Document:

Assignment and Assumption Agreement

 Exhibit 10.16 

ASSIGNMENT AND ASSUMPTION AGREEMENT 

This Assignment and Assumption Agreement, dated as of March 25, 2010 (this “Agreement”), is entered into by and
between Sky Acquisition LLC, a Delaware limited liability company (the “Assignor”), and Apria Holdings LLC, a Delaware limited liability company (the “Assignee”). 

W I T N E S S E T H: 

WHEREAS, on the date hereof, the Assignor, the Assignee and Apria Merger LLC, a Delaware limited liability company and
wholly-owned subsidiary of the Assignee (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), providing that Merger Sub shall merge with and into the Assignor (the
“Merger”), with the Assignor surviving the Merger (the “Surviving Entity”); 
 WHEREAS,
the Merger shall become effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware (the “Effective Time”); 

WHEREAS, pursuant to the terms of the Merger Agreement, the Assignor agreed to assign and transfer to the Assignee its rights and
obligations under (i) the Securityholders Agreement, dated November 24, 2008, among the Assignor and the other parties named therein (the “Securityholders Agreement”) and (ii) the management unit subscription
agreements set forth on Schedule A hereto (the “Subscription Agreements” and, together with the Securityholders Agreement, the “Assigned Agreements”); 

WHEREAS, the Assignor desires to transfer and assign its rights and obligations under the Securityholders Agreement and
Subscription Agreements to the Assignee; 
 WHEREAS, the Assignee has agreed to assume the rights and obligations of
Assignor with respect to the Securityholders Agreement and the Subscription Agreements, and to become a party to and be bound by the terms of the Securityholders Agreement and the Subscription Agreements; and 

WHEREAS, for the avoidance of doubt, the transactions contemplated by this Agreement shall take place prior to any transfer of the
membership interests in the Surviving Entity owned by the Assignee as a result of the Merger to Apria Finance Holdings Inc. or any other entity. 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto
hereby agree as follows: 
 1. In accordance with Section 7.6 of the Securityholders Agreement, the Assignor hereby
transfers and assigns to the Assignee, with effect as of the Effective Time, its rights and obligations in connection with the Securityholders Agreement. 

2. The Assignee hereby accepts such transfer and assignment and confirms its agreement to assume all of the obligations of the Assignor
under the Securityholders 

 
Agreement. The Assignee agrees that, by virtue of executing and delivering this Agreement, it will become a party to the Securityholders Agreement (and will be deemed to have executed and
delivered a counterpart thereof), and accepts and agrees to be bound by all of the terms and provisions of the Securityholders Agreement. 

3. In accordance with Section 7.02 of each Subscription Agreement, the Assignor hereby transfers and assigns to the Assignee, with
effect as of the Effective Time, its rights and obligations in connection with the Subscription Agreements. 
 4. The Assignee
hereby accepts such transfer and assignment and confirms its agreement to assume all of the obligations of the Assignor under the Subscription Agreements. The Assignee agrees that, by virtue of executing and delivering this Agreement, it will become
a party to the Subscription Agreements (and will be deemed to have executed and delivered a counterpart thereof), and accepts and agrees to be bound by all of the terms and provisions of the Subscription Agreements. 

5. The Assignor and Assignee acknowledge that, following the Effective Time, all references in the Assigned Agreements to “Sky
Acquisition LLC” shall refer to “Apria Holdings LLC”, pursuant to this Agreement and the terms and provisions of such Assigned Agreements. 

6. This Agreement does not, and shall not be construed to, confer upon or give to any person that is not a party hereto any rights or
remedies under or by reason of, or any rights to enforce or cause any party hereto to enforce any provision of, this Agreement, whether directly or indirectly, by right of subrogation or otherwise. 

7. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received the counterpart hereof signed by the other parties hereto. 

8. This Agreement constitutes the entire agreement, and supersedes all prior agreements, understandings and statements, both written and
oral, among the parties hereto or any of their respective affiliates with respect to the subject matter of this Agreement. 
 9.
This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without giving effect to principles of conflicts of law. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 

 2 

 IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption
Agreement to be duly executed as of the day and year first above written. 
  

					
	ASSIGNOR:
	
	SKY ACQUISITION LLC
		
	By:	 	/s/ Robert S. Holocombe
		 	Name:	 	Robert S. Holcombe
		 	Title:	 	Executive Vice President,
General Counsel and Secretary
	
	ASSIGNEE:
	
	APRIA HOLDINGS LLC
		
	By:	 	/s/ Robert S. Holocombe
		 	Name:	 	Robert S. Holcombe
		 	Title:	 	Executive Vice President,
General Counsel and Secretary

[Signature page to Assignment and Assumption Agreement] 

 Schedule A 

Assigned Subscription AgreementsForm of Annual Executive Bonus Plan of Apria Healthcare Group Inc.

 Exhibit 10.17 

 

					
			
	

	  		  	

 APRIA HEALTHCARE GROUP INC. 

Form of Annual EXECUTIVE BONUS PLAN 

The following sets forth the provisions of the Annual Executive Bonus Plan for Year
             of Apria Healthcare Group Inc. 
  

	 	•	 	 Eligibility. The Participants in the Plan are the              senior
executives listed on the attached Exhibit A, as well as any other executives selected by Apria’s Board of Directors in its discretion from among the employees of Apria and its affiliates. 

 

	 	•	 	 Determination of Bonuses. Each Participant’s target bonus will be 100% of his or her actual base salary paid in
            , with a maximum bonus opportunity of 150% (or 200%) of base salary*. In the event of any conflict between the terms of this Plan and the provisions of a
Participant’s Employment or Severance Agreement, the terms of the Agreement shall control. The portion of a target bonus that is actually paid out will generally be based on Apria’s achievement of the EBITDA and Free Cash Flow performance
metrics set forth in Exhibit A. In addition, certain Participants will have a portion of their bonus based on their achievement of individual objectives (MBOs) as noted in Exhibit A. Actual bonus amounts paid, however, will in each case be
determined by the Board in its sole discretion. Bonus payouts may be increased or reduced at the discretion of the Board. Bonuses approved by the Board will generally be paid to participants (less required withholdings) within three months following
December 31,         . 

  

	 	•	 	 Termination of Employment. A Participant must remain employed with Apria or one of its affiliates through the date bonuses are actually
paid to be eligible to receive a bonus; provided, however, that if the Participant’s employment is terminated by Apria or an affiliate (other than a termination for cause), the Participant may, at the discretion of the Board, receive a prorated
portion of the bonus he or she would have received but for such termination of employment (based on the number of days the Participant was employed with Apria or its affiliates during the year), such prorated bonus to be paid when bonuses are paid
generally for that year. 

  

	 	•	 	 Taxation. Bonus payments will be taxed as ordinary income (wages) in the year of payment. All payments will be subject to required
income, employment and other tax withholdings and any other authorized deductions. 

  

	 	•	 	 No Right to Bonus or Continued Employment. Nothing contained in this Plan or any related document constitutes an employment commitment by
Apria (or any affiliate), affects a Participant’s status as an employee at will who is subject to termination without cause, confers upon any Participant any right to remain employed by Apria (or any affiliate), or interferes in any way with
the right of Apria (or any affiliate) to terminate a Participant’s employment at any time. 

  

	 	•	 	 Administration. Based on the recommendations of the Chief Executive Officer, the Apria Board of Directors will take all actions necessary
or appropriate for the administration of this Plan. The Board has the authority to construe and interpret this Plan and to adjust the financial performance metrics to be considered in determining bonus amounts. All actions taken and all
interpretations and determinations made by the Chief Executive Officer and the Board in respect of this Plan shall be conclusive and binding on all persons and shall be given the maximum deference permitted by law. 

 

	*	The maximum bonus opportunity will be 200% for
                                    .

 Exhibit A 

                 EXECUTIVE BONUS PLAN
PARTICIPANTS 
  

											
	 	 	 	 	 	  	Performance Metrics (1)

	  Name	 	  Title	  	
    Adjusted    

EBITDA

(2)
	  	
    Adjusted Free    

    Cash Flow    

(2)
	  	    MBOs    

(3)
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 		 	 	 	 
	 	 	 	 	 	  	 	  	 	  	 
	 (1) 
	 	Subject to Board approval/adjustment, no bonus will be paid with respect to a
performance metric unless actual achievement of that metric is at least 90% of the target, and no bonus will be paid with respect to any performance metric unless the Adjusted EBITDA achievement is at least 90% of the Adjusted EBITDA target. Payouts
for all performance metrics (Adjusted EBITDA, Adjusted Free Cash Flow and MBOs) will increase in linear progression from 0% to 100% for metric achievement between 90% and 100% of the target, and from 100% to 150% (or 200%) for metric achievement
between 100% and 120%.
	 (2)
	 	Company-wide Adjusted EBITDA and Adjusted Free Cash Flow targets include
certain one-time adjustments as approved by the Board of Directors such as Non-Cash Profit Share Expense, Non-Recurring Items and the Blackstone Monitoring Fee.
	 (3)
	 	MBOs will be communicated separately to each participant with a weighting
percentage in the MBO column above. Participants with a “0” weight in the MBO column above may be assigned MBOs at the discretion of the CEO. If MBOs are assigned to these participants, the MBO weight will be up to 20% and the EBITDA
weight will be reduced accordingly. MBOs may qualify for overachievement as described in Footnote (1) above.

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