896                             $  266,904.14
Hudson Germany account #813                          $1,682,954.26
Hudson UK account # 100257                           $  603,004.27
Hudson AB Kiewclass account # 4550                   $   93,499.09

Other receivables:

Hudson Germany GL 121050                             $  225,000.00
Hudson Germany GL 141050                             $  461,523.00
Gibeck, Inc.                                         $  518,502.00

Total                                                $8,000,000.00

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