S-4

As filed with the Securities and Exchange Commission on July 16, 2010

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

APRIA HEALTHCARE GROUP INC.

(Exact name of registrant as specified in its charter)

SEE TABLE OF ADDITIONAL REGISTRANTS

Delaware (State or other jurisdiction of
incorporation or organization) 8082 (Primary Standard Industrial
Classification Code Number) 33-0488566 (I.R.S. Employer
Identification Number)

26220 Enterprise Court,

Lake Forest, CA 92630

(949) 639-2000

(Address, including zip code, and telephone number, including area code, of registrants’ principal executive offices)

Robert S. Holcombe, Esq.

Executive Vice President, General Counsel and Secretary

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

(949) 639-2000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With a copy to:

Edward P. Tolley III, Esq.

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017-3954

(212) 455-2000

Approximate date of commencement of proposed exchange offers: As soon as practicable after this Registration Statement is declared effective.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer    ¨ Accelerated filer    ¨ Non-accelerated filer    x (Do not check if a smaller reporting company) Small reporting company    ¨

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issue Tender Offer)    ¨

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)    ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Note	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee
11.25% Senior Secured Notes due 2014 (Series A-1 Notes)	$700,000,000	100%	$700,000,000	$49,910.00
Guarantees of 11.25% Senior Secured Notes due 2014 (Series A-1 Notes)(2)	(3)	(3)	(3)	(3)
12.375% Senior Secured Notes due 2014 (Series A-2 Notes)	$317,500,000	100%	$317,500,000	$22,637.75
Guarantees of 12.375 Senior Secured Notes due 2014 (Series A-2 Notes)(2)	(3)	(3)	(3)	(3)

(1) Estimated solely for the purpose of calculating the registration fee under Rule 457(f) of the Securities Act of 1933, as amended (the “Securities Act”).

(2) See inside facing page for additional registrant guarantors.

(3) Pursuant to Rule 457(n) under the Securities Act, no separate filing fee is required for the guarantees.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Table of Additional Registrant Guarantors

Exact Name of Registrant Guarantor as Specified in its Charter	State or Other Jurisdiction of Incorporation or Organization	I.R.S. Employer Identification Number	Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant Guarantor’s Principal Executive Offices
Apria Healthcare of New York State, Inc.	New York	16-1031905	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000
Apria Healthcare, Inc.	Delaware	33-0057155	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000
ApriaCare Management Systems, Inc.	Delaware	33-0675340	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000
ApriaDirect.Com, Inc.	Delaware	27-2820256	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000
Coram Alternate Site Services, Inc.	Delaware	76-0215922	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Clinical Trials, Inc.	Delaware	58-2160656	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Alabama	Delaware	58-1813484	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Florida	Delaware	58-1949695	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Greater D.C.	Delaware	58-2035129	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Greater New York	New York	58-1844719	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Indiana	Delaware	58-1813491	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Massachusetts	Delaware	33-0532814	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Mississippi	Delaware	58-1813479	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Nevada	Delaware	58-1972771	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of New York	New York	33-0458457	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of North Texas	Delaware	33-0556959	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Northern California	Delaware	58-1972773	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973

Exact Name of Registrant Guarantor as Specified in its Charter	State or Other Jurisdiction of Incorporation or Organization	I.R.S. Employer Identification Number	Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant Guarantor’s Principal Executive Offices
Coram Healthcare Corporation of South Carolina	Delaware	58-1813494	555  17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Southern California	Delaware	58-2006708	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Southern Florida	Delaware	58-1949686	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Utah	Delaware	95-4446209	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare of Wyoming, L.L.C.	Delaware	84-1463833	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Homecare of Minnesota, Inc.	Delaware	58-1874630	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Service Corporation	Delaware	58-1910054	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Specialty Infusion Services, Inc.	Delaware	58-1813486	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram, Inc.	Delaware	84-1300129	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
CoramRx, LLC	Delaware	25-1923172	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
H.M.S.S., Inc.	Delaware	76-0005650	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
T2 Medical, Inc.	Delaware	59-2405366	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
HealthInfusion, Inc.	Florida	65-0163627	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
AHNY-DME LLC	New York	27-2955068	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000
AHNY-IV LLC	New York	27-2954951	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000

The information in this prospectus is not complete and may be changed. We may not issue the exchange notes in the exchange offers until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where such offer or sale is not permitted.

Subject to Completion, dated July 16, 2010

PRELIMINARY PROSPECTUS

Apria Healthcare Group Inc.

Offers to Exchange

$700,000,000 aggregate principal amount of 11.25% Senior Secured Notes due 2014 (Series A-1) (the “exchange Series A-1 Notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for any and all outstanding 11.25% Senior Secured Notes due 2014 (Series A-1) (the “outstanding Series A-1 Notes”).

$317,500,000 aggregate principal amount of 12.375% Senior Secured Notes due 2014 (Series A-2) (the “exchange Series A-2 Notes” and, together with the exchange Series A-1 Notes, the “exchange notes”), which have been registered under the Securities Act, for any and all outstanding 12.375% Senior Secured Notes due 2014 (Series A-2) (the “outstanding Series A-2 Notes” and, together with the outstanding Series A-1 Notes, the “outstanding notes”).

The exchange notes will be fully and unconditionally guaranteed on a senior secured basis by our existing and future wholly-owned domestic subsidiaries that guarantee our existing senior secured asset-based revolving credit facility and the outstanding notes.

We are conducting the exchange offers in order to provide you with an opportunity to exchange your unregistered outstanding notes for freely tradeable exchange notes that have been registered under the Securities Act.

The Exchange Offers

• We will exchange all outstanding notes that are validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are freely tradeable.

• You may withdraw tenders of outstanding notes at any time prior to the expiration date of the applicable exchange offer.

• The exchange offers expire at 5:00 p.m., New York City time, on                     , 2010 which is the 21^st business day after the date of this prospectus.

• The exchange of outstanding notes for exchange notes in the exchange offers will not be a taxable event for U.S. federal income tax purposes.

• The terms of the exchange notes to be issued in the exchange offers are substantially identical to the outstanding notes, except that the exchange notes will be freely tradeable.

Results of the Exchange Offers:

• The exchange notes may be sold in the over-the-counter-market, in negotiated transactions or through a combination of such methods. We do not plan to list the exchange notes on a national market.

All untendered outstanding notes will continue to be subject to the restrictions on transfer set forth in the outstanding notes and in the indenture. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offers, we do not currently anticipate that we will register the outstanding notes under the Securities Act.

You should carefully consider the “Risk Factors” beginning on page 24 of this prospectus before participating in the exchange offers.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the exchange notes to be distributed in the exchange offers or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                     , 2010.

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. This prospectus may be used only for the purposes for which it has been published and no person has been authorized to give any information not contained herein. If you receive any other information, you should not rely on it. We are not making an offer of these securities in any state where the offer is not permitted.

TABLE OF CONTENTS

	Page
Forward-Looking Statements	ii
Market and Industry Data	ii
Trademarks	ii
Basis of Presentation	iii
Prospectus Summary	1
Risk Factors	24
The Transactions	47
Use of Proceeds	49
Capitalization	50
Selected Historical Consolidated Financial Data	51
Management’s Discussion and Analysis of Financial Condition and Results of Operations	53
Business	92
Management	120
Security Ownership of Principal Shareholders and Management	147
Certain Relationships and Related Party Transactions	150
The Exchange Offers	153
Description of Notes	163
Description of Other Indebtedness	239
Certain U.S. Federal Income Tax Considerations	242
Certain ERISA Considerations	249
Plan of Distribution	251
Legal Matters	252
Experts	252
Where You Can Find More Information	252
Index to Financial Statements	F-1

i

FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. These statements are based on the beliefs and assumptions of our management. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning our possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes”, “expects”, “anticipates”, “intends”, “plans”, “estimates” or similar expressions.

Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements. You should understand that the following important factors, in addition to those discussed in “Risk Factors” and elsewhere in this prospectus, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

• trends and developments affecting the collectibility of accounts receivable;

• government legislative and budget developments that could continue to affect reimbursement levels;

• potential reductions in reimbursement rates by government and third-party payors;

• the effectiveness of our operating systems and controls;

• healthcare reform and the effect of federal and state healthcare regulations;

• economic and political events, international conflicts and natural disasters;

• our ability to implement our outsourcing and other cost savings initiatives and to realize the projected benefits of these initiatives;

• acquisition-related risks; and

• the items discussed under “Risk Factors” in this prospectus.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

MARKET AND INDUSTRY DATA

Information included in this prospectus about the healthcare industry, including our general expectations concerning this industry, is based on estimates prepared using data from various sources and on assumptions made by us. We believe data regarding this industry are inherently imprecise, but based on our understanding of the market in which we compete, we believe that such data are generally indicative of this industry. Our estimates, in particular as they relate to our general expectations concerning this industry, involve risks and uncertainties and are subject to change based on various factors, including those discussed under the caption “Risk Factors.” Accordingly, you should not place undue reliance on the market and industry data included in this prospectus.

TRADEMARKS

This prospectus contains some of our trademarks, trade names and service marks. Each one of these trademarks, trade names or service marks is either (i) our registered trademark, (ii) a trademark for which we have a pending application, (iii) a trade name or service mark for which we claim common law rights or (iv) a registered trademark or application for registration which we have been licensed by a third party to use. All other trademarks, trade names or service marks of any other company appearing in this prospectus belong to their respective owners.

ii

BASIS OF PRESENTATION

As used in this prospectus, unless otherwise noted or the context otherwise requires, references to “Company,” “we,” “us,” and “our” are to Apria Healthcare Group Inc., a Delaware corporation, and its subsidiaries; references to “Apria” and the “Issuer” are to Apria Healthcare Group Inc., exclusive of its subsidiaries; references to “Merger Sub” are to Sky Merger Sub Corporation, a Delaware corporation; references to “Holdings” are to Apria Holdings LLC, a Delaware limited liability company, exclusive of its subsidiaries; references to “Sky Acquisition” are to “Sky Acquisition LLC”, a Delaware limited liability company, exclusive of its subsidiaries; references to “Blackstone” and the “Sponsor” are to Blackstone Capital Partners V L.P.; references to the “Investor Group” are, collectively, to Blackstone and certain funds affiliated with Blackstone, Dr. Norman C. Payson and certain other members of our management; and references to “home medical equipment,” “durable medical equipment” and “DME” are used synonymously.

The term “outstanding notes” refers to the outstanding 11.25% Senior Secured Notes due 2014 (Series A-1) and 12.375% Senior Secured Notes due 2014 (Series A-2). The term “exchange notes” refers to the 11.25% Senior Secured Notes due 2014 (Series A-1) and 12.375% Senior Secured Notes due 2014 (Series A-2), as registered under the Securities Act. The term “Series A-1 Notes” refers collectively to the outstanding Series A-1 Notes and the exchange Series A-1 Notes; the term “Series A-2 Notes” refers collectively to the outstanding Series A-2 Notes and the exchange Series A-2 Notes; and the term “Notes” refers collectively to the outstanding notes and the exchange notes.

We completed the acquisition of Coram, Inc. (“Coram”) on December 3, 2007. Historical financial information of the Company presented herein includes the results of Coram from the date of the acquisition and does not include the results of Coram prior to the date of the acquisition.

On June 18, 2008, Sky Acquisition and Merger Sub entered into an agreement and plan of merger with Apria (the “Merger Agreement”). Pursuant to the Merger Agreement, on October 28, 2008, Merger Sub merged with and into Apria, with Apria being the surviving corporation following the merger (the “Merger”). As a result of the Merger, the Investor Group beneficially owns all of Apria’s issued and outstanding capital stock.

The initial borrowings under Apria’s senior secured bridge credit agreement dated October 28, 2008 (the “senior secured bridge credit agreement”) and the credit agreement governing our senior secured asset-based revolving credit facility, dated October 28, 2008 (as amended from time to time, the “ABL Facility”), the equity investment by the Investor Group and the repayment of all outstanding indebtedness under our senior secured revolving credit facility, dated November 23, 2004, as amended (the “2004 senior secured revolving credit facility”), and Apria’s credit facility, dated June 18, 2008 (the “Interim Facility”), are collectively referred to in this prospectus as the “Original Financing.” The offerings of outstanding notes, the repayment of approximately $1,010.0 million of borrowings under Apria’s senior secured bridge credit agreement, plus accrued and unpaid interest, and the payment of related fees and expenses with the proceeds of the offerings of the outstanding notes, together with cash on hand, are collectively referred to in this prospectus as the “Refinancing.” The Merger, the Original Financing and the Refinancing are collectively referred to in this prospectus as the “Transactions.” For a more complete description of the Transactions, see “The Transactions” and “Description of Other Indebtedness.”

The term “Successor” refers to the Company following the Merger and the term “Predecessor” refers to the Company prior to the Merger.

Unless the context otherwise requires, the financial information presented herein is the financial information of Apria on a consolidated basis together with its subsidiaries.

iii

PROSPECTUS SUMMARY

This summary highlights information about us and the exchange offers contained in greater detail elsewhere in this prospectus. This summary is not complete and may not contain all of the information that may be important to you. You should carefully read the entire prospectus, especially the information presented under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before participating in the exchange offers.

Our Company

General

We are a quality, cost-efficient provider of home healthcare products and services in the United States, offering a comprehensive range of home respiratory therapy, home infusion therapy and home medical equipment services to over two million patients annually in all 50 states through approximately 500 locations. We hold market-leading positions across all of our major service lines—making us a leader in the homecare market. By targeting the managed care segment of the population, we are better positioned than many of our competitors to minimize risks associated with changes in Medicare/Medicaid reimbursement rates. We are focused on being the industry’s highest-quality provider of homecare services, while maintaining our commitment to being a low-cost operator. Our integrated product and service offerings, combined with our national scale and strong reputation, provide us with a strategic advantage in attracting clients, which include almost all of the national and regional managed care and government payors in the United States, and in retaining our referral base of more than 70,000 physicians, discharge planners, hospitals and third-party payors. For the year ended December 31, 2009 and for the three months ended March 31, 2010 our net revenues were $2,094.6 million and $508.9 million, respectively.

We have two operating segments, (1) home respiratory therapy and home medical equipment and (2) home infusion therapy. Within the two operating segments there are three core service lines: home respiratory therapy, home medical equipment and home infusion therapy. Through these service lines we provide patients with a variety of clinical and administrative support services and related products and supplies, most of which are prescribed by a physician as part of a care plan. We provide substantial benefits to both patients and payors by allowing patients to receive necessary care and services in the comfort of their own home while reducing the cost of treatment. Our services include:

• providing in-home clinical respiratory care, infusion nursing and pharmaceutical management services;

• educating patients and caregivers about health conditions or illnesses and providing written instructions about home safety, self-care and the proper use of equipment;

• monitoring patients’ individualized treatment plans;

• reporting patient progress and status to the physician and/or managed care organization;

• providing in-home delivery, set-up and maintenance of equipment and/or supplies; and

• processing claims to third-party payors and billing/collecting patient co-pays and deductibles.

Home Respiratory Therapy and Home Medical Equipment ($1,169.6 million and $278.3 million, or 55.8% and 54.7%, of our net revenues for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively)

Home Respiratory Therapy

We are the largest provider of home respiratory therapies in the United States to the managed care market serving approximately 1.5 million patients annually through our nationwide distribution platform that includes

1

approximately 400 locations. We offer a full range of home respiratory therapy products and services, from the simplest nebulizer and oxygen concentrator to the most complex ventilator. Our services offer a compelling relative cost advantage to our patients and payors. For example, in-home oxygen treatment costs for a Medicare patient are on average less than $7 per day. Patients utilize our products to treat a variety of conditions, including:

• chronic obstructive pulmonary diseases (“COPD”), such as emphysema and chronic bronchitis (the fourth leading cause of death in the U.S.);

• respiratory conditions associated with nervous system disorders or injuries, such as Lou Gehrig’s disease and quadriplegia;

• congestive heart failure; and

• lung cancer.

By focusing our efforts primarily on the managed care population, we limit our exposure to the highly-regulated Medicare respiratory business, which is subject to changes in coverage, payment and pricing guidelines. As an example, Medicare oxygen accounted for less than 10% and 11% of our total net revenues for the year ended December 31, 2009 and three months ended March 31, 2010, respectively.

We employ a nationwide clinical staff of more than 800 respiratory care professionals, including home respiratory therapists who provide direct patient care, monitoring and 24-hour support services under physician-directed treatment plans and in accordance with our proprietary acuity program. We derive revenues from the provision of oxygen systems, ventilators, respiratory assist devices, and Continuous Positive Airway Pressure (“CPAP”) and bi-level devices, as well as from the provision of infant apnea monitors, nebulizers, home-delivered respiratory medications and related services.

We are also the largest provider of sleep apnea devices, including CPAP/bi-level devices, and patient support services in the United States. The incidence and diagnosis of Obstructive Sleep Apnea (“OSA”) continues to increase in the United States. We believe that the strength of our position in this market is partly due to our significant presence in the managed care market, since OSA largely affects adults between the ages of 35 and 55 rather than the population served by Medicare. To manage our significant new and recurring patient volumes in a cost-effective, clinically sound manner, we developed an innovative care model called the “CPAP Center at Apria Healthcare.” This branch-based model allows Apria’s respiratory care practitioners to educate, on a timely and efficient basis, newly-diagnosed patients about their condition, the equipment and accessories their physician has prescribed for them, and the long-term importance of complying with the physician’s order. The model includes both one-on-one patient education and teaching performed in group settings, depending on the geographic area of the country and the patient’s payor’s contractual preferences.

Home Medical Equipment

As the leading provider of home medical equipment in the United States, we supply a wide range of products to help improve the quality of life for patients with special needs. Our integrated service approach allows patients, hospital and physician referral sources and managed care organizations accessing either our home respiratory or home infusion therapy services to also access needed home medical equipment through a single source. The use of home medical equipment provides a significant relative cost advantage to our patients and payors. For example, on average, it costs $50 per day to create an in-home hospital room versus approximately $1,500 per day for in-patient hospital care, according to the Centers for Medicare and Medicaid Services (“CMS”). Basic categories of equipment are:

• manual wheelchairs and ambulatory equipment, such as canes, crutches and walkers;

• hospital room equipment, such as hospital beds and bedside commodes;

2

• bathroom equipment, such as bath and shower benches, elevated toilet seats and toilet, tub or wall grab bars;

• phototherapy systems, such as blankets, wraps or treatment beds for babies with jaundice; and

• support surfaces, such as pressure pads and mattresses, for patients at risk for developing pressure sores or decubitus ulcers.

In May 2008, we announced a preferred provider agreement with Smith & Nephew plc, a leading provider of negative pressure wound therapy (“NPWT”), to provide NPWT services and products in the United States. NPWT is a topical treatment intended to promote healing in acute and chronic wounds affected by conditions including diabetes, arterial insufficiency and venous insufficiency.

Home Infusion Therapy ($925.0 million and $230.6 million, or 44.2% and 45.3%, of our net revenues for the year ended December 31, 2009 and three months ended March 31, 2010, respectively)

Through our acquisition of Coram in December 2007, we are the leading provider of home infusion therapy services in the United States—serving approximately 100,000 patients annually through 72 infusion pharmacy locations nationwide. We provide patients with intravenous and injectable medications and clinical services at home or in one of our 62 ambulatory infusion suites nationwide. We employ nursing clinicians who assess patients before their discharge from the hospital whenever possible, and then develop, in conjunction with the physician, a plan of care. Our home infusion products offer a compelling relative cost advantage to our patients and payors. For example, we believe that a home intravenous antibiotic program in a Medicare managed care plan costs significantly less than the cost to provide that service in a hospital setting.

Home infusion therapy is used to administer drugs and other therapeutic agents directly into the body through various types of catheters or tubing. Our services are frequently used to treat patients with infectious diseases, cancer, gastrointestinal diseases, chronic or acute pain syndromes, immune deficiencies, cardiovascular disease or chronic genetic diseases, and those who require therapies associated with bone marrow or solid organ transplantation. We employ licensed pharmacists and registered nurses who specialize in the delivery of home infusion therapy. They are able to respond to emergencies and questions regarding therapy 24 hours a day, seven days a week and provide initial and ongoing training and education to the patient and caregiver. Other support services include supply replenishment, pump management, preventive maintenance, assistance with insurance questions and outcome reporting.

We believe we are also a leading provider of enteral nutrition in the United States. Enteral nutrition, or “tube feeding,” is prescribed to patients whose gastrointestinal system is malfunctioning or who suffer from neurological conditions, swallowing disorders or malnutrition attributable to stroke, cancer or other conditions. In recent years, advances in enteral nutrition have enabled more adults and children to have their nutritional and caloric needs met by tube feeding, as opposed to more invasive and expensive therapies.

Recent Developments

Announcement of Single Payment Amounts (“SPAs”) and Initiation of Contract Offer Process Related to Round 1 Rebid of the Medicare DMEPOS Competitive Bidding Program

In early July 2010, CMS announced the new SPAs for each of the product categories included in the Round 1 Rebid. CMS then began the contracting process with suppliers by issuing contract offer letters to qualified providers. We received contract offers for a substantial majority of the bids we submitted. We did not receive contract offers for certain product categories in certain competitive bidding areas (“CBAs”), but the process will

3

not be completed until September 2010. Approximately $21 million of our net revenues for the fiscal year ended December 31, 2009 was generated by the products and CBAs included in the Round 1 Rebid. We estimate that the initial results of the Round 1 Rebid would reduce our net revenues in the fiscal year ending December 31, 2011 by approximately $8.0 million, assuming the current contract offers and no changes in volume. Assuming that Round 2 would include the same product categories and bidding rules and the markets currently being proposed by CMS, we estimate that approximately $110 million of our net revenues for the fiscal year ending December 31, 2011 would be subject to competitive bidding. Although the bidding process for Round 2 is currently scheduled to commence in 2011, the new Round 2 rates and guidelines are not scheduled to take effect until January 2013. Therefore, we cannot estimate the impact of potential Round 2 rate reductions on our business until more specific information is published by CMS and its contractors.

Enactment of a Comprehensive Healthcare Reform Package

In March 2010, the Federal government enacted a comprehensive healthcare reform package (the “Reform Package”) which consists of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010. See “Risks Relating to Our Business—Continued Reductions in Medicare and Medicaid Reimbursement Rates and the Comprehensive Healthcare Reform Package Could Have a Material Adverse Effect on Our Results of Operations and Financial Condition.”

Reorganization of the Senior Leadership Structure of our Home Respiratory Therapy and Home Medical Equipment Segment

In February 2010, we finalized a decision to reorganize the senior leadership structure of the home respiratory therapy and home medical equipment segment. As part of this reorganization, Lawrence A. Mastrovich, President, Home Respiratory Therapy and Home Medical Equipment segment, resigned and his responsibilities were assumed by other senior executives.

Industry Overview

The home healthcare market, which is projected to generate revenues of approximately $75 billion in the United States in 2010, comprises a broad range of products and services—including respiratory therapy, home infusion therapy, home medical equipment, home healthcare nursing, orthotics and prosthetics and general medical supplies—and is expected to grow at a compounded annual growth rate of 7.4% from 2008 through 2013 according to CMS. The markets that we serve—home respiratory therapy (14% of the home healthcare market), infusion therapy (9%) and home medical equipment (5%)—accounted for approximately $15 billion in revenues in 2008 according to the 2008 IBISWorld Industry Report. Our industry is highly-fragmented and is served by approximately 12,000 competitors.

We benefit from the following trends within the home healthcare market:

• Favorable industry dynamics. Favorable demographic trends and the continued shift to in-home healthcare have resulted in patient volume growth across our core service lines and are expected to continue to drive growth. As the baby boomer population ages and life expectancy increases, the elderly—who comprise the vast majority of our patients—will represent a higher percentage of the overall population. According to a 2008 U.S. Census Bureau projection, the U.S. population aged 55 and over is expected to grow at approximately twice the average rate of population growth from 76.5 million, or 25% of the population, in 2010 to 112 million, or 30% of the population, by 2030. An aging population, the continued prevalence of smoking, increasing obesity rates and higher diagnosis rates have

4

collectively driven growth across our service lines (including Coram) from 2005 to 2008—home respiratory therapy (patient growth of 14%), sleep apnea (patient growth of 21%) and infusion (patient growth of 14%, excluding enteral).

• Compelling in-home economics. By 2017, the nation’s healthcare spending is projected to increase to $4.3 trillion, growing at an average annual rate of 6.7%, according to CMS. The rising cost of healthcare has caused many payors to look for ways to contain costs and home healthcare is increasingly sought out as an attractive, cost-effective, clinically appropriate alternative to expensive facility-based care. For example, in-home oxygen treatment costs for a Medicare patient are on average less than $7 per day.

• Increased prevalence of in-home treatments. Improved technology has resulted in a wider variety of treatments being administered in patients’ homes. These improvements have allowed for earlier patient discharge and have lengthened the portion of the recuperation period spent outside of an institutional setting. In addition, medical advancements have also made medical equipment more simple, adaptable and cost-effective for use in the home.

• Preference for in-home care. Many patients prefer the convenience and typical cost advantages of home healthcare over institutional care as it provides patients with greater independence, increased responsibility and improved responsiveness to treatment. A December 2007 national telephone survey conducted by Harris Interactive found that over 82% of the respondents expressed a preference for homecare over institutional care, and that preference is even more prevalent among the age 55+ population (91%). The same poll found that 74% of adults surveyed agreed that homecare is part of the solution to the problem of rapidly increasing Medicare spending for seniors in the United States.

• Development of new infused and injectable drugs. There is a significant number of new infusion or injectable drugs in the development pipeline. We believe this proliferation of medications, many of which are for chronic conditions that require long-term treatment, will drive further increases in home infusion therapy utilization and referrals to our ambulatory infusion suites.

Our Competitive Strengths

Leading Market Positions with a Compelling Value Proposition

With approximately 11,400 employees and a national distribution footprint of approximately 500 locations that serve patients in all 50 states, we are the largest provider of home healthcare services in the United States. We are the market leader in infusion therapy and sleep apnea devices, the leading respiratory provider to the managed care market and the leading provider of home medical equipment. We believe that our national platform, comprehensive product line and leading reputation provide us with a greater opportunity than our competitors to attract more customers as our industry continues to grow. Our national presence and scale enables us to frequently obtain preferred provider status from other national and regional managed care payors, negotiate better terms with vendors and leverage our fixed overhead costs. For example, we are a preferred provider for a comprehensive list of home respiratory and medical equipment products and services to many managed care organizations and, for some of these payors, we are the exclusive provider. We believe we are better suited to service large managed care accounts due to our extensive branch network, state of the art logistics systems, national coverage of payors’ members, competitive pricing, comprehensive product line, accreditation from The Joint Commission and the Accreditation Commission for Health Care (the “ACHC” and, together with The Joint Commission, the “Commissions”), and our ability to connect electronically with payors’ systems. We have leveraged this competitive advantage to gain share in the managed care market.

Our acquisition of Coram in December 2007 has allowed us to further penetrate the specialty infusion market. With a significant number new infusion drugs in the pipeline and an increasing use of specialty infusion treatments, this market is expected to grow over the next few years. We are well-positioned in specialty infusion

5

services, and have aggressively established relationships with pharmaceutical and biotech companies to obtain early access to drugs in various stages of clinical trials. We believe there are other cross-selling opportunities and synergies to be achieved by offering a diverse mix of services. We also believe that an integrated approach allows us to offer patients, hospital and physician referral sources and managed care organizations a highly-valued single source for respiratory therapy, specialty home infusion and home medical equipment.

Diversified Product and Customer Mix

We have one of the most comprehensive product lines and diversified customer mixes among our peers. Our broad product offering has affirmed our status as a leading provider in each market and has made us a more attractive partner to referral sources and payors, as we provide a one-stop solution for homecare products and services.

We contract with a substantial majority of the national managed care organizations—including United HealthCare Services, Aetna Health Management, Humana Health Plans and Kaiser Foundation Health Plan, as well as a large number of regional and local payors. All of our contracted managed care organizations combined service over 217 million people.

The Coram acquisition enabled us to both expand our product offering in specialty infused drugs and rebalance our payor mix by reducing reliance on government payors such as Medicare and Medicaid while expanding relationships with managed care organizations. Managed care payors contributed approximately 72% and 70% of our net revenues for the year ended December 31, 2009 and the three months ended March 31, 2010 respectively, with no single contract accounting for more than 8% of net revenues during the same periods.

Proven Ability to Execute Cost Savings

We have successfully implemented a number of operational efficiency initiatives historically, which have helped to reduce our costs and significantly offset ongoing Medicare reimbursement changes. We launched a substantial cost reduction plan in late 2007 across a number of identified initiatives targeting approximately $198 million in expected annual savings, of which we have realized approximately $127 million through March 31, 2010.

Scalable and Diversified Platform for Home Healthcare Delivery

We currently provide service to more than 2 million patients through a national infrastructure that enables us to deliver services to patients in their homes. Through approximately 500 locations, we are able to deliver a wide variety of cost-effective products and services to various patient groups. We have successfully leveraged this distribution platform across a number of product and service offerings including CPAP/bi-level, enteral nutrition and NPWT devices, and we are using our nursing capacity to provide infusion services through our growing network of ambulatory infusion suites.

We historically supplied CPAP/bi-level devices to a large number of patients, but provided related accessories and supplies primarily on an as-needed basis. Patients who rely on CPAP and bi-level devices periodically require replacement accessories to ensure that they remain compliant to the therapy prescribed by their physician. These accessories include masks, tubing and supplies. Now in operation for over five years, a centralized customer care center for CPAP and bi-level patients provides support and information to patients so that they know what their payors cover in terms of replacement accessories and understand the health value of remaining compliant to their therapy over the long-term. Accessory net revenues were $155.9 million and $34.5 million and represented 47% and 46% of our total CPAP/bi-level net revenues for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively.

6

In May 2008, we announced a preferred provider agreement with Smith & Nephew plc to provide NPWT products, thus leveraging our existing branch delivery infrastructure and clinical expertise. Centralized patient intake and coordination of care is provided using the same service and systems platform as is used for the CPAP/bi-level direct marketing service program. Although the program is still in its developing stage, interest has been strong from managed care customers who would like to add the NPWT service to our existing contracts with them.

Experienced Management Team

We have a strong and experienced senior management team with over 200 years of combined experience spanning nearly every segment of the healthcare industry, including managed care, manufacturing, supply chain, procurement, home healthcare, acute care, skilled nursing and long-term care. With an average tenure of 20 years within the healthcare industry, this team possesses in-depth knowledge of our industry and the regulatory environment in which we operate, as well as our portfolio of home healthcare services.

Our Business Strategy

Our strategy is to position ourselves in the marketplace as a high-quality provider of a broad range of healthcare services and patient care management programs to our customers. The specific elements of our strategy are to:

• Grow profitable revenue and market share. We are focused on growing profitable revenues and increasing market share in our core home infusion therapy and home respiratory therapy service lines. We have undertaken a series of steps towards this end. Through our acquisition of Coram in December 2007, we considerably increased our home infusion capabilities and expanded our platform for further cross- selling opportunities. Since January 1, 2007, we have expanded our home respiratory therapy and home medical equipment sales force by 18%. This focus has allowed us to more effectively market our products and services to physicians, hospital discharge planners and managed care organizations.

• Continue to participate in the managed care market. We participate in the managed care market as a long-term strategic customer group because we believe that our scale, expertise, nationwide presence and array of home healthcare products and services will enable us to sign preferred provider agreements with managed care organizations. Managed care represented approximately 70% of our total net revenues for the three months ended March 31, 2010.

• Leverage our national distribution infrastructure. With approximately 500 locations and a robust platform supporting shared national services, we believe that we can efficiently add products, services and patients to our systems to grow our revenues and leverage our cost structure. For example, we have successfully leveraged this distribution platform across a number of product and service offerings, including a CPAP/bi-level supply replenishment program, enteral nutrition and NPWT services, and we are using our nursing capacity to provide infusion services through our growing network of ambulatory infusion suites. We seek to achieve margin improvements through operational initiatives focused on the continual reduction of costs and delivery of incremental efficiencies. At the same time, we believe that it is essential to consistently deliver superior customer service in order to increase referrals and retain existing patients. Performance improvement initiatives are underway in all aspects of our operations including customer service, patient satisfaction, logistics, supply chain, clinical services and billing/collections. We believe that by being responsive to the needs of our patients and payors we can provide ourselves with opportunities to take market share from our competitors.

• Continue to lead the industry in accreditation. The Medicare Improvement for Patients Act of 2008 (“MIPPA”) made accreditation mandatory for Medicare providers of durable medical equipment, prosthetics, orthotics and supplies (“DMEPOS”), effective October 1, 2009, per CMS regulation. We

7

were the first durable medical equipment provider to seek and obtain voluntary accreditation from The Joint Commission. All of our locations are currently accredited by The Joint Commission and our home infusion therapy service line is also accredited by the ACHC. In 2007, we completed a nationwide independent triennial accreditation renewal process conducted by The Joint Commission and we have more than 15 years of continuous accreditation by The Joint Commission—longer than any other homecare provider. In late June 2010, The Joint Commission completed its most recent triennial survey of our respiratory/home medical equipment and infusion locations and is expected to renew our accreditation for another three years.

• Execute our strategic initiatives to drive profitability. For the past several years, we have successfully engaged in a range of cost savings initiatives to ease pressure on our revenue that has been and continues to be caused by Medicare and Medicaid reimbursement changes. These initiatives are designed to improve customer service, delivery and vehicle routing services, streamline the billing and payment process, effectively manage purchasing costs and improve the overall experience of the patients we serve. We launched a substantial cost reduction plan in late 2007. To date, we have made significant progress across a number of the identified initiatives targeting expected annual savings of approximately $198 million, of which we realized approximately $127 million through March 31, 2010.

Regulatory Overview

We are subject to extensive government regulation, including numerous laws that regulate reimbursement of products and services under various government programs. There are a number of legislative and regulatory activities in Congress, including the March 2010 passage of the Reform Package, and at the Department of Health and Human Services (“HHS”) and CMS, the federal government agency responsible for administering the Medicare and Medicaid programs, that affect or may affect government reimbursement policies for our products and services.

Healthcare Reform Package. In March 2010, the Federal government enacted the comprehensive healthcare Reform Package. Among many other provisions, the Reform Package expands the Medicaid program, mandates extensive insurance market reforms, creates new health insurance access points (e.g., insurance exchanges), provides certain insurance subsidies (e.g., premiums and cost sharing), imposes individual and employer health insurance requirements and makes a number of changes to the U.S. Internal Revenue Code of 1986, as amended (the “Code”).

There are a number of provisions in the Reform Package that may affect us. For example, the Reform Package requires certain pharmaceutical and medical device manufacturers to pay an excise tax to the government, which may, in turn, increase our costs for these products. The Reform Package also provides for cuts in some Medicare payments made to certain providers and to Medicare Part C (“Medicare Advantage”) plans, through which we contract to provide services to Medicare beneficiaries. Also included in the Reform Package is (i) an expansion of the Recovery Audit Contractor Program, (ii) certain fraud and abuse prevention measures and (iii) expanded regulatory authority concerning the types of conduct that can result in additional fines and penalties for those healthcare providers who do not comply with applicable laws and regulations. Furthermore, the Reform Package grants the Secretary of HHS authority to set a date by which certain providers and suppliers will be required to establish a compliance program.

The Reform Package makes a number of changes to how certain of our products and services will be reimbursed by Medicare. The Reform Package also makes changes to the Medicare durable medical equipment consumer price index adjustment for 2011 and each subsequent year based upon the Consumer Price Index (the “CPI”) reduced by a new productivity adjustment which may result in negative updates and includes changes to the Medicare DMEPOS competitive bidding program. Significantly, Round 2 of the competitive bidding program

8

has been expanded from 70 to 91 of the largest metropolitan statistical areas (“MSAs”). The Reform Package also gives the Secretary of HHS the authority to apply competitive bid pricing to non-bid areas, but details of that process are unlikely to be understood until after CMS issues guidance or completes a related rulemaking process.

In an effort to further strengthen the integrity of the Medicare program, the Reform Package includes additional requirements concerning physician enrollment and certain mandatory face-to-face patient/physician visits in conjunction with the ordering of durable medical equipment. These provisions are likely to be the subject of rulemaking and are a high priority for the American Association for Homecare and other industry representative organizations. We expect the Administration to continue to enhance its oversight efforts, and we strive to incorporate any necessary changes into our overall corporate compliance and internal audit programs on a regular basis.

The effective dates of the various provisions within the Reform Package are staggered over the next several years, with some changes occurring immediately. Much of the interpretation of what the Reform Package requires will be subject to administrative rulemaking, the development of agency guidance and court interpretations.

Capped Rentals and Oxygen Equipment. The Deficit Reduction Act of 2005 (“DRA”) converted Medicare reimbursement for oxygen equipment from an ongoing rental method to a capped rental and rent-to-purchase methodology and limited reimbursement for rental of oxygen equipment to the current 36-month maximum. The DRA mandated that, after the 36-month rental period, the ownership of the equipment would transfer to the Medicare beneficiary.

MIPPA, which became law on July 15, 2008, while maintaining the 36-month rental cap, eliminated the mandatory title transfer for oxygen equipment. As a result, the equipment will continue to be owned by the oxygen provider for as long as the patient’s medical need exists, after which time it will be returned to the oxygen provider. Accordingly, because the 36-month rental period was retroactively applied to January 1, 2006, Medicare services provided on or after January 1, 2009 were the first Medicare claims for which the rental cap impacted Apria. In November 2008, CMS revised its regulations in order to be consistent with the provisions of the DRA and MIPPA. These regulations also set forth that CMS will not pay for any non-routine maintenance, oxygen tubing, cannulas and supplies after the 36-month rental period and that CMS will pay for certain routine maintenance and servicing activities after the 36-month rental cap. There may be future initiatives to implement a reduction to the capped rentals and/or monthly payment rate, but it is uncertain if such initiatives would ultimately be approved.

Competitive Bidding. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“MMA”) mandated implementation of a competitive bidding program for certain DMEPOS. By statute, CMS was required to implement the competitive bidding program over time, with the first phase (“Round 1”) of competition occurring in 10 of the MSAs in 2007, launch of the program in 2008 and in 70 additional markets in 2009, and in additional markets after 2009. In 2007 and 2008, CMS accepted and reviewed bids to begin Round 1 of the competitive bidding program. Winning contract suppliers began providing services under Round 1 on July 1, 2008.

With the enactment of MIPPA in July 2008, the competitive bidding program was delayed and all contracts awarded under Round 1 were immediately terminated. The contracting process was restarted through the re-bidding process in October 2009 (the “Round 1 Rebid”). CMS also announced in June 2009 that the new payment rates resulting from the bid process will go into effect in the CBAs in January 2011. Currently, all beneficiaries in the fee-for-service Medicare program may use any provider in any geographic area to obtain durable medical equipment and oxygen therapy services and products. In addition to the delay of the competitive bidding program, MIPPA requires a number of programmatic reforms prior to re-launching the program. To offset the cost of, or “pay for,” the delay in the roll-out of the competitive bidding program, Congress adopted an

9

average nationwide 9.5% payment reduction in the durable medical equipment fee schedule for product categories included in Round 1, effective January 1, 2009.

The Reform Package makes changes to the competitive bidding program. Significantly, Round 2 of the competitive bidding program has been expanded from 70 to 91 of the largest MSAs. CMS has announced that the effective date of the Round 2 pricing will be January 1, 2013; additional details concerning products to be included and other aspects of implementing Round 2 will not be fully known until after CMS completes a rulemaking process, which is currently scheduled for the summer or fall of 2010. The Reform Package also gives the Secretary of HHS the authority to apply competitive bid pricing to non-bid areas, but details of that process are unlikely to be understood until after CMS issues guidance or completes a related rulemaking process.

At a March 2010 Program Advisory and Oversight Committee (“PAOC”) meeting, CMS briefed the PAOC regarding the next round of the DMEPOS competitive bidding program. With review of Round 1 Rebid bids underway in March 2010, the briefing focused on certain aspects of Round 2, which is mandated by MIPPA to begin in 2011. In late June 2010, CMS published a Proposed Rule containing several provisions related to the competitive bidding program. The Proposed Rule included the proposed list of 21 additional MSAs to be included in Round 2, as well as provisions relating to the diabetic supply category. Those provisions include a proposed definition of “mail order” and “non-mail order” items and a proposal for providers to supply a minimum level of product choices to patients. The public comment period on the Proposed Rule will close in August and a Final Rule is expected in the fall of 2010. CMS expects to make additional changes to the program through the rulemaking process and anticipates that another proposed rule will be published in the summer of 2010, with a final rule to be published in the fall of 2010. Also, during the fall of 2010, CMS plans to announce the Round 2 product categories and begin pre-bidding supplier education. CMS anticipates that it will announce the Round 2 bidding schedule and begin the bidding process, with bidder registration, in the winter of 2011. CMS plans to complete the bid evaluation process, announce the SPAs and begin the contract process for Round 2 in the spring of 2012. In addition, CMS plans to announce the Round 2 contract suppliers in the summer of 2012. The new SPAs for Round 2 markets will take effect in January 2013.

In early July 2010, CMS announced the new SPAs for each of the product categories and each of the CBAs included in the Round 1 Rebid. CMS then began the contracting process with suppliers by issuing contract offer letters to qualified providers. This process is expected to take approximately two months, and CMS expects to announce the list of winners publicly in September 2010.

Reimbursement for Inhalation and Infusion Therapy Drugs. Beginning January 2005, Medicare Part B reimbursement for most drugs, including inhalation drugs, became based upon the manufacturer-reported average sales price (“ASP”) (subject to adjustment each quarter), plus 6%, plus a separate dispensing fee per patient episode. The Medicare reimbursement methodology for non-compounded, infused drugs administered through durable medical equipment, such as infusion pumps, was not affected by this MMA change and remains based upon either 95% of the October 1, 2003 Average Wholesale Price (“AWP”) or, for those drugs whose AWPs were not published in the applicable 2003 compendia, at 95% of the first published AWP.

In 2007 and 2008, changes were made by CMS to the reimbursement methodology for certain inhalation drugs. Beginning in the third quarter of 2007, CMS reimbursement for Xopenex^® and albuterol was based on a blended ASP for these two products. Additionally, the Medicare, Medicaid, and State Children’s Health Insurance Program Extension Act of 2007 partially reversed the CMS regulatory decision regarding Xopenex and albuterol. As a result, beginning on April 1, 2008, Medicare began to reimburse providers for Xopenex by blending the ASP of Xopenex and albuterol, but it no longer reimbursed providers for albuterol at the blended price. Rather, albuterol is reimbursed using an albuterol-only ASP.

Since the financial impact of changes in Medicare reimbursement that have been enacted to date began on or before January 1, 2009, our results of operations for the year ended December 31, 2009 and for the three months ended March 31, 2010 include operations after the Medicare reimbursement changes took effect.

10

The Transactions

On June 18, 2008, Apria, Sky Acquisition and Merger Sub entered into the Merger Agreement, pursuant to which, on October 28, 2008, Merger Sub merged with and into Apria, with Apria being the surviving corporation following the Merger. The Investor Group beneficially owns all of Apria’s issued and outstanding capital stock.

The initial borrowings under our senior secured bridge credit agreement and our ABL Facility, the equity investment by the Investor Group and the repayment of all outstanding indebtedness under our 2004 senior secured revolving credit facility and the Interim Facility are collectively referred to in this prospectus as the “Original Financing.” The offerings of the outstanding Series A-1 Notes and the outstanding Series A-2 Notes in May 2009 and August 2009, respectively, the repayment of approximately $1,010.0 million of borrowings under our senior secured bridge credit agreement, plus accrued and unpaid interest, and the payment of related fees and expenses with the proceeds of the offerings of the outstanding Series A-1 Notes and the outstanding Series A-2 Notes, together with cash on hand, are collectively referred to in this prospectus as the “Refinancing.” The Merger, the Original Financing and the Refinancing are collectively referred to in this prospectus as the “Transactions.” For a more complete description of the Transactions, see “The Transactions” and “Description of Other Indebtedness.”

11

The following chart summarizes our organizational structure, equity ownership and our principal indebtedness as of the date of this prospectus. This chart is provided for illustrative purposes only and does not represent all legal entities of Apria and its consolidated subsidiaries or all obligations of such entities.

(1) Consists of a $673.3 million cash equity investment by the Investor Group in membership interests of our parent entities, which investment includes Dr. Payson’s co-investment. The proceeds of such investment were contributed to Merger Sub, which used such proceeds, together with other sources of funds, to fund the Merger and the related transactions.

(2) Our ABL Facility is secured, subject to certain exceptions and permitted liens, (i) on a first-priority lien basis, by substantially all of our personal property consisting of accounts receivable, inventory, intercompany notes and intangible assets to the extent attached to the foregoing, and certain related assets and proceeds of the foregoing and (ii) on a second-priority lien basis, by all tangible and intangible assets that secure the Notes on a first-priority basis. See “Description of Other Indebtedness—Senior Secured Asset-Based Revolving Credit Facility.”

(3) At the closing of the Merger, we borrowed an aggregate of $1,010.0 million under our senior secured bridge credit agreement. Apria used the proceeds of the offerings of the outstanding Series A-1 Notes and the outstanding Series A-2 Notes in May 2009 and August 2009, respectively, together with cash on hand, to repay all borrowings under the senior secured bridge credit agreement, plus accrued and unpaid interest, and to pay related fees and expenses. Our senior secured bridge credit agreement was terminated concurrently with the closing of the outstanding Series A-2 Notes offering.

(4) The Notes and the related guarantees are secured by our assets, including (i) on a first-priority lien basis (subject to certain exceptions and permitted liens) by substantially all the tangible and intangible assets of Apria and its subsidiaries that are guarantors of the Series A-2 Notes (other than the collateral which secures our ABL Facility on a first-priority lien basis) and (ii) on a second-priority lien basis (subject to certain exceptions and permitted liens) by the collateral securing our ABL Facility on a first-priority lien basis. The Series A-1 Notes are entitled to a priority of payment over the Series A-2 Notes in certain circumstances.

(5) The Notes are guaranteed on a senior secured basis by all of our existing wholly-owned domestic subsidiaries that guarantee the obligations under the ABL Facility and will be guaranteed by our future wholly-owned domestic subsidiaries, subject to certain exceptions. See “Description of Notes—Guarantees.”

12

We are incorporated in the State of Delaware. Our principal executive offices are located at 26220 Enterprise Court, Lake Forest, California 92630 and our telephone number is (949) 639-2000.

The Blackstone Group

The Blackstone Group, one of the world’s leading global investment and advisory firms, was founded in 1985. Through its different businesses, as of March 31, 2010, Blackstone had total fee-earning assets under management of approximately $98.1 billion. Blackstone’s alternative asset management businesses include the management of corporate private equity funds, real estate funds, funds of hedge funds, credit-oriented funds, collateralized loan obligation vehicles (CLOs) and closed-end mutual funds. Blackstone also provides various financial advisory services, including mergers and acquisition advisory, restructuring and reorganization advisory, and fund placement services.

13

The Exchange Offers

General On May 27, 2009 and August 13, 2009, respectively, the Issuer issued an aggregate of $700.0 million principal amount of 11.25% Senior Secured Notes due 2014 (Series A-1) and $317.5 million principal amount of 12.375% Senior Secured Notes due 2014 (Series A-2) in private offerings. In connection with the private offerings, the Issuer and the guarantors entered into registration rights agreements with the initial purchasers in which they agreed, among other things, to deliver this prospectus to you and to complete the exchange offers within 450 days after the date of issuance and sale of the outstanding Series A-2 Notes.

You are entitled to exchange in the exchange offers your outstanding notes for exchange notes which are identical in all material respects to the outstanding notes except:

• the exchange notes have been registered under the Securities Act;

• the exchange notes are not entitled to any registration rights which are applicable to the outstanding notes under the registration rights agreements; and

• certain additional interest rate provisions are no longer applicable.

The Exchange Offers The Issuer is offering to exchange:

• $700.0 million principal amount of 11.25% Senior Secured Notes due 2014 (Series A-1), which have been registered under the Securities Act, for any and all of its outstanding 11.25% Senior Secured Notes due 2014 (Series A-1); and

• $317.5 million principal amount of 12.375% Senior Secured Notes due 2014 (Series A-2), which have been registered under the Securities Act, for any and all of its outstanding 12.375% Senior Secured Notes due 2014 (Series A-2).

You may only exchange outstanding notes in a principal amount of $2,000 or in integral multiples of $1,000 in excess thereof.

Resale Based on an interpretation by the staff of the Securities and Exchange Commission (the “SEC”) set forth in no-action letters issued to third parties, the Issuer believes that the exchange notes issued pursuant to the exchange offers in exchange for outstanding notes may be offered for resale, resold and otherwise transferred by you (unless you are our “affiliate” within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:

• you are acquiring the exchange notes in the ordinary course of your business; and

14

• you have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the exchange notes.

If you are a broker-dealer and receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making activities or other trading activities, you must acknowledge that you will deliver this prospectus in connection with any resale of the exchange notes. See “Plan of Distribution.”

Any holder of outstanding notes who:

• is our affiliate;

• does not acquire exchange notes in the ordinary course of its business; or

• tenders its outstanding notes in the exchange offers with the intention to participate, or for the purpose of participating, in a distribution of exchange notes;

cannot rely on the position of the staff of the SEC enunciated in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Sterling (available July 2, 1993), or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes.

Expiration Date The exchange offers will expire at 5:00 p.m., New York City time, on                     , 2010, which is the 21^st business day after the date of this prospectus, unless extended by us. The Issuer does not currently intend to extend the expiration date.

Withdrawal You may withdraw the tender of your outstanding notes at any time prior to the expiration of the applicable exchange offer. The Issuer will return to you any of your outstanding notes that are not accepted for any reason for exchange, without expense to you, promptly after the expiration or termination of the exchange offers.

Interest on the exchange notes and the outstanding notes Each exchange note will bear interest at their respective rate per annum set forth on the cover page of this prospectus from the most recent date to which interest has been paid on the outstanding notes. The interest will be payable semi-annually on May 1 and November 1. No interest will be paid on outstanding notes following their acceptance for exchange.

Conditions to the Exchange Offers The exchange offers are subject to customary conditions, which the Issuer may waive. See “The Exchange Offers—Conditions to the Exchange Offers.”

15

Procedures for Tendering Outstanding Notes If you wish to participate in the exchange offers, you must complete, sign and date the accompanying letter of transmittal, or a facsimile of such letter of transmittal, according to the instructions contained in this prospectus and the letter of transmittal. You must then mail or otherwise deliver the letter of transmittal, or a facsimile of such letter of transmittal, together with the outstanding notes and any other required documents, to the exchange agent at the address set forth on the cover page of the letter of transmittal.

If you hold outstanding notes through The Depository Trust Company (“DTC”) and wish to participate in the exchange offers, you must comply with the Automated Tender Offer Program procedures of DTC, by which you will agree to be bound by the letter of transmittal. By signing, or agreeing to be bound by, the letter of transmittal, you will represent to us that, among other things:

• you are not our “affiliate” within the meaning of Rule 405 under the Securities Act or, if you are our affiliate, that you will comply with any applicable registration and prospectus delivery requirements of the Securities Act;

• you do not have an arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;

• you are acquiring the exchange notes in the ordinary course of your business; and

• if you are a broker-dealer that will receive exchange notes for your own account in exchange for outstanding notes that were acquired as a result of market-making activities, that you will deliver a prospectus, as required by law, in connection with any resale of such exchange notes.

Special Procedures for Beneficial Owners If you are a beneficial owner of outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender those outstanding notes in the exchange offers, you should contact the registered holder promptly and instruct the registered holder to tender those outstanding notes on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either make appropriate arrangements to register ownership of the outstanding notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.

16

Guaranteed Delivery Procedures If you wish to tender your outstanding notes and your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other required documents, or you cannot comply with the applicable procedures under DTC’s Automated Tender Offer Program for transfer of book-entry interests, prior to the expiration date, you must tender your outstanding notes according to the guaranteed delivery procedures set forth in this prospectus under “The Exchange Offer—Guaranteed Delivery Procedures.”

Effect on Holders of Outstanding Notes As a result of the making of, and upon acceptance for exchange of all validly tendered outstanding notes pursuant to the terms of the exchange offers, the Issuer and the guarantors will have fulfilled a covenant under the applicable registration rights agreement. Accordingly, there will be no increase in the interest rate on the outstanding notes under the circumstances described in the registration rights agreements. If you do not tender your outstanding notes in the exchange offers, you will continue to be entitled to all the rights and limitations applicable to the outstanding notes as set forth in the indenture, except the Issuer and the guarantors will not have any further obligation to you to provide for the exchange and registration of the outstanding notes under the applicable registration rights agreement. To the extent that outstanding notes are tendered and accepted in the exchange offers, the trading market for remaining outstanding notes that are not so tendered and exchanged could be adversely affected.

Consequences of Failure to Exchange All untendered outstanding notes will continue to be subject to the restrictions on transfer set forth in the outstanding notes and in the indenture. In general, the outstanding notes may not be offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offers, the Issuer and the guarantors do not currently anticipate that they will register the outstanding notes under the Securities Act.

Certain U.S. Federal Income Tax Considerations The exchange of outstanding notes in the exchange offers will not be a taxable event for United States federal income tax purposes. See “Certain U.S. Federal Income Tax Considerations.”

Use of Proceeds The Issuer will not receive any cash proceeds from the issuance of exchange notes in the exchange offers. See “Use of Proceeds.”

Exchange Agent U.S. Bank National Association is the exchange agent for the exchange offers. The addresses and telephone numbers of the exchange agent are set forth in the section captioned “The Exchange Offers—Exchange Agent” of this prospectus.

17

The Exchange Notes

The terms of the exchange notes are identical in all material respects to the terms of the outstanding notes, except that the exchange notes will not contain terms with respect to transfer restrictions or additional interest upon a failure to fulfill certain of our obligations under the registration rights agreement. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be governed by the same indenture under which the outstanding notes were issued. The following summary is not intended to be a complete description of the terms of the exchange notes. For a more detailed description of the Notes, see “Description of Notes.”

Issuer Apria Healthcare Group Inc.

Notes Offered $700.0 million aggregate principal amount of 11.25% Senior Secured Notes due 2014 (Series A-1) and $317.5 million aggregate principal amount of 12.375% Senior Secured Notes due 2014 (Series A-2).

Maturity Date The exchange notes will mature on November 1, 2014.

Interest The exchange Series A-1 Notes and the exchange Series A-2 Notes will bear interest at a rate of 11.25% and 12.375% per annum, respectively, payable on May 1 and November 1 of each year.

Guarantees The exchange notes will be fully and unconditionally guaranteed on a senior secured basis, by all of our existing wholly-owned subsidiaries organized in the United States that guarantee the obligations under the ABL Facility and the outstanding notes, subject to certain limitations described herein.

If any of our wholly-owned restricted subsidiaries guarantee certain of our other debt, such subsidiaries shall also guarantee the exchange notes.

Under certain circumstances, subsidiaries may be released from these guarantees without the consent of the holders of the exchange notes.

See “Description of Notes—Guarantees.”

Collateral The exchange notes and the related guarantees will be secured by (1) a first-priority lien (subject to certain exceptions and permitted liens) on substantially all the tangible and intangible assets of the Issuer and the guarantors, including all of the capital stock of the Issuer, of each guarantor and of any material subsidiary of the Issuer (which, in the case of foreign subsidiaries, will be limited to 65% of the stock of each first-tier foreign subsidiary), other than the collateral securing the ABL Facility on a first-priority lien basis and (2) a second-priority lien on accounts receivable arising from the sale of inventory and other goods and services (including related contracts and contract rights, inventory, cash, deposit accounts, other bank accounts and securities accounts), inventory, intercompany notes and intangible assets to the extent attached to the foregoing, and the proceeds thereof, which secures the ABL Facility on a first-priority lien basis.

18

The collateral securing the exchange notes on a first-priority lien basis will not include (i) the collateral securing the ABL Facility on a first priority lien basis, (ii) certain excluded assets and (iii) those assets as to which the collateral agent representing the holders of the exchange notes reasonably determines that the costs of obtaining such a security interest are excessive in relation to the value of the security to be afforded thereby.

See “Description of Notes—Security for the Notes.”

Ranking The exchange notes and the related guarantees will be our senior secured obligations. The indebtedness evidenced by the exchange notes and the guarantees will rank:

• equal with all of the Issuer’s and the guarantors’ existing and future senior indebtedness, including any indebtedness under the ABL Facility and the outstanding notes;

• senior to all of the Issuer’s and the guarantors’ existing and future subordinated indebtedness;

• junior in priority as to collateral that secures the ABL Facility on a first-priority lien basis with respect to the Issuer’s and the guarantors’ obligations under the ABL Facility, any other debt incurred after the issue date that has a priority security interest relative to the Notes in the collateral that secures the ABL Facility and all cash management and hedging obligations incurred with any lender under the ABL Facility or any affiliate of any such lender; and

• equal in priority as to collateral that secures the Notes and the guarantees on a first-priority lien basis with respect to the Issuer’s and the guarantors’ obligations under our notes and any other pari passu lien obligations incurred after the issue date; provided that the Series A-1 Notes are entitled to a priority of payment over the Series A-2 Notes in certain circumstances, including upon any acceleration of the obligations under the Notes or any bankruptcy or insolvency event of default.

The Notes will also be effectively junior to the liabilities of any non-guarantor subsidiaries.

As of March 31, 2010:

• we had $1,017.5 million in aggregate principal amount of senior secured indebtedness outstanding under the outstanding notes;

• we had $16.1 million of drawn letters of credit under the ABL Facility and availability of $133.9 million under the ABL Facility, which are secured on a first-priority lien basis by substantially all of our personal property consisting of accounts receivable, inventory, intercompany notes and intangible assets to the extent attached to the foregoing, and certain related assets and proceeds of the foregoing; and

19

• we had $3.2 million in aggregate principal amount of other senior indebtedness outstanding (excluding the ABL Facility, the outstanding notes and guarantees of the foregoing).

See “Description of Notes—Ranking” and “Description of Notes—Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes.”

Optional Redemption We may, at our option, redeem some or all of the exchange notes at 100% of the principal amount thereof plus a “make-whole premium” at any time and from time to time prior to November 1, 2011.

We may, at our option, redeem some or all of the exchange notes, at any time and from time to time after November 1, 2011, at the redemption prices listed under “Description of Notes—Optional Redemption.”

In addition, prior to November 1, 2011, we may at our option redeem up to 35% of the exchange Series A-1 Notes at a redemption price of 111.25% of their principal amount, and up to 35% of the exchange Series A-2 Notes at a redemption price of 112.375% of their principal amount, plus accrued and unpaid interest, if any, to the date of redemption, from the proceeds of certain equity offerings. See “Description of the Notes—Optional Redemption.”

Mandatory Repurchase Offer If we experience specific types of changes of control, we must offer to repurchase the exchange notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase, subject to the rights of holders of exchange notes on the relevant record date to receive interest due on the relevant payment date.

Certain Covenants The exchange notes will be governed by the same indenture under which the outstanding notes were issued. The indenture governing the exchange notes contains covenants that, among other things, will limit our ability and the ability of our restricted subsidiaries to:

• incur additional debt;

• pay dividends and make other distributions;

• make certain investments;

• repurchase our stock;

• incur certain liens;

• enter into transactions with affiliates;

• merge or consolidate;

• enter into agreements that restrict the ability of our subsidiaries to make dividends or other payments to us; and

• transfer or sell assets.

20

These covenants are subject to important exceptions and qualifications. See “Description of Notes—Certain Covenants.”

Use of Proceeds We will not receive any proceeds from the exchange offers. See “Use of Proceeds.”

No Prior Market The exchange notes will generally be freely transferable (subject to certain restrictions discussed in “The Exchange Offers”) but will be a new issue of securities for which there will not initially be a market. Accordingly, there can be no assurance as to the development or liquidity of any market for the exchange notes. The initial purchasers in the private offering of the outstanding notes have advised us that they currently intend to make a market for the exchange notes, as permitted by applicable laws and regulations. However, they are not obligated to do so and may discontinue any such market making activities at any time without notice. We do not intend to apply for a listing of the exchange notes on any securities exchange or automated dealer quotation system.

Risk Factors

You should carefully consider the information set forth under the caption “Risk Factors” beginning on page 24 of this prospectus before participating in the exchange offers.

21

Summary Historical Consolidated Financial Data

Our summary historical consolidated financial data set forth below should be read in conjunction with “The Transactions,” “Selected Historical Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and accompanying notes contained herein. We derived the summary historical consolidated financial data for the year ended December 31, 2007, the periods from January 1, 2008 to October 28, 2008 and October 29, 2008 to December 31, 2008, the year ended December 31, 2009 and as of December 31, 2008 and 2009 from our audited consolidated financial statements which are included in this prospectus. We derived the summary historical consolidated financial data for the year ended December 31, 2006 and as of December 31, 2006 and 2007 from our audited consolidated financial statements which are not included in this prospectus. The historical results presented are not necessarily indicative of future results. Our audited consolidated financial statements for each of the years in the two-year period ended December 31, 2007, the periods from January 1, 2008 to October 28, 2008 and October 29, 2008 to December 31, 2008 and the year ended December 31, 2009 have been audited by Deloitte & Touche LLP, an independent registered public accounting firm.

Our summary historical consolidated financial data for the three months ended March 31, 2009 and as

of and for the three months ended March 31, 2010 have been derived from our unaudited condensed consolidated

financial statements, which are included in this prospectus. We derived the summary historical consolidated financial data as of March 31, 2009 from our unaudited condensed consolidated financial statements, which are not included in this prospectus. The unaudited condensed consolidated financial statements were prepared on a basis consistent with our audited consolidated financial statements. In our opinion, the unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for the fair presentation of those statements. Our results for the three months ended March 31, 2010 should not be considered indicative of the results for the full fiscal year ending December 31, 2010.

	Year Ended December 31,		Period January 1, 2008 to October 28, 2008		Period October 29, 2008 to December 31, 2008			Year Ended December 31, 2009			Three Months Ended March 31, 2009			Three Months Ended March 31, 2010
	2007
	(Predecessor)		(Predecessor)		(Successor)			(Successor)			(Successor)			(Successor)
	(dollars in thousands)
Statement of Operations Data:
Net revenues	$	1,631,801	$	1,773,289	$	356,665		$	2,094,561		$	516,431		$	508,876
Cost and expenses:
Total cost of net revenues		564,992		691,337		137,760			867,459			207,044			202,792
Provision for doubtful accounts		43,138		33,626		14,329			57,919			11,356			15,887
Selling, distribution and administrative		862,062		924,536		179,362			1,050,134			263,784			257,738
Amortization of intangible assets		3,079		3,461		1,008			3,716			1,277			1,657
Total costs and expenses		1,473,271		1,652,960		332,459			1,979,228			483,461			478,074
Operating income		158,530		120,329		24,206			115,333			32,970			30,802
Interest expense and other, net		20,493		29,684		25,441			127,591			32,267			32,489
Income (loss) from continuing operations before taxes		138,037		90,645		(1,235	)		(12,258	)		703			(1,687	)
Income tax expense (benefit)		51,998		34,192		659			(8,438	)		1,180			(884	)
Net income (loss) from continuing operations	$	86,039	$	56,453	$	(1,894	)	$	(3,820	)	$	(477	)	$	(803	)

22

	Year Ended December 31, 2007			Period January 1, 2008 to October 28, 2008			Period October 29, 2008 to December 31, 2008			Year Ended December 31, 2009			Three Months Ended March 31, 2009			Three Months Ended March 31, 2010
	(Predecessor)			(Predecessor)			(Successor)			(Successor)			(Successor)			(Successor)
							(dollars in thousands)
Cash Flow Data:
Net cash provided by operating activities	$	294,006		$	297,937		$	63,337		$	169,426		$	29,672		$	15,105
Net cash used in investing activities		(483,235	)		(154,493	)		(75,466	)		(168,656	)		(39,592	)		(24,013	)
Net cash (used in) provided by financing activities		203,023			(123,682	)		131,934			(10,625	)		(7,505	)		(15,866	)
Capital expenditures		128,759			157,183			26,217			150,597			39,843			27,319

	As of December 31,						As of March 31, 2010
	2007		2008		2009
	(Predecessor)		(Successor)		(Successor)		(Successor)
	(dollars in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	28,451	$	168,018	$	158,163	$	133,389
Short-term investments		—		—		23,673		19,183
Goodwill and intangible assets		822,992		1,292,403		1,341,456		1,341,299
Total assets		1,597,802		2,210,813		2,309,047		2,284,270
Total debt		687,283		1,022,233		1,021,146		1,020,704
Stockholders’ equity		512,025		672,820		678,731		678,978

23

RISK FACTORS

You should carefully consider the following risks, in addition to the other information contained in this prospectus, before participating in the exchange offers. The risks described below are not the only risks we face. Any of the following risks, as well as other risks and uncertainties not currently known to us or that we currently deem to be immaterial, could materially adversely affect our business, financial condition or results of operations.

Risks Associated with the Exchange Offers

If you choose not to exchange your outstanding notes in the exchange offers, the transfer restrictions currently applicable to your outstanding notes will remain in force and the market price of your outstanding notes could decline.

If you do not exchange your outstanding notes for exchange notes in the exchange offers, then you will continue to be subject to the transfer restrictions on the outstanding notes as set forth in the offering memorandum distributed in connection with the private offering of the outstanding notes. In general, the outstanding notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act.

The tender of outstanding notes under the exchange offers will reduce the remaining principal amount of the outstanding notes, which may have an adverse effect upon and increase the volatility of, the market price of the outstanding notes due to reduction in liquidity.

Your ability to transfer the notes may be limited by the absence of an active trading market, and an active trading market may not develop for the notes.

The exchange notes are a new issue of securities for which there is no established trading market. We do not intend to have the exchange notes listed on a national securities exchange or to arrange for quotation on any automated quotation system. The initial purchasers have advised us that they intend to make a market in the exchange notes, as permitted by applicable laws and regulations; however, the initial purchasers are not obligated to make a market in the exchange notes, and they may discontinue their market-making activities at any time without notice. Therefore, we cannot assure you as to the development or liquidity of any trading market for the exchange notes. The liquidity of any market for the exchange notes will depend on a number of factors, including:

• the number of holders of exchange notes;

• our operating performance and financial condition;

• the market for similar securities;

• the interest of securities dealers in making a market in the exchange notes; and

• prevailing interest rates.

Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the exchange notes. The market, if any, for the exchange notes may face similar disruptions that may adversely affect the prices at which you may sell your exchange notes. Therefore, you may not be able to sell your exchange notes at a particular time and the price that you receive when you sell may not be favorable.

24

Risks Relating to Our Business

Continued Reductions in Medicare and Medicaid Reimbursement Rates and the Comprehensive Healthcare Reform Package Could Have a Material Adverse Effect on Our Results of Operations and Financial Condition.

There are ongoing legislative and regulatory efforts to reduce or otherwise adversely affect Medicare reimbursement rates for products and services we provide. For example, the regulations implementing the mandates under the MMA, the DRA and MIPPA reduced the reimbursement for a number of products and services we provide and established a competitive bidding program for certain durable medical equipment under Medicare Part B. The Medicare DMEPOS competitive bidding program is intended to further reduce reimbursement for certain products as well as decrease the number of companies permitted to serve Medicare beneficiaries. In July 2008, MIPPA was passed and included a delay to the competitive bidding program. In order to ensure that the delay would achieve the same level of savings projected for the DMEPOS competitive bidding program, Congress adopted a nationwide average payment reduction of 9.5% in the DMEPOS fee schedule for those product categories included in Round 1, effective January 1, 2009. MIPPA called for those DMEPOS items that were not subject to Round 1 competitive bidding to receive a CPI update each year from 2009 to 2013. The CPI for 2009 for these items was 5%. For 2010, the CPI was -1.4%, however, the annual DMEPOS updates cannot be negative. The Reform Package made changes to the CPI adjustment for 2011 and each subsequent year based upon the CPI reduced by a new productivity adjustment which may result in negative updates.

In January 2009, CMS released an interim final rule implementing certain MIPPA provisions requiring CMS to conduct a second Round 1 competition in 2009 (the “Round 1 Rebid”) and mandated certain changes for both the Round 1 Rebid and subsequent rounds of the program. Despite industry advocacy and Congressional efforts to further delay CMS’ implementation of the program, the final rule took effect on April 18, 2009. In early July 2010, CMS announced the new SPAs for each of the product categories and each of the CBAs included in the Round 1 Rebid. CMS then began the contracting process with suppliers by issuing contract offer letters to qualified providers. We received contract offers for a substantial majority of the bids we submitted. We did not receive contract offers for certain product categories in certain CBAs, but the process will not be completed until September 2010. Approximately $21 million of our net revenues for the fiscal year ended December 31, 2009 was generated by the products and CBAs included in the Round 1 Rebid. We estimate that the initial results of the Round 1 Rebid would impact our net revenues in the fiscal year ending December 31, 2011 by approximately $8.0 million, assuming the current contract offers and no changes in volume. CMS expects to announce the winners in the fall of 2010 and the new rates will take effect in January 2011. The Reform Package also made changes to the competitive bidding program. Significantly, Round 2 of the competitive bidding program has been expanded from 70 to 91 of the largest MSAs. CMS has announced that the effective date of the Round 2 pricing will be January 1, 2013; additional details concerning products to be included and other aspects of implementing Round 2 will not be fully known until after CMS completes a rulemaking process, which is currently scheduled for the summer or fall of 2010. Assuming that Round 2 would include the same product categories, bidding rules and markets currently being proposed by CMS, we estimate that approximately $110 million of our net revenues for the fiscal year ending December 31, 2011 would be subject to competitive bidding. Although the bidding process for Round 2 is currently scheduled to commence in 2011, the effective date of new Round 2 rates and guidelines would take effect in January 2013 at the earliest. Therefore, we cannot estimate the impact of potential Round 2 rate reductions on our business until more specific information is published by CMS and its contractors. The Reform Package also gives the Secretary of Health and Human Services the authority to apply competitive bid pricing to non-bid areas, but details of that process are unlikely to be understood until after CMS issues guidance or completes a related rulemaking process. At this time, we cannot quantify what negative impact, if any, the revised program will have upon our revenue or operations when the program is reinitiated, but such impact could be material.

Further, the DRA resulted in reduced reimbursement rates for certain durable medical equipment, including the home oxygen equipment and services we provide, a reduced period for rental revenue, and potential increased

25

costs to us associated with replacement of certain patient-owned equipment. There have been various administrative and legislative proposals to further reduce the maximum capped rental period for oxygen equipment below the 36-month level mandated by the DRA to 13 and 18 months, respectively, and/or to reduce the monthly payment rates for oxygen equipment. In 2009, the “Medicare Home Oxygen Therapy Act of 2009” was introduced in the House of Representatives and subsequently offered and withdrawn as an amendment to healthcare reform legislation being debated in the House Energy and Commerce Committee. This bill would, among other things, have amended the current statutory language surrounding the provision of home oxygen therapy. It defined covered services to be provided by all oxygen providers, established criteria for a “qualified home oxygen provider” to meet, aligned the oxygen equipment provided more directly with patient need, eliminated the 36-month cap, provided for certain cost transparency and would be implemented in a budget neutral manner. While these proposals have not been enacted, the home oxygen industry continues to work with Congress on oxygen benefit reform measures, and similar proposals may be raised in the future.

In addition to these activities, certain other proposed legislative and regulatory activities may affect reimbursement policies and rates for other items and services we provide. For example, in March 2010, Congress enacted the Reform Package which includes comprehensive healthcare reform. Among many other provisions, the Reform Package expands the Medicaid program, mandates extensive insurance market reforms, creates new health insurance access points (e.g., insurance exchanges), provides certain insurance subsidies (e.g., premiums and cost sharing), imposes individual and employer health insurance requirements and makes a number of changes to the Code.

There are various provisions in the Reform Package that impact our business. For example, the Reform Package requires certain pharmaceutical and medical device manufacturers to pay an excise tax to the government, which may, in turn, increase our costs for these products. The Reform Package also provides for cuts in some Medicare payments made to certain providers and substantial cuts to Medicare Advantage plans, through which we contract to provide services to Medicare beneficiaries. Also included in the Reform Package are (i) an expansion of the Recovery Audit Contractor Program, (ii) certain fraud and abuse prevention measures and (iii) expanded regulatory authority concerning the types of conduct that can result in additional fines and penalties for those healthcare providers who do not comply with applicable laws and regulations. Furthermore, the Reform Package grants the Secretary of Health and Human Services authority to set a date by which certain providers and suppliers will be required to establish a compliance program.

The Reform Package makes a number of changes to how certain of the Company’s products will be reimbursed by Medicare. The Reform Package also makes changes to the Medicare durable medical equipment CPI adjustment for 2011 and each subsequent year based upon the CPI reduced by a new productivity adjustment which may result in negative updates and, as noted above, includes changes to the Medicare DMEPOS competitive bidding program.

In an effort to further strengthen the integrity of the Medicare program, the Reform Package includes additional requirements concerning physician enrollment and certain mandatory face-to-face patient/physician visits in conjunction with the ordering of durable medical equipment. These provisions are likely to be the subject of rulemaking and are a high priority for the American Association for Homecare and other industry representative organizations. We expect the Administration to continue to enhance its oversight efforts and the Company strives to incorporate any necessary changes into its overall corporate compliance and internal audit programs on a regular basis.

The effective dates of the various provisions within the Reform Package are staggered over the next several years, with some changes occurring immediately. Much of the interpretation of what the Reform Package requires will be subject to administrative rulemaking, the development of agency guidance and court interpretations. We cannot currently predict the adverse impact, if any, that these and other Reform Package changes might have on our operations, cash flow and capital resources, but such impact could be material. In addition, other legislative and regulatory changes could have a material adverse effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

26

There are also ongoing state and federal legislative and regulatory efforts to reduce or otherwise adversely affect Medicaid reimbursement rates for products and services we provide. For a number of years, some states have adopted alternative pricing methodologies for certain drugs, biologicals and home medical equipment reimbursed under the Medicaid program. In a number of states, the changes reduced the level of reimbursement we received for these items without a corresponding offset or increase to compensate for the service costs we incurred. For example, California’s Medicaid program (“Medi-Cal”) adopted a regulation that limits the amounts a provider can bill for certain durable medical equipment and medical supplies. In March 2009, the California Association of Medical Product Suppliers (“CAMPS”) initiated a lawsuit to invalidate this regulation as having been adopted in violation of California’s Administrative Procedure Act. On August 3, 2009, the court entered a decision denying CAMPS’ petition. CAMPS has appealed the court’s decision. If the regulation is ultimately upheld, it could result in our making refunds and other payments to Medi-Cal and our future revenues from Medi-Cal may be reduced. In addition to this Medi-Cal regulation, we currently are examining other similar Medicaid program rules to confirm whether we have complied with the particular states’ Medicaid reimbursement methodologies. The review could result in our making refunds and other payments to these state Medicaid programs and our future revenues may be reduced. Historically, when we have learned that states have adopted such alternative reimbursement methodologies, we have sometimes elected to stop accepting new Medicaid patient referrals for the affected drugs, biologicals and home medical equipment. We are currently evaluating the possibility of stopping or reducing our Medicaid business in a number of states with reimbursement policies that make it difficult for us to conduct operations profitably. Moreover, the Reform Package increases Medicaid enrollment over a number of years and imposes additional requirements on states, which could further strain state budgets and therefore result in additional policy changes or rate reductions. In addition, changes to the federal regulations pertaining to prescription drug pricing may also impact the Medicaid reimbursement available to us. We cannot currently predict the adverse impact, if any, that any such changes to or reduction in our Medicaid business might have on our operations, cash flow and capital resources, but such impact could be material. In addition, we cannot predict whether other states will consider similar or other reimbursement reductions or whether any such changes could have a material adverse effect on our results of operations, cash flow and capital resources.

We cannot estimate the ultimate impact of all legislated and contemplated Medicare and Medicaid reimbursement changes or provide assurance to investors that additional reimbursement reductions will not be made or will not have a material adverse effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

For further information, see “Business—Government Regulation—Medicare and Medicaid Revenues” and “Business—Government Regulation—Medicare Reimbursement.”

We Believe That Continued Pressure to Reduce Healthcare Costs Could Have a Material Adverse Effect on Us.

As the result of continuing reductions in payor reimbursement, we, like many other healthcare companies, are making substantial efforts to reduce our costs in providing healthcare services and products. Certain managed care organizations and larger insurers also regularly attempt to seek reductions in the prices at which we provide services to them and their patients. We have a large number of contractual arrangements with managed care organizations and other parties, which represented approximately 70% and 72% of our total net revenues for the three months ended March 31, 2010 and for the year ended December 31, 2009, respectively, and we expect that we will continue to enter into more of these contractual arrangements. Also, the Reform Package significantly reduces the government’s payment rates to Medicare Advantage plans. Other provisions impose minimum medical-loss ratios, state and federal premium review procedures and benefit requirements on insurers. There can be no assurance that we will retain or obtain Medicare Advantage or other such managed care contracts or that such plans will not attempt to further reduce the rates they pay to providers. In addition, if we are unable to successfully reduce our costs, we may be unable to continue to provide services directly to patients of certain payors or through these contractual arrangements. This would have a material adverse effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

27

The segment of the healthcare market in which we operate is highly competitive. In each of our service lines, there are a number of national providers and numerous regional and local providers. Other types of healthcare providers, including industrial gas manufacturers, individual hospitals and hospital systems, home health agencies and health maintenance organizations, have entered and may continue to enter the market to compete with our various service lines. With access to significantly greater financial and market resources than what is available to us, some of these competitors may be better positioned to compete in the market. This may increase pricing pressure and limit our ability to maintain or increase our market share and may have a material adverse effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

Non-Compliance With Laws and Regulations Applicable to Our Business and Future Changes in Those Laws and Regulations Could Have a Material Adverse Effect on Us.

We are subject to many stringent and frequently changing laws and regulations, and interpretations thereof, at both the federal and state levels, requiring compliance with burdensome and complex billing and payment, substantiation and record-keeping requirements. On an ongoing basis, we have implemented policies and procedures designed to meet the various documentation requirements of government payors as they have been interpreted and applied. Examples of such documentation requirements are contained in the Durable Medical Equipment Medicare Administrative Contractor (“DMEMAC”) Supplier Manuals which provide that clinical information from the “patient’s medical record” is required to justify the medical necessity for the provision of DME. An auditor for one of the DMEMACs has recently taken the position, among other things, that the “patient’s medical record” refers not to documentation maintained by the DME supplier but instead to documentation maintained by the patient’s physician, healthcare facility, or other clinician, and that clinical information created by the DME supplier’s personnel and confirmed by the patient’s physician is not sufficient to establish medical necessity. Other government auditors have recently taken the same or a similar position. It may be difficult, and sometimes impossible, for us to obtain such documentation from other healthcare providers. If these or other burdensome positions continue to be adopted by auditors, DMEMACs, other contractors or CMS in administering the Medicare program, we have the right to challenge these positions as being contrary to law. If these interpretations of the documentation requirements are ultimately upheld, however, it could result in our making significant refunds and other payments to Medicare and our future revenues from Medicare would likely be substantially reduced. We cannot currently predict the adverse impact, if any, that these new, more burdensome interpretations of the Medicare documentation requirements might have on our operations, cash flow and capital resources, but such impact could be material.

The federal False Claims Act imposes civil and criminal liability on individuals or entities that submit false or fraudulent claims for payment to the government. The federal government and a number of courts also have taken the position that claims presented in violation of certain other statutes, including the federal anti-kickback statute or the Omnibus Budget Reconciliation Act of 1993 (the “Stark Law”), can be considered a violation of the federal False Claims Act. Violations of the federal civil False Claims Act may result in treble damages, civil monetary penalties and exclusion from the Medicare, Medicaid and other federally funded healthcare programs. If certain criteria are satisfied, the federal civil False Claims Act allows a private individual to bring a qui tam suit on behalf of the government and, if the case is successful, to share in any recovery. Federal False Claims Act suits brought directly by the government or private individuals against healthcare providers, like us, are increasingly common and are expected to continue to increase.

The Reform Package also includes certain fraud and abuse prevention measures and expands regulatory authorities concerning the types of conduct that can result in additional fines and penalties for those healthcare providers who do not comply with applicable laws and regulations.

Financial relationships between us and physicians and other referral sources are also subject to strict limitations under laws such as the Stark Law and anti-kickback laws. In addition, strict licensure, accreditation, safety and marketing requirements apply to the provision of services, pharmaceuticals and medical equipment.

28

Violations of these laws and regulations could subject us to civil and criminal enforcement actions; licensure revocation, suspension or non-renewal; severe fines; facility shutdowns; repayment of amounts received from third party payors and possible exclusion from participation in federal healthcare programs such as Medicare and Medicaid. We cannot assure you that we are in compliance with all applicable existing laws and regulations or that we will be able to comply with any new laws or regulations that may be enacted in the future. In addition, from time to time, we may be the subject of investigations or audits or be a party to additional litigation which alleges violations of law. If any of those matters were successfully asserted against us, there could be a material adverse effect on our business, financial condition, results of operations, cash flow, capital resources, liquidity or prospects.

Changes in public policy, healthcare law, new interpretations of existing laws, or changes in payment methodology may have a significant effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

Our Business and Financial Performance May Be Adversely Affected By Our Inability to Effectively Execute and Implement Cost Savings Initiatives.

We launched a substantial cost reduction plan in late 2007 across a number of identified initiatives targeting pre-tax savings of approximately $198 million on an annualized basis, of which we have realized approximately $127 million through March 31, 2010. The programs related to the remaining targeted annualized savings of $71 million to be realized include customer service and billing center centralization (including consolidation and outsourcing or offshoring of certain operations), purchasing initiative synergies, contract cost reductions, outsourcing certain functions of our information technology department, a branch optimization program, outsourced equipment pickups and exchanges, document imaging, and insurance. Projected costs and savings associated with these initiatives are subject to a variety of risks, including:

• the contemplated costs to effect these initiatives may exceed estimates;

• the initiatives we are contemplating may require consultation with various customers, employees, labor representatives or regulators, and such consultations may influence the timing, costs and extent of expected savings;

• the loss of skilled employees in connection with the initiatives; and

• the projected savings contemplated under these programs may fall short of targets.

While we have begun and expect to continue to implement these cost savings initiatives, there can be no assurance that we will be able to do so successfully or that we will realize the projected benefits of these and other restructuring and cost savings initiatives. If we are unable to realize these anticipated cost savings initiatives, our business may be adversely affected. Moreover, our continued implementation of cost savings initiatives may have a material adverse effect on our business, results of operations and financial condition, including but not limited to the loss of revenue, increases in accounts receivable and reserves and/or write-offs of accounts receivable. Also, in response to changing business conditions, we may discontinue or significantly adjust our cost savings initiatives which would affect our ability to achieve future cost savings.

Our Failure to Successfully Design, Modify and Implement Computer and Other Process Changes to Maximize Productivity and Ensure Compliance Could Ultimately Have a Significant Negative Impact on Our Results of Operations and Financial Condition.

We have identified a number of areas throughout our operations where we intend to modify the current processes or systems in order to attain a higher level of productivity or ensure compliance. The ultimate cost savings expected from the successful design and implementation of such initiatives will be necessary to help offset the impact of Medicare and Medicaid reimbursement reductions and continued downward pressure on pricing. Additionally, Medicare and Medicaid often amend their documentation requirements. The DMEPOS competitive bidding program, once fully implemented, will also impose new reporting requirements on

29

contracted providers. Perot Systems Corporation, our outsourcing partner for certain information systems functions, was acquired by Dell Inc. in late 2009; new management could make operational, leadership or other changes that could impact our plans and cost-savings goals. Our failure to successfully design and implement system or process modifications could have a significant impact on our operations and financial condition. Further, the implementation of these system or process changes could have a disruptive effect on related transaction processing and operations.

Our Failure to Maintain Controls and Processes Over Billing and Collections or to Execute the Outsourcing Effectively, the Deterioration of the Financial Condition of Our Payors or Disputes With Third Parties Could Have a Significant Negative Impact on Our Results of Operations and Financial Condition.

The collection of accounts receivable is one of our most significant challenges and requires constant focus and involvement by management and ongoing enhancements to information systems and billing center operating procedures. For example, we have recently experienced an increase in accounts receivable attributable, among other things, to transitioning of some of our billing and collection functions to our outsourcing partner and to changes in payment practices by some of our payors and their intermediaries. While we believe that a portion of this increase is temporary, there can be no assurance that we will be able to return to or maintain our current levels of collectibility and days sales outstanding in future periods. Further, some of our payors and/or patients may experience financial difficulties, or may otherwise not pay accounts receivable when due, resulting in increased write-offs. If we are unable to properly bill and collect our accounts receivable, our results will be adversely affected. In addition, from time to time we are involved in disputes with various parties, including our payors and their intermediaries regarding their performance of various contractual or regulatory obligations. These disputes sometimes lead to legal and other proceedings and cause us to incur costs or experience delays in collections or loss of revenue. In addition, in the event such disputes are not resolved in our favor or cause us to terminate our relationships such parties, there may be an adverse impact on our results of operations or financial condition.

Our Outsourcing and Offshoring Activities Subject Us to Risks That Could Have a Significant Negative Impact on Our Results of Operations and Financial Condition.

We are pursuing an outsourcing strategy with respect to certain business functions. We are in the process of outsourcing certain billing, collections and other administrative and clerical services to Intelenet Global Services Private Limited (“Intelenet”) and certain information systems functions to Dell Services (formerly Perot Systems Corporation). See “Business—Outsourcing Activities” and “Certain Relationships and Related Party Transactions—Intelenet Agreement”. There is intense competition around the world for skilled business process and technical professionals and we expect that competition to increase, which could result in our outsourcing strategy not having the favorable economic impact currently projected. Operations in other parts of the world involve certain regional geopolitical risks that are different than operating in the United States, including the possibility of civil unrest, terrorism and substantial regulation by the individual governments. In addition, federal and state regulators have expressed concerns regarding the impact of offshoring on American business in general, including, for example, job loss, security and privacy concerns. These factors may cause disruptions in our business processes which could have a material adverse impact on our operations. We also may experience negative reactions from federal and state regulators, payors, patients and referral sources as a result of the actual or perceived concerns caused by the outsourcing of portions of our business operations including increases in accounts receivables or reserves, write-offs of accounts receivables and/or loss of revenues.

Non-Compliance With the Requirements of Coram’s Certification of Compliance Agreement Could Result in the Imposition of Significant Penalties and Sanctions.

As part of our acquisition of Coram, we assumed Coram’s obligations including those imposed on Coram as part of its three-year Certification of Compliance Agreement with the U.S. Department of Health and Human Services’ (“HHS”) Office of Inspector General (“OIG”), which requires Coram to maintain a compliance

30

program, monitor and ensure compliance with federal healthcare program requirements and submit timely reports to the government regarding the same. The year 2009 marked the second year of the three-year agreement; in both 2008 and 2009, the OIG accepted our annual certification documents as filed. Violation of the terms of the Compliance Agreement could result in the imposition of significant penalties and sanctions, including disqualification from Medicare and other reimbursement programs.

Our Failure to Maintain Required Licenses Could Impact Our Operations.

We are required to maintain a significant number of state and/or federal licenses for our operations and facilities. Certain employees—primarily those with clinical expertise in pharmacy, nursing, respiratory therapy and nutrition—are required to maintain licenses in the states in which they practice. We manage the facility licensing function centrally. In addition, individual clinical employees are responsible for obtaining, maintaining and renewing their professional licenses and we also have processes in place designed to notify branch or pharmacy managers of renewal dates for the clinical employees under their supervision. State and federal licensing requirements are complex and often open to subjective interpretation by various regulatory agencies. In addition, from time to time, we may become subject to new or different licensing requirements due to legislative or regulatory requirements developments or changes in our business, and such developments may cause us to make further changes in our business, the results of which may be material. Although we believe we have the right systems in place to monitor licensure, violations of licensing requirements may occur and our failure to acquire or maintain appropriate licensure for our operations, facilities and clinicians could result in interruptions in our operations, refunds to state and/or federal payors, sanctions or fines, which could have an adverse material impact on our business, financial condition, results of operation, cash flow, capital resources and liquidity.

Our Failure to Maintain Accreditation Could Impact Our Operations.

Accreditation is required by most of our managed care payors and is a mandatory requirement for all Medicare DMEPOS providers effective October 1, 2009. In late June 2010, The Joint Commission completed its triennial survey cycle and we expect it to renew our three-year accreditation. If we or any of our branches lose accreditation, or if any of our new branches are unable to become accredited, our failure to maintain accreditation or become accredited could have a material adverse effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

Political and Economic Conditions and the Recent Financial Turmoil in the United States and Global Capital and Credit Markets As Well As Significant Global or Regional Developments Such As Economic and Political Events, International Conflicts and Natural Disasters That are Out of Our Control Could Adversely Affect Our Revenue and Results of Operations and Overall Financial Growth and Could Have a Material Adverse Effect on Us.

Our business can be affected by a number of factors that are beyond our control such as general geopolitical, economic and business conditions, conditions in the financial services markets, and general political and economic developments. For example, the costs of military and security activities, government expenditures to support or bail out financial institutions or the U.S. credit markets in light of recent significant declines and volatility in the financial markets, or prolonged relief efforts in response to a natural disaster could increase pressure to reduce government expenditures for other purposes, including government-funded programs such as Medicare and Medicaid. In addition, reductions in reimbursement from Medicare and Medicaid programs could result if there is a significant change in government spending priorities. Any such reimbursement reductions could have a material adverse effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

Recent turmoil in the financial markets, including in the capital and credit markets, the present economic slowdown and the uncertainty over its breadth, depth and duration may continue to put pressure on the global economy and could have a negative effect on our business. Further, the recent worldwide financial and credit

31

turmoil has reduced the availability of liquidity and credit to fund the continuation and expansion of business operations worldwide. The shortage of liquidity and credit combined with recent substantial losses in worldwide equity markets could extend the economic recession in the United States or worldwide. As widely reported, financial markets in the United States, Europe and Asia have experienced extreme disruption, including, among other things, extreme volatility in security prices, severely diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations of others. Governments have taken unprecedented actions intended to address extreme market conditions that include severely restricted credit and declines in real estate values. There can be no assurance that the deterioration in financial markets will not impair our ability to obtain financing in the future, including, but not limited to, our ability to draw on funds under our ABL Facility and our ability to incur additional indebtedness. If conditions in the global economy, U.S. economy or other key vertical or geographic markets remain uncertain or weaken further, we could experience material adverse impacts on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

Our Strategic Growth Plan, Which Involves the Acquisition of Other Companies, May Not Succeed.

Our strategic growth plan involves, in part, the acquisition of other companies such as our 2007 acquisition of Coram. Such growth involves a number of risks, including:

• difficulties related to combining previously separate businesses into a single unit, including product and service offerings, distribution and operational capabilities and business cultures;

• availability of financing to the extent needed to fund acquisitions;

• customer loss and other general business disruption;

• managing the integration process while completing other independent acquisitions or dispositions;

• diversion of management’s attention from day-to-day operations;

• assumption of liabilities of an acquired business, including unforeseen or contingent liabilities or liabilities in excess of the amounts estimated;

• failure to realize anticipated benefits and synergies, such as cost savings and revenue enhancements;

• potentially substantial costs and expenses associated with acquisitions and dispositions;

• failure to retain and motivate key employees;

• coordinating research and development activities to enhance the introduction of new products and services; and

• difficulties in applying our internal control over financial reporting and disclosure controls and procedures to an acquired business.

We May Not Be Able to Realize Anticipated Cost Savings, Revenue Enhancements or Synergies From the Transactions or From Our Acquisitions.

We may not be able to realize the potential cost savings, synergies and revenue enhancements that we anticipate from the Transactions or from our acquisitions, either in the amount or within the time frame that we expect, and the costs of achieving these benefits may be higher than, and the timing may differ from, what we expect. Our ability to realize anticipated cost savings, synergies and revenue enhancements may be affected by a number of factors, including, but not limited to, the following:

• the use of more cash or other financial resources on integration and implementation activities than we expect;

• increases in other expenses unrelated to the Transactions or our acquisitions, which may offset the cost savings and other synergies from those transactions;

32

• our ability to eliminate effectively duplicative back office overhead and overlapping and redundant selling, general and administrative functions; and

• our ability to avoid labor disruptions in connection with any integration, particularly in connection with any headcount reduction.

In addition, estimated cost savings are only estimates and may not actually be achieved in the timeframe anticipated or at all. If we fail to realize anticipated cost savings, synergies or revenue enhancements, our financial results will be adversely affected, and we may not generate the cash flow from operations that we anticipated, or that is sufficient to repay our indebtedness.

There is an Inherent Risk of Liability in the Provision of Healthcare Services; Damage to Our Reputation or Our Failure to Adequately Insure Against Losses Could Have a Material Adverse Effect on Our Operations, Financial Condition or Prospects.

There is an inherent risk of liability in the provision of healthcare services. As participants in the healthcare industry, we expect to periodically be subject to lawsuits, some of which may involve large claims and significant costs to defend. In that case, the coverage limits under our insurance programs may not be adequate to protect us. We also cannot be assured that we will be able to maintain this insurance on acceptable terms in the future. A successful claim in excess of our coverage could have a material adverse effect upon our business, financial condition, results of operations, cash flow, capital resources and liquidity. Even where our insurance is adequate to cover claims against us, damage to our reputation in the event of a judgment against us could have an adverse effect on our business, financial condition, results of operations, cash flow, capital resources, liquidity or prospects.

We Experience Competition From Numerous Other Home Respiratory/Home Medical Equipment and Home Infusion Therapy Service Providers, and This Competition Could Adversely Affect Our Revenues and Our Business.

The home respiratory/home medical equipment and home infusion therapy markets are highly competitive and include a large number of providers, some of which are national providers, but most of which are either regional or local providers. We believe that the primary competitive factors are quality considerations such as responsiveness, the technical ability of the professional staff and the ability to provide comprehensive services. These markets are very fragmented. Some of our competitors may now or in the future have greater financial or marketing resources than we do. In addition, in certain markets, competitors may have more effective sales and marketing activities. Our largest national home respiratory/home medical equipment provider competitors are American HomePatient, Inc., Lincare Holdings, Inc. and Rotech Healthcare Inc. Our largest competitors in the home infusion therapy service market are Walgreens/OptionCare and Accredo/Critical Care Systems. The rest of the market in the United States consists of several medium-size competitors, as well as numerous small (under $3.5 million in revenues) local operations. There are relatively few barriers to entry in local home healthcare markets. We cannot assure you that the competitive nature of the homecare environment will not adversely affect our revenues and our business.

Our Business Operations are Labor Intensive. Difficulty Hiring Enough Additional Management and Other Employees, Increasing Costs of Compensation or Employee Benefits, and the Potential Impact of Unionization and Organizing Activities Could Have an Adverse Effect on Our Costs and Results of Operations.

The success of our business depends upon our ability to attract and retain highly motivated, well-qualified management and other employees. One of our largest costs is in the payment of salaries and benefits to our approximately 11,400 employees. We face significant competition in the recruitment of qualified employees, which has caused increased salary and wage rates among certain employee groups. If we are unable to recruit or

33

retain a sufficient number of qualified employees, or if the costs of compensation or employee benefits increase substantially, our ability to deliver services effectively could suffer and our profitability would likely be adversely affected. The Reform Package may materially increase our cost of providing health benefits to our employees and their dependents. In addition, union organizing activities have occurred in the past and may occur in the future, and the adverse impact of unionization and organizing activities on our costs and operating results could be substantial.

We are Highly Dependent Upon Senior Management; Our Failure to Attract and Retain Key Members of Senior Management Could Have a Material Adverse Effect on Us.

We are highly dependent on the performance and continued efforts of our senior management team. Our future success is dependent on our ability to continue to attract and retain qualified executive officers and senior management. Any inability to manage our operations effectively could have a material adverse effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

Our Reliance on Relatively Few Suppliers for the Majority of Our Patient Service Equipment, Pharmaceuticals and Supplies and New Excise Taxes Which Are To Be Imposed on Certain Manufacturers of Such Items Could Adversely Affect Our Ability to Operate.

We currently rely on a relatively small number of suppliers to provide us with the majority of our patient service equipment, pharmaceuticals and supplies. Significant price increases, or disruptions in the ability to obtain such equipment, pharmaceuticals and supplies from existing suppliers, may force us to use alternative suppliers. Additionally, the Reform Package calls for significant new excise taxes to be imposed on manufacturers of certain medical equipment and pharmaceuticals—taxes which they could attempt to pass on to customers such as us. Such manufacturers may be forced to make other changes to their products or manufacturing processes that are unacceptable to us, resulting in our desire to change suppliers. Any change in suppliers we use could cause delays in the delivery of such products and possible losses in revenue, which could adversely affect our results of operations. In addition, alternative suppliers may not be available, or may not provide their products and services at similar or favorable prices. If we cannot obtain the patient service equipment, pharmaceuticals and supplies we currently use, or alternatives at similar or favorable prices, our ability to provide such products may be severely impacted, which could have an adverse effect on our business, financial condition, results of operations, cash flow, capital resources and liquidity.

Our Failure to Establish and Maintain Relationships With Hospital and Physician Referral Sources May Cause Our Revenue to Decline.

Our success is partly dependent on referrals from hospital and physician sources. If we are unable to successfully establish new referral sources and maintain strong relationships with our current referral sources, or if efforts to increase the skill level and effectiveness of our sales force fail, our revenues may decline.

Changes in Medical Equipment Technology and Development of New Treatments May Cause Our Current Equipment or Services to Become Obsolete.

We evaluate changes in home medical equipment technology and treatments on an ongoing basis for purposes of determining the feasibility of replacing or supplementing items currently included in the patient service equipment inventory and services that we offer our customers. The selection of medical equipment and services we offer is formulated on the basis of a variety of factors, including overall quality, functional reliability, availability of supply, payor reimbursement policies, product features, labor costs associated with the technology, acquisition, repair and ownership costs and overall patient and referral source demand, as well as patient therapeutic and lifestyle benefits. Manufacturers continue to invest in research and development to introduce new products to the marketplace. It is possible that major changes in available technology, payor benefit or coverage policies related to those changes, or the preferences of patients and referral sources may cause our current

34

product offerings to become less competitive or obsolete, and it will be necessary for us to adapt to those changes. We endeavor to anticipate industry trends and initiate new product offerings in a way that minimizes the financial impact of increased cost of goods sold, equipment replacement costs and other expenses associated with changes in technology and demand. For example, Medicare DMEPOS competitive bidding regulations contain policies relating to the provision of products covered by the program. However, unanticipated changes could cause us to incur increased capital expenditures and accelerated equipment write-offs, and could force us to alter our sales, operations and marketing strategies.

Our Operations Involve the Transport of Compressed and Liquid Oxygen, Which Carries an Inherent Risk of Rupture or Other Accidents With the Potential to Cause Substantial Loss.

Our operations are subject to the many hazards inherent in the transportation of medical gas products and compressed and liquid oxygen, including ruptures, leaks and fires. These risks could result in substantial losses due to personal injury or loss of life, severe damage to and destruction of property and equipment and pollution or other environmental damage and may result in curtailment or suspension of our related operations. If a significant accident or event occurs, it could adversely affect our financial position and results of operations.

Our Medical Gas Facilities and Operations are Subject to Extensive Regulation by Federal and State Authorities and There Can Be No Assurance That Our Medical Gas Facilities Will Achieve and Maintain Compliance With Such Regulations.

We have a number of medical gas facilities in several states subject to federal and state regulatory requirements. Our medical gas facilities and operations are subject to extensive regulation by the Food and Drug Administration (“FDA”) and other federal and state authorities. The FDA regulates medical gases, including medical oxygen, pursuant to its authority under the federal Food, Drug and Cosmetic Act (“FFDCA”). Among other requirements, the FDA’s current Good Manufacturing Practice (“cGMP”) regulations impose certain quality control, documentation and recordkeeping requirements on the receipt, processing and distribution of medical gas. Further, in each state in which we do business, our medical gas facilities are subject to regulation under state health and safety laws, which vary from state to state. The FDA and state authorities conduct periodic, unannounced inspections at medical gas facilities to assess compliance with the cGMP and other regulations, and we expend significant time, money and resources in an effort to achieve substantial compliance with the cGMP regulations and other federal and state law requirements at each of our medical gas facilities. In the fourth quarter of 2009, the FDA changed its methodology for medical gas providers to register their sites with the agency; we complied with the regulation. There can be no assurance, however, that these efforts will be successful and that our medical gas facilities will achieve and maintain compliance with federal and state law regulations. Our failure to achieve and maintain regulatory compliance at our medical gas facilities could result in enforcement action, including warning letters, fines, product recalls or seizures, temporary or permanent injunctions, or suspensions in operations at one or more locations, and civil or criminal penalties which would materially harm our business, financial condition, results of operations, cash flow, capital resources and liquidity.

We have in the Past Identified a Material Weakness in Our Internal Controls Over Financial Reporting as it Relates to the Calculation of Accounts Receivable Reserves. If We Do Not Maintain Effective Internal Controls Over Financial Reporting, We Could Fail to Accurately Report Our Financial Results.

We have in the past identified a material weakness in our internal control over financial reporting. In light of this material weakness in internal control over financial reporting, we also concluded that our disclosure controls and procedures were not effective as of certain dates in 2007 and 2008.

A material weakness is defined by the standards issued by the Public Company Accounting Oversight Board as a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected. We did not effectively design and perform control activities to prevent or detect material misstatements that might exist in our reserve for uncollectible accounts receivable. Specifically, we did not

35

perform an analysis with a sufficient level of detail to support management’s estimate of the reserve for uncollectible accounts receivable.

During 2008, we implemented a remediation program designed to address such material weakness. In the fourth quarter of 2008, we concluded that our remediation program was operating effectively and as of December 31, 2008, management concluded that the material weakness was remediated and did not exist as of that date. If our remediation efforts are insufficient to address the material weaknesses, or if additional material weaknesses in our internal controls are discovered in the future, they may adversely affect our ability to record, process, summarize and report financial information timely and accurately and, as a result, our financial statements may contain material misstatements or omissions.

We have completed a number of acquisitions in the past several years, and may continue to pursue growth through strategic acquisitions. Among the risks associated with acquisitions are the risks of control deficiencies that result from the integration of the acquired business.

It is possible that control deficiencies could be identified by our management or by our independent auditing firm in the future or may occur without being identified. Such a failure could result in regulatory scrutiny, cause investors to lose confidence in our reported financial condition, lead to a default under our indebtedness and otherwise materially adversely affect our business and financial condition.

Affiliates of the Sponsor Own Substantially All of the Equity Interests in Us and May Have Conflicts of Interest With Us or the Holders of the Notes in the Future.

As a result of the Merger, investment funds affiliated with the Sponsor collectively own a substantial majority of our capital stock, and the Sponsor designees hold a majority of the seats on our Board of Directors. As a result, affiliates of the Sponsor have control over our decisions to enter into any corporate transaction and have the ability to prevent any transaction that requires the approval of stockholders regardless of whether holders of our Notes believe that any such transactions are in their own best interests. For example, affiliates of the Sponsor could collectively cause us to make acquisitions that increase the amount of our indebtedness or to sell assets, or could cause us to issue additional capital stock or declare dividends. So long as investment funds affiliated with the Sponsor continue to indirectly own a significant amount of the outstanding shares of our common stock, affiliates of the Sponsor will continue to be able to strongly influence or effectively control our decisions. The indenture governing the Notes and the credit agreement governing our ABL Facility permit us to pay advisory and other fees, dividends and make other restricted payments to the Sponsor under certain circumstances and the Sponsor or its affiliates may have an interest in our doing so. In addition, the Sponsor has no obligation to provide us with any additional debt or equity financing.

Additionally, the Sponsor is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us or that supply us with goods and services. For example, the Sponsor controls Intelenet, an Indian company with which we contracted in 2009 to assist us with the outsourcing of certain revenue management functions. The Sponsor may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. The holders of the Notes should consider that the interests of the Sponsor and other members of the Investor Group may differ from their interests in material respects. See “Security Ownership of Principal Shareholders and Management,” “Certain Relationships and Related Party Transactions,” “Description of Notes,” and “Description of Other Indebtedness.”

Proposed Federal Legislation, If Passed, Would Encourage Greater Unionization and Could Materially Impact Our Labor Costs and Customer Service Provided to Patients.

It is possible that the U.S. Congress will pass the Employee Free Choice Act, legislation which would change existing laws concerning union representation. The proposed Employee Free Choice Act would in certain circumstances eliminate the secret ballot voting process, shorten the time window in which a contract negotiation

36

between an employee and a labor union must take place and mandate arbitration of contract terms if a negotiated contract is not met within certain timeframes. While the ultimate outcome of this legislation is still unclear, any increased union representation within the homecare industry or mandatory arbitration of contract terms would potentially increase labor and other operating expenses. Additional unionization could also negatively impact our ability to provide high quality service to patients in the event of a strike or other work stoppage.

Our Ability to Retain Certain Hospital-Based Referral Revenue is Contingent on the Quality of Our Referral Process and Patient Service.

For over a decade, we have implemented a contractual business model with a number of hospitals which facilitates continuity of care and quality for patients who are being discharged from those hospitals to the homecare setting. We discontinued most of these arrangements in 2009. In these cases, we continue to work closely with the hospitals to accept discharges for their patients who require our services. However, the dissolution of the contractual relationship may result in the decision by hospitals to refer patients to our competitors in lieu of or in addition to us. We are not able to predict whether the discontinuance of these hospital arrangements will have a material impact on our overall operational and financial results.

Our Payor Contracts are Subject to Renegotiation or Termination Which Could Result in a Decrease in Our Revenue and Profits.

From time to time, our payor contracts are amended, renegotiated or terminated altogether. Sometimes in the renegotiation process, certain lines of business may not be renewed or a payor may enlarge its provider network or otherwise adversely change the way it conducts its business with us. In other cases, a payor may reduce its provider network in exchange for lower payment rates. Our revenue from a payor may also be adversely affected if the payor alters its administrative procedures for payments and audits or changes its order of preference among the providers to which it refers business. We cannot assure you that our payor contracts will not be terminated or altered in ways that are unfavorable to us as a result of renegotiation or such administrative changes.

Risks Relating to the Notes

Our Substantial Indebtedness Could Adversely Affect Our Financial Condition and Prevent Us From Fulfilling Our Obligations Under the Notes.

We have a substantial amount of debt, which requires significant interest and principal payments. As of March 31, 2010, we had approximately $1,020.7 million of total debt outstanding. Subject to the limits contained in the credit agreement governing our ABL Facility, the indenture governing the Notes and our other debt instruments, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could intensify. Specifically, our high level of debt could have important consequences to the holders of the Notes, including the following:

• making it more difficult for us to satisfy our obligations with respect to the Notes and our other debt;

• limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements;

• requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;

• increasing our vulnerability to general adverse economic and industry conditions;

• exposing us to the risk of increased interest rates as certain of our borrowings may be at variable rates of interest;

37

• limiting our flexibility in planning for and reacting to changes in the industry in which we compete;

• placing us at a disadvantage compared to other, less leveraged competitors; and

• increasing our cost of borrowing.

Our Variable Rate Indebtedness Subjects Us to Interest Rate Risk, Which Could Cause Our Indebtedness Service Obligations to Increase Significantly.

Borrowings under our ABL Facility are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease.

We May Be Unable to Service Our Indebtedness, Including the Notes.

Our ability to make scheduled payments on and to refinance our indebtedness, including the Notes, depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond our control, including the availability of financing in the international banking and capital markets. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, including the Notes, to refinance our debt or to fund our other liquidity needs. If we are unable to meet our debt service obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, including the Notes, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations.

The Indenture Governing the Notes and the Credit Agreement Governing Our ABL Facility Impose Significant Operating and Financial Restrictions on Our Company and Our Subsidiaries, Which May Prevent Us From Capitalizing on Business Opportunities.

The indenture governing the Notes and the credit agreement governing our ABL Facility impose significant operating and financial restrictions on us. These restrictions will limit our ability, among other things, to:

• incur additional indebtedness or enter into sale and leaseback obligations;

• pay certain dividends or make certain distributions on our capital stock or repurchase or redeem our capital stock;

• make certain capital expenditures;

• make certain loans, investments or other restricted payments;

• place restrictions on the ability of our subsidiaries to pay dividends or make other payments to us;

• engage in transactions with stockholders or affiliates;

• sell certain assets or engage in mergers, acquisitions and other business combinations;

• amend or otherwise alter the terms of our indebtedness;

• alter the business that we conduct;

• guarantee indebtedness or incur other contingent obligations; and

• create liens.

Our ABL Facility also includes financial covenants. Our ability to comply with these covenants is dependent on our future performance, which will be subject to many factors, some of which are beyond our control.

38

As a result of these covenants and restrictions, we are limited as to how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

Our failure to comply with the restrictive covenants described above as well as other terms of our existing indebtedness and/or the terms of any future indebtedness from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date. If we are forced to refinance these borrowings on less favorable terms, our results of operations and financial condition could be adversely affected.

Claims of Holders of the Series A-2 Notes Will Be Effectively Subordinated to Claims of Lenders Under the ABL Facility to the Extent of the Value of the Collateral Securing the ABL Facility on a First-Priority Lien Basis.

The Series A-2 Notes are secured on a first-priority lien basis by the Notes Collateral (as defined below) and on a second-priority lien basis by the ABL Collateral (as defined below). The Series A-2 Notes and the related guarantees will be effectively subordinated in right of payment to all of our and our subsidiary guarantors’ secured indebtedness under the ABL Facility to the extent of the value of the collateral securing the ABL Facility on a first-priority lien basis. In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding against us, the assets that are securing indebtedness under the ABL Facility on a first-priority lien basis must first be used to pay the first-priority claims under the ABL Facility in full before these assets may be used to make any payments on the Series A-2 Notes. After claims of the lenders under the ABL Facility have been satisfied in full, to the extent of the value of the collateral securing the ABL Facility on a first-priority lien basis, there may be no assets remaining under the ABL Collateral that may be applied to satisfy the claims of holders of the Series A-2 Notes.

Claims of Holders of the Notes Will Be Structurally Subordinated to Claims of Creditors of Certain of Our Subsidiaries That Will Not Guarantee the Notes.

The Notes may not be guaranteed by certain of our future subsidiaries, including all of our non-U.S. subsidiaries. Accordingly, claims of holders of the Notes will be structurally subordinated to the claims of creditors of these non-guarantor subsidiaries, including trade creditors. All obligations of our non-guarantor subsidiaries will have to be satisfied before any of the assets of such subsidiaries would be available for distribution, upon a liquidation or otherwise, to us or a guarantor of the Notes. The indenture governing the Notes will permit these subsidiaries to incur certain additional debt and will not limit their ability to incur other liabilities that are not considered indebtedness under the indenture.

Our Failure to Comply With the Agreements Relating to Our Outstanding Indebtedness, Including as a Result of Events Beyond Our Control, Could Result in an Event of Default That Could Materially and Adversely Affect Our Results of Operations and Our Financial Condition.

If there were an event of default under any of the agreements relating to our outstanding indebtedness, the holders of the defaulted debt could cause all amounts outstanding with respect to that debt to be due and payable immediately. We cannot assure you that our assets or cash flow would be sufficient to fully repay borrowings under our outstanding debt instruments if accelerated upon an event of default. Further, if we are unable to repay, refinance or restructure our indebtedness under our secured debt, the holders of such debt could proceed against the collateral securing that indebtedness. In addition, any event of default or declaration of acceleration under one debt instrument could also result in an event of default under one or more of our other debt instruments.

39

Federal and State Statutes May Allow Courts, Under Specific Circumstances, to Void the Notes and the Guarantees, Subordinate Claims in Respect of the Notes and the Guarantees and/or Require Holders of the Notes to Return Payments Received From Us.

Under the federal bankruptcy laws and comparable provisions of state fraudulent transfer laws, the Notes and the guarantees could be voided, or claims in respect of the Notes and the guarantees could be subordinated to all of our other debt, if the issuance of the Notes or a guarantee was found to have been made for less than their reasonable equivalent value and we, at the time we incurred the indebtedness evidenced by the Notes:

• were insolvent or rendered insolvent by reason of such indebtedness;

• were engaged in, or about to engage in, a business or transaction for which our remaining assets constituted unreasonably small capital; or

• intended to incur, or believed that we would incur, debts beyond our ability to pay such debts as they mature.

A court might also void the issuance of Notes or a guarantee, without regard to the above factors, if the court found that we issued the Notes or the guarantors entered into their respective guarantees with actual intent to hinder, delay or defraud our or their respective creditors.

A court would likely find that we or a guarantor did not receive reasonably equivalent value or fair consideration for the Notes or the guarantees, respectively, if we or a guarantor did not substantially benefit directly or indirectly from the issuance of the Notes. If a court were to void the issuance of the Notes or the guarantees, you would no longer have a claim against us or the guarantors. Sufficient funds to repay the Notes may not be available from other sources, including the remaining guarantees, if any. In addition, the court might direct you to repay any amounts that you already received from us or the guarantors with respect to the Notes.

In addition, any payment by us pursuant to the Notes made at a time we were found to be insolvent could be voided and required to be returned to us or to a fund for the benefit of our creditors if such payment is made to an insider within a one-year period prior to a bankruptcy filing or within 90 days for any outside party and such payment would give the creditors more than such creditors would have received in a distribution under Title 11 of the United States Code, as amended (the “Bankruptcy Code”).

The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, we would be considered insolvent if:

• the sum of our debts, including contingent liabilities, were greater than the fair saleable value of all our assets;

• the present fair saleable value of our assets were less than the amount that would be required to pay our probable liability on existing debts, including contingent liabilities, as they become absolute and mature; or

• we could not pay our debts as they become due.

In addition, although each guarantee will contain a provision intended to limit that guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer, this provision may not be effective to protect those guarantees from being voided under fraudulent transfer law, or may reduce that guarantor’s obligation to an amount that effectively makes its guarantee worthless.

Finally, as a court of equity, the bankruptcy court may subordinate the claims in respect of the Notes to other claims against us under the principle of equitable subordination, if the court determines that: (i) the holder of the Notes engaged in some type of inequitable conduct; (ii) such inequitable conduct resulted in injury to our

40

other creditors or conferred an unfair advantage upon the holder of the Notes; and (iii) equitable subordination is not inconsistent with the provisions of the Bankruptcy Code.

Holders of the Notes May Not Be Able to Fully Realize the Value of Their Liens.

The security interests and liens for the benefit of holders of the Notes may be released without such holders’ consent in specified circumstances. In particular, the security documents governing the Notes and our ABL Facility generally provide for an automatic release of all liens on any asset securing our ABL Facility on a first-priority basis and that is disposed of in compliance with the provisions of our ABL Facility and the indenture governing the Notes. As a result, we cannot assure holders of the Notes that the Notes will continue to be secured by a substantial portion of our assets. In addition, the capital stock of our subsidiaries will be excluded from the collateral to the extent liens thereon would trigger reporting obligations under Rule 3-16 of Regulation S-X, which requires financial statements from any company whose securities are collateral if its book value or market value, whichever is greater, would exceed 20% of the principal amount of the Notes secured thereby.

The Collateral May Not Be Valuable Enough to Satisfy All the Obligations Secured by Such Collateral.

The Notes are secured on a first-priority lien basis (subject to certain exceptions) by substantially all of our and the guarantors’ assets (other than accounts receivable, inventory and cash and proceeds and products of the foregoing and certain assets related thereto) (the “Notes Collateral”) and such collateral may be shared in certain circumstances with our future creditors; provided that the Series A-1 Notes are entitled to a priority of payment over our Series A-2 Notes in certain circumstances, including upon any acceleration of the obligations under the Notes or any bankruptcy or insolvency event of default with respect to the Issuer or any guarantor. The actual value of the Notes Collateral at any time will depend upon market and other economic conditions. The Notes are also secured on a second-priority lien basis (subject to certain exceptions) by our and each guarantor’s accounts receivable, inventory and cash and proceeds and products of the foregoing and certain assets related thereto (the “ABL Collateral”). The ABL Collateral will be subject to a first-priority security interest for the benefit of the lenders under our ABL Facility, and may be shared with our future creditors. Although the holders of obligations secured by first-priority liens on the ABL Collateral and the holders of obligations secured by second-priority liens on the ABL Collateral, including the Notes, will share in the proceeds of the ABL Collateral, the holders of obligations secured by first-priority liens in the ABL Collateral will be entitled to receive proceeds from any realization of the ABL Collateral to repay the obligations held by them in full before the holders of the Notes and the holders of other obligations secured by second-priority liens in the ABL Collateral receive any such proceeds.

In addition, the asset sale covenant and the definition of asset sale in the indenture governing the Notes have a number of significant exceptions pursuant to which we will be able to sell Notes Collateral without being required to reinvest the proceeds of such sale into assets that will comprise Notes Collateral or to make an offer to the holders of the Notes to repurchase the Notes.

All indebtedness under our ABL Facility will be secured by first-priority liens on the ABL Collateral (subject to certain exceptions). In addition, under the terms of the indenture governing the Notes, we may grant certain additional liens on any property or asset that constitutes ABL Collateral. Any grant of additional liens on the ABL Collateral would further dilute the value of the second-priority lien on the ABL Collateral securing the Notes. Further, as discussed above, we will be permitted under the terms of the indenture governing the Notes to sell all assets that constitute ABL Collateral and not apply the proceeds to invest in additional assets that will secure the Notes or repay outstanding indebtedness. The value of the pledged assets in the event of a liquidation will depend upon market and economic conditions, the availability of buyers and similar factors. No independent appraisals of any of the pledged property have been prepared by or on behalf of us in connection with the Notes. Accordingly, we cannot assure holders of the Notes that the proceeds of any sale of the pledged assets following an acceleration to maturity with respect to the Notes would be sufficient to satisfy, or would not be substantially less than, amounts due on the Notes and the other debt secured thereby. If the proceeds of any sale of the pledged assets were not sufficient to repay all amounts due on the Notes, the holders of the Notes (to the extent their Notes were not repaid from the proceeds of the sale of the

41

pledged assets) would have only an unsecured claim against our remaining assets. By their nature, some or all of the pledged assets may be illiquid and may have no readily ascertainable market value. Likewise, we cannot assure holders of the Notes that the pledged assets will be saleable or, if saleable, that there will not be substantial delays in their liquidation. To the extent that liens, rights and easements granted to third parties encumber assets located on property owned by us or constitute subordinate liens on the pledged assets, those third parties may have or may exercise rights and remedies with respect to the property subject to such encumbrances (including rights to require marshalling of assets) that could adversely affect the value of the pledged assets located at that site and the ability of the collateral agent to realize or foreclose on the pledged assets at that site.

In addition, the indenture governing the Notes permits us to issue additional secured debt, including debt secured equally and ratably by the same assets pledged for the benefit of the holders of the Notes and entitled to a priority of payment over the Series A-2 Notes to the same extent as the Series A-1 Notes. For example, we are permitted to issue additional Series A-1 Notes ($150.0 million at any time and an additional $150.0 million for acquisitions under certain circumstances), and we are permitted to incur up to an additional $200.0 million of debt which ranks equally and ratably with the Series A-1 Notes. This could reduce amounts payable to holders of the Series A-2 Notes from the proceeds of any sale of the collateral.

The Rights of Holders of the Notes With Respect to the ABL Collateral Will Be Substantially Limited by the Terms of the Intercreditor Agreement.

Under the terms of the intercreditor agreement which was entered into in connection with our ABL Facility, at any time that obligations that have the benefit of the first-priority liens on the ABL Collateral are outstanding, any actions that may be taken in respect of the ABL Collateral, including the ability to cause the commencement of enforcement proceedings against the ABL Collateral and to control the conduct of such proceedings, and the approval of amendments to, releases of ABL Collateral from the lien of, and waivers of past defaults under, the security documents, will be at the direction of the holders of the obligations secured by the first-priority liens. Neither the trustee nor the collateral agent, on behalf of the holders of the Notes, will have the ability to control or direct such actions, even if the rights of the holders of the Notes are adversely affected, subject to certain exceptions. See “Description of Notes—Security for the Notes” and “Description of Notes—Amendment, Supplement and Waiver.” Under the terms of the intercreditor agreement, at any time that obligations that have the benefit of the first-priority liens on the ABL Collateral are outstanding, if the holders of such indebtedness release the ABL Collateral for any reason whatsoever, including, without limitation, in connection with any sale of assets, the second-priority security interest in such ABL Collateral securing the Notes will be automatically and simultaneously released without any consent or action by the holders of the Notes, subject to certain exceptions. The ABL Collateral so released will no longer secure our and the guarantors’ obligations under the Notes. In addition, because the holders of the indebtedness secured by first-priority liens in the ABL Collateral control the disposition of the ABL Collateral, such holders could decide not to proceed against the ABL Collateral, regardless of whether there is a default under the documents governing such indebtedness or under the indenture governing the Notes. In such event, the only remedy available to the holders of the Notes would be to sue for payment on the Notes and the related guarantees under the indenture. In addition, the intercreditor agreement gives the holders of first-priority liens on the ABL Collateral the right to access and use the collateral that secures the Notes to allow those holders to protect the ABL Collateral and to process, store and dispose of the ABL Collateral.

The Rights of the Holders of the Notes With Respect to the Notes Collateral Will Be Substantially Limited by the Terms of the Intercreditor and Collateral Agency Agreement.

The relationship among the Series A-1 Notes and the Series A-2 Notes will be governed by an intercreditor and collateral agency agreement that was entered into in connection with the issuance of the Series A-1 Notes. This agreement describes, among other things, the obligations, powers and duties of the Notes Collateral Agent, actions and voting by the Series A-1 Notes and the Series A-2 Notes, the exercise of remedies, and the application of collateral proceeds. Pursuant to this agreement, the holders of the Series A-1 Notes (and certain

42

other secured indebtedness we are permitted under the indenture to incur) will be entitled to a priority of payment over the holders of the Series A-2 Notes in respect of any amounts received from the Company or any guarantor (or from the proceeds of any Notes Collateral or ABL Collateral) following any acceleration of the obligations under the Notes or any bankruptcy or insolvency event of default with respect to the Company or any “significant subsidiary” under the Notes, whether received from the proceeds of an asset sale, reorganization, liquidation, sale pursuant to section 363 of the bankruptcy code, any adequate protection payments, or otherwise. Pursuant to this priority waterfall, the holders of the Series A-1 Notes must receive an amount equal to all obligations, including accrued and unpaid interest outstanding on or prior to the acceleration or filing date, owing to them in respect of the Series A-1 Notes on the date of any payment or other distribution or other receipt of proceeds (other than amounts calculated in respect of postpetition interest, including amounts payable as “adequate protection”) before the holders of the Series A-2 Notes are entitled to receive any distribution on account of the obligations owing to them in respect of the Series A-2 Notes. In a situation in which the priority waterfall is in effect, if the Notes Collateral was fully liquidated and the proceeds of collateral distributed to the holders of the Series A-1 Notes were not sufficient to repay in full all obligations owing to them in respect of the Series A-1 Notes, then there would not be sufficient collateral proceeds to provide a recovery to holders of the Series A-2 Notes. In such event, holders of the Series A-2 Notes would have only an unsecured claim against our remaining assets.

The Value of the Collateral Securing the Notes May Not Be Sufficient to Secure Post-Petition Interest.

In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding against us, holders of the Notes will only be entitled to post-petition interest under the Bankruptcy Code to the extent that the value of their security interest in the collateral is greater than their pre-bankruptcy claim. Holders of the Notes that have a security interest in collateral with a value equal or less than their pre-bankruptcy claim will not be entitled to post-petition interest under the Bankruptcy Code. No appraisal of the fair market value of the collateral has been prepared in connection with the Notes and we therefore cannot assure you that the value of the noteholders’ interest in the collateral equals or exceeds the principal amount of the Notes. In addition, the ability of the holders of the Notes to receive post-petition interest may be further limited by the intercreditor agreement that was entered into in connection with the offering of the Series A-1 Notes that defines the relative rights of the Notes. In particular, the provisions relating to the priority of payments of the Series A-1 Notes over the Series A-2 Notes in certain circumstances also provide that the holders of the Series A-2 Notes are entitled to postpetition interest only after all obligations, including any accrued and unpaid pre-petition interest, in respect of the Series A-1 Notes are satisfied in full. See “—The Collateral May Not Be Valuable Enough to Satisfy All the Obligations Secured by Such Collateral” and “Description of Notes—Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes—Waterfall of Payment Following Acceleration or in Bankruptcy.”

The Waiver in the Intercreditor Agreement of Rights of Marshaling May Adversely Affect the Recovery Rates of Holders of the Notes in a Bankruptcy or Foreclosure Scenario.

The Notes and the guarantees are secured on a second-priority lien basis by the ABL Collateral. The intercreditor agreement provides that, at any time that obligations that have the benefit of the first-priority liens on the ABL Collateral are outstanding, the holders of the Notes, the trustee under the indenture governing the Notes and the collateral agent for the Notes may not assert or enforce any right of marshaling accorded to a junior lienholder, as against the holders of such indebtedness secured by first-priority liens in the ABL Collateral. Without this waiver of the right of marshaling, holders of such indebtedness secured by first-priority liens in the ABL Collateral would likely be required to liquidate collateral on which the Notes did not have a lien, if any, prior to liquidating the ABL Collateral, thereby maximizing the proceeds of the ABL Collateral that would be available to repay our obligations under the Notes. As a result of this waiver, the proceeds of sales of the ABL Collateral could be applied to repay any indebtedness secured by first-priority liens in the ABL Collateral before applying proceeds of other collateral securing indebtedness, and the holders of the Notes may recover less than they would have if such proceeds were applied in the order most favorable to the holders of the Notes.

43

In the Event of a Bankruptcy of Us or Any of the Guarantors, Holders of the Notes May Be Deemed to Have an Unsecured Claim to the Extent That Our Obligations in Respect of the Notes Exceed the Fair Market Value of the Collateral Securing the Notes.

In any bankruptcy proceeding with respect to us or any of the guarantors, it is possible that the bankruptcy trustee, the debtor-in-possession or competing creditors will assert that the fair market value of the collateral with respect to the Notes on the date of the bankruptcy filing was less than the then-current principal amount of the Notes. Upon a finding by the bankruptcy court that the Notes are under-collateralized, the claims in the bankruptcy proceeding with respect to the Notes would be bifurcated between a secured claim and an unsecured claim, and the unsecured claim would not be entitled to the benefits of security in the collateral. Other consequences of a finding of under-collateralization would be, among other things, a lack of entitlement on the part of the Notes to receive post-petition interest and a lack of entitlement on the part of the unsecured portion of the Notes to receive other “adequate protection” under federal bankruptcy laws. In addition, if any payments of post-petition interest had been made at the time of such a finding of under-collateralization, those payments could be recharacterized by the bankruptcy court as a reduction of the principal amount of the secured claim with respect to the Notes.

Because Each Guarantor’s Liability Under its Guarantees May Be Reduced to Zero, Avoided or Released Under Certain Circumstances, You May Not Receive Any Payments From Some or All of the Guarantors.

You have the benefit of the guarantees of the guarantors. However, the guarantees by the guarantors are limited to the maximum amount that the guarantors are permitted to guarantee under applicable law. As a result, a guarantor’s liability under its guarantee could be reduced to zero, depending upon the amount of other obligations of such guarantor. Further, under the circumstances discussed more fully above, a court under federal and state fraudulent conveyance and transfer statutes could void the obligations under a guarantee or further subordinate it to all other obligations of the guarantor. See“—Federal and State Statutes May Allow Courts, Under Specific Circumstances, to Void the Notes and the Guarantees, Subordinate Claims in Respect of the Notes and the Guarantees and/or Require Holders of the Notes to Return Payments Received From Us.” In addition, you will lose the benefit of a particular guarantee if it is released under certain circumstances described under “Description of Notes—Guarantees.”

Bankruptcy Laws May Limit the Ability of Holders of the Notes to Realize Value From the Collateral.

The right of the collateral agent to repossess and dispose of the pledged assets upon the occurrence of an event of default under the indenture governing the Notes is likely to be significantly impaired by applicable bankruptcy law if a bankruptcy case were to be commenced by or against us before the collateral agent repossessed and disposed of the pledged assets. For example, under the Bankruptcy Code, pursuant to the automatic stay imposed upon the bankruptcy filing, a secured creditor is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, or taking other actions to levy against a debtor, without bankruptcy court approval. Moreover, the Bankruptcy Code permits the debtor to continue to retain and to use collateral even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given “adequate protection.” The meaning of the term “adequate protection” may vary according to circumstances (and is within the discretion of the bankruptcy court), but it is intended in general to protect the value of the secured creditor’s interest in the collateral and may include cash payments or the granting of additional security, if and at such times as the court in its discretion determines, for any diminution in the value of the collateral as a result of the automatic stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. Generally, adequate protection payments, in the form of interest or otherwise, are not required to be paid by a debtor to a secured creditor unless the bankruptcy court determines that the value of the secured creditor’s interest in the collateral is declining during the pendency of the bankruptcy case. In addition, the bankruptcy court may determine not to provide cash payments as adequate protection to the holders of the Notes if, among other possible reasons, the bankruptcy court determines that the fair market value of the collateral with respect to the Notes on the date of

44

the bankruptcy filing was less than the then-current principal amount of the Notes. Furthermore, due to the imposition of the automatic stay, the lack of a precise definition of the term “adequate protection” and the broad discretionary powers of a bankruptcy court, it is impossible to predict (1) how long payments under the Notes could be delayed following commencement of a bankruptcy case, (2) whether or when the collateral agent could repossess or dispose of the pledged assets or (3) whether or to what extent holders of the Notes would be compensated for any delay in payment or loss of value of the pledged assets through the requirement of “adequate protection.”

The Collateral is Subject to Casualty Risks.

We are obligated under our ABL Facility to at all times cause all the pledged assets to be properly insured and kept insured against loss or damage by fire or other hazards to the extent that such properties are usually insured by corporations operating in the same or similar business. There are, however, some losses, including losses resulting from terrorist acts, that may be either uninsurable or not economically insurable, in whole or in part. As a result, we cannot assure holders of the Notes that the insurance proceeds will compensate us fully for our losses. If there is a total or partial loss of any of the pledged assets, we cannot assure holders of the Notes that the proceeds received by us in respect thereof will be sufficient to satisfy all the secured obligations, including the Notes. In the event of a total or partial loss to any of the mortgaged facilities, certain items of equipment and inventory may not be easily replaced. Accordingly, even though there may be insurance coverage, the extended period needed to manufacture replacement units or inventory could cause significant delays.

Rights of Holders of the Notes in the Collateral May Be Adversely Affected by the Failure to Perfect Security Interests in the Collateral.

Applicable law requires that a security interest in certain tangible and intangible assets can only be properly perfected and its priority retained through certain actions undertaken by the secured party. The liens in the collateral securing the Notes may not be perfected with respect to the claims of the Notes if the collateral agent is not able to take the actions necessary to perfect any of these liens on or prior to the date of the issuance of the Notes.

In addition, applicable law requires that certain property and rights acquired after the grant of a general security interest, such as real property, equipment subject to a certificate of title and certain proceeds, can only be perfected at the time such property and rights are acquired and identified. We and the guarantors have limited obligations to perfect the security interest of the holders of the Notes in specified collateral. There can be no assurance that the trustee or the collateral agent for the Notes will monitor, or that we will inform such trustee or collateral agent of, the future acquisition of property and rights that constitute collateral, and that the necessary action will be taken to properly perfect the security interest in such after-acquired collateral. Neither the trustee nor the collateral agent for the Series A-2 Notes has an obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security interest. Such failure may result in the loss of the security interest in the collateral or the priority of the security interest in favor of the Notes against third parties.

Any future pledge of collateral in favor of the holders of the Notes might be voidable in bankruptcy. Any future pledge of collateral in favor of the holders of the Notes, including pursuant to security documents delivered after the date of the indenture governing the Notes, might be voidable by the pledgor (as debtor in possession) or by its trustee in bankruptcy if certain events or circumstances exist or occur, including, under the Bankruptcy Code, if the pledgor is insolvent at the time of the pledge, the pledge permits the holders of the Notes to receive a greater recovery than if the pledge had not been given and a bankruptcy proceeding in respect of the pledgor is commenced with 90 days following the pledge, or, in certain circumstances, a longer period.

45

The Indenture Provides That the Notes Will Be Treated Under the Indenture as a Single Class for Purposes of Most Amendments and Waivers. Moreover, the Series A-1 Notes Are Entitled to a Priority in Payment Over the Series A-2 Notes Following Acceleration or a Bankruptcy Event of Default With Respect to Then Payable Principal and Interest.

The indenture provides that the Notes will be treated under the indenture as a single class for purposes of most amendments and waivers, other than certain matters that only affect the Series A-1 Notes or the Series A-2 Notes. Moreover, most accelerations of the Series A-1 Notes or Series A-2 Notes following an event of default will require action by the holders of 25% of the Notes combined. This may make it more difficult for the holders of the Series A-1 Notes or Series A-2 Notes to accelerate the Notes absent the concurrence of some of the other holders. In addition, for amendments or waivers that require a majority consent, even if a majority of the holders of the Series A-1 Notes or Series A-2 Notes voted in favor of an amendment or waiver, the amendment or waiver may not become effective unless a majority of both the series of Notes collectively vote in favor of the amendment or waiver. The indenture also provides that the Series A-1 Notes are entitled to a priority in payment over the Series A-2 Notes being issued in this offering following acceleration or a bankruptcy event of default with respect to then payable principal and interest, as further described in “Description of Notes—Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes.” This priority applies only following acceleration or a bankruptcy event of default. Further, this priority applies to principal and interest already due, but does not apply to post-petition interest. Post-petition interest, if any, would be paid to the holders of Notes only after the holders of Notes have received their principal and pre-petition interest. Finally, although bankruptcy courts in general honor intercreditor agreements entered into prior to the bankruptcy filing, there can be no assurance that the intercreditor arrangements between the Notes would not be modified, changed or rejected during the course of a bankruptcy proceeding, including a determination that the Notes should be considered separate classes for purposes of the bankruptcy proceeding.

The Series A-1 Notes Were Issued With Original Issue Discount (“OID”) for U.S. Federal Income Tax Purposes.

Since the “stated redemption price at maturity” of the Series A-1 Notes exceeds their “issue price” (both as described below under “Certain U.S. Federal Income Tax Considerations”) by more than a statutory de minimis threshold, the Series A-1 Notes are considered to have been issued with OID for U.S. federal income tax purposes in an amount equal to such excess. U.S. holders (as defined in “Certain U.S. Federal Income Tax Considerations”) of Series A-1 Notes will be required to include such OID in income as it accrues, in advance of the receipt of cash attributable to such income. For a discussion of the tax consequences of an investment in the Series A-1 Notes, see “Certain U.S. Federal Income Tax Considerations.”

We May Not Be Able to Finance a Change of Control Offer Required by the Indenture.

Upon a change of control, as defined under the indenture governing the Notes, you will have the right to require us to offer to purchase all of the Notes then outstanding at a price equal to 101% of the principal amount of the Notes, plus accrued interest. In order to obtain sufficient funds to pay the purchase price of the outstanding Notes, we expect that we would have to refinance the Notes. We cannot assure you that we would be able to refinance the Notes on reasonable terms, if at all. Our failure to offer to purchase all outstanding Notes or to purchase all validly tendered Notes would be an event of default under the indenture. Such an event of default may cause the acceleration of our other debt. Our future debt also may contain restrictions on repayment requirements with respect to specified events or transactions that constitute a change of control under the indenture.

46

THE TRANSACTIONS

As used in this prospectus, the term “Transactions” means, collectively, the Merger, the Original Financing and the Refinancing described below.

The Merger and the Original Financing

On June 18, 2008, Apria, Sky Acquisition and Merger Sub entered into the Merger Agreement, pursuant to which, on October 28, 2008, Merger Sub merged with and into Apria, with Apria being the surviving corporation following the Merger. The Investor Group beneficially owns all of Apria’s issued and outstanding capital stock.

The Investor Group made a $673.3 million cash equity investment in membership interests of Sky Acquisition and its parent entity, which investment includes Dr. Payson’s co-investment. The proceeds of such investment were contributed to Merger Sub, which used such proceeds, together with other sources of funds, to fund the Merger and the related transactions.

Following the closing of the Merger, Sky Acquisition and its parent entity adopted equity incentive arrangements for directors, executives and other senior management employees. Consistent with these arrangements, certain members of our management team have purchased and/or received, and may, from time to time, purchase and/or receive, equity interests or profit interests in one of our direct or indirect parent entities. Such purchases or awards of equity interests or profit interests may represent a substantial portion of the equity or profits of such parent entity.

In addition to the Merger Agreement, the parties entered into various ancillary agreements governing relationships between the parties after the Merger. See “Certain Relationships and Related Party Transactions.”

Concurrently with the signing of the Merger Agreement, Apria entered into a $280.0 million credit facility pursuant to a credit agreement with Banc of America Bridge LLC, Barclays Capital, the investment banking division of Barclays Bank PLC, Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC) and the lenders named therein (the “Interim Facility”). The loans under the Interim Facility bore interest at a rate of 11% per year with a maturity date of March 1, 2009. Proceeds of the Interim Facility were used to fund repurchases of $249.8 million of Apria’s 3.375% Convertible Senior Notes due 2033 (the “convertible senior notes”) in September 2008. We repaid all amounts outstanding under the Interim Facility and terminated it at the closing of the Merger.

The following financing transactions occurred in connection with the closing of the Merger:

• a cash investment made by the Investor Group totaling $673.3 million in membership interests of a parent entity of Sky Acquisition (which, in turn, contributed the proceeds of such investment to Sky Acquisition, which, in turn, contributed the proceeds of such investment to Merger Sub);

• borrowings by Apria of $30.0 million under its $150.0 million ABL Facility; and

• borrowings by Apria of $1,010.0 million under its senior secured bridge credit agreement.

In addition, on the closing date of the Merger, we terminated all commitments and repaid all outstanding borrowings under the 2004 senior secured revolving credit facility and the Interim Facility, totaling $553.8 million as of October 28, 2008, and paid all accrued and unpaid interest thereon.

47

The sources and uses of the funds used in connection with the Merger and the Original Financing are shown in the table below.

Sources			Uses
(dollars in millions)
ABL Facility(1)	$	30.0	Purchase of equity(4)	$	946.4
Senior secured bridge credit agreement(2)		1,010.0	Repayment of existing indebtedness(5):         2004 senior secured revolving credit             facility		305.1
Equity investment(3)		673.3	Interim facility		251.9
			Increase in cash(6)		110.8
			Fees and expenses(7)		99.1
Total sources	$	1,713.3	Total uses	$	1,713.3

(1) Upon the closing of the Merger, we entered into a $150.0 million senior secured asset-based revolving credit facility, which has a five-year maturity. We borrowed $30.0 million under the ABL Facility on the closing date of the Merger. See “Description of Other Indebtedness—Senior Secured Asset-Based Revolving Credit Facility” for more information.

(2) Upon the closing of the Merger, we entered into a senior secured bridge credit agreement, which has a six-year maturity. We borrowed an aggregate of $1,010.0 million under the senior secured bridge credit agreement on the closing date of the Merger. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness—Post-Transactions—Senior Secured Bridge Credit Agreement” for more information.

(3) Represents the cash equity contributed by the Investor Group.

(4) Represents the amount of total consideration paid to holders of approximately 43.9 million of outstanding shares of Apria’s common stock, approximately 0.9 million of outstanding shares of restricted stock and approximately 0.8 million of outstanding options to acquire Apria’s common stock with a net option value of approximately $5.1 million, which is based upon an average exercise price of $14.46 per share. At the effective time of the Merger, each share of Apria’s common stock issued and outstanding immediately prior to the effective time (other than dissenting shares, shares held in treasury or shares held by Sky Acquisition, Merger Sub or any wholly-owned subsidiary of Apria) was converted into a right to receive $21.00 in cash, without interest and less any applicable withholding taxes.

(5) Represents (i) $304.0 million of outstanding borrowings under our 2004 senior secured revolving credit facility and $1.1 million of accrued and unpaid interest related thereto and (ii) $249.8 million of outstanding borrowings under the Interim Facility and $2.1 million of accrued and unpaid interest related thereto, repaid in connection with the Merger. In September 2008, we were required pursuant to the terms of the indenture governing our convertible senior notes to repurchase $249.8 million of the convertible senior notes at a redemption price equal to 100% of the principal amount of the convertible senior notes properly tendered and not withdrawn plus accrued and unpaid interest to the redemption date. We funded the repurchase by borrowing $249.8 million under the Interim Facility. In addition, in December 2008, holders of $151,000 of the remaining outstanding $0.2 million of the convertible senior notes exercised their right to require us to repurchase their notes following the Merger. Approximately $77,000 of the convertible senior notes remain outstanding.

(6) Represents an increase of $110.8 million in cash on hand upon the completion of the Merger and the Original Financing, which is expected to be used for general corporate purposes.

(7) Includes commitment, accounting, legal and other professional fees, including the lenders’ fees and transaction fees paid to affiliates of the Sponsor.

The Refinancing

We used the proceeds from the offerings of our outstanding Series A-1 Notes and the outstanding Series A-2 Notes in May 2009 and August 2009, respectively, together with cash on hand, to repay all of the outstanding borrowings under our senior secured bridge credit agreement and to pay related fees and expenses. The senior secured bridge credit agreement was terminated concurrently with the closing of the outstanding Series A-2 Notes offering. The sources and uses of the funds in connection with the Refinancing are shown in the table below.

Sources			Uses
(dollars in millions)
			Repayment of the senior secured bridge
Series A-1 Notes	$	700.0	credit agreement(1)	$	1,027.2
Series A-2 Notes		317.5	Fees and expenses		19.1
Cash required for the Refinancing		28.8
Total Sources	$	1,046.3	Total Uses	$	1,046.3

(1) Represents $1,010.0 million outstanding under the senior secured bridge credit agreement prior to the offering of the outstanding Series A-1 Notes and $17.2 million of accrued and unpaid interest on the $1,010.0 million outstanding under the senior secured bridge credit agreement from May 1, 2009 until May 26, 2009 and $310.0 million outstanding under the senior secured bridge credit agreement from May 27, 2009 to August 12, 2009.

48

USE OF PROCEEDS

We will not receive any proceeds from the issuance of the exchange notes in the exchange offers. The exchange offers are intended to satisfy our obligations under the registration rights agreements that we entered into in connection with the private offerings of the outstanding notes. As consideration for issuing the exchange notes as contemplated in this prospectus, we will receive in exchange a like principal amount of outstanding notes, the terms of which are identical in all material respects to the exchange notes, except that the exchange notes will not contain terms with respect to transfer restrictions or additional interest upon a failure to fulfill certain of our obligations under the registration rights agreements. The outstanding notes that are surrendered in exchange for the exchange notes will be retired and cancelled and cannot be reissued. As a result, the issuance of the exchange notes will not result in any change in our capitalization.

49

CAPITALIZATION

The following table sets forth our consolidated cash and cash equivalents and capitalization as of March 31, 2010.

You should read this table in conjunction with “Prospectus Summary—Summary Historical Consolidated Financial Data,” “Use of Proceeds,” “Selected Historical Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

The outstanding notes that are surrendered in exchange for the exchange notes will be retired and cancelled and cannot be reissued. As a result, the issuance of the exchange notes will not result in any change in our capitalization.

	As of March 31, 2010
	(dollars in thousands)
Cash and cash equivalents	$	133,389
Total debt:
ABL Facility(1)		—
Series A-1 Notes		700,000
Series A-2 Notes		317,500
Other debt		3,204
Total debt		1,020,704
Total stockholders’ equity		678,978
Total capitalization	$	1,699,682

(1) Upon the closing of the Merger, we entered into a $150.0 million senior secured asset-based revolving credit facility, which has a five-year maturity. We had no outstanding borrowings and approximately $16.1 million of drawn letters of credit under the ABL Facility as of March 31, 2010. See “Description of Other Indebtedness—Senior Secured Asset-Based Revolving Credit Facility” for more information.

50

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical financial statements and accompanying notes contained herein. We derived the selected consolidated financial data for the year ended December 31, 2007, the periods from January 1, 2008 to October 28, 2008 and October 29, 2008 to December 31, 2008 and the year ended December 31, 2009 and as of December 31, 2008 and 2009 from our consolidated financial statements, which have been audited and are included in this prospectus. We derived the selected consolidated financial data for the years ended December 31, 2005 and 2006 and as of December 31, 2005, 2006 and 2007 from our consolidated financial statements that have been audited and are not included in this prospectus. The historical results presented are not necessarily indicative of future results. The audited consolidated financial statements for each of the years in the three-year period ended December 31, 2007, the periods from January 1, 2008 to October 28, 2008 and October 29, 2008 to December 31, 2008 and the year ended December 31, 2009 have been audited by Deloitte & Touche LLP, an independent registered public accounting firm.

Our selected historical condensed consolidated financial data for the three months ended March 31, 2009 and as of and for the three months ended March 31, 2010 have been derived from our condensed consolidated financial statements, which are included in this prospectus. We derived the selected historical consolidated financial data as of March 31, 2009 from our unaudited condensed consolidated financial statements, which are not included in this prospectus. The unaudited condensed consolidated financial statements were prepared on a basis consistent with our audited consolidated financial statements. In our opinion, the unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for the fair presentation of those statements. Our results for the three months ended March 31, 2010 should not be considered indicative of the results for the full fiscal year ending December 31, 2010.

	Year Ended December 31,									Period January 1, 2008 to October 28, 2008			Period October 29, 2008 to December  31, 2008			Year Ended December  31, 2009			Three  Months Ended March 31, 2009			Three  Months Ended March 31, 2010
	2005			2006			2007
	(Predecessor)			(Predecessor)			(Predecessor)			(Predecessor)			(Successor)			(Successor)			(Successor)			(Successor)
	(dollars in thousands)
Statement of Operations Data:
Net revenues	$	1,475,670		$	1,516,691		$	1,631,801		$	1,773,289		$	356,665		$	2,094,561		$	516,431		$	508,876
Cost and expenses:
Total cost of net revenues		479,213			521,580			564,992			691,337			137,760			867,459			207,044			202,792
Provision for doubtful accounts		46,948			38,723			43,138			33,626			14,329			57,919			11,356			15,887
Selling, distribution and administrative		792,031			804,285			862,062			924,536			179,362			1,050,134			263,784			257,738
Qui tam settlement and related costs		19,258			—			—			—			—			—			—			—
Amortization of intangible assets		6,941			5,080			3,079			3,461			1,008			3,716			1,277			1,657
Total costs and expenses		1,344,391			1,369,668			1,473,271			1,652,960			332,459			1,979,228			483,461			478,074
Operating income		131,279			147,023			158,530			120,329			24,206			115,333			32,970			30,802
Interest expense and other, net		22,119			29,463			20,493			29,684			25,441			127,591			32,267			32,489
Write-off of deferred debt issuance costs		—			—			—			—			—			—			—			—
Income (loss) from continuing operations before taxes		109,160			117,560			138,037			90,645			(1,235	)		(12,258	)		703			(1,687	)
Income tax expense (benefit)		40,677			43,297			51,998			34,192			659			(8,438	)		1,180			(884	)
Net income (loss) from continuing operations	$	68,483		$	74,263		$	86,039		$	56,453		$	(1,894	)	$	(3,820	)	$	(477	)	$	(803	)
Cash Flow Data:
Net cash provided by operating activities	$	206,299		$	280,914		$	294,006		$	297,937		$	63,337		$	169,426		$	29,672		$	15,105
Net cash used in investing activities		(223,571	)		(132,932	)		(483,235	)		(154,493	)		(75,466	)		(168,656	)		(39,592	)		(24,013	)
Net cash provided by (used in) financing activities		1,177			(156,629	)		203,023			(123,682	)		131,934			(10,625	)		(7,505	)		(15,866	)
Capital expenditures		118,867			125,628			128,759			157,183			26,217			150,597			39,843			27,319

51

	As of December 31,										As of March 31, 2010
	2005		2006		2007		2008		2009
	(Predecessor)		(Predecessor)		(Predecessor)		(Successor)		(Successor)		(Successor)
	(dollars in thousands)
Balance Sheet Data:
Total assets	$	1,198,461	$	1,154,636	$	1,597,802	$	2,210,813	$	2,309,047	$	2,284,270
Goodwill and intangible assets		551,565		545,738		822,992		1,292,403		1,341,456		1,341,299
Long-term debt, including current maturities		645,320		487,145		687,283		1,022,233		1,021,146		1,020,704
Stockholders’ equity		311,651		399,693		512,025		672,820		678,731		678,978

	Year Ended December 31,						Period January 1,  2008 to October 28, 2008		Period October 29,  2008 to December 31, 2008			Year Ended December 31, 2009			Three Months Ended March 31,
	2005		2006		2007										2009		2010
	(Predecessor)		(Predecessor)		(Predecessor)		(Predecessor)		(Successor)			(Successor)			(Successor)		(Successor)
Other Data:
Ratio of earnings to fixed charges(1)		2.5x		2.5x		2.9x		2.2x		.97x			0.9x			1.0x		.96x
Earnings deficiency to cover fixed charges	$	—	$	—	$	—	$	—	$	(1,235	)	$	(12,258	)	$	—	$	(1,687	)

(1) Computed by dividing pre-tax net income before fixed charges by fixed charges. Fixed charges means the sum of the following: net interest expense, amortized premiums, discounts and capitalized expenses related to indebtedness, and an estimate of the interest within rental expense. Net interest expense excludes any interest related to tax liabilities, which is recorded as income tax expense.

52

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding and assessing the trends and significant changes in our results of operations and financial condition. Historical results may not be indicative of future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties such as the current global economic uncertainty, including the tightening of the credit markets and the recent significant declines and volatility in our global financial markets, that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in the “Risk Factors” and “Forward-Looking Statements” sections of this prospectus. This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and the related notes and other information included in this prospectus.

Overview

We have three core service lines: home respiratory therapy, home medical equipment and home infusion therapy. In these core service lines, we offer a variety of patient care management programs, including clinical and administrative support services, products and supplies, most of which are prescribed by a physician as part of a care plan. We provide these services to patients through approximately 500 locations throughout the United States. We have two reportable operating segments:

• home respiratory therapy and home medical equipment; and

• home infusion therapy.

Strategy

Our strategy is to position ourselves in the marketplace as a high-quality provider of a broad range of healthcare services and patient care management programs to our customers. The specific elements of our strategy are to:

• Grow profitable revenue and market share. We are focused on growing profitable revenues and increasing market share in our core home respiratory therapy and home infusion therapy service lines. We have undertaken a series of steps towards this end. Since January 1, 2007, we have expanded our home respiratory therapy and home medical equipment sales force by 18%. This focus has allowed us to more effectively market our products and services to physicians, hospital discharge planners and managed care organizations. Through our acquisition of Coram in December 2007, we considerably increased our home infusion capabilities and expanded our platform for further cross-selling opportunities.

• Continue to participate in the managed care market. We participate in the managed care market as a long-term strategic customer group because we believe that our scale, expertise, nationwide presence and array of home healthcare products and services will enable us to sign preferred provider agreements with managed care organizations. Managed care represented approximately 70% of our total net revenues for the three months ended March 31, 2010.

• Leverage our national distribution infrastructure. With approximately 500 locations and a robust platform supporting shared national services, we believe that we can efficiently add products, services and patients to our systems to grow our revenues and leverage our cost structure. For example, we have successfully leveraged this distribution platform across a number of product and service offerings, including a CPAP/bi-level supply replenishment program, enteral nutrition and NPWT services, and we are using our nursing capacity to provide infusion services through our growing network of ambulatory infusion suites. We seek to achieve margin improvements through operational initiatives focused on the

53

continual reduction of costs and delivery of incremental efficiencies. At the same time, we believe that it is essential to consistently deliver superior customer service in order to increase referrals and retain existing patients. Performance improvement initiatives are underway in all aspects of our operations including customer service, patient satisfaction, logistics, supply chain, clinical services and billing/collections. We believe that by being responsive to the needs of our patients and payors we can provide ourselves with opportunities to take market share from our competitors.

• Continue to lead the industry in accreditation. MIPPA made accreditation mandatory for Medicare providers of DMEPOS, effective October 1, 2009, per CMS regulation. We were the first durable medical equipment provider to seek and obtain voluntary accreditation from The Joint Commission. All of our locations are currently accredited by The Joint Commission and our home infusion therapy service line is also accredited by the ACHC. In 2007, we completed a nationwide independent triennial accreditation renewal process conducted by The Joint Commission and we have more than 15 years of continuous accreditation by The Joint Commission—longer than any other homecare provider. In late June 2010, The Joint Commission completed its most recent triennial survey of our respiratory/home medical equipment and infusion locations and is expected to renew our accreditation for another three years.

• Execute our strategic initiatives to drive profitability. For the past several years, we have successfully engaged in a range of cost savings initiatives to ease pressure on our revenue that has been and continues to be caused by Medicare and Medicaid reimbursement changes. These initiatives are designed to improve customer service, delivery and vehicle routing services, streamline the payment process, effectively manage procurement costs and improve the overall experience of the patients we serve. We launched a substantial cost reduction plan in late 2007. To date, we have made significant progress across a number of identified initiatives targeting expected annual savings of approximately $198 million, of which we have realized approximately $127 million through March 31, 2010.

Recent Developments

Enactment of a Comprehensive Healthcare Reform Package. In March 2010, the Federal government enacted a comprehensive healthcare Reform Package which consists of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010. See “Risk Factors—Risks Relating to Our Business—Continued Reductions in Medicare and Medicaid Reimbursement Rates and the Comprehensive Healthcare Reform Package Could Have a Material Adverse Effect on Our Results of Operations and Financial Condition.”

Reorganization of the Senior Leadership Structure of our Home Respiratory Therapy and Home Medical Equipment Segment. On February 12, 2010, we finalized a decision to reorganize the senior leadership structure of the home respiratory therapy and home medical equipment segment. As part of this reorganization, Lawrence A. Mastrovich, President, Home Respiratory Therapy and Home Medical Equipment segment, resigned and his responsibilities were assumed by other senior executives.

Critical Accounting Policies

We consider the accounting policies that govern revenue recognition and the determination of the net realizable value of accounts receivable to be the most critical in relation to our consolidated financial statements. These policies require the most complex and subjective judgments of management. Additionally, the accounting policies related to goodwill, long-lived assets, share-based compensation and income taxes require significant judgment.

Revenue and Accounts Receivable. Revenues are recognized under fee for service/product arrangements for equipment we rent to patients, sales of equipment, supplies, pharmaceuticals and other items we sell to patients and under capitation arrangements with third party payors for services and equipment we provide to the patients of these payors. Revenue generated from equipment that we rent to patients is recognized over the rental period, typically one month, and commences on delivery of the equipment to the patients. Revenue related to sales of equipment, supplies and pharmaceuticals is recognized on the date of delivery to the patients. Revenues derived

54

from capitation arrangements were approximately 8%, 8%, 8%, 8%, and 10% of total net revenues for the three months period ended March 31, 2010, the year ended December 31, 2009, the period October 29, 2008 to December 31, 2008, the period January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, respectively. Capitation revenue is earned as a result of entering into a contract with a third party to provide its members certain services without regard to the actual services provided, therefore revenue is recognized in the period that the beneficiaries are entitled to health care services. All revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare and Medicaid.

In our business, there are multiple services and products delivered to patients. These arrangements involve equipment that is rented and related supplies that may be sold that cannot be returned. In arrangements with multiple deliverables, revenue is recognized when each deliverable is provided to the patient. For example, revenues from equipment rental supplies sales are recognized upon confirmation of delivery of the products, as the supplies sold are considered a separate unit of accounting.

Included in accounts receivable are earned but unbilled receivables of $49.5 million, $44.6 million and $48.2 million at March 31, 2010, December 31, 2009 and 2008, respectively. Delays ranging from a day up to several weeks between the date of service and billing can occur due to delays in obtaining certain required payor-specific documentation from internal and external sources. Earned but unbilled receivables are aged from date of service and are considered in the analysis of historical performance and collectibility.

Due to the nature of the industry and the reimbursement environment in which we operate, certain estimates are required to record total net revenues and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application, claim denial or account review.

Management performs periodic analyses to evaluate accounts receivable balances to ensure that recorded amounts reflect estimated net realizable value. Specifically, management considers historical realization data, accounts receivable aging trends, other operating trends, the extent of contracted business and business combinations. Also considered are relevant business conditions such as governmental and managed care payor claims processing procedures and system changes. Additionally, focused reviews of certain large and/or problematic payors are performed. Due to continuing changes in the healthcare industry and third-party reimbursement, it is possible that management’s estimates could change in the near term, which could have an impact on operations and cash flows.

Accounts receivable are reduced by an allowance for doubtful accounts which provides for those accounts from which payment is not expected to be received, although services were provided and revenue was earned. Upon determination that an account is uncollectible, it is written-off and charged to the allowance.

Goodwill and Long-Lived Assets. Goodwill arising from business combinations represents the excess of the purchase price over the estimated fair value of the net assets of the acquired business. Goodwill and indefinite-lived intangible assets are tested annually for impairment or more frequently if circumstances indicate the potential for impairment. We have selected October 1 to perform our annual impairment test. Also, we test for impairment of our intangible assets and long-lived assets on an ongoing basis, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Our goodwill impairment test is conducted at a “reporting unit” level and compares each reporting unit’s fair value to its carrying value. We have determined that our two operating segments are reporting units. As such, we have two reporting units, home respiratory therapy/home medical equipment and home infusion therapy. The measurement of fair value for each reporting unit is based on an evaluation of future discounted cash flows. In projecting our reporting units’ cash flows, we consider industry growth rates and trends, known and potential reimbursement reductions,

55

cost structure changes and local circumstances specific to a service line. Goodwill and indefinite-lived intangible assets were tested for impairment on October 1, 2009 and resulted in no impairment. If an asset had been deemed impaired, an impairment loss would have been recognized to the extent the carrying value of the asset exceeded its estimated fair market value.

Long-lived assets, including property and equipment and purchased intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Significant judgment is required in determining whether a potential indicator of impairment of long-lived assets exists and in estimating future cash flows for any necessary impairment tests. Recoverability of assets to be held and used is measured by the comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. As of March 31, 2010, December 31, 2009 and 2008, there was no impairment.

Share-Based Compensation. We measure and recognize compensation expense for all share-based payment awards made to employees and non-employee directors based on estimated fair values on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period in our consolidated financial statements. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We recognize share-based compensation expense on a straight-line basis over the requisite service period. Prior to the Merger, we estimated fair value of our share-based payment awards using the Black-Scholes valuation model. Subsequent to the Merger, the estimate of fair value of share-based awards on the date of grant is determined through the allocation of all outstanding securities to a business enterprise valuation. The enterprise valuation is based upon the income approach methodology of valuation that includes the discounted cash flow method. This determination of fair value is affected by assumptions regarding a number of highly complex and subjective variables. Changes in the subjective assumptions can materially affect the estimate of their fair value.

Income Taxes. Deferred income tax assets and liabilities are computed for differences between the carrying amounts of assets and liabilities for financial statement and tax purposes. Deferred income tax assets are required to be reduced by a valuation allowance when it is determined that it is more likely than not that all or a portion of a deferred tax asset will not be realized. In determining the necessity and amount of a valuation allowance, management considers our current and past performance, the market environment in which we operate, tax planning strategies and the length of tax benefit carryforward periods.

Our provision for income taxes is based on expected income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant management estimates and judgments are required in determining the provision for income taxes. We are routinely under audit by federal, state or local authorities regarding the timing and amount of deductions, allocation of income among various tax jurisdictions and compliance with federal, state and local tax laws. Tax assessments related to these audits may not arise until several years after tax returns have been filed. Although predicting the outcome of such tax assessments involves uncertainty, we believe that the recorded tax liabilities appropriately reflect our potential obligations.

Capitalized Software. Internally developed and purchased software are capitalized and amortized over periods that the assets are expected to provide benefit. Capitalized costs include direct costs of materials and services incurred in developing or obtaining internal-use software and payroll and benefit costs for employees directly involved in the development of internal-use software. In connection with the Merger in 2008, we evaluated our information technology strategy and concluded it was no longer advisable to implement a new enterprise-wide information system. As a result of this change in strategy, we wrote off approximately $65.0 million of capitalized information systems assets as part of our purchase accounting adjustments that were made in connection with the Merger in 2008.

56

Government Regulation

We are subject to extensive government regulation, including numerous laws directed at regulating reimbursement of our products and services under various government programs and preventing fraud and abuse. We maintain certain safeguards intended to reduce the likelihood that we will engage in conduct or enter into arrangements in violation of these restrictions. Corporate contract services and legal department personnel review and approve written contracts subject to these laws. We also maintain various educational and audit programs designed to keep our managers updated and informed regarding developments on these topics and to reinforce to employees our policy of strict compliance in this area. Federal and state laws require that we obtain regulatory licenses and that we enroll as a supplier with federal and state health programs. Under various federal and state laws, we are required to make filings or submit notices in connection with transactions that might be defined as a change of control of the Company. We are aware of these requirements and routinely make such filings with, and seek such approvals from, the applicable regulatory agencies. Notwithstanding these measures, violations of these laws and regulations may still occur, which could subject us to civil and criminal enforcement actions; licensure revocation, suspension or non-renewal; severe fines and penalties; the repayment of amounts previously paid to us and even the termination of our ability to provide services under certain government programs such as Medicare and Medicaid. See “Risk Factors—Risks Relating to Our Business—Continued Reductions in Medicare and Medicaid Reimbursement Rates and the Comprehensive Healthcare Reform Package Could Have a Material Adverse Effect on Our Results of Operations and Financial Condition.”

For additional information about government regulation of our business and industry, see “Business—Government Regulation.”

Results of Operations

Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009

Net Revenues. Net revenues decreased $7.5 million, or 1.5%, to $508.9 million in the three months ended March 31, 2010 from $516.4 million in the three months ended March 31, 2009. The decrease in revenue was due primarily to the non-renewal or termination of, or changes to, certain payor contracts. We or the payor terminated or did not renew certain contracts during 2009 and we expect to continue to strategically evaluate the profitability of payor contracts. The revenue decrease was partially offset by increases in home infusion therapy revenue. In addition, revenue in the three months ended March 31, 2009 was positively impacted by the recognition of monthly rental revenue previously deferred for services that were initiated prior to certain 2009 Medicare reimbursement reductions.

We also expect to continue to face pricing pressures from Medicare and Medicaid as well as from our managed care customers as these payors seek to lower costs by obtaining more favorable pricing from providers such as us. In addition to the pricing reductions, such changes could cause us to provide reduced levels of certain products and services in the future, resulting in a corresponding reduction in revenue. See “Business—Government Regulation.”

Gross Profit. Gross profit margin is defined as total net revenues less total costs of total net revenues divided by total net revenues. The gross profit margin in the three months ended March 31, 2010 was 60.1%, compared to 59.9% in the three months ended March 31, 2009. This improvement was primarily the result of our ability to obtain favorable pricing on the purchase of products and the termination of certain low margin or unprofitable payor contracts during 2009. This improvement is partially offset by an increase in infusion therapy drug revenue as a percent of total company revenue. Our infusion therapy drug products have a lower gross profit margin as a percentage of net revenues.

Provision for Doubtful Accounts. The provision for doubtful accounts is based on management’s estimate of the net realizable value of accounts receivable after considering actual write-offs of specific receivables. Accounts receivable estimated to be uncollectible are provided for by computing a required reserve using estimated future cash receipts based on historical cash receipts collections as a percentage of revenue. In

57

addition, management may adjust for changes in billing practices, cash collection protocols or practices, or changes in general economic conditions, contractual issues with specific payors, new markets or products. The provision for doubtful accounts, expressed as a percentage of total net revenues, was 3.1% and 2.2% in the three months ended March 31, 2010 and the three months ended March 31, 2009, respectively. The increased provision for doubtful accounts in 2010 is primarily the result of unfavorable collections experience occurring in 2010 compared to 2009.

Selling, Distribution and Administrative Expenses. Selling, distribution and administrative expenses are comprised of expenses incurred in direct support of operations and those associated with administrative functions. Expenses incurred by the operating locations include salaries and other expenses in the following functional areas: selling, distribution, clinical services, warehousing and repair. Many of these operating costs are directly variable with revenue growth patterns. Some are also very sensitive to market-driven price fluctuations such as facility lease and fuel costs. The administrative expenses include overhead costs incurred by the operating locations, regional and corporate support functions. These expenses are generally less sensitive to fluctuations in revenue growth than operating costs.

Selling, distribution and administrative expenses, expressed as a percentage of total net revenues was 50.6% for the three months ended March 31, 2010 compared to 51.1% for the three months ended March 31, 2009.

Selling, distribution and administrative expenses decreased by $6.0 million for the three months ended March 31, 2010 over the three months ended March 31, 2009. The $6.0 million decrease was comprised of a $16.1 million decrease in labor and other related expenses offset by an increase in other operating expenses of $10.1 million. The decrease in labor and other related expenses was due to reduced salaries and wages as a result of headcount reductions in 2009 due primarily to the outsourcing of certain functions relating to documentation, billing, reimbursements and other services, outsourcing of the information technology function and branch closure/consolidation as part of the branch optimization program, lower management incentive compensation program expense as a result of not meeting the targets in 2010, and the reduction in expenses related to equity incentive awards. The increases in other operating expenses of $10.1 million were primarily due to professional fees and expenses related to outsourcing certain billing and collection functions that did not exist in 2009, professional fees incurred in connection with the outsourcing of the information technology function, professional fees incurred in connection with a terminated debt offering and increase in our sponsor management fee.

Amortization of Intangible Assets. Amortization of intangible assets was $1.7 million in the three months ended March 31, 2010 and $1.3 million in the three months ended March 31, 2009. The amortization expense primarily results from the revaluation of intangible assets as a result of the Merger, including the finalization of the intangible asset valuation in 2009.

Interest Expense. Interest expense increased $0.2 million, or 0.5%, to $32.6 million in the three months ended March 31, 2010 from $32.4 million in the three months ended March 31, 2009. This increase is primarily due to higher amortization of deferred debt costs related to the $700.0 million of our outstanding 11.25% Senior Secured Notes due 2014 (Series A-1) and $317.5 million of our outstanding 12.375% Senior Secured Notes due 2014 (Series A-2) offset by a lower interest rate of 11.6% in the three months ended March 31, 2010 as compared to 12.0% for the three months ended March 31, 2009.

Interest Income and Other. Interest income and other decreased $0.1 million, or 46.5%, to $0.1 million in the three months ended March 31, 2010 from $0.2 million in the three months ended March 31, 2009.

Income Tax (Benefit) Expense. Our effective tax rate was a benefit of 52.4% for the three months ended March 31, 2010 compared with an expense of 167.8% for the three months ended March 31, 2009.

The 52.4% effective tax rate for the three months ended March 31, 2010 was due to the recognition of the tax benefits for certain state tax refunds.

58

The 167.8% effective tax rate for the three months ended March 31, 2009 was primarily due to recognition of items related to accrued interest for tax contingencies and adjustments to our 2009 net deferred tax liabilities to reflect changes in state tax law. Additionally, our effective tax rate for the three months ended March 31, 2009 was higher due to the relationship between non-deductible equity compensation as a percentage of our pre-tax income.

Our provision for income taxes is based on expected income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant management estimates and judgments are required in determining the provision for income taxes. We are routinely under audit by federal, state or local authorities regarding the timing and amount of deductions, allocation of income among various tax jurisdictions and compliance with federal, state and local tax laws. Tax assessments related to these audits may not arise until several years after tax returns have been filed. Although predicting the outcome of such tax assessments involves uncertainty, we believe that the recorded tax liabilities appropriately reflect our potential obligations under generally accepted accounting principles.

Segment Net Revenues and Earnings Before Interest and Taxes (“EBIT”)

The following table sets forth a summary of results of operations by segment:

(dollars in thousands)	Three Months Ended March 31, 2010		Percentage of Net Revenues		Three Months Ended March 31, 2009		Percentage of Net Revenues
Net revenues:
Home respiratory therapy and home medical equipment	$	278,316	54.7	%	$	294,651	57.1	%
Home infusion therapy		230,560	45.3			221,780	42.9
Total net revenues	$	508,876	100.0	%	$	516,431	100.0	%

EBIT is a measure used by our management to measure operating performance. EBIT is defined as net income (loss) plus interest expense and income taxes. EBIT is not a recognized term under Generally Accepted Accounting Principles (“GAAP”) and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.

	Three Months Ended March 31, 2010
(dollars in thousands)	Home  Respiratory Therapy and Home Medical Equipment		Percentage of Segment Net Revenues		Home Infusion Therapy		Percentage of Segment Net Revenues		Total
EBIT	$	9,866	3.5	%	$	20,823	9.0	%	$	30,689

	Three Months Ended March 31, 2009
(dollars in thousands)	Home  Respiratory Therapy and Home Medical Equipment		Percentage of Segment Net Revenues		Home Infusion Therapy		Percentage of Segment Net Revenues		Total
EBIT	$	23,523	8.0	%	$	9,396	4.2	%	$	32,919

We allocate certain expenses that are not directly attributable to a product line based upon segment headcount. For a reconciliation of net income (loss) to EBIT, see the table under “Results of Operations—EBIT” at the end of this section.

Home Respiratory Therapy and Home Medical Equipment Segment. For the home respiratory therapy and home medical equipment segment total net revenues decreased $16.4 million, or 5.5%, to $278.3 million in the three months ended March 31, 2010 from $294.7 million in the three months ended March 31, 2009. Revenues for the home respiratory therapy and home medical equipment segment decreased to 54.7% of total revenue in the three months ended March 31, 2010 from 57.1% in the three months ended March 31, 2009.

59

Home respiratory therapy revenues are derived primarily from the provision of oxygen systems, home ventilators, obstructive sleep apnea equipment, nebulizers, respiratory medications and related services. Revenues from the home respiratory therapy service line decreased by 5.2% in the three months ended March 31, 2010 compared to the three months ended March 31, 2009. The decrease in revenue resulted primarily from decreases in oxygen, sleep apnea and other respiratory revenue, due to the termination of or changes to certain payor contracts, as well as the impact of revenue recognized in the three months ended March 31, 2009 that was previously deferred for services performed prior to certain Medicare reimbursement reductions.

Home medical equipment revenues are derived from the rental and sale of equipment to assist patients with ambulation, safety and general care in and around the home. Home medical equipment revenues decreased by 7.6% in the three months ended March 31, 2010 compared to the three months ended March 31, 2009. The decrease was primarily due to the termination of or changes to certain payor contracts.

EBIT for the home respiratory and home medical equipment segment in the three months ended March 31, 2010 was $9.9 million compared to $23.5 million in the three months ended March 31, 2009. EBIT was 3.5% of segment net revenues in the three months ended March 31, 2010 compared to the 8.0% of segment net revenues in the three months ended March 31, 2009. This decrease in EBIT as a percentage of segment net revenues was primarily due to the unfavorable collection experience in the three months ended March 31, 2010 compared to the three months ended March 31, 2009 and an increase in sales, distribution and administrative costs as a percentage of net segment revenues due to a reduction in net segment revenues in the three months ended March 31, 2010 compared to the three months ended March 31, 2009.

Home Infusion Therapy Segment. For the home infusion therapy segment total net revenues increased $8.8 million, or 4.0%, to $230.6 million in the three months ended March 31, 2010 from $221.8 million in the three months ended March 31, 2009. Revenues for the home infusion therapy segment increased to 45.3% of total revenue in the three months ended March 31, 2010 from 42.9% in the three months ended March 31, 2009.

The home infusion therapy segment involves the administration of drugs or nutrients directly into the body intravenously through a needle or catheter. Infusion therapy services also include administering enteral nutrients directly into the gastrointestinal tract through a feeding tube. Home infusion therapy revenues increased by 4.0% in the three months ended March 31, 2010. The growth in revenue resulted primarily from an increase in the overall volume of specialty drugs, core drugs, non-core revenue and enteral nutrients. These increases were partially offset by a decrease in revenue due to the termination of a payor contract.

EBIT for the home infusion therapy segment in the three months ended March 31, 2010 was $20.8 million compared to $9.4 million in the three months ended March 31, 2009. EBIT was 9.0% of segment net revenues in the three months ended March 31, 2010 compared to 4.2% of segment net revenues in the three months ended March 31, 2009. This increase in EBIT as a percentage of segment net revenues was primarily due to an improvement in the gross profit margin in the three months ended March 31, 2010 compared to the three months ended March 31, 2009, and an improvement in sales, distribution and administrative costs as a percentage of net segment revenues in the three months ended March 31, 2010 compared to the three months ended March 31, 2009.

60

Year Ended December 31, 2009 Results Compared to the Period October 29, 2008 to December 31, 2008 Results

The following table compares year ended December 31, 2009 results with the period October 29, 2008 to December 31, 2008.

(in thousands)	Year Ended December 31, 2009			Percentage of Net  Revenues		Period October 29,  2008 to December 31, 2008			Percentage of Net  Revenues
Net revenues:
Fee for service arrangements	$	1,930,464		92.2	%	$	328,005		92.0	%
Capitation		164,097		7.8			28,660		8.0
TOTAL NET REVENUES		2,094,561		100.0			356,665		100.0
Costs and expenses:
Cost of net revenues:
Product and supply costs		638,452		30.5			105,120		29.5
Patient service equipment depreciation		101,681		4.9			17,539		4.9
Amortization of intangible assets		44,000		2.1			—		—
Home respiratory therapy services		34,700		1.7			6,270		1.8
Nursing services		36,345		1.7			6,276		1.8
Other		12,281		0.6			2,555		0.7
TOTAL COST OF NET REVENUES		867,459		41.4			137,760		38.6
Provision for doubtful accounts		57,919		2.8			14,329		4.0
Selling, distribution and administrative		1,050,134		50.1			179,362		50.3
Amortization of intangible assets		3,716		0.2			1,008		0.3
TOTAL COSTS AND EXPENSES		1,979,228		94.5			332,459		93.2
OPERATING INCOME		115,333		5.5			24,206		6.8
Interest expense		129,200		6.2			26,167		7.3
Interest income and other		(1,609	)	(0.1	)		(726	)	(0.2	)
LOSS BEFORE TAXES		(12,258	)	(0.6	)		(1,235	)	(0.3	)
Income tax (benefit) expense		(8,438	)	(0.4	)		659		0.2
NET LOSS	$	(3,820	)	(0.2	)%	$	(1,894	)	(0.5	)%

Net Revenues. Net revenues in the year ended December 31, 2009 were $2,094.6 million compared to $356.7 million in the period October 29, 2008 to December 31, 2008. Revenue for the year ended December 31, 2009 increased due to more operating days in the year ended December 31, 2009 compared to the period October 29, 2008 to December 31, 2008. In the year ended December 31, 2009 revenue was impacted by Medicare reimbursement reductions of $108.7 million that did not occur in the period October 29, 2008 to December 31, 2008. The Medicare reimbursement reductions primarily related to:

• respiratory drug reimbursement reductions effective April 1, 2008;

• changing the maximum rental period of oxygen equipment from an unlimited rental period to 36 months (the regulation effective date was January 2006; revenue was therefore impacted beginning in January 2009); and

• MIPPA legislation authorized an average of 9.5% payment reduction in the DMEPOS fee schedule effective January 2009.

We expect to continue to face pricing pressures from Medicare and Medicaid as well as from our managed care customers as these payers seek to lower costs by obtaining more favorable pricing from providers such as us. In addition to the pricing reductions, such changes could cause us to provide reduced levels of certain

61

products and services in the future, resulting in a corresponding reduction in revenue. See “Business— Government Regulation.” For the year ended December 31, 2009 and the period October 29, 2008 to December 31, 2008, revenues reimbursed under arrangements with Medicare and Medicaid were approximately 28% and 31%, respectively, as a percentage of total revenues. In the year ended December 31, 2009 and the period October 29, 2008 to December 31, 2008, no other third-party payor group represented more than 8% of our revenues. In fee for service arrangement revenue, rental and sale revenues comprise approximately $654.6 million or 33.9% and $1,275.9 million or 66.1% and $125.7 million or 38.3% and $202.3 or 61.7% in the year ended December 31, 2009 and the period October 29, 2008 to December 31, 2008.

Gross Profit. Gross profit margin is defined as total net revenues less total costs of total net revenues divided by total net revenues. The gross profit margin for the year ended December 31, 2009 was 58.6%, compared to 61.4% in the period October 29, 2008 to December 31, 2008. Included in cost of revenue for the year ended December 31, 2009 is $44.0 million of amortization related to our patient backlog intangible asset which was provisional in the period October 29, 2008 to December 31, 2008. In addition, this decrease in gross profit margin was primarily due to the negative impact of the Medicare reimbursement reductions. Excluding the intangible asset amortization and the impact of Medicare reimbursement reductions, the overall gross profit margin percentage for the year ended December 31, 2009 would have been 62.4%, compared to 61.4% in the period October 29, 2008 to December 31, 2008. This improvement in the gross profit margin was due to a shift in product mix to a higher volume of products with lower costs as a percentage of revenue in our home respiratory therapy service line and our ability to obtain favorable pricing on the purchase of products and supplies in our all three of our service lines. These improvements in the gross profit margin were partially offset by a decrease in the gross profit margin in our home infusion therapy service line as a result of a shift in product mix to more specialty drugs, which have a higher product cost as a percentage of revenue.

Provision for Doubtful Accounts. The provision for doubtful accounts is based on management’s estimate of the net realizable value of accounts receivable after considering actual write-offs of specific receivables. Accounts receivable estimated to be uncollectible are provided for by computing a required reserve using estimated future cash receipts based on historical cash receipts collections as a percentage of revenue. In addition, management may adjust for changes in billing practices, cash collection protocols or practices, or changes in general economic conditions, contractual issues with specific payors, new markets or products. The provision for doubtful accounts, expressed as a percentage of total net revenues, was 2.8% and 4.0% in the year ended December 31, 2009 and the period October 29, 2008 to December 31, 2008, respectively. The decrease in the provision for doubtful accounts in 2009 is primarily the result of favorable collections experience occurring in the year ended December 31, 2009 as a percentage compared to the period October 29, 2008 to December 31, 2008.

Selling, Distribution and Administrative Expenses. Selling, distribution and administrative expenses are comprised of expenses incurred in direct support of operations and those associated with administrative functions. Expenses incurred by the operating locations include salaries and other expenses in the following functional areas: selling, distribution, clinical services, warehousing and repair. Many of these operating costs are directly variable with revenue growth patterns. Some are also very sensitive to market-driven price fluctuations such as facility lease and fuel costs. The administrative expenses include overhead costs incurred by the operating locations and regional and corporate support functions. These expenses are generally less sensitive to fluctuations in revenue growth than operating costs.

Selling, distribution and administrative expenses, expressed as a percentage of total net revenues were 50.1% for the year ended December 31, 2009 compared to 50.3% for the period October 29, 2008 to December 31, 2008. Adjusted for Medicare reimbursement reductions of $108.7 million in the year ended December 31, 2009, the selling, distribution and administrative expense percentage for 2009 would have been 47.7% of revenue in the year ended December 31, 2009.

In the year ended December 31, 2009 and the period October 29, 2008 to December 31, 2008 labor and other related expenses as a percentage of total net revenues were 33.0% and 32.9%, respectively. For the year

62

ended December 31, 2009 when adjusting for the impact of Medicare reimbursement reductions, labor and related costs were 31.4% of total revenue. The decrease in labor and other related expenses was primarily due to reduced salaries and wages as a result of headcount reductions in 2009 and lower outside labor. These decreases were partially offset by increases due to higher management incentive compensation program expense, as a result of meeting the targets in 2009 and not in 2008, and higher termination and retention expense due to the projects to outsource certain billing, collection and information technology functions.

In the year ended December 31, 2009 and the period October 29, 2008 to December 31, 2008 other operating expenses as a percentage of total net revenues were 17.1% and 17.4%, respectively. For the year ended December 31, 2009 when adjusting for the impact of Medicare reimbursement reductions, other operating expenses were 16.3% of total revenue. The decreases in other operating expenses were primarily due to delivery costs, principally lower fuel prices and lower freight costs due to renegotiation of a contract with a vendor. These decreases were partially offset by expenses incurred in 2009 associated with our projects to outsource certain billing, collection and information technology functions that did not exist in 2008, professional fees incurred in connection with the sale of our outstanding Series A-1 Notes and Series A-2 Notes and expenses associated with other corporate initiative projects in 2009.

Amortization of Intangible Assets. Amortization of intangible assets was 0.2% and 0.3% of total net revenues in the year ended December 31, 2009 and the period October 29, 2008 to December 31, 2008, respectively. The amortization expense primarily results from the revaluation of intangible assets as a result of the Merger, including the finalization of the intangible asset valuation in 2009.

Interest Expense. Interest expense as a percentage of total net revenues was 6.2% for the year ended December 31, 2009. Adjusted for the impact of Medicare reimbursement reductions interest expense was 5.9% of total net revenues in the year ended December 31, 2009. Interest expense for the period October 29, 2008 to December 31, 2008 was 7.3% of revenue. This decrease is primarily due to higher interest expense in the two month period due to higher borrowing on the ABL facility and higher deferred debt costs in 2008 related to the Predecessor Revolving Credit Facility and Senior Secured Bridge Credit Agreement.

Interest Income and Other. Interest income and other was 0.1% as a percentage of total net revenues for the year ended December 31, 2009 compared to 0.2% as a percentage of total net revenues for the period October 29, 2008 to December 31, 2008. This decrease is due to a decrease in interest rates earned on invested cash.

Income Tax Benefit. The income tax benefit as a percentage of total net revenues for the year ended December 31, 2009 was 0.4% compared to a tax expense as a percentage of total net revenues of 0.2% for the period October 29, 2008 to December 31, 2008. The effective tax rate was 68.8% at December 31, 2009 compared to 53.4% for the period October 29, 2008 to December 31, 2008. The income tax benefit in the year ended December 31, 2009 resulted from (1) a reduction in our valuation allowances related to state net operating losses and other state deferred tax assets and (2) a decrease in our tax reserves due to settlements with state tax agencies and the expiration of statute of limitations.

Segment Net Revenues and EBIT

The following table sets forth a summary of results of operations by segment:

(in thousands)	Year Ended December 31, 2009		Percentage of Net Revenues		Period October 29, 2008 to December 31, 2008		Percentage of Net Revenues
Net revenues:
Home respiratory therapy and home medical equipment	$	1,169,609	55.8	%	$	209,567	58.8	%
Home infusion therapy		924,952	44.2			147,098	41.2
Total net revenues	$	2,094,561	100.0	%	$	356,665	100.0	%

63

(in thousands)	Year Ended December 31, 2009
	Home  Respiratory Therapy and Home Medical Equipment		Percentage of Segment Net Revenues		Home Infusion Therapy		Percentage of Segment Net Revenues		Total
EBIT	$	50,167	4.3	%	$	65,667	7.1	%	$	115,834

(in thousands)	Period October 29, 2008 to December 31, 2008
	Home  Respiratory Therapy and Home Medical Equipment		Percentage of Segment Net Revenues		Home Infusion Therapy			Percentage of Segment Net Revenues		Total
EBIT	$	26,255	12.5	%	$	(1,740	)	(1.2	)%	$	24,515

We allocate certain expenses that are not directly attributable to a product line based upon segment headcount. For a reconciliation of net income (loss) to EBIT, see the table under “Results of Operations—EBIT” at the end of this section.

Home Respiratory Therapy and Home Medical Equipment Segment. Net revenues for the home respiratory therapy and home medical equipment segment in the year ended December 31, 2009 was $1,169.6 million compared to $209.6 million in the period October 29, 2008 to December 31, 2008. Revenues for the home respiratory therapy and home medical equipment segment decreased to 55.8% of total revenue in the year ended December 31, 2009 from 58.8% in the period October 29, 2008 to December 31, 2008.

Home respiratory therapy revenues are derived primarily from the provision of oxygen systems, home ventilators, obstructive sleep apnea equipment, nebulizers, respiratory medications and related services. Revenues from the respiratory therapy service line decreased to 48.4% of total revenue in the year ended December 31, 2009 compared to 51.5% in the period October 29, 2008 to December 31, 2008. The majority of Medicare reimbursement reductions discussed above impacted the home respiratory therapy services line. Such reductions were $104.0 million for the year ended December 31, 2009. Adjusted for the Medicare reimbursement reductions, respiratory therapy revenues for 2009 would have been 50.7%. Home respiratory therapy revenues as a percentage of total revenue decreased as a result of increased sales as a percentage of total revenue in our home infusion therapy service line.

Home medical equipment revenues are derived from the rental and sale of equipment to assist patients with ambulation, safety and general care in and around the home. Home medical equipment revenues were 7.5% of total revenue in the year ended December 31, 2009 compared to 7.3% of total revenue in the period October 29, 2008 to December 31, 2008. During the year ended December 31, 2009, $1.9 million of the Medicare reimbursement reductions impacted this service line. Excluding the impact of the Medicare reimbursement reductions, home medical equipment revenue would have been 7.2% of total revenues in the year ended December 31, 2009.

EBIT for the home respiratory therapy and home medical equipment segment in the year ended December 31, 2009 was $50.2 million compared to $26.3 million in the period October 29, 2008 to December 31, 2008. EBIT was 4.3% of segment net revenues in the year ended December 31, 2009 compared to 12.5% of segment net revenues in the period October 28, 2008 to December 31, 2008. This decrease in EBIT as a percentage of segment net revenues was primarily due to the negative impact of the Medicare reimbursement reductions. This decrease in the EBIT was partially offset by a shift in product mix to a higher volume of products with lower costs as a percentage of segment net revenues in our home respiratory therapy service line and our ability to obtain favorable pricing on the purchase of products and supplies.

Home Infusion Therapy Segment. For the home infusion therapy segment total net revenues increased $777.9 million, or 528.8%, to $925.0 million in the year ended December 31, 2009 from $147.1 million in the period October 29, 2008 to December 31, 2008. Revenues for the home infusion therapy segment increased to 44.2% of total revenue in the year ended December 31, 2009 from 41.2% in the period October 29, 2008 to December 31, 2008.

64

Home infusion therapy involves the administration of drugs or nutrients directly into the body intravenously through a needle or catheter. Infusion therapy services also include administering enteral nutrients directly into the gastrointestinal tract through a feeding tube. Home infusion therapy revenues as a percentage of total revenue increased to 44.2% in the year ended December 31, 2009 compared to 41.2% in the period October 29, 2008 to December 31, 2008. The growth in revenue in the year ended December 31, 2009 resulted primarily from an increase in volume of specialty drugs, core drugs and enteral nutrients. The increase in these drugs was offset by a decrease in revenue due to the termination of a payor contract, and a decrease in volume of non-core revenue. As a result of increasing volume, specialty drug revenue also increased as a percentage of total home infusion therapy revenue. During the year ended December 31, 2009, Medicare reimbursement reductions impacted this service line by $2.8 million. Excluding the impact of Medicare reimbursement reductions, home infusion therapy revenue would have been 42.1% as a percentage of total revenue for the year ended December 31, 2009.

EBIT for the home infusion therapy segment in the year ended December 31, 2009 was $65.7 million compared to $(1.7) million in the period October 28, 2008 to December 31, 2008. EBIT was 7.1% of segment net revenues in the year ended December 31, 2009 compared to (1.2)% of segment net revenues in the period October 29, 2008 to December 31, 2008. This increase in EBIT was primarily due to our ability to obtain favorable pricing on the purchase of products and supplies and our ability to reduce our selling distribution and administrative costs as a percentage of segment net revenues partially offset by a decrease in the gross profit margin as a result of a shift in product mix to more specialty drugs, which have a higher product cost as a percentage of segment net revenues.

65

Year Ended December 31, 2009 Results Compared to Pro forma Year Ended December 31, 2008 Results

The following table compares the year ended December 31, 2009 results to the pro forma results for the year ended December 31, 2008 to reflect the Merger if it had occurred on January 1, 2008. We are providing a comparison of the year ended December 31, 2009 to the pro forma year ended December 31, 2008 for illustrative purposes only to facilitate the comparison of the results of the full year 2008 with the full year 2009.

	Year Ended December 31, 2009			Period October  29, 2008 to December 31, 2008			Period January  1, 2008 to October 28, 2008			Adjustments for the Transactions			Year Ended December 31, 2008 Pro forma			Year Ended December 31, 2009 Compared to Pro forma Year Ended December 31, 2008
(in thousands)																Increase/ Decrease			Percentage Change
	(Successor)			(Successor)			(Predecessor)
Net revenues:
Fee for service arrangements	$	1,930,464		$	328,005		$	1,630,767		$	—		$	1,958,772		$	(28,308	)	(1.4	)%
Capitation		164,097			28,660			142,522			—			171,182			(7,085	)	(4.1	)
TOTAL NET REVENUES		2,094,561			356,665			1,773,289			—			2,129,954			(35,393	)	(1.7	)
Costs and expenses:
Cost of net revenues:
Product and supply costs		638,452			105,120			526,610			—			631,730			6,722		1.1
Patient service equipment depreciation		101,681			17,539			89,246			—			106,785			(5,104	)	(4.8	)
Amortization of intangible assets		44,000			—			—			42,920	(a)		42,920			1,080		2.5
Home respiratory therapy services		34,700			6,270			31,893			—			38,163			(3,463	)	(9.1	)
Nursing services		36,345			6,276			29,773			—			36,049			296		0.8
Other		12,281			2,555			13,815			—			16,370			(4,089	)	(25.0	)
TOTAL COST OF NET REVENUES		867,459			137,760			691,337			42,920			872,017			(4,558	)	(0.5	)
Provision for doubtful accounts		57,919			14,329			33,626			—			47,955			9,964		20.8
Selling, distribution and administrative		1,050,134			179,362			924,536			(22,613	)(b)		1,081,285			(31,151	)	(2.9	)
Amortization of intangible assets		3,716			1,008			3,461			(796	)(c)		3,673			43		1.2
TOTAL COSTS AND EXPENSES		1,979,228			332,459			1,652,960			19,511			2,004,930			(25,702	)	(1.3	)
OPERATING INCOME		115,333			24,206			120,329			(19,511	)		125,024			(9,691	)	(7.8	)
Interest expense		129,200			26,167			31,838			74,270	(d)		132,275			(3,075	)	(2.3	)
Interest income and other		(1,609	)		(726	)		(2,154	)		—			(2,880	)		1,271		(44.1	)
(LOSS) INCOME BEFORE TAXES		(12,258	)		(1,235	)		90,645			(93,781	)		(4,371	)		(7,887	)	180.4
Income tax (benefit) expense		(8,438	)		659			34,192			(36,829	)(e)		(1,978	)		(6,460	)	326.6
(LOSS) INCOME	$	(3,820	)	$	(1,894	)	$	56,453		$	(56,952	)	$	(2,393	)	$	(1,427	)	59.6	%

(a) Reflects amortization expense of patient backlog intangible assets with finite lives that were identified as a result of the Merger, as set forth below:

(in thousands)	Gross Carrying Amount at December 31, 2009		Life	Annual Amortization Expense
Patient backlog	$	44,000	1.1	$	42,920

66

The adjustment was calculated as follows:

(in thousands)	Year Ended December 31, 2008
Amortization expense as a results of the Merger	$	42,920
Less: historical amortization expense		—
Total adjustment	$	42,920

(b) Represents adjustments to expenses as set forth below.

(in thousands)	Year Ended December 31, 2008
Legal, accounting and other expenses directly attributable to the Merger	$	(4,458	)
Management fee(i)		5,773
Accelerated stock option vesting (ii)		(22,328	)
Executive bonus payments (iii)		(1,600	)
Total adjustments to expenses	$	(22,613	)

(i) Reflects an annual management fee of $7.0 million payable to an affiliate of the Sponsor under the transaction and management fee agreement.

The adjustments for the management fee were calculated as follows:

(in thousands)	Year Ended December 31, 2008
Management fee	$	7,000
Less: management fee recorded for the periods shown		(1,227	)
Total adjustment	$	5,773

(ii) Reflects accelerated compensation expense due to the vesting and payout of all stock-based awards as a result of the Merger.

(iii) Represents incremental bonuses paid as a result of the Merger to certain executive officers pursuant to change in control provisions in their employment agreements.

(c) Reflects the amortization expense of intangible assets with finite lives that were identified as a result of the Merger, as set forth below.

(in thousands)	Gross Carrying Amount at December 31, 2009		Life	Annual Amortization Expense
Capitated relationships	$	40,000	20	$	2,000
Payor relationships		11,000	20		550
Net favorable leasehold interest		3,553	3.2		1,123
Total intangible assets with finite lives	$	54,553		$	3,673

The adjustments were calculated as follows:

(in thousands)	Year Ended December 31, 2008
Amortization expense as a results of the Merger	$	3,673
Less: historical amortization expense		(4,469	)
Total adjustment	$	(796	)

67

(d) Reflects interest expense resulting from our new capital structure (using current applicable LIBOR rates) as set forth below.

(in thousands)	Balance		Assumed Rate		Interest Expense Year Ended December 31, 2008
Senior Secured Bridge Credit Agreement(1)	$	1,010,000	12.00	%	$	121,200
ABL Facility(2)		150,000	1.20	%		1,803
Ongoing interest on other existing debt to be retained(3)		4,733				1,869
Total cash interest expense						124,872
Amortization of capitalized debt issuance costs related to the Merger(4)		57,678				7,403
Total pro forma interest expense related to the Merger						132,275
Less: historical interest expense						(58,005	)
Total adjustment to pro forma interest expense related to the Merger						74,270
Total pro forma interest expense					$	132,275

(1) Represents $1,010.0 million borrowed under the Senior Secured Bridge Credit Agreement entered into in October 2008, which bears interest at the rate of 12.00% per annum.

(2) Reflects $16.1 million of drawn letters of credit, no borrowings and the undrawn portion in the amount of $133.9 million under the ABL Facility. The interest rate on the ABL Facility used to compute pro format interest expense is an assumed blended interest rate of the letters of credit and the undrawn portion of the ABL Facility. The interest rate on borrowings under the ABL Facility is variable and had there been borrowings under the ABL Facility, the interest rate on the borrowed portion would have been determined using a three-month LIBOR rate of 0.25% plus an assumed applicable margin of 2.75%, based upon an assumed average excess availability of $133.9 million. The pro forma fee expense for letters of credit is assumed at 2.75% to 3.25%, depending on the average excess availability, with the lowest average excess availability resulting in the highest letters of credit fees and applicable margin. The ABL Facility also requires a fee for undrawn amounts ranging from 0.50% to 1.00% depending on the utilization percentage, with the lowest utilization rate resulting in the highest fee rate. The pro forma interest expense assumes a utilization fee of 1.00%. See “—Liquidity and Capital Resources” for more information. A 0.125% variance in the assumed blended interest rate for the ABL Facility would amount to a change in total annual pro forma interest expense of $0.2 million.

(3) Represents $4.7 million of capital leases, deferred compensation and certain other indebtedness that we retained following the Refinancing. On going interest amounts for debt that were retained after the Transactions are based upon actual interest amounts recorded during each of the pro forma periods. Includes interest expense recorded in relation to accretion of the Company’s deferred compensation plan of approximately $0.1 million and $1.0 million for the historical period of October 29, 2008 to December 31, 2008 and the historical period of January 1, 2008 to October 28, 2008.

(4) Debt issuance costs related to the Merger. Amortization is calculated using the effective interest method over the terms of the related debt.

68

(e) Reflects the estimated tax impact relating to the adjustments for the Merger, calculated at estimated statutory rates as set forth below.

(in thousands)	Year Ended December 31, 2008
Total adjustments for the Merger	$	(93,781	)
Adjustments without tax benefit		2,377
Adjustments resulting in tax benefit		(96,158	)
Statutory tax rate		38.3	%
Tax effect of the adjustments for the Merger	$	(36,829	)

Net Revenues. Net revenues decreased $35.4 million, or 1.7%, to $2,094.6 million in the year ended December 31, 2009 from $2,130.0 million in the pro forma year ended December 31, 2008. The revenue decline for the year ended December 31, 2009 was impacted by Medicare reimbursement reductions of $108.7 million. Had those reductions not been implemented, revenues for 2009 would have increased by 3.4%. The Medicare reimbursement reductions primarily related to:

• respiratory drug reimbursement reductions effective April 1, 2008;

• changing the maximum rental period of oxygen equipment from an unlimited rental period to 36 months (regulation effective date of January 2006); and

• MIPPA legislation authorized an average of 9.5% payment reduction in the DMEPOS fee schedule effective January 2009.

We expect to continue to face pricing pressures from Medicare and Medicaid as well as from our managed care customers as these payers seek to lower costs by obtaining more favorable pricing from providers such as us. In addition to the pricing reductions, such changes could cause us to provide reduced levels of certain products and services in the future, resulting in a corresponding reduction in revenue. See “Business—Government Regulation.”

Gross Profit. Gross profit margin is defined as total net revenues less total costs of total net revenues divided by total net revenues. The gross profit margin in the year ended December 31, 2009 was 58.6%, compared to 59.1% in the pro forma year ended December 31, 2008. Included in cost of revenue is amortization related to our patient backlog intangible asset of $44.0 million during the year ended December 31, 2009 and $42.9 million during the pro forma year ended December 31, 2008. As of December 31, 2009, the patient backlog intangible asset was fully amortized. Excluding the impact of the intangible asset amortization discussed above, the overall gross profit margin percentage for the year ended December, 31, 2009 would have been 60.7%, compared to 61.1% in the pro forma year ended December 31, 2008. This decrease of 0.4% in gross profit margin was primarily due to the negative impact of the Medicare reimbursement reductions. Excluding the intangible asset amortization and the impact of Medicare reimbursement reductions, the overall gross profit margin percentage for the year ended December 31, 2009 would have been 62.4%, compared to 61.1% in the pro forma year ended December 31, 2008. This improvement was primarily the result of a shift in product mix to a higher volume of products with lower cost as a percentage of revenue in our home respiratory service line; our ability to obtain favorable pricing on the purchase of products and supplies in all three of our service lines and the sale of the rehabilitation product line in June 2008. These favorable items were partially offset by a decrease in rental revenue with no corresponding decrease in fixed costs in our home medical equipment service line and a decrease in gross profit margin, as the result of the shift in product mix in our infusion therapy drugs to more specialty drugs, which have a higher product cost as a percentage of net revenues.

Provision for Doubtful Accounts. The provision for doubtful accounts is based on management’s estimate of the net realizable value of accounts receivable after considering actual write-offs of specific receivables.

69

Accounts receivable estimated to be uncollectible are provided for by computing a required reserve using estimated future cash receipts based on historical cash receipts collections as a percentage of revenue. In addition, management may adjust for changes in billing practices, cash collection protocols or practices, or changes in general economic conditions, contractual issues with specific payors, new markets or products. The provision for doubtful accounts, expressed as a percentage of total net revenues, was 2.8% and 2.3% in the year ended December 31, 2009 and the pro forma year ended December 31, 2008, respectively. The increased provision for doubtful accounts in 2009 is primarily the result of favorable collections experience occurring in 2008 compared to 2009.

Selling, Distribution and Administrative Expenses. Selling, distribution and administrative expenses are comprised of expenses incurred in direct support of operations and those associated with administrative functions. Expenses incurred by the operating locations include salaries and other expenses in the following functional areas: selling, distribution, clinical services, warehousing and repair. Many of these operating costs are directly variable with revenue growth patterns. Some are also very sensitive to market-driven price fluctuations such as facility lease and fuel costs. The administrative expenses include overhead costs incurred by the operating locations, regional and corporate support functions. These expenses are generally less sensitive to fluctuations in revenue growth than operating costs.

Selling, distribution and administrative expenses, expressed as a percentage of total net revenues was 50.1% for the year ended December 31, 2009 compared to 50.8% for the pro forma year ended December 31, 2008. Adjusted for Medicare reimbursement reductions of $108.7 million, the selling, distribution and administrative expense percentage for 2009 would have been 47.7% of revenue.

Selling, distribution and administrative expenses decreased by $31.2 million for the year ended December 31, 2009 over the pro forma year ended December 31, 2008. The $31.2 million decrease was composed of a $12.9 million decrease in labor and other related expenses and by a decrease in other operating expenses of $18.3 million. The decrease in labor and other related expenses was primarily due to reduced salaries and wages as a result of headcount reductions in 2009, the sale of our rehabilitation product line in July 2008, the reduction in expenses related to equity incentive awards, and lower outside labor. These decreases were partially offset by increases due to higher management incentive compensation program expense as a result of meeting the targets in 2009 and not in 2008, and higher termination and retention expense due to the projects to outsource certain billing, collection and information technology functions, and the Merger. The decreases in other operating expenses of $18.3 million were primarily due to delivery costs, principally lower fuel prices, lower freight costs due to renegotiation of a contract with a vendor, reduction in expenses due to sale of our rehabilitation product line in July 2008 and lower depreciation on information technology assets. These decreases were partially offset by expenses incurred in 2009 associated with our projects to outsource certain billing, collection and information technology functions that did not exist in 2008, professional fees incurred in connection with the sale of our outstanding Series A-1 Notes and Series A-2 Notes and expenses associated with other corporate initiative projects in 2009.

Amortization of Intangible Assets. Amortization of intangible assets was $3.7 million in the year ended December 31, 2009 and in the pro forma year ended December 31, 2008. The amortization expense primarily results from the revaluation of intangible assets as a result of the Merger, including the finalization of the intangible asset valuation in 2009.

Interest Expense. Interest expense decreased $3.1 million, or 2.3%, to $129.2 million in the year ended December 31, 2009 from $132.3 million in the pro forma year ended December 31, 2008. This decrease is primarily due to a lower interest rate of 11.8% in the year ended December 31, 2009 as compared to 12.0% for the pro forma year ended December 31, 2008.

Interest Income and Other. Interest income and other decreased $1.3 million, or 44.1%, to $1.6 million in the year ended December 31, 2009 from $2.9 million in the pro forma year ended December 31, 2008.

70

Income Tax Benefit. Income tax benefit increased $6.5 million to $(8.4) million in the year ended December 31, 2009 from $(1.9) million in the pro forma year ended December 31, 2008. The increase in income tax benefit in the year ended December 31, 2009 from the pro forma year ended December 31, 2008 resulted from (1) a reduction in our valuation allowances related to state net operating losses and other state deferred tax assets and (2) a decrease in our tax reserves due to settlements with state tax agencies and the expiration of statute of limitations. The reductions in our valuation allowances and tax reserves resulted in a 68.8% effective tax benefit for the year ended December 31, 2009 compared with 45.3% for the pro forma year ended December 31, 2008.

Segment Net Revenues and EBIT

The following table sets forth a summary of results of operations by segment:

(in thousands)	Year Ended December 31, 2009		Percentage of Net Revenues		Pro Forma Year Ended December 31, 2008		Percentage of Net Revenues
Net revenues:
Home respiratory therapy and home medical equipment	$	1,169,609	55.8	%	$	1,284,278	60.3	%
Home infusion therapy		924,952	44.2			845,676	39.7
Total net revenues	$	2,094,561	100.0	%	$	2,129,954	100.0	%

	Year Ended December 31, 2009
(in thousands)	Home  Respiratory Therapy and Home Medical Equipment		Percentage of Segment Net Revenues		Home Infusion Therapy		Percentage of Segment Net Revenues		Total
EBIT	$	50,167	4.3	%	$	65,667	7.1	%	$	115,834

	Pro Forma Year Ended December 31, 2008
(in thousands)	Home Respiratory Therapy and Home Medical Equipment		Percentage of Segment Net Revenues		Home Infusion Therapy		Percentage of Segment Net Revenues		Total
EBIT	$	111,708	8.7	%	$	14,188	1.7	%	$	125,896

We allocate certain expenses that are not directly attributable to a product line based upon segment headcount. For a reconciliation of net income (loss) to EBIT, see the table under “Results of Operations—EBIT” at the end of this section.

Home Respiratory Therapy and Home Medical Equipment Segment: For the home respiratory therapy and home medical equipment segment total net revenues decreased $114.7 million, or 8.9%, to $1,169.6 million in the year ended December 31, 2009 from $1,284.3 million in the pro forma year ended December 31, 2008. Revenues for the home respiratory therapy and home medical equipment segment decreased to 55.8% of total revenue in the year ended December 31, 2009 from 60.3% in the pro forma year ended December 31, 2008.

Home respiratory therapy revenues are derived primarily from the provision of oxygen systems, home ventilators, obstructive sleep apnea equipment, nebulizers, respiratory medications and related services. Revenues from the home respiratory therapy service line decreased by 7.6% in the year ended December 31, 2009 compared to the pro forma year ended December 31, 2008. The majority of Medicare reimbursement reductions discussed above impacted the home respiratory therapy services line. Such reductions were $104.0 million for year ended December 31, 2009. Adjusted for the Medicare reimbursement reductions, respiratory therapy revenues for 2009 would have increased by 1.9%. The increase in revenue, excluding the Medicare reimbursement reductions, resulted primarily from increases in oxygen, sleep apnea, and ventilator revenue, partially offset by decreases in respiratory medication revenue and nebulizer revenue.

71

Home medical equipment revenues are derived from the rental and sale of equipment to assist patients with ambulation, safety and general care in and around the home. Home medical equipment revenues decreased by 16.6% in the year ended December 31, 2009 compared to the pro forma year ended December 31, 2008. The decrease was primarily due to the sale of our rehabilitation product line in July 2008. In 2009, $1.9 million of the Medicare reimbursement reductions impacted this service line. Excluding the impact of the Medicare reimbursement reductions, home medical equipment revenues would have decreased 15.6% for the year ended December 31, 2009.

EBIT for the home respiratory and home medical equipment segment in the year ended December 31, 2009 was $50.2 million compared to $111.7 million in the pro forma year ended December 31, 2008. EBIT was 4.3% of segment net revenues in the year ended December 31, 2009 compared to the 8.7% of segment net revenues in the pro forma year ended December 31, 2008. This decrease in EBIT as a percentage of segment net revenues was primarily due to the negative impact of the Medicare reimbursement reductions and a decrease in rental revenue with no corresponding decrease in fixed costs in our home medical equipment service line. These decreases were partially offset by an improvement in gross profit margin as a result of a shift in product mix to a higher volume of products with lower cost as a percentage of segment net revenues in our home respiratory therapy service line; our ability to obtain favorable pricing on the purchase of products and supplies; and the sale of the rehabilitation product line in June 2008.

Home Infusion Therapy Segment. For the home infusion therapy segment total net revenues increased $79.3 million, or 9.4%, to $925.0 million in the year ended December 31, 2009 from $845.7 million in the pro forma year ended December 31, 2008. Revenues for the home infusion therapy segment increased to 44.2% of total revenue in the year ended December 31, 2009 from 39.7% in the pro forma year ended December 31, 2008.

The home infusion therapy segment involves the administration of drugs or nutrients directly into the body intravenously through a needle or catheter. Infusion therapy services also include administering enteral nutrients directly into the gastrointestinal tract through a feeding tube. Home infusion therapy revenues increased by 9.4% in the year ended December 31, 2009. The growth in revenue in the year ended December 31, 2009 resulted primarily from an increase in volume of specialty drugs, core drugs and enteral nutrients. The increase in these drugs was offset by a decrease in revenue due to the termination of a payor contract, and a decrease in volume of non-core revenue. As a result of increasing volume, specialty drug revenue also increased as a percentage of total home infusion therapy revenue. During the year ended December 31, 2009, Medicare reimbursement reductions impacted this service line by $2.8 million. Excluding the impact of Medicare reimbursement reductions, home infusion therapy revenue would have increased by 9.7%.

EBIT for the home infusion therapy segment in the year ended December 31, 2009 was $65.7 million compared to $14.2 million in the pro forma year ended December 31, 2008. EBIT was 7.1% of segment net revenues in the year ended December 31, 2009 compared to 1.7% of segment net revenues in the pro forma year ended December 31, 2008. This increase in EBIT was due to the increase in segment net revenues and the result of favorable product costs on our enteral nutrients and our ability to reduce our selling distribution and administrative costs as a percentage of segment net revenues. This favorability was partially offset by a decrease in gross profit margin, as the result of shift in product mix in our infusion therapy drugs to more specialty drugs, which have a higher product cost as a percentage of segment net revenues.

72

The Period January 1, 2008 to October 28, 2008 Results Compared to Year Ended December 31, 2007 Results

(in thousands)	Period January 1, 2008  to October 28, 2008			Percentage of Net Revenues		Year Ended December 31, 2007			Percentage of Net Revenues
Net revenues:
Fee for service arrangements	$	1,630,767		92.0	%	$	1,465,303		89.8	%
Capitation		142,522		8.0			166,498		10.2
TOTAL NET REVENUES		1,773,289		100.0			1,631,801		100.0
Costs and expenses:
Cost of net revenues:
Product and supply costs		526,610		29.7			386,496		23.7
Patient service equipment depreciation		89,246		5.0			110,775		6.8
Amortization of intangible assets		—		—			—		—
Home respiratory therapy services		31,893		1.8			38,886		2.4
Nursing services		29,773		1.7			11,353		0.7
Other		13,815		0.8			17,482		1.1
TOTAL COST OF NET REVENUES		691,337		39.0			564,992		34.6
Provision for doubtful accounts		33,626		1.9			43,138		2.6
Selling, distribution and administrative		924,536		52.1			862,062		52.8
Amortization of intangible assets		3,461		0.2			3,079		0.2
TOTAL COSTS AND EXPENSES		1,652,960		93.2			1,473,271		90.3
OPERATING INCOME		120,329		6.8			158,530		9.7
Interest expense		31,838		1.8			22,447		1.4
Interest income and other		(2,154	)	(0.1	)		(1,954	)	(0.1	)
INCOME BEFORE TAXES		90,645		5.1			138,037		8.5
Income tax expense		34,192		1.9			51,998		3.2
NET INCOME	$	56,453		3.2	%	$	86,039		5.3	%

Net Revenues. Net revenues increased $141.5 million, or 8.7%, to $1,773.3 million in the period January 1, 2008 to October 28, 2008 from $1,631.8 million in the year ended December 31, 2007. The increase in revenue was primarily in our infusion service line, due to service line growth subsequent to our acquisition of Coram in December 2007, offset by the fact that the period January 1, 2008 to October 28, 2008 had approximately two months less than the year ended December 31, 2007. The revenue growth rate for the period January 1, 2008 to October 28, 2008 was impacted by incremental Medicare reimbursement reductions of $18.6 million due to reimbursement reductions imposed in 2007 and 2008. The Medicare reimbursement reductions in 2008 related to respiratory drug reimbursement reductions, which were effective April 1, 2008.

We expect to continue to face pricing pressures from Medicare and Medicaid as well as from our managed care customers as these payers seek to lower costs by obtaining more favorable pricing from providers such as us. In addition to the pricing reductions, such changes could cause us to provide reduced levels of certain products and services in the future, resulting in a corresponding reduction in revenue. However, given our high volume of managed care business, we are well-positioned among our competitors with respect to serving the managed care market with a diversified array of services. See “Business—Government Regulation.”

Gross Profit. Gross profit margin is defined as total net revenues less total costs of total net revenues divided by total net revenues. The gross profit margin for the period January 1, 2008 to October 28, 2008 was 61.0% compared to 65.4% for the year ended December 31, 2007. The decrease in gross margin is due to the acquisition of the Coram home infusion therapy business being included in the entire period of January 1, 2008 to October 31, 2008 and only in one month in the year end December 31, 2007. The Coram home infusion therapy business has a lower gross profit margin due to the nature of the infusion business compared to our home respiratory therapy and home medical equipment service lines. Excluding the Coram acquisition, the gross profit

73

margin was 67.6% for the period January 1, 2008 to October 28, 2008 compared to 65.4% for the year ended December 31, 2007. This increase in the gross profit margin percentage resulted from our ability to secure favorable pricing on the purchases of products and supplies and lower depreciation expense.

Provision for Doubtful Accounts. The provision for doubtful accounts is based on management’s estimate of the net realizable value of accounts receivable after considering actual write-offs of specific receivables. Management considers historical realization data, accounts receivable aging trends, other operating trends, the extent of contracted business and business combinations. Also considered are relevant business conditions such as governmental and managed care payor claims processing procedures and system changes. Additionally, focused reviews of certain large and/or problematic payors are performed. The provision for doubtful accounts, expressed as a percentage of net revenues, was 1.9% in the period January 1, 2008 to October 28, 2008 and 2.6% for the year ended December 31, 2007. The decrease in the period January 1, 2008 to October 28, 2008 from the 2007 levels resulted primarily from a decrease in the aging of our accounts receivable.

Selling, Distribution and Administrative Expenses. Selling, distribution and administrative expenses are comprised of expenses incurred in direct support of operations and those associated with administrative functions. Expenses incurred by the operating locations include salaries and other expenses in the following functional areas: selling, distribution, clinical services, warehousing and repair. Many of these operating costs are directly variable with revenue growth patterns. Some are also very sensitive to market-driven price fluctuations such as facility lease and fuel costs. The administrative expenses include overhead costs incurred by the operating locations, regional and corporate support functions. These expenses do not fluctuate with revenue growth as closely as do operating costs.

Selling, distribution and administrative expenses, expressed as a percentage of total net revenues, was 52.1% for the period January 1, 2008 to October 28, 2008 compared to 52.8% for the year ended December 31, 2007. Selling, distribution and administrative expenses increased by $62.5 million for the period January 1, 2008 to October 28, 2008 compared to the year ended December 31, 2007. For period January 1, 2008 to October 28, 2008 labor and related expenses were 34.4% of net revenues compared to 35.1% for the year ended December 31, 2007. The decrease in labor and related expenses were due to the realization of certain synergies associated with the Coram transaction, lower management incentive compensation programs, lower salaries due to the sale of our rehab business and decreases due to changes in estimates related to health benefits. These decreases were partially offset by increases in labor and related expenses due to stock compensation expense from the change in control vesting due to the Merger and higher bonus and commission expenses, due to the revenue management team’s higher collection efforts and sale incentives being met above targeted amounts. Other operating expenses for the period January 1, 2008 to October 28, 2008 were 17.7% of net revenues compared to 17.8% for the year ended December 31, 2007. The decrease in other operating expenses was due to cost savings programs and lower delivery costs (primarily fuel and vehicle lease cost). These decreases were partially offset by the increases in expenses incurred related to the sale of the Company, which resulted in the Merger Agreement with Blackstone, costs incurred in support of our enterprise wide information system project, expenses incurred related to the sale of the rehabilitation product line in July 2008, and professional fees related to our accounts receivable reserve work.

Amortization of Intangible Assets. Amortization of intangible assets increased $0.4 million, or 12.4%, to $3.5 million in the period January 1, 2008 to October 28, 2008 from $3.1 million in year ended December 31, 2007. The increase in amortization expense in the period January 1, 2008 to October 28, 2008, when compared to the year ended December 31, 2007, resulted from our acquisition of Coram intangible assets in December 2007, offset by customer lists and covenants not to compete that became fully amortized in 2008.

Interest Expense. Interest expense increased $9.4 million, or 41.8%, to $31.8 million in the period January 1, 2008 to October 28, 2008 from $22.4 million in the year ended December 31, 2007. The increase in interest expense is partially offset by the fact that the period January 1, 2008 to October 28, 2008 had approximately two months less than the year ended December 31, 2007. The increase in interest expense in the

74

period January 1, 2008 to October 28, 2008 is due to the funding fee of $5.6 million related to the $280 million credit facility, entered into on June 18, 2008 (the “Interim Facility”), increased costs due to the amortization of debt issuance costs related to the Interim Facility and the corresponding increase in our interest rate on the Interim Facility. These increases were in addition to the impact of the $359.0 million we borrowed to purchase Coram in December 2007 and the write-off of the remaining deferred debt issuance costs related to the prior credit agreement. See “—Liquidity and Capital Resources—Indebtedness—Pre-Transactions” below.

Interest Income. Interest income increased $0.2 million, or 10.2%, to $2.1 million in the period January 1, 2008 to October 28, 2008 from $1.9 million in the year ended December 31, 2007. The increase in interest income is partially offset by the fact that the period January 1, 2008 to October 28, 2008 had approximately two months less than the year ended December 31, 2007.

Income Tax Expense. Income tax expense decreased $17.8 million, or 34.2%, to $34.2 million in the period January 1, 2008 to October 28, 2008 from $52.0 million in the year ended December 31, 2007. The decrease in the period January 1, 2008 to October 28, 2008 from the year ended December 31, 2007 resulted from lower pre-tax earnings; thus, decreasing our income tax expense. This income tax expense decrease was partially off-set by various unfavorable tax expense increases including higher non-deductible expenses in the period January 1, 2008 to October 28, 2008 as compared to the year ended December 31, 2007.

Segment Net Revenues and EBIT

The following table sets forth a summary of results of operations by segment:

(in thousands)	Period January 1, 2008 to October 28, 2008		Percentage of Net Revenues		Year Ended December 31, 2007		Percentage of Net Revenues
Net revenues:
Home respiratory therapy and home medical equipment	$	1,074,711	60.6	%	$	1,297,619	79.5	%
Home infusion therapy		698,578	39.4			334,182	20.5
Total net revenues	$	1,773,289	100.0	%	$	1,631,801	100.0	%
	Period January 1, 2008 to October 28, 2008
(in thousands)	Home  Respiratory Therapy and Home Medical Equipment		Percentage of Segment Net Revenues		Home Infusion Therapy		Percentage of Segment Net Revenues		Total
EBIT	$	102,927	9.6	%	$	17,965	2.6	%	$	120,892
	Year Ended December 31, 2007
(in thousands)	Home  Respiratory Therapy and Home Medical Equipment		Percentage of Segment Net Revenues		Home Infusion Therapy		Percentage of Segment Net Revenues		Total
EBIT	$	118,242	9.1	%	$	40,288	12.1	%	$	158,530

We allocate certain expenses that are not directly attributable to a product line based upon segment headcount. For a reconciliation of net income (loss) to EBIT, see the table under “Results of Operations—EBIT” at the end of this section.

Home Respiratory Therapy and Home Medical Equipment Segment: Net revenues for the home respiratory therapy and home medical equipment segment decreased $222.9 million, or 17.2%, to $1,074.7 million in the period January 1, 2008 to October 28, 2008 from the $1,297.6 million in the year ended December 31, 2007.

75

Home respiratory therapy revenues are derived primarily from the provision of oxygen systems, home ventilators, sleep apnea equipment, nebulizers, respiratory medications and related services. Revenues from the respiratory therapy service line decreased by 16.0% in the period January 1, 2008 to October 28, 2008 compared to the year ended December 31, 2007. The decrease is primarily due to the period January 1, 2008 to October 28, 2008 having approximately two months less than the year ended December 31, 2007. The majority of the Medicare reimbursement reductions discussed above impacted the respiratory therapy line. Such reductions were $17.3 million in the period January 1, 2008 to October 28, 2008. The growth in revenue dollars for the period January 1, 2008 to October 28, 2008 resulted primarily from an increase in revenue from oxygen equipment rental revenue and an increase in the sale of Bi-level devices and related supplies. These increases were offset by a decrease in respiratory drug revenue, primarily as a result of the Medicare reimbursement reductions in this area. This was offset by the fact that there were approximately two less months in the period January 1, 2008 to October 28, 2008 compared to the year ended December 31, 2007.

Home medical equipment revenues are derived from the rental and sale of equipment to assist patients with ambulation, safety and general care in and around the home. Home medical equipment revenues decreased by 23.1% in the period January 1, 2008 to October 28, 2008 compared to the year ended December 31, 2007. The decrease is primarily due to the period January 1, 2008 to October 28, 2008 having approximately two months less than the year ended December 31, 2007. In the period January 1, 2008 to October 28, 2008, $1.3 million of the Medicare reimbursement reductions impacted this service line. Excluding the impact of the Medicare reimbursement reductions home medical equipment revenue would have decreased by 6.5%. The decrease in revenue dollars for the period January 1, 2008 to October 31, 2008 primarily resulted from the sale of our rehabilitation product line in July 2008.

EBIT for the home respiratory therapy and home medical equipment segment in the period January 1, 2008 to October 28, 2008 was $102.9 million compared to $118.2 million in the year ended December 31, 2007. EBIT was 9.6% of segment net revenues for the period January 1, 2008 to October 28, 2008 compared to 9.1% of segment net revenues in the year ended December 31, 2007. The increase in EBIT as a percentage of segment net revenues was due to the sale of our rehabilitation product line in July 2008 and securing favorable pricing on the purchases of products and supplies.

Home Infusion Therapy Segment. For the home infusion therapy segment total net revenues increased $364.4 million, or 109.0%, to $698.6 million in the period January 1, 2008 to October 28, 2008 from $334.2 million in the year ended December 31, 2007. Revenues for the home infusion therapy segment increased to 39.4% of total revenue in the period January 1, 2008 to October 28, 2008 from 20.5% in the year ended December 31, 2007.

Home infusion therapy involves the administration of drugs or nutrients directly into the body intravenously through a needle or catheter. Infusion therapy services also include administering enteral nutrients directly into the gastrointestinal tract through a feeding tube. Home infusion therapy revenues increased by 109.0% in the period January 1, 2008 to October 28, 2008 compared to the year ended December 31, 2007. The increase in infusion revenue was due to our acquisition of Coram in December 2007.

EBIT for the home infusion therapy segment in the period January 1, 2008 to October 28, 2008 was $18.0 million compared to $40.3 million in the year ended December 31, 2007. EBIT was 2.6% of segment net revenues in the period January 1, 2008 to October 28, 2008 compared to 12.1% of segment net revenues in the year ended December 31, 2007. The decrease in EBIT is due to the inclusion of the results of our acquisition of Coram in December 2007, as it was in all periods from January 1, 2008 to October 28, 2008 and only in one month in the year ended December 31, 2007. The decrease in the EBIT as a percentage of segment net revenues that occurred in the period January 1, 2008 to October 28, 2008 as compared to the year ended December 31, 2007 was also due to the Coram acquisition. The Coram infusion business has a lower margin compared to the infusion business that existed in the first eleven months of the year ended December 31, 2007.

76

EBIT

EBIT is a measure used by our management to measure operating performance. EBIT is defined as net income (loss) plus interest expense and income taxes. EBIT is not a recognized term under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.

The following table provides a reconciliation from net income (loss) to EBIT:

(in thousands)	Year Ended December 31, 2007							Pro Forma Year Ended December 31, 2008
	Home Respiratory Therapy and Home Medical Equipment		Home Respiratory Therapy and Home Medical Equipment		Home Respiratory Therapy and Home Medical Equipment			Home Respiratory Therapy and Home Medical Equipment		Home Infusion Therapy			Total
Net income (loss)					$	86,039							$	(2,393	)
Interest expense, net (a)						20,493								130,267
Income tax (benefit) expense						51,998								(1,978	)
EBIT	$	118,242	$	40,288	$	158,530		$	111,708	$	14,188		$	125,896
(in thousands)	Period January 1, 2008 to October 28, 2008							Period October 29, 2008 to December 31, 2008
	Home Respiratory Therapy and Home Medical Equipment		Home Infusion Therapy		Total			Home Respiratory Therapy and Home Medical Equipment		Home Infusion      Therapy			Total
Net income (loss)					$	56,453							$	(1,894	)
Interest expense, net (a)						30,247								25,750
Income tax (benefit) expense						34,192								659
EBIT	$	102,927	$	17,965	$	120,892		$	26,255	$	(1,740	)	$	24,515
(in thousands)	Year Ended December 31, 2009
	Home Respiratory Therapy and Home Medical Equipment		Home Infusion Therapy		Total
Net loss					$	(3,820	)
Interest expense, net (a)						128,092
Income tax (benefit) expense						(8,438	)
EBIT	$	50,167	$	65,667	$	115,834

77

(in thousands)	Three Months Ended March 31, 2009							Three Months Ended March 31, 2010
	Home Respiratory Therapy and Home Medical Equipment		Home Infusion Therapy		Total			Home Respiratory Therapy and Home Medical Equipment		Home Infusion      Therapy		Total
Net loss					$	(477	)					$	(803	)
Interest expense, net (a)						32,216							32,376
Income tax (benefit) expense						1,180							(884	)
EBIT	$	23,523	$	9,396	$	32,919		$	9,866	$	20,823	$	30,689

(a) Reflects $22.4 million of interest expense, net of $1.9 million in interest income for 2007. Reflects $132.3 million of interest expense, net of $2.0 million in interest income for the pro forma year ended December 31, 2008. Reflects $31.8 million of interest expense, net of $1.6 million of interest income for the period January 1, 2008 to October 28, 2008. Reflects $26.2 million of interest expense, net of $0.4 million of interest income for the period October 29, 2008 to December 31, 2008. Reflects $129.2 million of interest expense, net of $1.1 million of interest income for 2009. Reflects $32.4 million of interest expense, net of $0.2 million of interest income for the three months ended March 31, 2009. Reflects $32.6 million of interest expense, net of $0.2 million of interest income for the three months ended March 31, 2010.

We allocate certain expenses that are not directly attributable to a product line based upon segment headcount. For a reconciliation of net income (loss) to EBIT, see the table under “Results of Operations—EBIT” at the end of this section.

Impact of Inflation and Changing Prices

We experience pricing pressures in the form of continued reductions in reimbursement rates, particularly from managed care organizations and from governmental payors such as Medicare and Medicaid. We are also impacted by rising costs for certain inflation-sensitive operating expenses such as labor and employee benefits, facility and equipment leases, and vehicle fuel. However, we generally do not believe these impacts are material to our revenues or net income.

Liquidity and Capital Resources

Our principal source of liquidity is our operating cash flow, which is supplemented by our ABL Facility, which provides for revolving credit of up to $150.0 million, subject to borrowing base availability. See “Description of Other Indebtedness—Senior Secured Asset-Based Revolving Credit Facility.” In recent years, we have generated operating cash flows in excess of our operating needs, which has afforded us the ability to pursue acquisitions and fund patient service equipment purchases to support revenue growth. We believe that our operating cash flow, together with our existing cash, cash equivalents, investments and ABL Facility, will continue to be sufficient to fund our operations and growth strategies for at least the next 12 months.

Our short-term investments consist of certificates of deposit with maturities greater than three months from our purchase date. As of March 31, 2010, the carrying value of our short-term investments approximates fair value and such investments do not individually exceed FDIC insurance limits.

Prior to the Merger we had initiated a project to implement a new enterprise-wide information system. The overall objective of the project was to deliver the necessary technology and automation across the organization to enable improvements in service, productivity and access to information. Development on certain modules commenced in 2006 and continued in 2007 and 2008. In connection with the Merger, we evaluated our information technology strategy and concluded that it was no longer advisable to implement a new enterprise- wide information system. As a result of this change in strategy, we wrote off approximately $65.0 million of capitalized information systems assets as part of our purchase accounting adjustments that were made in connection with the Merger.

78

In the three months ended March 31, 2010, our free cash flow was $(12.2) million. For the three months ended March 31, 2009 our free cash flow was $(10.2) million. We use free cash flow as a performance metric which is not calculated in accordance with GAAP. Free cash flow is defined as cash provided by operating activities less purchases of patient service equipment and property, equipment and improvements, exclusive of effects of acquisitions. It is presented as a supplemental performance measure and is not intended as an alternative to any other cash flow measure calculated in accordance with GAAP. Further, free cash flow may not be comparable to similarly titled measures used by other companies. A table reconciling free cash flow to net cash provided by operating activities is presented below.

(in thousands)	Three Month Ended March  31, 2010			Three Month Ended March  31, 2009
Reconciliation — Free Cash Flow:
Net (loss) income	$	(803	)	$	(477	)
Non-cash items		57,248			55,954
Change in operating assets and liabilities		(41,340	)		(25,805	)
Net cash provided by operating activities		15,105			29,672
Less: Purchases of patient service equipment and property, equipment and improvements		(27,319	)		(39,843	)
Free cash flow	$	(12,214	)	$	(10,171	)

Cash Flow. The following table presents selected data from our consolidated statement of cash flows:

(in thousands)	Three Month Ended March  31, 2010			Three Month Ended March  31, 2009
Net cash provided by operating activities	$	15,105		$	29,672
Net cash used in investing activities		(24,013	)		(39,592	)
Net cash used in financing activities		(15,866	)		(7,505	)
Net decrease in cash and equivalents		(24,774	)		(17,425	)
Cash and equivalents at beginning of period		158,163			168,018
Cash and equivalents at end of period	$	133,389		$	150,593

The Three Months Ended March 31, 2010 Results Compared to the Three Months Ended March 31, 2009

Net cash provided by operating activities in the three months ended March 31, 2010 was $15.1 million compared to $29.7 million in the three months ended March 31, 2009, a decrease of $14.6 million. The decrease in net cash provided by operating activities resulted from a $0.9 million increase in income before non-cash items to $56.4 million in 2010 from $55.5 million in 2009, offset by a $15.5 million increase in the cash used related to the change in operating assets and liabilities to a $41.3 million use of cash in 2010 from a $25.8 million use of cash in 2009.

The $15.5 million increase in cash used related to the change in operating assets and liabilities consisted primarily of the following:

• $6.8 million increase in cash provided by inventories to a $8.3 million provision of cash in the three months ended March 31, 2010 from a $1.5 million provision of cash in the three months ended March 31, 2009. The increase is primarily due to a decrease in our infusion and respiratory therapy and home medical equipment inventories.

79

• $2.9 million decrease in cash used by deferred revenue, net of expenses, to a $0.4 million use of cash in the three months ended March 31, 2010 from a $3.3 million use of cash in the three months ended March 31, 2009. The decrease is due primarily to the recognition of revenue in the three months ended March 31, 2009 that was previously deferred for services initiated prior to certain 2009 Medicare reimbursement reductions.

• $2.9 million decrease in cash used by prepaid expenses and other assets to a $5.8 million use of cash in the three months ended March 31, 2010 from a $8.7 million use of cash in the three months ended March 31, 2009. The decrease is due primarily to the accrual of tax benefits costs related to the Merger and payment of estimated taxes for the full year of 2009 in the three months ended March 31, 2009.

Offset by:

• $22.2 million increase in cash used by accounts receivable to a $47.1 million use of cash in the three months ended March 31, 2010 from a $24.9 million use of cash in the three months ended March 31, 2009. The increase is primarily related to delays in collections due to the initial outsourcing of our billing and collections process.

• $5.9 million increase in cash used by accounts payable to a $13.2 million use of cash in the three months ended March 31, 2010 from a $7.3 million use of cash in the three months ended March 31, 2009. The increase is primarily due to the timing of payment of invoices.

Net cash used in investing activities in the three months ended March 31, 2010 was $24.0 million, compared to $39.6 million in the three months ended March 31, 2009. The primary use of funds in 2010 was $27.3 million to purchase patient service equipment and property equipment and improvements; $21.4 million related to patient service equipment and $5.9 million related to property, equipment and improvements, primarily due to additions to our information systems hardware and software. Additionally, $12.7 million related to short-term investments that matured during the period which was partially offset by purchases of $8.2 million during this same period. The primary use of funds in 2009 was approximately $39.8 million to purchase patient service equipment and property equipment and improvements; $31.3 million related to patient service equipment and $8.5 million related to property, equipment and improvements, primarily due to additions to our information systems hardware and software and leaseshold improvements on new facilities.

Net cash used in financing activities in the three months ended March 31, 2010 was $15.9 million compared to $7.5 million in the three months ended March 31, 2009. Net cash used in financing activities in the three months ended March 31, 2010 primarily reflected the use of $14.1 million to pay down the book cash overdraft reported in accounts payable and debt issuance costs of $1.2 million incurred during the period. Net cash used in financing activities in the three months ended March 31, 2009 primarily reflected repayment of $5.7 million on the ABL Facility (net of additional borrowings during the period), in addition to $2.0 million used to pay down the book cash overdraft reported in accounts payable.

The Year Ended December 31, 2009 Results

Our cash and equivalents were $158.2 million at December 31, 2009. Net cash from operating activities was $169.4 million for the year ended December 31, 2009. Cash provided by operating activities was primarily the result of our net loss for the year ended December 31, 2009 adjusted for non-cash items, principally our provision for doubtful accounts, depreciation and amortization of intangible assets. These amounts were offset by changes in operating assets, primarily decreases in accounts receivable and accounts payable. Net cash used in investing activities was $168.7 million primarily due to $150.6 million of capital expenditures for normal course of business purchases primarily related to patient service and net, short-term investment purchases of $23.7 million. Our net cash used in financing activities were $10.6 million in the year ended December 31, 2009. This was primarily due to incurring debt issuance costs in connection with the sale of our outstanding Series A-1 Notes and Series A-2 Notes. As a result of the Merger on October 28, 2008, the Company has concluded that a comparison of the year ended December 31, 2009 to the period October 29, 2008 to December 31, 2008 does not provide a meaningful comparison and has chosen to discuss only the year ended December 31, 2009.

80

The Period October 29, 2008 to December 31, 2008 Results

Our cash increased to $168.0 million at December 31, 2008 from $48.2 million at October 29, 2008. Net cash from operating activities was $63.3 million for the period October 29, 2008 to December 31, 2008. Net cash used in investing activities was $75.5 million primarily due to $49.3 million of Merger-related costs and capital expenditures of $26.2 million for normal course of business purchases primarily related to patient service equipment. Our net cash provided by financing activities increased by $131.9 million in the period due to Merger related activities. Overall, the net increase in cash was $119.8 million.

The Period January 1, 2008 to October 28, 2008 Results Compared to the Year Ended December 31, 2007 Results

Net cash provided by operations in the period January 1, 2008 to October 28, 2008 was $297.9 million compared to $294.0 million in the year ended December 31, 2007, an increase of $3.9 million. Changes in cash provided by operations from the period January 1, 2008 to October 28, 2008 from the year ended December 31, 2007 is partially due to the fact that the period January 1, 2008 to October 28, 2008 had approximately two less months. Net cash provided by operations for the ten months ended October 31, 2007 was $237.7 million. The increase in net cash provided by operations for the period January 1, 2008 to October 28, 2008 compared to the ten months ended October 31, 2007, resulted from a $29.8 million increase in the cash used by the change in operating assets and liabilities to a $17.6 million use of cash in the period January 1, 2008 to October 28, 2008 from a $12.2 million provision of cash in the ten months ended October 31, 2007, offset by a $90.0 million increase in income before non-cash items to $315.5 million in 2008 from $225.5 million in 2007.

The $29.8 million increase in cash used by the change in operating assets and liabilities consisted primarily of the following:

• $23.8 million increase in cash used by income taxes payable to a $3.5 million use of cash in the period January 1, 2008 to October 28, 2008 from a $20.3 million provision of cash in the ten months ended October 31, 2007. The net increase in cash used was primarily due to a reduction in taxable income for the period of January 1, 2008 to October 28, 2008 as compared to the ten months ended October 31, 2007. The reduction in taxable income was caused by lower comparative pre-tax earnings, usage of Coram’s net operating loss carryforwards during 2008 and certain favorable tax deductions in the period of January 1, 2008 to October 28, 2008. This increase in cash used was off-set by a net increase in cash provided by income taxes payable which was primarily due to the receipt of significant tax refunds in 2008 resulting from certain favorable 2007 tax return to tax provision adjustments.

• $16.1 million increase in cash used by accrued payroll and related taxes and benefits to a $13.5 use of cash in the period January 1, 2008 to October 28, 2008 from a $2.6 million source in the ten months ended October 31, 2007. The increase was primarily due to an $11.7 million increase for management incentive compensation programs.

• $4.7 million was due to an increase in cash used by the change in inventories, to a $1.2 million use of cash in the period January 1, 2008 to October 28, 2008 from a $3.5 million provision of cash in the ten months ended October 31, 2007, primarily due to a purchase of inventory to be utilized over a ten-month period.

Offset by:

• $13.7 million decrease in cash used in accounts receivable, to a $8.9 million use of cash in the period January 1, 2008 to October 28, 2008 from a $22.6 million use of cash in the ten months ended October 31, 2007. This decrease in use of cash was primarily due to a net increase in accounts receivable primarily related to the Coram acquisition.

• $3.0 million increase in cash provided by prepaid expenses and other current assets to a $4.5 million provision of cash in the period January 1, 2008 to October 31, 2008 from a $1.5 million provision of cash in the ten months ended October 31, 2007. The increase was primarily due to prepaid inventory of $6.2 million due to a change in payment terms, offset by a decrease in prepaid insurance of $3.6 million.

81

Investing activities used $154.5 million in the period January 1, 2008 to October 28, 2008 compared to $483.2 million in the year ended December 31, 2007. Investing activities used $90.5 million in the ten months ended October 31, 2007. The primary use of funds in 2008 was approximately $157.2 million to purchase patient service equipment and property equipment and improvements; $104.6 million related to patient service equipment and $52.6 million related to property, plant and equipment, primarily due to additions to our information systems hardware and software, which was subsequently adjusted due to a change in strategy. The primary use of funds in the year ended December 31, 2007 was $350.0 million to purchase Coram in December 2007 and $128.8 million to purchase patient service equipment and property, equipment and improvements. The primary use of funds in the ten months ended October 31, 2007 was approximately $90.8 million to purchase patient service equipment for $62.5 million and property, equipment and improvements of $28.3 million.

Net cash used in financing activities in the period January 1, 2008 to October 28, 2008 was $123.7 million compared to net cash provided by financing activities of $203.0 million in the year ended December 31, 2007. Net cash used in financing activities in the ten months ended October 31, 2007 was $131.6 million. In the period January 1, 2008 to October 28, 2008, net cash used in financing activities primarily reflected our borrowing of $250.0 million in proceeds from the Interim Facility and $18.3 million under the Predecessor Revolving Credit Facility, offset by $138.3 million in repayments on the Predecessor Revolving Credit Facility, defined below, and $249.8 million in cash used for the redemption of our convertible senior notes. Net cash used in financing activities for the ten months ended October 31, 2007 reflected our repayment of $150.0 million on the Predecessor Revolving Credit Facility, offset by the issuance of common stock for $17.0 million in connection with the granting of equity awards and the exercises of stock options.

Contractual Cash Obligations. The following table summarizes the long-term cash payment obligations as of December 31, 2009 to which we are contractually bound. The years presented below represent 12-month periods ending December 31.

	Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Totals
	(in millions)
Series A-1 Notes	$	—	$	—	$	700	$	—	$	700
Series A-2 Notes		—		—		318		—		318
ABL Facility(1)		—		—		—		—		—
Interest Payments on Series A-1 Notes(2)		79		158		157		—		394
Interest Payments on Series A-2 Notes(3)		39		79		78		—		196
Fees on ABL Facility(1)(4)		2		3		1		—		6
Operating Leases		62		93		32		10		197
Capitalized Leases		2		1		—		—		3
Purchase Obligations(5)		49		112		113		128		402
Unrecognized Tax Benefits(6)		—		—		—		—		—
Total Contractual Cash Obligations	$	233	$	446	$	1,399	$	138	$	2,216

(1) Borrowings under the ABL Facility bear interest at a rate per annum equal to, at our option, either (a) a base rate determined by reference to the higher of (1) the prime rate of Bank of America, N.A. and (2) the federal funds effective rate plus 1/2 of 1%, plus an applicable margin of 2.00% or (b) a LIBOR rate determined by reference to LIBOR, adjusted for statutory reserve requirements, plus an applicable margin of 3.00%. The applicable margin for borrowings under our ABL Facility is subject to step ups and step downs based on average excess availability under the ABL Facility. The actual amounts of interest and fee payments under the ABL Facility will ultimately depend on the amount of debt and letters of credit outstanding and the interest rates in effect during each period. We are also required to pay customary letter of credit fees equal to the applicable margin on LIBOR loans and certain agency fees.

(2) Represents aggregate interest payments on $700.0 million of the Series A-1 Notes that are paid semi-annually in May and November. Interest payments on the Series A-1 Notes will total approximately $78 million annually until the Series A-1 Notes mature on November 1, 2014. The Series A-1 Notes bear interest at 11.25% per annum.

(3) Represents aggregate interest payments on $317.5 million of the Series A-2 Notes that are paid semi-annually in May and November. Interest payments on the Series A-2 Notes will total approximately $39 million annually until the Series A-2 Notes mature on November 1, 2014. The Series A-2 Notes bear interest at 12.375% per annum.

82

(4) The fees payable on the ABL Facility are based on an assumed fee for undrawn amounts of 1.00%, which represents the fees payable under the ABL Facility assuming no borrowings or drawn letters of credit. We are required to pay a commitment fee on the ABL Facility, in respect of the unutilized commitments there under, ranging from 0.50% to 1.00% per annum, which fee is determined based on the utilization of our ABL Facility (increasing when utilization is low and decreasing when utilization is high). The fees also include an administrative fee of $31,250 which is paid quarterly.

(5) The purchase obligations primarily relate to: (i) approximately $197 million due under the Intelenet Agreement (as described under “Business—Outsourcing Activities” below), pursuant to which we outsource to Intelenet certain functions relating to billing, collections and other administrative and clerical services and (ii) approximately $204 million due under an agreement with Dell Services (formerly Perot Systems Corporation), pursuant to which we outsource to Dell Services (formerly Perot Systems Corporation) certain information technology functions. As of March 31, 2010 the purchase obligation related to the Intelenet Agreement was approximately $172 million. See “Business—Outsourcing Activities.”

(6) Gross unrecognized tax benefits of $23.6 million are included within “Income Taxes Payable and Other Non-current Liabilities” in the total liabilities section of our March 31, 2010 consolidated balance sheet. The entire $24.0 million amount is not reflected in the contractual cash obligations table above since we cannot make a reliable estimate of the period in which cash payments will occur.

Accounts Receivable. Accounts receivable before allowance for doubtful accounts increased to $327.6 million as of March 31, 2010 from $292.1 million at December 31, 2009. Days sales outstanding (calculated as of each period-end by dividing accounts receivable, less allowance for doubtful accounts, by the rolling average of total net revenues) were 50 days at March 31, 2010, compared to 43 days at December 31, 2009. The increase in accounts receivable and days sales outstanding is a direct result of the delays in cash collections due to the outsourcing of our billing and collections process.

Accounts aged in excess of 180 days expressed as percentages of total receivables for certain major payor categories, and in total, are as follows:

	March 31, 2010		December 31, 2009
Total	17.8	%	18.3	%
Medicare	17.8	%	18.0	%
Medicaid	22.3	%	19.5	%
Patient Self pay	24.9	%	31.3	%
Managed care/other	16.0	%	16.6	%

Included in accounts receivable are earned but unbilled receivables of $49.5 million and $44.6 million at March 31, 2010 and December 31, 2009, respectively. Delays, ranging from a day up to several weeks, between the date of service and billing can occur due to delays in obtaining certain required payor-specific documentation from internal and external sources. Earned but unbilled receivables are aged from date of service and are considered in our analysis of historical performance and collectibility.

Inventories and Patient Service Equipment. Inventories consist primarily of pharmaceuticals and disposable products used in conjunction with patient service equipment. Patient service equipment consists of respiratory and home medical equipment that is provided to in-home patients for the course of their care plan, normally on a rental basis, and subsequently returned to us for redistribution after cleaning and maintenance is performed.

The branch locations serve as the primary point from which inventories and patient service equipment are delivered to patients. Certain products and services, such as infusion therapy and respiratory medications, bypass the respiratory/home medical equipment branches and are provided directly to patients from pharmacies or other central locations. The branches are supplied with inventory and equipment from central warehouses that service specific areas of the country. Such warehouses are also responsible for repairs and scheduled maintenance of patient service equipment, which adds to the frequent movement of equipment between locations. Further, the majority of our patient service equipment is located in patients’ homes. While utilization varies widely between equipment types, on the average, approximately 86% of equipment is on rent at any given time. Inherent in this asset flow is the fact that losses will occur. Depending on the product type, we perform physical inventories on

83

an annual or quarterly basis. Inventory and patient service equipment balances in the financial records are adjusted to reflect the results of these physical inventories. Inventory and patient service equipment gains and losses for the three months ended March 31, 2010 and 2009 were gains of $0.1 million and losses of $0.7 million, respectively.

Indebtedness—Pre-Transactions

2004 Senior Secured Revolving Credit Facility. On November 23, 2004, we entered into a senior secured revolving credit facility with Bank of America and a syndicate of lenders that was amended effective June 23, 2006. The amendment extended the maturity date from November 23, 2009 to June 23, 2011 and lowered the applicable interest rate margins and commitment fees. The 2004 senior secured credit agreement was structured as a $500 million revolving credit facility. In connection with the Merger on October 28, 2008, we repaid all outstanding indebtedness under our 2004 senior secured revolving credit facility.

Convertible Senior Notes. In August 2003, we issued 3.375% Convertible Senior Notes due 2033 in the aggregate principal amount of $250 million under an indenture between us and U.S. Bank National Association in a private placement. Holders of our convertible senior notes had the right to require us to redeem on September 1, 2008 some or all of their notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest. The holders of substantially all of the convertible senior notes exercised this right. On September 2, 2008, proceeds of the Interim Facility (described below) were used to fund repurchases of $249.8 million of our convertible senior notes. In addition, holders of the remaining $0.2 million of the convertible senior notes had the right, as a result of the change of control resulting from the Merger, to cause us to repurchase the convertible senior notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest. Pursuant to this right, holders of $151,000 of convertible senior notes exercised their option in December 2008. Approximately $77,000 of convertible senior notes remain outstanding in accordance with the terms of the indenture governing the convertible senior notes.

Interim Facility. On June 18, 2008, we entered into a $280 million Interim Facility pursuant to the credit agreement with Banc of America Bridge LLC, Barclays Capital, the investment banking division of Barclays Bank PLC, Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC) and the lenders named therein. On September 2, 2008, proceeds of the Interim Facility were used to fund repurchases of our convertible senior notes as described above. The loans under the Interim Facility bore interest at a rate of 11% per year with a maturity date of March 1, 2009. In addition, we paid usual and customary bank fees in connection with entering into the Interim Facility. In connection with the Merger, all borrowings under the Interim Facility were paid off on October 28, 2008 using a portion of the proceeds from the Original Financing.

Indebtedness—Post-Transactions

After the consummation of the Merger we became, and we continue to be, highly leveraged. As of March 31, 2010, our total indebtedness was $1,020.7 million, and we would have had an additional $133.9 million of available borrowings under our ABL Facility, less any limitations on borrowing resulting from actual collateral availability. As of March 31, 2010, the additional availability under our ABL Facility based on the borrowing base as of such date was $133.9 million.

Our liquidity requirements are and will be significant, primarily due to debt service requirements. Our net cash interest expense for the three months ended March 31, 2010 and the year ended December 31, 2009 was $29.8 million and $120.1 million, respectively.

We believe that our existing cash, plus the amounts we expect to generate from operations and amounts available through our ABL Facility, will be sufficient to meet our operating needs for the next twelve months, including working capital requirements, capital expenditures, debt repayment obligations and potential new acquisitions.

84

While we currently believe that we are in compliance with all of the financial covenants included in our ABL Facility, there is no assurance that we will continue to be able to do so in the future or that, if we do not, we will be able to obtain from our lenders waivers of default or amendments to the credit agreement governing our ABL Facility in the future.

As market conditions warrant, we and our major equityholders, including the Sponsor and its affiliates, may from time to time, depending upon market conditions, seek to repurchase debt securities that we have issued or loans that we have borrowed, including the Notes and the ABL Facility, in privately negotiated or open market transactions, by tender offer or otherwise.

ABL Facility. In connection with the Merger on October 28, 2008, we entered into the ABL Facility with Bank of America, N.A., as administrative agent and collateral agent, Wachovia Bank, National Association and Barclays Capital, the investment banking division of Barclays Bank PLC, as syndication agents, and The Bank of Nova Scotia, as documentation agent, and a syndicate of financial institutions and institutional lenders. Banc of America Securities LLC and Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC) acted as joint lead arrangers and Banc of America Securities LLC, Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC) and Barclays Capital, the investment banking division of Barclays Bank PLC, acted as joint bookrunners. Set forth below is a summary of the terms of our ABL Facility.

Our ABL Facility provides for revolving credit financing of up to $150.0 million, subject to borrowing base availability, with a maturity of five years, including both a letter of credit and swingline loan sub-facility. The borrowing base at any time is equal to the sum (subject to certain reserves and other adjustments) of 85% of eligible receivables and the lesser of (a) 85% of the net orderly liquidation value of eligible inventory and (b) $20.0 million.

Our ABL Facility includes borrowing capacity available for letters of credit and for borrowings on same-day notice, referred to as swingline loans.

Borrowings under our ABL Facility are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties.

Provided that no default or event of default is then existing or would arise therefrom, at our option, we may request that our ABL Facility be increased by an amount not to exceed $25.0 million, subject to certain consent rights of the administrative agent, swingline lender and issuing banks with respect to the lenders providing commitments for such increase. The terms of such incremental revolving facility shall be identical to our ABL Facility.

Interest Rate and Fees. Borrowings under our ABL Facility bear interest at a rate per annum equal to, at our option, either (a) a base rate determined by reference to the higher of (1) the prime rate of Bank of America, N.A. and (2) the federal funds effective rate plus 1/2 of 1% (“Base Rate”), plus an applicable margin of 2.00% or (b) a LIBOR rate determined by reference to the London Interbank Offered Rate, adjusted for statutory reserve requirements (“LIBOR”), plus an applicable margin of 3.00%. Beginning on April 1, 2009, the applicable margin for borrowings under our ABL Facility will be subject to step ups and step downs based on average excess availability under the ABL Facility. In addition to paying interest on outstanding amounts under our ABL Facility, we are required to pay a commitment fee, in respect of the unutilized commitments thereunder, ranging from 0.50% to 1.00% per annum, which fee will be determined based on utilization of our ABL Facility (increasing when utilization is low and decreasing when utilization is high). We must also pay customary letter of credit fees equal to the applicable margin on LIBOR loans and agency fees.

Repayments. If at any time the aggregate amount of outstandings under our ABL Facility, including letter of credit outstandings and swingline loans, exceeds the lesser of (i) the aggregate commitments under our ABL Facility and (ii) the borrowing base (except as a result of overadvance loans or protective advances), we will be

85

required to repay outstanding loans (including swingline loans) and repay or cash collateralize letters of credit in an aggregate amount equal to such excess. If the amount available under our ABL Facility is less than 12.5% of the lesser of the aggregate commitments or the borrowing base for five consecutive business days or certain events of default have occurred, we will be required, upon the occurrence and during the continuance of such cash dominion event, to deposit cash from our material deposit accounts daily in a core concentration account maintained with the administrative agent under our ABL Facility, which will be used to repay outstanding loans and cash collateralize letters of credit.

We may voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans at any time (subject to minimum repayment amounts and customary notice periods) without premium or penalty other than customary “breakage” costs with respect to LIBOR loans.

Amortization and Final Maturity. There is no scheduled amortization under our ABL Facility. All outstanding loans under the facility are due and payable in full on the fifth anniversary of the closing date.

Guarantees and Security. All obligations under our ABL Facility, any interest rate protection or other hedging arrangements entered into with any lender in the syndicate or any of its affiliates, and cash management obligations owing to any lender in the syndicate or any of its affiliates are unconditionally guaranteed by our parent and substantially all of our existing and future, direct and indirect, wholly-owned domestic restricted subsidiaries. All obligations under our ABL Facility, any interest rate protection or other hedging arrangements entered into with any lender in the syndicate or any of its affiliates, and cash management obligations owing to any lender in the syndicate or any of its affiliates, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of our assets and the assets of the guarantors, including:

• a first-priority security interest in substantially all personal property consisting of accounts receivable arising from the sale of inventory and other goods and services, inventory, intercompany notes and intangible assets to the extent attached to the foregoing, and certain related assets and proceeds of the foregoing; and

• a second-priority security interest in all tangible and intangible assets that secure the Notes on a first-priority basis.

Restrictive Covenants and Other Matters. Our ABL Facility requires that if excess availability is less than 12.5% of the lesser of the aggregate commitments and the borrowing base, we comply with a minimum fixed charge coverage ratio test. In addition, our ABL Facility includes negative covenants that, subject to significant exceptions, limit our ability and the ability of our parent and subsidiaries to, among other things:

• incur, assume or permit to exist additional indebtedness or guarantees;

• incur liens;

• make investments and loans;

• pay dividends, make payments or redeem or repurchase capital stock;

• engage in mergers, liquidations, dissolutions, asset sales and other dispositions (including sale leaseback transactions);

• prepay, redeem or purchase certain indebtedness;

• amend or otherwise alter terms of certain indebtedness;

• enter into agreements limiting subsidiary distributions;

• engage in certain transactions with affiliates;

• alter the business that we conduct;

• change our fiscal year; and

• with respect to our parent, engage in any activities not permitted.

86

Our ABL Facility contains certain customary representations and warranties, affirmative covenants and events of default, including among other things payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, failure of any guaranty or security document supporting our ABL Facility to be in full force and effect, and change of control. If such an event of default occurs, the lenders under our ABL Facility would be entitled to take various actions, including the acceleration of amounts due under our ABL Facility and all actions permitted to be taken by a secured creditor.

As of March 31, 2010, there were no borrowings under the ABL Facility, outstanding letters of credit totaled $16.1 million and additional availability under our ABL Facility subject to the borrowing base was $133.9 million. As of March 31, 2010, the additional availability under our ABL Facility based on the borrowing base as of such date was $133.9 million. At March 31, 2010, we were in compliance with all of the financial covenants required by the credit agreement governing our ABL Facility.

Senior Secured Bridge Credit Agreement. In connection with the Merger on October 28, 2008, we entered into a $1,010.0 million senior secured bridge credit agreement with Banc of America Bridge LLC, as administrative agent, Bank of America, N.A., as collateral agent, Wachovia Bank, National Association and Barclays Capital, the investment banking division of Barclays Bank PLC, as syndication agents, and The Bank of Nova Scotia, as documentation agent and a syndicate of financial institutions and institutional lenders. Banc of America Securities LLC and Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC) acted as joint lead arrangers and Banc of America Securities LLC, Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC) and Barclays Capital, the investment banking division of Barclays Bank PLC, acted as joint bookrunners.

We used the proceeds from the offerings of the Series A-1 Notes in May 2009 and Series A-2 Notes in August 2009, together with cash on hand, to repay all borrowings under the senior secured bridge credit agreement and to pay related fees and expenses. Our senior secured bridge credit agreement was terminated concurrently with the closing of the Series A-2 offering.

Notes. In May 2009, we issued $700.0 million of our outstanding 11.25% Senior Secured Notes due 2014 (Series A-1) and on August 2009, we issued $317.5 million of our outstanding 12.375% Senior Secured Notes due 2014 (Series A-2). The Series A-1 Notes and the Series A-2 Notes bear interest at a rate equal to 11.25% per annum and 12.375% per annum, respectively. The indenture governing the Notes, among other restrictions, limits our ability and the ability of our restricted subsidiaries to:

• incur additional debt;

• pay dividends and make other distributions;

• make certain investments;

• repurchase our stock;

• incur certain liens;

• enter into transactions with affiliates;

• merge or consolidate;

• enter into agreements that restrict the ability of our subsidiaries to make dividends or other payments to us; and

• transfer or sell assets.

Subject to certain exceptions, the indenture governing the Notes permits us and our restricted subsidiaries to incur additional indebtedness, including senior indebtedness and secured indebtedness. The indenture also does

87

not limit the amount of additional indebtedness that Sky Acquisition may incur. The Series A-1 Notes are entitled to a priority of payment over the Series A-2 Notes in certain circumstances, including upon any acceleration of the obligations under the Series A-1 Notes, the Series A-2 Notes or any bankruptcy or insolvency event of default with respect to Apria or any guarantor of the Notes. For more details, see “Description of Notes.”

Covenant Compliance. Under the indenture governing the Notes and under the credit agreement governing our ABL Facility, our ability to engage in activities such as incurring additional indebtedness, making investments, refinancing certain indebtedness, paying dividends and entering into certain merger transactions is governed, in part, by our ability to satisfy tests based on Adjusted EBITDA.

“Adjusted EBITDA” is defined as net income (loss), plus interest expense, net, provision (benefit) for income taxes and depreciation and amortization, further adjusted for certain other non-cash items, costs incurred related to initiatives, cost reduction and other adjustment items that are permitted by the covenants included in the indenture governing the Notes and the credit agreement governing our ABL Facility.

We believe that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about the calculation of, and compliance with, certain financial covenants in the indenture governing the Notes and in our ABL Facility. Adjusted EBITDA is a material component of these covenants. We caution investors that amounts presented in accordance with our definition of Adjusted EBITDA may not be comparable to similar measures disclosed by other issuers, because not all issuers and analysts calculate Adjusted EBITDA in the same manner.

Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP or as alternatives to cash flows from operating activities as a measure of our liquidity.

The following table provides a reconciliation from our net loss to Adjusted EBITDA:

(in thousands)	Three Months Ended March 31, 2010			Twelve Months Ended March 31, 2010
Net loss	$	(803	)	$	(4,146	)
Interest expense, net(a)		32,376			128,252
Income tax expense		(884	)		(10,502	)
Depreciation and amortization		33,237			172,323
Non-cash items(b)		5,747			23,182
Costs incurred related to initiatives(c)		10,774			58,577
Other adjustment items(d)		3,787			9,119
Projected cost savings and synergies(e)		12,884			71,370
Adjusted EBITDA	$	97,118		$	448,175

(a) Reflects $32.6 million of interest expense, net of $0.2 million of interest income for the three months ended March 31, 2010. Reflects $129.4 million of interest expense, net of $1.1 million of interest income for the twelve months ended March 31, 2010.

(b) Non-cash items are comprised of the following:

(in thousands)	Three Months Ended March 31, 2010		Twelve Months Ended March 31, 2010
Profit interest units compensation expense	$	1,128	$	6,477
Loss on patient service equipment, disposition of assets and other(i)		4,619		16,705
Total non-cash items	$	5,747	$	23,182

(i) Primarily represents non-cash losses related to the title transfer of equipment to Medicare patients at the end of the 13-month maximum rental period under the DRA and other disposals or write-offs of capital equipment. Equipment classified as 13-month rental equipment would include hospital beds, wheelchairs, nebulizers, patient lifts and CPAP devices.

88

(c) Costs incurred related to initiatives are comprised of the following:

(in thousands)	Three Months Ended March  31, 2010		Twelve Months Ended March 31, 2010
Employee severance(i)	$	387	$	2,625
Employee relocation costs(ii)		119		874
Executive severance and retention and other bonuses(iii)		3,136		7,388
Coram integration expense(iv)		80		973
Consulting fees(v)		3,074		22,705
Expenses relating to information technology outsourcing(vi)		29		9,077
Expenses relating to branch optimization program(vii)		29		3,062
Other(viii)		3,920		11,873
Total costs incurred related to initiatives	$	10,774	$	58,577

(i) Represents employee severance expenses with respect to a reduction in workforce of approximately 59 employees for the three months ended March 31, 2010 and approximately 381 employees for the twelve months ended March 31, 2010.

(ii) Represents moving expenses with respect to approximately 9 employees who were relocated during the three months ended March 31, 2010 and approximately 61 employees who were relocated during the twelve months ended March 31, 2010.

(iii) Represents $3.2 million related to executive severance as a result of the Merger for the three months ended March 31, 2010 and $4.9 million related to executive severance and $2.4 million related to executive retention and other bonuses as a result of the Merger for the twelve months ended March 31, 2010.

(iv) Represents expenses related to the integration of Coram and retention bonuses for certain Coram employees for the three and twelve months ended March 31, 2010.

(v) Represents consulting fees paid for the three and twelve months ended March 31, 2010, primarily related to three projects: (1) an initiative related to locating certain cost centers offshore; (2) consolidation of purchasing in order to gain cost reductions through volume discounts and renegotiations with supply vendors; and (3) a new cash management system designed to electronically post and match payments in order to enhance and improve workflow productivity and reporting.

(vi) Primarily represents professional fees and other costs associated with our initiative related to the outsourcing of selected information technology functions.

(vii) Represents lease termination and other costs associated with our initiative to close or consolidate approximately 48 branches as part of a branch optimization program.

(viii) For the three months ended March 31, 2010, primarily represents: (1) $2.8 million in fees and expenses related to a terminated debt offering in the first quarter of 2010; (2) $0.6 million in costs and fees related to the conversion to a new billing and collections system for our home infusion therapy business; (3) $0.3 million in costs and expenses related to the centralization of our admissions process for our home infusion therapy business; (4) $0.2 million in costs and fees related to the planned conversion to a new payroll processing system; and (5) $0.1 million in costs related to a new internal costs tracking system. For the twelve months ended March 31, 2010, primarily represents: (1) $6.1 million in fees and expenses related to the issuance of our outstanding Series A-1 Notes and Series A-2 Notes; (2) $2.1 million in costs and fees related to the planned conversion to a new payroll processing system; (3) $2.0 million in costs and fees related to the conversion to a new billing and collections system for our home infusion therapy business; (4) $1.0 million in costs and expenses related to the centralization of our admissions process for our home infusion therapy business; and (5) $0.4 million in costs related to a new internal costs tracking system.

(d) Other adjustment items primarily related to the sponsor management fee of $3.8 million for the three months ended March 31, 2010 and $9.1 million for the twelve months ended March 31, 2010.

(e) Projected net cost saving and synergies to be realized in connection with cost saving, restructuring and other similar initiatives.

Hedging Activities

We are exposed to interest rate fluctuations on any variable rate long-term debt. However, we currently do not have any variable rate debt outstanding or interest rate swap agreements in effect. Our policy for managing interest rate risk is to evaluate and monitor all available relevant information, including but not limited to, the structure of our interest-bearing assets and liabilities, historical interest rate trends and interest rate forecasts published by major financial institutions. The tools we may utilize to moderate our exposure to fluctuations in the relevant interest rate indices include, but are not limited to: (1) strategic determination of repricing periods and related principal amounts, and (2) derivative financial instruments such as interest rate swap agreements, caps or collars. We do not use derivative financial instruments for trading or other speculative purposes.

At September 30, 2008, we terminated our one remaining interest rate swap agreement which would have expired in January 2009. The impact of the termination was immaterial. During 2008 and during 2007, we had one interest rate swap agreement in effect to fix our LIBOR-based variable rate debt in connection with the Predecessor Revolving Credit Facility. The agreement, a forward-starting contract with a three-year term,

89

became effective in January 2006, and had a notional amount of $25.0 million that fixed an equivalent amount of our variable rate debt at 4.44%. For the three months ended March 31, 2010, the year ended December 31, 2009 and the periods October 29, 2008 to December 31, 2008 and January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, we (paid) received net settlement amounts of $0, $0, $0, $(0.2) million, and $0.2 million, respectively.

Unrealized gains and losses on the fair value of the swap agreements are reflected, net of taxes, in operating income, as the transactions no longer qualify for hedge accounting treatment. Our exposure to credit loss under the swap agreement was limited to the interest rate spread in the event of counterparty nonperformance. At March 31, 2010, December 31, 2009 and 2008, we did not have any swap agreements in effect.

Treasury Stock. All repurchased shares of common stock were held as treasury shares. All treasury shares were retired as part of the Merger on October 28, 2008.

Business Combinations and Asset Purchases. We periodically acquire complementary businesses. These transactions are accounted for as purchases and the results of operations of the acquired companies are included in the accompanying statements of operations from the dates of acquisition. Covenants not to compete are being amortized over the life of the respective agreements. Customer lists, favorable lease arrangements and patient referral sources are being amortized over the period of their expected benefit.

During the three months ended March 31, 2010, the Company purchased certain assets of a business for $1.5 million. No acquisitions were made during the three months ended March 31, 2009.

During 2009, we purchased the accounts receivable and/or active payment lists from four discount agreement customers.

During 2008, we did not make any acquisitions. However, as discussed above, on October 28, 2008, we were acquired by Sky Acquisition LLC, a company controlled by private investment funds affiliated with the Sponsor.

In December 2007, we acquired Coram for aggregate consideration of approximately $350.0 million. Allocation of this amount includes $78.4 million in net assets, $34.3 million in patient-referral sources, $69.4 million in trade names, $0.6 million in favorable lease arrangements and $176.0 million in goodwill. In 2006, we closed three small acquisitions for an aggregate consideration of $3.6 million. Cash paid for acquisitions, which includes amounts deferred from prior year acquisitions, totaled $354.6 million in 2007.

Inflation. We experience pricing pressures in the form of continued reductions in reimbursement rates, particularly from managed care organizations and from governmental payors such as Medicare and Medicaid. We are also impacted by rising costs for certain inflation-sensitive operating expenses such as labor and employee benefits, facility and equipment leases, and vehicle fuel. However, we generally do not believe these impacts are material to our revenues or net income.

Off-Balance Sheet Arrangements

We are not a party to off-balance sheet arrangements as defined by the SEC. However, from time to time we enter into certain types of contracts that contingently require us to indemnify parties against third-party claims. The contracts primarily relate to: (i) certain asset purchase agreements, under which we may provide customary indemnification to the seller of the business being acquired; (ii) certain real estate leases, under which we may be required to indemnify property owners for environmental and other liabilities, and other claims arising from our use of the applicable premises; and (iii) certain agreements with our officers, directors and employees, under which we may be required to indemnify such persons for liabilities arising out of their relationship with us.

90

The terms of such obligations vary by contract and in most instances a specific or maximum dollar amount is not explicitly stated therein. Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted. Consequently, no liabilities have been recorded for these obligations on our balance sheets for any of the periods presented.

Quantitative and Qualitative Disclosure About Market Risk

At March 31, 2010, there were no borrowings under our ABL Facility. The credit agreement governing the ABL Facility provides interest rate options based on the following indices: Federal Funds Rate, the Bank of America prime rate or LIBOR. All such interest rate options are subject to the application of an interest margin as specified in the bank credit agreement. At March 31, 2010, all of our outstanding asset-based debt was tied to the Bank of America prime rate. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness—Post-Transactions.”

During 2008 and 2007, we had one interest rate swap agreement in effect to fix our LIBOR-based variable rate debt in connection with the Predecessor Revolving Credit Facility. The swap agreement was terminated at September 30, 2008. The agreement, a forward-starting contract with a three-year term, became effective in January 2006, and had a notional amount of $25.0 million that fixed an equivalent amount of our variable rate debt at 4.44%. The impact of the termination was deemed immaterial. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Hedging Activities.”

Assuming we drew down the entire $150.0 million under the ABL Facility at March 31, 2010, a 1.0% change in the applicable interest rates would increase or decrease our annual cash flow and pretax earnings by approximately $1.5 million. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness—Post-Transactions.”

91

BUSINESS

Industry Overview

The home healthcare market, which is projected to generate revenues of approximately $75 billion in the United States in 2010, comprises a broad range of products and services—including respiratory therapy, home infusion therapy, home medical equipment, home healthcare nursing, orthotics and prosthetics and general medical supplies—and is expected to grow at a compounded annual growth rate of 7.4% from 2008 through 2013 according to CMS. The markets that we serve—home respiratory therapy (14% of the home healthcare market), infusion therapy (9%) and home medical equipment (5%)—accounted for approximately $15 billion in revenues in 2008 according to the 2008 IBISWorld Industry Report. Our industry is highly-fragmented and is served by approximately 12,000 competitors.

We benefit from the following trends within the home healthcare market:

• Favorable industry dynamics. Favorable demographic trends and the continued shift to in-home healthcare have resulted in patient volume growth across our core service lines and are expected to continue to drive growth. As the baby boomer population ages and life expectancy increases, the elderly—who comprise the vast majority of our patients—will represent a higher percentage of the overall population. According to a 2008 U.S. Census Bureau projection, the U.S. population aged 55 and over is expected to grow at approximately twice the average rate of population growth from 76.5 million, or 25% of the population, in 2010 to 112 million, or 30% of the population, by 2030. An aging population, the continued prevalence of smoking, increasing obesity rates and higher diagnosis rates have collectively driven growth across our service lines (including Coram) from 2005 to 2008—home respiratory therapy (patient growth of 14%), sleep apnea (patient growth of 21%) and infusion (patient growth of 14%, excluding enteral).

• Compelling in-home economics. By 2017, the nation’s healthcare spending is projected to increase to $4.3 trillion, growing at an average annual rate of 6.7%, according to CMS. The rising cost of healthcare has caused many payors to look for ways to contain costs and home healthcare is increasingly sought out as an attractive, cost-effective, clinically appropriate alternative to expensive facility-based care. For example, in-home oxygen treatment costs for a Medicare patient are on average less than $7 per day.

• Increased prevalence of in-home treatments. Improved technology has resulted in a wider variety of treatments being administered in patients’ homes. These improvements have allowed for earlier patient discharge and have lengthened the portion of the recuperation period spent outside of an institutional setting. In addition, medical advancements have also made medical equipment more simple, adaptable and cost-effective for use in the home.

• Preference for in-home care. Many patients prefer the convenience and typical cost advantages of home healthcare over institutional care as it provides patients with greater independence, increased responsibility and improved responsiveness to treatment. A December 2007 national telephone survey conducted by Harris Interactive found that over 82% of the respondents expressed a preference for homecare over institutional care, and that preference is even more prevalent among the age 55+ population (91%). The same poll found that 74% of adults surveyed agreed that homecare is part of the solution to the problem of rapidly increasing Medicare spending for seniors in the United States.

• Development of new infused and injectable drugs. There is a significant number of new infusion or injectable drugs in the development pipeline. We believe this proliferation of medications, many of which are for chronic conditions that require long-term treatment, will drive further increases in home infusion therapy utilization and referrals to our ambulatory infusion suites.

92

Our Company

General

We are a quality, cost-efficient provider of home healthcare products and services in the United States, offering a comprehensive range of home respiratory therapy, home infusion therapy and home medical equipment services to over two million patients annually in all 50 states through approximately 500 locations. We hold market-leading positions across all of our major service lines—making us a leader in the homecare market. By targeting the managed care segment of the population, we are better positioned than many of our competitors to minimize risks associated with changes in Medicare/Medicaid reimbursement rates. We are focused on being the industry’s highest-quality provider of homecare services, while maintaining our commitment to being a low-cost operator. Our integrated product and service offerings, combined with our national scale and strong reputation, provide us with a strategic advantage in attracting clients, which include almost all of the national and regional managed care and government payors in the United States, and in retaining our referral base of more than 70,000 physicians, discharge planners, hospitals and third-party payors. For the year ended December 31, 2009 and for the three months ended March 31, 2010 our net revenues were $2,094.6 million and 508.9 million, respectively.

History

A predecessor of the Company has been in existence since 1984. In 1995, it was acquired through a merger by Abbey Healthcare Group Incorporated, which changed its name to Apria Healthcare Group Inc. In 2007, we acquired Coram, Inc. On June 18, 2008, Apria, Sky Acquisition and Merger Sub entered into the Merger Agreement. As a result of the Merger, the Investor Group beneficially owns all of Apria’s issued and outstanding capital stock.

Operating Segments

We have two operating segments, (1) home respiratory therapy and home medical equipment and (2) home infusion therapy. Within the two operating segments there are three core service lines: home respiratory therapy, home medical equipment and home infusion therapy. Through these service lines we provide patients with a variety of clinical and administrative support services and related products and supplies, most of which are prescribed by a physician as part of a care plan. We provide substantial benefits to both patients and payors by allowing patients to receive necessary care and services in the comfort of their own home while reducing the cost of treatment. Our services include:

• providing in-home clinical respiratory care, infusion nursing and pharmaceutical management services;

• educating patients and caregivers about health conditions or illnesses and providing written instructions about home safety, self-care and the proper use of equipment;

• monitoring patients’ individualized treatment plans;

• reporting patient progress and status to the physician and/or managed care organization;

• providing in-home delivery, set-up and maintenance of equipment and/or supplies; and

• processing claims to third-party payors and billing/collecting patient co-pays and deductibles.

Home Respiratory Therapy and Home Medical Equipment ($1,169.6 million and $278.3 million, or 55.8% and 54.7%, of our net revenues for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively)

Home Respiratory Therapy

We are the largest provider of home respiratory therapies in the United States to the managed care market serving approximately 1.5 million patients annually through our nationwide distribution platform that includes approximately 400 locations. We offer a full range of home respiratory therapy products and services, from the

93

simplest nebulizer and oxygen concentrator to the most complex ventilator. Our services offer a compelling relative cost advantage to our patients and payors. For example, in-home oxygen treatment costs for a Medicare patient are on average less than $7 per day. Patients utilize our products to treat a variety of conditions, including:

• COPD, such as emphysema and chronic bronchitis (the fourth leading cause of death in the U.S.);

• respiratory conditions associated with nervous system disorders or injuries, such as Lou Gehrig’s disease and quadriplegia;

• congestive heart failure; and

• lung cancer.

By focusing our efforts on the managed care population, we limit our exposure to the highly-regulated Medicare respiratory business, which is subject to changes in coverage, payment and pricing guidelines. As an example, Medicare oxygen accounted for less than 10% and 11% of our total net revenues for the year ended December 31, 2009 and three months ended March 31, 2010, respectively.

We employ a nationwide clinical staff of more than 800 respiratory care professionals, including home respiratory therapists who provide direct patient care, monitoring and 24-hour support services under physician-directed treatment plans and in accordance with our proprietary acuity program. We derive revenues from the provision of oxygen systems, ventilators, respiratory assist devices, and CPAP/bi-level devices, as well as from the provision of infant apnea monitors, nebulizers, home-delivered respiratory medications and related services.

We are also the largest provider of sleep apnea devices, including CPAP/bi-level devices, and patient support services in the United States. The incidence and diagnosis of OSA continues to increase in the United States. We believe that the strength of our position in this market is partly due to our significant presence in the managed care market, since OSA largely affects adults between the ages of 35 and 55 rather than the population served by Medicare. To manage our significant new and recurring patient volumes in a cost-effective, clinically sound manner, we developed an innovative care model called the “CPAP Center at Apria Healthcare.” This branch-based model allows Apria’s respiratory care practitioners to educate, on a timely and efficient basis, newly-diagnosed patients about their condition, the equipment and accessories their physician has prescribed for them, and the long-term importance of complying with the physician’s order. The model includes both one-on-one patient education and teaching performed in group settings, depending on the geographic area of the country and the patient’s payor’s contractual preferences.

Home Medical Equipment

As the leading provider of home medical equipment in the United States, we supply a wide range of products to help improve the quality of life for patients with special needs. Our integrated service approach allows patients, hospital and physician referral sources and managed care organizations accessing either our home respiratory or home infusion therapy services to also access needed home medical equipment through a single source. The use of home medical equipment provides a significant relative cost advantage to our patients and payors. For example, on average, it costs $50 per day to create an in-home hospital room versus approximately $1,500 per day for in-patient hospital care, according to CMS. Basic categories of equipment are:

• manual wheelchairs and ambulatory equipment, such as canes, crutches and walkers;

• hospital room equipment, such as hospital beds and bedside commodes;

• bathroom equipment, such as bath and shower benches, elevated toilet seats and toilet, tub or wall grab bars;

• phototherapy systems, such as blankets, wraps or treatment beds for babies with jaundice; and

• support surfaces, such as pressure pads and mattresses, for patients at risk for developing pressure sores or decubitus ulcers.

94

In May 2008, we announced a preferred provider agreement with Smith & Nephew plc, a leading provider of NPWT, to provide NPWT services and products in the United States. NPWT is a topical treatment intended to promote healing in acute and chronic wounds affected by conditions including diabetes, arterial insufficiency and venous insufficiency.

Home Infusion Therapy ($925.0 million and $230.6 million, or 44.2% and 45.3%, of our net revenues for the year ended December 31, 2009 and three months ended March 31, 2010, respectively)

Through our acquisition of Coram in December 2007, we are the leading provider of home infusion therapy services in the United States—serving approximately 100,000 patients annually through 72 infusion pharmacy locations nationwide. We provide patients with intravenous and injectable medications and clinical services at home or in one of our 62 ambulatory infusion suites nationwide. We employ nursing clinicians who assess patients before their discharge from the hospital whenever possible, and then develop, in conjunction with the physician, a plan of care. Our home infusion products offer a compelling relative cost advantage to our patients and payors. For example, we believe that a home intravenous antibiotic program in a Medicare managed care plan costs significantly less than the cost to provide that service in a hospital setting.

Home infusion therapy is used to administer drugs and other therapeutic agents directly into the body through various types of catheters or tubing. Our services are frequently used to treat patients with infectious diseases, cancer, gastrointestinal diseases, chronic or acute pain syndromes, immune deficiencies, cardiovascular disease or chronic genetic diseases, and those who require therapies associated with bone marrow or solid organ transplantation. We employ licensed pharmacists and registered nurses who specialize in the delivery of home infusion therapy. They are able to respond to emergencies and questions regarding therapy 24 hours a day, seven days a week and provide initial and ongoing training and education to the patient and caregiver. Other support services include supply replenishment, pump management, preventive maintenance, assistance with insurance questions and outcome reporting.

We believe we are also a leading provider of enteral nutrition in the United States. Enteral nutrition, or “tube feeding,” is prescribed to patients whose gastrointestinal system is malfunctioning or who suffer from neurological conditions, swallowing disorders or malnutrition attributable to stroke, cancer or other conditions. In recent years, advances in enteral nutrition have enabled more adults and children to have their nutritional and caloric needs met by tube feeding, as opposed to more invasive and expensive therapies.

Recent Developments

Announcement of SPAs and Initiation of Contract Offer Process Related to Round 1 Rebid of the Medicare DMEPOS Competitive Bidding Program

In early July 2010, CMS announced the new SPAs for each of the product categories included in the Round 1 Rebid. CMS then began the contracting process with suppliers by issuing contract offer letters to qualified providers. We received contract offers for a substantial majority of the bids we submitted. We did not receive contract offers for certain product categories in CBAs, but the process will not be completed until September 2010. Approximately $21 million of our net revenues for the fiscal year ended December 31, 2009 was generated by the products and CBAs included in the Round 1 Rebid. We estimate that the initial results of the Round 1 Rebid would reduce our net revenues in the fiscal year ending December 31, 2011 by approximately $8.0 million, assuming the current contract offers and no changes in volume. Assuming that Round 2 would include the same product categories and bidding rules and the markets currently being proposed by CMS, we estimate that approximately $110 million of our net revenues for the fiscal year ending December 31, 2011 would be subject to competitive bidding. Although the bidding process for Round 2 is currently scheduled to commence in 2011, the new Round 2 rates and guidelines are not scheduled to take effect until January 2013. Therefore, we cannot estimate the impact of potential Round 2 rate reductions on our business until more specific information is published by CMS and its contractors.

95

Enactment of a Comprehensive Healthcare Reform Package

In March 2010, the Federal government enacted a comprehensive healthcare Reform Package which consists of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010. See “Risk Factors—Risks Relating to Our Business—Continued Reductions in Medicare and Medicaid Reimbursement Rates and the Comprehensive Healthcare Reform Package Could Have a Material Adverse Effect on Our Results of Operations and Financial Condition.”

Reorganization of the Senior Leadership Structure of our Home Respiratory Therapy and Home Medical Equipment Segment

In February 2010, we finalized a decision to reorganize the senior leadership structure of the home respiratory therapy and home medical equipment segment. As part of this reorganization, Lawrence A. Mastrovich, President, Home Respiratory Therapy and Home Medical Equipment segment, resigned and his responsibilities were assumed by other senior executives.

Our Competitive Strengths

We believe that we have the following competitive strengths:

Leading Market Positions with a Compelling Value Proposition

With approximately 11,400 employees and a national distribution footprint of approximately 500 locations that serve patients in all 50 states, we are the largest provider of home healthcare services in the United States. We are the market leader in infusion therapy and sleep apnea devices, the leading respiratory provider to the managed care market and the leading provider of home medical equipment. We believe that our national platform, comprehensive product line and leading reputation provide us with a greater opportunity than our competitors to attract more customers as our industry continues to grow. Our national presence and scale enables us to frequently obtain preferred provider status from other national and regional managed care payors, negotiate better terms with vendors and leverage our fixed overhead costs. For example, we are a preferred provider for a comprehensive list of home respiratory and medical equipment products and services to many managed care organizations and, for some of these payors, we are the exclusive provider. We believe we are better suited to service large managed care accounts due to our extensive branch network, state of the art logistic systems, national coverage of payors’ members, competitive pricing, comprehensive product line, accreditation from The Joint Commission and the ACHC, and our ability to connect electronically with payors’ systems. We have leveraged this competitive advantage to gain share in the managed care market.

Our acquisition of Coram in December 2007 has allowed us to further penetrate the specialty infusion market. With a significant number of new infusion drugs in the pipeline and an increasing use of specialty infusion treatments, this market is expected to grow over the next few years. We are well-positioned in specialty infusion services, and have aggressively established relationships with pharmaceutical and biotech companies to obtain early access to drugs in various stages of clinical trials. We believe there are other cross-selling opportunities and synergies to be achieved by offering a diverse mix of services. We also believe that an integrated approach allows us to offer patients, hospital and physician referral sources and managed care organizations a highly-valued single source for respiratory therapy, specialty home infusion and home medical equipment.

Diversified Product and Customer Mix

We have one of the most comprehensive product lines and diversified customer mixes among our peers. Our broad product offering has affirmed our status as a leading provider in each market and has made us a more attractive partner to referral sources and payors, as we provide a one-stop solution for homecare products and services.

96

We contract with a substantial majority of the national managed care organizations—including United HealthCare Services, Aetna Health Management, Humana Health Plans and Kaiser Foundation Health Plan, as well as a large number of regional and local payors. All of our contracted managed care organizations combined service over 217 million people.

The Coram acquisition enabled us to both expand our product offering in specialty infused drugs and rebalance our payor mix by reducing reliance on government payors such as Medicare and Medicaid while expanding relationships with managed care organizations. Managed care payors contributed approximately 72% and 70% of our net revenues for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively, with no single contract accounting for more than 8% of net revenues during the same periods.

Proven Ability to Execute Cost Savings

We have successfully implemented a number of operational efficiency initiatives historically, which have helped to reduce our costs and significantly offset ongoing Medicare reimbursement changes. We launched a substantial cost reduction plan in late 2007 across a number of identified initiatives targeting approximately $198 million in expected annual savings, of which we have realized approximately $127 million through March 31, 2010.

Scalable and Diversified Platform for Home Healthcare Delivery

We currently provide service to more than 2 million patients through a national infrastructure that enables us to deliver services to patients in their homes. Through approximately 500 locations, we are able to deliver a wide variety of cost-effective products and services to various patient groups. We have successfully leveraged this distribution platform across a number of product and service offerings including CPAP/bi-level, enteral nutrition and NPWT devices, and we are using our nursing capacity to provide infusion services through our growing network of ambulatory infusion suites.

We historically supplied CPAP/bi-level devices to a large number of patients, but provided related accessories and supplies primarily on an as-needed basis. Patients who rely on CPAP and bi-level devices periodically require replacement accessories to ensure that they remain compliant to the therapy prescribed by their physician. These accessories include masks, tubing and supplies. Now in operation for over five years, a centralized customer care center for CPAP and bi-level patients provides support and information to patients so that they know what their payors cover in terms of replacement accessories and understand the health value of remaining compliant to their therapy over the long-term. Accessory net revenues were $155.9 million and $34.5 million and represented 47% and 46% of our total CPAP/bi-level net revenues for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively.

In May 2008, we announced a preferred provider agreement with Smith & Nephew plc to provide NPWT products, thus leveraging our existing branch delivery infrastructure and clinical expertise. Centralized patient intake and coordination of care is provided using the same service and systems platform as is used for the CPAP/bi-level direct marketing service program. Although the program is still in its developing stage, interest has been strong from managed care customers who would like to add the NPWT service to our existing contracts with them.

Experienced Management Team

We have a strong and experienced senior management team with over 200 years of combined experience spanning nearly every segment of the healthcare industry, including managed care, manufacturing, supply chain, procurement, home healthcare, acute care, skilled nursing and long-term care. With an average tenure of 20 years within the healthcare industry, this team possesses in-depth knowledge of our industry and the regulatory environment in which we operate, as well as our portfolio of home healthcare services.

97

Our Business Strategy

Our strategy is to position ourselves in the marketplace as a high-quality provider of a broad range of healthcare services and patient care management programs to our customers. The specific elements of our strategy are to:

• Grow profitable revenue and market share. We are focused on growing profitable revenues and increasing market share in our core home infusion therapy and home respiratory therapy service lines. We have undertaken a series of steps towards this end. Through our acquisition of Coram in December 2007, we considerably increased our home infusion capabilities and expanded our platform for further cross-selling opportunities. Since January 1, 2007, we have expanded our home respiratory therapy and home medical equipment sales force by 18%. This focus has allowed us to more effectively market our products and services to physicians, hospital discharge planners and managed care organizations.

• Continue to participate in the managed care market. We participate in the managed care market as a long-term strategic customer group because we believe that our scale, expertise, nationwide presence and array of home healthcare products and services will enable us to sign preferred provider agreements with managed care organizations. Managed care represented approximately 70% of our total net revenues for the three months ended March 31, 2010.

• Leverage our national distribution infrastructure. With approximately 500 locations and a robust platform supporting shared national services, we believe that we can efficiently add products, services and patients to our systems to grow our revenues and leverage our cost structure. For example, we have successfully leveraged this distribution platform across a number of product and service offerings, including a CPAP/bi-level supply replenishment program, enteral nutrition and NPWT services, and we are using our nursing capacity to provide infusion services through our growing network of ambulatory infusion suites. We seek to achieve margin improvements through operational initiatives focused on the continual reduction of costs and delivery of incremental efficiencies. At the same time, we believe that it is essential to consistently deliver superior customer service in order to increase referrals and retain existing patients. Performance improvement initiatives are underway in all aspects of our operations including customer service, patient satisfaction, logistics, supply chain, clinical services and billing/collections. We believe that by being responsive to the needs of our patients and payors we can provide ourselves with opportunities to take market share from our competitors.

• Continue to lead the industry in accreditation. MIPPA made accreditation mandatory for Medicare providers of DMEPOS, effective October 1, 2009, per CMS regulation. We were the first durable medical equipment provider to seek and obtain voluntary accreditation from The Joint Commission. All of our locations are currently accredited by The Joint Commission and our home infusion therapy service line is also accredited by the ACHC. In 2007, we completed a nationwide independent triennial accreditation renewal process conducted by The Joint Commission and we have more than 15 years of continuous accreditation by The Joint Commission—longer than any other homecare provider. In late June 2010, The Joint Commission completed its most recent triennial survey of our respiratory/home medical equipment and infusion locations and is expected to renew our accreditation for another three years.

• Execute our strategic initiatives to drive profitability. For the past several years, we have successfully engaged in a range of cost savings initiatives to ease pressure on our revenue that has been and continues to be caused by Medicare and Medicaid reimbursement changes. These initiatives are designed to improve customer service, delivery and vehicle routing services, streamline the billing and payment process, effectively manage purchasing costs and improve the overall experience of the patients we serve. We launched a substantial cost reduction plan in late 2007. To date, we have made significant progress across a number of the identified initiatives targeting expected annual savings of approximately $198 million, of which we realized approximately $127 million through March 31, 2010.

98

Service Lines

We are a quality, cost-efficient provider of a broad range of home healthcare services through approximately 500 locations that serve patients throughout the United States. We have two operating segments: (1) home respiratory therapy and home medical equipment and (2) home infusion therapy. Within these two segments, there are three core service lines: home respiratory therapy, home medical equipment and home infusion therapy. The following table provides examples of the services and products we provide in each service line:

Service Line	Examples of Services and Products
Home respiratory therapy	Provision of oxygen systems, stationary and portable ventilators, obstructive sleep apnea equipment, nebulizers, respiratory medications and related clinical/administrative support services
Home medical equipment	Provision of patient safety items, ambulatory aids and in-home equipment, such as wheelchairs, hospital beds and Negative Pressure Wound Therapy
Home infusion therapy	Intravenous or injectable administration of anti-infectives, pain management, chemotherapy, nutrients (also administered through a feeding tube), immune globulin (“IVIG”), coagulant and blood clotting factors, antitrypsin deficiency medication, other medications and related clinical/administrative support services

The following table sets forth a summary of net revenues by service line, expressed as percentages of total net revenues:

	Year Ended December 31,				Period January  1, 2008 to October 28, 2008		Period October  29, 2008 to December 31, 2008		Year Ended December 31, 2009		Three months ended March 31, 2009		Three months ended March 31, 2010
	2006		2007
	(Predecessor)		(Predecessor)		(Predecessor)		(Successor)		(Successor)		(Successor)		(Successor)
Home respiratory therapy	68	%	67	%	52	%	52	%	48	%	49	%	48	%
Home medical equipment/other	14	%	13	%	9	%	7	%	8	%	8	%	7	%
Total home respiratory and home medical equipment segment	82	%	80	%	61	%	59	%	56	%	57	%	55	%
Home infusion therapy segment	18	%	20	%	39	%	41	%	44	%	43	%	45	%
Total net revenues	100	%	100	%	100	%	100	%	100	%	100	%	100	%

Home Respiratory Therapy and Home Medical Equipment ($1,169.6 million and $278.3 million, or 55.8% and 54.7%, of our net revenues for the year ended December 31, 2009 and the three months ended March 31, 2010, respectively)

Home Respiratory Therapy

We are the largest provider of home respiratory therapies in the United States to the managed care market serving approximately 1.5 million patients annually through our nationwide distribution platform that includes approximately 400 locations. We offer a full range of home respiratory therapy products and services, from the

99

simplest nebulizer and oxygen concentrator to the most complex ventilator. Our services offer a compelling relative cost advantage to our patients and payors. For example, in-home oxygen treatment costs for a Medicare patient are on average less than $7 per day. Patients utilize our products to treat a variety of conditions, including:

• COPD, such as emphysema and chronic bronchitis (the fourth leading cause of death in the U.S.);

• respiratory conditions associated with nervous system disorders or injuries, such as Lou Gehrig’s disease and quadriplegia;

• congestive heart failure; and

• lung cancer.

By focusing our efforts primarily on the managed care population, we limit our exposure to the highly-regulated Medicare respiratory business, which is subject to changes in coverage, payment and pricing guidelines. As an example, Medicare oxygen accounted for less than 10% and 11% of our total net revenues for the year ended December 31, 2009 and three months ended March 31, 2010, respectively.

We employ a nationwide clinical staff of more than 800 respiratory care professionals, including home respiratory therapists who provide direct patient care, monitoring and 24-hour support services under physician-directed treatment plans and in accordance with our proprietary acuity program. We derive revenues from the provision of oxygen systems, ventilators, respiratory assist devices, and CPAP/bi-level devices, as well as from the provision of infant apnea monitors, nebulizers, home-delivered respiratory medications and related services.

We are also the largest provider of sleep apnea devices, including CPAP/bi-level devices, and patient support services in the United States. The incidence and diagnosis of OSA continues to increase in the United States. We believe that the strength of our position in this market is partly due to our significant presence in the managed care market, since OSA largely affects adults between the ages of 35 and 55 rather than the population served by Medicare. To manage our significant new and recurring patient volumes in a cost-effective, clinically sound manner, we developed an innovative care model called the “CPAP Center at Apria Healthcare.” This branch-based model allows Apria’s respiratory care practitioners to educate, on a timely and efficient basis, newly-diagnosed patients about their condition, the equipment and accessories their physician has prescribed for them, and the long-term importance of complying with the physician’s order. The model includes both one-on-one patient education and teaching performed in group settings, depending on the geographic area of the country and the patient’s payor’s contractual preferences.

Home Medical Equipment

As the leading provider of home medical equipment in the United States, we supply a wide range of products to help improve the quality of life for patients with special needs. Our integrated service approach allows patients, hospital and physician referral sources and managed care organizations accessing either our home respiratory or home infusion therapy services to also access needed home medical equipment through a single source. The use of home medical equipment provides a significant relative cost advantage to our patients and payors. For example, on average, it costs $50 per day to create an in-home hospital room versus approximately $1,500 per day for in-patient hospital care, according to CMS. Basic categories of equipment are:

• manual wheelchairs and ambulatory equipment, such as canes, crutches and walkers;

• hospital room equipment, such as hospital beds and bedside commodes;

• bathroom equipment, such as bath and shower benches, elevated toilet seats and toilet, tub or wall grab bars;

• phototherapy systems, such as blankets, wraps or treatment beds for babies with jaundice; and

100

• support surfaces, such as pressure pads and mattresses, for patients at risk for developing pressure sores or decubitus ulcers.

In May 2008, we announced a preferred provider agreement with Smith & Nephew plc, a leading provider of NPWT, to provide NPWT services and products in the United States. NPWT is a topical treatment intended to promote healing in acute and chronic wounds affected by conditions including diabetes, arterial insufficiency and venous insufficiency.

Home Infusion Therapy ($925.0 million and $230.6 million, or 44.2% and 45.3%, of our net revenues for the year ended December 31, 2009 and three months ended March 31, 2010, respectively)

Through our acquisition of Coram in December 2007, we are the leading provider of home infusion therapy services in the United States—serving approximately 100,000 patients annually through 72 infusion pharmacy locations nationwide. We provide patients with intravenous or injectable medications and clinical services at home or in one of our 62 ambulatory infusion suites nationwide. We employ nursing clinicians who assess patients before their discharge from the hospital whenever possible, and then develop, in conjunction with the physician, a plan of care. Our home infusion products offer a compelling relative cost advantage to our patients and payors. For example, we believe that a home intravenous antibiotic program in a Medicare managed care plan costs significantly less than the cost to provide that service in a hospital setting.

Home infusion therapy is used to administer drugs and other therapeutic agents directly into the body through various types of catheters or tubing. Our services are frequently used to treat patients with infectious diseases, cancer, gastrointestinal diseases, chronic or acute pain syndromes, immune deficiencies, cardiovascular disease or chronic genetic diseases, and those who require therapies associated with bone marrow or solid organ transplantation. We employ licensed pharmacists and registered nurses who specialize in the delivery of home infusion therapy. They are able to respond to emergencies and questions regarding therapy 24 hours a day, seven days a week and provide initial and ongoing training and education to the patient and caregiver. Other support services include supply replenishment, pump management, preventive maintenance, assistance with insurance questions and outcome reporting.

We believe we are also a leading provider of enteral nutrition in the United States. Enteral nutrition, or “tube feeding,” is prescribed to patients whose gastrointestinal system is malfunctioning or who suffer from neurological conditions, swallowing disorders or malnutrition attributable to stroke, cancer or other conditions. In recent years, advances in enteral nutrition have enabled more adults and children to have their nutritional and caloric needs met by tube feeding, as opposed to more invasive and expensive therapies. Our patient intake and care model for enteral patients is unique in that it includes centralized customer service and monthly refill operations. Rather than performing those functions at all branches, they are centralized in four regional centers, with first-dose support provided by the branches.

Organization and Operations

Organization. Our approximately 500 locations deliver home healthcare products and services to patients in their homes and to other care sites through our delivery fleet and our qualified delivery professionals and clinical employees. Our home respiratory therapy, home medical equipment and home infusion therapy service lines are organized into geographic divisions that provide management oversight.

Corporate Compliance. As a leader in the home healthcare industry, we have implemented a compliance program to further our commitment to providing quality home healthcare services and products while maintaining high standards of ethical and legal conduct. We believe that it is essential to operate our business with integrity and in full compliance with applicable regulations. Our Corporate Compliance Program includes a written Code of Ethical Business Conduct that employees receive as part of their initial orientation process and which is reinforced on an ongoing basis via training, communications and the application of disciplinary

101

guidelines. Additionally, managers and above are required to complete an annual regulatory certification process during which they attest that they have reviewed the Code with their direct reports. The compliance program is designed to accomplish the goals described above through employee education, a confidential disclosure program, written policy guidelines, periodic reviews, frequent reinforcement, compliance audits, a formal disciplinary component and other programs. Compliance oversight is provided by the Corporate Compliance Committee, which meets quarterly, consisting of senior and mid-level management personnel from various functional disciplines. In addition to updates provided to the Board of Directors during its regular meetings, a written Compliance Program Report is submitted annually to the Board for review and discussion.

Pursuant to the merger agreement to acquire Coram, we assumed Coram’s obligations under its Certification of Compliance Agreement with the OIG of the HHS (the “Compliance Agreement”). The Compliance Agreement, which became effective on August 22, 2007, obligates Coram to maintain a compliance program to monitor and ensure compliance with federal healthcare program requirements. Under the Compliance Agreement, Coram’s compliance program must include maintenance of specified funding levels for the compliance program for at least three years following the date of the Compliance Agreement, prompt refunding of any overpayments, and implementation of various compliance program elements such as training, auditing and disclosure programs, development of a code of conduct and appointment of a compliance officer and compliance committee. Additionally, the Compliance Agreement requires notification to the OIG of certain events and imposes an annual certification requirement on Coram. The Compliance Agreement provides for stipulated penalties for failure to comply with its provisions. The year 2009 marked the second year of the three-year Compliance Agreement; in both 2008 and 2009, the OIG accepted our annual certification documents as filed.

Internal Audit. Our internal audit function reports directly to the Audit Committee of the Board of Directors and provides ongoing assessments of our system of disclosure controls and procedures, and internal control over financial reporting. Our internal audit function is responsible for both operational and financial reviews of our operations, for monitoring compliance with policies and procedures and for the identification and development of best practices within the organization.

Operating Systems and Controls. Our business is dependent, to a substantial degree, upon the quality of our operating and field information policies and procedures for proper contract administration, accurate order entry and pricing, billing and collections, and inventory and patient service equipment management. These policies and procedures also provide reporting that enables us to monitor and evaluate contract profitability. Our information services department works closely with all of the operating areas of our business to ensure that our policies and procedures are compliant with government regulations and payor requirements and to support their business improvement initiatives with technological solutions. See “Risk Factors—Risks Relating to Our Business—Our Failure to Successfully Design, Modify and Implement Computer and Other Process Changes to Maximize Productivity and Ensure Compliance Could Ultimately Have a Significant Negative Impact on Our Results of Operations and Financial Condition.”

We have established performance indicators which measure operating results against expected thresholds for the purpose of allowing all levels of management to identify and modify areas requiring improvement and to monitor the resulting progress. We have also developed mechanisms for measuring and reporting patient and customer satisfaction. Operating models with strategic targets have been developed to move us toward more effective management of the sales, customer service, accounts receivable, clinical and distribution areas of our business. Our management team is compensated using performance-based incentives focused on certain specified criteria such as Adjusted EBITDA and adjusted free cash flow. See “Executive Compensation—Compensation Discussion and Analysis—Compensation Elements.”

Payors. We derive substantially all our revenues from third-party payors, including private insurers, managed care organizations, Medicare and Medicaid. For the year ended December 31, 2009, approximately 22% of our total net revenues were derived from Medicare and 6% from Medicaid. Generally, each third-party payor has specific requirements which must be met before claim submission will result in payment. Certain

102

payor-related functions are now being administered by Intelenet. We have policies and procedures in place to manage the claims submission process, including verification procedures to facilitate complete and accurate documentation. Notwithstanding these measures, violations of these requirements may still occur and could result in the termination of a contract with a payor, the repayment of amounts previously received or other potentially significant liability. When the third party payor is a governmental entity, violations of these requirements could subject us to civil, administrative and criminal enforcement actions. From time to time, we engage in renegotiation, sometimes precipitated by a written or verbal termination notice, with payors with which we are contracted to provide our various products and services. See “Risk Factors—Risks Relating to Our Business—Continued Reductions in Medicare and Medicaid Reimbursement Rates and the Comprehensive Healthcare Reform Package Could Have a Material Adverse Effect on Our Results of Operations and Financial Condition,” “Risk Factors—Risks Relating to Our Business—Non-Compliance With Laws and Regulations Applicable to Our Business and Future Changes in Those Laws and Regulations Could Have a Material Adverse Effect on Us,” “Risk Factors—Risks Relating to Our Business—Our Outsourcing and Offshoring Activities Subject Us to Risks That Could Have a Significant Negative Impact on Our Results of Operations and Financial Condition,” “Risk Factors—Risks Relating to Our Business—Our Payor Contracts are Subject to Renegotiation or Termination Which Could Result in a Decrease in Our Revenue and Profits” and “Certain Relationships and Related Party Transactions—Intelenet Agreement.”

Receivables Management. We operate in an environment with complex requirements governing billing and reimbursement for our products and services. Initiatives focused specifically on receivables management such as system enhancements, process refinements and organizational changes have resulted in improvement and consistency in key accounts receivable indicators.

We are expanding our use of technology in areas such as electronic claims submission and electronic funds transfer with managed care organizations to more efficiently process business transactions. This use of technology can expedite claims processing and reduce the administrative cost associated with this activity for both us and our customers/payors. We now submit approximately 93% of our home respiratory and home medical equipment claims and approximately 80% of our home infusion therapy claims electronically. We are also focusing our resources on developing internal expertise with the unique reimbursement requirements of certain large third-party payors, which should help reduce subsequent denials and shorten related collection periods. Our policy is to collect co-payments from the patient or applicable secondary payor. In the absence of a secondary payor, we generally require the co-payment at the time the patient is initially established with the product/service. Subsequent months’ co-payments are billed to the patient. We are also seeking to streamline related processes in order to maximize the co-payment collection rate. Certain patient pay management functions are now being administered by Intelenet. We have established policies and procedures for Intelenet to perform effectively on our behalf. See “Risk Factors—Risks Relating to Our Business—Our Outsourcing and Offshoring Activities Subject Us to Risks That Could Have a Significant Negative Impact on Our Results of Operations and Financial Condition,” “Risk Factors—Risks Relating to Our Business—Our Failure to Maintain Controls and Processes Over Billing and Collections or the Deterioration of the Financial Condition of Our Payors Could Have a Significant Negative Impact on Our Results of Operations and Financial Condition” and “Certain Relationships and Related Party Transactions—Intelenet Agreement.”

Marketing

Through our field sales force, we market our services primarily to physicians, managed care organizations, hospitals, medical groups, home health agencies and case managers. We have developed and put into practice several marketing initiatives, including but not limited to:

Automated Call Routing Through Toll-Free Numbers. This allows select managed care organizations to reach any of our locations and to access the full range of our services through toll free telephone numbers.

103

Nationwide Accreditation. All of our branch locations are accredited by the Joint Commission and our home infusion therapy service line is also accredited by the ACHC. Each of the two Commissions is a nationally recognized organization that develops standards for various healthcare industry segments and monitors compliance with those standards through voluntary surveys of participating providers. As the home healthcare industry has grown, and accreditation has become a mandatory requirement for Medicare DMEPOS providers, the need for objective quality measurements has increased. Accreditation by either Commission entails a lengthy voluntary review process that is conducted every three years. Accreditation is also widely considered a prerequisite for entering into contracts with managed care organizations at every level and is required for Medicare competitive bidding. Because accreditation is expensive and time consuming, not all providers choose to undergo the process.

Essential Care Model. We have developed the Essential Care Model, a proprietary model that defines the services, supplies and products delivered in conjunction with prescribed homecare equipment and therapies. The Essential Care Model is used to establish consistent and clear expectations for referral sources, payors and patients.

Patient Satisfaction and Complaint Resolution Process. We have a centralized patient satisfaction survey function that periodically conducts targeted member satisfaction studies for key managed care organizations as specified by the various contractual arrangements. The same centralized group manages a complaint resolution process through which service improvements are identified and implemented at the field level. We believe that both centralized processes afford us visibility to centralized performance improvement data and trends that enable us to amend policies and procedures as necessary to meet the needs of patients and referral sources.

Apria Great Escapes^® Travel Program. Our more than 500 location network facilitates travel for patients who require oxygen, alternate site infusion or other products, services and therapies. We coordinate equipment and service needs for thousands of traveling patients annually, which enhances their mobility and quality of life.

Comprehensive, Patient-Centric Clinical and Therapy Management Programs. We offer a number of clinical management programs designed to help physicians and managed care customers better manage patients through the use of homecare and ambulatory infusion suites to achieve substantial healthcare savings through the careful and appropriate oversight and management of medical equipment services and biotherapies. Our COPD Care Management, Sleep Management, RespiratoryAssist^™, SatAssist^™, Nourish^™ and Tube Feeding Programs provide feedback to physicians regarding changes in patients’ clinical status, thus preventing unnecessary hospital or emergency admissions. Our proprietary EyeOn^® infusion therapy management programs for Hemophilia and IVIG support thousands of patients each year. Our extensive experience and clinical expertise have enabled our development of proprietary, proven therapy management programs designed specifically for these high cost and highly complex biotherapies. The EyeOn^® program creates proven cost savings through careful risk assessment, management, and appropriate utilization management techniques.

Sales

As of March 31, 2010, we employed approximately 1,000 sales professionals whose primary responsibility is to generate new referrals and to maintain existing relationships for all of our service lines. Key customers include physicians and their staffs, hospital-based healthcare professionals and managed care organizations, among others. We provide our sales professionals with the necessary clinical and technical training to represent our major service offerings. As larger segments of the marketplace become involved with managed care, specially trained members of our sales force provide us with a competitive advantage based on their working knowledge of pricing, contracting and negotiating with payors.

An integral component of our overall sales strategy is to increase volume through managed care referral sources and traditional physician referral channels. Specific growth initiatives designed to increase customer awareness of our clinical and operational programs are in place with the goal of securing a greater share of the

104

traditional market. The ultimate decision makers for healthcare services vary greatly, from closed model managed care organizations to preferred provider networks, which are controlled by more traditional means. Our selling structure and strategies are designed to adapt to changing market factors and will continue to adjust as further changes in the industry occur. Managed care organizations continue to represent a significant portion of our business in several of our primary metropolitan markets. No third-party managed care payor group, however, represented more than 8% of our total net revenues for the three months ended March 31, 2010. Among our more significant managed care customers during 2009 and three months ended March 31, 2010 were Aetna Health Management, CIGNA Health Corporation, Kaiser Foundation Health Plan and United HealthCare Services. We also offer various fee-for-service arrangements to hospitals or hospital systems whose patients have home healthcare needs. See “Risk Factors—Risks Relating to Our Business—We Believe That Continued Pressure to Reduce Healthcare Costs Could Have a Material Adverse Effect on Us” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Competition

The segment of the healthcare market in which we operate is highly competitive. In each of our service lines there are a limited number of national providers and numerous regional and local providers. The competitive factors most important in the regional and local markets are:

• reputation with referral sources, including local physicians and hospital-based professionals;

• accessibility and responsiveness;

• price of services;

• overall ease of doing business;

• quality of patient care and associated services; and

• range of home healthcare services and products.

In addition to the foregoing, the most important competitive factors in the larger, national markets are:

• ability to service a wide geographic area;

• ability to develop and maintain contractual relationships with managed care organizations;

• access to capital;

• information systems capabilities; and

• accreditation by the Commissions or a similar accrediting body.

We believe that we compete effectively in each of our service lines with respect to all of the above factors and that we have an established record as a quality provider, as reflected by the accreditation of all of our branches.

In each of our service lines there are a number of national providers and numerous regional and local providers with which we directly compete. Among the national providers are, American HomePatient, Inc., Medco/Critical Care Systems, Lincare Holdings, Inc., Walgreen’s Option Care and Rotech Healthcare Inc. Other types of healthcare providers, including industrial gas manufacturers, individual hospitals and hospital systems, home health agencies and health maintenance organizations, have entered and may continue to enter the market to compete with our various service lines. Depending on their business strategies and financial position, it is possible that our competitors may have access to significantly greater financial and marketing resources than we do. This may increase pricing pressure and limit our ability to maintain or increase our market share. See “Risk Factors—Risks Relating to Our Business—We Believe That Continued Pressure to Reduce Healthcare Costs Could Have a Material Adverse Effect on Us” and “Risk Factors—Risks Relating to Our Business—We Experience Competition From Numerous Other Home Respiratory/Home Medical Equipment and Home Infusion Therapy Service Providers, and This Competition Could Adversely Affect Our Revenues and Our Business.”

105

Acquisition and Development Activities

In order to take advantage of our core competencies, expand our service offerings and enhance our value proposition for our customers, we may elect to make selective acquisitions of businesses with complementary products and services, or with operations in additional markets. We expect to carefully evaluate each acquisition opportunity through an extensive due diligence process to determine those that have the greatest potential for growth and increased profitability under our operating structure.

Outsourcing Activities

We are pursuing an outsourcing strategy with respect to certain billing, collections, administrative and information systems functions and have selected two business process outsourcing firms, Intelenet and Dell Services (formerly Perot Systems Corporation), to assist with implementing a portion of this strategy.

Intelenet Agreement

In May 2009, we entered into the Master Service Agreement (“Intelenet Agreement”) with Intelenet, an Indian company affiliated with the Sponsor, regarding the outsourcing of certain functions relating to billing, collections and other administrative and clerical services. A portion of such services to be outsourced were transitioned to Intelenet during 2009. A portion of such services to be outsourced have been transitioned to Intelenet and additional services are expected to be transitioned over the next 18 months. Only certain services are currently subject to the Intelenet Agreement. However, if all services currently planned for outsourcing to Intelenet are in fact handled by Intelenet, we expect to make payments to Intelenet of approximately $200 million over a seven-year period that began in the second quarter of 2009. One of the members of our Board of Directors, Mr. Patrick Bourke, is an employee of the Sponsor and also serves on the Board of Directors of Intelenet. During the year ended December 31, 2009 and the three months ended March 31, 2010, we paid approximately $3.7 million and $4.0 million, respectively, under the Intelenet Agreement.

Perot Systems Agreement

In April 2009, we entered into an Information Technology Services Agreement (the “Perot Agreement”) with Perot Systems Corporation (“Perot Systems”) to outsource certain information technology functions to Perot Systems. Dell Inc. acquired Perot Systems in November 2009 and created a new business unit called Dell Services, which provides the services covered by the Perot Agreement. We expect to pay approximately $216.0 million to Dell Services over the ten-year term of the Perot Agreement. During the year ended December 31, 2009 and the three months ended March 31, 2010, we paid approximately $11.4 million and $7.4 million, respectively, under the Perot Agreement. In addition to amounts under the ten-year term of the agreement, we expect to pay approximately $15.0 million over the first 60 months of the contract for services rendered primarily in support of the cost savings initiatives described earlier relating to operations and revenue management functions.

Government Regulation

We are subject to extensive government regulation, including numerous laws directed at regulating reimbursement of our products and services under various government programs and preventing fraud and abuse, as more fully described below. We maintain certain safeguards intended to reduce the likelihood that we will engage in conduct or enter into arrangements in violation of these restrictions. Corporate contract services and legal department personnel review and approve written contracts subject to these laws. We also maintain various educational and audit programs designed to keep our managers updated and informed regarding developments on these topics and to reinforce to employees our policy of strict compliance in this area. Federal and state laws require that we obtain facility and other regulatory licenses and that we enroll as a supplier with federal and state health programs. Under various federal and state laws, we are required to make filings or submit notices in connection with transactions that might be defined as a change of control of the Company. We are aware of these requirements and routinely make such filings with, and seek such approvals from, the applicable regulatory

106

agencies. Notwithstanding these measures, due to changes in and new interpretations of such laws and regulations, and changes in our business, violations of these laws and regulations may still occur, which could subject us to civil and criminal enforcement actions; licensure revocation, suspension or non-renewal; severe fines and penalties; the repayment of amounts previously paid to us and even the termination of our ability to provide services, including those provided under certain government programs such as Medicare and Medicaid. See “Risk Factors—Risks Relating to Our Business—Continued Reductions in Medicare and Medicaid Reimbursement Rates and the Comprehensive Healthcare Reform Package Could Have a Material Adverse Effect on Our Results of Operations and Financial Condition” and “Risk Factors—Risks Relating to Our Business—Our Failure To Maintain Required Licenses Could Impact Our Operations.”

Medicare and Medicaid Revenues. In the three months ended March 31, 2010 approximately 24% and 6% of our net revenues were reimbursed by the Medicare and state Medicaid programs, respectively. No other third-party payor represented more than 8% of our total net revenues for the three months ended March 31, 2010. The majority of our revenues are derived from rental income on equipment rented and related services provided to patients, sales of equipment, supplies and pharmaceuticals and other items we sell to patients for patient care under fee-for-service arrangements. Revenues derived from capitation arrangements represented 8% of total net revenues for the three months ended March 31, 2010.

Medicare Reimbursement. There are a number of legislative and regulatory activities in Congress and at CMS that affect or may affect Medicare reimbursement policies for products and services we provide. Specifically, a number of important legislative changes that affect our business were included in the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“MMA”), which was signed into law in December 2003, the Deficit Reduction Act of 2005 (“DRA”), which was signed into law in February 2006, MIPPA, which became law on July 15, 2008, and the Reform Package. These Acts and their implementing regulations and guidelines contain numerous provisions that were significant to us and continue to have an impact on our operations today, as described below.

DMEPOS Competitive Bidding. The MMA required implementation of a competitive bidding program for certain DMEPOS items. By statute, CMS was required to implement the DMEPOS competitive bidding program over time, with Round 1 of competition occurring in portions of 10 of the largest MSAs, in 2007, launch of the program in 2008 and in 70 additional markets in 2009, and in additional markets after 2009.

In 2007 and 2008, CMS sought and reviewed bids and developed a plan to implement Round 1 on July 1, 2008. CMS offered us contracts in several CBAs in Round 1; we accepted the contracts for certain product categories and declined others due to unacceptably low competitively determined SPAs in certain markets, which would not adequately cover the cost of providing quality service to our patients in those areas. We, along with other winning contract suppliers, began providing services under Round 1 on July 1, 2008.

The bidding process for Round 1 was controversial and complex, which resulted in deadline extensions. Moreover, CMS was subject to numerous lawsuits seeking a delay of Round 1. Then on July 15, 2008, MIPPA was enacted which, among other provisions, delayed the DMEPOS competitive bidding program by requiring that Round 1 competition commence in 2009, and required a number of program reforms prior to CMS’ re-launching the program. As a result, contracts that were awarded under Round 1 were terminated. The new “Round 1 Rebid” contracting process opened on October 21, 2009 and bids had to be submitted by December 21, 2009. We submitted our bids and related documentation by the stated deadlines and CMS informed us of their receipt. In late June 2010, CMS published a Proposed Rule containing several provisions related to the competitive bidding program. The Proposed Rule included the proposed list of 21 additional MSAs to be included in Round 2, as well as provisions relating to the diabetic supply category. Those provisions include a proposed definition of “mail order” and “non-mail order” items and a proposal for providers to supply a minimum level of product choices to patients. The public comment period on the Proposed Rule will close in August and a Final Rule is expected in the fall of 2010. In early July 2010, CMS announced the new SPAs for each of the product categories and each of the CBAs included in the Round 1 Rebid. CMS then began the

107

contracting process with suppliers by issuing contract offer letters to qualified providers. This process is expected to take approximately two months, and CMS expects to announce the list of winners publicly in September 2010. The new rates will take effect in January 2011. Until then, all Medicare beneficiaries in the fee-for-service Medicare program may use any provider in any geographic area, including the CBAs, to obtain home medical equipment and oxygen therapy services and products.

Under MIPPA, the initial CBAs and product categories subject to rebidding are very similar to those of Round 1. MIPPA also excludes Negative Pressure Wound Therapy Pumps and Related Supplies and Accessories as a competitive bidding product category in Round 1 and permanently excludes Group 3 Complex Rehabilitative Power Wheelchairs and Related Accessories as a competitive bidding product category. MIPPA also includes a new provision requiring bids for mail order diabetes testing supplies after Round 1 to include a certain percentage of all types of available diabetic testing strips.

The estimated annual total net revenues associated with the items that would have been subject to competitive bidding in Round 1 of what was to be the initial year of the program represented approximately 1.4% of our annual total net revenues. Although Medicare has not yet published its 2009 expenditures by CBA or product category, based on 2008 data provided during the Round 1 Rebid process, we estimate that after the DRA and MIPPA reimbursement reductions of 2009 and a change in our business mix since 2007 are allocated for, the estimated annual total net revenues associated with items subject to competitive bidding in the Round 1 Rebid is approximately 1.0% of our annual total net revenues. In early July 2010, CMS announced the new SPAs for each of the product categories and each of the CBAs included in the Round 1 Rebid. CMS then began the contracting process with suppliers by issuing contract offer letters to qualified providers. We received contract offers for a substantial majority of the bids we submitted. We did not receive contract offers for certain product categories in certain CBAs, but the process will not be completed until September 2010. Approximately $21 million of our net revenues for the fiscal year ended December 31, 2009 was generated by the products and CBAs included in the Round 1 Rebid. We estimate that the initial results of the Round 1 Rebid would impact our net revenues in the fiscal year ending December 31, 2011 by approximately $8.0 million, assuming the current contract offers and no changes in volume.

Notwithstanding the changes MIPPA requires, competitive bidding imposes a significant risk to DMEPOS suppliers. Under the rules governing Round 1 and the Round 1 Rebid which proceeded after the delay, if a DMEPOS supplier operating in a CBA is not awarded a contract for that CBA, the supplier generally will not be able to bill and be reimbursed by Medicare for DMEPOS items supplied in that CBA for the time period covered by the competitive bidding program unless the supplier meets certain exceptions or acquires a winning bidder. Because the applicable statutes mandate financial savings from the competitive bidding program, a winning contract supplier will receive lower Medicare payment rates under competitive bidding than the otherwise applicable DMEPOS fee schedule rates. As competitive bidding is phased in across the country under the revised MIPPA implementation schedule, we will likely experience a reduction in reimbursement, as will most if not all other DMEPOS suppliers in the impacted areas. In addition, there is a risk that the new competitive bidding prices will become a benchmark for reimbursement from other payors. MIPPA does not prevent CMS from adjusting prices for DMEPOS items in non-bid areas; however, before using its authority to adjust prices in non-bid areas, MIPPA requires that CMS issue a regulation that specifies the methodology to be used and consider how prices through competitive bidding compare to costs for those items and services in the non-bid areas. In January 2009, CMS released an interim final rule on the DMEPOS competitive bidding program implementing certain MIPPA provisions requiring CMS to conduct the Round 1 Rebid in 2009 and mandating certain changes for both the Round 1 Rebid and subsequent rounds of the program, including (i) a decreased financial documentation burden, (ii) a process for providing feedback to suppliers regarding missing hardcopy documentation (primarily financial in nature, not the electronic bid form itself), and (iii) requiring bidders and, ultimately, contracted providers, to disclose to CMS information regarding accreditation status and subcontracting relationships. This interim final rule also formally exempted certain DMEPOS items (including crutches, canes, walkers, folding manual wheelchairs, blood glucose monitors and infusion pumps that are durable medical equipment) when furnished by hospitals to the hospitals’ own patients

108

during an admission or on the date of discharge. In addition, the regulations permanently exclude Group 3 Complex Rehabilitative Power Wheelchairs and Related Accessories as a competitive bidding product category. The competitive bidding interim final rule became effective on April 18, 2009.

The Reform Package includes changes to the Medicare DMEPOS competitive bidding program. Significantly, Round 2 of the competitive bidding program has been expanded from 70 to 91 of the largest MSAs. CMS has announced that the effective date of the Round 2 pricing will be January 1, 2013; additional details concerning products to be included and other aspects of implementing Round 2 will not be fully known until after CMS completes a rulemaking process, which is currently scheduled for the summer or fall of 2010. Assuming that Round 2 would include the same product categories, bidding rules and markets currently being proposed by CMS, we estimate that approximately $110 million of our net revenues for the fiscal year ending December 31, 2011 would be subject to competitive bidding. Although the bidding process for Round 2 is currently scheduled to commence in 2011, the new Round 2 rates and guidelines are not scheduled to take effect until January 2013. Therefore, we cannot estimate the impact of potential Round 2 rate reductions on our business until more specific information is published by CMS and its contractors. The Reform Package also gives the Secretary of Health and Human Services the authority to apply competitive bid pricing to non-bid areas, but details of that process are unlikely to be understood until after CMS issues guidance or completes a related rulemaking process.

With respect to the competitive bidding program generally, at a March 2010 PAOC meeting, CMS briefed the PAOC regarding the next round of the DMEPOS competitive bidding program. With review of Round 1 Rebid bids then underway, the briefing focused on certain aspects of Round 2, which is mandated by MIPPA to begin in 2011. CMS expects to make changes to the program through the rulemaking process and anticipates that another proposed rule will be published in the summer of 2010, with a final rule to be published in the fall of 2010 relating to the Round 2 product categories, and then begin pre-bidding supplier education. CMS anticipates that it will announce the Round 2 bidding schedule and begin the bidding process, with bidder registration, in the winter of 2011. CMS plans to complete the bid evaluation process, announce the SPAs and begin the contract process in the spring of 2012. In addition, CMS plans to announce the Round 2 contract suppliers in the summer of 2012. We cannot quantify what negative impact, if any, the revised program, including the expansion of Round 2, will have upon our revenue or operations once the program is reinitiated, but it could be material.

Nevertheless, we believe that our geographic coverage, clinical marketing programs and purchasing strength provide competitive advantages to maintain and enhance market share under Medicare competitive bidding. However, there is no guarantee that we will be selected as a winning contract supplier in any phase of the program and be awarded competitive bidding contracts by CMS. Under the current competitive bidding regulations, if we are not selected as a winning contract supplier for a particular CBA, we will generally not be allowed to supply Medicare beneficiaries in the CBA with products subject to competitive bidding, unless we elect to continue to service existing patients under the “grandfathering provision” of the most recent final rule or we acquire a winning supplier. Because of our combination of both managed care and traditional business, we believe we can nevertheless maintain a favorable overall market position in a particular CBA even if we are not selected as a contract supplier.

Medicare Fee Schedule for DMEPOS and CPI Adjustments. In addition to the adoption of the DMEPOS competitive bidding program, the MMA implemented a five-year freeze on annual CPI payment increases for most durable medical equipment from 2004 to 2008. In MIPPA, in order to offset the cost of, or “pay for,” the delay in the implementation of the DMEPOS competitive bidding program, Congress approved a nationwide average payment reduction of 9.5% in the DMEPOS fee schedule for those product categories included in Round 1, effective January 1, 2009. These product categories could be subjected to a legislated CPI update in 2014, except if the item is still subject to competitive bidding or CMS has otherwise adjusted the payment rate.

The MIPPA legislation also authorized nationwide CPI increases from 2009 to 2013 for those DMEPOS items that were not subject to competitive bidding in July 2008. The CPI update for 2009 for non-competitively

109

bid items was 5%. For 2010, the CPI was -1.4%, however, the annual DMEPOS updates cannot be negative. Accordingly, the CPI update in 2010 is 0%. The Reform Package makes changes to the Medicare durable medical equipment consumer price index adjustment for 2011 and each subsequent year based upon the CPI reduced by a new productivity adjustment which may result in negative updates.

Capped Rentals and Oxygen Equipment. Under the DRA, beginning with Medicare beneficiaries who received DMEPOS products and services as of January 2006, ownership of certain durable medical equipment categorized by CMS in the “capped rental” category (e.g., hospital beds, wheelchairs, nebulizers, patient lifts and CPAP devices) automatically transfers to the Medicare beneficiary at the end of a maximum rental period. As of January 1, 2006, the maximum rental period for this category became 13 months. Therefore, the first month in which the new policy had an impact on our revenue was February 2007. In addition, the service and maintenance fee, which had been paid to suppliers twice yearly after the rental period ended in order to cover various non-equipment service costs for patients who require use of the equipment, was eliminated for those patients who commenced service on or after January 1, 2006. However, the DRA provides for additional payments for maintenance and service of the item for repair parts and labor not covered by a supplier’s or manufacturer’s warranty. Implementing regulations also imposed other repair and replacement obligations on suppliers with respect to equipment that does not last the useful lifetime of the equipment, which CMS has generally defined as being five years.

With respect to oxygen equipment, the DRA converted Medicare reimbursement for oxygen equipment from an ongoing rental method to a capped rental and rent-to-purchase methodology and limited reimbursement for rental of oxygen equipment to the current 36-month maximum. The DRA mandated that, after the 36-month rental period, the ownership of the equipment would transfer to the Medicare beneficiary, who would assume primary responsibility for identifying when repairs or preventive maintenance are needed. However, MIPPA repealed the mandatory title transfer for oxygen equipment. The existing implementing regulations to the DRA and MIPPA provisions also limit supplier replacement of oxygen equipment during the rental period, and require suppliers to replace beneficiary-owned equipment that does not last the useful lifetime of the equipment, which CMS has generally defined as being five years. As a result, the equipment will continue to be owned by the home oxygen provider for as long as the patient’s medical need exists, after which time it will be returned to the home oxygen provider.

The 36-month rental period was retroactively applied to January 1, 2006 for all beneficiaries requiring oxygen as of December 31, 2005. Accordingly, Medicare services provided on or after January 1, 2009 were the first Medicare claims in which the rental cap impacted us. DRA regulations, which remain intact despite the repeal of mandatory title transfer, established new payment classes for oxygen equipment, including transfilling and portable equipment, new monthly rental reimbursement rates, and new reimbursement rates for the delivery of oxygen contents, if applicable. On November 19, 2008, CMS published revised regulations implementing DRA and MIPPA. Under the revised regulations, suppliers must continue furnishing oxygen equipment after the 36-month rental cap period during any period of medical need for the remainder of the reasonable useful lifetime of the equipment, with certain limited exceptions. CMS also specified that a new period of continuous use will not begin following the 36-month rental cap period until the end of the equipment’s reasonable useful lifetime, unless the equipment is replaced because it is lost, stolen, irreparably damaged, or is replaced after the reasonable useful life expires. CMS has provided that the reasonable useful lifetime of oxygen equipment is five years (60 months). Therefore, a new oxygen capped rental period (36 months) may begin after the five year (60 months) useful lifetime of the oxygen equipment. However, at least one DMEMAC has provided that a patient must request that the supplier provide the new oxygen equipment and the supplier may not arbitrarily issue new equipment. Among other provisions, CMS also stated that it would not reimburse suppliers for oxygen tubing, cannulas and supplies patients may need between the 37th and 60th months of oxygen therapy and requires that the initial supplier of oxygen therapy make arrangements with another supplier if a patient relocates temporarily or permanently outside of the initial supplier’s service area. In addition, CMS stated that it would not establish any reimbursement rates for non-routine services patients may require after the 36-month rental period. Our policies and procedures conform to the pertinent implementing regulations of the DRA and MIPPA.

110

Regarding repairs and maintenance of oxygen equipment, CMS revised its regulations so that for services provided on or after January 1, 2009, the implementing regulations permitted payment in calendar year 2009 only to suppliers for general maintenance and servicing of certain oxygen equipment every six months, beginning after the first six-month period elapsed after the initial 36-month rental period. The final rule governing repairs and maintenance of oxygen equipment limits payment for general maintenance and servicing visits to 30 minutes of labor based on rates the Medicare contractors establish. With respect to equipment parts, CMS has stated that payments will not be made for equipment parts and that the supplier is responsible for replacing the parts on equipment from the supplier’s inventory in order to meet the patient’s medical need for oxygen. CMS issued guidance in November 2009 continuing the general maintenance and servicing payments for certain oxygen equipment. We cannot speculate on any future changes CMS may make to its repair, maintenance and service, supply or other fee schedules related to oxygen. We may or may not continue to provide repair and maintenance service on oxygen equipment that has met the cap. We routinely evaluate the impact of the changes caused by both the DRA and MIPPA and adjust our operating policies accordingly.

In January 2006, CMS published a final regulation that shifted payment for certain respiratory assist devices from the “frequent and substantial” payment category to the “capped rental” category. Under “frequent and substantial” payment, Medicare payment continues for the duration of the beneficiary’s medical need for the device, while “capped rental” payment is limited to 13 months despite the length of medical need. The change in the payment category became effective April 1, 2006. Although the change impacted company revenues and operating income from April 2006 through partial year 2008, there was no residual impact in 2009. We estimate that this change in payment categories resulted in a reduction in revenues of approximately $0.9 million in the period January 1, 2008 to October 28, 2008 from the same period in 2007. There was no impact in the year ended December 31, 2009 or the period October 29, 2008 to December 31, 2008.

In recent years, there have been several legislative and executive branch efforts to further reduce the maximum rental period for oxygen therapy, equipment and related services. Former President Bush’s 2007, 2008 and 2009 healthcare budget proposals sought to reduce the maximum rental period for oxygen equipment from the DRA-mandated 36 months to 13 months, which was recommended by the HHS OIG in a limited study of the oxygen benefit published in 2006 entitled “Medicare Home Oxygen: Equipment Cost and Servicing.” Neither President Obama’s 2010 budget proposal nor the Reform Package included a reduction in the oxygen rental period. However, it is premature to know whether future budgets or proposals will contain such a provision.

Over the course of 2008, CMS and the DMEMACs issued coverage determinations for positive airway pressure (“PAP”) devices, including CPAP and bi-level devices. Among other changes, the new Medicare DMEMAC local coverage determinations (“LCDs”) require additional documentation of clinical benefit of the PAP devices for continued coverage of the device beyond the first three months of therapy. Specifically, for PAP devices with initial dates of service on or after November 1, 2008, documentation of clinical benefit must be demonstrated by: (1) a face-to-face clinical re-evaluation by the treating physician (between the 31st and 90th day) with documentation that symptoms of obstructive sleep apnea are improved; and (2) objective evidence of adherence to use of the PAP device, reviewed by the treating physician. The LCDs define adherence to therapy as the use of the PAP device greater than or equal to 4 hours per night on 70% of nights during a consecutive thirty (30) day period anytime during the first three months of initial usage. If the clinical benefit requirements are not met, then continued coverage of the PAP device and related accessories are denied by Medicare as not medically necessary. We believe these requirements effectively require suppliers to supply PAP devices that monitor patient compliance and record hours of use, which adds to our expense structure without a corresponding increase in payments from Medicare. In late 2008 and throughout 2009, we have adjusted our operational model, patient care and payment policies to comply with these new Medicare requirements. These requirements only apply to Medicare Part B fee-for-service patients, not to those patients enrolled in Medicare Advantage or commercial health plans, and Medicare Part B fee-for-service represents a smaller portion of the overall PAP patient market. Despite our intensive efforts to educate patients about the importance of complying with their physician-prescribed therapy, some of our Medicare Part B patients did not meet the threshold for compliance in

111

2009. In order to reduce the impact of the LCDs, we are continuing to educate patients and referral sources concerning the importance of compliance with the patient’s prescribed therapy. However, these LCDs are likely to continue to impact the PAP industry.

Reimbursement for Inhalation and Infusion Therapy Drugs. As a result of MMA, beginning January 2005, Medicare Part B reimbursement for most drugs, including inhalation drugs, became based upon the manufacturer-reported ASP (subject to adjustment each quarter), plus 6%, plus a separate dispensing fee per patient episode. CMS publishes the ASP plus 6% payment levels in the month that precedes the first day of each quarter, and we have no way of knowing if the quarterly ASPs will increase or decrease since manufacturers report applicable ASP information directly to CMS. Since 2006, dispensing fees have remained at $57.00 for a 30-day supply for a new patient, $33.00 for each 30-day supply thereafter, and $66.00 for each 90-day supply.

The Medicare reimbursement methodology for non-compounded, infused drugs administered through durable medical equipment, such as infusion pumps, was not affected by this MMA change. It remains based upon either 95% of the October 1, 2003 AWP or, for those drugs whose AWPs were not published in the applicable 2003 compendia, at 95% of the first published AWP. Also, coding and reimbursement changes pertaining to compounded medications, issued in 2007, did not have a material impact on us due to the extremely low volume of patient-specific, physician-prescribed compounding that was performed by our inhalation pharmacies.

Although CMS had considered issuing a National Coverage Decision (“NCD”) for certain inhalation drug therapies, in the third quarter of 2007, CMS issued a NCD that stated that no national coverage policy was appropriate at that time. Rather, CMS stated that it would continue to defer decisions about the medical necessity of individual respiratory drugs to the local contractors. Thereafter, in April of 2008, the DMEMACs finalized proposed LCD policies for several respiratory drugs, including Xopenex^® and DuoNeb^®1 . Each of these two drugs was subjected to a separate “least costly alternative” (“LCA”) policy which would have changed the reimbursement methodology in a way that would effectively have eliminated Medicare beneficiary access to these drugs which are frequently used to treat COPD. After complaints were filed by Medicare beneficiaries in the Federal District Court for the District of Columbia, CMS announced that it planned to withdraw the LCA for Xopenex. On November 5, 2008, the plaintiffs in the Xopenex case filed a Motion to Voluntarily Dismiss all claims in the litigation. Subsequent to the filing of the complaint in the DuoNeb case, CMS postponed the LCA for DuoNeb until November 1, 2008. In November 2008, the Federal District Court for the District of Columbia enjoined CMS’s LCA for DuoNeb, saying that the Medicare program’s policy of paying for only “the least costly alternative” was not permitted under the Medicare law and finding that Medicare and some of its contractors had unlawfully limited payments for DuoNeb. The court made two distinct findings on the merits, in summary: (1) with limited exceptions (e.g., a public health emergency) CMS does not have the authority to deviate from the 106% ASP calculation for a covered Part B drug, and (2) the “reasonable and necessary” language in Section 1862 refers to coverage only and cannot be applied to reimbursement determinations. The court reasoned that CMS’s position would have given the Secretary of HHS significant discretion to determine the amount paid for every item and service covered by Medicare, without reference to the detailed formulas established in the laws enacted by Congress. This decision was appealed by the government in the U.S. Court of Appeals for the District of Columbia. In December 2009, the U.S. Court of Appeals for the District of Columbia upheld the District Court’s ruling in all regards and confirmed the distinction between Medicare coverage and reimbursement by ruling that the Medicare statute precludes the Secretary from issuing a coverage determination that sets the reimbursement rate for a covered drug based on the “least costly alternative”. This decision has national implications for the coverage of inhalation drugs. The time period for the government to file an appeal of the Court of Appeals’ decision has expired, and the government did not appeal.

In 2007 and 2008, there were other changes to the reimbursement methodology for the inhalation drugs Xopenex and albuterol. Beginning in the third quarter of 2007, CMS began reimbursing providers of Xopenex and albuterol a blended ASP for these two inhalation drugs. On December 29, 2007, the President signed into law

¹ Xopenex is a registered trademark of Sepracor, Inc., and DuoNeb is a registered trademark of Dey Labs, LLC.

112

the Medicare, Medicaid, and State Children’s Health Insurance Program Extension Act of 2007, which partially reversed the CMS regulatory decision regarding Xopenex and albuterol. Beginning on April 1, 2008, Medicare began to reimburse providers for Xopenex by blending the average sales prices of Xopenex and albuterol, but it no longer reimbursed providers for albuterol at the blended price. Rather, albuterol is reimbursed using an albuterol-only ASP.

We estimate that the combined effect of these changes to inhalation drug reimbursement resulted in a $7.9 million decline in revenue for the year ended December 31, 2009 from the same period in 2008. However, we have undertaken strategies intended to partially mitigate these negative impacts, including the discontinuation of the inhalation drug Xopenex from our inhalation pharmacies’ drug formulary and other formulary changes.

A limited number of infusion therapies, supplies and equipment are covered by Medicare Part B. The MMA, through the new Medicare Part D program, provided expanded coverage for certain home infusion therapy drugs, but excluded coverage for the corresponding supplies and clinical services needed to safely and effectively administer these drugs. We have contracted with a limited number of Medicare Part D prescription drug plans in order to provide continuity of care for certain patients.

Due to ongoing Part D and Part B coverage and payment issues associated with home infusion therapy, the industry is continuing to work with CMS and Congress to rectify the Medicare coverage and payment limitations that restrict Medicare beneficiary and referral source access to quality home infusion therapy services. Bills were introduced in the 111th Congress in January 2009 (as they were in both the 109th and 110th Congress) to consolidate home infusion therapy coverage under Part B. The Medicare Home Infusion Coverage Act of 2009 would provide for Medicare infusion benefit coverage in a more comprehensive manner that is analogous to how the therapy is covered by the managed care sector, including Medicare Advantage plans. Industry representatives continue to present the cost-saving and patient care advantages of home infusion therapy to CMS, members of Congress and the Obama Administration in an effort to, at a minimum, include a formal demonstration project in future legislation. Testimony before the Senate Finance Committee in September 2009 acknowledged the current gap in coverage and potential benefits of home infusion therapy to the Medicare program and beneficiaries. At this time, we cannot predict whether the legislation will be introduced in the 112th Congress or become law.

Enrollment and Accreditation of Durable Medical Equipment Suppliers; Surety Bond Requirements. While we support the elimination of fraudulent suppliers and are working with CMS to support these initiatives, we also note that a number of initiatives and developments with respect to the enrollment and accreditation of providers could impact our operations in the future. For example, MIPPA mandated a September 30, 2009 deadline for accreditation of all durable medical equipment providers who bill the Medicare program for DMEPOS services and products. We and all of our branches currently are accredited. If we or any of our branches lose accreditation, or if any of our new branches are unable to become accredited, that could have a material adverse effect on our results of operations, cash flow and capital resources.

In July 2007, CMS issued a proposed rule requiring all DMEPOS suppliers to provide CMS with a surety bond of at least $65,000 for each National Provider Identifier (“NPI”) number the supplier holds. On January 2, 2009, CMS issued the final rule, requiring a surety bond of $50,000 by October 2, 2009 per NPI number which Medicare has approved for billing privileges. Apria obtained the required surety bonds for all of its applicable locations before the deadline and received confirmation from the National Supplier Clearinghouse (“NSC”) that the NSC has recorded the bonds properly in its records. In addition, the NSC prescribes an elevated bond amount of $50,000 per occurrence of an adverse legal action within the 10 years preceding enrollment, reenrollment or revalidation. The rule, effective March 3, 2009, is designed to ensure that Medicare can recover any erroneous payment amounts or civil money penalties up to $50,000 that result from fraudulent or abusive supplier billing practices.

In October 2008, CMS announced enhancements to its program integrity initiatives designed to identify and prevent waste, fraud and abuse. The initiatives include: (i) conducting more stringent reviews of DMEPOS

113

suppliers’ applications, including background checks of new DMEPOS suppliers’ principals and owners to ensure they have not been suspended by Medicare; (ii) making unannounced site visits to suppliers and home health agencies to ensure they are active, legitimate businesses; (iii) implementing extensive pre- and post-payment claims review; (iv) verifying the relationship between physicians who order a large volume of DMEPOS equipment and the beneficiaries for whom they ordered these services; and (v) identifying and visiting beneficiaries to ensure appropriate receipt of Medicare-reimbursable items and services. We work cooperatively with CMS and its contractors in response to these initiatives but cannot predict whether CMS’ various program integrity efforts will or will not negatively impact our operations.

Following the implementation of a 3-year demonstration program using Recovery Audit Contractors (“RACs”) to detect and correct improper payments in the Medicare fee-for-service program, the Tax Relief and Health Care Act of 2006 required HHS to establish the RAC initiative as a permanent, nationwide program by no later than January 1, 2010. CMS selected the four RAC contractors for the permanent RAC program and the permanent RAC program is currently underway. Prior to initiating any audits, RACs are required to obtain CMS’ pre-approval of the issue that will be subject to audit, and then post the approved audit issue on their websites. All RACs have now posted CMS-approved audit issues on their websites. The currently posted approved audit issues include those which apply to Durable Medical Equipment (“DME”) suppliers. States have also implemented similar state Medicaid audit programs, often know as Medicaid Integrity Contractors (“MICs”). The Reform Package expands the RAC program to include Medicare Parts C and D in the program. In addition, the Reform Package requires states to establish contracts with RACs to identify underpayments and overpayments and to recoup overpayments made for services provided under State Medicaid programs. In addition, in March of 2010, President Obama issued a presidential memorandum announcing a government-wide program expanding the use “payment recapture audits” in order to reclaim improper payments. We cannot at this time quantify any negative impact that the expansion of the RAC program or other similar programs may have on us.

In October 2008, CMS announced the establishment of new Zone Program Integrity Contractors (“ZPICs”), who are responsible for ensuring the integrity of all Medicare-related claims. The ZPICs assumed the responsibilities previously held by Medicare’s Program Safeguard Contractors (“PSCs”).

Other Issues

• Medical Necessity & Other Documentation Requirements. In order to ensure that Medicare beneficiaries only receive medically necessary and appropriate items and services, the Medicare program has adopted a number of documentation requirements. For example, the DMEMAC Supplier Manuals provide that clinical information from the “patient’s medical record” is required to justify the medical necessity for the provision of DME. We have implemented policies and procedures to meet Medicare’s documentation requirements. However, an auditor for one of the DMEMACs has taken the position, among other things, that the “patient’s medical record” refers not to documentation maintained by the DME supplier but instead to documentation maintained by the patient’s physician, healthcare facility or other clinician, and that clinical information created by the DME supplier’s personnel and confirmed by the patient’s physician is not sufficient to establish medical necessity. It may be difficult, and sometimes impossible, for us to obtain documentation from other healthcare providers. If these or other burdensome positions are generally adopted by auditors, DMEMACs, other contractors or CMS in administering the Medicare program, we would have the right to challenge these positions as being contrary to law. If these interpretations of the documentation requirements are ultimately upheld, however, it could result in our making refunds and other payments to Medicare and our future revenues from Medicare may be reduced. We cannot currently predict the adverse impact, if any, these interpretations of the Medicare documentation requirements might have on our operations, cash flow and capital resources, but such impact could be material.

• Inherent Reasonableness. The Balanced Budget Act of 1997 granted authority to HHS to increase or reduce Medicare Part B reimbursement for home medical equipment, including oxygen, by up to 15% each year under

114

an “inherent reasonableness” authority. Pursuant to that authority, CMS published a final rule that established a process by which such adjustments may be made. The rule applies to all Medicare Part B services except those paid under a physician fee schedule, a prospective payment system, or a competitive bidding program. Neither HHS nor CMS has issued any subsequent communication or information for several years and therefore, we cannot predict whether or when HHS would exercise its authority in this area or predict any negative impact of any such change.

The impact of changes in Medicare reimbursement that have been enacted to date are reflected in our results of operations for the year ended December 31, 2009. We cannot estimate the combined possible impact of all legislative, regulatory and contemplated reimbursement changes that could have a material adverse effect on our results of operations, cash flow, and capital resources. Moreover, our estimates of the impact of certain of these changes appearing in this “Government Regulation” section are based on a number of assumptions and are subject to uncertainties and there can be no assurance that the actual impact was not or will not be different from our estimates.

Medicaid Reimbursement. State Medicaid programs implement reimbursement policies for the items and services we provide that may or may not be similar to those of the Medicare program. Budget pressures on these state programs often result in pricing and coverage changes that may have a detrimental impact on our operations and/or financial performance. States sometimes have adopted alternative pricing methodologies for certain drugs, biologicals, and home medical equipment under their Medicaid programs that reduce the level of reimbursement received by us without a corresponding offset or increase to compensate for the service costs incurred. For example, Medi-Cal adopted a regulation that limits the amounts a provider can bill for certain durable medical equipment and medical supplies. In March 2009, CAMPS initiated a lawsuit to invalidate this regulation as having been adopted in violation of California’s Administrative Procedure Act. On August 3, 2009, the court entered a decision denying CAMPS’ petition. CAMPS has appealed the court’s decision. If the regulation is ultimately upheld, it would most likely result in our making refunds and other payments to Medi-Cal and our future revenues from Medi-Cal may be reduced. Historically, when such alternative pricing methodologies were adopted, we have sometimes elected to stop accepting new Medicaid patient referrals for the affected drugs, biologicals, and home medical equipment. We are currently evaluating the possibility of stopping or reducing our Medicaid business in a number of states with reimbursement policies that make it difficult for us to safely care for patients or conduct operations profitably. Moreover, the Reform Package increases Medicaid enrollment over a number of years and imposes additional requirements on states which, combined with the current economic recession and state deficits, could further strain state budgets and therefore result in additional policy changes or rate reductions. We cannot currently predict the adverse impact, if any, that any such change to or reduction in our Medicaid business might have on our operations, cash flow and capital resources, but such impact could be material. In addition, we cannot predict whether other states will consider similar or other reimbursement reductions, whether healthcare reform provisions pertaining to Medicaid will ultimately be passed into law or whether any such changes would have a material adverse effect on our results of operations, cash flow and capital resources.

HIPAA. The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) is comprised of a number of components pertaining to the privacy and security of certain protected health information (“PHI”), as well as the standard formatting of certain electronic health transactions. Many states have similar, but not identical, restrictions. Existing and any new laws or regulations have a significant effect on the manner in which we handle healthcare related data and communicate with payors. Among other provisions, the HITECH Act of the American Recovery and Reinvestment Act of 2009 includes additional requirements related to the privacy and security of PHI, clarifies and increases penalties of HIPAA and provides State Attorneys General with HIPAA enforcement authority. We have adopted a number of policies and procedures to conform to HIPAA requirements, as modified by the HITECH Act of the American Recovery and Reinvestment Act of 2009, throughout our operations and educated our workforce about HIPAA provisions. We face potential administrative, civil and criminal sanctions if we do not comply with the existing or new laws and regulations. Imposition of these sanctions could have a material adverse effect on our operations.

115

Enforcement of Healthcare Fraud and Abuse Laws. In recent years, the federal government has made a policy decision to significantly increase the financial resources allocated to enforcing the healthcare fraud and abuse laws. Moreover, Congress adopted a number of additional provisions in the Reform Package that are designed to reduce healthcare fraud and abuse. In addition, private insurers and various state enforcement agencies have increased their level of scrutiny of healthcare claims in an effort to identify and prosecute fraudulent and abusive practices in the healthcare area. From time to time, we may be the subject of investigations or a party to additional litigation which alleges violations of law. If any of those matters were successfully asserted against us, there could be a material adverse effect on our business, financial position, results of operations or prospects.

Anti-Kickback Statutes. As a provider of services under the Medicare and Medicaid programs, we must comply with a provision of the federal Social Security Act, commonly known as the “federal anti-kickback statute.” The federal anti-kickback statute prohibits the offer or receipt of any bribe, kickback or rebate in return for the referral or arranging for the referral of patients, products or services covered by federal healthcare programs. Federal healthcare programs have been defined to include plans and programs that provide health benefits funded by the United States Government, including Medicare, Medicaid and TRICARE (formerly known as the Civilian Health and Medical Program of the Uniformed Services or CHAMPUS), among others. Some courts and the OIG interpret the statute to cover any arrangement where even one purpose of the remuneration is to influence referrals. Violations of the federal anti-kickback statute may result in civil and criminal penalties and exclusion from participation in federal healthcare programs.

Due to the breadth of the federal anti-kickback statute’s broad prohibition, there are a few statutory exceptions that protect various common business transactions and arrangements from prosecution. In addition, the OIG has published safe harbor regulations that outline other arrangements that also are deemed protected from prosecution under the federal anti-kickback statute, provided all applicable criteria are met. The failure of an activity to meet all of the applicable safe harbor criteria does not necessarily mean that the particular arrangement violates the federal anti-kickback law, but these arrangements will be subject to greater scrutiny by enforcement agencies.

Some states have enacted statutes and regulations similar to the federal anti-kickback statute, but which apply not only to the federal healthcare programs, but also to any payor source of the patient. These state laws may contain exceptions and safe harbors that are different from those of the federal law and that may vary from state to state. A number of states in which we operate have laws that prohibit fee-splitting arrangements between healthcare providers, if such arrangements are designed to induce or encourage the referral of patients to a particular provider. Additionally, several states have passed laws further regulating interactions between healthcare providers and physician referral sources. In late 2009, the state of New York enacted a requirement for certain healthcare providers to file a formal statement in which they attest that they have adopted a formal corporate compliance program which meets the state’s specific requirements; we complied with that requirement. Possible sanctions for violations of these restrictions include exclusion from state-funded healthcare programs, loss of licensure, and civil and criminal penalties. Such statutes vary from state to state, are often vague and often have been subject to only limited court or regulatory agency interpretation.

Marketing Laws. Because of our drug compounding and oxygen services, we may be subject to new and increasingly common state laws and regulations regarding our marketing activities and the nature of our interactions with physicians and other healthcare entity customers. These laws may require us to comply with certain codes of conduct, limit or report certain marketing expenses, disclose certain physician and customer arrangements, and ensure the appropriate licensure of certain sales personnel. There have also been similar federal legislative and regulatory initiatives. Violations of these laws and regulations, to the extent applicable, could subject us to civil and criminal fines and penalties, as well as possible exclusion from participation in federal healthcare programs, such as Medicare and Medicaid. From time to time, we may be the subject of investigations or audits or be a party to litigation which alleges violations of these laws. If any of those matters were successfully asserted against us, there could be a material adverse effect on our business, financial position, results of operations or prospects.

116

Physician Self-Referral. Certain provisions of the Omnibus Budget Reconciliation Act of 1993 (the “Stark Law”) prohibit healthcare providers such as us, subject to certain exceptions, from submitting claims to the Medicare and Medicaid programs for designated health services if we have a financial relationship with the physician making the referral for such services or with a member of such physician’s immediate family. The term “designated health services” includes several services commonly performed or supplied by us, including durable medical equipment and home health services. In addition, “financial relationship” is broadly defined to include any ownership or investment interest or compensation arrangement pursuant to which a physician receives remuneration from the provider at issue. The Stark Law prohibition applies regardless of the reasons for the financial relationship and the referral; and therefore, unlike the federal anti-kickback statute, an intent to violate the law is not required. Like the federal anti-kickback statute, the Stark Law contains a number of statutory and regulatory exceptions intended to protect certain types of transactions and business arrangements from penalty. In order to qualify an arrangement under a Stark Law exception, compliance with all of the exception’s requirements is necessary. Violations of the Stark Law may result in loss of Medicare and Medicaid reimbursement, civil penalties and exclusion from participation in the Medicare and Medicaid programs.

In addition, a number of the states in which we operate have similar prohibitions against physician self-referrals, which may not necessarily be limited to Medicare or Medicaid services and may not include the same statutory and regulatory exceptions found in the Stark Law.

False Claims. The federal False Claims Acts impose civil and criminal liability on individuals or entities that submit false or fraudulent claims for payment to the government. Violations of the federal civil False Claims Act may result in treble damages, civil monetary penalties and exclusion from the Medicare, Medicaid and other federally funded healthcare programs. If certain criteria are satisfied, the federal civil False Claims Act allows a private individual to bring a qui tam suit on behalf of the government and, if the case is successful, to share in any recovery. Federal False Claims Act suits brought directly by the government or private individuals against healthcare providers, like us, are increasingly common and are expected to continue to increase.

The federal government has used the federal False Claims Act to prosecute a wide variety of alleged false claims and fraud allegedly perpetrated against Medicare and state healthcare programs. The government and a number of courts also have taken the position that claims presented in violation of certain other statutes, including the federal anti-kickback statute or the Stark Law, can be considered a violation of the federal False Claims Act, based on the theory that a provider impliedly certifies compliance with all applicable laws, regulations and other rules when submitting claims for reimbursement.

On May 20, 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 (“FERA”). Among other things, FERA modifies the federal False Claims Act by expanding liability to contractors and subcontractors who do not directly present claims to the federal government. FERA also expanded the False Claims Act liability for what is referred to as a “reverse false claim” by explicitly making it unlawful to knowingly conceal or knowingly and improperly avoid or decrease an obligation owed to the federal government.

A number of states have enacted false claims acts that are similar to the federal False Claims Act. Even more states are expected to do so in the future because Section 6031 of the DRA amended the federal law to encourage these types of changes in law at the state level. In addition, there is a corresponding increase in state-initiated false claims enforcement efforts.

Other Fraud and Abuse Laws. HIPAA created, in part, two new federal crimes: “Healthcare Fraud” and “False Statements Relating to Healthcare Matters.” The Healthcare Fraud statute prohibits executing a knowing and willful scheme or artifice to defraud any healthcare benefit program. A violation of this statute is a felony and may result in fines and/or imprisonment. The False Statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact by any trick, scheme or device or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. A violation of this statute is a felony and may result in fines and/or imprisonment.

117

The increased public focus on waste, fraud and abuse and their related cost to society will likely result in additional Congressional hearings, CMS regulatory changes or new laws. The Reform Package also provides for new regulatory authority, additional fines and penalties. At this time, we cannot predict whether these or other reforms will ultimately become law, or the impact of such reforms on our business operations and financial performance.

Certification of Compliance Agreement. Pursuant to the merger agreement to acquire Coram, we assumed Coram’s obligations. On August 22, 2007, Coram entered into a three-year Compliance Agreement with the OIG which obligates Coram to maintain a compliance program to monitor, ensure compliance with federal healthcare program requirements and submit timely reports to the government regarding the same. Violation of the terms of the Compliance Agreement could result in the imposition of penalties and sanctions, including disqualification from Medicare and other reimbursement programs. The year 2009 marked the second year of the three-year agreement; in both 2008 and 2009, the OIG accepted our annual certification documents as filed. See “—Organization and Operations—Corporate Compliance” and “Risk Factors—Risks Relating to Our Business— Non-Compliance With the Requirements of Coram’s Certification of Compliance Agreement Could Result in the Imposition of Significant Penalties and Sanctions” for additional information regarding the Compliance Agreement.

Facility and Clinician Licensure. Various federal and state authorities and clinical practice boards regulate the licensure of our facilities and clinical specialists working for us, either directly as employees or on a per diem or contractual basis. Regulations and requirements vary from state to state, and in some states, we are required to make filings in connection with transactions that may be defined as a change of control. Moreover, several states are currently contemplating the establishment or expansion of facility licensure related to the home healthcare industry. We are committed to complying with all applicable licensing requirements and maintain centralized functions to manage over 4,500 facility licenses and/or permits that are required to operate our business.

Healthcare Reform Legislation. Economic, political and regulatory influences are causing fundamental changes in the healthcare industry in the United States. Various healthcare reform proposals are formulated and proposed by the legislative and administrative branches of the federal government on a regular basis. In addition, some of the states in which we operate periodically consider various healthcare reform proposals. Even with the passage of the Reform Package, we anticipate that federal and state governments will continue to review and assess alternative healthcare delivery systems and payment methodologies and public debate of these issues will continue in the future. A number of parties, including some State governments, have expressed their intentions to challenge the Reform Package, and we cannot predict the outcome of such challenges, if any. Changes in the law or new interpretations of existing laws can have a substantial effect on permissible activities, the relative costs associated with doing business in the healthcare industry and the amount of reimbursement by governmental and other third-party payors. Due to uncertainties regarding the ultimate features of reform initiatives and their enactment and implementation, we cannot predict which, if any, of such reform proposals will be adopted, or when they may be adopted, or that any such reforms will not have a material adverse effect on our results of operations, cash flow, capital resources and liquidity.

Employees

As of March 31, 2010, we had 11,419 employees, of which 10,011 were full-time and 1,408 were part-time and per-diem. As of March 31, 2010, none of our employees were represented by a labor union or other labor organization.

Properties

We lease our headquarters, located in Lake Forest, California, which consists of approximately 100,000 square feet of office space. The lease expires in January 2012.

118

We have approximately 500 locations that serve patients in all 50 states, including branches, billing centers, pharmacies, warehouse and storage facilities. The regional facilities usually house a branch and various regional support functions such as repair, billing and distribution. The regional facilities are typically located in light industrial areas and generally range from 16,000 to 133,000 square feet. The typical branch facility, other than those that share a building with a region, is a combination warehouse and office and can range from 650 to 50,000 square feet. We lease substantially all of our facilities with lease terms of ten years or less.

Legal Proceedings

We are also engaged in the defense of certain claims and lawsuits arising out of the ordinary course and conduct of our business, the outcomes of which are not determinable at this time. Insurance policies covering such potential losses, where such coverage is cost effective, are maintained. In the opinion of management, any liability that might be incurred upon the resolution of these claims and lawsuits will not, in the aggregate, have a material adverse effect on our financial condition or results of operations.

119

MANAGEMENT

Directors and Executive Officers

The following table sets forth information with respect to the individuals who have been serving as the members of our Board of Directors since the consummation of the Merger as well as information relating to the executive officers of Apria (ages are as of July 1, 2010).

Name	Age	Position
Norman C. Payson, M.D.	62	Executive Chairman of the Board of Directors; Chief Executive Officer
Chris A. Karkenny	42	Executive Vice President and Chief Financial Officer
James G. Gallas	47	Executive Vice President and Chief Administrative Officer
Daniel E. Greenleaf	45	President, Home Infusion Therapy Segment
Neil P. Simpkins	44	Director
Michael Dal Bello	39	Director
Patrick J. Bourke III	51	Director

Norman C. Payson, M.D. was appointed Executive Chairman of the Board of Directors and Chief Executive Officer effective as of October 2008. He currently serves as Vice Chairman of the Board of Directors and Chairman of the Board Finance Committee of City of Hope, a not-for-profit tertiary cancer hospital and research center. He was Chief Executive Officer of Oxford Health Plans from 1998 through 2002. Dr. Payson co-founded Healthsource, Inc., a large health plan operating in 15 states, in 1985 and served as its Chief Executive Officer from 1985 through 1997.

On October 26, 2004, the SEC issued an order finding that Dr. Payson violated Section 13(d) of the Exchange Act in connection with the submission of certain Section 13D filings relating to Dr. Payson’s holdings in Oxford Health Plans, Inc. that were not filed on a timely basis and that contained certain inaccurate and incomplete disclosures. At the time of his initial election to our Board of Directors in 2008, our Corporate Governance and Nominating Committee and the Board of Directors reviewed the circumstances in detail and determined that such violations were not an adverse reflection on Dr. Payson’s ability to serve on the Board of Directors and that such violations are not material to the evaluation of his qualifications or integrity.

Chris A. Karkenny joined us as Executive Vice President and Chief Financial Officer in November 2006. From January 2003 to February 2006, Mr. Karkenny served as Senior Vice President of Corporate Development and Treasury Operations of PacifiCare Health Systems, Inc., a Fortune 500 company. From August 1999 to December 2002, Mr. Karkenny served as Chief Executive Officer of NetCatalyst, a California investment banking firm. From July 1998 to August 1999, Mr. Karkenny served as a partner in Technologz, a California-based business incubator, and was a founder, Board member and initial Chief Financial Officer of CardioNow, a healthcare application service provider. From 1995 to March 1998, he served as Treasurer of Quarterdeck Corporation.

James G. Gallas joined us as Executive Vice President and Chief Administrative Officer in April 2009. Mr. Gallas most recently served as Principal in charge of KPMG’s Healthcare Revenue Cycle Management Practice from January 2009 to March 2009. Prior to that, from September 2005 to December 2008, Mr. Gallas served as Senior Vice President in charge of the Healthcare Segment of BearingPoint, Inc., formerly KPMG Consulting, Inc., a global management and technology consulting company. From January 2000 to August 2005, Mr. Gallas served as Vice President in charge of BearingPoint, Inc.’s Healthcare Provider Practice. Prior to that time, from August 1997 to December 1999, Mr. Gallas served as a Partner at KPMG, LLP until the time KPMG Consulting, Inc. separated from KPMG LLP, at which point Mr. Gallas served as a Managing Director for KPMG Consulting, Inc. From July 1985 to July 1997, Mr. Gallas served as an accountant, Manager and Senior Manager at KPMG, LLP.

120

Daniel E. Greenleaf was appointed President of the Home Infusion Therapy Segment in April 2008. Mr. Greenleaf most recently served as President and Chief Executive Officer of VioQuest Pharmaceuticals, Inc., a New Jersey-based biopharmaceutical company focused on the acquisition, development and commercialization of oncology drug therapies, from 2005 to 2007. Prior to his role at VioQuest Pharmaceuticals, Inc., Mr. Greenleaf was President of U.S. Operations for Celltech Biopharmaceuticals, a NYSE listed company prior to its sale to UCB in 2004. Celltech is a global biopharmaceutical leader focused on severe diseases such as central nervous system disorders, rheumatoid arthritis, Crohn’s disease and multiple sclerosis. Additional experience includes serving as Senior Vice President of Operations for Nabi Pharmaceuticals, a research company focused on the development of products targeting nicotine addiction and serious infections, as well as progressively more responsible management and executive-level positions with Schering-Plough Corporation, a global healthcare company, from 1992 to 2002. Mr. Greenleaf was a captain and navigator in the United States Air Force and served in Operation Desert Storm.

Neil P. Simpkins became one of our directors immediately after the completion of the Merger in October 2008. Mr. Simpkins has served as a Senior Managing Director in the Private Equity Group of Blackstone since December 1999. From 1993 until the time he joined Blackstone, Mr. Simpkins was a principal at Bain Capital. Prior to joining Bain Capital, Mr. Simpkins was a consultant at Bain & Company in London and the Asia Pacific region. He currently serves as Chairman of the Board of Directors of TRW Automotive Inc. and as a director of Vanguard Health Systems, Inc., Team Health, Inc. and Summit Materials, LLC.

Michael Dal Bello became one of our directors immediately after the completion of the Merger in October 2008. Mr. Dal Bello has been a Managing Director in the Private Equity Group of The Blackstone Group since December 2008 and was a Principal in this group from 2005 until 2008, and an Associate from 2002 until 2005. Prior to joining Blackstone, Mr. Dal Bello received an M.B.A. from Harvard Business School in 2002. Mr. Dal Bello serves on the Board of Directors of Biomet, Inc., Catalent Pharma Solutions, Inc., Sithe Global Power, LLC, Team Health, Inc. and Vanguard Health Systems, Inc.

Patrick J. Bourke III became one of our directors immediately after the completion of the Merger in October 2008. Mr. Bourke is an Executive Director in the Private Equity Group of Blackstone. Before joining Blackstone in 2008, Mr. Bourke was the Executive Vice President of Business Operations and Chief Re-engineering Officer of Travelport Limited. Prior to Travelport Limited, Mr. Bourke was a key executive at Perot Systems, Inc. where he held numerous management roles. Mr. Bourke started his career at Electronic Data Systems Corporation in their Systems Engineering Development program. Mr. Bourke serves on the Board of Directors of Intelenet Global Services Private Limited.

On February 12, 2010, we finalized a decision to reorganize the senior leadership structure of the home respiratory therapy and home medical equipment segment. As part of this reorganization, Lawrence A. Mastrovich, President, Home Respiratory Therapy and Home Medical Equipment service lines, resigned and his responsibilities were assumed by the other senior executives.

Corporate Governance Matters

Background and Experience of Directors. When considering whether directors and nominees have the experience, qualifications, attributes or skills, taken as a whole, to enable our Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure, our Board of Directors focused primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth immediately above. In particular, the members of our Board of Directors considered the following important characteristics: (i) Messrs. Neil P. Simpkins, Michael Dal Bello and Patrick J. Bourke III are representatives appointed by The Blackstone Group, our principal stockholder, and have significant financial and investment experience from their involvement in Blackstone’s investment in numerous portfolio companies, particularly those in the healthcare industry, and have played active roles in overseeing those businesses and (ii) our Chief Executive Officer has extensive experience in the healthcare industry and in executive management.

121

Executive Compensation

Compensation Discussion and Analysis

Introduction

Our executive compensation plan is designed to attract and retain individuals qualified to manage and lead the Company and to also motivate them to contribute to achievement of our financial goals and ultimately create and grow our equity value.

In connection with the Merger, we recruited some of our senior management employees, including our Chief Executive Officer and our Executive Vice President and Chief Administrative Officer, and entered into new employment arrangements or amendments to existing employment agreements with other senior executives. We continued to compensate our senior management on a basis similar to immediately prior to the Merger, except that, in light of our status as a private company, we adopted less broad-based equity incentive arrangements for our senior executives and did not continue a practice of granting equity awards on an annual basis.

Our named executive officers for 2009 are:

• Norman C. Payson, M.D., our Executive Chairman of the Board of Directors and Chief Executive Officer;

• Chris A. Karkenny, our Executive Vice President and Chief Financial Officer; and

• our three other most highly compensated executive officers who served in such capacities at December 31, 2009, namely,

• James G. Gallas, our Executive Vice President and Chief Administrative Officer,

• Lawrence A. Mastrovich, our former President, Home Respiratory Therapy and Home Medical Equipment segment and

• Daniel E. Greenleaf, our President, Home Infusion Therapy segment.

Dr. Payson and Mr. Gallas joined us subsequent to the Merger, and Mr. Mastrovich resigned from the Company, effective as of March 15, 2010. See “Business—Our Company—Recent Developments.”

Executive Compensation Objectives and Philosophy

Our primary executive compensation objective is to:

• attract, retain and motivate leaders who are capable of advancing our mission and strategy and ultimately, create and maintain our long-term equity value. Such leaders must engage in a collaborative approach and possess the ability to execute our strategy in an industry characterized by competitiveness, growth and a challenging business environment;

• reward senior management in a manner aligned with our financial performance; and

• align senior management’s interests with our equity owners’ long-term interests through equity participation and ownership.

To achieve our objective, we deliver executive compensation through a combination of the following components:

• Base salary;

• Bonuses (annual cash incentive compensation and discretionary bonus);

• Long-term incentive compensation;

122

• Broad-based employee benefits;

• Supplemental executive benefits and perquisites; and

• Severance benefits.

We provide competitive base salaries and other benefits and perquisites, including severance benefits, to attract and retain senior management talent. We also use annual cash incentive compensation and long-term equity incentives to ensure a performance-based delivery of pay that aligns as closely as possible the rewards of our named executive officers with the long-term interests of our equity-owners while enhancing executive retention.

Compensation Determination Process

Following the Merger, our Board of Directors makes all decisions about our executive compensation. Presently, our Board of Directors does not have a compensation committee.

In making initial compensation determinations with respect to our named executive officers following the Merger, our Board of Directors considered a number of variables, consistent with our executive compensation objective, including individual circumstances related to each executive’s recruitment or retention. For example, compensation for each of Dr. Payson and Mr. Karkenny was determined as part of the negotiation of each executive’s employment agreement. In connection with the negotiation of Mr. Karkenny’s employment agreement, our Board of Directors considered the fact that he would be entitled to severance if he terminated his employment following the Merger pursuant to the terms of his then existing employment agreement and provided him with an overall compensation package, that included an increase in base salary and a grant of restricted equity units, intended to induce him to stay with us. In addition, our Board of Directors decided to grant to Dr. Payson substantially greater equity incentive awards with vesting terms that differ from the terms applicable to other senior executives in light of his role as our Executive Chairman of the Board of Directors and Chief Executive Officer and his substantially greater equity investment in our ultimate parent, BP Healthcare Holdings LLC. The specific terms of each of Dr. Payson’s employment agreement and Mr. Karkenny’s employment agreement are discussed below under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards—Employment Agreements.” Subsequent to the determination of initial compensation packages following the Merger, our Board of Directors has not made any compensation determinations with respect to our named executive officers other than determinations of annual cash incentive awards described below under “—Compensation Elements—Bonuses—Annual Cash Incentive Compensation.” Our Board of Directors did not use any compensation consultants in making its compensation determinations.

Dr. Payson and Mr. Karkenny generally participate in discussions and deliberations of our Board of Directors regarding the determinations of annual cash incentive awards for our executives. Specifically, they make recommendations to our Board of Directors regarding the performance targets to be used under our annual Executive Bonus Plan and the amounts of annual cash incentive awards and any discretionary bonus amounts to be made to our senior executives. In the future, we expect that Dr. Payson will also make recommendations to our Board of Directors regarding base salary adjustments for other executives based on his annual review of each officer’s performance. We expect that our Board of Directors will consider Dr. Payson’s recommendations and may exercise discretion in modifying his recommendations.

Compensation Elements

The following is a discussion and analysis of each component of our executive compensation program.

Base Salary.

Base salary compensates executives for performing requirements of their position and provides executives with a level of cash income predictability and stability with respect to a portion of their total compensation. Our

123

Board of Directors believes that the level of an executive officer’s base salary should reflect that executive officer’s performance, experience and breadth of responsibilities, salaries for similar positions within the community and in our industry generally and any other factors relevant to that particular job. In determining applicable base salaries with respect to those named executive officers that were hired subsequent to the Merger, namely, Dr. Payson and Mr. Gallas, our Board of Directors also consulted with outside recruiters to ensure that we could recruit the candidate of our choice by offering a competitive base salary. In connection with the negotiation of Mr. Karkenny’s employment agreement, our Board of Directors increased his then annual base salary in order to provide an overall compensation package that would incentivize him to stay with us notwithstanding his entitlement to severance upon his resignation. In approving amended employment agreements for Messrs. Mastrovich and Greenleaf, our Board of Directors did not make any adjustments to their respective base salaries previously approved by the former Board’s compensation committee because they believed that the amounts of their base salaries were appropriate in light of their duties, performance and similar positions within our community and industry.

Base salaries may be adjusted annually and, in certain circumstances, adjusted mid-year to deal with competitive pressures or changes in job responsibilities, in the sole discretion of our Board of Directors. Our Board of Directors did not make any adjustments to any of our named executive officers’ base salaries in 2009.

Bonuses.

Annual Cash Incentive Compensation. Annual cash incentive awards are available to our named executive officers under our annual Executive Bonus Plan in order to motivate our executive officers to achieve short-term performance goals and tie a portion of their cash compensation to performance.

Under our Executive Bonus Plan for 2009 (the “2009 Bonus Plan”), each named executive officer was eligible to earn an annual cash incentive award based on achievement of performance targets for 2009. These performance targets were determined by our Board of Directors early in the year, after taking into consideration Dr. Payson and Mr. Karkenny’s recommendations and our budget for the year. The potential amount of the annual cash incentive award was based on a percentage of the executive officer’s base salary actually paid during 2009, except with respect to Mr. Gallas, whose potential award was based on a percentage of his annualized base salary rate at date of hire pursuant to the terms of his offer letter. The following table illustrates our named executive officers’ potential cash incentive awards as a percentage of their base salary.

	Threshold Bonus Opportunity for achieving threshold performance	Target Bonus Opportunity for achieving target performance	Maximum Bonus Opportunity for achieving maximum performance
Norman C. Payson, M.D.	0%	100%	200%
Chris A. Karkenny	0%	100%	200%
James G. Gallas(1)	—	100%	150%
Lawrence A. Mastrovich	0%	100%	150%
Daniel E. Greenleaf	0%	100%	150%

(1) Pursuant to Mr. Gallas’ offer letter dated March 10, 2009, for the performance year 2009, he was guaranteed a minimum bonus of $262,500. Therefore, there was no threshold bonus opportunity for achieving threshold performance that applied to Mr. Gallas.

124

In 2009, the cash incentive awards were based on Company-wide Adjusted EBITDA target, EBITDA target of the particular business for which the executive has primary responsibilities, Adjusted Free Cash Flow target or a combination of one or more of these targets. The following table lists the performance metrics and relative weightings given thereto with respect of each of our named executive officers under the 2009 Bonus Plan.

	Company-wide Adjusted EBITDA	EBITDA(1)	Adjusted Free Cash  Flow
Norman C. Payson, M.D.	100%	—	—
Chris A. Karkenny	100%	—	—
James G. Gallas	80%	—	20%
Lawrence A. Mastrovich	24%	56%	20%
Daniel E. Greenleaf	24%	56%	20%

(1) Represents EBITDA of the particular business for which the executive has primary responsibilities. For Mr. Mastrovich, represents EBITDA of Home Respiratory Therapy and Home Medical Equipment segment plus Enteral business, and for Mr. Greenleaf, represents EBITDA of Home Infusion Therapy segment less Enteral business.

Company-wide Adjusted EBITDA, as used under the 2009 Bonus Plan, is calculated as Adjusted EBITDA (as calculated under the indenture governing the Notes), as further adjusted for certain items approved by our Board of Directors, such as loss on disposition of assets and other, employee severance costs, employee relocation costs and other income including joint ventures. Adjusted Free Cash Flow, as used under the 2009 Bonus Plan, is calculated as Free Cash Flow (as defined under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”), as further adjusted for certain items approved by our Board of Directors, such as equity compensation expense, costs incurred related to initiatives (other than employee severance costs and employee relocation costs), the Sponsor monitoring fee and unbudgeted initiative capital expenditures. EBITDA of Home Respiratory Therapy and Home Medical Equipment segment plus Enteral business is calculated as earnings before interest, taxes, depreciation and amortization of Home Respiratory Therapy and Home Medical Equipment segment plus Enteral business, and EBITDA of Home Infusion Therapy segment less Enteral business is calculated as earnings before interest, taxes, depreciation and amortization of Home Infusion Therapy segment less Enteral business.

Under our 2009 Bonus Plan, no cash incentive award was to be made with respect to any performance metric unless our actual Company-wide Adjusted EBITDA for 2009 was above 90% of the target Company-wide Adjusted EBITDA, and no cash incentive award was to be made with respect to a performance metric unless actual achievement of that metric was above 90% of the target. The target cash incentive award amount with respect to a performance metric was to be paid if the actual performance was 100% of the target, and the maximum cash incentive award amount with respect to a performance metric was to be paid if the actual performance was 120% of the target or above. Straight-line interpolation determined the cash payout for performance which falls between the threshold and target or between target and maximum.

Notwithstanding the establishment of the performance goals and the formula for determining the cash incentive award payment amounts as illustrated in the tables above, our Board of Directors could award lesser amounts under our annual Executive Bonus Plan to one or more named executive officers, if, in the exercise of its business judgment, our Board of Directors determined that they were warranted under the circumstances and in our best interest. In addition, our Board of Directors could award a discretionary bonus in addition to the amount the executive would be eligible to receive under our annual Executive Bonus Plan for exceptional performance or achievement.

For 2009, our Board of Directors set a Company-wide Adjusted EBITDA target of $352.9 million, Adjusted Free Cash Flow target of $92.5 million, Home Respiratory Therapy and Home Medical Equipment segment plus Enteral business EBITDA target of $426.0 million and Home Infusion Therapy segment less Enteral business EBITDA target of $67.2 million.

125

In 2009, we achieved 101.0% of the Company-wide Adjusted EBITDA target (or $356.4 million), 104.5% of the Adjusted Free Cash Flow target (or $96.6 million), 102.4% of the Home Respiratory Therapy and Home Medical Equipment segment plus Enteral business EBITDA target (or $436.3 million) and 115.9% of Home Infusion Therapy segment less Enteral business EBITDA target (or $77.8 million).

The following table illustrates the calculation of the annual cash incentive awards paid to each of our named executive officers under our 2009 Bonus Plan in light of these performance results. The total amount awarded to each of the named executive officers shown in the table below is reported under the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table, except that for Mr. Gallas, the guaranteed minimum amount is reported under the Bonus column.

	Actual Amount Awarded  for Company-wide Adjusted EBITDA Achievement	Actual Amount Awarded for EBITDA Achievement(1)		Actual Amount Awarded for Adjusted Free Cash Flow Achievement		Total Amount Awarded
Norman C. Payson, M.D.	$825,175		—		—	$	825,175
Chris A. Karkenny	$514,173		—		—	$	514,173
James G. Gallas	$430,324		—	$	116,730	$	547,055
Lawrence A. Mastrovich	$147,561	$	356,305	$	133,425	$	637,291
Daniel E. Greenleaf	$121,297	$	386,045	$	109,677	$	617,019

(1) Represents actual amount awarded for EBITDA achievement of the particular business for which the executive has primary responsibilities. For Mr. Mastrovich, represents the amount awarded for Home Respiratory Therapy and Home Medical Equipment segment plus Enteral business EBITDA achievement, and for Mr. Greenleaf, represents the amount awarded for Home Infusion Therapy segment less Enteral business EBITDA achievement.

The specific bonus awards under our 2009 Bonus Plan were reviewed and approved by our Board of Directors in February, 2010 and were paid to our named executive officers in March, 2010.

In March 2010, our Board of Directors approved our Executive Bonus Plan for 2010 (the “2010 Bonus Plan”). The performance metrics and the formula for determining the payout amounts under the 2010 Bonus Plan for each named executive officer (although not the financial performance target levels) remained the same as the 2009 Bonus Plan except that for Dr. Payson and Mr. Karkenny the potential payouts are based 80% on the Company-wide Adjusted EBITDA and 20% on the Adjusted Free Cash Flow, the same as for Mr. Gallas, rather than being 100% based on the Company-wide Adjusted EBITDA. The financial performance target levels under the 2010 Bonus Plan were approved by our Board of Directors after consultation with Dr. Payson and Mr. Karkenny.

Discretionary Bonus.

In addition, our Chief Financial Officer, Mr. Karkenny, was paid a retention bonus of $2,100,000 in January 2009, subject to a claw-back obligation under specified termination scenarios, pursuant to the terms of his employment agreement. Mr. Gallas was also paid a sign-on bonus of $150,000 in March 2009, subject to a claw-back obligation under specified termination scenarios, in connection with the commencement of his employment with us. See “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards—Employment Agreements” for descriptions of Mr. Karkenny’s employment agreement and Mr. Gallas’ offer letter.

Long-Term Incentive Compensation.

Following the Merger, our Board of Directors determined to grant to our management employees, including our named executive officers, long-term incentive awards that are designed to promote our interests by providing

126

our management employees with the opportunity to acquire an equity interest in the Company as an incentive for the person to remain in our service. Our Board of Directors granted these long-term incentive awards to our Chief Executive Officer, Dr. Payson, in the form of Class B Units of BP Healthcare Holdings LLC, our ultimate parent, and to our other named executive officers in the form of Class B Units and Class C Units of Sky Acquisition LLC, our direct parent, and, in the case of Mr. Karkenny, Class A-2 Units of Sky Acquisition LLC as well, as further described below. Pursuant to a reorganization we conducted in March 2010, the Class B Units and Class C Units of Sky Acquisition LLC were converted or exchanged into Class B Units and Class C Units of Holdings. See “Prospectus Summary—The Transactions.” For purposes of the discussion of equity award grants under this “—Long-Term Incentive Compensation” section, the Class B Units and Class C Units of Holdings mean the Class B Units and Class C Units of Sky Acquisition LLC granted prior to the reorganization, and our Board of Directors means our Board of Directors acting in its capacity as the board of directors of the applicable parent entity, unless the context indicates otherwise.

Class A-2 Units of Holdings are equity interests in Holdings and have economic characteristics that are similar to those of shares of common stock in a corporation. Certain of our executives have made equity investments in Holdings by purchasing Class A-2 Units of Holdings. In addition, our Board of Directors granted to Mr. Karkenny Class A-2 Units of Holdings, subject to vesting terms, similar to restricted common stock in a corporation. Mr. Karkenny’s Class A-2 Units vest if an initial public offering or change of control occurs and the valuation of Class A-1 Units of Holdings implied by the transaction exceeds 110% of the aggregate capital contributions of affiliates of the Sponsor for the Class A-1 Units. Mr. Karkenny does not need to be employed at the time of the initial public offering or change in control to vest.

Class B and Class C Units of Holdings are limited liability company profits interests having economic characteristics similar to stock appreciation rights and representing the right to share in any increase in the equity value of Holdings that exceeds specified thresholds. For a Class B Unit, the threshold is the value of a Class A Unit on grant date which generally was $1.00, so a Class B Unit has a value at any given time equal to the value of a Class A Unit minus $1.00). For a Class C unit, the threshold was $2.00, so a Class C Unit has a value at any given time equal to the value of a Class A Unit minus $2.00. Some Class B Units have a higher threshold representing the estimated fair value of a Class A unit on the applicable grant date.

The Class B Units are divided into a time-vesting portion (2/3 of the Class B Units granted) and a performance-vesting portion (1/3 of the Class B Units granted). All Class C Units are performance-vesting. See “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Award Grants—Equity Units of Holdings Granted to Our Named Executive Officers (Other than Our Chief Executive Officer)” below for a discussion of the vesting and other terms of these equity units.

Our Board of Directors granted to Dr. Payson 38,697,318 Class B units of BP Healthcare Holdings LLC in November 2008 with a grant date fair value of $13.9 million. These Class B Units are economically equivalent to the Class B Units of Holdings. These Class B Units are 80% time-vesting and 20% performance-vesting. See “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Award Grants—Equity Units of BP Healthcare Holdings LLC Granted to Our Chief Executive Officer.” The Class B Units granted to Dr. Payson are designed to incentivize him to remain in our service and motivate him to focus on efforts that will increase the value of equity in BP Healthcare Holdings over the long term.

Our Board of Directors granted to Mr. Karkenny 500,000 Class A-2 Units, 6,675,287 Class B Units and 2,225,096 Class C Units of Holdings in December 2008 with an aggregate grant date fair value of $3.0 million. The Class A-2 Units granted to Mr. Karkenny are designed to motivate him to focus on efforts that will deliver our financial success and also enable him to participate in our long-term growth. Our Board of Directors granted each of our other named executive officers a combination of Class B Units and Class C Units of Holdings in March 2009 and, in the case of Mr. Gallas, in April 2009 in connection with the commencement of his employment. The aggregate grant date fair values of all such Class B and Class C Units of Holdings were $3.4 million. The Class B Units and Class C Units of Holdings granted to our named executive officers are designed

127

to motivate them to focus on efforts that will increase the value of our equity while enhancing their retention. The specific sizes of the equity grants made to our named executive officers were determined in light of the Sponsor’s practices with respect to management equity programs at other private companies in its portfolio and the executive officer’s position and level of responsibilities within the Company. In addition, in the case of Dr. Payson, consideration was also given to his substantial equity investment in BP Healthcare Holdings, and in the case of Mr. Karkenny, consideration was also given to enhancing his retention following the Merger. Subsequent to these initial grants of equity awards, our Board of Directors has not made additional grants of equity awards to our named executive officers.

Broad-based Employee Benefits.

We provide to all our employees, including our named executive officers, broad-based benefits that are intended to attract and retain employees while providing them with retirement and health and welfare security. Broad-based employee benefits include:

• a 401(k) savings plan;

• medical, dental, vision, life and accident insurance, disability coverage, dependent care and healthcare flexible spending accounts; and

• employee assistance program benefits.

Under our 401(k) savings plan, we match a portion of the funds set aside by the employee. At no cost to the employee, we provide $10,000 in basic life and accident insurance coverage and $100,000 in business travel accident insurance. The employee may also select supplemental life and accident insurance, for a premium to be paid by the employee.

Supplemental Executive Benefits and Perquisites.

We provide a nonqualified deferred compensation plan and modest perquisites which are also intended to attract and retain executives. The deferred compensation plan is intended to promote retention by providing to participants a long-term savings opportunity on a tax-efficient basis and is accomplished with only a modest administrative cost to the Company as the employees’ deferrals are not matched by the Company. Under the deferred compensation plan, participants may defer certain portions of their salary, annual bonus and annual 401(k) savings plan refund offset amount, as more fully explained in the narrative following the “Nonqualified Deferred Compensation” table below.

Our named executive officers also receive modest perquisites provided or reimbursed by us. These perquisites include supplemental long-term disability coverage, executive medical and dental benefits and transportation-related benefits. In addition, Messrs. Gallas and Greenleaf have received relocation-related expense reimbursements as part of the terms of their offer letter and employment agreement, respectively. We provide these perquisites because they are cost-effective and promote retention and recruitment. These perquisites are reflected in the All Other Compensation column of the Summary Compensation Table and the accompanying footnote.

Severance Arrangements and Noncompetition Agreements

Our Board of Directors believes that severance arrangements are necessary to attract and retain the talent necessary for our long-term success. Our Board of Directors views our severance arrangements as recruitment and retention devices that help secure the continued employment and dedication of our named executive officers, including when we are considering strategic alternatives.

Each of our named executive officers (other than Mr. Mastrovich, who has resigned from the Company) has a severance arrangement with us either as part of his employment agreement or as a separate severance

128

agreement. Under the terms of these severance arrangements, each named executive officer is entitled to severance benefits if he is terminated by us without cause or by him as a result of constructive termination or for good reason, as applicable. In connection with Mr. Mastrovich’s resignation from the Company, we entered into a general release of claims agreement with Mr. Mastrovich pursuant to which we agreed to pay him severance compensation. In addition, Messrs. Karkenny and Greenleaf have separate noncompetition agreements with us. These agreements provide for additional payments upon a termination of the executive’s employment by us without cause or by the executive for good reason, in each case, during a specified period.

The severance payments under these agreements are contingent upon the affected executive’s compliance with the post-termination restrictive covenants contained therein. See “Potential Payments to Named Executive Officers Upon Termination of Employment or Change in Control—Severance Arrangements” for descriptions of these agreements.

129

Summary Compensation Table

The following table provides summary information concerning compensation paid or accrued by us to or on behalf of our named executive officers for services rendered to us during 2009.

Name and Principal Position	Salary ($)	Bonus (1) ($)	Stock Awards(2) ($)	Non-Equity Incentive Plan Compensation(3) ($)	All Other Compensation (4)($)	Total ($)
Norman C. Payson, M.D. Executive Chairman of the Board of Directors and Chief Executive Officer	752,060	—	—	825,175	13,737	1,590,972
Chris A. Karkenny Executive Vice President and Chief Financial Officer	476,305	2,100,000	—	514,173	13,273	3,103,751
James G. Gallas (5) Executive Vice President and Chief Administrative Officer	396,635	412,500	685,039	284,555	67,452	1,846,181
Lawrence A. Mastrovich (6) Former President, Home Respiratory Therapy and Home Medical Equipment Segment	581,593	—	1,501,456	637,291	23,730	2,744,070
Daniel E. Greenleaf President, Home Infusion Therapy Segment	476,305	—	1,219,933	617,019	69,633	2,382,890

(1) Amounts included in this column reflect:

• a retention bonus paid during 2009 for Mr. Karkenny, which bonus was subject to a clawback obligation under specified employment termination scenarios and

• a signing bonus of $150,000, which bonus was subject to a clawback obligation under specified employment termination scenarios, and a guaranteed minimum bonus for 2009 of $262,500 paid pursuant to the terms of the offer letter for Mr. Gallas.

See the discussion under “Compensation Discussion and Analysis—Bonuses.”

(2) Amounts included in this column reflect the aggregate grant date fair value of Class B Units and Class C Units of Holdings granted during 2009, calculated in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures, utilizing the assumptions discussed in Note 9 to our financial statements for the year ended December 31, 2009. With respect to the performance-vesting Class B Units and Class C Units, the estimate of the grant date fair value determined in accordance with FASB ASC Topic 718 assumes the vesting of 100% of the units awarded. The values of the performance-vesting Class B and Class C Units at the grant date assuming achievement of the highest performance conditions are not determinable because there are no maximum performance conditions under the terms of Class B and Class C Units. See “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards—Terms of Equity Award Grants—Equity Units of Holdings Granted to Our Named Executive Officers (Other than Our Chief Executive Officer).”

(3) Amounts included in this column reflect the cash incentive awards paid under the 2009 Bonus Plan, except that for Mr. Gallas, the guaranteed minimum bonus of $262,500 is included in the Bonus column. See “Compensation Discussion and Analysis — Bonuses —Annual Cash Incentive Compensation.”

(4) Amounts reported under All Other Compensation for each of the named executive officers include the premiums paid by us on behalf of the executive officer for executive medical insurance and executive dental insurance coverages. In addition, they include:

• For Mr. Karkenny – premiums paid by us on behalf of Mr. Karkenny for the executive long-term disability insurance coverage and gas card/toll road fees paid by us and the related amount of tax gross-up;

• For Mr. Gallas – gas card fees paid by us and the related amount of tax gross-up; relocation expenses reimbursed by us and the related amount of tax gross-up; and corporate housing expenses reimbursed by us;

• For Mr. Mastrovich – premiums paid by us on behalf of Mr. Mastrovich for the executive long-term disability insurance coverage and gas card/toll road fees paid by us and the related amount of tax gross-up; and

• For Mr. Greenleaf – premiums paid by us on behalf of Mr. Greenleaf for the executive long-term disability insurance coverage; gas card fees paid by us and the related amount of tax gross-up; and $38,000 of expenses reimbursed by us in connection with his relocation to Denver, Colorado pursuant to the terms of his employment agreement and $19,899 of the related amount of tax gross-up.

Each perquisite was valued at the actual amount paid to the provider by us on behalf of the named executive officer.

130

(5) Mr. Gallas joined the Company on April 1, 2009. Therefore, the amount reflected under the Salary column for Mr. Gallas reflects the base salary earned by him for the partial year period from the commencement of his employment to December 31, 2009.

(6) Mr. Mastrovich resigned from the Company on March 15, 2010. The severance compensation we agreed to pay him is reflected in the table under the “Potential Payments Upon Termination or Change-in-Control” section.

Grants of Plan-Based Awards

The following table provides supplemental information relating to grants of plan-based awards made to our named executive officers during 2009.

Name	Grant Date	Type of Award	Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)			Estimated Future Payouts Under Equity Incentive Plan Awards			All Other Stock Awards: Number of Shares of Stock or Units (#)(4)	Grant Date Fair Value of Stock and Option Awards($)(5)
			Threshold ($)	Target ($)	Maximum ($)	Threshold (#)	Target (#)(3)	Maximum (#)
Norman C. Payson, M.D.			0	786,507	1,573,014
Chris A. Karkenny			0	490,079	980,158
James G. Gallas (2)			—	525,000	787,500
	4/29/09	Class B					706,226		1,412,452	593,230
	4/29/09	Class C					706,226			91,809
Lawrence A. Mastrovich			0	600,085	900,128
	3/11/09	Class B					1,547,893		3,095,785	1,300,230
	3/11/09	Class C					1,547,893			201,226
Daniel E. Greenleaf			0	493,279	739,919
	3/11/09	Class B					1,257,663		2,515,326	1,056,437
	3/11/09	Class C					1,257,663			163,496

(1) Reflects possible payouts under our 2009 Bonus Plan. See “Compensation Discussion and Analysis—Bonus—Annual Cash Incentive Compensation” for a discussion of threshold, target and maximum cash incentive compensation payouts. The actual amounts of cash incentive compensation paid to our named executive officers under our 2009 Bonus Plan are disclosed in the Summary Compensation Table under the Non-Equity Incentive Plan Compensation column.

(2) Mr. Gallas was guaranteed a minimum bonus of $262,500 for 2009 pursuant to the terms of his offer letter. This guaranteed minimum bonus is reflected in the Bonus column of the Summary Compensation Table. In addition, pursuant to the terms of his offer letter, Mr. Gallas’ target cash incentive compensation payout amount reflected in the table above is based on his annualized base salary rate at date of hire instead of his base salary paid during 2009.

(3) Reflects the number of performance-vesting Class B Units and Class C Units of Holdings granted during 2009.

(4) Reflects the number of time-vesting Class B Units of Holdings granted during 2009.

(5) Represents the aggregate grant date fair value of Class B Units or Class C Units, as applicable, calculated in accordance with the guidance in FASB ASC Topic 718, utilizing the assumptions discussed in Note 9 to our financial statements for the year ended December 31, 2009. With respect to the performance-vesting Class B Units and Class C Units which are reflected under the “Estimated Future Payouts Under Equity Incentive Plan Awards”, the estimate of the grant date fair value determined in accordance with FASB ASC Topic 718 assumes the vesting of 100% of the units awarded.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards

Employment Agreements

Norman C. Payson

Apria and its indirect parent entity, BP Healthcare Holdings LLC, entered into an employment agreement, effective October 28, 2008, with Dr. Payson pursuant to which Dr. Payson serves as our Chief Executive Officer and Executive Chairman of our Board of Directors. His employment agreement has a four-year term with automatic annual renewals and also contains the terms summarized below.

131

Compensation Arrangements

• base salary at the annual rate of $750,000, subject to increases as determined by the Board of Directors;

• target annual bonus award of 100% of base salary (and a maximum bonus award of 200% of base salary), based upon certain performance goals established by our Board of Directors;

• eligibility for equity award grants as determined by our Board of Directors;

• participation in our employee benefit plans; and

• reimbursement for reasonable and customary business expenses, as well as reimbursement for his private airplane operating expenses relating to business travel up to a maximum of $1.55 million per year.

Termination Provisions

Generally, either party may terminate Dr. Payson’s employment agreement at any time, but Dr. Payson must provide 60 days advance written notice to us of his resignation. See “Potential Payments upon Termination or Change-in-Control—Severance Arrangements” for a description of the severance provisions related to Dr. Payson’s termination of employment.

In addition, if Dr. Payson resigns, or we remove him, from the position of Chief Executive Officer of Apria and/or Sky Acquisition LLC but the party initiating such action notifies the other party that it desires Mr. Payson to continue to serve as the Executive Chairman of the Board of Directors of Apria or the Chairman of the Board of Directors of Sky Acquisition, then we must terminate his employment agreement and enter into a services agreement with Dr. Payson, pursuant to which he would continue to serve as the Executive Chairman of the Board of Directors of Apria and the Chairman of the Board of Directors of Sky Acquisition and serve as a senior advisor to BP Healthcare Holdings, and we would pay him $500,000 per year for his services to Apria. The services agreement would terminate on October 28, 2012, unless earlier terminated by either party or extended by mutual agreement of the parties thereto.

Chris A. Karkenny

Apria entered into an employment agreement, effective October 28, 2008, with Mr. Karkenny pursuant to which Mr. Karkenny continues to serve as our Chief Financial Officer. His employment agreement has a five-year term with automatic annual renewals and also contains the terms summarized below.

Compensation Arrangements

• base salary at the annual rate of $475,000 after December 31, 2008, subject to increases as determined by our Board of Directors;

• target annual bonus award of 100% of base salary (and a maximum bonus award of 200% of base salary), based upon certain performance goals established by our Board of Directors;

• eligibility for equity award grants as determined by our Board of Directors;

• retention bonus payment of $2,100,000, payable on January 5, 2009, subject to a claw-back obligation described below;

• participation in our employee benefit plans; and

• reimbursement of reasonable and customary business expenses.

Notwithstanding the foregoing, the agreement provides that in the event Mr. Karkenny terminates his employment with Apria, other than his resignation as a result of a “constructive termination”, or upon his death or disability, in each case prior to March 31, 2010, he is required to pay to Apria the amount by which $2,100,000 exceeds the product of (x) $140,000 and (y) the number of full months following January 1, 2009 that he was continuously employed by Apria.

132

Termination Provisions

Generally, either party may terminate Mr. Karkenny’s employment agreement at any time, but Mr. Karkenny must provide 30 days advance written notice to Apria of his resignation. See “Potential Payments Upon Termination or Change-in-Control—Severance Arrangements” for a description of the severance provisions related to Mr. Karkenny’s termination of employment.

James G. Gallas

Apria entered into an offer letter, dated March 10, 2009, with Mr. Gallas pursuant to which Mr. Gallas serves as our Chief Administrative Officer. Mr. Gallas’ employment with Apria is on an “at-will” basis. His offer letter contains the terms summarized below.

Compensation Arrangements

• base salary at the annual rate of $525,000, subject to merit based wage adjustments consistent with other senior executives under our wage administration policy;

• target annual bonus award of 100% of base salary (and a maximum bonus award of 150% of base salary), with a guaranteed minimum bonus of $262,500 for the plan year 2009;

• a sign-on bonus of $150,000, a portion of which is required to be refunded to Apria on a ratable basis if he voluntarily terminates his employment or is terminated for misconduct before completing 24 months of employment;

• eligibility for equity award grants equal to 0.365% of the fully diluted ownership of Holdings;

• participation in our employee benefit plans; and

• relocation benefits, including reasonable air, hotel, meal and transportation expenses associated with his temporary commute from Ohio to Southern California up to the time of completion of relocation and six months of temporary housing expenses in the Southern California area up to $5,000 per month.

Termination Provisions

We also entered into a severance agreement, dated March 10, 2009, with Mr. Gallas. See “Potential Payments Upon Termination or Change-in-Control—Severance Arrangements” for a description of the severance provisions contained in his severance agreement.

Daniel E. Greenleaf

Apria entered into an amended and restated employment agreement with Mr. Greenleaf on October 24, 2008, which was effective as of April 7, 2008 and pursuant to which Mr. Greenleaf serves as President of Coram, Inc., our Home Infusion Therapy segment. Mr. Greenleaf’s employment with Apria is on an “at-will” basis. His employment agreement contains the terms summarized below.

Compensation Arrangements

• base salary at the annual rate of $475,000, subject to increases from time to time by Apria;

• target annual bonus award of 100% of base salary (and a maximum award of 150% of base salary);

• eligibility for equity award grants;

• participation in our employee benefit plans; and

• reimbursement of certain relocation expenses and reasonable and customary business expenses. Relocation expenses include an amount equal to the greater of $7,000 gross or $4,500 net per month, for up to six months, to cover the carrying costs of Mr. Greenleaf’s old residence if his residence becomes

133

vacant and remains unsold and up to a total of $30,000 of the interest costs associated with indebtedness incurred by Mr. Greenleaf to fund the equity portion of the purchase price for his new residence in Denver, Colorado during the period prior to the sale of his old residence.

Termination Provisions

Generally, either party may terminate Mr. Greenleaf’s employment agreement at any time, by giving the other party at least 30 days advance written notice. See “Potential Payments Upon Termination or Change-in-Control—Severance Arrangements” for a description of the severance provisions related to Mr. Greenleaf’s termination of employment.

Lawrence A. Mastrovich

Apria entered into an employment agreement, effective October 24, 2008 and amended as of April 3, 2009, with Mr. Mastrovich pursuant to which Mr. Mastrovich served as our President, Home Respiratory Therapy and Home Medical Equipment segment until March 15, 2010. His employment agreement contained the terms summarized below.

Compensation Arrangements

• base salary at the annual rate of $580,000, subject to increases as determined by Apria;

• participation in all annual bonus, incentive, savings and retirement plans, practices, policies and programs applicable generally to our Chief Executive Officer, including our Executive Bonus Plan and 401(k) savings plan;

• participation in our welfare, savings and retirement benefit plans; and

• reimbursement for reasonable employment expenses.

Termination Provisions

In connection with our reorganization of the senior leadership structure of the home respiratory therapy and home medical equipment service lines, Mr. Mastrovich resigned as President, Home Respiratory Therapy and Home Medical Equipment segment, effective as of March 15, 2010. See “Potential Payments Upon Termination or Change-in-Control—Severance Arrangements” for a description of the termination provisions of his employment agreement that were triggered upon his resignation.

General Release of Claims Agreement

In connection with Mr. Mastrovich’s resignation from the Company, Apria entered into a general release of claims agreement with him, effective March 15, 2010, pursuant to which Mr. Mastrovich agreed to release us and our affiliates from all claims, subject to certain conditions and qualifications therein, and we agreed to pay him a total of $2,568,849 in severance compensation and $77,395 to repurchase his vested equity units. See “Potential Payments upon Termination or Change-in-Control—Severance Arrangements” for a description of the severance payments we agreed to make to Mr. Mastrovich pursuant to this agreement.

Terms of Equity Award Grants

Equity Units of BP Healthcare Holdings LLC Granted to Our Chief Executive Officer

Vesting Terms

The Class B Units of BP Healthcare Holdings granted to our Chief Executive Officer are 80% time-vesting and 20% performance-vesting. The time-vesting units vest over 4 years starting on October 28, 2008 in quarterly tranches but will become fully vested on an accelerated basis either (x) upon a change in control while he

134

continues to provide services to us or (y) if affiliates of the Sponsor receive cash proceeds in respect of 50% of their units in BP Healthcare Holdings equal to at least 200% of their aggregate capital contributions in respect of such units while he continues to provide services to us. In addition, if his services are terminated (a) by us without “cause” or (b) by him as a result of “constructive termination,” an additional number of these time-vesting Class B Units will vest equal to the number that would have vested over the 24-month period following the applicable termination date. Any of these time-vesting Class B Units that are unvested on termination of his services will be forfeited.

One-half of the performance-vesting Class B Units granted to our Chief Executive Officer vest only if affiliates of the Sponsor receive cash proceeds equal to at least 200% of their aggregate capital contributions in respect of all of their units in BP Healthcare Holdings and the other half vest only if they receive cash proceeds equal to at least 300% of their aggregate capital contributions in respect of all of their units in BP Healthcare Holdings. Any of these performance-vesting units that are unvested upon a termination of his services (x) by us without “cause,” (y) by him as a result of “constructive termination” or (z) by him for any reason on or following October 28, 2012 will remain outstanding until the second anniversary of the applicable termination date (unless they vest prior to that date). If the performance-vesting units do not vest by such anniversary, then they will be immediately forfeited.

Put and Call Rights

Prior to our initial public offering, if the Chief Executive Officer’s employment is terminated due to death or disability, he has the right, subject to certain limitations, for a specified period following the termination date, to cause us to purchase on one occasion all, but not less than all, of his vested Class B Units at the fair market value of such units. Our Chief Executive Officer does not have the right to require us to repurchase the Class A-2 units of BP Healthcare Holdings LLC that he purchased.

If the Chief Executive Officer’s employment is terminated by us “for cause,” due to his death or disability or, prior to the fourth anniversary of the vesting date, by him (other than as a result of constructive termination), then we have the right for a specified period following the termination to cause the Chief Executive Officer (or his permitted transferees) to sell to us all vested Class B units held by him at (i) the lesser of fair market value thereof and cost, in the event of termination for cause, which means that such vested units will be effectively forfeited or (ii) the fair market value thereof, in the event of termination due to death or disability or voluntary termination (other than as a result of constructive termination) prior to the fourth anniversary of the vesting date.

Equity Units of Holdings Granted to Our Named Executive Officers Other than Our Chief Executive Officer

Vesting Terms

Class A-2 Units. Class A-2 Units of Holdings granted to Mr. Karkenny vest if an initial public offering or change of control occurs and the valuation of Class A-1 Units of Holdings implied by the transaction exceeds 110% of the aggregate capital contributions of affiliates of the Sponsor for the Class A-1 Units. Mr. Karkenny does not need to be employed at the time of our initial public offering or change in control to vest. The Class A-2 Units will be forfeited if an initial public offering or change of control occurs at a valuation that does not result in vesting.

Class B Units. The Class B Units of Holdings granted to all of our named executive officers other than our Chief Executive Officer are divided into a time-vesting portion (2/3 of the Class B Units granted) and a performance-vesting portion (1/3 of the Class B Units granted). The time-vesting portion of these Class B Units vest over 5 years, with 20% vesting on the 12-month anniversary of the later of (x) October 28, 2008 and (y) the date of the executive’s commencement of employment with us and the remainder in quarterly tranches thereafter, except that in the case of Mr. Karkenny, they vest over 57 months, with 25% vesting on October 28, 2009 and the remainder in quarterly tranches thereafter, in each case subject to the executive officer’s continued employment

135

through each vesting date. Notwithstanding the foregoing, the time-vesting Class B units of Holdings will become fully vested on an accelerated basis upon a change in control while the executive continues to provide services to us.

The performance-vesting portion of these Class B Units vest only if affiliates of the Sponsor receive cash proceeds (not subject to any clawback, indemnity or similar contractual obligation) in respect of 25% of its units equal to 200% of its aggregate capital contributions for such units.

Class C Units. All Class C Units are performance-vesting and have the same vesting terms as the performance-vesting Class B Units.

Any of the Class B Units or Class C Units that are unvested on termination of the executive’s services will be forfeited.

Put and Call Rights

Prior to our initial public offering, if the executive’s employment is terminated due to death or disability, he has the right, subject to certain limitations, for a specified period following the termination date, to cause us to purchase on one occasion all, but not less than all, of his vested Class A-2, Class B or Class C Units at the fair market value thereof.

If the executive’s employment is terminated due to (i) death or disability, (ii) by us without cause, (iii) voluntarily as a result of constructive termination or (iv) voluntarily (other than as a result of a constructive termination) after the later of (x) October 28, 2010 and (y) the second anniversary of the date the executive commenced his employment with us or, in the case of Mr. Karkenny, after January 28, 2010, or the executive engages in any conduct that would be a violation of a restrictive covenant set forth in the management unit subscription agreement but for the fact that the conduct occurred outside the relevant periods, then we have the right to purchase all of the executive’s vested Class B or Class C Units at the fair market value thereof.

If the executive’s employment is terminated (i) by us for “cause” or (ii) voluntarily (other than as a result of a constructive termination) on or before the later of (x) October 28, 2010 and (y) the second anniversary of the date the executive commenced employment with us or, in the case of Mr. Karkenny, on or before January 28, 2010, or the executive breaches any of the restrictive covenants set forth in the management unit subscription agreement, then we have the right to purchase all of the executive’s vested Class B or Class C Units at the lesser of fair market value thereof and cost, which means that such vested Class B or Class C Units will be effectively forfeited.

Restrictive Covenants

As a condition of receiving the units, our named executive officers have agreed to certain restrictive covenants, including confidentiality of information, non-competition, non-solicitation and non-disparagement covenants in the management unit subscription agreements. As described above, we have the right to purchase our named executive officers’ vested units in the event of breach of these restrictive covenants either within or outside the periods covered by the restrictive covenants.

136

Outstanding Equity Awards at Fiscal-Year End

The following table provides information regarding outstanding equity awards made to our named executive officers as of December 31, 2009. The equity awards held by Dr. Payson are Class B Units of BP Healthcare Holdings, and the equity awards held by the other named executive officers are Class B and Class C Units of Holdings.

		Stock Awards
Name	Grant Date	Number of Shares or Units of Stock That Have Not Vested (1) (#)	Market Value of Shares or Units of Stock That Have Not Vested (1) ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (2) (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (2) ($)
Norman C. Payson M.D.	11/24/2008	23,218,391	(3	)	7,739,463	(3	)
Chris A. Karkenny	12/19/2008	3,337,310	(3	)	4,950,637	(3	)
James G. Gallas	4/29/2009	1,412,452	(3	)	1,412,452	(3	)
Lawrence A. Mastrovich(4)	3/11/2009	2,476,628	(3	)	3,095,786	(3	)
Daniel A. Greenleaf	3/11/2009	2,012,261	(3	)	2,515,326	(3	)

(1) Reflects time-vesting Class B Units that have not vested. The following provides information with respect to the vesting schedule of the time-vesting Class B Units that have not vested as of December 31, 2009:

• Dr. Payson – 1,934,866 units vest every three months starting on January 28, 2010 until all of them vest on October 28, 2012.

• Mr. Karkenny – 222,487 units vest every three months starting on January 28, 2010 until all of them vest on July 28, 2013.

• Mr. Gallas – 282,490 units vested on April 1, 2010 and 70,623 units vest every three months starting on July 1, 2010 until all of them vest on April 1, 2014.

• Mr. Greenleaf – 125,766 units vest every three months starting on January 28, 2010 until all of them vest on October 28, 2013.

Vesting will be accelerated under specified events while the executive continues to provide services to us, as described under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards-Terms of Equity Award Grants.”

(2) Reflects performance-vesting Class B Units and Class C Units and, with respect to Mr. Karkenny, Class A-2 Units.

(3) There was no public market for the units as of December 31, 2009, and thus the market value as of that date is not determinable. For purposes of FASB ASC Topic 718, the grant date fair value of Dr. Payson’s Class B Units was $0.36 per unit, the grant date fair value of Mr. Karkenny’s Class A-2, Class B and Class C Units were $0.75 per unit, 0.35 per unit and 0.15 per unit, respectively, and the grant date fair values of the other named executive officers’s Class B and Class C Units were $0.28 per unit and $0.13 per unit, respectively.

(4) Mr. Mastrovich forfeited all of his unvested Class B and Class C Units upon his resignation from the Company on March 15, 2010.

137

Option Exercises and Stock Vested

The following table provides information regarding the number of equity units that vested for our named executive officers during 2009.

	Stock Awards
Name	Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($)
Norman C. Payson, M.D.	7,739,464	(1	)
Chris A. Karkenny	1,112,437	(1	)
James G. Gallas	—	—
Lawrence A. Mastrovich	619,157	(1	)
Daniel A. Greenleaf	503,065	(1	)

(1) There was no public market for the units as of the vesting dates, and thus the market values as of the vesting dates are not determinable. For purposes of FASB ASC Topic 718, the grant date fair value of Dr. Payson’s Class B Units was $0.36 per unit, the grant date fair value of Mr. Karkenny’s Class B Unit was $0.35 per unit and the grant date fair value of the other named executive officers’s Class B Units were $0.28 per unit.

Nonqualified Deferred Compensation

The following table provides information regarding activity in our nonqualified deferred compensation plan for the named executive officers during 2009. Mr. Mastrovich was the only named executive officer who participated in our nonqualified deferred compensation plan during 2009.

Name	Executive Contributions in Last FY ($)	Registrant Contributions in Last FY ($)	Aggregate Earnings in Last FY ($)	Aggregate Withdrawals/ Distributions ($)	Aggregate Balance at Last FYE ($)
Norman C. Payson, M.D.	—	—	—	—	—
Chris A. Karkenny	—	—	—	—	—
James G. Gallas	—	—	—	—	—
Lawrence A. Mastrovich (1)	—	—	307	1,534,279	388,145
Daniel A. Greenleaf	—	—	—	—	—

(1) In connection with Mr. Mastrovich’s resignation from the Company, he received the remaining balance in his account of $396,314 on April 12, 2010.

Under our nonqualified deferred compensation plan, the participants may defer up to 50% of their salary, up to 100% of their annual bonus, and 100% of their annual 401(k) savings plan refund offset amount, the latter of which is an amount equal to their refund (if any) from our 401(k) savings plan. Returns on deferrals in an individual’s account under the nonqualified deferred compensation plan are credited or debited based on the performance of hypothetical measurement funds selected by the individual, which selection can be changed as often as daily, from a menu of options offered in connection with the plan. We do not match amounts that are deferred by employees pursuant to the nonqualified deferred compensation plan.

An individual may choose to receive distributions in either a lump sum or in annual installments at death, retirement, or termination of employment with us or, in the event of an in-service distribution, at a date specified by the individual at least three years after the end of the year in which the deferral is made. An individual may also receive a distribution if he or she experiences an unforeseeable financial emergency, as defined in the nonqualified deferred compensation plan.

138

Potential Payments Upon Termination or Change-in-Control

The following table describes the potential payments and benefits that would have been payable to our named executive officers under existing plans and contractual arrangements assuming (i) a termination of employment or (ii) a change of control occurred on December 31, 2009, except that the amounts shown in the following table for Mr. Mastrovich reflect the amounts we agreed to pay to him pursuant to the general release of claims agreement, dated as of March 15, 2010.

The amounts shown in the table do not include payments and benefits to the extent they are provided generally to all salaried employees upon termination of employment and do not discriminate in scope, terms or operation in favor of the named executive officers. These include accrued salary, distributions of plan balances under our 401(k) savings plan and distributions of plan balances under the non-qualified deferred compensation plan. Furthermore, the amounts shown in the table do not include amounts that may be payable to a named executive officer upon the sale or purchase of his vested equity units pursuant to the exercise of the put or call rights described under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards—Terms of Equity Award Grants.”

Name	Cash Severance Payment ($)(1)	Continuation of Group Health Plans ($)(2)	Total Termination Benefits (Excluding Acceleration of Equity Awards)(3) ($)
Norman C. Payson, M.D.
Without Cause or as a result of Constructive Termination	825,175	17,981	843,156
Chris A. Karkenny
Without Cause or as a result of Constructive Termination	3,194,331	35,977	3,230,308
James G. Gallas
Without Cause or with Good Reason	1,050,000	30,570	1,080,570
Daniel A. Greenleaf
Without Cause or with Good Reason	2,792,020	40,247	2,832,267
Lawrence A. Mastrovich
Without Cause or with Good Reason	2,512,841	56,008	2,568,849

(1) Cash severance payment includes the following:

• Dr. Payson — his annual bonus earned under the 2009 Bonus Plan of $825,175;

• Mr. Karkenny — (i) his annual bonus earned under the 2009 Bonus Plan of $514,173; (ii) two times the sum of (x) his annual base salary rate of $475,000 and (y) his target annual bonus of $490,079 and (iii) $750,000 payable under the noncompetition agreement we entered into with him prior to the Merger;

• Mr. Gallas — two times his annual base salary rate of $525,000; and

• Mr. Greenleaf — (i) two times the sum of (x) his annual base salary rate of $475,000 and (y) the average of his earned bonus for 2009 and his annual base salary rate for 2009, which equals $546,010 and (ii) $750,000 payable under the noncompetition agreement we entered into with him prior to the Merger

Cash severance payment for Mr. Mastrovich is described below under “Severance Arrangements—Lawrence A. Mastrovich—General Release of Claims Agreement.”

(2) Reflects the cost of providing the executive officer with a continuation of medical, dental and vision insurance under COBRA, including the cost of his participation in the senior executive medical and dental programs, for one year after termination in the case of Dr. Payson and Mr. Gallas and for two years after termination in the case of Messrs. Karkenny and Greenleaf. We have included such costs because

139

notwithstanding the specific contractual provisions in the applicable named executive officer’s employment agreement or severance agreement, we would pay out such amounts in the event the named executive officers were terminated under the scenarios illustrated in the table above.

(3) If Dr. Payson were terminated by us without cause or by him as a result of constructive termination, an additional number of his time-vesting Class B Units equal to the number that would have vested over the 24-month period following the termination date would become immediately vested. Total termination benefits for Dr. Payson excludes the market value of 15,478,927 such unvested time-vesting Class B Units that would become immediately vested. Because there was no public market for the Class B Units of BP Healthcare Holdings as of December 31, 2009, the market value as of that date is not determinable. For purposes of FASB ASC Topic 718, the grant date fair value of Dr. Payson’s Class B Units was $0.36 per unit.

In addition, upon a change of control, our other named executive officers’ unvested time-vesting Class B Units would become immediately vested. As of December 31, 2009, the number of Class B units that were subject to acceleration of vesting upon a change of control was as follows: Mr. Karkenny — 3,337,310; Mr. Gallas — 1,412,452 and Mr. Greenleaf — 2,012,261. Because there was no public market for Holdings’ Class B Units as of December 31, 2009, the market value as of that date is not determinable. For purposes of FASB ASC Topic 718, the grant date fair value of each Class B Unit of Holdings was $0.35 for Mr. Karkenny and $0.28 for Messrs. Gallas and Greenleaf.

Total termination benefits for Mr. Mastrovich does not include the $77,395 we agreed to pay him to repurchase his vested equity units.

Severance Arrangements

Norman C. Payson

Pursuant to the terms of Dr. Payson’s employment agreement, if Dr. Payson’s employment is terminated without “cause” by Apria or by him as a result of a “constructive termination,” Dr. Payson will be entitled to receive the following severance benefits:

• a pro rata portion of an annual bonus in respect of the year of termination and

• continued coverage under our group health plans until the earlier of (x) twelve months from the date of Dr. Payson’s termination of employment with Apria and (y) the date Dr. Payson is or becomes eligible for comparable coverage under health plans of another employer.

The amounts payable to Dr. Payson upon a termination of employment described above are subject to Dr. Payson providing a release of all claims to us. Following termination without cause or as a result of a constructive termination, except as set forth above, Dr. Payson will have no further rights to any compensation or any other benefits under his employment agreement.

Furthermore, if Dr. Payson fails to comply with the non-competition, non-solicitation and confidentiality covenants contained in his employment agreement, we have the right to terminate the payments described above. The confidentiality covenant has an indefinite term, whereas the non-competition and non-solicitation covenants have terms of twelve and twenty-four months, respectively. The term of a particular covenant will be extended by the length of any period that Dr. Payson is in breach of such covenant; however, we have the right to waive a breach of any covenant by Dr. Payson.

In addition, pursuant to the terms of Dr. Payson’s employment agreement, if Dr. Payson resigns, or we remove him, from the position of Chief Executive Officer of Apria and/or Sky Acquisition, and we terminate his employment agreement and enter into a services agreement with him, then we would pay him $500,000 per year for his services to Apria under the services agreement. Any such resignation by Dr. Payson does not constitute “cause” and any such removal by us does not constitute “constructive termination” under the terms of his

140

employment agreement. See “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards—Employment Agreements—Norman C. Payson.”

For purposes of Dr. Payson’s employment agreement, “cause” means (i) Dr. Payson’s willful and continued failure to substantially perform his duties to us or our affiliates (other than as a result of total or partial incapacity due to physical or mental illness or as a result of him resigning as our Chief Executive Officer); (ii) his engagement in fraud or willful dishonesty (other than dishonesty that has no material detrimental impact on our reputation or business and our affiliates); (iii) any act on the part of Dr. Payson that constitutes a felony (other than traffic offenses) or its equivalent under applicable non-U.S. law or (iv) his material breach of the restrictive covenant provisions of the agreement; provided, further, that “cause” ceases to exist for an event on the ninetieth (90th) day following the later of its occurrence or the knowledge thereof by a majority of our Board of Directors, unless we or our affiliates have given him written notice thereof prior to such date.

For purposes of Dr. Payson’s employment agreement, “constructive termination” means the occurrence of one of the following: (i) our failure to pay or cause to be paid Dr. Payson’s base salary, annual bonus (if any) or reimbursable expenses when due; (ii) except in certain circumstances, a reduction in his base salary or target annual bonus; (iii) any substantial and sustained diminution in his authority or responsibilities; (iv) any material breach by us of any material agreement with him; provided that none of these events shall constitute constructive termination unless we fail to cure such event within 30 days after receipt from him of written notice specifying in reasonable detail the event which constitutes constructive termination; provided, further, that “constructive termination” ceases to exist for an event on the ninetieth (90th) day following the later of its occurrence or his knowledge thereof, unless he has given Apria written notice thereof prior to such date.

Chris A. Karkenny

Pursuant to the terms of Mr. Karkenny’s employment agreement, if Mr. Karkenny’s employment is terminated without cause by Apria or by him as a result of a constructive termination, Mr. Karkenny will be entitled to receive the following severance benefits:

• a pro rata portion of an annual bonus in respect of the year of termination;

• subject to his compliance with the restrictive covenants described below, two times the sum of (x) his annual base salary and (y) his target annual bonus payable over twenty-four months; and

• continued coverage under our group health plans until the earlier of (x) twenty-four months from the executive’s date of termination of employment with Apria and (y) the date the executive is or becomes eligible for comparable coverage under health plans of another employer.

The amounts payable to Mr. Karkenny upon a termination of employment described above are subject to Mr. Karkenny providing a release of all claims to us. Following termination without cause or as a result of a constructive termination, except as set forth above, Mr. Karkenny will have no further rights to any compensation or any other benefits under his employment agreement.

Furthermore, the payment of severance compensation equal to two times the sum of (x) his annual base salary and (y) his target annual bonus described above is contingent upon Mr. Karkenny’s continued compliance with the non-competition, non-solicitation, non-disparagement and confidentiality covenants contained in his employment agreement. The confidentiality covenant has an indefinite term, and the non-competition, non-disparagement and non-solicitation covenants each have a term of eighteen months. The term of a particular covenant will be extended by the length of any period that Mr. Karkenny is in breach of such covenant.

In addition, pursuant to the terms of Mr. Karkenny’s employment agreement, if Mr. Karkenny had terminated his employment prior to March 31, 2010, other than as a result of “constructive termination” or upon his death or disability, he would have been required to pay to us a portion of his $2,100,000 retention bonus equal to the amount by which $2,100,000 exceeds the product of (x) $140,000 and (y) the number of full months following January 1, 2009 that he was continuously employed by us.

141

For purposes of Mr. Karkenny’s employment agreement, “cause” generally means that our Board of directors has determined that Mr. Karkenny has (i) engaged in or committed willful misconduct; (ii) engaged in or committed theft, fraud or other illegal conduct; (iii) refused or demonstrated an unwillingness to substantially perform his duties for a 30-day period after written notice from Apria; (iv) refused or demonstrated an unwillingness to reasonably cooperate in good faith with certain investigations; (v) engaged in or committed insubordination; (vi) engaged in or committed any willful act that is injurious to our reputation or business; (vii) willfully violated his fiduciary duty or his duty of loyalty to us or our Code of Ethical Business Conduct in any material respect; (viii) used alcohol or drugs (other than prescribed drugs for their intended purpose) in a manner which materially and repeatedly interferes with the performance of his duties; or (ix) engaged in or committed a material breach of his employment agreement for a 30-day period after written notification is delivered by us.

For purposes of Mr. Karkenny’s employment agreement, “constructive termination” means the occurrence of one of the following: (i) our failure to pay or cause to be paid Mr. Karkenny’s base salary, annual bonus (if any) or retention payments when due; (ii) a reduction in Mr. Karkenny’s retention payments, base salary or target annual bonus; (iii) any substantial and sustained diminution in his authority or responsibilities; (iv) a material reduction in, or the failure of Apria to provide in all material respects, the employee benefits to which he is entitled to or receiving as of the date hereof (excluding any reductions generally applicable to all senior executives); (iv) a relocation of his principal place of business which will result in an increase by more than 30 miles in his one-way commute; (v) a reduction in his title or a material reduction in the nature, status or scope of his authorities, duties and/or responsibilities; (vi) the failure of a successor employer to Apria to assume Mr. Karkenny’s employment agreement in writing; (vii) our delivery of a written notice to not extend the employment term; or (viii) his not being the Executive Vice President and Chief Financial Officer of the operating entity following the occurrence of a change of control; provided that none of these events shall constitute constructive termination unless we fail to cure such event within 30 days after receipt from him of written notice specifying in reasonable detail the event which constitutes constructive termination; provided, further, that “constructive termination” shall cease to exist for an event on the ninetieth (90th) day following the later of its occurrence or his knowledge thereof, unless he has given Apria written notice thereof prior to such date.

James G. Gallas

Pursuant to the terms of Mr. Gallas’ severance agreement, either party may terminate Mr. Gallas’s employment at any time. If Mr. Gallas’ employment is terminated without cause by Apria or with good reason by Mr. Gallas, then the terminating party must give the other party at least 30 days advance written notice.

If Mr. Gallas’ employment is terminated without cause by us or terminated with good reason by Mr. Gallas, he will be entitled to receive the following severance benefits:

• annual base salary at the rate in effect at the time of termination and

• the sum of (x) the average of his two most recent annual bonuses, if any, received prior to termination, and (y) the annual cost of providing him with a continuation of medical, dental and vision insurance under COBRA, including the cost of his participation in the senior executive medical and dental programs; provided however, that in the event he has been employed for less than one year and for that reason has not yet received an annual bonus, then his average annual bonus shall be deemed to be 100% of his annual base salary rate as of the date of his employment with Apria.

The amounts payable to Mr. Gallas upon a termination of employment described above shall be paid in periodic installments over a period of twelve months provided that Mr. Gallas executes a release of all claims to us. Such payments are also contingent upon Mr. Gallas’s continued compliance with certain non-competition, non-solicitation and confidentiality covenants contained in his employment agreement. The confidentiality covenant has an indefinite term, whereas the non-competition and non-solicitation covenants each have a term of twelve months. If we believe that Mr. Gallas is in violation of the non-competition or non-solicitation covenant

142

after his termination, we may suspend all of the payments described above until he establishes that he is not in violation of such covenants. However, we also have the right to waive a breach of any covenant by Mr. Gallas.

Pursuant to the terms of Mr. Gallas’ offer letter, he is required to refund a portion of the $150,000 sign-on bonus paid to him if he voluntarily terminates his employment with us (other than as a result of constructive termination) or is terminated for misconduct before completing 24 months of employment, in an amount equal to 1/24^th of the total for each month less than 24 completed.

For purposes of Mr. Gallas’ executive severance agreement, “cause” generally means that we have determined that Mr. Gallas has (i) engaged in or committed willful misconduct; (ii) engaged in or committed theft, fraud or other illegal conduct; (iii) refused or demonstrated an unwillingness to substantially perform his duties after written notice from Apria; (iv) refused or demonstrated an unwillingness to reasonably cooperate in good faith with certain investigations; (v) engaged in or committed insubordination; (vi) engaged in or committed any willful act that is injurious to our reputation or business; (vii) violated his fiduciary duty or his duty of loyalty to us or our Code of Ethical Business Conduct in any material respect; (viii) used alcohol or drugs (other than prescribed drugs for their intended purpose) in a manner which materially and repeatedly interferes with the performance of his duties; or (ix) engaged in or committed a material breach of his severance agreement.

Under his severance agreement, “good reason” generally means (i) the reduction of Mr. Gallas’s annual base salary (except in the case of certain reductions affecting all executive officers equally); (ii) the addition of greater than 30 miles to Mr. Gallas’s one-way commute (except in connection with a relocation of our principal executive offices); or (iii) our failure to require our successor to expressly assume and perform Mr. Gallas’ severance agreement. However, “good reason” will cease to exist under Mr. Gallas’ severance agreement if Mr. Gallas agrees to any of the above conditions in writing, fails to terminate his employment within 120 days after the occurrence of such conditions, or if we remedy such conditions within 30 days after receipt of written notice (within 60 days of the initial existence of the condition from Mr. Gallas).

Daniel E. Greenleaf

Pursuant to the terms of Mr. Greenleaf’s employment agreement, if Mr. Greenleaf’s employment is terminated without cause by Apria or by him with good reason, Mr. Greenleaf will be entitled to receive the following severance benefits:

• a payment equal to two times the sum of (x) his annual base salary at the rate in effect at the time of termination, (y) the average of his annual bonuses with respect to our two most recently completed fiscal years, if any, and (z) the annual cost for Mr. Greenleaf to obtain medical, dental and vision insurance under COBRA; provided however, that in the event he has been employed for a period which includes one (but not two) full annual bonus cycles prior to the termination of employment, the average of his annual bonuses described above shall be deemed to be equal to the average of the earned annual bonus for the full bonus cycle during his employment plus an amount equal to his base salary for the year of termination.

The amounts payable to Mr. Greenleaf upon a termination of employment described above shall be paid in periodic installments over a period of twenty-four months provided that Mr. Greenleaf executes a release of all claims to us. Such payments are also contingent upon Mr. Greenleaf’s continued compliance with certain non-competition, non-solicitation, non-disparagement and confidentiality covenants contained in his employment agreement. The confidentiality covenant has an indefinite term, whereas the non-competition and non-solicitation covenants each have a term of twenty-four months and the non-disparagement covenant has a term of twelve months. If we believe that Mr. Greenleaf is in violation of the non-competition, non-solicitation, non-disparagement or confidentiality covenant after his termination, we may suspend all of the payments described above until he establishes that he is not in violation of such covenant. However, we also have the right to waive a breach of any covenant by Mr. Greenleaf.

143

For purposes of Mr. Greenleaf’s employment agreement, “cause” generally means that our Board of Directors determines that the executive has done any of the following: (i) engaged in or committed willful misconduct; (ii) engaged in or committed theft, fraud or other conduct constituting a felony (other than traffic related offenses or as a result of vicarious liability); (iii) refused or demonstrated an unwillingness to substantially perform his duties for a 30-day period after written demand from Apria; (iv) refused or demonstrated an unwillingness to reasonably cooperate in good faith with certain investigations; (v) engaged in or committed any willful act that is injurious to our business or reputation; (vi) willfully violated his fiduciary duty or his duty of loyalty to us or our Code of Ethical Business Conduct in any material respect; (vii) used alcohol or drugs (other than prescribed drugs for their intended purposes) in a manner which materially and repeatedly interferes with the performance of his duties or which has the effect of materially injuring our business or reputation; or (viii) engaged in or committed a material breach of his amended and restated employment agreement for a 30-day period after written notice from Apria.

For the purposes of Mr. Greenleaf’s employment agreement during a period that (i) begins with the first to occur of (1) the initial public announcement of a change of control or (2) the 90th day preceding a change of control and (ii) ends two years following such change of control, “cause” generally means only the occurrence of either or both of the following: (A) Mr. Greenleaf’s conviction for committing an act of fraud, embezzlement, theft, or other act constituting a felony (other than traffic related offenses or as a result of vicarious liability); or (B) the willful engaging by Mr. Greenleaf in misconduct that is significantly injurious to us. For purposes of the above clause (B) no act, or failure to act, on Mr. Greenleaf’s part shall be considered willful unless done or omitted to be done, by him not in good faith or without reasonable belief that his action or omission was in the best interest of the Company.

For purposes of Mr. Greenleaf’s employment agreement during the period that begins with the first to occur of (i) the initial public announcement of a change of control or (ii) the ninetieth (90th) day preceding a change of control and ends two years following such change of control, “good reason” means, without the executive’s written consent, the occurrence of any of the following: (i) a material reduction in the nature, status or scope of Mr. Greenleaf’s authorities, duties, and/or responsibilities from their level in effect on the day immediately prior to the change of control; (ii) a reduction in Mr. Greenleaf’s base salary from its highest level in effect at any point in the three months preceding the change of control or a significant reduction in Mr. Greenleaf’s aggregate incentive opportunities under our short and/or long-term incentive programs, as such opportunities exist immediately prior to the change of control; (iii) our failure to maintain Mr. Greenleaf’s relative level of coverage and accruals under our employee benefit and/or retirement plans, policies, practices or arrangements in which he participates immediately prior to the change of control; (iv) Mr. Greenleaf is informed by us that his principal place of employment will be relocated to a location that will result in an increase of more than 30 miles in his one-way commute; and (v) for purposes of his employment agreement, we are not permitting him to continue to serve in a mutually acceptable senior executive position.

For purposes of Mr. Greenleaf’s employment agreement, in circumstances unrelated to a change of control or subsequent to the expiration of the two-year period following a change of control, “good reason” generally means the occurrence of any one of the following events without Mr. Greenleaf’s written consent: (i) his annual base salary is reduced, except for a one-time “across-the-board” salary reduction not exceeding ten percent which is imposed simultaneously on all executive officers; (ii) we require Mr. Greenleaf to be based at an office location which will result in an increase of more than 30 miles in his one-way commute; (iii) we do not permit him to serve in a mutually acceptable senior executive position; or (iv) Mr. Greenleaf ceases to continue to serve in his current position or another mutually acceptable senior executive position.

Lawrence A. Mastrovich

Pursuant to the terms of Mr. Mastrovich’s employment agreement, if Mr. Mastrovich had been terminated by us without cause or by him for good reason, Mr. Mastrovich would have been entitled to receive the following severance benefits:

• 200% of his base salary;

144

• 200% of the average of his annual bonuses for the two most recently completed fiscal years; and

• 200% of the annual cost of obtaining medical, dental and vision insurance under COBRA.

Under Mr. Mastrovich’s employment agreement, “cause” generally meant that we had determined that Mr. Mastrovich had (i) engaged in or committed willful misconduct; (ii) engaged in or committed theft, fraud or other illegal conduct; (iii) refused or demonstrated an unwillingness to substantially perform his duties after a written notice from Apria; (iv) refused or demonstrated an unwillingness to reasonably cooperate in good faith with certain investigations; (v) engaged in or committed insubordination; (vi) engaged in or committed any willful act injurious to our business or reputation; (vii) willfully violated his fiduciary duty or his duty of loyalty to us or our Code of Ethical Business Conduct in any material respect; (viii) used alcohol or drugs in a manner which materially and repeatedly interfered with the performance of his duties; or (ix) engaged in or committed a material breach of his employment agreement.

For the purposes of Mr. Mastrovich’s employment agreement, “good reason” meant (i) the reduction of Mr. Mastrovich’s annual base salary (except in the case of certain reductions affecting all executive officer’s equally); (ii) the addition of greater than 30 miles to Mr. Mastrovich’s one-way commute (except in connection with a relocation of our principal executive offices); or (iii) our failure to permit Mr. Mastrovich to continue to serve as the President, Home Respiratory Therapy and Home Medical Equipment segment or another mutually acceptable senior executive position.

General Release of Claims Agreement

In connection with Mr. Mastrovich’s resignation from the Company, we entered into a general release of claims agreement with Mr. Mastrovich, effective March 15, 2010, pursuant to which we agreed to pay Mr. Mastrovich:

• severance compensation in the gross amount of $2,568,849, to be paid over the one-year period of his non-competition agreement, consisting of:

• 200% of his base salary, totaling $1,160,000;

• 200% of the average of his annual bonuses for the two most recently completed fiscal years, totaling $1,102,841;

• 200% of the annual cost of obtaining medical, dental and vision insurance under COBRA, totaling $56,008; and

• $250,000 in consideration for his continued compliance with certain non-competition and anti-solicitation provisions in his employment agreement and

• $77,395 to repurchase his vested equity units.

The payments described above are subject to Mr. Mastrovich’s continued compliance with restrictive covenants contained in his employment agreement, including non-competition, non-solicitation and non-disparagement covenants for a period of two years, as well as non-competition and non-solicitation provisions contained in the separate noncompetition agreement he had entered into with us. Furthermore, Mr. Mastrovich must abide by the confidentiality provision of his employment agreement and refrain from seeking to revoke his various releases of claims under the general release of claims agreement. A provision of the general release of claims agreement may be waived in writing by the party adversely affected by such waiver. Furthermore, the general release of claims agreement does not affect Mr. Mastrovich’s rights under the deferred compensation, 401(k) savings plan or similar benefit plans.

145

Noncompetition Agreements

We have noncompetition agreements with Mr. Karkenny and Mr. Greenleaf that they entered into prior to the Merger. These noncompetition agreements provide for a payment of $750,000 upon a termination of the executive’s employment with Apria either by Apria without cause or by the executive for good reason, in each case, during the period that begins with the first to occur of (i) the initial public announcement of a change of control or (ii) the ninetieth (90th) day preceding a change of control and ends two years following such change of control. The payments under these noncompetition agreements are contingent upon the affected executive’s compliance with the post-termination noncompetition covenant contained therein. Currently, the two-year period specified in these noncompetition agreements expires on October 28, 2010.

For purposes of the noncompetition agreements, during the period that begins with the first to occur of (x) the initial public announcement of a change of control or (y) the ninetieth (90th) day preceding a change of control, and ends two years following such change of control, “cause” means only the occurrence of either or both of the following: (i) the executive’s conviction for committing an act of fraud, embezzlement, theft, or other act constituting a felony; or (ii) the willful engaging by the executive in misconduct that is significantly injurious to us.

“Good reason” during the same period means the occurrence of any of the following: (i) a material reduction in the nature, status or scope of the executive’s authorities, duties, and/or responsibilities from their level in effect on the day immediately prior to the change of control; (ii) a reduction in the executive’s base salary from its highest level in effect at any point in the three months preceding the change of control or a significant reduction in the executive’s aggregate incentive opportunities under our short and/or long-term incentive programs, as such opportunities exist immediately prior to the change of control; (iii) our failure to maintain the executive’s relative level of coverage and accruals under our employee benefit and/or retirement plans, policies, practices or arrangements in which the executive participates immediately prior to the change of control; (iv) the executive is informed by us that his principal place of employment will be relocated to a location that will result in an increase of more than thirty miles in the executive’s one-way commute; and (v) for purposes of the employment agreements, we are not permitting the executive to continue to serve in a mutually acceptable senior executive position.

Director Compensation

Directors who are also our employees receive no separate compensation for service on our Board of Directors or committees of our Board of Directors. Non-employee directors also currently receive no separate compensation for service on our Board of Directors or committees of our Board of Directors.

146

SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT

Holdings owns 100% of the issued and outstanding common stock of Apria Finance Holdings Inc., which owns 100% of the limited liability company interests of Sky Acquisition LLC, which owns 100% of issued and outstanding common stock of the Issuer. The limited liability company interests of Holdings consist of Class A-1 Units, Class A-2 Units, Class B Units and Class C Units. Class A-1 and Class A-2 Units are equity interests in Holdings and have economic characteristics that are similar to those of shares of common stock in a corporation. The Class A-2 Units generally have the same voting and economic rights as Class A-1 Units, subject to certain restrictions and put and call rights applicable to units held by employees. Class B and Class C units are limited liability company profits interests having economic characteristics similar to stock appreciation rights and representing the right to share in any increase in the equity value of Holdings that exceeds specified thresholds. Class B Units and Class C Units are subject to different vesting schedules and other conditions including certain transfer restrictions and put and call rights applicable only to employees. For additional information, see “Management—Executive Compensation—Compensation Discussion and Analysis—Compensation Elements—Long-Term Incentive Compensation”, “Management—Executive Compensation—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards—Terms of Equity Award Grants” and “Certain Relationships and Related Party Transactions.”

The following table sets forth information with respect to the beneficial ownership of the Class A-1 Units and Class A-2 Units of Holdings taken together as a single class, the Class B Units of Holdings, the Class C Units of Holdings, and the aggregate Class A-1 Units, Class A-2 Units, Class B Units and Class C Units taken together as a single class, in each case, as of March 31, 2010 for (i) each individual or entity known by us to own beneficially more than 5% of the aggregate Units, (ii) each of our named executive officers, (iii) each of our directors and (iv) all of our directors and our executive officers as a group.

The amounts and percentages of Units beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.

Except as otherwise indicated in the footnotes below, each of the beneficial owners has, to our knowledge, sole voting and investment power with respect to the indicated Class A-1 Units, Class A-2 Units, Class B Units and Class C Units. Unless otherwise noted, the address of each beneficial owner of is c/o Apria Healthcare Group LLC, 26220 Enterprise Court, Lake Forest, CA 92630.

	Class A Units				Class B Units				Class C Units				Aggregate
Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership		Percent		Amount and Nature of Beneficial Ownership		Percent		Amount and Nature of Beneficial Ownership		Percent		Amount and Nature of Beneficial Ownership		Percent
Blackstone Funds	673,333,333	(1)	99.62	%	41,178,785	(1)	48.40	%	827,155	(1)	5.34	%	715,339,273	(2)	92.12	%
Norman C. Payson, M.D.	(3)		(3)		(3)		(3)		(3)		(3)		(3)		(3)
Chris A. Karkenny	500,000	(4)	*		6,675,287		7.84	%	2,225,096		14.38	%	9,400,383		1.21	%
James G. Gallas	—		—		2,118,678		2.49	%	706,226		4.56	%	2,824,904		0.36	%
Daniel E. Greenleaf	—		—		3,772,989		4.43	%	1,257,663		8.13	%	5,030,652		0.65	%
Neil P. Simpkins (5)	—		—		—		—		—		—		—		—
Michael Dal Bello (6)	—		—		—		—		—		—		—		—
Patrick J. Bourke (7)	—		—		—		—		—		—		—		—
All Directors and Executive Officers as a Group (7 persons)	500,000	(4)	*		12,566,954		14.76	%	4,188,985		27.07	%	17,255,939		2.22	%

* Less than 1%.

147

(1) Units of Holdings shown as beneficially owned by the Blackstone Funds (as hereinafter defined) are held directly by BP Healthcare Holdings LLC (“BP Holdings”). Through BP Holdings, the Blackstone Funds beneficially own all of the Class A-1 Units of Holdings, including (i) 388,296,685 Class A-1 Units in which Blackstone Capital Partners V L.P. (“BCP V”) has an economic interest, representing 57.45% of the Class A Units of Holdings, (ii) 101,814,701 Class A-1 Units in which Blackstone Capital Partners V-AC L.P. (“BCP V-AC”) has an economic interest, representing 15.06% of the Class A Units of Holdings, (iii) 2,051,801 Class A-1 Units in which Blackstone Family Investment Partnership V L.P (“Family”) has an economic interest, representing 0.30% of the Class A Units of Holdings, (iv) 895,435 Class A-1 Units in which Blackstone Participation Partnership V L.P. (“Participation”) has an economic interest, representing 0.13% of the Class A Units of Holdings, (v) 96,388,572 Class A-1 Units in which BCP V-S L.P. (“BCP V-S”) has an economic interest, representing 14.26% of the Class A Units of Holdings, (vi) 73,886,139 Class A-1 Units held by BCP V Co-Investors L.P. (“BCP V Co-Investors, and collectively, the “Blackstone Funds”), representing 10.93% of the Class A Units of Holdings. Dr. Payson owns 10,000,000 Class A-2 Units and 38,697,318 Class B Units of BP Holdings. By virtue of the limited liability company agreement of BP Holdings, which provides that BCP V has the sole authority to appoint members of the board of directors of BP Holdings, BCP V may also be deemed to beneficially own 10,000,000 Class A-2 Units of Holdings, representing 1.48% of the Class A Units of Holdings, and 38,697,318 Class B Units of Holdings, representing 45.45% of the Class B Units of Holdings, held by BP Holdings in which Dr. Payson has an economic interest. The general partner of BCP V, BCP V-AC, BCP V-S and BCP V Co-Investors is Blackstone Management Associates V L.L.C. BMA V L.L.C. is the sole member of Blackstone Management Associates V L.L.C. The general partner of Family and Participation is BCP V Side-By-Side GP L.L.C. Blackstone Holdings III L.P. is the managing member and majority in interest owner of BMA V L.L.C. and the sole member of BCP V Side-By-Side GP L.L.C. Blackstone Holdings III L.P. is indirectly controlled by The Blackstone Group L.P. and is owned, directly or indirectly, by Blackstone professionals and The Blackstone Group L.P. The Blackstone Group L.P. is controlled by its general partner, Blackstone Group Management L.L.C., which is in turn wholly owned by Blackstone’s senior managing directors and controlled by its founder, Stephen A. Schwarzman. Each of such Blackstone entities and Mr. Schwarzman may be deemed to beneficially own the securities beneficially owned by the Blackstone Funds directly or indirectly controlled by it or him, but each disclaims beneficial ownership of such securities except to the extent of its or his indirect pecuniary interest therein. The address of each of the entities listed in this note is c/o The Blackstone Group, L.P., 345 Park Avenue, New York, New York 10154.

(2) The securityholders agreement of Holdings provides (i) that each unit of Holdings owned by an employee will vote in the same proportion as the units held by BP Holdings LLC, (ii) that BP Holdings has the right to require each unit owned by an employee to participate in any transaction constituting a change of control or any other transaction involving a transfer of units owned by BP Holding to a third-party and (iii) generally restricts the transfer of each unit owned by an employee until the earliest of (x) six months following an initial public offering, (y) a change of control or (z) October 28, 2015. As a result, BP Holdings and BCP V may be deemed to beneficially own 100% of outstanding Units of Holdings. The units of Holdings held by employees that may be so deemed beneficially owned by BP Holdings and BCP V are not reported in the table above. For additional information, see “Management—Executive Compensation—Compensation Discussion and Analysis—Compensation Elements—Long-Term Incentive Compensation” and “Certain Relationships and Related Party Transactions.”

(3) Dr. Payson owns 10,000,000 Class A-2 Units and 38,697,318 Class B Units of BP Holdings. For additional information, see Note 9 to our financial statements for the year ending December 31, 2009.

(4) Represents Class A-2 Units.

(5) Mr. Simpkins is a Senior Managing Director of The Blackstone Group. Mr. Simpkins disclaims beneficial ownership of any shares owned directly or indirectly by the Blackstone Funds, except to the extent of his indirect pecuniary interest therein. Mr. Simpkins’ address is c/o The Blackstone Group, L.P., 345 Park Avenue, New York, New York 10017.

148

(6) Mr. Dal Bello is a Managing Director of The Blackstone Group. Mr. Dal Bello disclaims beneficial ownership of any shares owned directly or indirectly by the Blackstone Funds, except to the extent of his indirect pecuniary interest therein. Mr. Dal Bello’s address is c/o The Blackstone Group, L.P., 345 Park Avenue, New York, New York 10017.

(7) Mr. Bourke is an Executive Director of The Blackstone Group. Mr. Bourke disclaims beneficial ownership of any shares owned directly or indirectly by the Blackstone Funds, except to the extent of his indirect pecuniary interest therein. Mr. Bourke’s address is c/o The Blackstone Group, L.P., 345 Park Avenue, New York, New York 10017.

149

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Transaction and Management Fee Agreement

In connection with the Merger, Merger Sub entered into a transaction and management fee agreement with Blackstone Management Partners V L.L.C. (“BMP”). The Company succeeded to and assumed the rights and obligations of Merger Sub pursuant to the transaction and management fee agreement upon the closing of the Merger. Under the transaction and management fee agreement, Merger Sub agreed to pay BMP, at the closing of the Merger, a $18.7 million transaction fee as consideration for BMP undertaking financial and structural analysis, due diligence and other assistance in connection with the Merger. In addition, the Company agreed to reimburse BMP for any out-of-pocket expenses incurred by BMP and its affiliates in connection with the Merger and the provision of services under the transaction and management fee agreement.

In addition, under this agreement, BMP (including through its affiliates) agreed to provide services, including without limitation, (a) advice regarding the structure, distribution and timing of debt and equity offerings and advice regarding relationships with the Company’s lenders and bankers, (b) advice regarding the business and strategy of the Company, including compensation arrangements, (c) advice regarding dispositions and/or acquisitions and (d) such advice directly related or ancillary to the above financial advisory services as may be reasonably requested by the Company. In consideration for the services, the Company will pay BMP at the beginning of each fiscal year a management fee equal to the greater of $7.0 million or 2.0% of the Company’s consolidated EBITDA for the immediately preceding fiscal year. BMP shall have no obligation to provide any other services to the Company absent express agreement. In addition, in the absence of an express agreement to provide investment banking or other financial advisory services to the Company, and without regard to whether such services were provided, BMP is entitled to receive a fee equal to 1.0% of the aggregate transaction value upon the consummation of any acquisition, divestiture, disposition, merger, consolidation, restructuring, refinancing, recapitalization, issuance of private or public debt or equity securities (including an initial public offering of equity securities), financing or similar transaction by the Company.

At any time in connection with or in anticipation of a change of control of the Company, a sale of all or substantially all of the Company’s assets or an initial public offering of common equity of the Company or its successor, BMP may elect to receive, in consideration of BMP’s role in facilitating such transaction and in settlement of the termination of the services, a single lump sum cash payment equal to the then-present value of all then-current and future annual management fees payable under the transaction and management fee agreement, assuming a hypothetical termination date of the agreement to be the twelfth anniversary of such election. The transaction and management fee agreement will continue until the earlier of the twelfth anniversary of the date of the agreement or such date as the Company and BMP may mutually determine. The Company has agreed to indemnify BMP and its affiliates, directors, officers, employees, agents and representatives from and against all liabilities relating to the services contemplated by the transaction and management fee agreement and the engagement of BMP pursuant to, and the performance of BMP and its affiliates of the services contemplated by, the transaction and management fee agreement.

Limited Liability Company Agreements, Securityholders Agreements and Subscription Agreements of Sky Acquisition and BP Holdings

In connection with the Transactions, certain funds affiliated with the Sponsor and Dr. Payson entered into a limited liability company agreement with BP Holdings setting forth the economic and governance rights of the holders of units representing limited liability company membership interests of BP Holdings. In addition, BP Holdings, Mr. Karkenny and other members of our management entered into a limited liability company agreement with Sky Acquisition setting forth the economic and governance rights of the holders of units representing limited liability company membership interests of Sky Acquisition. The limited liability company agreements of BP Holdings and Sky Acquisition include provisions governing the appointment of the directors and officers of BP Holdings and Sky Acquisition, the distributions to the members of BP Holdings and Sky Acquisition, and other corporate governance provisions and indemnification provisions.

150

In connection with their subscription for equity units of BP Holdings, certain funds affiliated with the Sponsor and Dr. Payson entered into securityholders and subscription agreements with BP Holdings. In addition, BP Holdings, Mr. Karkenny and other members of our management entered into securityholders and subscription agreements with Sky Acquisition in connection with their subscription for equity units of Sky Acquisition. The securityholders and subscription agreements contain certain rights and obligations of the parties thereto with respect to voting, transfer restrictions and rights, including tag-along rights, drag-along rights, registration rights and rights of first refusal, and certain other matters.

In March 2010, we conducted a reorganization pursuant to which we added two new companies, Holdings and Apria Finance, to our corporate structure. Upon the completion of the reorganization, Holdings became a company beneficially owned by the Sponsor and other members of the Investor Group and all of the equity securities of Sky Acquisition held by such holders were converted or exchanged into equivalent securities of Holdings. See “Prospectus Summary—The Transactions.”

In connection with the reorganization, the security holders and subscription agreements with Sky Acquisition were assigned to Holdings.

Intelenet Agreement

In May 2009, we entered into the Intelenet Agreement with Intelenet, an Indian company affiliated with the Sponsor, regarding the outsourcing of certain functions relating to billing, collections and other administrative and clerical services. See “Business—Outsourcing Activities.” If all services currently planned for outsourcing to Intelenet are in fact handled by Intelenet, we expect to make payments to Intelenet of approximately $200 million over a seven-year period that began in the second quarter of 2009. One of the members of our Board of Directors, Mr. Patrick Bourke, is an employee of the Sponsor and also serves on the Board of Directors of Intelenet. During the year ended December 31, 2009 and the three months ended March 31, 2010, we paid approximately $3.7 million and $4.0 million, respectively, under the Intelenet Agreement.

Equity Healthcare Agreement

We have entered into an employer health program agreement with Equity Healthcare LLC (“Equity Healthcare”), effective as of January 1, 2010. Equity Healthcare negotiates with providers of standard administrative services for health benefit plans as well as other related services for cost discounts and quality of service monitoring capability by Equity Healthcare. Because of the combined purchasing power of its client participants, Equity Healthcare is able to negotiate pricing terms for providers that are believed to be more favorable than the companies could obtain for themselves on an individual basis. In consideration for Equity Healthcare’s provision of access to these favorable arrangements and its monitoring of the contracted third parties’ delivery of contracted services to us, we pay Equity Healthcare a fee of $2 per participating employee per month (“PEPM Fee”). As of March 31, 2010, we had approximately 6,600 employees enrolled in our Equity Healthcare health benefit plans in the United States.

Equity Healthcare may also receive a fee (“Health Plan Fees”) from one or more of the health plans with whom Equity Healthcare has contractual arrangements if the total number of employees joining such health plans from participating companies exceeds specified thresholds. If and when Equity Healthcare reaches the point at which the aggregate of its receipts from the PEPM Fee and the Health Plan Fees have covered all of its allocated costs, it will apply the incremental revenues derived from all such fees to (a) reduce the PEPM Fee otherwise payable by us; (b) avoid or reduce an increase in the PEPM Fee that might otherwise have occurred on contract renewal; or (c) arrange for additional services to us at no cost or reduced cost.

Equity Healthcare is an affiliate of Blackstone, with whom Neil P. Simpkins, Michael Del Bello and Patrick Bourke, members of our Board, are affiliated and in which they may have an indirect pecuniary interest.

151

Expense Reimbursement

Pursuant to the terms of Dr. Payson’s employment agreement, we reimbursed Dr. Payson for his private airplane operating expenses relating to business travel in the amount of $580,500 during 2009. See “Management—Executive Compensation—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards—Employment Agreements—Norman C. Payson” for a description of Dr. Payson’s employment agreement.

Procedures with Respect to Review and Approval of Related Person Transactions

The Board of Directors has not adopted a formal written policy for the review and approval of transactions with related persons. However, the Board of Directors reviews and approves transactions with related persons as appropriate.

152

THE EXCHANGE OFFERS

Purpose and Effect of the Exchange Offers

The Issuer and the guarantors of the outstanding notes have entered into registration rights agreements with the initial purchasers of the outstanding notes in which the Issuer and the guarantors agreed, under certain circumstances, to use their reasonable best efforts to file a registration statement relating to offers to exchange the outstanding notes for exchange notes, to cause the registration statement to become effective under the Securities Act and to consummate the exchange offers no later than 450 days after the date of issuance and sale of the Series A-2 Notes. As of the date of this prospectus, $700.0 million aggregate principal amount of the 11.25% Senior Secured Notes due 2014 (Series A-1) and $317.5 million aggregate principal amount of the 12.375% Senior Secured Notes due 2014 (Series A-2) are outstanding. The outstanding Series A-1 Notes and the outstanding Series A-2 Notes were issued in May 2009 and August 2009, respectively.

Under the circumstances set forth below, the Issuer and the guarantors will use their reasonable best efforts to cause the SEC to declare effective a shelf registration statement with respect to the resale of the outstanding notes within the time periods specified in the registration rights agreements and keep such registration statement effective for up to two years after the effective date of the shelf registration statement. These circumstances include:

• if any changes in law, SEC rules or regulations or applicable interpretations thereof by the SEC do not permit the Issuer and the guarantors to effect the exchange offers as contemplated by the registration rights agreements;

• if the exchange offers are not consummated within 450 days after the date of issuance of the Series A-2 Notes;

• if any initial purchaser so requests with respect to the outstanding notes not eligible to be exchanged for the exchange notes and held by it within 30 days after the consummation of the exchange offers; or

• if any holder that participates in the exchange offers does not receive freely transferable exchange notes in exchange for tendered outstanding notes and notifies the Issuer within 30 days after such holder becomes aware of it.

Under each registration rights agreement, if we fail to complete the exchange offers (other than in the event we file a shelf registration statement) or the shelf registration statement, if required thereby, is not declared effective, in either case on or prior to 450 days after the date of issuance and sale of the Series A-2 Notes (the “target registration date”), the interest rate on the outstanding notes will be increased by (x) 0.25% per annum for the first 90-day period immediately following the target registration date and (y) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case, until the exchange offers are completed or the shelf registration statement, if required, is declared effective by the SEC, up to a maximum of 1.00% per annum of additional interest. Copies of the registration rights agreements have filed as exhibits to the registration statement of which this prospectus is a part.

If you wish to exchange your outstanding notes for exchange notes in the exchange offers, you will be required to make the following written representations:

• you are not an affiliate of the Issuer or any guarantor within the meaning of Rule 405 of the Securities Act;

• you have no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the exchange notes in violation of the provisions of the Securities Act;

• you are not engaged in, and do not intend to engage in, a distribution of the exchange notes; and

• you are acquiring the exchange notes in the ordinary course of your business.

153

Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where the broker-dealer acquired the outstanding notes as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. Please see “Plan of Distribution.”

Resale of Exchange Notes

Based on interpretations by the SEC set forth in no-action letters issued to third parties, we believe that you may resell or otherwise transfer exchange notes issued in the exchange offers without complying with the registration and prospectus delivery provisions of the Securities Act, if:

• you are not an affiliate of the Issuer or any guarantor within the meaning of Rule 405 under the Securities Act;

• you do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes;

• you are not engaged in, and do not intend to engage in, a distribution of the exchange notes; and

• you are acquiring the exchange notes in the ordinary course of your business.

If you are an affiliate of the Issuer or any guarantor, or are engaging in, or intend to engage in, or have any arrangement or understanding with any person to participate in, a distribution of the exchange notes, or are not acquiring the exchange notes in the ordinary course of your business:

• you cannot rely on the position of the SEC set forth in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Sterling, dated July 2, 1993, or similar no-action letters; and

• in the absence of an exception from the position stated immediately above, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes.

This prospectus may be used for an offer to resell, resale or other transfer of exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offers. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. Please read “Plan of Distribution” for more details regarding the transfer of exchange notes.

Terms of the Exchange Offers

On the terms and subject to the conditions set forth in this prospectus and in the accompanying letters of transmittal, the Issuer will accept for exchange in the exchange offers any outstanding notes that are validly tendered and not validly withdrawn prior to the expiration date. Outstanding notes may only be tendered in a principal amount of $2,000 and in integral multiples of $1,000 in excess thereof. The Issuer will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding notes surrendered in the exchange offers.

The form and terms of the exchange notes will be identical in all material respects to the form and terms of the outstanding notes except the exchange notes will be registered under the Securities Act, will not bear legends restricting their transfer and will not provide for any additional interest upon failure by the Issuer and the guarantors to fulfill their obligations under the applicable registration rights agreement to complete the exchange offers, or file, and cause to be effective, a shelf registration statement, if required thereby, within the specified

154

time period. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be issued under and entitled to the benefits of the same indenture that governs the terms of the outstanding notes. For a description of the indenture, see “Description of Notes.”

The exchange offers are not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange.

This prospectus and the letters of transmittal are being sent to all registered holders of outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the exchange offers. The Issuer and the guarantors intend to conduct the exchange offers in accordance with the provisions of the registration rights agreements, the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations of the SEC. Outstanding notes that are not tendered for exchange in the exchange offers will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits such holders have under the indenture and the applicable registration rights agreement except the Issuer and the guarantors will not have any further obligation to you to provide for the registration of the outstanding notes under the registration rights agreements.

The Issuer will be deemed to have accepted for exchange properly tendered outstanding notes when the Issuer has given written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from the Issuer and delivering exchange notes to holders. Subject to the terms of the applicable registration rights agreement, the Issuer expressly reserves the right to amend or terminate the exchange offers and to refuse to accept the occurrence of any of the conditions specified below under “—Conditions to the Exchange Offers.”

If you tender your outstanding notes in the exchange offers, you will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain applicable taxes described below in connection with the exchange offers. It is important that you read “—Fees and Expenses” below for more details regarding fees and expenses incurred in the exchange offers.

Expiration Date; Extensions, Amendments

As used in this prospectus, the term “expiration date” means 5:00 p.m., New York City time, on                     , 2010, which is the 21st business day after the date of this prospectus. However, if the Issuer, in its sole discretion, extends the period of time for which the applicable exchange offer is open, the term “expiration date” will mean the latest time and date to which the Issuer shall have extended the expiration of the applicable exchange offer.

To extend the period of time during which an exchange offer is open, the Issuer will notify the exchange agent of any extension by written notice, followed by notification by press release or other public announcement to the registered holders of the outstanding notes no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

The Issuer reserves the right, in its sole discretion:

• to delay accepting for exchange any outstanding notes (if the Issuer amends or extends the exchange offers);

• to extend the exchange offers or to terminate the exchange offers if any of the conditions set forth below under “—Conditions to the Exchange Offers” have not been satisfied, by giving written notice of such delay, extension or termination to the exchange agent; and

• subject to the terms of the applicable registration rights agreement, to amend the terms of the exchange offers in any manner.

155

Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by notice to the registered holders of the outstanding notes. If the Issuer amends the exchange offers in a manner that it determines to constitute a material change, the Issuer will promptly disclose the amendment in a manner reasonably calculated to inform the holders of applicable outstanding notes of that amendment.

Conditions to the Exchange Offers

Despite any other term of the exchange offers, the Issuer will not be required to accept for exchange, or to issue exchange notes in exchange for, any outstanding notes and the Issuer may terminate or amend the exchange offers as provided in this prospectus prior to the expiration date if in their reasonable judgment:

• the exchange offers or the making of any exchange by a holder violates any applicable law or interpretation of the SEC; or

• any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offers that, in their judgment, would reasonably be expected to impair their ability to proceed with the exchange offers.

In addition, the Issuer will not be obligated to accept for exchange the outstanding notes of any holder that has not made to the Issuer:

• the representations described under “—Purpose and Effect of the Exchange Offers,” “—Procedures for Tendering Outstanding Notes” and “Plan of Distribution;” or

• any other representations as may be reasonably necessary under applicable SEC rules, regulations, or interpretations to make available to the Issuer an appropriate form for registration of the exchange notes under the Securities Act.

The Issuer expressly reserves the right at any time or at various times to extend the period of time during which the exchange offers are open. Consequently, the Issuer may delay acceptance of any outstanding notes by giving written notice of such extension to their holders. The Issuer will return any outstanding notes that the Issuer does not accept for exchange for any reason without expense to their tendering holder promptly after the expiration or termination of the exchange offers.

The Issuer expressly reserves the right to amend or terminate the exchange offers and to reject for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions of the exchange offers specified above. In addition, the Issuer is generally required to extend the offering period for any material change, including the waiver of a material condition, so that at least five business days remain in the exchange offers after the change. The Issuer will give written notice of any extension, amendment, non-acceptance or termination to the holders of the outstanding notes as promptly as practicable. In the case of any extension, such notice will be issued no later than 9:00 a.m. New York City time, on the next business day after the previously scheduled expiration date.

These conditions are for sole benefit of the Issuer and the Issuer may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times prior to the expiration date in its sole discretion. If the Issuer fails at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of such right. Each such right will be deemed an ongoing right that the Issuer may assert at any time or at various times prior to the expiration date.

In addition, the Issuer will not accept for exchange any outstanding notes tendered, and will not issue exchange notes in exchange for any such outstanding notes, if at such time any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939 (the “TIA”).

156

Procedures for Tendering Outstanding Notes

To tender your outstanding notes in the exchange offers, you must comply with either of the following:

• complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signature(s) on the letter of transmittal guaranteed if required by the letter of transmittal and mail or deliver such letter of transmittal or facsimile thereof to the exchange agent at the address set forth below under “—Exchange Agent” prior to the expiration date; or

• comply with DTC’s Automated Tender Offer Program procedures described below.

In addition, either:

• the exchange agent must receive certificates for outstanding notes along with the letter of transmittal prior to the expiration date;

• the exchange agent must receive a timely confirmation of book-entry transfer of outstanding notes into the exchange agent’s account at DTC according to the procedures for book-entry transfer described below or a properly transmitted agent’s message prior to the expiration date; or

• you must comply with the guaranteed delivery procedures described below.

Your tender, if not withdrawn prior to the expiration date, constitutes an agreement between the Issuer and you upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal.

The method of delivery of outstanding notes, letters of transmittal, and all other required documents to the exchange agent is at your election and risk. We recommend that instead of delivery by mail, you use an overnight or hand delivery service, properly insured. In all cases, you should allow sufficient time to assure timely delivery to the exchange agent before the expiration date. You should not send letters of transmittal or certificates representing outstanding notes to us. You may request that your broker, dealer, commercial bank, trust company or nominee effect the above transactions for you.

If you are a beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company, or other nominee and you wish to tender your notes, you should promptly contact the registered holder and instruct the registered holder to tender on your behalf. If you wish to tender the outstanding notes yourself, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either:

• make appropriate arrangements to register ownership of the outstanding notes in your name; or

• obtain a properly completed bond power from the registered holder of outstanding notes.

The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.

Signatures on the letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., a commercial bank or trust company having an office or correspondent in the United States or another “eligible guarantor institution” within the meaning of Rule 17A(d)-15 under the Exchange Act unless the outstanding notes surrendered for exchange are tendered:

• by a registered holder of the outstanding notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” in the letter of transmittal; or

• for the account of an eligible guarantor institution.

157

If the letter of transmittal is signed by a person other than the registered holder of any outstanding notes listed on the outstanding notes, such outstanding notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder’s name appears on the outstanding notes and an eligible guarantor institution must guarantee the signature on the bond power.

If the letter of transmittal or any certificates representing outstanding notes, or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations, or others acting in a fiduciary or representative capacity, those persons should also indicate when signing and, unless waived by the Issuer, they should also submit evidence satisfactory to the Issuer of their authority to so act.

The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC’s system may use DTC’s Automated Tender Offer Program to tender. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, electronically transmit their acceptance of the exchange by causing DTC to transfer the outstanding notes to the exchange agent in accordance with DTC’s Automated Tender Offer Program procedures for transfer. DTC will then send an agent’s message to the exchange agent. The term “agent’s message” means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that:

• DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering outstanding notes that are the subject of the book-entry confirmation;

• the participant has received and agrees to be bound by the terms of the letter of transmittal, or in the case of an agent’s message relating to guaranteed delivery, that such participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and

• the Issuer may enforce that agreement against such participant.

Acceptance of Exchange Notes

In all cases, the Issuer will promptly issue exchange notes for outstanding notes that it has accepted for exchange under the exchange offers only after the exchange agent timely receives:

• outstanding notes or a timely book-entry confirmation of such outstanding notes into the exchange agent’s account at the book-entry transfer facility; and

• a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message.

By tendering outstanding notes pursuant to the exchange offers, you will represent to the Issuer that, among other things:

• you are not an affiliate of the Issuer or the guarantors within the meaning of Rule 405 under the Securities Act;

• you do not have an arrangement or understanding with any person or entity to participate in a distribution of the exchange notes; and

• you are acquiring the exchange notes in the ordinary course of your business.

In addition, each broker-dealer that is to receive exchange notes for its own account in exchange for outstanding notes must represent that such outstanding notes were acquired by that broker-dealer as a result of market-making activities or other trading activities and must acknowledge that it will deliver a prospectus that meets the requirements of the Securities Act in connection with any resale of the exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. See “Plan of Distribution.”

158

The Issuer will interpret the terms and conditions of the exchange offers, including the letters of transmittal and the instructions to the letters of transmittal, and will resolve all questions as to the validity, form, eligibility, including time of receipt, and acceptance of outstanding notes tendered for exchange. Determinations of the Issuer in this regard will be final and binding on all parties. The Issuer reserves the absolute right to reject any and all tenders of any particular outstanding notes not properly tendered or to not accept any particular outstanding notes if the acceptance might, in their or their counsel’s judgment, be unlawful. The Issuer also reserves the absolute right to waive any defects or irregularities as to any particular outstanding notes prior to the expiration date.

Unless waived, any defects or irregularities in connection with tenders of outstanding notes for exchange must be cured within such reasonable period of time as the Issuer determine. Neither the Issuer, the exchange agent, nor any other person will be under any duty to give notification of any defect or irregularity with respect to any tender of outstanding notes for exchange, nor will any of them incur any liability for any failure to give notification. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the exchange agent to the tendering holder, unless otherwise provided in the letter of transmittal, promptly after the expiration date.

Book-Entry Delivery Procedures

Promptly after the date of this prospectus, the exchange agent will establish an account with respect to the outstanding notes at DTC, as book-entry transfer facilities, for purposes of the exchange offers. Any financial institution that is a participant in the book-entry transfer facility’s system may make book-entry delivery of the outstanding notes by causing the book-entry transfer facility to transfer those outstanding notes into the exchange agent’s account at the facility in accordance with the facility’s procedures for such transfer. To be timely, book-entry delivery of outstanding notes requires receipt of a confirmation of a book-entry transfer, a “book-entry confirmation,” prior to the expiration date. In addition, although delivery of outstanding notes may be effected through book-entry transfer into the exchange agent’s account at the book-entry transfer facility, the letter of transmittal or a manually signed facsimile thereof, together with any required signature guarantees and any other required documents, or an “agent’s message,” as defined below, in connection with a book-entry transfer, must, in any case, be delivered or transmitted to and received by the exchange agent at its address set forth on the cover page of the letter of transmittal prior to the expiration date to receive exchange notes for tendered outstanding notes, or the guaranteed delivery procedure described below must be complied with. Tender will not be deemed made until such documents are received by the exchange agent. Delivery of documents to the book-entry transfer facility does not constitute delivery to the exchange agent.

Holders of outstanding notes who are unable to deliver confirmation of the book-entry tender of their outstanding notes into the exchange agent’s account at the book-entry transfer facility or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date must tender their outstanding notes according to the guaranteed delivery procedures described below.

Guaranteed Delivery Procedures

If you wish to tender your outstanding notes but your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other required documents to the exchange agent or comply with the applicable procedures under DTC’s Automatic Tender Offer Program, prior to the expiration date, you may still tender if:

• the tender is made through an eligible guarantor institution;

• prior to the expiration date, the exchange agent receives from such eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail, or hand delivery or a properly transmitted agent’s message and notice of guaranteed delivery, that (1) sets forth your name and address, the certificate number(s) of such outstanding notes and the principal amount

159

of outstanding notes tendered; (2) states that the tender is being made thereby; and (3) guarantees that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal, or facsimile thereof, together with the outstanding notes or a book-entry confirmation, and any other documents required by the letter of transmittal, will be deposited by the eligible guarantor institution with the exchange agent; and

• the exchange agent receives the properly completed and executed letter of transmittal or facsimile thereof, as well as certificate(s) representing all tendered outstanding notes in proper form for transfer or a book-entry confirmation of transfer of the outstanding notes into the exchange agent’s account at DTC, and all other documents required by the letter of transmittal within three New York Stock Exchange trading days after the expiration date.

Upon request, the exchange agent will send to you a notice of guaranteed delivery if you wish to tender your outstanding notes according to the guaranteed delivery procedures.

Withdrawal Rights

Except as otherwise provided in this prospectus, you may withdraw your tender of outstanding notes at any time prior to 5:00 p.m., New York City time, on the expiration date.

For a withdrawal to be effective:

• the exchange agent must receive a written notice, which may be by telegram, telex, facsimile or letter, of withdrawal at its address set forth below under “—Exchange Agent;” or

• you must comply with the appropriate procedures of DTC’s Automated Tender Offer Program system.

Any notice of withdrawal must:

• specify the name of the person who tendered the outstanding notes to be withdrawn;

• identify the outstanding notes to be withdrawn, including the certificate numbers and principal amount of the outstanding notes; and

• where certificates for outstanding notes have been transmitted, specify the name in which such outstanding notes were registered, if different from that of the withdrawing holder.

If certificates for outstanding notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of such certificates, you must also submit:

• the serial numbers of the particular certificates to be withdrawn; and

• a signed notice of withdrawal with signatures guaranteed by an eligible institution unless you are an eligible guarantor institution.

If outstanding notes have been tendered pursuant to the procedures for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of the facility. The Issuer will determine all questions as to the validity, form, and eligibility, including time of receipt of notices of withdrawal and its determination will be final and binding on all parties. Any outstanding notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offers. Any outstanding notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder, without cost to the holder, or, in the case of book-entry transfer, the outstanding notes will be credited to an account at the book-entry transfer facility, promptly after withdrawal, rejection of tender or termination of the exchange offers. Properly withdrawn outstanding notes may be retendered by following the procedures described under “—Procedures for Tendering Outstanding Notes” above at any time on or prior to the expiration date.

160

Exchange Agent

U.S. Bank National Association has been appointed as the exchange agent for the exchange offers. The U.S. Bank National Association also acts as trustee under the indenture governing the notes. You should direct all executed letters of transmittal and all questions and requests for assistance, requests for additional copies of this prospectus or of the letters of transmittal, and requests for notices of guaranteed delivery to the exchange agent addressed as follows:

By Mail or Overnight Courier:	By Facsimile:	By Hand Delivery:
U. S. Bank National Association 60 Livingston Ave. St. Paul, Minnesota 55107 Attn: Specialized Finance	651/495- 8158	U. S. Bank National Association 60 Livingston Ave. 1st Floor—Bond Drop Window St. Paul, Minnesota 55107
	To Confirm by Telephone: 1-800-934-6802

If you deliver the letter of transmittal to an address other than the one set forth above or transmit instructions via facsimile other than the one set forth above, that delivery or those instructions will not be effective.

Fees and Expenses

The registration rights agreements provide that we will bear all expenses in connection with the performance of our obligations relating to the registration of the exchange notes and the conduct of the exchange offers. These expenses include registration and filing fees, accounting and legal fees and printing costs, among others. We will pay the exchange agent reasonable and customary fees for its services and reasonable out-of-pocket expenses. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for customary mailing and handling expenses incurred by them in forwarding this prospectus and related documents to their clients that are holders of outstanding notes and for handling or tendering for such clients.

We have not retained any dealer-manager in connection with the exchange offers and will not pay any fee or commission to any broker, dealer, nominee or other person, other than the exchange agent, for soliciting tenders of outstanding unregistered notes pursuant to the exchange offers.

Accounting Treatment

We will record the exchange notes in our accounting records at the same carrying value as the outstanding notes, which is the aggregate principal amount as reflected in our accounting records on the date of exchanges, as the terms of the exchange notes are substantially identical to the terms of the outstanding notes. Accordingly, we will not recognize any gain or loss for accounting purposes upon the consummation of the exchange offers. We will capitalize the expenses relating to the exchange offers.

Transfer Taxes

The Issuer and the guarantors will pay all transfer taxes, if any, applicable to the exchanges of outstanding notes under the exchange offers. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:

• certificates representing outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of outstanding notes tendered;

• tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal; or

• a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange offers.

161

If satisfactory evidence of payment of such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed to that tendering holder.

Holders who tender their outstanding notes for exchange will not be required to pay any transfer taxes. However, holders who instruct the Issuer to register exchange notes in the name of, or request that outstanding notes not tendered or not accepted in the exchange offers be returned to, a person other than the registered tendering holder will be required to pay any applicable transfer tax.

Consequences of Failure to Exchange

If you do not exchange your outstanding notes for exchange notes under the exchange offers, your outstanding notes will remain subject to the restrictions on transfer of such outstanding notes:

• as set forth in the legend printed on the outstanding notes as a consequence of the issuances of the outstanding notes pursuant to the exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and

• as otherwise set forth in the applicable offering memorandum distributed in connection with the private offerings of the outstanding notes.

In general, you may not offer or sell your outstanding notes unless they are registered under the Securities Act or if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the applicable registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act.

Other

Participating in the exchange offers are voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offers or to file a registration statement to permit resales of any untendered outstanding notes.

162

DESCRIPTION OF NOTES

General

Certain terms used in this description are defined under the subheading “—Certain Definitions.” In this description, (1) the term “Company” refers only to Apria Healthcare Group Inc. and not any of its Affiliates and (2) the terms “we,” “our” and “us” each refer to the Company and its consolidated Subsidiaries.

The Company has previously issued $700 million of 11.25% Senior Secured Notes due 2014 (Series A-1) (the “Series A-1 Notes”) and $317.5 million aggregate principal amount of its 12.375% senior secured notes due 2014 (Series A-2) (the “Series A-2 Notes”) under an indenture dated May 27, 2009 (the “Indenture”) among the Company, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”). The Series A-2 Notes are identical in all respects to the Series A-1 Notes, except that (1) the holders of the Series A-1 Notes are entitled to a priority of payment over the holders of the Series A-2 Debt in the circumstances described below under “—Security for the Notes—Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes” and (2) the Series A-2 Notes have different redemption terms than the Series A-1 Notes. References herein to “Series A-2 Debt” include the Series A-2 Notes other obligations. As of the date of this prospectus, Series A-2 Debt consisted entirely of the outstanding Series A-2 Notes. Unless the context requires otherwise, references to the “Series A-1 Notes” include the outstanding Series A-1 Notes and the exchange Series A-1 Notes; references to the “Series A-2 Notes” include the outstanding Series A-2 Notes and the exchange Series A-2 Notes; and references herein to the “Notes” include the Series A-1 Notes and the Series A-2 Notes. In this description, we sometimes generically refer to each of the Series A-1 Notes and the Series A-2 Notes, separately, as a “Series of Notes.” We also sometimes generically refer to each of the Series A-1 Notes, the Series A-2 Notes and the Term Loans, separately, as a “Series of Debt.”

The following description is only a summary of the material provisions of the Indenture and the Collateral Documents and does not purport to be complete and is qualified in its entirety by reference to the provisions of the Indenture and the Collateral Documents, including the definitions therein of certain terms used below. We urge you to read the Indenture because it, not this description, defines your rights as Holders of the Series A-2 Notes. You may request copies of the Indenture and the Collateral Documents at our address set forth under the heading “Summary.”

Brief Description of the Notes

The Notes:

• are general secured senior obligations of the Company;

• are secured, together with the Series A-1 Notes and any additional Series A-2 Debt, on a first priority lien basis by the Notes/Term Collateral and on a second priority lien basis by the ABL Collateral, in each case subject to certain liens permitted by the Indenture;

• are effectively senior to all unsecured Indebtedness of the Company to the extent of the value of the collateral securing the Series A-2 Notes;

• are effectively subordinated to the ABL Facility to the extent of the value of the ABL Collateral;

• the Series A-2 Notes rank equally with the Series A-1 Notes and any additional Series A-2 Debt with respect to the Notes/Term Collateral and the ABL Collateral, subject to the Series A-1 Notes’ priority of payment described below;

• without giving effect to security interests, rank equally in right of payment with all existing and future Senior Indebtedness of the Company;

• are structurally subordinated to all existing and future Indebtedness, claims of holders of Preferred Stock and other liabilities of the Company’s Subsidiaries that do not guarantee the Notes;

• are senior in right of payment to any Subordinated Indebtedness of the Company;

163

• are guaranteed on a senior secured basis by the Guarantors, as described under “—Guarantees”; and

• are subject to registration with the SEC pursuant to a Registration Rights Agreement.

The Series A-1 Notes are entitled to a priority of payment over the Series A-2 Debt in the circumstances described below under “—Security for the Notes—Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes.”

As of the date of this prospectus, all of the Company’s wholly-owned domestic subsidiaries are “Restricted Subsidiaries.” However, under certain circumstances, we will be permitted to designate certain of our subsidiaries as “Unrestricted Subsidiaries.” Any Unrestricted Subsidiaries will not be subject to any of the restrictive covenants in the Indenture and will not guarantee the Series A-2 Notes.

Guarantees

The Guarantors, as primary obligors and not merely as sureties, have initially jointly and severally, fully and unconditionally guaranteed, on a senior secured basis, the performance and full and punctual payment when due, whether at maturity, by acceleration or otherwise, of all obligations of the Company under the Indenture and the Notes, whether for payment of principal of, any premium or interest on or Additional Interest in respect of the Notes, expenses, indemnification or otherwise, on the terms set forth in the Indenture by executing the Indenture.

All of the Restricted Subsidiaries of the Company (other than as detailed below) have initially guaranteed the Notes. None of our Foreign Subsidiaries have guaranteed or will guarantee the Notes. Each of the Guarantees of the Notes is a general senior secured obligation of each Guarantor, is secured on a first priority lien basis by the assets of such Guarantor constituting Notes/Term Collateral and on a second priority basis by the assets of such Guarantor constituting ABL Collateral, in each case subject to certain liens permitted by the Indenture, is effectively senior to all unsecured Indebtedness of such Guarantor to the extent of the value of the collateral securing such Guarantee, is effectively subordinated to such Guarantor’s Guarantee of the ABL Facility to the extent of the value of the ABL Collateral owned by such Guarantor and, without giving effect to security interests, ranks pari passu in right of payment with all existing and future Senior Indebtedness of each such Guarantor, and is senior in right of payment to all existing and future Subordinated Indebtedness of each such entity. Each of the Guarantees is structurally subordinated to Indebtedness, claims of holders of Preferred Stock and other liabilities of Subsidiaries of each Guarantor that does not Guarantee the Notes.

Although all of the Company’s existing wholly-owned domestic subsidiaries Guarantee the Notes, not all of the Company’s future Subsidiaries will be required to Guarantee the Notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor Subsidiaries, the non-guarantor Subsidiaries will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to the Company. As a result, all of the existing and future liabilities of these non-guarantor Subsidiaries, including any claims of trade creditors, will be effectively senior to the Notes.

The obligations of each Guarantor under its Guarantee will be limited as necessary to prevent the Guarantee from constituting a fraudulent conveyance under applicable law. This provision may not, however, be effective to protect a Guarantee from being voided under fraudulent transfer law, or may reduce the applicable Guarantor’s obligation to an amount that effectively makes its Guarantee worthless.

Any entity that makes a payment under its Guarantee will be entitled upon payment in full of all guaranteed obligations under the Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

If a Guarantee were rendered voidable, it could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the Guarantor, and, depending on the amount of such

164

indebtedness, a Guarantor’s liability on its Guarantee could be reduced to zero. See “Risk Factors—Risks Relating to the Notes—Federal and State Statutes May Allow Courts, Under Specific Circumstances, to Void the Notes and the Guarantees, Subordinate Claims in Respect of the Notes and the Guarantees and/or Require Holders of the Notes to Return Payments Received From Us.”

A Guarantee by a Guarantor shall provide by its terms that it shall be automatically and unconditionally released and discharged with respect to the Notes upon:

(1)(a) any sale, exchange or transfer (by merger or otherwise) of the Capital Stock of such Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary, if such sale, exchange or transfer is made in compliance with the applicable provisions of the Indenture;

(b) the release or discharge of the guarantee by such Guarantor of the ABL Facility or the guarantee which resulted in the creation of such Guarantee, except a discharge or release by or as a result of payment under such guarantee;

(c) the proper designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with the provisions set forth under “—Certain Covenants—Limitation on Restricted Payments” and the definition of “Unrestricted Subsidiary”; or

(d) the Company exercising its legal defeasance option or covenant defeasance option with respect to the Notes as described under “—Legal Defeasance and Covenant Defeasance” or the Company’s obligations under the Indenture being discharged with respect to the Notes in accordance with the terms of the Indenture; and

(2) such Guarantor delivering to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.

Ranking

The payment of the principal of, premium, if any, and interest on the Notes and the payment of any Guarantee will be pari passu in right of payment with all Senior Indebtedness of the Company or the relevant Guarantor, as the case may be, including the obligations of the Company and such Guarantor under the ABL Facility, subject to the collateral and intercreditor arrangements described below.

The Notes and the Guarantees will be effectively senior in right of payment to all of the Company’s and the Guarantors’ existing and future unsecured Indebtedness to the extent of the value of the collateral securing the Notes. The Series A-2 Notes and the Guarantees rank equally with, and are secured equally with, the $700.0 million aggregate principal amount of Series A-1 Notes and any additional Series A-2 Debt, subject to the Series A-1 Notes’ priority of payment described below. The Series A-2 Notes will be effectively subordinated to all of the Company’s and each Guarantor’s existing and future Secured Indebtedness other than the Series A-1 Notes (including Indebtedness under the ABL Facility) to the extent of the value of the assets that do not constitute the Notes/Term Collateral securing such Indebtedness on a first priority lien basis. As of March 31, 2010, the Company and the Guarantors had $3.1 million principal amount of Secured Indebtedness outstanding other than the Notes, consisting of $3.1 million of existing capital leases. In addition, as of March 31, 2010, the Company had $133.9 million of available borrowing capacity under the ABL Facility and the option to raise incremental borrowing capacity under the ABL Facility of up to $25.0 million, all of which would constitute Secured Indebtedness.

Although the Indenture contains limitations on the amount of additional Indebtedness that the Company and the Guarantors may incur, under certain circumstances the amount of such Indebtedness could be substantial and, in any case, such Indebtedness may be Senior Indebtedness. The Indenture also does not limit the amount of additional Indebtedness that Holdings may incur. See “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.”

165

The $700.0 million of Series A-1 Notes are entitled to a priority of payment over the Series A-2 Notes and any additional Series A-2 Debt in the circumstances described below under “—Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes.” The Company may issue up to an additional $300.0 million of Series A-1 Notes under the Indenture which would also be entitled to this priority of payment over the Series A-2 Notes. In addition, the Company may issue up to an additional $200.0 million of indebtedness (which may be in the form of notes or loans) which would also be entitled to this priority of payment over the Series A-2 Notes.

Paying Agent and Registrar for the Notes

The Company will maintain one or more paying agents for the Notes in the Borough of Manhattan, City of New York. The initial paying agent for the Notes is the Trustee.

The Company will also maintain a registrar with offices in the Borough of Manhattan, City of New York. The initial registrar is the Trustee. The registrar will maintain a register reflecting ownership of the Notes outstanding from time to time and will make payments on and facilitate transfers of Notes on behalf of the Company.

The Company may change the paying agents or the registrars without prior notice to the Holders. The Company or any of its Subsidiaries may act as a paying agent or registrar.

Transfer and Exchange

A Holder may transfer or exchange the Notes in accordance with the Indenture. The registrar and the Trustee may require a Holder to furnish appropriate endorsements and transfer documents in connection with a transfer of the Notes. Holders will be required to pay all taxes due on transfer. The Company will not be required to transfer or exchange any Note selected for redemption. Also, the Company will not be required to transfer or exchange any Note for a period of 15 days before a selection of the Notes to be redeemed.

Principal, Maturity and Interest

The Notes will mature on November 1, 2014. Subject to compliance with the covenant described below under the caption “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,” the Company may issue (1) up to $150.0 million of additional Notes, plus (2) up to $150.0 million of additional Notes the proceeds of which will be used solely to finance acquisitions (solely to the extent the Fixed Charge Coverage Ratio following any such acquisition and debt incurrence would have been at least 3.50 to 1.00, determined on a pro forma basis), in each case from time to time after this offering under the Indenture (any such additional Notes, “Additional Notes”). All Notes, including any additional Notes subsequently issued under the Indenture, will be treated as a single class for all purposes under the Indenture, including waivers, amendments, redemptions and offers to purchase. Holders of Additional Notes will share equally and ratably in the Collateral; provided that the Series A-1 Notes will be entitled to a priority of payment over the Series A-2 Debt in the circumstances described below under “—Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes.” Unless the context requires otherwise, references to “Notes” for all purposes of the Indenture and this “Description of Notes” include any additional Notes that are actually issued. The Company will issue Notes in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

Interest on the Series A-1 Notes will accrue at the rate of 11.25% per annum and will be payable semiannually in arrears on November 1 and May 1, commencing on November 1, 2009 to the Holders of Series A-1 Notes of record on the immediately preceding October 15 and April 15. Interest on the Series A-2 Notes will accrue at the rate of 12.375% per annum and will be payable semiannually in arrears on November 1 and May 1, commencing on November 1, 2009 to the Holders of Series A-2 Notes of record on the immediately preceding

166

October 15 and April 15. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the issue date of the Notes. Interest on the Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Additional Interest may accrue on the outstanding notes in certain circumstances pursuant to the Registration Rights Agreement. All references in the Indenture, in any context, to any interest or other amount payable on or with respect to the Notes shall be deemed to include any Additional Interest pursuant to the Registration Rights Agreement.

Principal of, premium, if any, and interest on the Notes will be payable at the office or agency of the Company maintained for such purpose within the City and State of New York or, at the option of the Company, payment of interest may be made by check mailed to the Holders of the Notes at their respective addresses set forth in the register of Holders; provided that all payments of principal, premium, if any, and interest with respect to the Notes represented by one or more global notes registered in the name of or held by DTC or its nominee will be made by wire transfer of immediately available funds to the accounts specified by the Holder or Holders thereof. Until otherwise designated by the Company, the Company’s office or agency in New York will be the office of the Trustee maintained for such purpose.

Security for the Notes

The Notes and the Guarantees will have the benefit of the Collateral, which will consist of (i) the Notes/Term Collateral (defined below) as to which the Holders of the Notes, the holders of the Additional Notes (if any) and the holders of any additional Series A-2 Debt will have a first-priority security interest (subject to Permitted Liens) and the holders of ABL Lenders Debt will have a second-priority security interest and (ii) the ABL Collateral as to which the holders of ABL Lenders Debt will have a first-priority security interest and the Holders of the Notes, the holders of Additional Notes (if any) and the holders of any additional Series A-2 Debt will have a second-priority security interest (subject to Permitted Liens). The Company and the Guarantors will be able to Incur additional Indebtedness in the future which could share in the Collateral, including up to $300 million of additional Series A-1 Notes and up to $200 million of additional indebtedness (which may be in the form of notes or loans) which will have a priority of payment over the Series A-2 Notes. The amount of all such additional Indebtedness will be limited by the covenants disclosed under “—Certain Covenants—Liens” and “—Limitation on Incurrence of Indebtedness and Issuances of Disqualified Stock.” Under certain circumstances the amount of such additional Secured Indebtedness could be significant.

Notes/Term Collateral

The Notes/Term Collateral will be pledged as collateral to the Notes/Term Collateral Agent for the benefit of the Trustee, the Notes/Term Collateral Agent, the Holders of the Notes and the holders of any additional Series A-2 Debt. The Notes and Guarantees will be secured, together with any additional Series A-2 Debt, by first-priority security interests in the Notes/Term Collateral, subject to Permitted Liens. The Notes/Term Collateral consists of (i) substantially all of the present and future tangible and intangible assets of the Company and the Guarantors, including without limitation equipment, contracts, intellectual property, real property, general intangibles, material intercompany notes and proceeds of the foregoing, and (ii) all of the Capital Stock of the Company, each Guarantor and each Restricted Subsidiary of the Company (limited, in the case of foreign subsidiaries, to 65% of the Capital Stock of each first-tier Foreign Subsidiary), in each case other than the ABL Collateral, Excluded Assets and subject to the limitations and exclusions described under “—Limitations on Stock Collateral” (collectively, the “Notes/Term Collateral”).

Initially, subject to Permitted Liens, only the Notes and any additional Series A-2 Debt will have the benefit of the first-priority security interest in the Notes/Term Collateral. Except for Indebtedness secured by Permitted Liens, no other Indebtedness incurred by the Company may share in the first-priority security interest in the Notes/Term Collateral other than any Additional Notes.

167

The Company initially will grant a second-priority lien on and security interest in the Notes/Term Collateral for the benefit of the ABL Lenders Debt, which initially will consist of the loans outstanding under the ABL Facility, obligations with respect to letters of credit issued under the ABL Facility, certain hedging and cash management obligations incurred with the lenders under the ABL Facility or their affiliates and any other obligations under the ABL Facility. Any additional Indebtedness that is incurred by the Company in compliance with the terms of the Indenture may also be given a lien on and security interest in the Notes/Term Collateral (to the extent such lien constitutes a Permitted Lien) that ranks junior to the lien of the Notes and any additional Series A-2 Debt in the Notes/Term Collateral. Except as provided in the Intercreditor Agreement, holders of such junior liens will not be able to take any enforcement action with respect to the Notes/Term Collateral so long as any Notes or any additional Series A-2 Debt are outstanding.

ABL Collateral

The Notes and any additional Series A-2 Debt, will also be secured by a second-priority lien on and security interest in the ABL Collateral (subject to Permitted Liens). The ABL Collateral will consist of substantially all accounts receivable arising from the sale of inventory and other goods and services (including related contracts and contract rights, inventory, cash (other than certain cash proceeds of the Notes/Term Collateral), deposit accounts, other bank accounts and securities accounts), inventory, intercompany notes and intangible assets to the extent attached to the foregoing and the proceeds thereof, in each case held by the Company, the Guarantors and Holdings (collectively, the “ABL Collateral”). Generally, the Notes’ and any additional Series A-2 Debt’s second-priority lien on and security interest in the ABL Collateral will be terminated and automatically released if the lien on such ABL Collateral is released.

From and after the Issue Date, subject to the limitations contained under “—Certain Covenants—Liens” and the definition of “Permitted Liens,” the Company or any Guarantor may grant an additional lien on any property or asset that constitutes ABL Collateral in order to secure any obligation permitted to be incurred pursuant to the Indenture. In general, any such additional liens (other than Permitted Liens) must rank junior to the second-priority lien securing the Notes and any additional Series A-2 Debt.

Excluded Assets

Notwithstanding the foregoing, the Notes and any additional Series A-2 Debt will not be secured by a lien on Excluded Assets and will be subject to Permitted Liens.

The Notes/Term Collateral does not and will not include the following (collectively, the “Excluded Assets”):

(1) any property or assets owned by any Foreign Subsidiary,

(2) Excluded Contracts;

(3) Excluded Equipment;

(4) any interest in fee-owned real property of the Company and the Guarantors if the greater of its cost and book value is less than $5.0 million;

(5) any interest in leased real property of the Company and the Guarantors;

(6) motor vehicles and other assets subject to certificates of title;

(7) letter of credit rights;

(8) commercial tort claims of less than $20.0 million;

(9) assets requiring perfection through control agreements;

(10) pledges and security interests prohibited by law;

168

(11) assets to the extent a security interest in such assets would result in material adverse tax consequences as reasonably determined by the Company; and

(12) proceeds and products from any and all of the foregoing excluded collateral described in clauses (1) through (11), unless such proceeds or products would otherwise constitute Notes/Term Collateral;

provided, however, that Excluded Assets will not include any asset which secures obligations with respect to ABL Lenders Debt. In addition, the Company and its Subsidiaries shall not be required to obtain any landlord waivers, estoppels or collateral access letters.

Limitations on Stock Collateral

The Capital Stock and other securities of a Subsidiary of the Company that are owned by the Company or any Guarantor will constitute Notes/Term Collateral only to the extent that such Capital Stock and other securities can secure the Notes and any additional Series A-2 Debt without Rule 3-16 of Regulation S-X under the Securities Act (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the SEC (or any other governmental agency). In the event that Rule 3-16 of Regulation S-X under the Securities Act requires or is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary (other than the Company) due to the fact that such Subsidiary’s Capital Stock and other securities secure the Notes or any additional Series A-2 Debt, then the Capital Stock and other securities of such Subsidiary shall automatically be deemed not to be part of the Notes/Term Collateral (but only to the extent necessary to not be subject to such requirement). In such event, the Collateral Documents may be amended or modified, without the consent of any Holder of Notes, to the extent necessary to release the security interests in the shares of Capital Stock and other securities that are so deemed to no longer constitute part of the Notes/Term Collateral.

In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Subsidiary’s Capital Stock and other securities to secure the Notes and any additional Series A-2 Debt in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Capital Stock and other securities of such Subsidiary shall automatically be deemed to be a part of the Notes/ Term Collateral (but only to the extent necessary to not be subject to any such financial statement requirement). In such event, the Collateral Documents may be amended or modified, without the consent of any Holder of Notes, to the extent necessary to subject to the Liens under the Collateral Documents such additional Capital Stock and other securities.

In accordance with the limitations set forth in the two immediately preceding paragraphs, the Notes/Term Collateral includes shares of Capital Stock of Subsidiaries of the Company only to the extent that the applicable value of such Capital Stock (on a Subsidiary-by-Subsidiary basis) is less than 20% of the aggregate principal amount of the Notes outstanding. Following the Issue Date, however, the portion of the Capital Stock of Subsidiaries constituting Notes/Term Collateral may decrease or increase as described above.

Permitted Liens

The Company and the Guarantors are permitted by the Indenture to create or incur Permitted Liens. The Notes and any additional Series A-2 Debt will be effectively subordinated to existing and future secured Indebtedness and other liabilities to the extent of the Company’s or the Guarantor’s assets serving as collateral for such Permitted Liens.

In particular, the Notes will be effectively subordinated to security interests on acquired property or assets of acquired companies which are secured prior to (and not in connection with) such acquisition; such security interests generally constitute Permitted Liens. Indebtedness of Foreign Subsidiaries permitted by the Indenture

169

may also be secured by security interests on the property and assets of such Foreign Subsidiaries. The Indenture also permits the Company and the Guarantors to create other Permitted Liens, including up to $200 million of liens which are senior to the liens securing the Series A-2 Notes. See “Risk Factors—Risks Relating to the Notes—Holders of the Notes May Not Be Able to Fully Realize the Value of Their Liens” and “Risk Factors—Risks Relating to the Notes—The Collateral May Not Be Valuable Enough to Satisfy All the Obligations Secured by Such Collateral.”

Collateral Documents and Certain Related Intercreditor Provisions

The Company, the Guarantors and the Notes/Term Collateral Agent (on behalf of the Trustee and the Holders of the Notes, the Series A-1 Notes and the holders of any additional Series A-2 Debt) have entered into the Collateral Documents creating and establishing the terms of the security interests that secure the Notes and the guarantees thereof and any additional Series A-2 Debt. These security interests will secure the payment and performance when due of all of the obligations of the Company and the Guarantors under the Notes, the Indenture, the Guarantees, any additional Series A-2 Debt, and the Collateral Documents, as provided in the Collateral Documents. The Trustee became the Notes/Term Collateral Agent, replacing Bank of America, N.A., upon the consummation of the offering of Series A-2 Notes in August 2009. The Trustee, the Notes/Term Collateral Agent, each Holder of the Notes and each holder of any additional Series A-2 Debt and each other holder of, or obligee in respect of, any Obligations in respect of the Notes and any additional Series A-2 Debt outstanding at such time are referred to collectively as the “Notes/Term Secured Parties.”

Intercreditor Agreement

The Company, the Guarantors, the Notes/Term Collateral Agent and the ABL Collateral Agent have entered into the Intercreditor Agreement. Although the Holders of the Notes are not party to the Intercreditor Agreement, by their acceptance of the Notes they will agree to be bound thereby. Pursuant to the terms of the Intercreditor Agreement, the Notes/Term Collateral Agent will determine the time and method by which the security interests in the Notes/Term Collateral will be enforced and the ABL Collateral Agent will determine the time and method by which the security interests in the ABL Collateral will be enforced.

The aggregate amount of the obligations secured by the ABL Collateral may, subject to the limitations set forth in the Indenture, be increased.

A portion of the obligations secured by the ABL Collateral consists or may consist of Indebtedness that is revolving in nature, and the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed and such obligations may, subject to the limitations set forth in the Indenture, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, refinanced or otherwise amended or modified from time to time, all without affecting the subordination of the liens held by the Holders or the provisions of the Intercreditor Agreement defining the relative rights of the parties thereto. The lien priorities provided for in the Intercreditor Agreement shall not be altered or otherwise affected by any amendment, modification, supplement, extension, increase, replacement, renewal, restatement or refinancing of either the obligations secured by the ABL Collateral or the obligations secured by the Notes/Term Collateral, by the release of any Collateral or of any guarantees securing any secured obligations or by any action that any representative or secured party may take or fail to take in respect of any Collateral.

No Action With Respect to the ABL Collateral

The Intercreditor Agreement provides that none of the Notes/Term Secured Parties may commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, the ABL Collateral under any Collateral Document, applicable law or

170

otherwise, at any time when the ABL Collateral is subject to any first-priority security interest and any ABL Lenders Debt secured by such ABL Collateral remains outstanding or any commitment to extend credit that would constitute such ABL Lenders Debt remains in effect. Only the ABL Collateral Agent shall be entitled to take any such actions or exercise any such remedies. Notwithstanding the foregoing, the Notes/Term Collateral Agent may, but shall have no obligation to, take all such actions it deems necessary to perfect or continue the perfection of the second-priority security interest in the ABL Collateral of the Holders of the Notes and any additional Series A-2 Debt. The ABL Collateral Agent will be subject to similar restrictions with respect to its ability to enforce the second-priority security interest in the Notes/Term Collateral held by holders of ABL Lenders Debt.

No Duties of ABL Collateral Agent

The Intercreditor Agreement provides that neither the ABL Collateral Agent nor any holder of any ABL Lenders Debt secured by any ABL Collateral will have any duties or other obligations to any Notes/Term Secured Party with respect to the ABL Collateral, other than to transfer to the Notes/Term Collateral Agent any proceeds of any such ABL Collateral in which the Notes/Term Collateral Agent continues to hold a security interest remaining following any sale, transfer or other disposition of such ABL Collateral (in each case, unless the lien on all such ABL Collateral of the Holders of the Notes and any additional Series A-2 Debt is terminated and released prior to or concurrently with such sale, transfer, disposition, payment or satisfaction), the payment and satisfaction in full of such ABL Lenders Debt and the termination of any commitment to extend credit that would constitute such ABL Lenders Debt, or, if the ABL Collateral Agent is in possession of all or any part of such ABL Collateral after such payment and satisfaction in full and termination, such ABL Collateral or any part thereof remaining, in each case without representation or warranty on the part of the ABL Collateral Agent or any such holder of ABL Lenders Debt. In addition, the Intercreditor Agreement will further provide that, until the ABL Lenders Debt secured by any ABL Collateral shall have been paid and satisfied in full and any commitment to extend credit that would constitute ABL Lenders Debt secured thereby shall have been terminated, the ABL Collateral Agent will be entitled, for the benefit of the holders of such ABL Lenders Debt, to sell, transfer or otherwise dispose of or deal with such ABL Collateral without regard to any second-priority security interest therein or any rights to which any Notes/Term Secured Party would otherwise be entitled as a result of such second-priority security interest. Without limiting the foregoing, the Notes/Term Collateral Agent has agreed in the Intercreditor Agreement and each Holder of the Notes and any additional Series A-2 Debt has or will agree by its acceptance of the Notes and any additional Series A-2 Debt, as applicable, that neither the ABL Collateral Agent nor any holder of any ABL Lenders Debt secured by any ABL Collateral will have any duty or obligation first to marshal or realize upon the ABL Collateral, or to sell, dispose of or otherwise liquidate all or any portion of the ABL Collateral, in any manner that would maximize the return to the Notes/Term Secured Parties, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the Notes/Term Secured Parties from such realization, sale, disposition or liquidation. The Intercreditor Agreement has similar provisions regarding the duties owed to the ABL Collateral Agent and the holders of any ABL Lenders Debt by the Notes/ Term Secured Parties with respect to the Notes/Term Collateral.

The Intercreditor Agreement additionally provides that the Notes/Term Collateral Agent waives, and each Holder of the Notes and any additional Series A-2 Debt has or will waive, by its acceptance of the Notes and any additional Series A-2 Debt, any claim that may be had against the ABL Collateral Agent or any holder of any ABL Lenders Debt arising out of (i) any actions which the ABL Collateral Agent or such holder of ABL Lenders Debt take or omit to take (including, actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral and actions with respect to the collection of any claim for all or any part of the ABL Lenders Debt from any account debtor, guarantor or any other party) in accordance with the documents governing any such ABL Lenders Debt or any other agreement related thereto or to the collection of such ABL Lenders Debt or the valuation, use, protection or release of any security for such ABL Lenders Debt, (ii) any election by the ABL Collateral Agent or such holder of ABL Lenders Debt, in any proceeding instituted under

171

Title 11 of the United States Code of the application of Section 111 1 (b) of Title 11 of the United States Code or (iii) any borrowing of, or grant of a security interest or administrative expense priority under Section 364 of Title 11 of the United States Code to, the Company or any of its Subsidiaries as debtor-in-possession. The ABL Collateral Agent and holders of ABL Lenders Debt has agreed to waive similar claims with respect to the actions of any of the Notes/Term Secured Parties.

No Interference; Payment Over; Reinstatement

The Notes/Term Collateral Agent has agreed in the Intercreditor Agreement and each Holder of the Notes and each holder of any additional Series A-2 Debt will agree by its acceptance of the Notes and any additional Series A-2 Debt, as applicable, that:

• it will not take or cause to be taken any action the purpose or effect of which is, or could be, to make any Lien that the Notes/Term Collateral Agent has (on behalf of the Holders of the Notes and any additional Series A-2 Debt) on the ABL Collateral pari passu with, or to give the Notes/Term Collateral Agent, the Trustee, the Holders of the Notes and any additional Series A-2 Debt any preference or priority relative to, any Lien that the holders of any ABL Lenders Debt secured by any ABL Collateral have with respect to such ABL Collateral;

• it will not challenge or question in any proceeding the validity or enforceability of any first-priority security interest in the ABL Collateral, the validity, attachment, perfection or priority of any lien held by the holders of any ABL Lenders Debt secured by any ABL Collateral, or the validity or enforceability of the priorities, rights or duties established by or other provisions of the Intercreditor Agreement;

• it will not take or cause to be taken any action the purpose or intent of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of the ABL Collateral by the ABL Collateral Agent or the holders of any ABL Lenders Debt secured by such ABL Collateral;

• it will have no right to (A) direct the ABL Collateral Agent or any holder of any ABL Lenders Debt secured by any ABL Collateral to exercise any right, remedy or power with respect to such ABL Collateral or (B) consent to the exercise by the ABL Collateral Agent or any holder of any ABL Lenders Debt secured by the ABL Collateral of any right, remedy or power with respect to such ABL Collateral;

• it will not institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against the ABL Collateral Agent or any holder of any ABL Lenders Debt secured by any ABL Collateral seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to, and neither the ABL Collateral Agent nor any holders of any ABL Lenders Debt secured by any ABL Collateral will be liable for, any action taken or omitted to be taken by the ABL Collateral Agent or such lenders with respect to such ABL Collateral;

• it will not seek, and will waive any right, to have any ABL Collateral or any part thereof marshaled upon any foreclosure or other disposition of such ABL Collateral; and

• it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of the Intercreditor Agreement.

The ABL Collateral Agent and the holders of ABL Lenders Debt have agreed to similar limitations with respect to their rights in the Notes/Term Collateral and their ability to bring a suit against the Notes/Term Collateral Agent, the Holders of the Notes or any additional Series A-2 Debt.

The Notes/Term Collateral Agent has agreed in the Intercreditor Agreement and each Holder of the Notes and any additional Series A-2 Debt will agree by its acceptance of the Notes and any additional Series A-2 Debt, as applicable, that if it obtains possession of the ABL Collateral or realizes any proceeds or payment in respect of the ABL Collateral, pursuant to any Collateral Document or by the exercise of any rights available to it under

172

applicable law or in any bankruptcy, insolvency or similar proceeding or through any other exercise of remedies, at any time when any ABL Lenders Debt secured or intended to be secured by such ABL Collateral remains outstanding or any commitment to extend credit that would constitute ABL Lenders Debt secured or intended to be secured by such ABL Collateral remains in effect, then it will hold such ABL Collateral, proceeds or payment in trust for the ABL Collateral Agent and the holders of any ABL Lenders Debt secured by such ABL Collateral and transfer such ABL Collateral, proceeds or payment, as the case may be, to the ABL Collateral Agent. The Notes/Term Collateral Agent, each Holder of the Notes and any additional Series A-2 Debt will further agree that if, at any time, all or part of any payment with respect to any ABL Lenders Debt secured by any ABL Collateral previously made shall be rescinded for any reason whatsoever, it will promptly pay over to the ABL Collateral Agent any payment received by it in respect of any such ABL Collateral and shall promptly turn any such ABL Collateral then held by it over to the ABL Collateral Agent, and the provisions set forth in the Intercreditor Agreement will be reinstated as if such payment had not been made, until the payment and satisfaction in full of such ABL Lenders Debt. The ABL Collateral Agent and the holders of ABL Lenders Debt will be subject to similar limitations with respect to the Notes/Term Collateral and any proceeds or payments in respect of any Notes/Term Collateral.

Entry Upon Premises by ABL Collateral Agent and Holders of ABL Lenders Debt

The Intercreditor Agreement provides that if the ABL Collateral Agent takes any enforcement action with respect to the ABL Collateral, the Notes/Term Secured Parties (i) will cooperate with the ABL Collateral Agent in its efforts to enforce its security interest in the ABL Collateral and to finish any work-in-process and assemble the ABL Collateral, (ii) will not hinder or restrict in any respect the ABL Collateral Agent from enforcing its security interest in the ABL Collateral or from finishing any work-in-process or assembling the ABL Collateral, and (iii) will, subject to the rights of any landlords under real estate leases, permit the ABL Collateral Agent, its employees, agents, advisers and representatives, at the sole cost and expense of the ABL Collateral Agent and the holders of ABL Lenders Debt, to enter upon and use the Notes/Term Collateral (including (x) equipment, processors, computers and other machinery related to the storage or processing of records, documents or files and (y) intellectual property), for a period not to exceed 180 days after the taking of such enforcement action, for purposes of(A) assembling and storing the ABL Collateral and completing the processing of and turning into finished goods of any ABL Collateral consisting of work-in-process, (B) selling any or all of the ABL Collateral located on such Notes/Term Collateral, whether in bulk, in lots or to customers in the ordinary course of business or otherwise, (C) removing any or all of the ABL Collateral located on such Notes/Term Collateral, or (D) taking reasonable actions to protect, secure, and otherwise enforce the rights of the ABL Collateral Agent and the holders of ABL Lenders Debt in and to the ABL Collateral; provided, however, that nothing contained in the Intercreditor Agreement will restrict the rights of the Notes/Term Collateral Agent from selling, assigning or otherwise transferring any Notes/Term Collateral prior to the expiration of such 180-day period if the purchaser, assignee or transferee thereof agrees to be bound by the provisions of the Intercreditor Agreement. If any stay or other order prohibiting the exercise of remedies with respect to the ABL Collateral has been entered by a court of competent jurisdiction, such 180-day period shall be tolled during the tendency of any such stay or other order. If the ABL Collateral Agent conducts a public auction or private sale of the ABL Collateral at any of the real property included within the Notes/Term Collateral, the ABL Collateral Agent shall provide the Notes/Term Collateral Agent with reasonable notice and use reasonable efforts to hold such auction or sale in a manner which would not unduly disrupt the Notes/Term Collateral Agent’s use of such real property.

During the period of actual occupation, use or control by the ABL Collateral Agent or the holders of ABL Lenders Debt or their agents or representatives of any Notes/Term Collateral, the ABL Collateral Agent and the holders of ABL Lenders Debt will (i) be responsible for the ordinary course third-party expenses related thereto, including costs with respect to heat, light, electricity, water and real property taxes with respect to that portion of any premises so used or occupied, and (ii) be obligated to repair at their expense any physical damage to such Notes/Term Collateral or other assets or property resulting from such occupancy, use or control, and to leave such Notes/Term Collateral or other assets or property in substantially the same condition as it was at the commencement of such occupancy, use or control, ordinary wear and tear excepted. The ABL Collateral Agent

173

and the holders of ABL Lenders Debt agree to pay, indemnify and hold the Notes/Term Collateral Agent harmless from and against any third-party liability resulting from the gross negligence or willful misconduct of the ABL Collateral Agent or any of its agents, representatives or invitees in its or their operation of such facilities. In the event, and only in the event, that in connection with its use of some or all of the premises constituting Notes/Term Collateral, the ABL Collateral Agent requires the services of any employees of the Company or any of its Subsidiaries, the ABL Collateral Agent shall pay directly to any such employees the appropriate, allocated wages of such employees, if any, during the time periods that the ABL Collateral Agent requires their services. Notwithstanding the foregoing, in no event shall the ABL Collateral Agent or the holders of ABL Lenders Debt have any liability to the Notes/Term Secured Parties pursuant to the Intercreditor Agreement as a result of any condition (including any environmental condition, claim or liability) on or with respect to the Notes/Term Collateral existing prior to the date of the exercise by the ABL Collateral Agent or the holders of ABL Lenders Debt of their rights under the Intercreditor Agreement and the ABL Collateral Agent and the holders of ABL Lenders Debt will not have any duty or liability to maintain the Notes/Term Collateral in a condition or manner better than that in which it was maintained prior to the use thereof by them, or for any diminution in the value of the Notes/Term Collateral that results solely from ordinary wear and tear resulting from the use of the Notes/Term Collateral by such persons in the manner and for the time periods specified under the Intercreditor Agreement. Without limiting the rights granted under the Intercreditor Agreement, the ABL Collateral Agent and the holders of ABL Lenders Debt will cooperate with the Notes/Term Secured Parties in connection with any efforts made by the Notes/Term Secured Parties to sell the Notes/Term Collateral.

Agreements With Respect to Bankruptcy or Insolvency Proceedings

If the Company or any of its Subsidiaries becomes subject to a case under Title 11 of the United States Code, as amended (the “Bankruptcy Code”) and, as debtor(s)-in-possession, moves for approval of financing (“DIP Financing”) to be provided by one or more lenders (the “DIP Lenders”) under Section 364 of the Bankruptcy Code or the use of cash collateral with the consent of the DIP Lenders under Section 363 of the Bankruptcy Code, the Notes/Term Collateral Agent has agreed in the Intercreditor Agreement and each Holder of the Notes and each holder of any additional Series A-2 Debt has or will agree by its acceptance of the Notes and additional Series A-2 Debt, as applicable, that it will raise no objection to any such financing or to the Liens on the ABL Collateral securing the same (“DIP Financing Liens”) or to any use of cash collateral that constitutes ABL Collateral, unless the ABL Collateral Agent or the holders of any ABL Lenders Debt secured by such ABL Collateral oppose or object to such DIP Financing or such DIP Financing Liens or use of such cash collateral (and, to the extent that such DIP Financing Liens are senior to, or rank pari passu with, the Liens of such ABL Lenders Debt in such ABL Collateral, the Notes/Term Collateral Agent will, for themselves and on behalf of the Holders of the Notes and the holders of any additional Series A-2 Debt, subordinate the liens of the Notes/Term Secured Parties in such ABL Collateral to the liens of the ABL Lenders Debt in such ABL Collateral and the DIP Financing Liens), so long as the Notes/Term Secured Parties retain liens on all the Notes/Term Collateral, including proceeds thereof arising after the commencement of such proceeding, with the same priority as existed prior to the commencement of the case under the Bankruptcy Code. The ABL Collateral Agent and the holders of ABL Lenders Debt will agree to similar provisions with respect to any DIP Financing.

The Notes/Term Collateral Agent has agreed in the Intercreditor Agreement and each Holder of the Notes and each holder of any additional Series A-2 Debt will agree by its acceptance of the Notes and additional Series A-2 Debt, as applicable, that it will not object to or oppose a sale or other disposition of any ABL Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code if the ABL Collateral Agent and the holders of ABL Lenders Debt shall have consented to such sale or disposition of such ABL Collateral. The ABL Collateral Agent and the holders of ABL Lenders Debt have agreed to similar limitations with respect to their right to object to a sale of Notes/Term Collateral.

Insurance

Unless and until written notice by the ABL Collateral Agent to the Notes/Term Collateral Agent that the obligations under the ABL Facility have been paid in full and all commitments to extend credit under the ABL

174

Facility shall have been terminated, as between the ABL Collateral Agent, on the one hand, and the Notes/Term Collateral Agent, as the case may be, on the other hand, only the ABL Collateral Agent will have the right (subject to the rights of the Grantors under the security documents related to the ABL Facility, the Term Loan Facility and the Indenture and the Collateral Documents) to adjust or settle any insurance policy or claim covering or constituting ABL Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding affecting the ABL Collateral. Unless and until written notice by the Trustee and the Notes/Term Collateral Agent to the ABL Collateral Agent that the obligations under the Indenture, the Notes and any additional Series A-2 Debt have been paid in full, as between the ABL Collateral Agent, on the one hand, and the Notes/Term Collateral Agent, as the case may be, on the other hand, only the Notes/Term Collateral Agent will have the right (subject to the rights of the Grantors under the security documents related to the ABL Facility, the Term Loan Facility and the Indenture and the Collateral Documents) to adjust or settle any insurance policy covering or constituting Notes/Term Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding solely affecting the Notes/Term Collateral. To the extent that an insured loss covers or constitutes both ABL Collateral and Notes/ Term Collateral, then the ABL Collateral Agent and the Notes/Term Collateral Agent will work jointly and in good faith to collect, adjust or settle (subject to the rights of the Grantors under the security documents related to the ABL Facility, the Term Loan Facility and the Indenture and the Collateral Documents) under the relevant insurance policy.

Refinancings of the ABL Facility, the Notes and any additional Series A-2 Debt

The obligations under the ABL Facility, the obligations under the Indenture and the Notes and the obligations under any additional Series A-2 Debt may be refinanced or replaced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is otherwise required to permit the refinancing transaction under the ABL Facility or any security document related thereto, the Term Loan Facility, the Indenture or the Collateral Documents) of the ABL Collateral Agent or any holder of ABL Lenders Debt or any Notes/Term Secured Party, all without affecting the Lien priorities provided for in the Intercreditor Agreement; provided, however, that the holders of any such refinancing or replacement indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of the Intercreditor Agreement pursuant to such documents or agreements (including amendments or supplements to the Intercreditor Agreement) as the ABL Collateral Agent or the Notes/Term Collateral Agent, as the case may be, shall reasonably request and in form and substance reasonably acceptable to the ABL Collateral Agent or the Notes/Term Collateral Agent, as the case may be.

In connection with any refinancing or replacement contemplated by the foregoing paragraph, the Intercreditor Agreement may be amended at the request and sole expense of the Company, and without the consent of either the ABL Collateral Agent or the Notes/Term Collateral Agent, (a) to add parties (or any authorized agent or trustee therefor) providing any such refinancing or replacement indebtedness, (b) to establish that Liens on any Notes/Term Collateral securing such refinancing or replacement Indebtedness shall have the same priority as the Liens on any Notes/Term Collateral securing the Indebtedness being refinanced or replaced and (c) to establish that the Liens on any ABL Collateral securing such refinancing or replacement indebtedness shall have the same priority as the Liens on any ABL Collateral securing the Indebtedness being refinanced or replaced, all on the terms provided for herein immediately prior to such refinancing or replacement.

Use of Proceeds of ABL Collateral

After the satisfaction of all obligations under any ABL Lenders Debt secured by ABL Collateral and the termination of all commitments to extend credit that would constitute ABL Lenders Debt secured or intended to be secured by any ABL Collateral, the Trustee and the Notes/Term Collateral Agent, in accordance with the terms of the Indenture and the Collateral Documents, will distribute all cash proceeds (after payment of the costs of enforcement and collateral administration, including any amounts owed to the Trustee in its capacity as Trustee or Notes/Term Collateral Agent) of the ABL Collateral received by it under the Collateral Documents for the ratable benefit of the Holders of the Notes and any Additional Notes and any additional Series A-2 Debt.

175

Subject to the terms of the Collateral Documents, the Company and the Guarantors will have the right to remain in possession and retain exclusive control of the Collateral securing the Notes and any additional Series A-2 Debt (other than any cash, securities, obligations and Cash Equivalents constituting part of the Collateral and deposited with the Notes/Term Collateral Agent or the ABL Collateral Agent in accordance with the provisions of the Collateral Documents and other than as set forth in the Collateral Documents), to freely operate the Collateral and to collect, invest and dispose of any income there from.

Release of Collateral

The Company and the Guarantors will be entitled to the releases of property and other assets included in the Collateral from the Liens securing the Notes under any one or more of the following circumstances:

• to enable the disposition of such property or assets to the extent not prohibited under the covenant described under “—Repurchase at the Option of Holders—Asset Sales”;

• in the case of a Guarantor that is released from its Guarantee, the release of the property and assets of such Guarantor; or

• as described under “—Amendment, Supplement and Waiver” below.

Subject to the provisions contained in the Intercreditor Agreement, in general the second-priority lien on the ABL Collateral securing the Notes and any additional Series A-2 Debt will remain in full force and effect notwithstanding the termination and repayment in full of the ABL Facility, subject to certain exceptions.

The second-priority lien on the ABL Collateral securing the Notes and any additional Series A-2 Debt will terminate and be released automatically if the first-priority liens on the ABL Collateral are released by the ABL Collateral Agent (unless, at the time of such release of such first-priority liens, an Event of Default shall have occurred and be continuing under the Indenture). Notwithstanding the existence of an Event of Default, the second-priority lien on the ABL Collateral securing the Notes and any additional Series A-2 Debt shall also terminate and be released automatically to the extent the first-priority liens on the ABL Collateral are released by the ABL Collateral Agent in connection with a sale, transfer or disposition of ABL Collateral that is either not prohibited under the Indenture and the Series A-2 Debt or occurs in connection with the foreclosure of, or other exercise of remedies with respect to, such ABL Collateral by the ABL Collateral Agent (except with respect to any proceeds of such sale, transfer or disposition that remain after satisfaction in full of the ABL Lenders Debt). The liens on the Collateral securing the Notes and any additional Series A-2 Debt that otherwise would have been released pursuant to the first sentence of this paragraph but for the occurrence and continuation of an Event of Default will be released when such Event of Default and all other Events of Default under the Indenture and the Series A-2 Debt cease to exist.

The security interests in all Collateral securing the Notes also will be released upon (i) payment in full of the principal of, together with accrued and unpaid interest (including additional interest, if any) on, the Notes and all other obligations related thereto under the Indenture, the Guarantees under the Indenture and the Collateral Documents that are due and payable at or prior to the time such principal, together with accrued and unpaid interest (including additional interest, if any), are paid or (ii) a legal defeasance or covenant defeasance under the Indenture as described below under “—Legal Defeasance and Covenant Defeasance” or a discharge of the Indenture as described under “—Satisfaction and Discharge.”

No Impairment of Security Interests

Subject to the rights of the holders of Permitted Liens, neither the Company nor any of its Restricted Subsidiaries is permitted to take any action, or knowingly or negligently omit to take any action, which action or omission would or could reasonably be expected to have the result of materially impairing the security interest with respect to the Collateral for the benefit of the Trustee and Holders.

176

The Indenture governing the Notes provides that any release of Collateral in accordance with the provisions of the Indenture governing the Notes and the Collateral Documents will not be deemed to impair the security under the Indenture governing the Notes and that any Person may rely on such provision in delivering a certificate requesting release so long as all other provisions of the Indenture governing the Series A-2 Notes with respect to such release have been complied with.

In addition, the Company will not amend, modify or supplement, or permit or consent to any amendment, modification or supplement of, the Collateral Documents in any manner that would be adverse to the Holders of the Notes in any material respect, except as permitted under “—Amendment, Supplement and Waiver.”

Sufficiency of Notes/Term Collateral

In the event of foreclosure on the Notes/Term Collateral, the proceeds from the sale of the Collateral may not be sufficient to satisfy in full the Company’s obligations under the Notes, any additional Series A-2 Debt and the ABL Lenders Debt. The amount to be received upon such a sale would be dependent on numerous factors, including but not limited to the timing and the manner of the sale. In addition, the book value of the Notes/Term Collateral should not be relied on as a measure of realizable value for such assets. By its nature, the book value of certain portions of the Notes/Term Collateral may have to be greatly discounted when ascertaining its marketable value and portions of the Notes/Term Collateral may be illiquid and may have no readily ascertainable market value at all. In particular, the Notes/Term Collateral (including intellectual property) is generally more illiquid than the ABL Collateral (receivables and inventory). Accordingly, there can be no assurance that the Notes/Term Collateral can be sold in a short period of time in an orderly manner. A significant portion of the Notes/Term Collateral includes assets that may only be usable, and thus retain value, as part of the existing operating business of the Company and its subsidiaries. Accordingly, any such sale of the Notes/Term Collateral separate from the sale of certain of the operating businesses of the Company and its subsidiaries may not be feasible or of significant value.

Certain Bankruptcy Limitations

The right of the Notes/Term Collateral Agent to repossess and dispose of the Notes/Term Collateral upon the occurrence of an Event of Default would be significantly impaired by applicable bankruptcy law in the event that a bankruptcy case were to be commenced by or against the Company or any of the Guarantors prior to the Notes/Term Collateral Agent having repossessed and disposed of the Notes/Term Collateral. Upon the commencement of a case for relief under the Bankruptcy Code, a secured creditor such as the Notes/Term Collateral Agent is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from the debtor, without bankruptcy court approval. Moreover, the Bankruptcy Code permits the debtor to continue to retain and use Notes/Term Collateral even though the debtor is in default under the applicable debt instruments provided that the secured creditor is given adequate protection. The meaning of the term “adequate protection” may vary according to the circumstances, but it is intended in general to protect the value of the secured creditor’s interest in the Notes/Term Collateral and may include cash payments or the granting of additional security, if and at such times as the court in its discretion determines, for any diminution in the value of the Notes/Term Collateral as a result of the stay of repossession or disposition as a result of the automatic stay under the Bankruptcy Code or any use of the Notes/Term Collateral by the debtor during the pendency of the bankruptcy case. A bankruptcy court may determine that a secured creditor may not require compensation for a diminution in the value of the Notes/Term Collateral if the value of the Notes/Term Collateral exceeds the debt it secures. In addition, a bankruptcy court may determine not to provide cash payments as adequate protection to a secured creditor if (among other reasons) the bankruptcy court determines that the amount due under the Notes exceeds the value of the Notes/Term Collateral.

In view of the broad equitable powers of a bankruptcy court, it is impossible to predict how long payments under the Notes could be delayed following commencement of a bankruptcy case (to the extent such payments are made during the pendency of the bankruptcy case), whether or when the Notes/Term Collateral Agent could repossess or dispose of the Collateral, the value of the Notes/Term Collateral at the time of the bankruptcy

177

petition or whether or to what extent Holders of the Notes would be compensated for any delay in payment or loss of value of the Notes/Term Collateral through the requirement of “adequate protection.” Any disposition of the Notes/Term Collateral during a bankruptcy case would also require permission from the bankruptcy court. Furthermore, in the event a bankruptcy court determines the value of the Collateral is not sufficient to repay all amounts due on the Notes, the claims of the Holders of the Notes in the bankruptcy case would be bifurcated into secured and unsecured components: they would hold secured claims to the extent of the value of the Notes/Term Collateral to which the Holders of the Notes are entitled, and unsecured claims with respect to such shortfall. The Bankruptcy Code only permits the payment and/or accrual of post-petition interest, costs and attorney’s fees to a secured creditor during a debtor’s bankruptcy case to the extent the value of the Notes/Term Collateral is determined by the bankruptcy court to exceed the aggregate outstanding principal amount of the obligations secured by the Notes/Term Collateral. To the extent the Holders of the Notes are determined to be undersecured, interest accrual under the Notes would cease as of the date of the bankruptcy filing.

In addition, the Notes/Term Collateral Agent may need to evaluate the impact of the potential liabilities before determining to foreclose on the secured property because lenders that hold a security interest in real property may be held liable under environmental laws for the costs of remediating or preventing release or threatened releases of hazardous substances at the secured property. In this regard, the Notes/Term Collateral Agent may decline to foreclose on the Notes/Term Collateral or exercise remedies available if it does not receive indemnification to its satisfaction from the Holders of the Notes and the holders of any additional Series A-2 Debt. Finally, the Notes/Term Collateral Agent’s ability to foreclose on the Notes/Term Collateral on behalf of Holders of the Notes and holders of any additional Series A-2 Debt may be subject to lack of perfection, the consent of third parties, prior liens and practical problems associated with the realization of the Notes/Term Collateral Agent’s security interest in the Notes/Term Collateral.

Compliance with Trust Indenture Act

The Trust Indenture Act will become applicable to the Indenture upon the qualification of the Indenture under the Trust Indenture Act, which will occur at such time as the Notes have been registered under the Securities Act. The Indenture provides that the Company will comply with the provisions of §314 of the Trust Indenture Act to the extent applicable. To the extent applicable, the Company will cause §313(b) of the Trust Indenture Act, relating to reports, and §314(d) of the Trust Indenture Act, relating to the release of property or securities subject to the Lien of the Collateral Documents, to be complied with. Any certificate or opinion required by §314(d) of the Trust Indenture Act may be made by an officer or legal counsel, as applicable, of the Company except in cases where §314(d) of the Trust Indenture Act requires that such certificate or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other expert selected by or reasonably satisfactory to the Trustee. Notwithstanding anything to the contrary in this paragraph, the Company will not be required to comply with all or any portion of §314(d) of the Trust Indenture Act if it determines, in good faith based on the written advice of counsel, a copy of which written advice shall be provided to the Trustee, that under the terms of §314(d) of the Trust Indenture Act or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including “no action” letters or exemptive orders, all or any portion of §314(d) of the Trust Indenture Act is inapplicable to any release or series of releases of Collateral.

Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes

The priorities of payment between the Series A-2 Debt (including the Series A-2 Notes) and the Series A-1 Notes is governed by an Intercreditor and Collateral Agency Agreement, dated as of May 27, 2009, among the Company, Banc of America Bridge LLC, as bridge loan agent (the “Bridge Loan Agent”), U.S. Bank National Association, as indenture trustee, and Bank of America, N.A., as Notes/Term Collateral Agent. This agreement describes, among other things, the obligations, powers and duties of the Notes/Term Collateral Agent, actions and voting by the Series A-2 Debt and Series A-1 Notes, the exercise of remedies, and the application of collateral proceeds.

178

Voting as Single Class

The Series A-2 Notes, the Series A-1 Notes and any Term Loans then outstanding will generally vote together as a single class for all purposes to the extent described below under “Events of Default” and “Amendment, Modification and Waiver.”

Waterfall of Payment Following Acceleration or in Bankruptcy

The Series A-1 Notes shall be entitled to a priority of payment over the Series A-2 Debt in the circumstances and to the extent described below. Any amount received by the Trustee or the Notes/Term Collateral Agent from the Company or any Guarantor (or from proceeds of any Notes/Term Collateral or ABL Collateral) following any acceleration of the obligations under the Series A-1 Notes or Series A-2 Debt or any bankruptcy or insolvency Event of Default with respect to the Company or any Significant Subsidiary under the Series A-1 Notes or Series A-2 Debt, whether received from the proceeds of an asset sale, reorganization, liquidation, sale pursuant to Section 363 of the Bankruptcy Code, adequate protection payments, or otherwise, shall be applied:

(i) first, to the payment of all reasonable and documented costs and expenses incurred by the Trustee, the Bridge Loan Agent or the Notes/Term Collateral Agent in connection with any collection or sale or otherwise in connection with the Indenture, the Term Loan Facility or any Collateral Document or arrangement in connection therewith, including all court costs and the reasonable fees and expenses of its agents and legal counsel and any other reasonable and documented costs or expenses incurred in connection with the exercise of any right or remedy under the Indenture or Term Loan Facility or any Collateral Document or arrangement in connection therewith (and, if there shall be a shortfall in the amount available pursuant to this clause, to pay all amounts due under this clause on a pro rata basis taking into account all amounts due under this clause (including on account of fees, expenses or otherwise, as applicable));

(ii) second, to the holders of the Series A-1 Notes, an amount equal to all obligations, including accrued and unpaid interest outstanding on or prior to the acceleration or filing date, owing to them in respect of the Series A-1 Notes on the date of any payment or other distribution or other receipt of proceeds (other than any amounts calculated in respect of post-petition interest, including amounts payable as “adequate protection”) (and, if there shall be a shortfall in the amount available pursuant to this clause, to pay all amounts due under this clause on a pro rata basis taking into account all amounts due under this clause (including on account of principal, interest, fees, expenses or otherwise, as applicable));

(iii) third, to the holders of the Series A-2 Debt, an amount equal to all obligations, including accrued and unpaid interest outstanding on or prior to the acceleration or filing date, owing to them in respect of the Series A-2 Debt on the date of any payment or other distribution or other receipt of proceeds (other than any amounts calculated in respect of post-petition interest, including amounts payable as “adequate protection”) (and, if there shall be a shortfall in the amount available pursuant to this clause, to pay all amounts due under this clause on a pro rata basis taking into account all amounts due under this clause (including on account of principal, interest, fees, expenses or otherwise, as applicable));

(iv) fourth, to the holders of the Series A-1 Notes, an amount equal to the amount calculated as owing to them in respect of post-petition interest, calculated at the contract rate of interest (regardless of whether such amount is allowed or allowable as a claim) (and, if there shall be a shortfall in the amount available pursuant to this clause, to pay all amounts due under this clause on a pro rata basis taking into account all amounts due under this clause);

(v) fifth, to the holders of the Series A-2 Debt, an amount equal to the amount calculated as owing to them in respect of post-petition interest, calculated at the contract rate of interest (regardless of whether such amount is allowed or allowable as a claim) (and, if there shall be a shortfall in the amount available pursuant to this clause, to pay all amounts due under this clause on a pro rata basis taking into account all amounts due under this clause); and

179

(vi) sixth, any surplus then remaining shall be paid to the Company or the applicable Guarantor or their successors or assigns or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct; provided that any amount received constituting ABL Collateral shall be applied in accordance with the provisions set forth in the Intercreditor Agreement.

The Bridge Loan Agent has agreed and each holder of Series A-2 Debt will be deemed to agree to turn over to the Trustee or the Notes/Term Collateral Agent, on behalf of the holders of the Series A-1 Notes, amounts otherwise received or receivable by them to the extent necessary to effectuate the priority of payments set forth above, even if such turnover has the effect of reducing the claim or recovery of the holders of the Series A-2 Debt.

The waterfall of payment provisions described above relate only to the relationship between the Series A-1 Notes and the Series A-2 Debt. The Company may issue up to $300.0 million of Additional Notes which may be Series A-1 Notes and would therefore be entitled to be treated as Series A-1 Notes for purposes of the waterfall. In addition, the Company may incur up to $200.0 million of additional Permitted Liens which may be secured equally and ratably with the Series A-1 Notes; the debt secured by these additional Permitted Liens would also be entitled to be treated as Series A-1 Notes for purposes of the waterfall of payment provisions described above.

Certain Other Intercreditor Arrangements

The Holders of Series A-2 Notes, the holders of Series A-1 Notes, the Bridge Loan Agent, the holders of any additional Series A-2 Debt, the Trustee and the Notes/Term Collateral Agent have agreed or will agree that (a) the grant of Liens pursuant to the Collateral Documents constitutes a single grant of Liens for the ratable benefit of the Holders of Series A-2 Notes, the holders of Series A-1 Notes and holders of any additional Series A-2 Debt and (b) the Series A-1 Notes and the Series A-2 Debt shall be classified as a single class of secured claims (or, if relevant, a single class of secured claims and a single class of unsecured claims) in any liquidation or plan of reorganization proposed or adopted in a bankruptcy, insolvency or liquidation case. To further effectuate the intent of the immediately preceding sentence, the Holders of Series A-2 Notes, the holders of Series A-1 Notes, the Bridge Loan Agent, the holders of any additional Series A-2 Debt, the Trustee and the Notes/Term Collateral Agent have agreed or will agree that, if it is held that the claims of the Series A-1 Notes and the Series A-2 Debt in respect of the Collateral constitute two classes of claims (rather than one class of secured claims or, if relevant, a single class of secured claims and a single class of unsecured claims), any distributions in respect of Collateral in any bankruptcy, insolvency or liquidation case that are made to any of them will be reallocated among the holders of Series A-1 Notes and the holders of Series A-2 Debt as if there were a single class of secured claims (or, if relevant, a single class of secured claims and a single class of unsecured claims) against the Company and the Guarantors in respect of the Collateral in compliance with the provisions described under “—Waterfall of Payment Following Acceleration or in Bankruptcy” above. Moreover, the Holders of Series A-2 Notes, the holders of Series A-1 Notes, the Bridge Loan Agent, the holders of any additional Series A-2 Debt, the Trustee and the Notes/Term Collateral Agent have agreed or will agree not to take actions, and not to initiate or prosecute or encourage any other Person to initiate or prosecute any claim, action, objection or other proceeding or otherwise assert any position inconsistent with the intent of the first sentence of this paragraph.

If, in any bankruptcy, insolvency or liquidation case, any equity securities, debt securities or other non-cash consideration from the reorganized debtor is distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, the amount of such non-cash consideration to be distributed to each of the holders of the Series A-1 Notes and the holders of the Series A-2 Debt, respectively, shall be determined in accordance with the provisions described under “—Waterfall of Payment Following Acceleration or in Bankruptcy” above. In addition, if, in any bankruptcy, insolvency or liquidation case, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both on account of the Series A-1 Notes and on account of the Series A-2 Debt, then, to the extent the debt obligations distributed on account of the Series A-1 Notes and on account of the

180

Series A-2 Debt are secured by Liens upon the same property, the provisions described under “—Waterfall of Payment Following Acceleration or in Bankruptcy” above will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to such debt obligations.

For purposes of distribution of non-cash consideration, including any equity securities or debt securities, the value of such non-cash consideration shall be equal to either the current market price or the fair market value thereof and will be determined as follows: (i) if such non-cash consideration is a marketable security, the average daily closing price thereof on a principal national securities exchange or NASDAQ for a specified preceding period or (ii) if such non-cash consideration is not a marketable security or the average daily closing price thereof cannot be determined, by one or more nationally recognized investment banks with experience in similar transactions according to procedures customary for similar transactions.

For purposes of these intercreditor arrangements, all references to the Company or any Guarantor shall include such Person as a debtor-in-possession and any receiver or trustee for such Person in any bankruptcy, insolvency or liquidation case.

Mandatory Redemption; Offers to Purchase; Open Market Purchases

The Company is not required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Company may be required to make an offer to purchase Notes as described under the caption “—Repurchase at the Option of Holders.” In addition, we may, at our discretion, at any time and from time to time purchase the Notes or any additional Series A-2 Debt in the open market or otherwise.

Optional Redemption

Except as set forth below, the Company will not be entitled to redeem the Notes at its option prior to November 1, 2011.

At any time prior to November 1, 2011, the Company may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail to the registered address of each Holder or otherwise delivered in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption (the “Redemption Date”), subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date.

On and after November 1, 2011, the Company may redeem the Notes, in whole or in part, upon notice as described under the heading “—Repurchase at the Option of Holders—Selection and Notice” at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date, if redeemed during the twelve-month period beginning on November 1 of each of the years indicated below:

Series A-1 Notes

Year	Percentage
2011	105.625	%
2012	102.813	%
2013 and thereafter	100.000	%

Series A-2 Notes

Year	Percentage
2011	106.188	%
2012	103.094	%
2013 and thereafter	100.000	%

181

Until November 1, 2011, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Series A-1 Notes issued by it at a redemption price equal to 111.25% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders of Series A-1 Notes of record on the relevant record date to receive interest due on the relevant interest payment date, with the net cash proceeds of one or more Equity Offerings; provided that at least 65% of the aggregate principal amount of Series A-1 Notes originally issued under the Indenture and any Additional Notes that are Series A-1 Notes issued under the Indenture after the issue date of the Series A-1 Notes (excluding Series A-1 Notes and Additional Notes that are Series A-1 Notes held by the Company or Subsidiaries or Affiliates of the Company) remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

In addition, until November 1, 2011, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Series A-2 Notes issued by it at a redemption price equal to 112.375% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Redemption Date, subject to the right of Holders of Series A-2 Notes of record on the relevant record date to receive interest due on the relevant interest payment date, with the net cash proceeds of one or more Equity Offerings; provided that at least 65% of the aggregate principal amount of Series A-2 Notes originally issued under the Indenture and any Additional Notes that are Series A-2 Notes issued under the Indenture after the issue date of the Series A-2 Notes (excluding Series A-2 Notes and Additional Notes that are Series A-2 Notes held by the Company or Subsidiaries or Affiliates of the Company) remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to, the completion of the related Equity Offering.

The Trustee shall select the Notes to be purchased in the manner described under “—Repurchase at the Option of Holders—Selection and Notice.”

Repurchase at the Option of Holders

Change of Control

The Indenture provides that if a Change of Control occurs, unless the Company has previously or concurrently mailed a redemption notice with respect to all the outstanding Notes as described under “—Optional Redemption,” the Company will make an offer to purchase all of the Notes pursuant to the offer described below (the “Change of Control Offer”) at a price in cash (the “Change of Control Payment”) equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, subject to the right of Holders of the Notes of record on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control, the Company will send notice of such Change of Control Offer by first-class mail, with a copy to the Trustee, to each Holder of Notes to the address of such Holder appearing in the security register or otherwise in accordance with the procedures of DTC with a copy to the Trustee, with the following information:

(1) that a Change of Control Offer is being made pursuant to the covenant entitled “Change of Control” under the Indenture and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Company;

(2) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”);

(3) that any Note not properly tendered will remain outstanding and continue to accrue interest;

182

(4) that unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the paying agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) that Holders will be entitled to withdraw their tendered Notes and their election to require the Company to purchase such Notes; provided that the paying agent receives, not later than the close of business on the expiration date of the Change of Control Offer, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

(7) that if the Company is repurchasing less than all of the Notes, the remaining Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered. The unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess thereof;

(8) the other instructions, as determined by the Company, consistent with the covenant described hereunder, that a Holder must follow; and

(9) if such notice is mailed prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional upon the occurrence of such Change of Control.

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the Indenture by virtue thereof.

On the Change of Control Payment Date, the Company will, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer,

(2) deposit with the paying agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered, and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to, and purchased by, the Company.

The ABL Facility provides, and future credit agreements or other agreements relating to Senior Indebtedness to which the Company becomes a party may provide, that certain change of control events with respect to the Company would constitute a default thereunder (including events that would constitute a Change of Control under the Indenture). If we experience a change of control event that triggers a default under the ABL Facility or any such future Indebtedness, we could seek a waiver of such default or repurchase or prepayment provision or seek to refinance the ABL Facility or such future Indebtedness. In the event we do not obtain such a waiver or refinance the ABL Facility or such future Indebtedness, such default could result in amounts outstanding under the ABL Facility or such future Indebtedness being declared due and payable.

Our ability to pay cash to the Holders of Notes following the occurrence of a Change of Control may be limited by our then-existing financial resources. Therefore, sufficient funds may not be available when necessary to make any required repurchases.

183

The Change of Control purchase feature of the Notes may in certain circumstances make more difficult or discourage a sale or takeover of us and, thus, the removal of incumbent management. The Change of Control purchase feature is a result of negotiations between the Initial Purchasers and us. We have no present intention to engage in a transaction involving a Change of Control, although it is possible that we could decide to do so in the future. Subject to the limitations discussed below, we could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings. Restrictions on our ability to incur additional Indebtedness are contained in the covenants described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and “—Certain Covenants—Liens.” Such restrictions in the Indenture can be waived only with the consent of the holders of a majority in principal amount of the Notes and any additional Series A-2 Debt then outstanding. Except for the limitations contained in such covenants, however, the Indenture does not contain any covenants or provisions that may afford Holders of the Notes protection in the event of a highly leveraged transaction.

We will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by us and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

The definition of “Change of Control” includes a disposition of all or substantially all of the assets of the Company to any Person. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “all or substantially all” of the assets of the Company. As a result, it may be unclear as to whether a Change of Control has occurred and whether a Holder of Notes may require the Company to make an offer to repurchase the Notes as described above.

The provisions under the Indenture relating to the Company’s obligation to make an offer to repurchase the Notes as a result of a Change of Control may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes.

Asset Sales

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to consummate an Asset Sale, unless:

(1) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (as determined in good faith by the Company or, if $40.0 million or more, the board of directors of the Company) of the assets sold or otherwise disposed of;

(2) except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that the following shall be deemed to be cash for purposes of this provision and for no other purpose:

(a) any liabilities (as reflected in the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto) of the Company or such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or liabilities to the extent owed to the Company or any Affiliate of the Company) that are assumed by the transferee of any such assets and for which the Company and all of its Restricted Subsidiaries have been validly released by all applicable creditors in writing;

184

(b) any securities, notes or other similar obligations received by the Company or such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received) within 180 days following the closing of such Asset Sale;

(c) any Designated Non-cash Consideration received by the Company or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of (i) $50.0 million and (ii) 2.5% of Total Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value; and

(3) to the extent that any assets received by the Company and its Restricted Subsidiaries in such Asset Sale constitute securities or may be used or useful in a Similar Business, such assets are concurrently with their acquisition added to the Notes/Term Collateral securing the Notes, other than Excluded Assets and subject to the limitations and exclusions described under “—Security for the Notes—Limitations on Stock Collateral.”

Within 365 days after the receipt of any Net Proceeds of any Asset Sale, the Company or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale,

(1) to permanently reduce Indebtedness as follows:

(a) if the assets subject of such Asset Sale constitute Notes/Term Collateral, to permanently reduce (or offer to reduce, as applicable) Obligations under the Series A-1 Notes and the Series A-2 Debt on a pro rata basis; provided further that all reductions of obligations under the Series A-2 Notes shall be made as provided under “Optional Redemption,” through open-market purchases (to the extent such purchases are at or above 100% of the principal amount thereof plus accrued unpaid interest) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders of Notes to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;

(b) if the assets subject of such Asset Sale do not constitute Collateral, but constitute collateral for other Senior Indebtedness, which Lien is permitted by the Indenture, to permanently reduce Obligations under such other Senior Indebtedness that is secured by a Lien, which Lien is permitted by the Indenture, and to correspondingly reduce commitments with respect thereto;

(c) if the assets subject of such Asset Sale do not constitute Collateral, to permanently reduce Obligations under other Senior Indebtedness (and to correspondingly reduce commitments with respect thereto), provided that the Company shall equally and ratably reduce (or offer to reduce, as applicable) Obligations under the Series A-1 Notes and Series A-2 Debt on a pro rata basis; provided further that all reductions of obligations under the Notes shall be made as provided under “Optional Redemption,” through open-market purchases (to the extent such purchases are at or above 100% of the principal amount thereof plus accrued and unpaid interest) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders of Notes to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid; or

(d) if the assets subject of such Asset Sale do not constitute Collateral, to permanently reduce Indebtedness of a Restricted Subsidiary that is not a Guarantor, other than Indebtedness owed to the Company or any Restricted Subsidiary,

(2) to make (a) an Investment in any one or more businesses; provided that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Company or another of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (b) capital expenditures or (c) acquisitions of other assets, in each

185

of (a), (b) and (c), used or useful in a Similar Business, provided that the assets (including Capital Stock) acquired with the Net Proceeds of a disposition of Collateral are pledged as Collateral to the extent required under the Collateral Documents; or

(3) to make an investment in (a) any one or more businesses; provided that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Company or another of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (b) properties or (c) acquisitions of other assets that, in each of (a), (b) and (c), replace the businesses, properties and/or assets that are the subject of such Asset Sale, provided that the assets (including Capital Stock) acquired with the Net Proceeds of a disposition of Collateral are pledged as Collateral to the extent required under the Collateral Documents;

provided that, in the case of clauses (2) and (3) above, a binding commitment entered into not later than such 365th day shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as the Company, or such other Restricted Subsidiary enters into such commitment with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment within 120 days of such commitment (an “Acceptable Commitment”) and, in the event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, or such Net Proceeds are not actually so invested or paid in accordance with clauses (2) or (3) above by the end of such 120-day period, then such Net Proceeds shall constitute Excess Proceeds.

Any Net Proceeds from the Asset Sale that are not invested or applied as provided and within the time period set forth in the first sentence of the preceding paragraph will be deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $30.0 million, the Company shall make an offer to all Holders of the Notes and, if required by the terms of any Indebtedness that is pari passu with the Notes or any Guarantee (“Pari passu Indebtedness”), to the holders of such Pari passu Indebtedness (an “Asset Sale Offer”), to purchase the maximum aggregate principal amount of the Notes and such Pari passu Indebtedness that is an integral multiple of $1,000 (but in minimum amounts of $2,000) that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. The Company will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $30.0 million by mailing the notice required pursuant to the terms of the Indenture, with a copy to the Trustee. The Company may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the relevant 365 days or with respect to Excess Proceeds of $30.0 million or less.

To the extent that the aggregate amount of Notes and such Pari passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes, subject to other covenants contained in the Indenture. If the aggregate principal amount of Notes or the Pari passu Indebtedness surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such Pari passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari passu Indebtedness tendered. Additionally, the Company may, at its option, make an Asset Sale Offer using proceeds from any Asset Sale at any time after consummation of such Asset Sale. Upon consummation of any Asset Sale Offer, any Net Proceeds not used to purchase Notes in such Asset Sale Offer shall not be deemed Excess Proceeds and the Company may use any Net Proceeds not required to be used for general corporate purposes, subject to other covenants contained in the Indenture. To the extent the Asset Sale giving rise to the Asset Sale Offer involves Notes/ Term Collateral, the Asset Sale Offer will be made first to Holders of Series A-1 Notes and holders of Series A-2 Debt and, if any Excess Proceeds remain, second to holders of other Pari passu Indebtedness.

Pending the final application of any Net Proceeds pursuant to this covenant, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Indebtedness outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by the Indenture.

186

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in the Indenture by virtue thereof.

Selection and Notice

If the Company is redeeming less than all of the Notes issued by it at any time, the Trustee will select the Notes to be redeemed (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed or (b) on a pro rata basis to the extent practicable or, to the extent that selection on a pro rata basis is not practicable, by lot or such other similar method in accordance with the procedures of DTC.

Notices of purchase or redemption shall be mailed by first-class mail, postage prepaid, at least 30 but not more than 60 days before the purchase or redemption date to each Holder of Notes at such Holder’s registered address or otherwise in accordance with the procedures of DTC, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture. If any Note is to be purchased or redeemed in part only, any notice of purchase or redemption that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased or redeemed.

The Company will issue a new Note in a principal amount equal to the unredeemed portion of the original Note in the name of the Holder upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.

Certain Covenants

Set forth below are summaries of certain covenants contained in the Indenture.

Limitation on Restricted Payments

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(I) declare or pay any dividend or make any payment or distribution on account of the Company’s, or any of its Restricted Subsidiaries’ Equity Interests, including, without limitation, payable in connection with any merger or consolidation other than:

(a) dividends or distributions by the Company payable solely in Equity Interests (other than Disqualified Stock) of the Company; or

(b) dividends, payments or distributions by a Restricted Subsidiary so long as, in the case of any dividend, payment or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly-Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;

(II) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Company, or any direct or indirect parent of the Company, including, without limitation, in connection with any merger or consolidation;

187

(III) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value in each case, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness, other than (a) Indebtedness permitted under clauses (7) and (8) of the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” or (a) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or

(IV) make any Restricted Investment

(all such payments and other actions set forth in clauses (I) through (IV) above (other than any exceptions thereof) being collectively referred to as “Restricted Payments”), unless, at the time of such Restricted Payment:

(1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

(2) immediately after giving effect to such transaction on a pro forma basis, the Company could incur $1.00 of additional Indebtedness under the provisions of the first paragraph of the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), (2) (with respect to the payment of dividends on Refunding Capital Stock (as defined below) pursuant to clause (b) thereof only), (6)(c), (7), (9) and (14) (to the extent not deducted in calculating Consolidated Net Income) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the sum of (without duplication):

(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) beginning October 1, 2008 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit; plus

(b) 100% of the aggregate net cash proceeds and the fair market value, as determined in good faith by the Company, of marketable securities or other property (other than assets or Equity Interests constituting entire portfolio companies owned by the Permitted Holders) received by the Company since immediately after the Issue Date (other than net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (12)(a) of the second paragraph of “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”) from the issue or sale of:

(i) (A) Equity Interests of the Company, including Treasury Capital Stock (as defined below), but excluding cash proceeds and the fair market value, as determined in good faith by the Company, of marketable securities or other property received from the sale of:

(x) Equity Interests to employees, directors or consultants of the Company, any direct or indirect parent company of the Company and the Company’s Subsidiaries after the Issue Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of the next succeeding paragraph; and

(y) Designated Preferred Stock; and

(B) to the extent such net cash proceeds are actually contributed to the Company as equity (other than Disqualified Stock), Equity Interests of any of the Company’s direct or

188

indirect parent companies (excluding contributions of the proceeds from the sale of Designated Preferred Stock of any such companies or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of the next succeeding paragraph); or

(ii) debt securities of the Company that have been converted into or exchanged for such Equity Interests of the Company;

provided, however, that this clause (b) shall not include the proceeds from (W) Refunding Capital Stock (as defined below), (X) Equity Interests or debt securities of the Company sold to a Restricted Subsidiary, as the case may be, (Y) Disqualified Stock or debt securities that have been converted into Disqualified Stock or (Z) Excluded Contributions; plus

(c) 100% of the aggregate amount of cash and the fair market value, as determined in good faith by the Company, of marketable securities or other property (other than assets or Equity Interests constituting entire portfolio companies owned by the Permitted Holders) contributed to the capital of the Company (other than as Disqualified Stock) following the Issue Date (other than (i) net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (12)(a) of the second paragraph of “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”, (ii) contributions from a Restricted Subsidiary or (iii) any Excluded Contribution); plus

(d) 100% of the aggregate amount received in cash and the fair market value, as determined in good faith by the Company, of marketable securities or other property (other than assets or Equity Interests constituting entire portfolio companies owned by the Permitted Holders) received by the Company or any Restricted Subsidiary by means of:

(i) the sale or other disposition (other than to the Company or a Restricted Subsidiary) of Restricted Investments made by the Company or its Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Company or its Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees, which constitute Restricted Investments by the Company or its Restricted Subsidiaries, in each case after the Issue Date; or

(ii) the sale (other than to the Company or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary (other than to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to clause (7) of the next succeeding paragraph or to the extent such Investment constituted a Permitted Investment) or a distribution or dividend from an Unrestricted Subsidiary, in each case, after the Issue Date; plus

(e) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary after the Issue Date, the fair market value of the Investment in such Unrestricted Subsidiary, as determined by the Company in good faith or if, in the case of an Unrestricted Subsidiary, such fair market value may exceed $35.0 million, in writing by an Independent Financial Advisor, at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary other than an Unrestricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to clause (7) of the next succeeding paragraph or to the extent such Investment constituted a Permitted Investment;

provided, however, that for purposes of determining the fair market value of such other property received by the Company or any Restricted Subsidiary or contributed to the capital of the Company, as the case may be, pursuant to clauses (3)(b), (c) and (d) above, the Company shall deliver to the Trustee an Officer’s Certificate signed by the Chief Financial Officer of the Company certifying as to the fair market value of such other property and, if the fair market value is at least $75.0 million, a written opinion of a recognized independent expert stating the fair market value of such other property.

189

The foregoing provisions will not prohibit:

(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration thereof or the giving of the irrevocable redemption notice, as applicable, if at the date of declaration or notice such payment would have complied with the provisions of the Indenture;

(2)(a) the redemption, repurchase, defeasance, retirement or other acquisition of any Equity Interests (“Treasury Capital Stock”) or Subordinated Indebtedness of the Company or any Equity Interests of any direct or indirect parent company of the Company, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary) of, Equity Interests of the Company or any direct or indirect parent company of the Company to the extent contributed to the Company (in each case, other than any Disqualified Stock or Designated Preferred Stock) (“Refunding Capital Stock”) and (b) if immediately prior to the retirement of Treasury Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this paragraph, the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of the Company) in an aggregate amount no greater than the aggregate amount per year of dividends per annum that were declarable and payable on such Treasury Capital Stock immediately prior to such retirement;

(3) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of the Company or a Guarantor made in exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Company or a Guarantor, as the case may be, which is incurred in compliance with “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” so long as:

(a) the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired for value, plus the amount of any reasonable premium to be paid (including reasonable premiums) and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness;

(b) such new Indebtedness is subordinated to the Series A-2 Notes or the applicable Guarantee at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value;

(c) such new Indebtedness has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired; and

(d) such new Indebtedness has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired;

(4) a Restricted Payment to pay for the repurchase, redemption or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Company or any of its direct or indirect parent companies held by any future, present or former employee, director or consultant of the Company, any of its Restricted Subsidiaries or any of its direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, including any Equity Interests rolled over by management of the Company in connection with the Transaction, (x) upon the death or disability of such employee, director or consultant or (y) upon the resignation or other termination of employment of such employee, director or consultant; provided, however, that the aggregate Restricted Payments made under this clause (4) do not exceed in any calendar year $15.0 million (which shall increase to $25.0 million subsequent to the consummation of an underwritten public Equity Offering by the Company or any direct or indirect parent corporation of the

190

Company) (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $25.0 million in any calendar year (which shall increase to $40.0 million subsequent to the consummation of an underwritten public Equity Offering by the Company or any direct or indirect parent of the Company)); provided further that such amount in any calendar year may be increased by an amount not to exceed:

(a) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the Company and, to the extent contributed to the Company, Equity Interests of any of the Company’s direct or indirect parent companies, in each case to members of management, directors or consultants of the Company, any of its Subsidiaries or any of its direct or indirect parent companies that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (3) of the preceding paragraph; plus

(b) the cash proceeds of key man life insurance policies received by the Company or its Restricted Subsidiaries after the Issue Date; less

(c) the amount of any Restricted Payments previously made with the cash proceeds described in clauses (a) and (b) of this clause (4);

and provided further that cancellation of Indebtedness owing to the Company or any of its Restricted Subsidiaries from members of management of the Company, any of the Company’s direct or indirect parent companies or any of the Company’s Subsidiaries in connection with a repurchase of Equity Interests of the Company or any of its direct or indirect parent companies will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of the Indenture;

(5) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company or any of its Restricted Subsidiaries and of Preferred Stock of any Restricted Subsidiary issued in accordance with the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” to the extent such dividends are included in the definition of “Fixed Charges”;

(6)(a) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by the Company after the Issue Date;

(b) the declaration and payment of dividends to a direct or indirect parent company of the Company, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of such parent corporation issued after the Issue Date, provided that the amount of dividends paid pursuant to this clause (b) shall not exceed the aggregate amount of cash actually contributed to the Company from the sale of such Designated Preferred Stock; or

(c) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph;

provided, however, in the case of each of (a), (b) and (c) of this clause (6), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is Preferred Stock, after giving effect to such issuance or declaration on a pro forma basis, the Company and its Restricted Subsidiaries on a consolidated basis would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

(7) Investments in Unrestricted Subsidiaries having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (7) that are at the time outstanding, without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities, not to exceed the greater of (x) $30.0 million and (y) 1.0% of Total Assets at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

191

(8) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(9) the declaration and payment of dividends on the Company’s common stock (or payments of dividends to any direct or indirect parent entity to fund payments of dividends on such entity’s common stock), following the consummation of an underwritten public offering of the Company’s common stock or the common stock of any of its direct or indirect parent companies after the Issue Date, of up to 6% per annum of the net cash proceeds received by or contributed to the Company in or from any such public offering, other than public offerings with respect to common stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

(10) Restricted Payments in an aggregate amount equal to the amount of Excluded Contributions previously received by the Company and its Restricted Subsidiaries;

(11) other Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (11) not to exceed the greater of (x) $30.0 million and (y) 1.0% of Total Assets at the time made;

(12) distributions or payments of Receivables Fees;

(13) any Restricted Payment made as part of the Transaction (including payments made after the Issue Date in respect of long-term incentive plans or tax gross-ups or other deferred compensation), and the fees and expenses related thereto, or used to fund amounts owed to Affiliates (including dividends to any direct or indirect parent of the Company to permit payment by such parent of such amounts), in each case to the extent permitted by (or, in the case of a dividend to fund such payment, to the extent such payment, if made by the Company, would be permitted by) the covenant described under “—Transactions with Affiliates”;

(14) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness in accordance with the provisions similar to those described under the captions “—Repurchase at the Option of Holders—Change of Control” and “—Repurchase at the Option of Holders—Asset Sales”; provided that all Notes tendered in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have first been repurchased, redeemed or acquired for value;

(15) the declaration and payment of dividends by the Company to, or the making of loans to, any direct or indirect parent in amounts required for any direct or indirect parent companies to pay, in each case without duplication:

(a) franchise and excise taxes and other fees, taxes and expenses, in each case to the extent required to maintain their corporate existence;

(b) federal, state and local income taxes, to the extent such income taxes are attributable to the income of the Company and its Restricted Subsidiaries and, to the extent of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in any fiscal year does not exceed the amount that the Company and its Restricted Subsidiaries would be required to pay in respect of federal, state and local taxes for such fiscal year were the Company, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent entity;

(c) customary salary, bonus and other benefits payable to officers and employees of any direct or indirect parent company of the Company to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Company and its Restricted Subsidiaries;

(d) general corporate operating and overhead costs and expenses of any direct or indirect parent company of the Company to the extent such costs and expenses are attributable to the ownership or operation of the Company and its Restricted Subsidiaries; and

(e) fees and expenses other than to Affiliates of the Company related to any unsuccessful equity or debt offering of such parent entity; and

192

(16) the distribution, by dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Company or a Restricted Subsidiary by Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are cash and/or Cash Equivalents or were contributed to such Unrestricted Subsidiary in anticipation of such distribution, dividend or other payment);

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (7), (11) and (16), no Default shall have occurred and be continuing or would occur as a consequence thereof.

As of the date of this prospectus, all of the Company’s wholly-owned domestic subsidiaries will be Restricted Subsidiaries. The Company will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the last sentence of the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation will be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to the first paragraph of this covenant or under clause (7), (10) or (11) of the second paragraph of this covenant, or pursuant to the definition of “Permitted Investment,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be subject to any of the restrictive covenants set forth in the Indenture.

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and subject to the second proviso in this paragraph any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided further, that Restricted Subsidiaries that are not Guarantors may not incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to this paragraph if, after giving pro forma effect to such incurrence or issuance (including a pro forma application of the net proceeds therefrom), the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock of Restricted Subsidiaries that are not Guarantors incurred or issued pursuant to this paragraph would exceed $25.0 million.

The foregoing limitations will not apply to:

(1) the incurrence of Indebtedness under Credit Facilities by the Company or any of its Restricted Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to an aggregate principal amount at any one time outstanding not to exceed the greater of (x) $175.0 million and (y) the Borrowing Base;

(2) the incurrence by the Company and any Guarantor of (a) Indebtedness represented by the Series A-1 Notes (including any Guarantee) (other than any Additional Notes) and any notes (including Guarantees thereof) issued in exchange for the Series A-1 Notes pursuant to the Registration Rights Agreement or

193

similar agreement and (b) Indebtedness under the Term Loan Facility and/or Series A-2 Notes (including Guarantees thereof) (other than any Additional Notes) and any notes (including Guarantees thereof) issued in exchange for the Series A-2 Notes pursuant to a registration rights agreement, up to an aggregate principal amount of $310.0 million (plus up to an additional $15.0 million of Series A-2 Notes which the Company has the right to issue);

(3) Indebtedness of the Company and its Restricted Subsidiaries in existence on the Issue Date (other than Indebtedness described in clauses (1) and (2));

(4) Indebtedness (including Capitalized Lease Obligations) and Disqualified Stock incurred or issued by the Company or any of its Restricted Subsidiaries, and Preferred Stock issued by any of the Company’s Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (other than software) that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount at the date of such incurrence (including all Refinancing Indebtedness Incurred to refinance any other Indebtedness incurred pursuant to this clause (4)) not to exceed 4.0% of Total Assets; provided, however, that such Indebtedness exists at the date of such purchase or transaction or is created within 270 days thereafter (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (4) shall cease to be deemed incurred or outstanding for purposes of this clause (4) but shall be deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under the first paragraph of this covenant without reliance on this clause (4));

(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that

(a) such Indebtedness is not reflected on the balance sheet of the Company, or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this subclause (a)); and

(b) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;

(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in the Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause;

(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor;

194

provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a person other than the Company or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause;

(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary, provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of Preferred Stock not permitted by this clause;

(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness of the Company or any Restricted Subsidiary permitted to be incurred pursuant to “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,” exchange rate risk or commodity pricing risk;

(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(12)(a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary equal to 100.0% of the net cash proceeds received by the Company since immediately after the Issue Date from the issue or sale of Equity Interests of the Company or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(b) and (3)(c) of the first paragraph of “—Limitation on Restricted Payments” to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to the second paragraph of “—Limitation on Restricted Payments” or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed the greater of (x) $150.0 million and (y) 5.0% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under the first paragraph of this covenant without reliance on this clause (12)(b));

(13) the incurrence or issuance by the Company or any Restricted Subsidiary of Indebtedness or Disqualified Stock, and the issuance by any Restricted Subsidiary of Preferred Stock, in each case which serves to refund, refinance, replace, renew, extend or defease any Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary incurred as permitted under the first paragraph of this covenant and clauses (2), (3), (4) and (12)(a) above, this clause (13) and clause (14) below or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund, refinance, replace, renew, extend or defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:

(a) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced, replaced, renewed, extended or defeased,

195

(b) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively, and

(c) shall not include (i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor that refinances Indebtedness or Disqualified Stock of the Company, (ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor, or (iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

provided further that subclause (a) of this clause (13) will not apply to any refunding or refinancing of any Secured Indebtedness;

(14)(x) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary, incurred or issued to finance an acquisition or (y) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Company or any Restricted Subsidiary or merged into the Company or a Restricted Subsidiary in accordance with the terms of the Indenture; provided that in the case of (x) and (y) after giving effect to such acquisition or merger, either (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this covenant or (b) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is greater than immediately prior to such acquisition or merger;

(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within two Business Days of its incurrence;

(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;

(17)(a) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of the Indenture, or

(b) any guarantee by a Restricted Subsidiary of Indebtedness of the Company provided that such guarantee is incurred in accordance with the covenant described below under “—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries”;

(18) Indebtedness of Foreign Subsidiaries of the Company in an amount not to exceed, at any one time outstanding and together with any other Indebtedness incurred under this clause (18), the greater of (x) $50.0 million and (y) 10.0% of the total assets of the Foreign Subsidiaries on a consolidated basis as shown on the Company’s most recent balance sheet (it being understood that any Indebtedness incurred pursuant to this clause (18) shall cease to be deemed incurred or outstanding for purposes of this clause (18) but shall be deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which the Company or its Restricted Subsidiaries could have incurred such Indebtedness under the first paragraph of this covenant without reliance on this clause (18));

(19) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business; and

196

(20) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to current or former officers, directors and employees thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent company of the Company to the extent described in clause (4) of the second paragraph under the caption “—Limitation on Restricted Payments.”

For purposes of determining compliance with this covenant:

(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (20) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company, in its sole discretion, will classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in one of the above clauses; and

(2) at the time of incurrence, the Company will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in the first and second paragraphs above; provided that all Indebtedness outstanding under the Credit Facilities on the Issue Date will be treated as incurred on the Issue Date under clause (1) of the preceding paragraph.

Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount, the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional Disqualified Stock or Preferred Stock, as applicable, will in each case not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this covenant.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

The Indenture provides that the Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is subordinated or junior in right of payment to any Indebtedness of the Company or such Guarantor, as the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes or such Guarantor’s Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Guarantor, as the case may be.

The Indenture does not treat (1) unsecured Indebtedness as subordinated or junior to Secured Indebtedness merely because it is unsecured or (2) Senior Indebtedness as subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral.

197

Liens

The Company will not, and will not permit any Guarantor to, directly or indirectly, create, incur, assume or otherwise cause or suffer to exist any Lien (except Permitted Liens) that secures obligations under any Indebtedness or any related Guarantee of the Company or any Guarantor (any such Lien, the “Initial Lien”), on any asset or property of the Company or any Guarantor, or any income or profits therefrom, or assign or convey any right to receive income therefrom except, in the case of any asset or property that does not constitute Collateral, any Initial Lien if the Notes are equally and ratably secured with (or on a senior basis to, in the case such Initial Lien secures any Subordinated Indebtedness) the obligations secured by such Initial Lien.

Any Lien created for the benefit of the Holders of the Notes pursuant to the last clause of the preceding paragraph shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Initial Lien which release and discharge in the case of any sale of any such asset or property shall not affect any Lien that the Notes/Term Collateral Agent may have on the proceeds from such sale.

Merger, Consolidation or Sale of All or Substantially All Assets

Company. The Company may not, directly or indirectly, consolidate or merge with or into or wind up into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the Company’s properties or assets, in one or more related transactions, to any Person unless:

(1) the Company is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership (including a limited partnership), trust or limited liability company organized or existing under the laws of the jurisdiction of organization of the Company or the laws of the United States, any state thereof, the District of Columbia or any territory thereof (such Person, as the case may be, being herein called the “Successor Company”); provided that in the case where the Successor Company is not a corporation, a co-obligor of the Notes is a corporation;

(2) the Successor Company, if other than the Company, expressly assumes all the obligations of the Company under the Notes and the Collateral Documents, pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee, and the Registration Rights Agreement if the exchange offer contemplated therein has not been consummated or if the Company continues to have an obligation to file or maintain the effectiveness of a shelf registration statement as provided under such agreement;

(3) immediately after such transaction, no Default or Event of Default exists;

(4) immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable four-quarter period,

(a) the Company or the Successor Company, as applicable, would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,” or

(b) the Fixed Charge Coverage Ratio for the Company (or, if applicable, the Successor Company) and its Restricted Subsidiaries would be greater than such Ratio for the Company and its Restricted Subsidiaries immediately prior to such transaction;

(5) each Guarantor, unless it is the other party to the transactions described above, in which case subclause (b) of the second succeeding paragraph shall apply, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under the Indenture, the Notes, the

198

Collateral Documents and the Registration Rights Agreement if the exchange offer contemplated therein has not been consummated or if the Company continues to have an obligation to file or maintain the effectiveness of a shelf registration statement as provided under such agreement;

(6) the Company (or, if applicable, the Successor Company) shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture;

(7) the Collateral transferred to the Successor Company will (a) continue to constitute Collateral under the Indenture and the Collateral Documents, (b) be subject to the Lien in favor of the Trustee for the benefit of the holders of the Notes, and (c) not be subject to any Lien, other than Liens permitted by the terms of the Indenture; and

(8) to the extent that the assets of the Person which is merged or consolidated with or into the Successor Company are assets of the type which would constitute Collateral under the Collateral Documents, the Successor Company will take such actions as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Collateral Documents in the manner and to the extent required in the Indenture.

The Successor Company will succeed to, and be substituted for the Company, as the case may be, under the Indenture, the Guarantees and the Notes, as applicable. Notwithstanding the foregoing clauses (3) and (4),

(1) any Restricted Subsidiary may consolidate with or merge into or transfer all or part of its properties and assets to the Company, and

(2) the Company may merge with an Affiliate of the Company, as the case may be, solely for the purpose of reincorporating the Company in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

Guarantors. Subject to certain limitations described in the Indenture governing release of a Guarantee upon the sale, disposition or transfer of a guarantor, no Guarantor will, and the Company will not permit any Guarantor to, consolidate or merge with or into or wind up into (whether or not the Company or Guarantor is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(1)(a) such Guarantor is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership, trust or limited liability company organized or existing under the laws of the jurisdiction of organization of such Guarantor, as the case may be, or the laws of the United States, any state thereof, the District of Columbia or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the “Successor Person”);

(b) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under the Indenture, such Guarantor’s related Guarantee and the Collateral Documents pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(c) immediately after such transaction, no Default or Event of Default exists;

(d) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture;

(e) the Collateral transferred to the Successor Person will (a) continue to constitute Collateral under the Indenture and the Collateral Documents, (b) be subject to the Lien in favor of the trustee for the benefit of the holders of the Notes, and (c) not be subject to any Lien, other than Liens permitted by the terms of the Indenture; and

199

(f) to the extent that the assets of the Person which is merged or consolidated with or into the Successor Person are assets of the type which would constitute Collateral under the Collateral Documents, the Successor Person will take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Collateral Documents in the manner and to the extent required in the Indenture; or

(2) the transaction is made in compliance with the covenant described under “—Repurchase at the Option of Holders—Asset Sales.”

Subject to certain limitations described in the Indenture, the Successor Person will succeed to, and be substituted for, such Guarantor under the Indenture and such Guarantor’s Guarantee. Notwithstanding the foregoing, any Guarantor may (i) merge into or transfer all or part of its properties and assets to another Guarantor or the Company, (ii) merge with an Affiliate of the Company solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof or (iii) convert into a corporation, partnership, limited partnership, limited liability company or trust organized under the laws of the jurisdiction of organization of such Guarantor, in each case without regard to the requirements set forth in the preceding paragraph.

Transactions with Affiliates

The Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend, any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of any Affiliate of the Company (each of the foregoing, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $12.5 million, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Company or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis; and

(2) the Company delivers to the Trustee, with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $25.0 million, a resolution adopted by the majority of the board of directors of the Company approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (1) above.

The foregoing provisions will not apply to the following:

(1) transactions between or among the Company or any of its Restricted Subsidiaries;

(2) Restricted Payments permitted by the provisions of the Indenture described above under the covenant “—Limitation on Restricted Payments” and the definition of “Permitted Investment”;

(3) the payment of management, consulting, monitoring and advisory fees and related expenses to the Investors pursuant to the Sponsor Management Agreement in an aggregate amount in any fiscal year not to exceed the greater of $7.0 million and 2.0% of EBITDA for such fiscal year (calculated, solely for the purpose of this clause (3), assuming (a) that such fees and related expenses had not been paid, when calculating Net Income, and (b) without giving effect to clause (g) of the definition of EBITDA) (plus any unpaid management, consulting, monitoring and advisory fees and related expenses within such amount accrued in any prior year) and the termination fees pursuant to the Sponsor Management Agreement not to exceed the amount set forth in the Sponsor Management Agreement as in effect on the Issue Date or any amendment thereto (so long as any such amendment is not disadvantageous to the Holders when taken as a whole as compared to the Sponsor Management Agreement in effect on the Issue Date);

(4) the payment of reasonable and customary fees paid to, and indemnities provided for the benefit of, former, current or future officers, directors, employees or consultants of the Company, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

200

(5) transactions in which the Company or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or stating that such terms are not materially less favorable to the Company or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis;

(6) any agreement as in effect as of the Issue Date, or any amendment thereto (so long as any such amendment is not disadvantageous to the Holders when taken as a whole as compared to the applicable agreement as in effect on the Issue Date);

(7) the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Company or any of its Restricted Subsidiaries of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (7) to the extent that the terms of any such amendment or new agreement are not otherwise disadvantageous to the Holders when taken as a whole;

(8) the Transaction and the payment of all fees and expenses related to the Transaction;

(9) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture which are fair to the Company and its Restricted Subsidiaries, in the reasonable determination of the board of directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(10) the issuance of Equity Interests (other than Disqualified Stock) of the Company to any Permitted Holder or to any director, officer, employee or consultant;

(11) sales of accounts receivable, or participations therein, in connection with any Receivables Facility;

(12) payments by the Company or any of its Restricted Subsidiaries to any of the Investors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures which payments are approved by a majority of the board of directors of the Company in good faith;

(13) payments or loans (or cancellation of loans) to employees or consultants of the Company, any of its direct or indirect parent companies or any of its Restricted Subsidiaries and employment agreements, stock option plans and other similar arrangements with such employees or consultants which, in each case, are approved by the Company in good faith;

(14) investments by the Investors in securities of the Company or any of its Restricted Subsidiaries so long as (i) the investment is being offered generally to other investors on the same or more favorable terms and (ii) the investment constitutes less than 5.0% of the proposed or outstanding issue amount of such class of securities; and

(15) the pledge of Equity Interests of any Unrestricted Subsidiary to lenders to support the Indebtedness of such Unrestricted Subsidiary owed to such lenders.

201

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

The Company will not, and will not permit any of its Restricted Subsidiaries that are not Guarantors to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary that is not a Guarantor to:

(1)(a) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or

(b) pay any liabilities owed to the Company or any of its Restricted Subsidiaries;

(2) make loans or advances to the Company or any of its Restricted Subsidiaries; or

(3) sell, lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries,

except (in each case) for such encumbrances or restrictions existing under or by reason of:

(a) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the ABL Facility and the Term Loan Facility and the related documentation;

(b) the Indenture and the Notes;

(c) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature discussed in clause (3) above on the property so acquired;

(d) applicable law or any applicable rule, regulation or order;

(e) any agreement or other instrument of a Person acquired by the Company or any Restricted Subsidiaries in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;

(f) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Company pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(g) Secured Indebtedness otherwise permitted to be incurred pursuant to the covenants described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and “—Liens” that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(h) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(i) other Indebtedness, Disqualified Stock or Preferred Stock of Foreign Subsidiaries permitted to be incurred subsequent to the Issue Date pursuant to the provisions of the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(j) customary provisions in joint venture agreements and other similar agreements relating solely to such joint venture;

(k) customary provisions contained in leases or licenses of intellectual property and other agreements, in each case, entered into in the ordinary course of business;

(l) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (a) through (k) above; provided that such amendments, modifications, restatements, renewals,

202

increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company, no more restrictive with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing; and

(m) restrictions created in connection with any Receivables Facility that, in the good faith determination of the Company are necessary or advisable to effect the transactions contemplated under such Receivables Facility.

Limitation on Guarantees of Indebtedness by Restricted Subsidiaries

The Company will not permit any of its Wholly-Owned Subsidiaries that are Restricted Subsidiaries (and non-Wholly Owned Subsidiaries if such non-Wholly Owned Subsidiaries guarantee other capital markets debt securities), other than a Guarantor or a Foreign Subsidiary guaranteeing Indebtedness of another Foreign Subsidiary, to guarantee the payment of any Indebtedness of the Company or any other Guarantor unless:

(1) such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to the Indenture providing for a Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of the Company or any Guarantor:

(a) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or such Guarantor’s Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes; and

(b) such Restricted Subsidiary waives and will not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against the Company or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guarantee; and

(2) such Restricted Subsidiary within 30 days executes and delivers a joinder agreement to the Collateral Documents providing for a pledge of its assets as Collateral for the Notes to the same extent as set forth in the Indenture and the Collateral Documents;

provided that this covenant shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.

Events of Loss

Subject to the Intercreditor Agreement and the other Collateral Documents, in the case of an Event of Loss with respect to any Notes/Term Collateral, the Company or the affected Restricted Subsidiary, as the case may be, will apply the Net Loss Proceeds from such Event of Loss, within 365 days after receipt, at its option to:

(1) permanently reduce Obligations under the Notes and any additional Series A-2 Debt in accordance with paragraph (1)(a) of the second paragraph under “—Repurchase at the Option of Holders—Asset Sales”;

(2) rebuild, repair, replace or construct improvements to the affected property or facility (or enter into a binding agreement to do so, provided that (x) such rebuilding, repair, replacement or construction has been completed within six months after the date of such binding agreement and (y) if such rebuilding, repair, replacement or construction is not consummated within the period set forth in subclause (x), the Net Loss Proceeds not so applied will be deemed to be Excess Loss Proceeds (as defined below)); or

(3) invest in assets and properties as described in clauses (2) and (3) of the second paragraph under the caption “—Repurchase at the Option of Holders—Asset Sales,” substituting the term “Event of Loss” for the term “Asset Sale,” the term “Net Loss Proceeds” for the term “Net Proceeds” and the term “Excess Loss Proceeds” for the term “Excess Proceeds.”

203

In case of clause (2) or (3) above, any replacement assets or property shall be pledged as Notes/Term Collateral, in accordance with the Collateral Documents and otherwise in compliance with the provisions in the Indenture governing After-Acquired Property.

Any Net Loss Proceeds from an Event of Loss that are not applied or invested as provided in the prior paragraph will be deemed to constitute “Excess Loss Proceeds.” When the aggregate amount of Excess Loss Proceeds exceeds $30.0 million, the Company will make an offer (a “Loss Proceeds Offer”) to all holders of Notes and holders of Series A-2 Debt to purchase the maximum principal amount of Notes and any additional Series A-2 Debt that may be purchased out of such Excess Loss Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes and any additional Series A-2 Debt plus accrued and unpaid interest thereon, if any, to the date of purchase. If any Excess Loss Proceeds remain after consummation of a Loss Proceeds Offer, such Excess Loss Proceeds may be used for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of the Notes and any additional Series A-2 Debt tendered into such Loss Proceeds Offer exceeds the amount of Excess Loss Proceeds, then the Notes and such additional Series A-2 Debt will be purchased on a pro rata basis based on the principal amount of the Notes and such additional Series A-2 Debt tendered. The Company may satisfy the foregoing obligations with respect to any Net Loss Proceeds from an Event of Loss by making a Loss Proceeds Offer with respect to such Net Loss Proceeds prior to the expiration of the relevant 365 days or with respect to Net Loss Proceeds of $30.0 million or less.

The Indenture provides that the Company will comply with the applicable tender offer rules, including Rule 14e-1 under the Exchange Act, and any other applicable securities laws or regulations in connection with a Loss Proceeds Offer.

“Casualty” means any casualty, loss, damage, destruction or other similar loss with respect to real or personal property or improvements.

“Condemnation” means any taking by a Governmental Authority of property or assets, or any part thereof or interest therein, for public or quasi-public use under the power of eminent domain, by reason of any public improvement or condemnation or in any other manner.

“Condemnation Award” means all proceeds of any Condemnation or transfer in lieu thereof.

“Event of Loss” means, with respect to any Collateral, any (1) Casualty of such Collateral, (2) Condemnation or seizure (other than pursuant to foreclosure or confiscation or requisition of the use of such Collateral) or (3) settlement in lieu of clause (2) above, in each case having a fair market value in excess of $10.0 million.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central bank).

“Net Loss Proceeds” means, with respect to any Event of Loss, the proceeds in the form of (a) cash or Cash Equivalents, (b) insurance proceeds, (c) Condemnation Awards or (d) damages awarded by any judgment, in each case received by the Company or any of its Restricted Subsidiaries from such Event of Loss, net of:

(1) reasonable out-of-pocket expenses and fees relating to such Event of Loss (including without limitation legal, accounting and appraisal or insurance adjuster fees);

(2) taxes paid or payable after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements;

204

(3) any repayment of Indebtedness that is secured by, or directly related to, the property or assets that are the subject of such Event of Loss;

(4) amounts required to be paid to any Person (other than the Company or any Restricted Subsidiary) owning a beneficial interest in the assets subject to the Event of Loss or having a Lien thereon; and

(5) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Event of Loss and retained by the Company or any Restricted Subsidiary, as the case may be, after such Event of Loss, including, without limitation, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Event of Loss.

After-Acquired Property

Promptly following the acquisition by the Company or any Guarantor of any After-Acquired Property (but subject to the limitations, if applicable, described under “—Security for the Notes—Notes/Term Collateral” and “—Security for the Notes—Limitations on Stock Collateral”) the Company or such Guarantor shall execute and deliver such mortgages, deeds of trust, security instruments, financing statements and certificates and opinions of counsel as shall be reasonably necessary to vest in the Notes/Term Collateral Agent a perfected security interest in such After-Acquired Property and to have such After-Acquired Property added to the Notes/Term Collateral or the ABL Collateral, as applicable, and thereupon all provisions of the Indenture relating to the Notes/Term Collateral or the ABL Collateral, as applicable, shall be deemed to relate to such After-Acquired Property to the same extent and with the same force and effect.

Reports and Other Information

Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Indenture will require the Company to file with the SEC (and make available to the Trustee and Holders of the Notes (without exhibits), without cost to any Holder, within 15 days after it files them with the SEC) from and after the Issue Date,

(1) within 90 days (or any other time period then in effect under the rules and regulations of the Exchange Act with respect to the filing of a Form 10-K by a non-accelerated filer) after the end of each fiscal year, annual reports on Form 10-K, or any successor or comparable form, containing the information required to be contained therein, or required in such successor or comparable form;

(2) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, reports on Form 10-Q containing all quarterly information that would be required to be contained in Form 10-Q, or any successor or comparable form;

(3) promptly from time to time after the occurrence of an event required to be therein reported, such other reports on Form 8-K, or any successor or comparable form; and

(4) any other information, documents and other reports which the Company would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

in each case, in a manner that complies in all material respects with the requirements specified in such form; provided that the Company shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event the Company will make available such information to prospective purchasers of the Notes, in addition to providing such information to the Trustee and the Holders of the Notes, in each case within 15 days after the time the Company would be required to file such information with the SEC, if it were subject to Section 13 or 15(d) of the Exchange Act. In addition, to the extent not satisfied by the foregoing, the Company will agree that, for so long as any Notes are outstanding, it will furnish to Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

205

In the event that any direct or indirect parent company of the Company becomes a guarantor of the Notes, the Indenture will permit the Company to satisfy its obligations in this covenant with respect to financial information relating to the Company by furnishing financial information relating to such parent company; provided that the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Company and its Restricted Subsidiaries on a standalone basis, on the other hand.

Notwithstanding the foregoing, such requirements shall be deemed satisfied prior to the commencement of the exchange offer or the effectiveness of the shelf registration statement (but in no event later than the date specified in the applicable registration rights agreement by which the exchange offer for the Notes must be consummated) (1) by the filing with the SEC of the exchange offer registration statement or shelf registration statement (or any other registration statement), and any amendments thereto, with such financial information that satisfies Regulation S-X of the Securities Act or (2) by posting reports that would be required to be filed substantially in the form required by the SEC on the Company’s website (or on the website of any of its parent companies) or providing such reports to the Trustee, with financial information that satisfied Regulation S-X of the Securities Act, subject to exceptions consistent with the presentation of financial information in the offering memoranda distributed in connection with the private offerings of the outstanding notes, to the extent filed within the times specified above.

Notwithstanding anything herein to the contrary, the Company will not be deemed to have failed to comply with any of its obligations hereunder for purposes of clause (3) under “—Events of Default and Remedies” until 90 days after the date any report hereunder is due.

Further Assurances

The Company and the Guarantors shall execute any and all further documents, financing statements, agreements and instruments, and take all further action that may be required under applicable law, or that the Trustee may reasonably request, in order to grant, preserve, protect and perfect the validity and priority of the security interests created or intended to be created by the Collateral Documents in the Collateral. In addition, from time to time, the Company will reasonably promptly secure the obligations under the Indenture and the Collateral Documents by pledging or creating, or causing to be pledged or created, perfected security interests with respect to the Collateral. Such security interests and Liens will be created under the Collateral Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance reasonably satisfactory to the Trustee.

Events of Default and Remedies

The Indenture provides that each of the following is an Event of Default:

(1) default in payment when due and payable (whether at maturity, upon redemption, acceleration or otherwise), of principal of, or premium, if any, on (A) with respect to holders of the Series A-1 Notes, the Series A-1 Notes and (B) with respect to holders of the Series A-2 Notes, the Series A-2 Notes;

(2) default for 30 days or more in the payment when due of interest or Additional Interest on or with respect to on (A) with respect to holders of the Series A-1 Notes, the Series A-1 Notes and (B) with respect to holders of the Series A-2 Notes, the Series A-2 Notes;

(3) failure by the Company or any Guarantor for 60 days after receipt of written notice given by the Trustee or the holders of not less than 25% of the aggregate principal amount of all then outstanding Series of Debt (unless such failure affects some but not all Series of Debt, in which case the notice of such failure may be given by the Trustee or the holders of not less than 25% of the aggregate principal amount of the then outstanding Series of Debt that are affected by such failure) to comply with any of its obligations, covenants or agreements (other than a default referred to in clauses (1) and (2) above) contained in the Indenture, the Notes or the Collateral Documents;

206

(4) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries, other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both:

(a) such default either results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or relates to an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated maturity; and

(b) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at stated final maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, aggregate $50.0 million or more at any one time outstanding;

(5) failure by the Company or any Significant Subsidiary to pay final judgments aggregating in excess of $50.0 million, which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;

(6) certain events of bankruptcy or insolvency with respect to the Company or any Significant Subsidiary; the Guarantee of any Significant Subsidiary shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer of any Guarantor that is a Significant Subsidiary, as

(7) the case may be, denies that it has any further liability under its Guarantee or gives notice to such effect, other than by reason of the termination of the Indenture or the release of any such Guarantee in accordance with the Indenture; or

(8) any of the Collateral Documents ceases to be in full force and effect, or any of the Collateral Documents ceases to give the Holders of the Notes the Liens purported to be created thereby, or any of the Collateral Documents is declared null and void or the Company or any Restricted Subsidiary denies in writing that it has any further liability under any Collateral Document or gives written notice to such effect (in each case, other than in accordance with the terms of the Indenture or the terms of the Collateral Documents), provided that if a failure of the sort described in this clause (8) is susceptible of cure, no Event of Default shall arise under this clause (8) with respect thereto until 30 days after notice of such failure shall have been given to the Company by the Trustee or the holders of not less than 25% of the aggregate principal amount of all then outstanding Series of Debt (unless such failure affects some but not all Series of Debt, in which case the notice of such failure may be given by the holders of not less than 25% of the aggregate principal amount of the then outstanding Series of Debt that are affected by such failure).

If any Event of Default (other than of a type specified in clause (6) above) occurs and is continuing under the Indenture, the Trustee or the holders of not less than 25% of the aggregate principal amount of all then outstanding Series of Debt (unless such Event of Default affects some but not all Series of Debt, in which case the holders of not less than 25% of the aggregate principal amount of the then outstanding Series of Debt that are affected by such Event of Default) may (subject to the terms and conditions of the Notes/Term Intercreditor Agreement) declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately; provided, however, that (i) with respect to any payment Event of Default with respect to the Series A-1 Notes but not the Series A-2 Notes or the Term Loans (if any), the Trustee or the holders of at least 25% in principal amount of the then outstanding Series A-1 Notes may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Series A-1 Notes to be due and payable immediately and (ii) with respect to any payment Event of Default with

207

respect to the Series A-2 Notes, but not the Series A-1 Notes or the Term Loans (if any), the Trustee or the Holders of at least 25% in principal amount of the then outstanding Series A-2 Notes may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Series A-2 Notes to be due and payable immediately.

Upon the effectiveness of such declaration, such principal and interest will be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising under clause (6) of the first paragraph of this section, all outstanding Notes will become due and payable without further action or notice. The Indenture provides that the Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it determines that withholding notice is in their interest. In addition, the Trustee shall have no obligation to accelerate the Notes if in the best judgment of the Trustee acceleration is not in the best interest of the holders of the Notes.

The Indenture provides that the holders of a majority of the aggregate principal amount of all then outstanding Series of Debt (unless such Event of Default affects some but not all Series of Debt, in which case the holders of a majority of the aggregate principal amount of the then outstanding Series of Debt that are affected by such Event of Default), by notice to the Trustee, may waive any existing Default and its consequences under the Indenture or the Collateral Documents except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting holder and rescind any acceleration with respect to the Notes and its consequences (provided such rescission would not conflict with any judgment of a court of competent jurisdiction), provided that any rescission of acceleration of the Series A-1 Notes, which acceleration resulted from a payment Event of Default, must be approved by the holders of more than 50% in principal amount of the then outstanding Series A-1 Notes, and any rescission of acceleration of the Series A-2 Notes, which acceleration resulted from a payment Event of Default, must be approved by the Holders of more than 50% in principal amount of the then outstanding Series A-2 Notes.

In the event of any Event of Default specified in clause (4) above, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose:

(1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged;

(2) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or

(3) the default that is the basis for such Event of Default has been cured.

Subject to the provisions of the Indenture relating to the duties of the Trustee thereunder, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder of a Note may pursue any remedy with respect to the Indenture or the Notes unless, subject to the provisions of the Notes/Term Intercreditor Agreement and the Intercreditor Agreement:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) holders of at least 25% in the aggregate principal amount of all then outstanding Series of Notes (or, in the case of an Event of Default that affects some but not all Series of Notes, holders of at least 25% in the aggregate principal amount of the then outstanding Series of Notes that are affected by such Event of Default) have requested the Trustee to pursue the remedy;

(3) Holders of the Notes have offered the Trustee reasonable security or indemnity against any loss, liability or expense;

208

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) holders of a majority in principal amount of all then outstanding Series of Notes (or, in the case of an Event of Default that affects some but not all Series of Notes, holders of a majority in principal amount of the then outstanding Series of Notes that are affected by such Event of Default) have not given the Trustee a direction inconsistent with such request within such 60-day period.

Subject to certain restrictions contained in the Indenture, the Notes/Term Intercreditor Agreement and the Intercreditor Agreement, the holders of a majority in principal amount of the total outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder of a Note or that would involve the Trustee in personal liability.

The Indenture provides that the Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required, within 30 days, upon becoming aware of any Default, to deliver to the Trustee a statement specifying such Default.

In addition to acceleration of maturity of the Notes, if an Event of Default occurs and is continuing, the Trustee or the Notes/Term Collateral Agent, as applicable, subject to the provisions contained in the Notes/Term Intercreditor Agreement and the Intercreditor Agreement, will have the right to exercise remedies with respect to the Collateral, such as foreclosure, as are available under the Indenture, the Collateral Documents and at law.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of the Company or any Guarantor or any of their parent companies shall have any liability for any obligations of the Company or the Guarantors under the Notes, the Guarantees, the Indenture or the Collateral Documents or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting the Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such waiver is against public policy.

Legal Defeasance and Covenant Defeasance

The obligations of the Company and the Guarantors with respect to the Notes under the Indenture, the Notes, the Guarantees and the Collateral Documents, as the case may be, will terminate (other than certain obligations) and will be released upon payment in full of all of the Notes. The Company may, at its option and at any time, elect to have all of its obligations discharged with respect to the Notes and have each Guarantor’s obligation discharged with respect to its Guarantee (“Legal Defeasance”) and cure all then existing Events of Default except for:

(1) the rights of Holders of Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust created pursuant to the Indenture;

(2) the Company’s obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the Trustee, and the Company’s obligations in connection therewith;

(4) the Legal Defeasance provisions of the Indenture; and

(5) the priority of payment provisions between the Series A-1 Notes and the Series A-2 Debt.

209

In addition, the Company may, at its option and at any time, elect to have its obligations and those of each Guarantor released with respect to substantially all the restrictive covenants that are described in the Indenture (“Covenant Defeasance”) and thereafter any omission to comply with such obligations shall not constitute a Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including bankruptcy, receivership, rehabilitation and insolvency events pertaining to the Company) described under “—Events of Default and Remedies” will no longer constitute an Event of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the stated maturity date or on the redemption date, as the case may be, of such principal, premium, if any, or interest on such Notes and the Company must specify whether such Notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,

(a) the Company has received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(b) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that resulting from borrowing funds to be applied to make the deposit required to effect such Legal Defeasance or Covenant Defeasance and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, the ABL Facility, the Term Loan Facility or any other material agreement or instrument (other than the Indenture) to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound (other than that resulting with respect to any Indebtedness being defeased from any borrowing of funds to be applied to make the deposit required to effect such Legal Defeasance or Covenant Defeasance and any similar and simultaneous deposit relating to such Indebtedness, and the granting of Liens in connection therewith);

(6) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

210

(7) the Company shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or any Guarantor or others; and

(8) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Any Legal Defeasance or Covenant Defeasance may be made by the Company with respect to the Series A-2 Notes, the Series A-1 Notes, or both Series of Notes.

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect as to all Notes, when:

(1) either

(a) all Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or

(b) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders of the Notes, cash in U.S. dollars, Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;

(2) no Default (other than that resulting from borrowing funds to be applied to make such deposit or any similar or simultaneous deposit relating to other Indebtedness) with respect to the Indenture or the Notes shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under the ABL Facility, the Term Loan Facility or any other material agreement or instrument (other than the Indenture) to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound (other than resulting from any borrowing of funds to be applied to make such deposit and any similar deposit relating to other Indebtedness and the granting of liens in connection therewith);

(3) the Company has paid or caused to be paid all sums payable by it under the Indenture; and

(4) the Company has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.

In addition, the Company must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

The Company may satisfy and discharge its obligations under the Indenture with respect to the Series A-2 Notes, the Series A-1 Notes or both Series of Notes.

211

Amendment, Supplement and Waiver

Except as provided below, the Indenture, any Guarantee, the Notes and the Collateral Documents may be amended or supplemented with the consent of the holders of at least a majority in aggregate principal amount of the Series A-1 Notes and the Series A-2 Notes then outstanding, collectively, including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes, and any existing Default or compliance with any provision of the Indenture, the Notes issued thereunder or any Collateral Document may be waived with the consent of the holders of a majority in aggregate principal amount of the Series A-1 Notes and the Series A-2 Notes and the Term Loans (if any) then outstanding, collectively, in each case, other than Notes beneficially owned by the Company or its Affiliates (including consents obtained in connection with a purchase of or tender offer or exchange offer for the Notes); provided that any provision or Default that affects some but not all Series of Debt may be amended, supplemented or waived, as the case may be, with the consent of the holders of a majority in aggregate principal amount of the then outstanding Series of Debt that are affected by such provision or Default.

The Indenture provides that, without the consent of each affected Holder of Notes, an amendment or waiver may not, with respect to any Notes held by a non-consenting Holder:

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the fixed final maturity of any such Note or alter or waive the provisions with respect to the redemption of such Series A-2 Notes (other than provisions relating to the covenants described above under the caption “Repurchase at the Option of Holders”);

(3) reduce the rate of or change the time for payment of interest on any Note;

(4)(A) waive a Default in the payment of principal of or premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the holders of a majority in aggregate principal amount of all then outstanding Series of Debt (or, in the case of a Default that affects some but not all Series of Debt, by the holders of a majority in aggregate principal amount of the then outstanding Series of Debt that are affected by such Default), and a waiver of the payment default that resulted from such acceleration, or (B) waive a Default in respect of a covenant or provision contained in the Indenture or any Guarantee which cannot be amended or modified without the consent of all Holders;

(5) make any Note payable in money other than U.S. dollars;

(6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of or premium, if any, or interest or Additional Interest on the Notes;

(7) make any change in these amendment and waiver provisions;

(8) impair the right of any Holder to receive payment of principal of, premium, if any, or interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes or the Guarantees;

(9) make any change to or modify the ranking of the Notes that would adversely affect the Holders;

(10) except as expressly permitted by the Indenture, modify the Guarantee of any Significant Subsidiary in any manner adverse to the Holders of the Notes;

(11) release the Liens created by the Collateral Documents on all or substantially all the Collateral (other than in accordance with the terms of the ABL Facility, the Term Loan Facility and the Collateral Documents); or

(12) make any change in the provisions of the Indenture or any Collateral Document dealing with the application of proceeds of the Collateral (including, without limitation, the provisions under “—Security for the Notes—Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes—Waterfall of Payment Following Acceleration or in Bankruptcy”) that would adversely affect the Holders.

212

Notwithstanding the foregoing, the Company, any Guarantor (with respect to a Guarantee or the Indenture to which it is a party) and the Trustee may amend or supplement the Indenture, the Collateral Documents and any Guarantee or Notes without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes of such series in addition to or in place of certificated Notes;

(3) to comply with the covenant relating to mergers, consolidations and sales of assets;

(4) to provide for the assumption of the Company’s or any Guarantor’s obligations to the Holders;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under the Indenture of any such Holder;

(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Company or any Guarantor;

(7) to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act;

(8) to evidence and provide for the acceptance and appointment under the Indenture of a successor Trustee thereunder pursuant to the requirements thereof;

(9) to provide for the issuance of exchange notes or private exchange notes, which are identical to exchange notes except that they are not freely transferable;

(10) to provide for the issuance of Additional Notes in accordance with the Indenture and to secure Additional Note Obligations, if any;

(11) to add a Guarantor under the Indenture or to release a Guarantor in accordance with the terms of the Indenture;

(12) to conform the text of the Indenture, Guarantees or the Notes to any provisions of this “Description of Notes” (or any similar description with respect to the Notes in the offering memoranda relating to the original issuances of the outstanding notes) to the extent that such provision in this “Description of Notes” (or any description of the Notes in the offering memoranda relating to the original issuances of the outstanding notes) was intended to be a verbatim recitation of a provision of the Indenture, Guarantee or Notes;

(13) to make any amendment to the provisions of the Indenture relating to the transfer and legending of Notes as permitted by the Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided, however, that (i) compliance with the Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of holders to transfer Notes;

(14) to provide for the succession of any parties to the Collateral Documents or the Intercreditor Agreement (and other amendments that are administrative or ministerial in nature) in connection with an amendment, renewal, extension, substitution, refinancing, restructuring, replacement, supplementing or other modification from time to time of the ABL Facility, the Term Loan Facility or any other agreement that is not prohibited by the Indenture;

(15) to provide for the release or addition of Collateral or Guarantees in accordance with the terms of the Indenture and the Collateral Documents;

(16) to provide for the issuance of the Notes in a manner consistent with the terms of the Indenture; or

(17) to provide for the succession of the Trustee as collateral agent under the Indenture, the Intercreditor Agreement and the Collateral Documents.

213

Holders of the Series A-2 Notes and holders of the Series A-1 Notes then outstanding will vote as a single class for all purposes under the Indenture and the Collateral Documents, including waivers, supplements and amendments, except that the holders of each Series of Debt then outstanding which is affected thereby will each vote separately with respect to:

(a) matters that propose to amend or otherwise modify the priority of payment provisions and other intercreditor provisions described above under “—Security for the Notes—Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes” or otherwise contained in the Notes/Term Intercreditor Agreement; and

(b) any matter that adversely and disproportionately affects the rights or obligations of one Series of Debt as compared to any other Series of Debt.

In addition, the Intercreditor Agreement provides that, subject to certain exceptions, any amendment, waiver or consent to any of the collateral documents securing the obligations under the ABL Facility, to the extent applicable to the ABL Collateral, will also apply automatically to the comparable Collateral Documents with respect to the Holders’ interest in the ABL Collateral. The Intercreditor Agreement has a similar provision regarding the effect of any amendment, waiver or consent to any of the Collateral Documents, to the extent applicable to the Notes/Term Collateral, on the corresponding collateral documents with respect to any obligations under the ABL Facility.

The Company has elected to exclude the provisions of Section 315(d)(3) and 316(a)(1) of the Trust Indenture Act from the Indenture. When the Indenture becomes subject to the Trust Indenture Act, to the extent any Term Loans remain outstanding at that time, and to the extent any of the voting and/or remedial provisions contained in the Indenture are deemed by any court or governmental authority to be inconsistent with the Trust Indenture Act, any action under the Indenture that requires the vote or participation of then outstanding Term Loans shall be taken without the participation of the then outstanding Term Loans.

The consent of the Holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

Notices

Notices given by publication will be deemed given on the first date on which publication is made and notices given by first-class mail, postage prepaid, will be deemed given five calendar days after mailing.

Concerning the Trustee

The Indenture contains certain limitations on the rights of the Trustee thereunder, should it become a creditor of the Company, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee is permitted to engage in other transactions; however, if it acquires any conflicting interest, it must eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.

The Indenture provides that the holders of a majority in principal amount of all then outstanding Series of Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur (which shall not be cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of his own affairs. Subject to such provisions, the Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of the Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

214

Governing Law

The Indenture, the Notes and any Guarantee are or will be governed by and construed in accordance with the laws of the State of New York.

Certain Definitions

Set forth below are certain defined terms used in the Indenture. For purposes of the Indenture, unless otherwise specifically indicated, the term “consolidated” with respect to any Person refers to such Person consolidated with its Restricted Subsidiaries, and excludes from such consolidation any Unrestricted Subsidiary as if such Unrestricted Subsidiary were not an Affiliate of such Person.

“ABL Facility” means the Credit Facility, dated as of October 28, 2008, by and among the Company, the Guarantors, the lenders party thereto in their capacities as lenders thereunder and Bank of America, N.A., as Administrative Agent, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof and any indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” above).

“ABL Collateral Agent” means Bank of America, N.A. and any successor under the ABL Facility, or if there is no ABL Facility, the “ABL Collateral Agent” designated pursuant to the terms of the ABL Lenders Debt.

“ABL Lenders Debt” means (i) any Indebtedness outstanding from time to time under the ABL Facility, (ii) any Indebtedness which has a senior priority security interest relative to the Series A-1 Notes and Series A-2 Debt in the ABL Collateral, (iii) all obligations with respect to such Indebtedness and any Hedging Obligations directly related to any ABL Lenders Debt entered into with any lender (or its affiliates) under the ABL Facility and (iv) all Bank Products entered into with any lender (or its affiliates) under the ABL Facility.

“Acquired Indebtedness” means, with respect to any specified Person,

(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted Subsidiary of such specified Person, and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Acquisition” means the acquisition of the Company by the Investors on October 28, 2008 and the related transactions contemplated by the Transaction Agreement.

“Additional Interest” means all additional interest then owing pursuant to the Registration Rights Agreement.

“Additional Note Obligations” means Obligations of the Company with respect to Additional Notes permitted to be incurred under the Indenture which are secured by a Lien on the Notes/Term Collateral equally and ratably with the Series A-1 Notes issued on the Issue Date, provided that such Lien is permitted to be incurred under the Indenture.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control”

215

(including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

“After-Acquired Property” means any and all assets or property (other than Excluded Assets) acquired after the Issue Date, including any property or assets acquired by the Company or a Guarantor from another Guarantor, which in each case constitutes Collateral as defined in the Indenture.

“Applicable Premium” means, with respect to any Note on any Redemption Date, the greater of:

(1) 1.0% of the principal amount of such Note; and

(2) the excess, if any, of (a) the present value at such Redemption Date of (i) the redemption price of such Note at November 1, 2011 (each such redemption price being set forth in the table appearing above under the caption “Optional Redemption”), plus (ii) all required interest payments due on such Note through November 1, 2011 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the principal amount of such Note.

“Asset Sale” means:

(1) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of the Company or any of its Restricted Subsidiaries (each referred to in this definition as a “disposition”); or

(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than Preferred Stock of Restricted Subsidiaries issued in compliance with the covenant described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”), whether in a single transaction or a series of related transactions;

in each case, other than:

(a) any disposition of Cash Equivalents or Investment Grade Securities or surplus, obsolete or worn-out equipment in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale in the ordinary course of business or any disposition of ABL Collateral;

(b) the disposition of all or substantially all of the assets of the Company governed by, and in a manner permitted pursuant to, the provisions described above under “—Certain Covenants—Merger, Consolidation or Sale of All or Substantially All Assets” or any disposition that constitutes a Change of Control pursuant to the Indenture;

(c) the making of any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under the covenant described above under “—Certain Covenants—Limitation on Restricted Payments”;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of transactions with an aggregate fair market value of less than $ 15.0 million;

(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary of the Company to the Company or by the Company or a Restricted Subsidiary of the Company to another Restricted Subsidiary of the Company;

(f) to the extent allowable under Section 1031 of the Internal Revenue Code of 1986 or comparable law or regulation, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

216

(g) the lease, assignment or sub-lease of any real or personal property in the ordinary course of business;

(h) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(i) foreclosures, condemnations or any similar action on assets;

(j) sales of accounts receivable, or participations therein, in connection with any Receivables Facility;

(k) any financing transaction with respect to the acquisition or construction of property by the Company or any Restricted Subsidiary after the Issue Date, including Sale and Lease-Back Transactions and asset securitizations permitted by the Indenture; and

(l) the licensing and sub-licensing of intellectual property or other general intangibles in the ordinary course of business or consistent with past practice.

“Bank Products” means any facilities or services related to cash management, including treasury, depository, overdraft, credit or debit card, purchase card, electronic funds transfer and other cash management arrangements.

“Borrowing Base” means, as of any date, an amount equal to:

(1) 50% of the value of all net accounts receivable owned by the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date; plus

(2) 50% of the value of all net inventory owned by the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date;

all calculated on a consolidated basis and in accordance with GAAP.

“Business Day” means each day which is not a Legal Holiday.

“Capital Stock” means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

“Cash Equivalents” means:

(1) United States dollars;

(2)(a) €, or any national currency of any participating member state of the EMU; or

(b) such local currencies held by the Company or any Restricted Subsidiary from time to time in the ordinary course of business;

217

(3) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government (or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of the U.S. government), with maturities of 24 months or less from the date of acquisition;

(4) certificates of deposit, time deposits and Eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus of not less than $500.0 million in the case of U.S. banks and $100.0 million (or the U.S. dollar equivalent as of the date of determination) in the case of non-U.S. banks;

(5) repurchase obligations for underlying securities of the types described in clauses (3) and (4) entered into with any financial institution meeting the qualifications specified in clause (4) above;

(6) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P and in each case maturing within 24 months after the date of creation thereof;

(7) marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof;

(8) investment funds investing 95% of their assets in securities of the types described in clauses (1) through (7) above;

(9) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having an Investment Grade Rating from either Moody’s or S&P with maturities of 24 months or less from the date of acquisition;

(10) Indebtedness or Preferred Stock issued by Persons with a rating of “A” or higher from S&P or “A2” or higher from Moody’s with maturities of 24 months or less from the date of acquisition; and

(11) Investments with average maturities of 24 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) and (2) above, provided that such amounts are converted into any currency listed in clauses (1) and (2) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.

“Change of Control” means the occurrence of any of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person other than a Permitted Holder; or

(2) the Company becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies.

218

“Collateral” means all of the assets and properties subject to the Liens created by the Collateral Documents.

“Collateral Documents” means, collectively, the security agreements, pledge agreements, mortgages, collateral assignments, deeds of trust and all other pledges, agreements, financing statements, patent, trademark or copyright filings, mortgages or other filings or documents that create or purport to create a Lien in the Collateral in favor of the Notes/Term Collateral Agent and/or the Trustee (for the benefit of the holders of Series A-1 Notes and Series A-2 Notes), the Intercreditor Agreement and the Notes/Term Intercreditor Agreement, in each case as they may be amended from time to time, and any instruments of assignment, control agreements, lockbox letters or other instruments or agreements executed pursuant to the foregoing.

“Consolidated Depreciation and Amortization Expense” means with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

“Consolidated Interest Expense” means, with respect to any Person for any period, without duplication, the sum of:

(1) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (a) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (c) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations and (e) net payments, if any, pursuant to interest rate Hedging Obligations with respect to Indebtedness and excluding (u) accretion or accrual of discounted liabilities not constituting Indebtedness, (v) any expense resulting from the discounting of any outstanding Indebtedness in connection with the application of purchase accounting in connection with any acquisition, (w) any Additional Interest, (x) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses, (y) any expensing of bridge, commitment and other financing fees and (z) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Facility); plus

(2) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

(3) interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income, of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided, however, that, without duplication,

(1) any after-tax effect of extraordinary, non-recurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses (including relating to the Transaction), severance, relocation costs and curtailments or modifications to pension and post-retirement employee benefit plans and other restructuring costs shall be excluded,

(2) the cumulative effect of a change in accounting principles during such period shall be excluded,

(3) any after-tax effect of income (loss) from disposed, abandoned, transferred, closed or discontinued operations and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations shall be excluded,

219

(4) any after-tax effect of gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business, as determined in good faith by the Company, shall be excluded,

(5) the Net Income for such period of any Person that is not a Subsidiary or is an Unrestricted Subsidiary or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of the Company shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period,

(6) solely for the purpose of determining the amount available for Restricted Payments under clause (3)(a) of the first paragraph of “—Certain Covenants—Limitation on Restricted Payments,” the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived, provided that Consolidated Net Income of the Company will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) or Cash Equivalents to the Company or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein,

(7) effects of adjustments (including the effects of such adjustments pushed down to the Company and its Restricted Subsidiaries) in the property and equipment, inventory and other intangible assets, deferred revenue and debt line items in such Person’s consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to the Transaction or any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded,

(8) any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments shall be excluded,

(9) any impairment charge or asset write-off, in each case, pursuant to GAAP and the amortization of intangibles arising pursuant to GAAP shall be excluded,

(10) any non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights shall be excluded,

(11) any fees and expenses incurred during such period, or any amortization thereof for such period, in connection with any acquisition, disposition, recapitalization, Investment, Asset Sale, issuance or repayment of Indebtedness, issuance of Equity Interests, refinancing transaction or amendment or modification of any debt instrument (in each case, including any such transaction consummated prior to the Issue Date and any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction shall be excluded, and

(12) accruals and reserves that are established or adjusted within twelve months of the Issue Date that are so required to be established or adjusted as a result of the Transaction in accordance with GAAP or changes as a result of a modification of accounting policies shall be excluded.

Notwithstanding the foregoing, for the purpose of the covenant described under “—Certain Covenants—Limitation on Restricted Payments” only (other than clause (3)(d) thereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Company and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Company and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by the Company or any of its Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under such covenant pursuant to clause (3)(d) thereof.

220

“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent,

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(2) to advance or supply funds

(a) for the purchase or payment of any such primary obligation, or

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

“Coram Acquisition” means the acquisition by the Company of Coram, Inc. completed on December 3, 2007.

“Credit Facilities” means, with respect to the Company or any of its Restricted Subsidiaries, one or more debt facilities, including the ABL Facility and the Term Loan Facility, or other financing arrangements (including, without limitation, commercial paper facilities or indentures), providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof and any indentures or credit facilities or commercial paper facilities that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount permitted to be borrowed thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, lender or group of lenders.

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“Designated Non-cash Consideration” means the fair market value of non-cash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Company, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

“Designated Preferred Stock” means Preferred Stock of the Company or any parent corporation thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate executed by the principal financial officer of the Company or the applicable parent corporation thereof, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of the first paragraph of the “—Certain Covenants—Limitation on Restricted Payments” covenant.

“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or

221

upon the happening of any event, matures or is mandatorily redeemable (other than solely as a result of a change of control or asset sale) pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale), in whole or in part, in each case prior to the date 91 days after the maturity date of the Notes; provided, however, that if such Capital Stock is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

“EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period

(1) increased (without duplication) by:

(a) provision for taxes based on income or profits or capital gains, including, without limitation, state, franchise and similar taxes and foreign withholding taxes of such Person paid or accrued during such period to the extent the same was deducted (and not added back) in computing Consolidated Net Income; plus

(b) Fixed Charges of such Person for such period (including (x) net losses on Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk and (y) costs of surety bonds in connection with financing activities, in each case, to the extent included in Fixed Charges) to the extent the same was deducted (and not added back) in calculating such Consolidated Net Income; plus

(c) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent the same were deducted (and not added back) in computing Consolidated Net Income; plus

(d) the amount of any integration costs or other business optimization expenses or reserves deducted (and not added back) in such period in computing Consolidated Net Income, including any one-time costs incurred in connection with acquisitions after the Issue Date and costs related to the closure and/or consolidation of facilities; plus

(e) any other non-cash charges, including any write-offs or write-downs, reducing Consolidated Net Income for such period (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period); plus

(f) the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly-Owned Subsidiary deducted (and not added back) in such period in calculating Consolidated Net Income; plus

(g) the amount of management, monitoring, consulting and advisory fees and related expenses paid in such period to the Investors to the extent otherwise permitted under “—Certain Covenants— Transactions with Affiliates”; plus

(h) the amount of net cost savings and synergies projected by the Company in good faith to be realized as a result of specified actions taken or with respect to which substantial steps have been taken (in the good faith determination of the Company) and which are expected to be realized within 12 months of the date thereof in connection with the Acquisition, future acquisitions and cost saving, restructuring and other similar initiatives (which cost savings shall be added to EBITDA until fully realized and calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that such cost savings are reasonably identifiable and factually supportable (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definition of “Fixed Charge Coverage Ratio”) (notwithstanding the foregoing, all net cost savings and synergies described in the offering memorandum for the Series A-1 Notes may be added back to EBITDA); plus

222

(i) the amount of loss on sale of receivables and related assets to the Receivables Subsidiary in connection with a Receivables Facility; plus

(j) any costs or expense incurred by the Company or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of the Company or net cash proceeds of an issuance of Equity Interests of the Company (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in clause (3) of the first paragraph under “—Certain Covenants—Limitation on Restricted Payments;”

(2) decreased by (without duplication) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period; and

(3) increased or decreased by (without duplication):

(a) any net gain or loss resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards No. 133; plus or minus, as applicable,

(b) any net gain or loss resulting in such period from currency translation gains or losses related to currency remeasurements of Indebtedness (including any net loss or gain resulting from hedge agreements for currency exchange risk).

“EMU” means economic and monetary union as contemplated in the Treaty on European Union.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

“Equity Offering” means any public or private sale of common stock or Preferred Stock of the Company (excluding Disqualified Stock) or any of its direct or indirect parent companies to the extent contributed to the Company as Equity (other than Disqualified Stock), other than:

(1) public offerings with respect to the Company’s or any direct or indirect parent company’s common stock registered on Form S-8;

(2) issuances to any Subsidiary of the Company; and

(3) any such public or private sale that constitutes an Excluded Contribution.

“€” means the single currency of participating member states of the EMU.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Excluded Contract” means at any date any rights or interest of the Company or any Guarantor in any assets or under any agreement, contract, license, instrument, document or other general intangible (referred to solely for purposes of this definition as a “Contract”) to the extent that such Contract by the terms of a restriction in favor of a Person who is not the Company or any Guarantor, or any requirement of law, prohibits, or requires any consent or establishes any other condition for or would terminate because of an assignment thereof or a grant of a security interest therein by the Company or a Guarantor; provided that: (i) rights to payment under any such Contract otherwise constituting an Excluded Contract by virtue of this definition shall be included in the Collateral to the extent permitted thereby or by Section 9-406 or Section 9-408 of the Uniform Commercial Code and (ii) all proceeds paid or payable to any of the Company or any Guarantor from any sale, transfer or assignment of such Contract and all rights to receive such proceeds shall be included in the Collateral.

223

“Excluded Contribution” means net cash proceeds, marketable securities or Qualified Proceeds received by the Company from

(1) contributions to its common equity capital, and

(2) the sale (other than to a Subsidiary of the Company or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Company) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Company,

in each case after the Issue Date and in each case designated as Excluded Contributions pursuant to an officer’s certificate executed by the principal financial officer of the Company on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in clause (3) of the first paragraph under “—Certain Covenants—Limitation on Restricted Payments.”

“Excluded Equipment” means at any date any equipment or other assets of the Company or any Guarantor which is subject to, or secured by, a Capitalized Lease Obligation or a purchase money obligation if and to the extent that (i) a restriction in favor of a Person who is not the Company or a Restricted Subsidiary contained in the agreements or documents granting or governing such Capitalized Lease Obligation or purchase money obligation prohibits, or requires any consent or establishes any other conditions for or would result in the termination of such agreement or document because of an assignment thereof, or a grant of a security interest therein, by the Company or any Guarantor and (ii) such restriction relates only to the asset or assets acquired by the Company or any Guarantor with the proceeds of such Capitalized Lease Obligation or purchase money obligation and attachments thereto, improvements thereof or substitutions therefor; provided that all proceeds paid or payable to any of the Company or any Guarantor from any sale, transfer or assignment or other voluntary or involuntary disposition of such assets and all rights to receive such proceeds shall be included in the Collateral to the extent not otherwise required to be paid to the holder of any Capitalized Lease Obligations or purchase money obligations secured by such assets.

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Company or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than Indebtedness incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Fixed Charge Coverage Ratio Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, consolidations and disposed operations (as determined in accordance with GAAP) that have been made by the Company or any of its Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis, assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and disposed operations (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Company or any of its Restricted Subsidiaries since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation or disposed operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or disposed operation had occurred at the beginning of the applicable four-quarter period.

224

For purposes of this definition, whenever pro forma effect is to be given to an Investment, acquisition, disposition, merger or consolidation (including the Transaction and the Coram Acquisition) or any other transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company (and may include, for the avoidance of doubt and without duplication, cost savings, synergies and operating expense resulting from such Investment, acquisition, disposition, merger or consolidation (including the Transaction and the Coram Acquisition) or other transaction, in each case calculated in the manner described in the definition of “EBITDA” herein). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period except as set forth in the first paragraph of this definition. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

“Fixed Charges” means, with respect to any Person for any period, the sum of:

(1) Consolidated Interest Expense of such Person for such period;

(2) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock of any Restricted Subsidiary during such period; and

(3) all dividends or other distributions accrued (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.

“Foreign Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof, or the District of Columbia and any Restricted Subsidiary of such Foreign Subsidiary.

“GAAP” means generally accepted accounting principles in the United States which are in effect on the Issue Date.

“Government Securities” means securities that are:

(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or

(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

225

“Guarantee” means the guarantee by any Guarantor of the Company’s Obligations under the Indenture.

“Guarantor” means each Restricted Subsidiary that Guarantees the Notes in accordance with the terms of the Indenture and its successors and assigns, until released from its obligations under its Guarantee in accordance with the terms of the Indenture.

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer, modification or mitigation of interest rate, commodity or currency risks either generally or under specific contingencies.

“Holder” means the Person in whose name a Note is registered on the registrar’s books.

“Holdings” means Sky Acquisition LLC, a Delaware limited liability company.

“Indebtedness” means, with respect to any Person, without duplication:

(1) any indebtedness of such Person, whether or not contingent:

(a) in respect of borrowed money;

(b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof);

(c) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP; or

(d) representing net obligations under any Hedging Obligations;

if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise on, the obligations of the type referred to in clause (1) of a third Person (whether or not such items would appear upon the balance sheet of the such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and

(3) to the extent not otherwise included, the obligations of the type referred to in clause (1) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person;

provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (a) Contingent Obligations incurred in the ordinary course of business or (b) obligations under or in respect of Receivables Facilities.

“Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged.

“Initial Purchasers” means Banc of America Securities LLC, Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC), Barclays Capital Inc. and Scotia Capital (USA) Inc.

226

“Intercreditor Agreement” means the Lien Subordination and Intercreditor Agreement, dated as of October 28, 2008, among the ABL Collateral Agent, the Notes/Term Collateral Agent, Sky Acquisition LLC, Sky Merger Sub Corporation, the Company and each Guarantor, as it may be amended from time to time in accordance with the Indenture.

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

“Investment Grade Securities” means:

(1) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents);

(2) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among the Company and its Subsidiaries;

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment or distribution; and

(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, advances to customers, commission, travel and similar advances to officers and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of the Company in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and the covenant described under “—Certain Covenants—Limitation on Restricted Payments”:

(1) “Investments” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to:

(a) the Company’s “Investment” in such Subsidiary at the time of such redesignation; less

(b) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Company.

“Investors” means The Blackstone Group and each of its Affiliates, but not including any of its portfolio companies.

“Issue Date” means May 27, 2009.

“Legal Holiday” means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York.

“Lien” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention

227

agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed to constitute a Lien.

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

“Net Proceeds” means the aggregate cash proceeds and Cash Equivalents received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale, including any cash and Cash Equivalents received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of Indebtedness secured by a Lien on such assets (other than as required by clause (1) of the second paragraph of “—Repurchase at the Option of Holders—Asset Sales”) and any deduction of appropriate amounts to be provided by the Company or any of its Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Company or any of its Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

“Notes/Term Collateral Agent” means Bank of America, N.A., in its capacity as “Collateral Agent” under the Intercreditor Agreement, the Notes/Term Intercreditor Agreement, and the other Collateral Documents, and any successor thereto in such capacity.

“Notes/Term Intercreditor Agreement” means the Intercreditor and Collateral Agency Agreement, dated as of the Issue Date, among the Company, each Guarantor, Banc of America Bridge LLC, as bridge loan agent, Bank of America, N.A., as Notes/Term Collateral Agent, and U.S. Bank National Association, as Trustee, and as it may be amended from time to time in accordance with the Indenture.

“Obligations” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

“Officer” means the Chairman of the Board, the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Company or a Guarantor.

“Officer’s Certificate” means a certificate signed on behalf of the Company by an Officer of the Company or on behalf of a Guarantor by an Officer of such Guarantor, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company or any officer of such Guarantor that meets the requirements set forth in the Indenture.

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, a Subsidiary of the Company or the Trustee.

228

“Permitted Asset Swap” means the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the Company or any of its Restricted Subsidiaries and another Person; provided, that any cash or Cash Equivalents received must be applied in accordance with the “Repurchase at the Option of Holders—Asset Sales” covenant; provided further that the assets received are pledged as Collateral to the extent required by the Collateral Documents to the extent that the assets disposed of constituted Collateral.

“Permitted Holders” means each of the Investors and members of management of the Company (or its direct or indirect parent or Subsidiary) on the Issue Date who are holders of Equity Interests of the Company (or any of its direct or indirect parent companies) and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the foregoing are members; provided that, in the case of such group and without giving effect to the existence of such group or any other group, such Investors and members of management, collectively, have beneficial ownership of more than 50% of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies.

“Permitted Investment” means:

(1) any Investment in the Company or any of its Restricted Subsidiaries;

(2) any Investment in cash and Cash Equivalents or Investment Grade Securities;

(3) any Investment by the Company or any of its Restricted Subsidiaries in a Person that is engaged in a Similar Business if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary; or

(b) such Person, in one transaction or a series of related transactions, is merged or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary,

and, in each case, any Investment held by such Person; provided, that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer;

(4) any Investment in securities or other assets, including earnouts, not constituting cash and Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of “—Repurchase at the Option of Holders—Asset Sales” or any other disposition of assets not constituting an Asset Sale;

(5) any Investment existing on the Issue Date;

(6) any Investment acquired by the Company or any of its Restricted Subsidiaries:

(a) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable; or

(b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(7) Hedging Obligations permitted under clause (10) of the second paragraph under the covenant described in “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(8) [intentionally omitted];

(9) Investments the payment for which consists of Equity Interests (exclusive of Disqualified Stock) of the Company, or any of its direct or indirect parent companies; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the first paragraph under the covenant described in “—Certain Covenants—Limitations on Restricted Payments”;

229

(10) guarantees of Indebtedness of the Company and any Restricted Subsidiary permitted under the covenant described in “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(11) any transaction to the extent it constitutes an Investment that is permitted and made in accordance with the provisions of the second paragraph of the covenant described under “—Certain Covenants— Transactions with Affiliates” (except transactions described in clauses (2), (5) and (9) of such paragraph);

(12) Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment;

(13) additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (13) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities), not to exceed the greater of (x) $95.0 million and (y) 3.5% of Total Assets at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(14) Investments relating to a Receivables Subsidiary that, in the good faith determination of the Company are necessary or advisable to effect any Receivables Facility;

(15) loans and advances to officers, directors and employees, in each case incurred in the ordinary course of business or consistent with past practices or to fund such Person’s purchase of Equity Interests of the Company or any direct or indirect parent company thereof;

(16) Investments (including debt obligations and Equity Interests) received in connection with the bankruptcy or reorganization of suppliers and customers or in settlement of delinquent obligations of, or other disputes with, customers and suppliers arising in the ordinary course of business or upon the foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment; and

(17) Investments in joint ventures of the Company or any of its Restricted Subsidiaries existing on the Issue Date or created after the Issue Date in an aggregate amount not to exceed $20.0 million.

“Permitted Liens” means, with respect to any Person:

(1) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business;

(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(3) Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(4) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

230

(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental, to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(6) Liens (including Liens on Collateral) securing Indebtedness permitted to be incurred pursuant to clauses (4), (10) and (12)(b) of the second paragraph under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; provided, however, that Liens securing Indebtedness permitted to be incurred pursuant to such clause (12)(b) shall not secure such Indebtedness in excess of $100.0 million at any one time outstanding;

(7) Liens existing on the Issue Date;

(8) Liens on property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided further, however, that such Liens may not extend to any other property owned by the Company or any of its Restricted Subsidiaries;

(9) Liens on property at the time the Company or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into the Company or any of its Restricted Subsidiaries; provided, however, that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition; provided further, however, that the Liens may not extend to any other property owned by the Company or any of its Restricted Subsidiaries;

(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary permitted to be incurred in accordance with the covenant described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(11) Liens securing Hedging Obligations so long as related Indebtedness is, and is permitted to be under the Indenture, secured by a Lien on the same property securing such Hedging Obligations;

(12) Liens on specific items of inventory of other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(13) leases, subleases, licenses or sublicenses granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries and do not secure any Indebtedness;

(14) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business;

(15) Liens in favor of the Company or any Guarantor;

(16) Liens on equipment of the Company or any of its Restricted Subsidiaries granted in the ordinary course of business to the Company’s clients;

(17) Liens on accounts receivable and related assets incurred in connection with a Receivables Facility;

(18) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (7), (8) and (9); provided, however, that (a) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater,

231

committed amount of the Indebtedness described under clauses (7), (8) and (9) at the time the original Lien became a Permitted Lien under the Indenture, and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(19) deposits made in the ordinary course of business to secure liability to insurance carriers;

(20) other Liens (including Liens on Collateral) securing obligations not to exceed $100.0 million at any one time outstanding;

(21) Liens securing Indebtedness of any Foreign Subsidiary permitted to be incurred under the Indenture, to the extent such Liens relate only to the assets and properties of such Foreign Subsidiary;

(22) Liens securing judgments for the payment of money not constituting an Event of Default under clause (5) under the caption “Events of Default and Remedies” so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

(23) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

(24) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code or any comparable or successor provision on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

(25) Liens deemed to exist in connection with Investments in repurchase agreements permitted under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

(26) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(27) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Company or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Company and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(28)(a) Liens securing the Series A-1 Notes and the related Guarantees of the Series A-1 Notes (and exchange notes in respect thereof), up to $150.0 million of Additional Notes or Term Loans or a combination thereof and up to $150.0 million of Additional Notes or Term Loans or a combination thereof the proceeds of which will be used solely to finance acquisitions (solely to the extent the Fixed Charge Coverage Ratio following any such acquisition and debt incurrence would have been at least 3.50 to 1.00, determined on a pro forma basis) and (b) Liens securing the Series A-2 Debt, in an amount no greater than $310.0 million (plus up to an additional $15.0 million of Series A-2 Notes which the Company has the right to issue), so long as the Series A-1 Notes are equally and ratably secured and such Series A-2 Debt is subject to the priority of payment provisions contained in the Notes/Term Intercreditor Agreement and the Indenture;

(29) Liens securing (x) Indebtedness and other obligations permitted to be incurred under Credit Facilities, including any letter of credit facility relating thereto, that was incurred pursuant to clause (1) of the second paragraph under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance

232

of Disqualified Stock and Preferred Stock” in an amount up to the greater of (A) $175.0 million and (B) the Borrowing Base, and (y) obligations of the Company or any Subsidiary in respect of any Bank Products provided by any lender party to the ABL Facility or any Affiliate of such lender (or any Person that was a lender or an Affiliate of a lender at the time the applicable agreements pursuant to which such Bank Products are provided were entered into); provided, however, that any Liens on Notes/Term Collateral granted pursuant to this clause (29) must be junior in priority to the Liens on such Collateral granted in favor of the Notes/Term Collateral Agent for the benefit of the Trustee and the holders of the Series A-1 Notes and the Series A-2 Notes and the benefit of the Term Loan Lenders and the holders of the Term Loans pursuant to the Collateral Documents and the terms of such junior interest may be no more favorable to the beneficiaries thereof than the terms contained in the Intercreditor Agreement; and provided, further, that no Liens may be granted pursuant to this clause (29) unless the Series A-1 Notes, the Series A-2 Notes and the Term Loans are secured by a second-priority Lien that is junior in priority to the Liens on such Collateral but senior in priority to any other Liens granted on such Collateral;

(30) Liens on the Collateral to secure obligations in respect of any Indebtedness permitted to be incurred pursuant to the first paragraph under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; provided, however, that such Liens on the Collateral are junior in priority to the Liens granted to holders of the Series A-1 Notes, the Series A-2 Notes and the Term Loans;

(31) any encumbrance or restriction (including put and call arrangements) with respect to capital stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(32) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business; and

(33) Liens solely on any cash earnest money deposits made by the Company or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder.

For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Preferred Stock” means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.

“Qualified Proceeds” means assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business; provided that the fair market value of any such assets or Capital Stock shall be determined by the Company in good faith.

“Rating Agencies” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the Series A-1 Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company which shall be substituted for Moody’s or S&P or both, as the case may be.

“Receivables Facility” means any of one or more receivables financing facilities as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the Obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Company or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) pursuant to which the Company or any of its Restricted Subsidiaries sells its accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

233

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any accounts receivable or participation interest therein issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Facility.

“Receivables Subsidiary” means any Subsidiary formed for the purpose of, and that solely engages only in one or more Receivables Facilities and other activities reasonably related thereto.

“Registration Rights Agreement” means the Registration Rights Agreement with respect to the applicable Series of Notes, among the Company, the Guarantors and the Initial Purchasers, as such agreement may be amended, modified or supplemented from time to time and, with respect to any Additional Notes, one or more registration rights agreements among the Company and the other parties thereto, as such agreement(s) may be amended, modified or supplemented from time to time, relating to rights given by the Company to the purchasers of Additional Notes to register such Additional Notes under the Securities Act.

“Related Business Assets” means assets (other than cash or Cash Equivalents) used or useful in a Similar Business, provided that any assets received by the Company or a Restricted Subsidiary in exchange for assets transferred by the Company or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” means, at any time, any direct or indirect Subsidiary of the Company (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided, however, that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary.”

“S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

“Sale and Lease-Back Transaction” means any arrangement providing for the leasing by the Company or any of its Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to a third Person in contemplation of such leasing.

“SEC” means the U.S. Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries secured by a Lien.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Senior Indebtedness” means:

(1) all Indebtedness of the Company or any Guarantor outstanding under the ABL Facility (including interest accruing on or after the filing of any petition in bankruptcy or similar proceeding or for reorganization of the Company or any Guarantor (at the rate provided for in the documentation with respect thereto, regardless of whether or not a claim for post-filing interest is allowed in such proceedings)), and any and all other fees, expense reimbursement obligations, indemnification amounts, penalties, and other amounts (whether existing on the Issue Date or thereafter created or incurred) and all obligations of the Company or any Guarantor to reimburse any bank or other Person in respect of amounts paid under letters of credit, acceptances or other similar instruments;

234

(2) all Hedging Obligations (and guarantees thereof) owing to a Lender (as defined in the ABL Facility) or any Affiliate of such Lender (or any Person that was a Lender or an Affiliate of such Lender at the time the applicable agreement giving rise to such Hedging Obligation was entered into), provided that such Hedging Obligations are permitted to be incurred under the terms of the Indenture;

(3) all Series A-2 Debt;

(4) any other Indebtedness of the Company or any Guarantor permitted to be incurred under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinate in right of payment to the Notes or any related Guarantee; and

(5) all Obligations with respect to the items listed in the preceding clauses (1), (2), (3) and (4); provided, however, that Senior Indebtedness shall not include:

(a) any obligation of such Person to the Company or any of its Subsidiaries;

(b) any liability for federal, state, local or other taxes owed or owing by such Person;

(c) any accounts payable or other liability to trade creditors arising in the ordinary course of business;

(d) any Indebtedness or other Obligation of such Person which is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; or

(e) that portion of any Indebtedness which at the time of incurrence is incurred in violation of the Indenture; provided, however, that such Indebtedness shall be deemed not to have been incurred in violation of the Indenture for purposes of this clause if the holder(s) of such Indebtedness or their agent or representative (i) had no actual knowledge at the time of incurrence that the incurrence of such Indebtedness violated the Indenture and (ii) shall have received a certificate from an officer of the Company to the effect that the incurrence of such Indebtedness does not violate the provisions of the Indenture.

“Series A-2 Debt” means (i) any Indebtedness outstanding from time to time under the Term Loan Facility, including without limitation any “Rollover Loans” as defined therein, (ii) any Series A-2 Notes, and (iii) all obligations with respect to such Indebtedness and any Hedging Obligations permitted under any Series A-2 Debt owed or owing to any lender (or its affiliates) under the Term Loan Facility or the ABL Facility which qualifies as a “Secured Hedge Agreement” under the Term Loan Facility.

“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.

“Similar Business” means any business conducted or proposed to be conducted by the Company and its Restricted Subsidiaries on the Issue Date or any business that is similar, reasonably related, incidental or ancillary thereto.

“Sponsor Management Agreement” means the management agreement between certain of the management companies associated with the Investors and the Company and/or one of its direct or indirect parent companies as in effect on the Issue Date.

“Subordinated Indebtedness” means, with respect to the Notes,

(1) any Indebtedness of the Company which is by its terms subordinated in right of payment to the Notes, and

(2) any Indebtedness of any Guarantor which is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.

235

The Series A-2 Debt shall not be deemed “Subordinated Indebtedness” hereunder by virtue of the provisions described under “—Security for the Notes—Priorities of Payment as between Series A-2 Debt (including the Series A-2 Notes) and Series A-1 Notes.”

“Subsidiary” means, with respect to any Person:

(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof or is consolidated under GAAP with such Person at such time; and

(2) any partnership, joint venture, limited liability company or similar entity of which

(a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and

(b) such Person or any Restricted Subsidiary of such Person is a general partner or otherwise controls such entity.

“Term Loans” means loans made pursuant to and in accordance with the Term Loan Facility, including the Rollover Loans as defined therein.

“Term Loan Lenders” means the lenders under the Term Loan Facility.

“Term Loan Facility” means the Senior Secured Bridge Credit Agreement, dated as of October 28, 2008, by and among the Company, the Guarantors, the lenders party thereto in their capacities as lenders thereunder and Bank of America Bridge LLC, as Administrative Agent, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof and any indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” above).

“Total Assets” means the total assets of the Company, except where expressly provided otherwise, and its Restricted Subsidiaries on a consolidated basis, as shown on the most recent balance sheet of the Company; provided, however, that in no event at anytime shall Total Assets be deemed to equal an amount less than the amount of total assets of the Company and its Restricted Subsidiaries on a consolidated basis as of the Issue Date.

“Transaction” means the merger contemplated by the Transaction Agreement, the issuances of the Series A-1 Notes and the Series A-2 Notes and borrowings under the ABL Facility and the Term Loan Facility on October 28, 2008 in order to finance the merger and repay certain debt as described in the offering memorandum relating to the sale of the Series A-1 Notes.

“Transaction Agreement” means the Agreement and Plan of Merger, dated as of June 18, 2008, by and among Apria Healthcare Group Inc., Sky Acquisition LLC and Sky Merger Sub Corporation, as the same may be amended prior to the Issue Date.

236

“Treasury Rate” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H. 15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to November 1, 2011; provided, however, that if the period from the Redemption Date to November 1, 2011 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-777bbbb).

“Unrestricted Subsidiary” means:

(1) any Subsidiary of the Company which at the time of determination is an Unrestricted Subsidiary (as designated by the Company, as provided below); and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Company may designate any Subsidiary of the Company (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, the Company or any Subsidiary of the Company (other than solely any Subsidiary of the Subsidiary to be so designated); provided that

(1) any Unrestricted Subsidiary must be an entity of which the Equity Interests entitled to cast at least a majority of the votes that may be cast by all Equity Interests having ordinary voting power for the election of directors or Persons performing a similar function are owned, directly or indirectly, by the Company;

(2) such designation complies with the covenant described under “Certain Covenants—Limitation on Restricted Payments”; and

(3) each of:

(a) the Subsidiary to be so designated; and

(b) its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any Restricted Subsidiary.

The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, no Default shall have occurred and be continuing and either:

(1) the Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described in the first paragraph under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; or

(2) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation.

Any such designation by the Company shall be notified by the Company to the Trustee by promptly filing with the Trustee a copy of the resolution of the board of directors of the Company or any committee thereof giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

237

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing:

(1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment; by

(2) the sum of all such payments.

“Wholly-Owned Subsidiary” of any Person means a Subsidiary of such Person, 100% of the outstanding Equity Interests of which (other than directors’ qualifying shares) shall at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person.

238

DESCRIPTION OF OTHER INDEBTEDNESS

Senior Secured Asset-Based Revolving Credit Facility

We summarize below the principal terms of the agreements that govern our senior secured asset-based revolving credit facility. This summary is not a complete description of all the terms of such agreements.

General

In connection with the Merger, on October 28, 2008, we entered into a senior secured asset-based revolving credit facility, or ABL Facility, with Bank of America, N.A., as administrative agent and collateral agent, Wachovia Bank, National Association and Barclays Capital, the investment banking division of Barclays Bank PLC, as syndication agents, and The Bank of Nova Scotia, as documentation agent, and a syndicate of financial institutions and institutional lenders. Banc of America Securities LLC and Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC) acted as joint lead arrangers and Banc of America Securities LLC, Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC) and Barclays Capital, the investment banking division of Barclays Bank PLC, acted as joint bookrunners.

Our ABL Facility provides for revolving credit financing of up to $150.0 million, subject to borrowing base availability, with a maturity of five years, including both a letter of credit and swingline loan sub-facility.

The borrowing base at any time is equal to the sum (subject to certain reserves and other adjustments) of:

• 85% of eligible receivables; and

• the lesser of (a) 85% of the net orderly liquidation value of eligible inventory and (b) $20.0 million.

Our ABL Facility includes borrowing capacity available for letters of credit and for borrowings on same-day notice, referred to as swingline loans.

Borrowings under our ABL Facility are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties.

Provided that no default or event of default is then existing or would arise therefrom, at our option, we may request that our ABL Facility be increased by an amount not to exceed $25.0 million, subject to certain consent rights of the administrative agent, swingline lender and issuing banks with respect to the lenders providing commitments for such increase. The terms of such incremental revolving facility shall be identical to our ABL Facility.

Interest Rate and Fees

Borrowings under our ABL Facility bear interest at a rate per annum equal to, at our option, either (a) a base rate determined by reference to the higher of (1) the prime rate of Bank of America, N.A. and (2) the federal funds effective rate plus 1/2 of 1% (“Base Rate”), plus an applicable margin of 2.00% or (b) a LIBOR rate determined by reference to LIBOR, adjusted for statutory reserve requirements, plus an applicable margin of 3.00%. The applicable margin for borrowings under our ABL Facility is subject to step ups and step downs based on average excess availability under the ABL Facility. In addition to paying interest on outstanding amounts under our ABL Facility, we are required to pay a commitment fee, in respect of the unutilized commitments thereunder, ranging from 0.50% to 1.00% per annum, which fee will be determined based on utilization of our ABL Facility (increasing when utilization is low and decreasing when utilization is high). We must also pay customary letter of credit fees equal to the applicable margin on LIBOR loans and agency fees.

Mandatory Repayments

If at any time the aggregate amount of outstandings under our ABL Facility, including letter of credit outstandings and swingline loans, exceeds the lesser of (i) the aggregate commitments under our ABL Facility

239

and (ii) the borrowing base (except as a result of overadvance loans or protective advances), we will be required to repay outstanding loans (including swingline loans) and repay or cash collateralize letters of credit in an aggregate amount equal to such excess. If the amount available under our ABL Facility is less than 12.5% of the lesser of the aggregate commitments or the borrowing base for five consecutive business days or certain events of default have occurred, we will be required, upon the occurrence and during the continuance of such cash dominion event, to deposit cash from our material deposit accounts daily in a core concentration account maintained with the administrative agent under our ABL Facility, which will be used to repay outstanding loans and cash collateralize letters of credit.

Voluntary Repayments

We may voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans at any time (subject to minimum repayment amounts and customary notice periods) without premium or penalty other than customary “breakage” costs with respect to LIBOR loans.

Amortization and Final Maturity

There is no scheduled amortization under our ABL Facility. All outstanding loans under the facility are due and payable in full on the fifth anniversary of the closing date.

Guarantees and Security

All obligations under our ABL Facility, any interest rate protection or other hedging arrangements entered into with any lender in the syndicate or any of its affiliates, and cash management obligations owing to any lender in the syndicate or any of its affiliates are unconditionally guaranteed by our parent and substantially all of our existing and future, direct and indirect, wholly-owned domestic restricted subsidiaries. All obligations under our ABL Facility, any interest rate protection or other hedging arrangements entered into with any lender in the syndicate or any of its affiliates, and cash management obligations owing to any lender in the syndicate or any of its affiliates, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of our assets and the assets of the guarantors, including:

• a first-priority security interest in substantially all personal property consisting of accounts receivable arising from the sale of inventory and other goods and services, inventory, intercompany notes and intangible assets to the extent attached to the foregoing, and certain related assets and proceeds of the foregoing; and

• a second-priority security interest in all tangible and intangible assets that secure the Notes on a first-priority basis.

Restrictive Covenants and Other Matters

Our ABL Facility requires that if excess availability is less than 12.5% of the lesser of the aggregate commitments and the borrowing base, we comply with a minimum fixed charge coverage ratio test. In addition, our ABL Facility includes negative covenants that, subject to significant exceptions, limit our ability and the ability of our parent and subsidiaries to, among other things:

• incur, assume or permit to exist additional indebtedness or guarantees;

• incur liens;

• make investments and loans;

• pay dividends, make payments or redeem or repurchase capital stock;

• engage in mergers, liquidations, dissolutions, asset sales and other dispositions (including sale leaseback transactions);

240

• prepay, redeem or purchase certain indebtedness;

• amend or otherwise alter terms of certain indebtedness;

• enter into agreements limiting subsidiary distributions;

• engage in certain transactions with affiliates;

• alter the business that we conduct;

• change our fiscal year; and

• with respect to our parent, engage in any activities not permitted.

Our ABL Facility contains certain customary representations and warranties, affirmative covenants and events of default, including among other things payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, failure of any guaranty or security document supporting our ABL Facility to be in full force and effect, and change of control. If such an event of default occurs, the lenders under our ABL Facility would be entitled to take various actions, including the acceleration of amounts due under our ABL Facility and all actions permitted to be taken by a secured creditor.

As of March 31, 2010, there were no outstanding borrowings under the ABL Facility, outstanding letters of credit totaled $16.1 million and additional availability under our ABL Facility subject to the borrowing base was $133.9 million. As of March 31, 2010, our availability under the borrowing base certificate was $133.9 million. At March 31, 2010, we were in compliance with all of the financial covenants required by the credit agreement governing our ABL Facility.

241

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

Exchange Offers

The exchange of outstanding notes for exchange notes in the exchange offers will not constitute a taxable event to holders for U.S. federal income tax purposes. Consequently, you will not recognize gain or loss upon receipt of an exchange note, the holding period of the exchange note will include the holding period of the outstanding note exchanged therefor and the basis of the exchange note will be the same as the basis of the outstanding note immediately before the exchange.

In any event, persons considering the exchange of outstanding notes for exchange notes should consult their own tax advisors concerning the U.S. federal income tax consequences in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction.

Ownership of the Notes

The following is a summary of certain U.S. federal income tax consequences of the acquisition, ownership, and disposition of the Notes as of the date hereof. It is based on provisions of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed Treasury regulations promulgated thereunder (the “Treasury Regulations”), and administrative and judicial interpretations thereof, all as of the date hereof and all of which are subject to change, possibly on a retroactive basis. No ruling from the Internal Revenue Service (the “IRS”) has been or is expected to be sought with respect to any aspect of the transactions described herein. Accordingly, no assurance can be given that the IRS will agree with the views expressed in this summary, or that a court will not sustain any challenge by the IRS in the event of litigation. The following relates only to Notes that are held as capital assets (i.e., generally, property held for investment). This summary does not address all of the U.S. federal income tax consequences that may be relevant to particular holders in light of their personal circumstances, or to certain types of holders that may be subject to special tax treatment (such as banks and other financial institutions, employee stock ownership plans, partnerships or other pass-through entities for U.S. federal income tax purposes, certain former citizens or residents of the United States, controlled foreign corporations, corporations that accumulate earnings to avoid U.S. federal income tax, regulated investment companies, real estate investment trusts, passive foreign investment companies, traders in securities that have elected the mark-to-market method of accounting, insurance companies, tax-exempt organizations, dealers in securities and foreign currencies, brokers, persons who hold the Notes as part of a straddle, hedge or other integrated transaction or who hedge the interest rate on the Notes, persons deemed to sell Notes under the constructive sale provisions of the Code, “U.S. holders” (as defined below) whose functional currency is not the U.S. dollar, or persons subject to the alternative minimum tax). In addition, this summary does not include any description of the tax laws of any state, local, or non-U.S. jurisdiction that may be applicable to a particular holder and does not consider any aspects of U.S. federal tax law other than income taxation (such as estate and gift taxation).

For purposes of this discussion, a “U.S. holder” is a beneficial owner of the Notes that is, for U.S. federal income tax purposes:

• an individual who is a citizen or resident of the United States;

• a corporation (or other business entity treated as a corporation) created or organized in or under the laws of the United States or any state thereof or the District of Columbia;

• an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust if a court within the United States can exercise primary supervision over its administration, and one or more United States persons have the authority to control all of the substantial decisions of that trust (or a trust that was in existence on August 20, 1996, and validly elected to continue to be treated as a U.S. trust).

242

A “non-U.S. holder” is an individual, corporation, estate, or trust that is a beneficial owner of the Notes that is not a U.S. holder.

The U.S. federal income tax treatment of a partner in a partnership (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes) that holds the Notes generally will depend on such partner’s particular circumstances and on the activities of the partnership. Partners in such partnerships should consult their own tax advisors.

U.S. Federal Income Tax Consequences to U.S. Holders

Additional Interest

Our obligation to pay you additional interest in the event that we fail to comply with specified obligations under the registration rights agreements and the indenture governing the Notes may implicate the provisions of the Treasury Regulations relating to “contingent payment debt instruments.” We believe and are taking the position that the likelihood that we will make payments of additional interest is remote. Therefore, we are taking the position that the Notes should not be treated as contingent payment debt instruments and this discussion generally assumes that the Treasury Regulations relating to contingent payment debt instruments are not applicable. However, the determination of whether such a contingency is remote or not is inherently factual. Therefore, we can give you no assurance that our position would be sustained if challenged by the IRS. A successful challenge of this position by the IRS could affect the timing and amount of a U.S. holder’s income and could cause the gain from the sale or other disposition of a Note to be treated as ordinary income, rather than capital gain. Our position for purposes of the contingent payment debt regulations as to the likelihood of these additional payments being remote is binding on a U.S. holder, unless the U.S. holder discloses in the proper manner to the IRS that it is taking a different position. If, contrary to our expectations, we pay additional interest, such additional interest should be taxable to a U.S. holder as ordinary interest income at the time it is paid or accrues in accordance with the U.S. holder’s method of accounting for U.S. federal income tax purposes.

Treatment of Interest

Stated interest on the Notes will generally be taxable to U.S. holders as ordinary interest income as the interest accrues or is paid in accordance with the holder’s regular method of accounting for U.S. federal income tax purposes.

Original Issue Discount

The Series A-1 Notes will be treated as having been issued with original issue discount (“OID”) for U.S. federal income tax purposes in an amount equal to the difference between their “stated redemption price at maturity” (the sum of all payments to be made on the Series A-1 Notes other than payments of “qualified stated interest”) and their “issue price”. You should be aware that you generally must include OID in gross income in advance of the receipt of cash attributable to that income. The Series A-2 Notes were not issued with OID for U.S. federal income tax purposes.

We are taking the position that the “issue price” of the Series A-1 Notes is the first price at which a substantial amount of the Series A-1 Notes was sold for cash to the public (not including bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). There can be no assurance, however, that the IRS will not assert a contrary position, and U.S. holders should consult their own tax advisors in this regard.

The term “qualified stated interest” means stated interest that is unconditionally payable in cash or in property (other than debt instruments of the issuer) at least annually at a single fixed rate (or, subject to certain conditions, at a rate based on one or more interest indices). The stated interest payments on the Notes are qualified stated interest, and are treated as described above under “—Treatment of Interest.”

243

The amount of OID that you must include in income is the sum of the “daily portions” of OID with respect to the Series A-1 Note for each day during the taxable year or portion of the taxable year in which you held such Series A-1 Note (“accrued OID”). The daily portion is determined by allocating to each day in any “accrual period” a pro rata portion of the OID allocable to that accrual period. The “accrual period” for a Series A-1 Note may be of any length and may vary in length over the term of the Series A-1 Note, provided that each accrual period is no longer than one year and each scheduled payment of principal or interest occurs on the first day or the final day of an accrual period. The amount of OID allocable to any accrual period other than the final accrual period is an amount equal to the excess, if any, of:

• the product of the Series A-1 Note’s adjusted issue price at the beginning of such accrual period (as described below) and its yield to maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), over

• the aggregate of all qualified stated interest allocable to the accrual period.

OID allocable to a final accrual period is the difference between the amount payable at maturity (other than a payment of qualified stated interest) and the adjusted issue price at the beginning of the final accrual period. The “adjusted issue price” of a Series A-1 Note at the beginning of any accrual period is equal to its issue price increased by the accrued OID for each prior accrual period, determined without regard to the amortization of any acquisition premium or amortizable bond premium, as described below under “—Acquisition Premium, Amortizable Bond Premium.” Under these rules, you will have to include in income increasingly greater amounts of OID in successive accrual periods. We are required to provide information returns stating the amount of OID accrued on Series A-1 Notes held of record by persons other than corporations and other exempt holders.

You may elect to treat all interest on a Series A-1 Note as OID and calculate the amount includible in gross income under the constant yield method described above. The election is to be made for the taxable year in which you acquired the Series A-1 Note, and may not be revoked without the consent of the IRS. You should consult with your own tax advisors about this election.

Market Discount

If you purchase a Note for an amount that is less than its stated principal amount (in the case of the Series A-2 Notes) or adjusted issue price (in the case of the Series A-1 Notes), the amount of the difference will be treated as market discount for U.S. federal income tax purposes, unless that difference is less than a specified de minimis amount. Under the market discount rules, you will be required to treat any principal payment on, or any gain on the sale, exchange, retirement or other disposition of, a Note as ordinary income to the extent of the market discount that you have not previously included in income and are treated as having accrued on the Note at the time of the payment or disposition.

In addition, you may be required to defer, until the maturity of the Note or its earlier disposition in a taxable transaction, the deduction of all or a portion of the interest expense on any indebtedness attributable to the Note. You may elect, on a Note-by- Note basis, to deduct the deferred interest expense in a tax year prior to the year of disposition. You should consult your own tax advisors before making this election.

Any market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the Note, unless you elect to accrue on a constant interest method. You may elect to include market discount in income currently as it accrues, on either a ratable or constant interest method, in which case the rule described above regarding deferral of interest deductions will not apply.

Acquisition Premium, Amortizable Bond Premium

If you purchase a Series A-1 Note for an amount that is greater than its adjusted issue price but equal to or less than its stated principal amount, you will be considered to have purchased that Series A-1 Note at an

244

“acquisition premium.” Under the acquisition premium rules, the amount of OID that you must include in gross income with respect to a Series A-1 Note for any taxable year will be reduced by the portion of the acquisition premium properly allocable to that year.

If you purchase a Note for an amount in excess of its stated principal amount, you will be considered to have purchased the Note at a premium and, in the case of the Series A-1 Notes, you will not be required to include any OID in income. You generally may elect to amortize the premium over the remaining term of the Note on a constant yield method as an offset to interest when includible in income under your regular accounting method. If you do not elect to amortize bond premium, that premium will decrease the gain or increase the loss you would otherwise recognize on disposition of the Note.

Sale, Exchange, or Other Disposition of the Notes

Your adjusted tax basis in a Note will, in general, be your cost for that Note, increased by any OID or market discount previously included in income, and reduced by any amortized premium. In general, upon the sale, exchange, redemption, retirement at maturity, or other taxable disposition of a Note, a U.S. holder will recognize taxable gain or loss equal to the difference between (1) the amount of the cash and the fair market value of any property received (less any portion allocable to any accrued and unpaid qualified stated interest, which will be taxable as interest to the extent not previously included in income) and (2) the U.S. holder’s adjusted tax basis in the Note (as described above). Except as described above with respect to market discount, gain or loss realized on the sale, exchange, redemption, retirement at maturity, or other taxable disposition of a Note will generally be capital gain or loss. Capital gains of non-corporate taxpayers derived in respect of capital assets held for more than one year are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

Backup Withholding and Information Reporting

In general, a U.S. holder of the Notes will be subject to backup withholding with respect to interest on the Notes (including OID, if any), and the proceeds of a sale or disposition of the Notes (including a redemption or retirement), at the applicable tax rate (currently 28%), unless such holder (a) is an entity that is exempt from withholding and, when required, demonstrates this fact, or (b) timely provides the payor with its taxpayer identification number (“TIN”), certifies under penalty of perjury that the TIN provided to the payor is correct and that the holder has not been notified by the IRS that such holder is subject to backup withholding due to underreporting of interest or dividends, and otherwise complies with applicable requirements of the backup withholding rules. In addition, such payments to U.S. holders that are not exempt entities will generally be subject to information reporting requirements. A U.S. holder who does not timely provide the payor with its correct TIN may be subject to penalties imposed by the IRS. The amount of any backup withholding from a payment to a U.S. holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.

U.S. Federal Income Tax Consequences to Non-U.S. Holders

Additional Interest

The interest rate on the Notes is subject to increase if we fail to comply with specified obligations under the registration rights agreements and the indenture governing the Notes. We believe that the likelihood that we will make payments of additional interest is remote. However, if we do make such payments, it is possible that the payments might be subject to U.S. federal withholding tax at a rate of 30% or lower treaty rate, if applicable. Non-U.S. holders should consult their own tax advisors as to the tax considerations that relate to the potential additional interest payments.

245

Treatment of Interest

Subject to the discussion of backup withholding below, under the “portfolio interest exemption,” a non-U.S. holder will generally not be subject to U.S. federal income tax (or any withholding tax) on payments of interest on the Notes (which for purposes of this discussion includes any OID), provided that:

• interest paid on the Notes is not effectively connected with a non-U.S. holder’s conduct of a trade or business in the United States;

• the non-U.S. holder does not actually or constructively own 10% or more of the total combined voting power of all classes of our stock entitled to vote;

• the non-U.S. holder is not, and is not treated as, a bank receiving interest on an extension of credit pursuant to a loan agreement entered into in the ordinary course of its trade or business;

• the non-U.S. holder is not a “controlled foreign corporation” that is related (directly or indirectly) to us; and

• certain certification requirements are met.

Under current law, the certification requirements will be satisfied in any of the following circumstances:

• if a non-U.S. holder provides to us or our paying agent a statement on IRS Form W-8BEN (or suitable successor or substitute form), together with all appropriate attachments, signed under penalty of perjury, identifying the non-U.S. holder by name and address and stating, among other things, that the non-U.S. holder is not a United States person;

• if (i) a Note is held through a securities clearing organization, bank or another financial institution that holds customers’ securities in the ordinary course of its trade or business, (ii) the non-U.S. holder provides the form described above to such organization or institution, and (iii) such organization or institution, under penalty of perjury, certifies to us that it has received such statement from the beneficial owner or another intermediary and furnishes us or our paying agent with a copy thereof; or

• if a financial institution or other intermediary that holds the Note on behalf of the non-U.S. holder has entered into a withholding agreement with the IRS and submits an IRS Form W-8IMY (or suitable successor form) and certain other required documentation to us or our paying agent.

If the requirements of the portfolio interest exemption described above are not satisfied, a 30% withholding tax will apply to the gross amount of interest on the Notes (including OID) that is paid to a non-U.S. holder, unless either: (a) an applicable income tax treaty reduces or eliminates such tax, and the non-U.S. holder claims the benefit of that treaty by providing a properly completed and duly executed IRS Form W-8BEN (or suitable successor or substitute form) establishing qualification for benefits under the treaty, or (b) the interest is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States and the non-U.S. holder provides an appropriate statement to that effect on a properly completed and duly executed IRS Form W-8ECI (or suitable successor form).

If a non-U.S. holder is engaged in a trade or business in the United States and interest (including OID) on a Note is effectively connected with the conduct of that trade or business, the non-U.S. holder will be required to pay U.S. federal income tax on that interest on a net income basis (and the 30% withholding tax described above will not apply provided the duly executed IRS Form W-8ECI is provided to us or our paying agent) generally in the same manner as a U.S. person unless an applicable income tax treaty provides otherwise. If a non-U.S. holder is eligible for the benefits of an income tax treaty between the United States and its country of residence, and the non-U.S. holder claims the benefit of the treaty by properly submitting an IRS Form W-8BEN, any interest income that is effectively connected with a U.S. trade or business will be subject to U.S. federal income tax in the manner specified by the treaty and generally will only be subject to such tax if such income is attributable to a permanent establishment (or a fixed base in the case of an individual) maintained by the non-U.S. holder in the

246

United States. In addition, a non-U.S. holder that is treated as a foreign corporation for U.S. federal income tax purposes may be subject to an additional branch profits tax equal to 30% (or lower applicable treaty rate) of its earnings and profits for the taxable year that are effectively connected with its conduct of a trade or business in the United States, subject to adjustments.

Sale, Exchange, or Other Disposition of the Notes

Subject to the discussion of backup withholding below, a non-U.S. holder generally will not be subject to U.S. federal income tax (or any withholding thereof) on any gain realized by such holder upon a sale, exchange, redemption, retirement at maturity, or other taxable disposition of the Notes, unless:

• the non-U.S. holder is an individual present in the United States for 183 days or more during the taxable year of disposition and who has a “tax home” in the United States and certain other conditions are met;

• the gain is effectively connected with the conduct of a U.S. trade or business of the non-U.S. holder (and, if an applicable income tax treaty so provides, the gain is attributable to a U.S. permanent establishment of the non-U.S. holder or a fixed base in the case of an individual); or

• the disposition proceeds represent accrued and unpaid interest and the non-U.S. holder cannot satisfy the requirements of the “portfolio interest exemption” described above.

If the first exception applies, the non-U.S. holder generally will be subject to U.S. federal income tax at a rate of 30% on the amount by which its U.S.-source capital gains exceed its U.S.-source capital losses. If the second exception applies, the non-U.S. holder will generally be subject to U.S. federal income tax on the net gain derived from the sale, exchange, redemption, retirement at maturity or other taxable disposition of the Notes in the same manner as a U.S. holder. In addition, corporate non-U.S. holders may be subject to an additional 30% branch profits tax (or lower applicable treaty rate) on any such effectively connected gain. If the third exception applies, the non-U.S. holder generally will be subject to U.S. federal income tax at a rate of 30% on the amount of accrued and unpaid interest. If a non-U.S. holder is eligible for the benefits of an income tax treaty between the United States and its country of residence, the U.S. federal income tax treatment of any such gain may be modified in the manner specified by the treaty.

Information Reporting and Backup Withholding

When required, we or our paying agent will report to the IRS and to each non-U.S. holder the amount of any interest paid on the Notes (including any OID) in each calendar year, and the amount of U.S. federal income tax withheld, if any, with respect to these payments. Copies of the information returns reporting such interest payments and any withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of a treaty or agreement.

Non-U.S. holders who have provided certification as to their non-U.S. status or who have otherwise established an exemption will generally not be subject to backup withholding tax on payments of principal or interest (including any OID) if neither we nor our agent have actual knowledge or reason to know that such certification is unreliable or that the conditions of the exemption are in fact not satisfied.

Payments of the proceeds from the sale or other disposition of a Note (including a redemption or retirement) outside the U.S. to or through a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, additional information reporting, but generally not backup withholding, may apply to those payments if the broker is one of the following: (a) a United States person, (b) a “controlled foreign corporation” for U.S. federal income tax purposes, (c) a foreign person 50 percent or more of whose gross income from all sources for the three-year period ending with the close of its taxable year preceding the payment was effectively connected with a U.S. trade or business, or (d) a foreign partnership with specified connections to the United States.

247

Payment of the proceeds from a sale or other disposition of a Note (including a redemption or retirement) to or through the U.S. office of a broker will be subject to information reporting and backup withholding unless the non-U.S. holder certifies as to its non-U.S. status or otherwise establishes an exemption from information reporting and backup withholding.

The amount of any backup withholding from a payment to a non-U.S. holder will be allowed as a credit against such holder’s U.S. federal income tax liability, if any, and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.

248

CERTAIN ERISA CONSIDERATIONS

The following is a summary of certain considerations associated with the acquisition of the Notes by employee benefit plans that are subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) or provisions under any other federal, state, local, non-U.S. or other laws, or rules or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws”), and entities whose underlying assets are considered to include “plan assets” of any such employee benefit plan, plan, account or arrangement (each, a “Plan”).

General Fiduciary Matters

ERISA and the Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Code (an “ERISA Plan”) and prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties.

In considering an investment in the Notes with a portion of the assets of any Plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciary’s duties to the Plan including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws. Under ERISA and the Code, any person who exercises any discretionary authority or control over the administration of an ERISA Plan or the management or disposition of the assets of an ERISA Plan, or who renders investment advice for a fee or other compensation to an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan.

Prohibited Transaction Issues

Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in specified transactions involving plan assets with persons or entities who are “parties in interest,” within the meaning of ERISA, or “disqualified persons,” within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engaged in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under Title I of ERISA and/or Section 4975 of the Code. In addition, the fiduciary of the ERISA Plan that engaged in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and/or the Code. The acquisition and/or holding of Notes by an ERISA Plan with respect to which we or any of the guarantors are considered a party in interest or disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and held in accordance with an applicable statutory, class or individual prohibited transaction exemption. Included among the exemptions that may apply to the acquisition and holding of the Notes are U.S. Department of Labor prohibited transaction class exemption (“PTCE”) 84-14, respecting transactions determined by independent qualified professional asset managers, PTCE 90-1, respecting insurance company pooled separate accounts, PTCE 91-38, respecting bank collective investment funds, PTCE 95-60, respecting life insurance company general accounts and PTCE 96-23, respecting transactions determined by in-house asset managers. In addition, Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code provide limited relief from the prohibited transaction provisions of ERISA and Section 4975 of the Code for certain transactions, provided that neither the issuer of the securities nor any of its affiliates (directly or indirectly) have or exercise any discretionary authority or control or render any investment advice with respect to the assets of any ERISA Plan involved in the transaction and provided further that the ERISA Plan pays no more than adequate consideration in connection with the transaction. There can be no assurance that all of the conditions of any such exemptions will be satisfied.

Because of the foregoing, the Notes should not be acquired or held by any person investing “plan assets” of any Plan, unless such acquisition and holding (and the exchange of outstanding notes for exchange notes) will not constitute a non-exempt prohibited transaction under ERISA or Section 4975 of the Code or a similar violation under any applicable Similar Laws.

249

Representation

By acceptance of a Note (including an exchange note), each holder and subsequent transferee will be deemed to have represented and warranted that either (i) no portion of the assets used by such holder or transferee to acquire or hold the Notes or any interest therein constitutes assets of any Plan or (ii) the acquisition and holding of the Notes (and the exchange of outstanding notes for exchange notes) or any interest therein by such holder or transferee will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a similar violation under any applicable Similar Laws.

The foregoing discussion is general in nature and is not intended to be all-inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries or other persons considering acquiring or holding the Notes on behalf of, or with the assets of, any Plan, consult with their counsel regarding the potential applicability of ERISA, Section 4975 of the Code and any Similar Laws to such transactions and whether an exemption would be applicable to the acquisition and holding of the Notes.

250

PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offers must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where the outstanding notes were acquired as a result of market-making activities or other trading activities. To the extent any such broker-dealer participates in the exchange offers, we have agreed that for a period of up to 90 days, we will use our reasonable best efforts to make this prospectus, as amended or supplemented, available to such broker-dealer for use in connection with any such resale, and will deliver as many additional copies of this prospectus and each amendment or supplement to this prospectus and any documents incorporated by reference in this prospectus as such broker-dealer may reasonably request.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own accounts pursuant to the exchange offers may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of these methods of resale, at market prices prevailing at the time of resale, at prices related to the prevailing market prices or negotiated prices. Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer or the purchasers of any exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offers and any broker or dealer that participates in a distribution of the exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any resale of exchange notes and any commissions or concessions received by these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

We have agreed to pay all expenses incident to the exchange offers and will indemnify the holders of outstanding notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act.

251

LEGAL MATTERS

The validity and enforceability of the exchange notes and certain exchange guarantees will be passed upon for us by Simpson Thacher & Bartlett LLP, New York, New York. An investment vehicle comprised of several partners of Simpson Thacher & Bartlett LLP, members of their families, related persons and others own interests representing less than 1% of the capital commitments of funds affiliated with Blackstone. Certain matters under Florida law will be passed upon by Holland & Knight LLP.

EXPERTS

The consolidated financial statements of Apria Healthcare Group, Inc. and subsidiaries as of December 31, 2009 (Successor) and December 31, 2008 (Successor) and the year ended December 31, 2009 and for the period from October 29, 2008 through December 31, 2008 for the Successor and for the period from January 1, 2008 through October 28, 2008 (Predecessor) and for the year ended December 31, 2007 for the Predecessor included in this prospectus and the related financial statement schedule included elsewhere in the prospectus, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein and elsewhere in the prospectus (which report expresses an unqualified opinion on the financial statements and financial statement schedule and includes an explanatory paragraph referring to the merger of the Company with and into Sky Merger Sub Corporation, a Delaware corporation, a wholly-owned subsidiary of Sky Acquisition LLC, a Delaware limited liability company on October 28, 2008). Such financial statements and financial statement schedule have been so included in reliance upon the report of Deloitte & Touche LLP given upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We and our guarantors have filed with the SEC a registration statement on Form S-4 under the Securities Act with respect to the exchange notes. This prospectus, which forms a part of the registration statement, does not contain all of the information set forth in the registration statement. For further information with respect to us, our guarantors and the exchange notes, reference is made to the registration statement. Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete, and, where such contract or other document is an exhibit to the registration statement, each such statement is qualified by the provisions in such exhibit, to which reference is hereby made. The registration statement and other information can be inspected and copied at the Public Reference Room of the SEC located at Room 1580, 100 F Street, N.E., Washington D.C. 20549. Copies of such materials, including copies of all or any portion of the registration statement, can be obtained from the Public Reference Room of the SEC at prescribed rates. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room. Such materials may also be accessed electronically by means of the SEC’s home page on the Internet (http://www.sec.gov). However, any such information filed with the SEC does not constitute a part of this prospectus.

So long as we are subject to the periodic reporting requirements of the Exchange Act, we are required to furnish the information required to be filed with the SEC to the trustee and the holders of the outstanding unregistered notes. We have agreed that, even if we are not required under the Exchange Act to furnish such information to the SEC, we will nonetheless continue to furnish information that would be required to be furnished by us by Section 13 or 15(d) of the Exchange Act.

252

INDEX TO FINANCIAL STATEMENTS

	Page
Audited Financial Statements of Apria Healthcare Group Inc.
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets—December 31, 2009 and 2008	F-3
Consolidated Statements of Operations—The year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008 and January 1, 2008 to October 28, 2008 and the year ended December 31, 2007	F-4
Consolidated Statements of Stockholders’ Equity—The year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008 and January 1, 2008 to October 28, 2008 and the year ended December 31, 2007	F-5
Consolidated Statements of Cash Flows—The year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008 and January 1, 2008 to October 28, 2008 and the year ended December 31, 2007	F-6
Notes to Consolidated Financial Statements	F-8
Schedule II—Valuation and Qualifying Accounts	F-51
Unaudited Financial Statements of Apria Healthcare Group Inc.
Condensed Consolidated Balance Sheets—March 31, 2010 and December 31, 2009	F-52
Condensed Consolidated Statement of Operations—Three months ended March 31, 2010 and 2009	F-53
Condensed Consolidated Statements of Cash Flows—Three months ended March 31, 2010 and 2009	F-54
Notes to Unaudited Condensed Consolidated Financial Statements	F-55

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Apria Healthcare Group Inc., a wholly-owned subsidiary of Sky Acquisition LLC

Lake Forest, California

We have audited the accompanying consolidated balance sheets of Apria Healthcare Group Inc. and subsidiaries (the “Company”) as of December 31, 2009 (“Successor”) and December 31, 2008 (“Successor”), and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2009 and for the period from October 29, 2008 through December 31, 2008 for the Successor. We have also audited the related consolidated statements of operations, stockholders’ equity, and cash flows for the period from January 1, 2008 to October 28, 2008 (“Predecessor”) and the year ended December 31, 2007 for the Predecessor. Our audits also included the financial statement schedule listed in the Index at Page F-1. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 2 to the consolidated financial statements, on October 28, 2008, Sky Merger Sub Corporation, a Delaware corporation, a wholly-owned subsidiary of Sky Acquisition LLC, a Delaware limited liability company, merged with and into the Company with the Company continuing as the surviving corporation and wholly-owned subsidiary of Sky Acquisition LLC.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Apria Healthcare Group Inc. and subsidiaries as of December 31, 2009 (“Successor”) and December 31, 2008 (“Successor”), and the results of their operations and cash flows for the year ended December 31, 2009 and for the period from October 29, 2008 through December 31, 2008 for the Successor, and the results of their operations and cash flows for the period from January 1, 2008 to October 28, 2008 (“Predecessor”) and the year ended December 31, 2007 for the Predecessor, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

DELOITTE & TOUCHE LLP

Costa Mesa, California

March 2, 2010,

(July 16, 2010 as to Note 15 and Note 17)

F-2

APRIA HEALTHCARE GROUP INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
	2009			2008
	(Successor)			(Successor)
	(in thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	158,163		$	168,018
Short-term investments		23,673			—
Accounts receivable, less allowance for doubtful accounts of $39,927 and $25,271 at December 31, 2009 and 2008, respectively		252,133			273,205
Inventories		68,267			59,219
Deferred income taxes		87,016			58,444
Deferred expenses		3,049			3,181
Prepaid expenses and other current assets		24,362			18,131
TOTAL CURRENT ASSETS		616,663			580,198
PATIENT SERVICE EQUIPMENT, less accumulated depreciation of $97,874 and $17,410 at December 31, 2009 and 2008, respectively		198,808			209,740
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET		80,227			67,755
GOODWILL		759,197			895,069
INTANGIBLE ASSETS, NET		582,259			397,334
DEFERRED DEBT ISSUANCE COSTS, NET		63,110			49,648
OTHER ASSETS		8,783			11,069
	$	2,309,047		$	2,210,813
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	123,856		$	141,382
Accrued payroll and related taxes and benefits		66,842			74,238
Other accrued liabilities		100,768			100,989
Deferred revenue		27,253			30,515
Current portion of long-term debt		1,690			8,750
TOTAL CURRENT LIABILITIES		320,409			355,874
LONG-TERM DEBT, net of current portion		1,019,456			1,013,483
DEFERRED INCOME TAXES		259,030			127,707
INCOME TAXES PAYABLE AND OTHER NON-CURRENT LIABILITIES		31,421			40,929
TOTAL LIABILITIES		1,630,316			1,537,993
COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value: 1,000 shares authorized; 100 shares issued		—			—
Additional paid-in capital		684,445			674,714
Accumulated deficit		(5,714	)		(1,894	)
TOTAL STOCKHOLDERS’ EQUITY		678,731			672,820
	$	2,309,047		$	2,210,813

See notes to consolidated financial statements.

F-3

APRIA HEALTHCARE GROUP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31, 2009			Period October 29, 2008 to December 31, 2008			Period January 1, 2008 to October 28, 2008			Year Ended December 31, 2007
	(Successor)			(Successor)			(Predecessor)			(Predecessor)
	(in thousands)
Net revenues:
Fee for service arrangements	$	1,930,464		$	328,005		$	1,630,767		$	1,465,303
Capitation		164,097			28,660			142,522			166,498
TOTAL NET REVENUES		2,094,561			356,665			1,773,289			1,631,801
Costs and expenses:
Cost of net revenues:
Product and supply costs		638,452			105,120			526,610			386,496
Patient service equipment depreciation		101,681			17,539			89,246			110,775
Amortization of intangible assets		44,000			—			—			—
Home respiratory therapy services		34,700			6,270			31,893			38,886
Nursing services		36,345			6,276			29,773			11,353
Other		12,281			2,555			13,815			17,482
TOTAL COST OF NET REVENUES		867,459			137,760			691,337			564,992
Provision for doubtful accounts		57,919			14,329			33,626			43,138
Selling, distribution and administrative		1,050,134			179,362			924,536			862,062
Amortization of intangible assets		3,716			1,008			3,461			3,079
TOTAL COSTS AND EXPENSES		1,979,228			332,459			1,652,960			1,473,271
OPERATING INCOME		115,333			24,206			120,329			158,530
Interest expense		129,200			26,167			31,838			22,447
Interest income and other		(1,609	)		(726	)		(2,154	)		(1,954	)
(LOSS) INCOME BEFORE TAXES		(12,258	)		(1,235	)		90,645			138,037
Income tax (benefit) expense		(8,438	)		659			34,192			51,998
NET (LOSS) INCOME	$	(3,820	)	$	(1,894	)	$	56,453		$	86,039

See notes to consolidated financial statements.

F-4

APRIA HEALTHCARE GROUP INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Common Stock			Additional Paid-In Capital			Treasury Stock				Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive (Loss) Income			Total Stockholders Equity
	Shares	Par Value					Shares	Cost
	(in thousands)
(Predecessor)
Balance at January 1, 2007	59,762	$	60	$	482,123		16,973	$	(429,573	)	$	346,732		$	351		$	399,693
Cumulative effect adjustment for uncertain tax positions												(4,233	)					(4,233	)
Exercise of stock options	887		1		17,617													17,618
Tax benefits related to stock options					4,057													4,057
Tax shortfalls on share-based compensation					(99	)												(99	)
Compensatory stock options and awards	196				11,150													11,150
Restricted stock retained in treasury upon vesting							77		(2,078	)								(2,078	)
Unrealized loss on interest rate swap agreements, net of taxes															(122	)		(122	)
Net income												86,039						86,039
Total comprehensive income												86,039			(122	)		85,917
Balance at December 31, 2007	60,845		61		514,848		17,050		(431,651	)		428,538			229			512,025
Exercise of stock options	73				509													509
Tax expense related to stock options					(7,719	)												(7,719	)
Tax benefits on share-based compensation					497													497
Compensatory stock options and awards	144				10,626													10,626
Restricted stock retained in treasury upon vesting							62		(1,360	)								(1,360	)
Unrealized loss on interest rate swap agreements, net of taxes															(229	)		(229	)
Net income												56,453						56,453
Total comprehensive income												56,453			(229	)		56,224
Balance at October 28, 2008	61,062		61		518,761		17,112		(433,011	)		484,991			—			570,802
(Successor)
Issuance of common stock					673,334													673,334
Profit interest					1,380													1,380
Net loss												(1,894	)					(1,894	)
Balance at December 31, 2008	—	$	—	$	674,714		—	$	—		$	(1,894	)	$	—		$	672,820
Equity contributions					2,075													2,075
Profit interest					7,656													7,656
Net loss												(3,820	)					(3,820	)
Balance at December 31, 2009	—	$	—	$	684,445		—	$	—		$	(5,714	)	$	—		$	678,731

See notes to consolidated financial statements.

F-5

APRIA HEALTHCARE GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31, 2009			Period October 29, 2008 to December 31, 2008			Period January 1, 2008 to October 28, 2008			Year Ended December 31, 2007
	(Successor)			(Successor)			(Predecessor)			(Predecessor)
	(in thousands)
OPERATING ACTIVITIES
Net (loss) income	$	(3,820	)	$	(1,894	)	$	56,453		$	86,039
Items included in net income not requiring cash:
Provision for doubtful accounts		57,919			14,329			33,626			43,138
Depreciation		125,327			22,049			112,759			131,645
Amortization of intangible assets		47,716			1,008			3,461			3,079
Amortization of deferred debt issuance costs		8,023			4,237			9,064			1,778
Deferred income taxes		(3,224	)		8,016			54,162			4,605
Expense on profit interest units		7,656			1,380			—			—
Share-based compensation		—			—			34,162			11,150
Excess tax benefits from shared-based compensation		—			—			(497	)		(4,057	)
Loss (gain) on disposition of assets and other		15,899			2,849			12,324			(536	)
Other		(4,944	)		—			—			—
Changes in operating assets and liabilities, exclusive of effects of acquisitions:
Accounts receivable		(39,599	)		(6,995	)		(8,926	)		(33,724	)
Inventories		(9,048	)		(10,233	)		(1,164	)		2,589
Prepaid expenses and other assets		(7,198	)		1,169			4,513			(48	)
Accounts payable, exclusive of book cash overdraft		(14,077	)		14,103			1,133			7,043
Accrued payroll and related taxes and benefits		(8,596	)		(120	)		(13,526	)		6,873
Income taxes payable		(2,263	)		(6,235	)		(3,506	)		20,380
Deferred revenue, net of deferred expenses		(3,130	)		(1,103	)		1,834			289
Accrued expenses		2,785			20,777			2,065			13,763
NET CASH PROVIDED BY OPERATING ACTIVITIES		169,426			63,337			297,937			294,006
INVESTING ACTIVITIES
Purchases of patient service equipment and property, equipment and improvements, exclusive of effects of acquisitions		(150,597	)		(26,217	)		(157,183	)		(128,759	)
Purchases of short-term investments		(37,554	)		—			—			—
Maturities of short-term investments		13,881			—			—			—
Merger related costs		—			(49,269	)		—			—
Proceeds from disposition of assets		6,893			20			5,295			102
Cash paid for acquisitions		(1,279	)		—			(2,605	)		(354,578	)
NET CASH USED IN INVESTING ACTIVITIES		(168,656	)		(75,466	)		(154,493	)		(483,235	)
FINANCING ACTIVITIES
Proceeds from Predecessor Revolving Credit Facility		—			—			18,300			359,000
Payments on Predecessor Revolving Credit Facility		—			(304,000	)		(138,300	)		(170,000	)
Proceeds from Senior Secured Bridge Credit Agreement		—			1,010,000			250,000			—
Payments on Senior Secured Bridge Credit Agreement		(1,010,000	)		—			—			—
Payments on Interim Facility		—			(249,772	)		(228	)		—
Redemption of convertible senior notes		—			(151	)		(249,772	)		—
Proceeds from ABL Facility		630			36,000			—			—
Payments on ABL Facility		(6,630	)		(30,000	)		—			—
Payments on other long-term debt		(2,856	)		(5,245	)		(3,159	)		(3,264	)
Proceeds from issuance of Series A-1 Notes		700,000			—			—			—
Proceeds from issuance of Series A-2 Notes		317,500			—			—			—
Change in book cash overdraft included in accounts payable		7,902			(850	)		7,771			(4,291	)
Debt issuance costs related to the Interim Facility		—			(45,661	)		(9,204	)		—
Debt issuance costs related to Series A-1 and Series A-2 Notes		(19,039	)		—			—			—
Debt issuance costs related to the ABL Facility		(207	)		(5,250	)		—			—
Equity contribution		2,075			673,334			—			—
Repurchases of common stock		—			(922,935	)		—			—
Change in control payment for options and awards		—			(23,536	)		—			—
Excess tax benefits from share-based compensation		—			—			497			4,057
Issuances of common stock		—			—			413			17,521
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(10,625	)		131,934			(123,682	)		203,023
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(9,855	)		119,805			19,762			13,794
Cash and cash equivalents at beginning of period		168,018			48,213			28,451			14,657
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	158,163		$	168,018		$	48,213		$	28,451

F-6

APRIA HEALTHCARE GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)

SUPPLEMENTAL DISCLOSURES—See Note 8—Long-term Debt and Note 10—Income Taxes for cash paid for interest and income taxes, respectively.

NON-CASH TRANSACTIONS—See Statements of Stockholders’ Equity, Note 6—Business Combinations and Note 11—Leases for tax benefit from stock option exercises, non-cash treasury stock transactions, liabilities assumed in acquisitions and purchase of property and equipment under capital leases, respectively.

Purchases of patient service equipment and property, equipment and improvements exclude purchases that remain unpaid at the end of the respective year. Such amounts are then included in the following year’s purchases. Unpaid purchases were $11,011, $17,292 and $10,994 at December 31, 2009, 2008 and 2007, respectively.

See notes to consolidated financial statements.

F-7

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—Summary of Significant Accounting Policies

Basis of Presentation: The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These statements include the accounts of Apria Healthcare Group Inc. (“Apria” or “the Company”) and its subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation.

On October 28, 2008, the Company completed its merger (the “Merger”) with Sky Merger Sub Corporation (“Merger Sub”), a Delaware corporation and wholly-owned subsidiary of Sky Acquisition LLC, a Delaware limited liability company (“Sky LLC”). Sky LLC is controlled by private investment funds affiliated with The Blackstone Group (“Blackstone” or “Sponsor”). Pursuant to the terms of the Merger Agreement, holders of our common stock received $21.00 in cash for each share of common stock that they owned immediately prior to the effective time of the Merger. As a result of the Merger, our common stock was delisted from the New York Stock Exchange and we ceased to be a publicly held corporation. (See Note 2—The Merger.)

The historical financial results for the periods prior to the completion of the Merger on October 28, 2008 relate to our accounting predecessor (the “Predecessor”). The period subsequent to the completion of the Merger relates to our accounting successor (“the Successor”). The terms “us,” “we,” “our,” “Apria,” and the “Company” as used in these consolidated financial statements refer to the Successor and its subsidiaries subsequent to the Merger on October 28, 2008 and the Predecessor and its subsidiaries prior to that date. The consolidated financial statements for all predecessor periods have been prepared using the historical basis of accounting for the Company. As a result of the Merger and the associated purchase accounting, our consolidated financial statements for periods subsequent to the Merger are not comparable to periods preceding the Merger.

Company Background: Apria operates in the home healthcare segment of the healthcare industry, providing a variety of high-quality clinical patient care management programs, related products and supplies as prescribed by a physician and/or authorized by a case manager as part of a care plan. Essentially all products and services offered by the Company are provided through the Company’s network of approximately 500 locations, which are located throughout the United States. We provide services and products in two operating segments and within these two operating segments there are three core service lines: home respiratory therapy, home medical equipment and home infusion therapy. Both segments provide products and services in the home setting to patients and are primarily paid for by a third-party payor, such as Medicare, Medicaid, managed care or other third-party insurer. Sales for both segments are primarily derived from referral sources such as hospital discharge planners, medical groups or independent physicians.

Use of Accounting Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Among the significant estimates affecting the consolidated financial statements are those related to revenue recognition and the resulting accounts receivable, share-based compensation, income taxes, goodwill and long-lived assets.

Revenue Recognition and Concentration of Credit Risk: Revenues are recognized under fee for service/product arrangements for equipment the Company rents to patients, sales of equipment, supplies, pharmaceuticals and other items the Company sells to patients and under capitation arrangements with third party payors for services and equipment the Company provides to the patients of these payors. Revenue generated from equipment that the Company rents to patients is recognized over the rental period, typically one month, and commences on delivery of the equipment to the patients. Revenue related to sales of equipment, supplies and pharmaceuticals is recognized on the date of delivery to the patients. Revenues derived from capitation arrangements were approximately 8%, 8%, 8% and 10% of total net revenues for the year ended December 31,

F-8

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2009, the periods October 29, 2008 to December 31, 2008, January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, respectively. Capitation revenue is earned as a result of entering into a contract with a third party to provide its members certain services without regard to the actual services provided, therefore revenue is recognized in the period that the beneficiaries are entitled to health care services. All revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare and Medicaid. For the year ended December 31, 2009, the period October 29, 2008 to December 31, 2008, the period January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, revenues reimbursed under arrangements with Medicare and Medicaid were approximately 28%, 31%, 32% and 35%, respectively, as a percentage of total net revenues. In the year ended December 31, 2009, the periods January 1, 2008 to October 28, 2008 and October 29, 2008 to December 31, 2008, no other third-party payor group represented more than 8% of the Company’s revenues. In the year ended December 31, 2007, no other third-party payor group represented more than 9% of the Company’s revenue. In fee for service arrangement revenue, rental and sale revenues comprise approximately $654.6 million or 33.9% and $1,275.9 million or 66.1%; $125.7 million or 38.3% and $202.3 million or 61.7%; $622.4 million or 38.2% and $1,008.3 million or 61.8%; and $730.5 million or 49.9% and $734.8 million or 50.1% in the year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008, January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, respectively.

In the Company’s business, there are multiple services and products delivered to patients. These arrangements involve equipment that is rented and related supplies that may be sold that cannot be returned. In arrangements with multiple deliverables, revenue is recognized when each deliverable is provided to the patient. For example, revenues from equipment rental supplies sales are recognized upon of delivery of the products, as the supplies sold are considered a separate unit of accounting.

Cash and Cash Equivalents: Cash is maintained with various financial institutions. These financial institutions are located throughout the United States and the Company’s cash management practices limit exposure to any one institution. Book cash overdrafts, which are reported as a component of accounts payable, were $32.5 million and $21.1 million at December 31, 2009 and 2008, respectively. Management considers all highly liquid instruments purchased with a maturity of less than three months to be cash equivalents.

Short-Term Investments: Certificates of deposit with maturities greater than three months from our purchase date are classified as short-term investments. As of December 31, 2009, the carrying value of the Company’s short-term investments approximates fair value and such investments do not individually exceed the $0.25 million FDIC insurance.

Accounts Receivable: Included in accounts receivable are earned but unbilled receivables of $44.6 million and $48.2 million at December 31, 2009 and 2008, respectively. Delays ranging from a day up to several weeks between the date of service and billing can occur due to delays in obtaining certain required payor-specific documentation from internal and external sources. Earned but unbilled receivables are aged from date of service and are considered in the analysis of historical performance and collectibility.

Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required to record total net revenues and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application, claim denial or account review.

F-9

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Management performs periodic analyses to evaluate accounts receivable balances to ensure that recorded amounts reflect estimated net realizable value. Specifically, management considers historical realization data, accounts receivable aging trends, other operating trends, the extent of contracted business and business combinations. Also considered are relevant business conditions such as governmental and managed care payor claims processing procedures and system changes. Additionally, focused reviews of certain large and/or problematic payors are performed. Due to continuing changes in the healthcare industry and third-party reimbursement, it is possible that management’s estimates could change in the near term, which could have an impact on operations and cash flows.

Accounts receivable are reduced by an allowance for doubtful accounts which provides for those accounts from which payment is not expected to be received, although services were provided and revenue was earned. Upon determination that an account is uncollectible, it is written-off and charged to the allowance.

Deferred Revenue and Deferred Expense: A lessor is required to recognize rental income over the lease term. Rental of patient equipment is billed on a monthly basis beginning on the date the equipment is delivered. Since deliveries can occur on any day during a month, the amount of billings that apply to the next month are deferred. Only the direct costs associated with the initial rental period are deferred.

Inventories: Inventories are stated at the lower of cost (first-in, first-out method) or market and consist primarily of pharmaceuticals and items used in conjunction with patient service equipment. Inventories are reduced by a reserve for slow moving or obsolete inventory.

Patient Service Equipment: Patient service equipment is stated at cost and consists of medical equipment rented to patients on a month-to-month basis. Depreciation is provided using the straight-line method over the estimated useful lives of the equipment, which range from one to ten years.

Property, Equipment and Improvements: Property, equipment and improvements are stated at cost. Included in property and equipment are assets under capitalized leases which consist of information systems hardware and software. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for each of the categories presented in Note 5 are as follows: leasehold improvements—the shorter of the remaining lease term or seven years; equipment and furnishings—three to fifteen years; and information systems—three to six years.

Capitalized Software: Included in property, equipment and improvements are costs related to internally developed and purchased software that are capitalized and amortized over periods that the assets are expected to provide benefit. Capitalized costs include direct costs of materials and services incurred in developing or obtaining internal-use software and payroll and benefit costs for employees directly involved in the development of internal-use software. In connection with the Merger, we evaluated our information technology strategy and concluded it was no longer advisable to implement a new enterprise-wide information system. As a result of this change in strategy, we wrote off approximately $65.0 million of capitalized information systems assets as part of our purchase accounting adjustments that were made in connection with the Merger. Additions to capitalized internally developed software totaled $9.5 million for the year ended December 31, 2009.

Goodwill and long-lived assets: Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. The amounts and useful lives assigned to intangible assets acquired, other than goodwill, impact the amount and timing of future amortization.

F-10

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Goodwill and indefinite-lived intangible assets are not amortized but instead tested at least annually for impairment, or more frequently when events or changes in circumstances indicate that the assets might be impaired. Goodwill is tested for impairment by comparing the carrying value to the fair value of the reporting unit to which the goodwill is assigned. A two-step test is used to identify the potential impairment and to measure the amount of impairment, if any. The first step is to compare the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired; otherwise, goodwill is impaired and the loss is measured by performing step two. Under step two, the impairment loss is measured by comparing the implied fair value of the reporting unit with the carrying amount of goodwill. Management has determined that our two operating segments are reporting units. As such, the Company has two reporting units, home respiratory therapy/home medical equipment and home infusion therapy. The Company performs the annual test for impairment as of the first day of its fourth quarter and determines fair value using the income approach methodology of valuation that includes the discounted cash flow method. During the annual goodwill impairment test in 2009, the Company completed step one and determined that there was no impairment of goodwill since the fair value of the reporting units exceeded the carrying value. Our annual indefinite-lived intangible assets impairment test in 2009 also resulted in no impairment as the fair value of the assets excluded the carrying value.

Long-lived assets, including property and equipment and purchased intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Significant judgment is required in determining whether a potential indicator of impairment of long-lived assets exists and in estimating future cash flows for any necessary impairment tests. Recoverability of assets to be held and used is measured by the comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Purchased intangible assets consist primarily of trade names, patient backlog, capitated relationships and payor relationships resulting from the Merger. Purchased intangible assets that have definite lives are amortized on a straight-line basis over the estimated useful lives of the related assets, generally ranging from one to twenty years.

Deferred Debt Issuance Costs: Capitalized debt issuance costs include those associated with the Company’s Series A-1 Notes, Series A-2 Notes and Asset Based Revolving Credit Facility (“ABL Facility”). Such costs are classified as non-current assets. Costs relating to the ABL Facility are being amortized through the maturity date of October 2013. Costs relating to the Series A-1 Notes and Series A-2 Notes are amortized from the issuance date through October 2014. See Note 8—Long-term Debt.

Fair Value of Financial Instruments: The carrying value of Apria’s bank debt approximates fair value because the underlying instruments are variable notes that reprice frequently. The fair value of the Series A-1 Notes and Series A-2 Notes, as determined by reference to quoted prices for private transactions of Apria’s issuances, is $768.3 million and $349.3 million at December 31, 2009. The carrying amounts of cash and cash equivalents, accounts receivable, trade payables and accrued expenses approximate fair value due to their short maturity.

Product and Supply Costs: Product and supply costs presented within cost of total net revenues are comprised primarily of the cost of supplies and equipment provided to patients, infusion drug costs and enteral product costs.

F-11

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Home Respiratory Therapy Expenses: Home respiratory therapy expenses presented within cost of total net revenues are comprised primarily of employee salary and benefit costs or contract fees paid to respiratory therapists and other related professionals who are deployed to service a patient. Home respiratory therapy personnel are also engaged in a number of administrative and marketing tasks, and accordingly, these costs are classified within selling, distribution and administrative expenses and amounted to $23.5 million, $3.9 million, $18.0 million and $19.8 million in the year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008, January 1, 2008 to October 28, 2008 and the year ended December 31, 2007, respectively.

Distribution Expenses: Distribution expenses are included in selling, distribution and administrative expenses and totaled $159.4 million, $27.8 million, $158.2 million and $175.9 million in the year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008, January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, respectively. Such expense represents the cost incurred to coordinate and deliver products and services to the patients. Included in distribution expenses are leasing, maintenance, licensing and fuel costs for the vehicle fleet; salaries and other costs related to drivers and dispatch personnel; and amounts paid to courier and other outside shipping vendors. Such expenses fall within the definition of “shipping and handling” costs and are classified within selling and administrative expenses and may not be comparable to other companies.

Self-Insurance: Coverage for certain employee medical claims and benefits, as well as workers’ compensation, vehicle liability, professional and general liability are self-insured. Accruals for medical claims at December 31, 2009 and 2008 were $7.0 million and $6.3 million, respectively. Amounts accrued for costs of the other liability coverages totaled $27.8 million and $23.4 million at December 31, 2009 and 2008, respectively. All such amounts are classified in other accrued liabilities.

Advertising: Advertising costs are expensed as incurred. Such expenses are included in selling, distribution and administrative expenses and amounted to $2.9 million, $0.7 million, $2.7 million and $3.8 million for the year ended December 31, 2009, the period October 29, 2008 to December 31, 2008, the period January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, respectively.

Income Taxes: Deferred income tax assets and liabilities are computed for differences between the carrying amounts of assets and liabilities for financial statement and tax purposes. Deferred income tax assets are required to be reduced by a valuation allowance when it is determined that it is more likely than not that all or a portion of a deferred tax asset will not be realized. In determining the necessity and amount of a valuation allowance, management considers our current and past performance, the market environment in which we operate, tax planning strategies and the length of tax benefit carryforward periods.

Derivative Instruments and Hedging Activities: From time to time derivative financial instruments were used to limit exposure to interest rate fluctuations on the Company’s variable rate long-term debt. Unrealized gains and losses on the fair value of the swap agreements were reflected, net of taxes, in operating income, as the transactions no longer qualify for hedge accounting treatment. Exposure to credit loss under the swap agreement is limited to the interest rate spread in the event of counterparty nonperformance. At December 31, 2009 and 2008, we did not have any swap agreements in effect.

Share-Based Compensation/Profit Interest Units: We measure and recognize compensation expense for all share-based payment awards made to employees and non-employee directors based on estimated fair values on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period in our consolidated financial statements. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We recognize share-based compensation expense on a straight-line basis over the requisite service period. Prior to the

F-12

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Merger, we estimated fair value of our share-based payment awards using the Black-Scholes valuation model. Subsequent to the Merger, the estimate of fair value of share-based awards on the date of grant is determined through the allocation of all outstanding securities to a business enterprise valuation. The enterprise valuation is based upon a combination of the income approach and the market approach. The income approach is based on discounted cash flows. The market approach uses a selection of comparable companies in determining value. This determination of fair value is affected by assumptions regarding a number of highly complex and subjective variables. Changes in the subjective assumptions can materially affect the estimate of their fair value.

Comprehensive Income: For the year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008 and January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, the difference between net income and comprehensive income is $0, $0, $0 and $0.1 million, respectively, net of taxes, which is attributable to unrealized (losses) and gains on various interest rate swap agreements.

Reclassification: Certain amounts from the prior year have been reclassified on the balance sheet to conform with the current year presentation. For the year ended December 31, 2008, $6.0 million was reclassified from other accrued liabilities to accrued payroll and related taxes and benefits related to management incentive compensation programs.

NOTE 2—The Merger

On June 18, 2008, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sky LLC and Merger Sub. Sky LLC is controlled by private investment funds affiliated with Blackstone.

Pursuant to the terms of the Merger Agreement, on October 28, 2008, Merger Sub merged with and into the Company (the “Merger”) with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Sky LLC. The total purchase price of the Merger was $1,713.3 million, inclusive of retired debt and associated transaction costs. As a result of the Merger, Apria’s common stock, par value $0.001 per share, was delisted from the New York Stock Exchange and the Company ceased to be publicly traded. At the effective time of the Merger, each share of Apria’s common stock then outstanding was converted into the right to receive $21.00 in cash.

In order to finance the Merger, debt repayment and other transaction expenses, we incurred new indebtedness totaling approximately $1,040.0 million (see Note 8—Long-term Debt). This new debt, together with approximately $673.3 million of equity invested by affiliates of Blackstone, was used to fund the acquisition of our previously outstanding common stock, pay transaction costs, establish certain cash reserves and finance the retirement of debt.

Allocation of Purchase Price

The total purchase price was allocated to the assets acquired and liabilities assumed based on their fair values at the acquisition date. In valuing acquired assets and assumed liabilities, fair values are based on, but are not limited to, quoted market prices, expected future cash flows, current replacement costs, market rate assumptions and appropriate discount and growth rates.

Under the purchase method of accounting, the assets and liabilities of our Predecessor were recorded at their respective fair values as of the date of the acquisition. In September 2009, we finalized the valuation of the intangible assets related to the Merger, resulting in adjustments to the value of our capitated relationships, patient backlogs, trade names and goodwill. The adjustments to our capitated relationships and patient backlogs also resulted in additional amortization expense. If we had finalized the valuation of the intangible assets as of the

F-13

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

date of the Merger, $11.9 million of the amortization expense recorded during the three months ended September 30, 2009 would have been recorded in 2008. The following table summarizes the fair values of the assets acquired and liabilities assumed.

	Fair Value
	(in millions)
Current assets, including $158.2 in cash and cash equivalents	$	567.5
Property and equipment		268.8
Amortizable intangible assets		98.6
Non-amortizable intangible assets		532.0
Goodwill		759.2
Other assets		71.3
Current liabilities		(304.9	)
Long-term debt		(7.2	)
Deferred income taxes		(230.5	)
Other non-current liabilities		(41.5	)
	$	1,713.3

We do not expect any of the goodwill resulting from this transaction to be tax deductible. Goodwill and trade names are considered to have an indefinite life and are not amortized, but rather are reviewed annually for impairment or more frequently if indicators of impairment exist.

NOTE 3—Segments

The Company has two operating segments and within these two operating segments there are three core service lines: home respiratory therapy, home medical equipment and home infusion therapy. We have two reportable operating segments (1) home respiratory therapy and home medical equipment and (2) home infusion therapy. The home respiratory therapy and home medical equipment segment provides services and equipment to assist patients with oxygen systems, sleep apnea, ambulation and general care around the home, as well as to provide respiratory medications and related services. The home infusion therapy segment primarily provides patients with pharmaceuticals and services prescribed in conjunction with the administration of nutrients or medication intravenously or through a gastrointestinal tube.

Amounts for prior periods have been recast to the current management view.

	Net Revenues
Operating Segment	Year Ended December  31, 2009		Period October 29, 2008  to December 31, 2008 (Successor)		Period January 1, 2008  to October 28, 2008 (Predecessor)		Year Ended December  31, 2007
Home Respiratory Therapy and Home Medical Equipment	$	1,169,609	$	209,567	$	1,074,711	$	1,297,619
Home Infusion Therapy		924,952		147,098		698,578		334,182
Total	$	2,094,561	$	356,665	$	1,773,289	$	1,631,801

F-14

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	EBIT
Operating Segment	Year Ended December 31, 2009		Period October 29, 2008 to December 31, 2008 (Successor)			Period January 1, 2008  to October 28, 2008 (Predecessor)		Year Ended December 31, 2007
Home Respiratory Therapy and Home Medical Equipment	$	50,167	$	26,255		$	102,927	$	118,242
Home Infusion Therapy		65,667		(1,740	)		17,965		40,288
Total	$	115,834	$	24,515		$	120,892	$	158,530
	Depreciation and Amortization
Operating Segment	Year Ended December 31, 2009		Period October 29, 2008 to December 31, 2008 (Successor)			Period January 1, 2008 to October 28, 2008 (Predecessor)		Year Ended December 31, 2007
Home Respiratory Therapy and Home Medical Equipment	$	151,287	$	20,041		$	101,479	$	128,640
Home Infusion Therapy		21,756		3,015			14,742		6,084
Total	$	173,043	$	23,056		$	116,221	$	134,724

Our Chief Operating Decision Maker (“CODM”) does not review assets assigned to segments. Therefore, such items are not reported in the table above.

Earnings before interest and taxes (“EBIT”). EBIT is a measure used by our management to measure operating performance. EBIT is defined as net income (loss) plus interest expense and income taxes. EBIT is not a recognized term under Generally Accepted Accounting Principles (“GAAP”) and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.

The following table provides a reconciliation from net (loss) income to EBIT:

	Year Ended December 31, 2009							Period October 29, 2008 to December 31, 2008
	Home Respiratory Therapy and Home Medical Equipment		Home Infusion Therapy		Total			Home Respiratory Therapy and Home Medical Equipment		Home Infusion Therapy			Total
	(in thousands)
Net (loss) income					$	(3,820	)						$	(1,894	)
Interest expense, net (a)						128,092								25,750
Income tax (benefit) expense						(8,438	)							659
EBIT	$	50,167	$	65,667	$	115,834		$	26,255	$	(1,740	)	$	24,515

F-15

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Period January 1, 2008 to October 28, 2008						Year Ended December 31, 2007
	Home Respiratory Therapy  and Home Medical Equipment		Home Infusion Therapy		Total		Home Respiratory Therapy  and Home Medical Equipment		Home Infusion Therapy		Total
	(in thousands)
Net (loss) income					$	56,453					$	86,039
Interest expense, net (a)						30,247						20,493
Income tax (benefit) expense						34,192						51,998
EBIT	$	102,927	$	17,965	$	120,892	$	118,242	$	40,288	$	158,530

(a) Reflects $129.2 million of interest expense, net of $1.1 million of interest income for 2009. Reflects $26.2 million of interest expense, net of $0.4 million of interest income for the period October 29, 2008 to December 31, 2008. Reflects $31.8 million of interest expense, net of $1.6 million of interest income for the period January 1, 2008 to October 28, 2008. Reflects $22.4 million of interest expense, net of $1.9 million in interest income for 2007.

We allocate certain expenses that are not directly attributable to a product line based upon segment headcount.

NOTE 4—Recent Accounting Pronouncements

In June 2009, the FASB issued Accounting Standards Codification (“ASC”) 105 Generally Accepted Accounting Principles (the “Codification”) as the single source of authoritative nongovernmental U.S. Generally Accepted Accounting Principles (“GAAP”) to be launched on July 1, 2009. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. The Codification is effective for interim and annual periods ending after September 15, 2009. The Codification was adopted by the Company in the interim period ending September 30, 2009. All references made to U.S GAAP use the new Codification numbering system prescribed by the FASB. However, as the Codification is not intended to change existing GAAP, it did not have any impact on the Company’s consolidated financial statements.

In June 2009, the FASB issued ASC 810, “Consolidation” (“ASC 810”) (originally issued as Statement of Financial Accounting Standard No. 167, “Amendments to FASB Interpretation No. 46(R)”). Among other items, ASC 810 responds to concerns about the application of certain key provisions of FIN 46(R), including those regarding the transparency of the involvement with variable interest entities. ASC 810 is effective for calendar year companies beginning on January 1, 2010. The Company does not believe the adoption of ASC 810 will have a significant impact on its financial position, results of operations, cash flows, or disclosures.

In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05, “Measuring Liabilities at Fair Value” (“ASU 2009-05”). ASU 2009-05 provides additional guidance clarifying the measurement of liabilities at fair value. ASU 2009-05 is effective in fourth quarter 2009 for a calendar-year entity. The Company adopted the provisions of ASU 2009-05 in the fourth quarter of 2009.

In October 2009, the FASB issued ASU 2009-13, “Multiple-Deliverable Revenue Arrangements” which amends ASC Topic 605, Revenue Recognition (“ASU 2009-13”) Under this standard, management is no longer required to obtain vendor-specific objective evidence or third party evidence of fair value for each deliverable in

F-16

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

an arrangement with multiple elements, and where evidence is not available we may now estimate the proportion of the selling price attributable to each deliverable. ASU 2009-13 will be effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the impact of ASU 2009-13 on its financial position, results of operations, cash flows and disclosures.

In January 2010, the FASB issued ASU 2010-6, “Improving Disclosures About Fair Value Measurements” (“ASU 2010-6”) which requires reporting entities to make new disclosures about recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair- value measurements. ASU 2010-6 is effective for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December 15, 2010. We do not expect the adoption of ASU 2010-6 to have a material impact on our consolidated financial statements.

NOTE 5—Property, Equipment and Improvements

Property, equipment and improvements consist of the following:

	December 31,
	2009			2008
	(in thousands)
Leasehold improvements	$	34,720		$	27,978
Equipment and furnishings		20,471			16,547
Information systems—hardware		31,285			18,352
Information systems—software		24,796			9,723
		111,272			72,600
Less accumulated depreciation		(31,045	)		(4,845	)
	$	80,227		$	67,755

The Company has corrected the classification of certain of its assets as of December 31, 2008. Depreciation expense for property, equipment and improvements was $23.7 million, $4.9 million, $23.5 million and $20.9 million for the year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008 and January 1, 2008 to October 28, 2008, and for the year ended December 31, 2007, respectively.

NOTE 6—Business Combinations and Asset Purchases

During 2009, the Company purchased the accounts receivable and/or active patient lists from four discount agreement customers. During 2008 we did not make any acquisitions. However, as discussed above, on October 28, 2008, we were acquired by Sky Acquisition LLC, a company controlled by private investment funds affiliated with The Blackstone Group. See Note 2—The Merger.

In connection with the Merger, we recorded amounts in 2008 related to intangible assets based upon a preliminary valuation. During 2009, we completed the valuation of the intangible assets related to the Merger, resulting in adjustments to the value of our capitated relationships, patient backlogs, trade names and goodwill. If we had finalized the valuation of the intangible assets as of the date of the Merger, $11.9 million of the amortization expense recorded during the three months ended September 30, 2009 would have been recorded in 2008.

F-17

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Changes in goodwill related to the Merger during 2009 were as follows:

	(in thousands)
Balance at December 31, 2008	$	895,069
Additions:
Tax adjustments relating to establishing deferred tax liabilities for intercompany payables for subsidiaries		15,123
Professional fees related to the Merger		1,912
Change in estimated value of favorable leasehold interests		1,790
Executive severance		1,200
Other		582
Reductions:
Adjustments resulting from completion of intangible asset valuations net of related tax adjustments		(145,846	)
Tax adjustments relating to Merger costs		(3,772	)
Change in estimated value of deferred debt issuance costs		(6,180	)
Tax benefit from true-up of pre-acquisition tax returns		(681	)
Balance at December 31, 2009	$	759,197

None of the amounts recorded as goodwill in connection with the Merger are expected to be deductible for tax purposes.

On December 3, 2007, the acquisition of Coram, Inc. (“Coram”) was completed. Coram, which was privately-held and a national provider of home infusion and specialty pharmaceutical services. The Coram acquisition has strategically provided the Company the opportunity to diversify our product and payor mix and lessen our reliance on Medicare-reimbursed respiratory and HME services. Additionally it has positioned the Company as a dominant player in the growing clinical and specialty pharmaceutical and infusion market. The integration of Coram’s and Apria’s infusion businesses was largely complete by mid-2009. This transaction was accounted for as purchases and, accordingly, the results of operations are included in the consolidated income statements from the date of acquisition.

F-18

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the allocation of the purchase price of all 2007 acquisitions. Payments for prior years’ acquisitions totaled $0, $0, $2.6 million and $0.1 million for the year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008 and January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, respectively. At December 31, 2009 and 2008 there was no remaining unpaid consideration.

	Year Ended December 31, 2007
	(in thousands)
Fair value of patient service equipment acquired	$	7,014
Fair value of property and equipment acquired		24,916
Fair value of other assets acquired		132,070	(1)
Intangible assets		104,284
Goodwill		176,048
Total assets acquired		444,332
Liabilities assumed and accrued, net of payments from prior years’ acquisitions		(89,754	)(2)
Net assets acquired	$	354,578

(1) Consists primarily of $82.5 million in net accounts receivable, $14.0 million in net inventory and $28.3 million in deferred tax assets.

(2) Consists primarily of $44.9 million in accounts payable, $17.7 million in accrued compensation and $9.4 million in other accrued liabilities.

The following supplemental unaudited pro forma information presents the combined operating results of Apria and Coram, as if the acquisitions had occurred at the beginning of the period presented. The pro forma information is based on the historical financial statements of Apria and Coram. Amounts are not necessarily indicative of the results that may have been attained had the combinations been in effect at the beginning of the periods presented or that may be achieved in the future.

	Year Ended December 31, 2007
	(in thousands)
Net revenues	$	2,103,791
Net income		86,275

F-19

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 7—Goodwill and Intangible Assets

Changes in goodwill by segment are as follows:

	Home  Infusion Therapy			Home Respiratory Therapy and Home Medical Equipment			Total
	(in thousands)
Balance, December 31, 2007 (Predecessor)	$	256,455		$	458,780		$	715,235
Purchase accounting adjustments (Predecessor)		(4,058	)		—			(4,058	)
Balance October 28, 2008 (Predecessor)		252,397			458,780			711,177
Purchase accounting adjustments as a result of the Merger, net		51,568			132,324			183,892
Balance, December 31, 2008 (Successor)		303,965			591,104			895,069
Purchase accounting adjustments related to the Merger		(46,142	)		(89,730	)		(135,872	)
Balance, December 31, 2009 (Successor)	$	257,823		$	501,374		$	759,197

Intangible assets consist of the following:

	December 31, 2009								December 31, 2008
	Average Life in Years	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Net Book Value
	(dollars in thousands)
Intangible assets subject to amortization:
Patient backlog	1.1	$	44,000	$	(44,000	)	$	—	$	—	$	—		$	—
Capitated relationships	20.0		40,000		(2,333	)		37,667		75,000		(625	)		74,375
Payor relationships	20.0		11,000		(642	)		10,358		11,000		(92	)		10,908
Net favorable leasehold interest	3.2		3,553		(1,319	)		2,234		5,343		(292	)		5,051
Subtotal	2.4		98,553		(48,294	)		50,259		91,343		(1,008	)		90,334
Intangible assets not subject to amortization:
Trade names	—		525,000		—			525,000		300,000		—			300,000
Accreditations with commissions	—		7,000		—			7,000		7,000		—			7,000
Subtotal	—		532,000		—			532,000		307,000		—			307,000
Total		$	630,553	$	(48,294	)	$	582,259	$	398,343	$	(1,008	)	$	397,334

Amortization expense was $47.7 million, $1.0 million, $3.5 million and $3.1 million for the year ended December 31, 2009, the period October 29, 2008 to December 31, 2008, the period January 1, 2008 to October 28, 2008 and the year ended December 31, 2007, respectively. Estimated amortization expense for each of the fiscal years ending December 31, is presented below:

Year Ending December 31,	(in thousands)
2010	$	3,556
2011		3,474
2012		2,854
2013		2,550
2014		2,550

F-20

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 8—Long-Term Debt

Long-term debt consists of the following:

	December 31,
	2009			2008
	(in thousands)
Senior Secured Bridge Credit Agreement	$	—		$	1,010,000
Series A-1 Notes		700,000			—
Series A-2 Notes		317,500			—
Notes payable relating to ABL Facility		—			6,000
Convertible senior notes		77			77
Capital lease obligations (see Note 11)		3,569			5,778
Other					378
		1,021,146			1,022,233
Less: current maturities		(1,690	)		(8,750	)
	$	1,019,456		$	1,013,483

Series A-1 Notes and Series A-2 Notes. In May 2009, we issued $700.0 million of its 11.25% Senior Secured Notes due 2014 (Series A-1) and on August 2009, we issued $317.5 million of its 12.375% Senior Secured Notes due 2014 (Series A-2). The Series A-1 Notes and the Series A-2 Notes bear interest at a rate equal to 11.25% per annum and 12.375% per annum, respectively. The indenture governing the Series A-1 Notes and the Series A-2 Notes, among other restrictions, limits our ability and the ability of our restricted subsidiaries to:

• incur additional debt;

• pay dividends and make other distributions;

• make certain investments;

• repurchase our stock;

• incur certain liens;

• enter into transactions with affiliates;

• merge or consolidate;

• enter into agreements that restrict the ability of our subsidiaries to make dividends or other payments to us; and

• transfer or sell assets.

Subject to certain exceptions, the indenture governing the Series A-1 Notes and the Series A-2 Notes permits Apria and its restricted subsidiaries to incur additional indebtedness, including senior indebtedness and secured indebtedness. The indenture also does not limit the amount of additional indebtedness that Sky Acquisition may incur. The Series A-1 Notes are entitled to a priority of payment over the Series A-2 notes in certain circumstances, including upon any acceleration of the obligations under the Series A-1 Notes, the Series A-2 Notes or any bankruptcy or insolvency event or default with respect to Apria or any guarantor of the Series A-1 Notes and the Series A-2 Notes.

F-21

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Senior Secured Bridge Credit Agreement. In connection with the Merger on October 28, 2008, we entered into a $1,010.0 million Senior Secured Bridge Credit Agreement with Banc of America Securities LLC and Wachovia Capital Markets, LLC, as joint lead arrangers, Banc of America Securities LLC, Wachovia Capital Markets, LLC and Barclays Capital, the investment banking division of Barclays Bank PLC, as joint bookrunners and Banc of America Bridge LLC, as administrative agent and Bank of America, N.A., as collateral agent, and a syndicate of financial institutions and institutional lenders. In connection with the issuance of the Series A-1 and Series A-2 Notes, we repaid all borrowings and terminated the Senior Secured Bridge Credit Agreement.

ABL Facility. In connection with the Merger on October 28, 2008, we entered into the ABL Facility with Banc of America Securities LLC and Wachovia Capital Markets, LLC, as joint lead arrangers, Banc of America Securities LLC, Wachovia Capital Markets, LLC and Barclays Capital, the investment banking division of Barclays Bank PLC, as joint bookrunners and Bank of America, N.A., as administrative agent and collateral agent, and a syndicate of financial institutions and institutional lenders.

Our ABL Facility provides for revolving credit financing of up to $150.0 million, subject to borrowing base availability, with a maturity of five years, including both a letter of credit and swingline loan sub-facility. The borrowing base at any time is equal to the sum (subject to certain reserves and other adjustments) of 85% of eligible receivables and the lesser of (a) 85% of the net orderly liquidation value of eligible inventory and (b) $20.0 million.

Our ABL Facility includes borrowing capacity available for letters of credit and for borrowings on same-day notice, referred to as swingline loans.

Borrowings under our ABL Facility are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties.

Provided that no default or event of default is then existing or would arise therefrom, at our option, we may request that our ABL Facility be increased by an amount not to exceed $25.0 million, subject to certain consent rights of the administrative agent, swingline lender and issuing banks with respect to the lenders providing commitments for such increase. The terms of such incremental revolving facility shall be identical to our ABL Facility.

Interest Rate and Fees. Borrowings under our ABL Facility bear interest at a rate per annum equal to, at our option, either (a) a base rate determined by reference to the higher of (1) the prime rate of Bank of America, N.A. and (2) the federal funds effective rate plus 1/2 of 1% (“Base Rate”), plus an applicable margin of 2.00% or (b) a LIBOR rate determined by reference to the London Interbank Offered Rate, adjusted for statutory reserve requirements (“LIBOR”), plus an applicable margin of 3.00%. Beginning on April 1, 2009, the applicable margin for borrowings under our ABL Facility will be subject to step ups and step downs based on average excess availability under that facility. In addition to paying interest on outstanding amounts under our ABL Facility, we are required to pay a commitment fee, in respect of the unutilized commitments thereunder, ranging from 0.50% to 1.00% per annum, which fee will be determined based on utilization of our ABL Facility (increasing when utilization is low and decreasing when utilization is high). We must also pay customary letter of credit fees equal to the applicable margin on LIBOR loans and agency fees.

Repayments. If at any time the aggregate amount of outstanding borrowings under our ABL Facility, including letters of credit and swingline loans, exceeds the lesser of (i) the aggregate commitments under our ABL Facility and (ii) the borrowing base (except as a result of overadvance loans or protective advances), we will be required to repay outstanding loans (including swingline loans) and repay or cash collateralize letters of credit in an aggregate amount equal to such excess. If the amount available under our ABL Facility is less than

F-22

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

12.5% of the lesser of the aggregate commitments or the borrowing base for five consecutive business days or certain events of default have occurred, we will be required, upon the occurrence and during the continuance of such cash dominion event, to deposit cash from our material deposit accounts daily in a core concentration account maintained with the administrative agent under our ABL Facility, which will be used to repay outstanding loans and cash collateralize letters of credit.

We may voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans at any time (subject to minimum repayment amounts and customary notice periods) without premium or penalty other than customary “breakage” costs with respect to LIBOR loans.

Amortization and Final Maturity. There is no scheduled amortization under our ABL Facility. All outstanding loans under the facility are due and payable in full on the fifth anniversary of the closing date.

Guarantees and Security. All obligations under our ABL Facility, any interest rate protection or other hedging arrangements entered into with any lender in the syndicate or any of its affiliates, and cash management obligations owing to any lender in the syndicate or any of its affiliates are unconditionally guaranteed by our parent and substantially all of our existing and future, direct and indirect, wholly-owned domestic restricted subsidiaries. All obligations under our ABL Facility, any interest rate protection or other hedging arrangements entered into with any lender in the syndicate or any of its affiliates, and cash management obligations owing to any lender in the syndicate or any of its affiliates, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of our assets and the assets of the guarantors, including:

• a first-priority security interest in substantially all personal property consisting of accounts receivable arising from the sale of inventory and other goods and services, inventory, intercompany notes and intangible assets to the extent attached to the foregoing, and certain related assets and proceeds of the foregoing; and

• a second-priority security interest in all tangible and intangible assets that secure the Senior Secured Bridge Credit Agreement on a first-priority basis.

Restrictive Covenants and Other Matters. Our ABL Facility requires that if excess availability is less than 12.5% of the lesser of the aggregate commitments and the borrowing base, we comply with a minimum fixed charge coverage ratio test. In addition, our ABL Facility includes negative covenants that, subject to significant exceptions, limit our ability and the ability of our parent and subsidiaries to, among other things:

• incur, assume or permit to existing additional indebtedness or guarantees;

• incur liens;

• make investments and loans;

• pay dividends, make payments or redeem or repurchase capital stock;

• engage in mergers, liquidations, dissolutions, asset sales and other dispositions (including sale leaseback transactions);

• prepay, redeem or purchase certain indebtedness;

• amend or otherwise alter terms of certain indebtedness;

• enter into agreements limiting subsidiary distributions;

• engage in certain transactions with affiliates;

• alter the business that we conduct;

F-23

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

• change our fiscal year; and

• with respect to our parent, engage in any activities not permitted.

Our ABL Facility contains certain customary representations and warranties, affirmative covenants and events of default, including among other things payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, failure of any guaranty or security document supporting our ABL Facility to be in full force and effect, and change of control. If such an event of default occurs, the lenders under our ABL Facility would be entitled to take various actions, including the acceleration of amounts due under our ABL Facility and all actions permitted to be taken by a secured creditor.

As of December 31, 2009 there were no borrowings on the ABL Facility, outstanding letters of credit totaled $16.1 million and additional availability under the ABL Facility subject to the borrowing base was $133.9 million. As of December 31, 2009, the available borrowing base of the ABL Facility was approximately $123.9 million. At December 31, 2009, we were in compliance with all of the financial covenants required by the credit agreement governing the ABL Facility.

Interim Facility. On June 18, 2008, we entered into the Interim Facility pursuant to the credit agreement with Banc of America Bridge LLC, Barclays Capital, the investment banking division of Barclays Bank PLC, Wachovia Capital Markets, LLC and the lenders named therein. On September 2, 2008, proceeds of the Interim Facility were used to fund repurchases of our 3 3/8% Convertible Senior Notes due 2033 (the “convertible senior notes”) as described below. The loans under the Interim Facility bore interest at a rate of eleven per cent (11%) per year with a maturity date of March 1, 2009. In addition, we paid usual and customary bank fees in connection with entering into the Interim Facility. The credit agreement governing the Interim Facility included restrictions on additional indebtedness, business operations, liens, transfers and sales of assets, and transactions with affiliates. The credit agreement governing the Interim Facility also contained customary events of default which would permit the lenders to accelerate payments under the Interim Facility if not cured within applicable grace periods, including the failure to make timely payments under the Interim Facility and the failure to follow certain covenants. All borrowings under the Interim Facility were paid off on October 28, 2008 using a portion of the proceeds from the Merger financings.

Convertible Senior Notes. In August 2003, we issued 3.375% Convertible Senior Notes due 2033 in the aggregate principal amount of $250.0 million under an indenture between us and U.S. Bank National Association in a private placement. Holders of our convertible senior notes had the right to require us to redeem on September 1, 2008 some or all of their notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest. The holders of substantially all of the convertible senior notes exercised this right. On September 2, 2008, proceeds of the Interim Facility were used to fund repurchases of $249.8 million of our convertible senior notes. In addition, holders of the remaining $0.2 million of the convertible senior notes had the right, as a result of the change of control resulting from the Merger, to cause us to repurchase the convertible senior notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest. Pursuant to this right, holders of $0.2 million of convertible senior notes exercised their option in December 2008. Approximately $0.1 million of convertible senior notes remain outstanding at December 31, 2009 in accordance with the terms of the indenture governing the convertible senior notes.

Predecessor Revolving Credit Facility. On November 23, 2004, we entered into a senior secured revolving credit facility (“Predecessor Revolving Credit Facility”) with Bank of America and a syndicate of lenders that was amended effective June 23, 2006. The amendment extended the maturity date from November 23, 2009 to June 23, 2011 and lowered the applicable interest rate margins and commitment fees. The credit agreement was

F-24

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

structured as a $500.0 million revolving credit facility. In connection with the Merger on October 28, 2008, we repaid all outstanding indebtedness under our Predecessor Revolving Credit Facility.

As market conditions warrant, we and our major equity holders, including the Sponsor and its affiliates, may from time to time, depending upon market conditions, seek to repurchase our debt securities or loans in privately negotiated or open market transactions, by tender offer or otherwise.

Maturities of long-term debt are as follows:

Year Ending December 31,	(in thousands)
2010	$	1,690
2011		1,358
2012		343
2013		240
2014		1,017,515
Thereafter		—
	$	1,021,146

Total interest paid on debt in the year ended December 31, 2009, the period October 29, 2008 to December 31, 2008, the period January 1, 2008 to October 28, 2008, and the year ended December 31, 2007 amounted to $122.7 million, $3.2 million, $23.4 million and $18.1 million, respectively. Amounts accrued for interest totaled $19.8 million and $21.9 million at December 31, 2009 and 2008, respectively. All such amounts are classified in other accrued liabilities.

Hedging Activities. We are exposed to interest rate fluctuations on our variable rate long-term debt. However, we currently do not have any interest rate swap agreements in effect. Our policy for managing interest rate risk is to evaluate and monitor all available relevant information, including but not limited to, the structure of our interest-bearing assets and liabilities, historical interest rate trends and interest rate forecasts published by major financial institutions. The tools we may utilize to moderate our exposure to fluctuations in the relevant interest rate indices include, but are not limited to: (1) strategic determination of repricing periods and related principal amounts, and (2) derivative financial instruments such as interest rate swap agreements, caps or collars. We do not use derivative financial instruments for trading or other speculative purposes.

At September 30, 2008, we terminated our one remaining interest rate swap agreement which would have expired in January 2009. The impact of the termination was immaterial. During 2008 and during 2007, we had one interest rate swap agreement in effect to fix our LIBOR-based variable rate debt in connection with the Predecessor Revolving Credit Facility. The agreement, a forward-starting contract with a three-year term, became effective in January 2006, and had a notional amount of $25.0 million that fixed an equivalent amount of our variable rate debt at 4.44%. For the year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008 and January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, we (paid) received net settlement amounts of $0, $0, ($0.2) million and $0.2 million, respectively.

Unrealized gains and losses on the fair value of the swap agreements are reflected, net of taxes, in operating income, as the transactions no longer qualify for hedge accounting treatment. Our exposure to credit loss under the swap agreement was limited to the interest rate spread in the event of counterparty nonperformance. At December 31, 2009 and 2008, we did not have any swap agreements in effect.

F-25

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 9—Profit Interest Units, Share-Based Compensation and Stockholders’ Equity

Profit Interest Units: In November and December of 2008, BP Healthcare Holdings LLC (“BP Holdings”) and Sky LLC, parent entities of the Company affiliated with the Sponsor, granted equity units to the Company’s Chief Executive Officer and the Company’s Chief Financial Officer for purposes of retaining them and enabling such individuals to participate in the long-term growth and financial success of the Company. In addition, in 2009, Sky LLC granted equity units to certain management employees for purposes of retaining them and enabling such individuals to participate in the long-term growth and financial success of the Company. Profit interest units are measured at the grant date, based on the calculated fair value of the award, and are recognized as an expense over the employee’s requisite service provided. These equity awards were issued in exchange for services to be performed.

BP Holdings granted the Company’s Chief Executive Officer 38,697,318 Class B units, all of which are subject to vesting terms based on either (i) continued service to BP Holdings or its subsidiaries and/or (ii) performance/market conditions.

• Time-Vesting Units. The portion of the Class B units that vest based on continued service represent 80% of the total Class B units. These units vest ratably over 48 months starting on October 28, 2008 based on continued service, but will become fully vested on an accelerated basis either (x) upon a change in control while the Company’s Chief Executive Officer continues to provide services to BP Holdings or its subsidiaries or (y) if affiliates of the Sponsor receive cash proceeds in respect to 50% of their units in BP Holdings equal to at least 200% of their aggregate capital contributions in respect of such units while the Company’s Chief Executive Officer continues to provide services to BP Holdings or its subsidiaries. In addition, if the Company’s Chief Executive Officer’s services are terminated (a) by the Company without “cause” or (b) by the Chief Executive Officer as a result of “constructive termination,” an additional number of these time-vesting Class B units will vest equal to the number that would have vested over the 24-month period following the applicable termination date. Any of these time-vested Class B units that are unvested on termination of the executive’s services will be forfeited.

• Performance-Vesting Units. The remaining portion of the Class B units that vest based on performance/market conditions represent 20% of the total Class B units. One-half of these units will vest if affiliates of the Sponsor receive cash proceeds equal to at least 200% of their aggregate capital contributions in respect of all of their units in BP Holdings, with the other half eligible to vest if they receive cash proceeds equal to at least 300% of their aggregate capital contributions in respect of all of their units in BP Holdings. Any of these performance-vesting units that are unvested upon a termination of the Company’s Chief Executive Officer’s services (x) by the Company without “cause,” (y) by the executive as a result of “constructive termination” or (z) by the executive for any reason on or following October 28, 2012, will remain outstanding until the second anniversary of the applicable termination date (unless they vest prior to that date). If the units do not vest by such anniversary, then any unvested performance-vesting units shall be immediately forfeited.

Assumptions used were as follows:

Expected volatility(1)	23.0	%
Risk free interest rate(2)	2.24	%
Expected life(3)	5.0 years

(1) The expected volatility is derived from the volatilities of comparable publicly traded companies.

(2) The risk free interest rate is interpolated from the constant maturity treasury rate (“CMT Rate”) as of the valuation date with the maturity matching the expected life.

(3) The expected life is based on management’s estimates.

F-26

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes activity for profit interest units of BP Holdings for the period October 29, 2008 to December 31, 2009:

	Class B Units	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life
Balance at October 29, 2008	—	$	—
Granted on November 24, 2008	38,697,318		0.36
Balance at December 31, 2008	38,697,318
Granted	—
Exercised	—
Forfeited	—
Balance at December 31, 2009	38,697,318			3.8
Vested units at December 31, 2009	7,739,464			3.8

The fair value of the B units is $13.9 million.

Sky LLC granted the Company’s Chief Financial Officer 500,000 Class A-2 units, 6,675,287 Class B units and 2,225,096 Class C units, all of which are subject to vesting terms based on either (i) continued service to Sky LLC or its subsidiaries or (ii) performance/market conditions.

• Class A-2 Units. The Class A-2 units vest if an initial public offering (“IPO”) or change of control occurs and the valuation of Class A-1 units of Sky LLC implied by the transaction exceeds 110% of the aggregate capital contributions of affiliates of the Sponsor for the Class A-1 units. The Company’s Chief Financial Officer does not need to be employed at the time of the IPO or change in control to vest. The Class A-2 Units will be forfeited if an IPO or change of control occurs at a valuation that does not result in vesting.

• Time-Vesting Units. The portion of the Class B units that vest based on continued service represent 66 2/3% of the total Class B units. These units vest ratably over 57 months starting on October 28, 2008 based on continued service, but will become fully vested on an accelerated basis upon a change in control while the Company’s Chief Financial Officer continues to provide services to Sky LLC or its subsidiaries. Any of these time-vested Class B units that are unvested on termination of the executive’s services will be forfeited.

• Performance-Vesting Units. The remaining portion of the Class B units and all of the Class C units vest based on performance/market conditions. These units will vest if affiliates of the Sponsor receive cash proceeds equal to at least 200% of their aggregate capital contributions in respect of 25% of their units in Sky LLC while the Company’s Chief Financial Officer continues to provide services to Sky LLC or its subsidiaries.

Notwithstanding the vesting terms described above, if the Company’s Chief Financial Officer voluntarily resigns (in the absence of “constructive termination”) before January 28, 2010, then Sky LLC may require the forfeiture of any vested Class B or C units.

F-27

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Assumptions used were as follows:

Expected volatility(1)	23.0	%
Risk free interest rate(2)	1.35	%
Estimated life(3)	5.0 years

(1) The expected volatility is derived from the volatilities of comparable publicly traded companies.

(2) The risk free interest rate is interpolated from the CMT Rate as of the valuation date with the maturity matching the estimated life.

(3) The estimated life is based on management’s estimates.

The following table summarizes activity for profit interest units of Sky LLC granted to the Company’s Chief Financial Officer for the period October 29, 2008 to December 31, 2009:

	Granted A-2 Units	Weighted Average Grant Date Fair Value		Granted B Units	Weighted Average Grant Date Fair Value		Granted C Units	Weighted Average Grant Date Fair Value
Balance at October 29, 2008	—	$	—	—	$	—	—	$	—
Granted on December 19, 2008	500,000		0.75	6,675,287		0.35	2,225,096		0.15
Balance at December 31, 2008	500,000			6,675,287			2,225,096
Exercised	—		—	—		—	—		—
Forfeited	—		—	—		—	—		—
Balance at December 31, 2009	500,000			6,675,287			2,225,096
Vested units at December 31, 2009	—			1,112,437			—

The fair value of the A-2 units is $0.4 million, the fair value of the B units is $2.3 million and the fair value of the C units is $0.3 million.

During 2009, Sky LLC granted certain management employees 38,542,529 Class B units and 12,847,509 Class C units, all of which are subject to vesting terms based on either (i) continued service to Sky LLC or its subsidiaries or (ii) performance/market conditions.

• Time-Vesting Units. The portion of the Class B units that vest based on continued service represent 66 2/3% of the total Class B units. These units vest ratably over 60 months starting on October 28, 2008 based on continued service, but will become fully vested on an accelerated basis upon a change in control while the employee continues to provide services to Sky LLC or its subsidiaries. Any of these time-vested Class B units that are unvested on termination of the employee’s services will be forfeited.

• Performance-Vesting Units. The remaining portion of the Class B units and all of the Class C units vest based on performance/market conditions. These units will vest if affiliates of the Sponsor receive cash proceeds equal to at least 200% of their aggregate capital contributions in respect of 25% of their units in Sky LLC while the employee continues to provide services to Sky LLC or its subsidiaries.

Notwithstanding the vesting terms described above, if the employee voluntarily resigns (in the absence of “constructive termination”) then Sky LLC may require the forfeiture of any vested Class B or C units.

F-28

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Assumptions used were as follows:

Expected volatility(1)	25.0	%
Risk free interest rate(2)	1.96	%
Estimated life(3)	5.0 years

(1) The expected volatility is derived from the volatilities of comparable publicly traded companies.

(2) The risk free interest rate is interpolated from the CMT Rate as of the valuation date with the maturity matching the estimated life.

(3) The estimated life is based on management’s estimates.

The following table summarizes activity for profit interest units of Sky LLC granted to or purchased by certain management employees for the period January 1, 2009 to December 31, 2009:

	Purchased A-2 Units	Weighted Average Grant Date Fair Value		Granted B Units		Weighted Average Grant Date Fair Value		Granted C Units		Weighted Average Grant Date Fair Value
Balance at December 31, 2008	—	$	—	—		$	—	—		$	—
Granted in 2009	2,075,000		0.59	38,542,529			0.28	12,847,509			0.13
Forfeited	—		—	(1,262,500	)		—	(420,833	)		—
Exercised	—		—	—			—	—			—
Balance at December 31, 2009	2,075,000			37,280,029				12,426,676
Vested units at December 31, 2009	—			4,219,521				—

The fair value of the A-2 units is $1.2 million, the fair value of the B units is $10.4 million and the fair value of the C units is $1.6 million.

Expense recorded related to profit interest units was $7.7 million and $1.4 million in the year ended December 31, 2009 and the period October 29, 2008 to December 31, 2008, respectively. As of December 31, 2009, total unrecognized profit interest compensation cost related to unvested profit interest units was $9.7 million, which is expected to be expensed over a weighted average period of 3.5 years.

Share-based Compensation: In connection with the Merger on October 28, 2008, all of our then existing share-based awards became fully vested. Each share of common stock was converted into the right to receive $21.00 in cash. The Predecessor recognized approximately $22.3 million of additional compensation expense due to the vesting and payout of all stock-based awards. In total, the Company paid cash of approximately $23.5 million to settle all of the Predecessor’s stock-based awards outstanding at October 28, 2008.

Share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant).

For the period January 1, 2008 to October 28, 2008, share-based compensation expense was $34.7 million, of which $3.6 million was related to awards issued prior to the adoption of ASC 718 Compensation – Stock Compensation. For the year ended December 31, 2007, share-based compensation expense was $11.2 million. All such compensation is reflected in the accompanying condensed consolidated income statement within the selling, distribution and administrative expense line item. The related awards were granted to administrative

F-29

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

personnel or members of the Board of Directors and therefore no portion of the share-based compensation has been classified within cost of total net revenues.

For the period January 1, 2008 to October 28, 2008, cash received from the exercise of options totaled $0.4 million. Income tax expense related to stock-based compensation arrangements amounted to $7.2 million.

Estimates of the fair value of stock options are determined using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, the expected volatility of the Company’s stock over the option’s expected term, the risk-free interest rate over the option’s term, and the expected annual dividend yield. Management believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of stock options granted in 2008. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards.

The key input assumptions that were utilized in the valuation of the stock options granted are summarized in the table below.

	Period January 1, 2008  to October 28, 2008		Year Ended December 31, 2007
Expected option term in years(1)	6.2		4.6
Expected volatility(2)	37.3	%	29.9	%
Risk-free interest rate(3)	3.1	%	4.5	%
Expected annual dividend yield	0	%	0	%

(1) The expected option term is based on historical exercise and post-vesting termination patterns.

(2) Expected volatility represents a combination of historical stock price volatility and implied volatility from publicly-traded options on Apria’s common stock.

(3) The risk-free interest rate is based on the implied yield on a U.S. Treasury zero coupon issue with a remaining term equal to the expected term of the option. As a result of the Merger, profit interest units were granted to certain members of management as a new form of incentive compensation.

2003 Performance Incentive Plan: In July 2003, stockholders approved the 2003 Performance Incentive Plan (“2003 Plan”), which permitted the grant of stock options, stock appreciation rights (“SARs”), stock bonuses, restricted stock, performance stock, stock units, phantom stock, dividend equivalents, or similar rights to purchase or acquire shares, and cash awards. The 2003 Plan was terminated at the Merger date in October 2008.

Stock Options: The 2003 Plan provided for the granting of stock options to employees and non-employee directors. Such grants to employees included non-qualified and incentive stock options. The exercise price of an option was established at the fair market value of a share of common stock on the date of grant. Vesting of stock options was time-based, generally over a three-year period. All stock options were terminated at the Merger date in October 2008.

F-30

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the activity for stock options for the year ended December 31, 2007 and the period January 1, 2008 to October 28, 2008:

	Options		Weighted Average Exercise Price
Outstanding at January 1, 2007	4,056,314		$	24.59
Granted	759,830			30.84
Exercised	(863,693	)		20.23
Forfeited	(219,068	)		29.26
Outstanding at December 31, 2007	3,733,383			26.60
Granted	15,000			21.02
Exercised	(273,249	)		15.50
Forfeited	(3,475,134	)		27.44
Outstanding at October 28, 2008	—			—

The weighted-average fair value of stock options granted during the period ended January 1, 2008 to October 28, 2008, and the year ended December 31, 2007 were $6.55 and $10.20, respectively. There were 759,830 stock options granted in the year 2007. The total intrinsic value of options exercised was $1.2 million and $9.6 million for the period January 1, 2008 to October 28, 2008 and the year ended December 31, 2007, respectively.

Restricted Stock Purchase Rights: In 2003 and 2004, restricted stock purchase rights were granted under the 2003 Plan to certain members of executive management. The awards represented the right to purchase a certain number of shares of common stock at a future date at a specified exercise price. The exercise price was established at 25% of the fair market value of a share of common stock on the date of grant. Such awards generally required that certain performance conditions and service conditions be met before the awards would vest. All restricted stock purchase rights were terminated at the Merger date in October 2008.

The following table summarizes the activity for restricted stock purchase rights for the year ended December 31, 2007 and the period January 1, 2008 to October 28, 2008:

	Restricted Stock Purchase Rights		Weighted Average Exercise Price
Outstanding at January 1, 2007	300,000		$	6.79
Granted	—			—
Exercised	(23,000	)		6.46
Forfeited	—			—
Outstanding at December 31, 2007	277,000			6.82
Granted	—			—
Exercised	(277,000	)		6.82
Forfeited	—			—
Outstanding at October 28, 2008	—			—

The total intrinsic value of restricted stock purchase rights exercised was $3.9 million and $0.5 million for the period ended January 1, 2008 to October 28, 2008 and the year ended December 31, 2007, respectively. No such awards were granted during these three periods.

F-31

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock Appreciation Rights: On February 29, 2008, Apria granted stock appreciation rights to certain members of executive management under the 2003 Performance Incentive Plan. The awards represented the right to receive a payment in stock, equal to the excess of the fair market value of a specified number of shares of Apria common stock on the date the stock appreciation right was exercised over the fair market value of a share of Apria common stock on the date the stock appreciation right was granted (the “base price”). Generally, the base price would not be less than the per share fair market value on the date of grant. Vesting of stock appreciation rights was time-based over a four-year period. All stock appreciation rights were terminated at the Merger date in October 2008.

The following table summarizes the activity for stock appreciation rights for the period January 1, 2008 to October 28, 2008:

	Stock Appreciation Rights		Weighted-Average Exercise Price
Outstanding at January 1, 2008	—		$	—
Granted	773,850			20.51
Exercised	(305,960	)		18.67
Forfeited	(467,890	)		21.71
Outstanding at October 28, 2008	—			—

The weighted-average fair value of stock appreciation rights granted during the period January 1, 2008 to October 28, 2008 was $8.59. There were no stock appreciation rights granted in the prior period. The total intrinsic value of stock appreciation rights exercised was $0.7 million for the period January 1, 2008 to October 28, 2008.

Restricted Stock Awards and Units: The 2003 Plan provided for the granting of restricted stock and restricted stock units to its non-employee directors and employees. Such awards generally required that certain performance conditions and service conditions be met before the awards would vest. All restricted stock awards and units were terminated at the Merger date in October 2008.

The following table summarizes the activity for restricted stock awards and units for the year ended December 31, 2007 and the period January 1, 2008 to October 28, 2008:

	Shares or Share Units		Weighted-Average Grant-Date Fair Value
Nonvested restricted stock awards and units at January 1, 2007	486,922		$	27.16
Granted	405,310			29.82
Vested and released	(186,901	)		24.09
Forfeited	(64,460	)		27.32
Nonvested restricted stock awards and units at December 31, 2007	640,871			29.73
Granted	423,890			21.35
Vested and released	(1,045,070	)		26.41
Forfeited	(19,691	)		25.69
Nonvested restricted stock awards and units at October 28, 2008	—

F-32

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The total intrinsic value of restricted stock awards or units released was $22.0 million and $5.1 million for the period January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, respectively.

The following activity occurred under the 2003 Plan:

	Period January 1, 2008  to October 28, 2008		Year Ended December 31, 2007
	(in thousands)
Total fair value of stock awards vested	$	21,999	$	5,081

Treasury Stock: All repurchased shares of common stock were held as treasury shares. All treasury shares were retired as part of the Merger on October 28, 2008.

In 2007, 68,863 shares of employee restricted stock, valued at $1.8 million, were retained upon vesting to satisfy the related tax obligations and 8,689 shares of employee restricted stock purchase rights valued at $0.3 million, were retained upon vesting to satisfy the related exercise price and tax obligations.

NOTE 10—Income Taxes

Income tax (benefit) expense consists of the following:

	Year Ended December 31, 2009			Period October 29,  2008 to December 31, 2008			Period January 1,  2008 to October 28, 2008			Year Ended December 31, 2007
	(Successor)			(Successor)			(Predecessor)			(Predecessor)
	(in thousands)
Current
Federal	$	(5,912	)	$	(7,826	)	$	(9,561	)	$	28,710
State		168			180			2,468			3,954
		(5,744	)		(7,646	)		(7,093	)		32,664
Deferred
Federal		(1,575	)		8,318			39,682			16,388
State		(1,119	)		(13	)		1,603			2,946
		(2,694	)		8,305			41,285			19,334
	$	(8,438	)	$	659		$	34,192		$	51,998

The current tax expense for the year ended December 31, 2009 includes a net tax benefit of $5.7 million relating to the release of accruals for tax uncertainties. The current tax expense for the period of October 29, 2008 to December 31, 2008 includes a net tax expense of $0.2 million relating to tax uncertainty accruals. Income tax benefits of $1.3 million and $1.4 million relating to tax uncertainty accruals are included in the current tax expense for the period of January 1, 2008 to October 29, 2008 and for the year ended December 31, 2007, respectively.

Tax shortfalls from share-based payments of $0 and $7.2 million were debited to additional paid-in capital for the periods of October 29, 2008 to December 31, 2008 and January 1, 2008 to October 29, 2008, respectively. Excess tax benefits from share-based payments of $4.0 million were credited to additional paid-in capital for the year ended December 31, 2007. See Consolidated Statements of Stockholders’ Equity.

F-33

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A reconciliation of the differences between income tax expense and an amount calculated utilizing the federal statutory rate is as follows:

	Year Ended December 31, 2009			Period October 29,  2008 to December 31, 2008			Period January 1,  2008 to October 28, 2008			Year Ended December 31, 2007
	(Successor)			(Successor)			(Predecessor)			(Predecessor)
	(in thousands)
Income tax expense at statutory rate	$	(4,290	)	$	(432	)	$	31,726		$	48,294
Non-deductible expenses		778			207			1,345			533
State taxes, net of federal benefit and state loss carryforwards		3,342			95			2,205			6,033
Share-based compensation		2,679			483			650			469
Change in valuation allowance		(4,646	)		32			237			(336	)
Change in liability for unrecognized tax benefits		(5,660	)		243			(1,339	)		(1,405	)
Other		(641	)		31			(632	)		(1,590	)
	$	(8,438	)	$	659		$	34,192		$	51,998

Significant components of deferred tax assets and liabilities are as follows:

	December 31,
	2009			2008
	(in thousands)
Deferred tax assets:
Allowance for doubtful accounts	$	21,521		$	18,081
Overpayment reserve		4,880			—
Accruals		16,938			17,152
Accrued vacation		7,320			9,937
Asset valuation reserves		2,159			5,501
Net operating loss carryforward and tax credits		65,663			43,352
Intangible assets		7,859			8,973
Tax benefits related to unrecognized state tax benefits and interest accrued		3,097			4,957
Other, net		9,290			12,125
		138,727			120,078
Less: valuation allowance		(4,373	)		(10,702	)
Total deferred tax assets		134,354			109,376
Deferred tax liabilities:
Tax over book depreciation		(32,983	)		(22,291	)
Tax over book goodwill amortization		(21,135	)		(3,093	)
Separately identifiable intangibles		(220,110	)		(149,084	)
Contingent debt interest		—			—
Subsidiary basis difference		(14,407	)		—
Deferred expenses		(1,319	)		(1,372	)
Debt issuance costs and related amounts		(14,275	)		—
Other, net		(2,139	)		(2,799	)
Total deferred tax liabilities		(306,368	)		(178,639	)
Net deferred tax liabilities	$	(172,014	)	$	(69,263	)

F-34

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Deferred income taxes are recognized for the difference between the carrying amounts of assets and liabilities for financial statement and tax purposes. Deferred income tax assets are required to be reduced by a valuation allowance when it is determined that it is more likely than not that all or a portion of a deferred tax asset will not be realized. During 2009, the valuation allowance was decreased by $6.3 million based on the Company’s projection of future taxable income with respect to certain separate state tax filings made by certain subsidiaries of the Company.

As of December 31, 2009, federal NOLs of approximately $138.4 million are available to offset future federal taxable income. Such NOLs will expire at various times and in varying amounts during our calendar 2010 through 2029 tax years. A significant portion of these NOLs are subject to an annual utilization limitation as required by Section 382 of the Internal Revenue Code of 1986, as amended.

During 2009, the Company reclassified $30.8 million of federal NOLs from a non-current asset to a current asset on the consolidated balance sheet. The reclassification was based on the amount of federal NOL the Company expects to utilize in calendar 2010.

The Company’s non-current deferred tax liabilities increased $131.3 million to $259.0 million at December 31, 2009 from $127.7 million at December 31, 2008. The $131.3 million increase was primarily due to adjustments resulting from the finalization of the Company’s intangible asset valuation related to the merger that resulted in adjustments to the value of capitated relationships, patient backlogs, and trade names.

A reconciliation of the beginning and ending balances of the gross liability for unrecognized tax benefits at December 31, 2009, 2008 and 2007 is as follows:

	2009			2008			2007
	(in thousands)
Balance included in Income Taxes Payable and Other Non-Current Liabilities at January 1	$	26,895		$	27,000		$	17,687
Balance included in Deferred Income Taxes at January 1		84,644			88,960			10,029
Total gross unrecognized tax benefits at January 1		111,539			115,960			27,716
Additions for tax positions related to the current year		1,238			2,461			3,630
Additions for tax positions related to prior years		3,763			12,477			6,661
Additions due to acquisitions during the year		—			—			83,203
Reductions for tax positions related to prior years		(13,557	)		(14,214	)		(941	)
Settlements		(424	)		(1,158	)		(1,231	)
Reductions due to lapse in statute of limitations		(2,137	)		(3,956	)		(3,078	)
Other		—			(31	)		—
Total gross unrecognized tax benefits at December 31	$	100,422		$	111,539		$	115,960

Total gross unrecognized tax benefits of $100.4 million is reflected on the Company’s December 31, 2009 balance sheet as follows: (a) $20.3 million included in Income Taxes Payable and Other Non-Current Liabilities and (b) $80.2 million included in Deferred Income Taxes.

Total gross unrecognized tax benefits of $111.5 million is reflected on the Company’s December 31, 2008 balance sheet as follows: (a) $26.9 million included in Income Taxes Payable and Other Non-Current Liabilities and (b) $84.6 million included in Deferred Income Taxes.

F-35

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2009, the amount of unrecognized tax benefits which, if ultimately recognized, could affect the effective tax rate in a future period is $87.2 million. The $87.2 million amount is net of federal and/or state tax benefits and is inclusive of $2.2 million of penalties and interest (net of tax benefit).

As of December 31, 2009, the Company does not expect material increases or decreases to its unrecognized tax benefits for the 12-month rolling period ending December 31, 2010.

Interest expense and penalties related to unrecognized tax benefits are recognized as part of the provision for income taxes. Gross interest and penalties of $3.3 million and $6.4 million are provided for within the liability for unrecognized tax benefits as December 31, 2009 and December 31, 2008, respectively.

The Company files federal and state income tax returns in jurisdictions with varying statutes of limitations expiration dates. The calendar 2006 through 2009 tax years generally remains subject to examination by tax authorities. Certain state tax agencies are currently examining the tax years 2002 and forward.

Net income taxes paid in 2009 amounted to $0.6 million. Net income taxes paid in the period of October 29, 2008 through December 31, 2008 amounted to $0.1 million. Net income tax refunds for the period of January 1, 2008 through October 28, 2008 amounted to $16.5 million. Net income taxes paid during 2007 amounted to $26.9 million.

NOTE 11—Leases

The Company leases all of its facilities. Lease terms are generally ten years or less with renewal options for additional periods. The occasionally unused facility space is subleased when a lease buyout is not a viable option. Sublease income is recognized monthly and is offset against facility lease expense. Sublease income in the year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008, January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, amounted to $0.9 million, $0, $0.1 million and $0.8 million, respectively. In addition, delivery vehicles and office equipment are leased under operating leases. Many leases provide that taxes, maintenance, insurance and other expenses are the responsibility of the Company. Rentals are generally increased annually by the Consumer Price Index, subject to certain maximum amounts defined within individual agreements. Net rent expense in the year ended December 31, 2009, the period October 29, 2008 to December 31, 2008, the period January 1, 2008 to October 28, 2008, and the year ended December 31, 2007 amounted to $82.1 million, $13.8 million, $68.9 million and $76.2 million, respectively.

For the year ended December 31, 2009, infusion pumps totaling $0.3 million were acquired under a capital lease arrangement, with a lease term of 60 months. During the period January 1, 2008 to October 28, 2008, infusion pumps totaling $1.1 million were acquired under a capital lease arrangement, with a lease term of 60 months. In December 2007, infusion pumps and vehicles were acquired, as a result of the acquisition of Coram, totaling $6.9 million under capital lease arrangements with lease terms ranging from 36 to 60 months. Related amortization amounted to $2.0 million, $0.3 million, $1.9 million and $0.2 million for the year ended December 31, 2009, the periods October 29, 2008 to December 31, 2008, January 1, 2008 to October 28, 2008 and the one-month period in 2007, respectively.

F-36

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following amounts for assets under capital lease obligations are included in property, equipment and improvements:

	December 31,
	2009			2008
	(in thousands)
Infusion pumps	$	5,901		$	5,821
Vehicles		428			443
Less accumulated depreciation		(2,362	)		(344	)
	$	3,967		$	5,920

Future minimum payments, by year and in the aggregate, required under capital lease obligations and noncancelable operating leases consist of the following at December 31, 2009:

	Capital Leases			Operating Leases
	(in thousands)
2010	$	1,765		$	61,694
2011		1,430			52,180
2012		368			41,175
2013		247			21,882
2014		15			9,312
Thereafter		—			10,568
		3,825		$	196,811
Less interest included in minimum lease payments		(256	)
Present value of minimum lease payments		3,569
Less current portion		(1,613	)
	$	1,956

NOTE 12—Employee Benefit Plans

401(k) Savings Plan: The Company has a 401(k) defined contribution plan, whereby eligible employees may contribute up to 35% of their annual base earnings. The Company matches 25% of the first 8% of employee contributions. Total expenses related to the defined contribution plan were $3.2 million, $0.5 million, $2.5 million and $2.0 million in the year ended December 31, 2009, the period October 29, 2008 to December 31, 2008, the period January 1, 2008 to October 28, 2008, and the year ended December 31, 2007, respectively.

Deferred Compensation Plan: A non-qualified deferred compensation plan is available for approximately 235 employees. The plan provides participants with the advantages of pre-tax contributions and tax deferred compounding of interest. Plan assets, which represent the fair market value of the investments, were $4.9 million and $4.6 million, and plan liabilities were $2.8 million and $3.8 million at December 31, 2009 and 2008, respectively.

NOTE 13—Commitments and Contingencies

Litigation: During 2009, the Company was the defendant in a purported California class action lawsuit asserting blanket claims of liability under various California employee protection statutes and regulations relating to payment of regular and overtime wages (Venegas v. Apria Healthcare, Inc. Case No. CHC 06 449669). In July

F-37

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2009, the parties agreed on a settlement of this case which was finally approved by means of a final order and judgment entered by the Court on February 8, 2010. The case is now fully resolved and the Company has paid a total of $3.0 million pursuant to the settlement.

The Company is also engaged in the defense of certain claims and lawsuits arising out of the ordinary course and conduct of its business, the outcomes of which are not determinable at this time. Insurance policies covering such potential losses, where such coverage is cost effective, are maintained. In the opinion of management, any liability that might be incurred upon the resolution of these claims and lawsuits will not, in the aggregate, have a material adverse effect on the Company’s financial condition or results of operations.

Medicare and Medicaid Reimbursement: There are a number of provisions contained within recent legislation or proposed legislation that affect or may affect Medicare and Medicaid reimbursement polices for items and services provided. In addition, recent bills introduced in Congress to finance national healthcare reform could change the Company’s tax rates in the future. The Company cannot be certain of the ultimate impact of all legislated and contemplated changes, and therefore, cannot provide assurance that these changes will not have a material adverse effect on the Company’s financial condition or results of operations.

Supplier Concentration: Currently, approximately 58.2% of purchases for patient service equipment and supplies are from five vendors. Although there are a limited number of suppliers, management believes that other vendors could provide similar products on comparable terms. However, a change in suppliers could cause delays in service delivery and possible losses in revenue, which could adversely affect the Company’s financial condition or results of operations.

Guarantees and Indemnities: From time to time, certain types of contracts are entered into that contingently require indemnification of parties against third party claims. These contracts primarily relate to (i) certain asset purchase agreements, under which indemnification may be provided to the seller of the business being acquired; (ii) certain real estate leases, which may require indemnification to property owners for environmental or other liabilities and other claims arising from use of the applicable premises; and (iii) certain agreements with officers, directors and employees, which may require indemnification of such persons for liabilities arising out of their relationship with the Company.

The terms of such obligations vary by contract and in most instances a specific or maximum dollar amount is not explicitly stated therein. Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted. Consequently, no liabilities have been recorded for these obligations on the balance sheet for any of the periods presented.

NOTE 14—Certain Relationships and Related Party Transactions

Transaction and Management Fee Agreement: In connection with the Merger, Merger Sub entered into a transaction and management fee agreement with Blackstone Management Partners V L.L.C. (“BMP”). The Company succeeded to and assumed the rights and obligations of Merger Sub pursuant to the transaction and management fee agreement upon the closing of the Merger. Under the transaction and management fee agreement, Merger Sub agreed to pay BMP undertaking financial and structural analysis, due diligence and other assistance in connection with the Merger. In addition the Company agreed to reimburse BMP for any out-of-pocket expenses incurred by BMP and its affiliates in connection with the Merger and the provision of services under the transaction and management fee agreement.

In addition, under this agreement, BMP (including through its affiliates) agree to provide services, including without limitation, (a) advice regarding the structure, distribution and timing of debt and equity offerings and

F-38

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

advice regarding relationships with the Company’s lenders and bankers, (b) advice regarding the business and strategy of the Company, including compensation arrangements, (c) advice regarding dispositions and/or acquisitions and (d) such advice directly related or ancillary to the above financial advisory services as may be reasonably requested by the Company. In consideration for the services, Merger Sub will pay BMP at the beginning of each fiscal year a management fee equal to the greater of $7.0 million or 2.0% of the Company’s consolidated EBITDA for the immediately preceding fiscal year. BMP shall have no obligation to provide any other services to the Company absent express agreement. In addition, in the absence of an express agreement to provide investment banking or other financial advisory services to the Company, and without regard to whether such services were provided, BMP is entitled to receive a fee equal to 1.0% of the aggregate transaction value upon the consummation of any acquisition, divestiture, disposition, merger, consolidation, restructuring, refinancing, recapitalization, issuance of private or public debt of equity securities (including an initial public offering of equity securities), financing or similar transaction by the Company.

At any time in connection with or in anticipation of a change of control of the Company, a sale of all or substantially all of the Company’s assets or an initial public offering of common equity of the Company or its successor, BMP may elect to receive, in consideration of BMP’s role in facilitating such transaction and in settlement of the termination of the services, a single lump sum cash payment equal to the then-present value of all then-current and future annual management fees payable under the transaction and management fee agreement, assuming a hypothetical termination date of the agreement to be the twelfth anniversary of such election. The transaction and management fee agreement will continue until the earlier of the twelfth anniversary of the date of the agreement or such date as the Company and BMP may mutually determine. The Company has agreed to indemnify BMP and its affiliates, directors, officers, employees, agents and representatives from and against all liabilities relating to the services contemplated by the transaction and management fee agreement and the engagement of BMP pursuant to, and the performance of BMP and its affiliates of the services contemplated by, the transaction and management fee agreement.

Intelenet Agreement: In May 2009, we entered into the Intelenet Agreement with Intelenet, an Indian company affiliated with the Sponsor, regarding the outsourcing of certain functions relating to billing, collections and other administrative and clerical services. A portion of such services to be outsourced were transitioned to Intelenet during 2009. A portion of such services to be outsourced have been transitioned to Intelenet and additional services are expected to be transitioned over the next 18 months. Only certain services are currently subject to the Intelenet Agreement. However, if all services currently planned for outsourcing to Intelenet are in fact handled by Intelenet, we expect to make payments to Intelenet of approximately $200.0 million over a seven-year period that began in the second quarter of 2009. One of the members of our Board of Directors, Mr. Patrick Bourke, is an employee of the Sponsor and also services on the Board of Directors of Intelenet. During the year ended December 31, 2009, the Company paid approximately $3.7 million to Intelenet.

NOTE 15—Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries

The Company conducts substantially all of its business through its subsidiaries. Substantially all of the Company’s wholly-owned domestic subsidiaries (the “Guarantors”) fully and unconditionally guarantee the Series A-1 Notes and Series A-2 Notes on a senior secured basis. The Guarantors also guarantee our ABL Facility.

See also Note 8—Long-Term Debt.

The following condensed consolidated financial statements quantify the financial position as of December 31, 2009 and December 31, 2008 and the operations and cash flows for the year ended December 31, 2009, the period October 29, 2008 to December 31, 2008, the period January 1, 2008 to October 28, 2008 and the year ended December 31, 2007 present financial information for the parent Company issuer, the guarantor subsidiaries, the non-guarantor subsidiaries and consolidating adjustments, consisting of the entries that eliminate the investment in subsidiaries and intercompany balances and transactions.

F-39

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2009

(Successor)

	Parent Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Adjustments			Condensed Consolidated
	(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	150,364		$	7,208		$	591	$	—		$	158,163
Short-term investments		23,673			—			—		—			23,673
Accounts receivable less allowance for doubtful accounts		7			251,149			977		—			252,133
Inventories, net		—			68,007			260		—			68,267
Deferred income taxes		17,497			69,519			—		—			87,016
Deferred expenses		—			3,049			—		—			3,049
Intercompany		606,473			381,071			—		(987,544	)		—
Prepaid expenses and other current assets		5,213			19,149			—		—			24,362
TOTAL CURRENT ASSETS		803,227			799,152			1,828		(987,544	)		616,663
PATIENT SERVICE EQUIPMENT, less accumulated depreciation		—			198,770			38		—			198,808
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET		28,393			51,805			29		—			80,227
GOODWILL		—			759,197			—		—			759,197
INTANGIBLE ASSETS, NET		460,000			122,259			—		—			582,259
DEFERRED DEBT ISSUANCE COSTS, NET		63,110			—			—		—			63,110
INTERCOMPANY RECEIVABLE		350,000			2,902			—		(352,902	)		—
INVESTMENT IN SUBSIDIARIES		380,455			538			—		(380,993	)		—
OTHER ASSETS		4,911			3,872			—		—			8,783
	$	2,090,096		$	1,938,495		$	1,895	$	(1,721,439	)	$	2,309,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—		$	123,597		$	259	$	—		$	123,856
Accrued payroll and related taxes and benefits		20,893			45,843			106		—			66,842
Other accrued liabilities		20,799			78,977			992		—			100,768
Deferred revenue		—			27,253			—		—			27,253
Intercompany		157,140			470,404			—		(627,544	)		—
Current portion of long-term debt		77			361,613			—		(360,000	)		1,690
TOTAL CURRENT LIABILITIES		198,909			1,107,687			1,357		(987,544	)		320,409
LONG-TERM DEBT, net of current portion		1,020,402			351,956			—		(352,902	)		1,019,456
DEFERRED INCOME TAXES		183,105			75,925			—		—			259,030
INCOME TAXES PAYABLE AND OTHER NON-CURRENT LIABILITIES		8,949			22,472			—		—			31,421
TOTAL LIABILITIES		1,411,365			1,558,040			1,357		(1,340,446	)		1,630,316
STOCKHOLDERS’ EQUITY
Common stock		—			1			—		(1	)		—
Additional paid-in capital		684,445			396,766			—		(396,766	)		684,445
(Accumulated deficit) retained earnings		(5,714	)		(16,312	)		538		15,774			(5,714	)
TOTAL STOCKHOLDERS’ EQUITY		678,731			380,455			538		(380,993	)		678,731
	$	2,090,096		$	1,938,495		$	1,895	$	(1,721,439	)	$	2,309,047

F-40

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2008

(Successor)

	Parent Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Adjustments			Condensed Consolidated
	(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	159,393		$	8,260		$	365	$	—		$	168,018
Accounts receivable less allowance for doubtful accounts		59			272,144			1,002		—			273,205
Inventories, net		—			59,061			158		—			59,219
Deferred income taxes		7,156			51,288			—		—			58,444
Deferred expenses		—			3,181			—		—			3,181
Intercompany		761,639			255,928			—		(1,017,567	)		—
Prepaid expenses and other current assets		1,240			16,891			—		—			18,131
TOTAL CURRENT ASSETS		929,487			666,753			1,525		(1,017,567	)		580,198
PATIENT SERVICE EQUIPMENT, less accumulated depreciation		—			209,683			57		—			209,740
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET		12,884			54,805			66		—			67,755
GOODWILL		—			895,069			—		—			895,069
INTANGIBLE ASSETS, NET		235,000			162,334			—		—			397,334
DEFERRED DEBT ISSUANCE COSTS, NET		49,648			—			—		—			49,648
INTERCOMPANY RECEIVABLE		350,000			2,939			—		(352,939	)		—
INVESTMENT IN SUBSIDIARIES		395,474			666			—		(396,140	)		—
OTHER ASSETS		4,612			6,457			—		—			11,069
	$	1,977,105		$	1,998,706		$	1,648	$	(1,766,646	)	$	2,210,813
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—		$	141,215		$	167	$	—		$	141,382
Accrued payroll and related taxes and benefits		10,063			64,060			115		—			74,238
Other accrued liabilities		22,203			78,086			700		—			100,989
Deferred revenue		—			30,515			—		—			30,515
Intercompany		153,377			504,190			—		(657,567	)		—
Current portion of long-term debt		6,000			362,750			—		(360,000	)		8,750
TOTAL CURRENT LIABILITIES		191,643			1,180,816			982		(1,017,567	)		355,874
LONG-TERM DEBT, net of current portion		1,013,016			353,406			—		(352,939	)		1,013,483
DEFERRED INCOME TAXES		81,307			46,400			—		—			127,707
INCOME TAXES PAYABLE AND OTHER NON-CURRENT LIABILITIES		18,319			22,610			—		—			40,929
TOTAL LIABILITIES		1,304,285			1,603,232			982		(1,370,506	)		1,537,993
STOCKHOLDERS’ EQUITY
Common stock		—			1			—		(1	)		—
Additional paid-in capital		674,714			396,766			—		(396,766	)		674,714
(Accumulated deficit) retained earnings		(1,894	)		(1,293	)		666		627			(1,894	)
TOTAL STOCKHOLDERS’ EQUITY		672,820			395,474			666		(396,140	)		672,820
	$	1,977,105		$	1,998,706		$	1,648	$	(1,766,646	)	$	2,210,813

F-41

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended December 31, 2009

(Successor)

	Parent Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Condensed Consolidated
	(in thousands)
Operating net revenues	$	—		$	2,087,326	$	7,235	$	—		$	2,094,561
Net revenues from subsidiaries		220,449			—		—		(220,449	)		—
TOTAL NET REVENUES		220,449			2,087,326		7,235		(220,449	)		2,094,561
TOTAL COST OF NET REVENUES		—			863,305		4,154		—			867,459
Provision for doubtful accounts		—			57,811		108		—			57,919
Selling, distribution and administrative		197,666			1,070,641		2,276		(220,449	)		1,050,134
Amortization of intangible assets		832			2,884		—		—			3,716
TOTAL COSTS AND EXPENSES		198,498			1,994,641		6,538		(220,449	)		1,979,228
OPERATING INCOME		21,951			92,685		697		—			115,333
Interest expense		128,363			837		—		—			129,200
Interest income and other		(71,820	)		69,871		340		—			(1,609	)
(LOSS) INCOME BEFORE TAXES		(34,592	)		21,977		357		—			(12,258	)
Income tax (benefit) expense		(15,132	)		6,694		—		—			(8,438	)
NET (LOSS) INCOME		(19,460	)		15,283		357		—			(3,820	)
Equity in income of subsidiaries, net of tax		15,640			357		—		(15,997	)		—
NET (LOSS) INCOME ATTRIBUTABLE TO PARENT ISSUER	$	(3,820	)	$	15,640	$	357	$	(15,997	)	$	(3,820	)

F-42

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Period October 29, 2008 to December 31, 2008

(Successor)

	Parent Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Adjustments			Condensed Consolidated
	(in thousands)
Operating net revenues	$	—		$	355,371		$	1,294	$	—		$	356,665
Net revenues from subsidiaries		51,447			—			—		(51,447	)		—
TOTAL NET REVENUES		51,447			355,371			1,294		(51,447	)		356,665
TOTAL COST OF NET REVENUES		—			137,084			676		—			137,760
Provision for doubtful accounts		—			14,292			37		—			14,329
Selling, distribution and administrative		28,141			202,287			381		(51,447	)		179,362
Amortization of intangible assets		238			770			—		—			1,008
TOTAL COSTS AND EXPENSES		28,379			354,433			1,094		(51,447	)		332,459
OPERATING INCOME		23,068			938			200		—			24,206
Interest expense		25,872			295			—		—			26,167
Interest income and other		(5,665	)		4,836			103		—			(726	)
INCOME (LOSS) BEFORE TAXES		2,861			(4,193	)		97		—			(1,235	)
Income tax expense (benefit)		1,867			(1,208	)		—		—			659
NET INCOME (LOSS)		994			(2,985	)		97		—			(1,894	)
Equity in loss of subsidiaries, net of tax		(2,888	)		97			—		2,791			—
NET (LOSS) INCOME ATTRIBUTABLE TO PARENT ISSUER	$	(1,894	)	$	(2,888	)	$	97	$	2,791		$	(1,894	)

F-43

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Period January 1, 2008 to October 28, 2008

(Predecessor)

	Parent Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Condensed Consolidated
	(in thousands)
Operating net revenues	$	—		$	1,766,882	$	6,407	$	—		$	1,773,289
Net revenues from subsidiaries		179,186			—		—		(179,186	)		—
TOTAL NET REVENUES		179,186			1,766,882		6,407		(179,186	)		1,773,289
TOTAL COST OF NET REVENUES		—			688,123		3,214		—			691,337
Provision for doubtful accounts		—			33,525		101		—			33,626
Selling, distribution and administrative		131,387			970,086		2,249		(179,186	)		924,536
Amortization of intangible assets		—			3,461		—		—			3,461
TOTAL COSTS AND EXPENSES		131,387			1,695,195		5,564		(179,186	)		1,652,960
OPERATING INCOME		47,799			71,687		843		—			120,329
Interest expense		30,294			1,544		—		—			31,838
Interest income and other		(32,634	)		30,068		412		—			(2,154	)
INCOME BEFORE TAXES		50,139			40,075		431		—			90,645
Income tax expense		17,506			16,686		—		—			34,192
NET INCOME		32,633			23,389		431		—			56,453
Equity in income of subsidiaries, net of tax		23,820			431		—		(24,251	)		—
NET INCOME (LOSS) ATTRIBUTABLE TO PARENT ISSUER	$	56,453		$	23,820	$	431	$	(24,251	)	$	56,453

F-44

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended December 31, 2007

(Predecessor)

	Parent Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Condensed Consolidated
	(in thousands)
Operating net revenues	$	—		$	1,631,172		$	629		$	—		$	1,631,801
Net revenues from subsidiaries		172,959			—			—			(172,959	)		—
TOTAL NET REVENUES		172,959			1,631,172			629			(172,959	)		1,631,801
TOTAL COST OF NET REVENUES		—			564,658			334			—			564,992
Provision for doubtful accounts		—			43,011			127			—			43,138
Selling, distribution and administrative		119,106			915,706			209			(172,959	)		862,062
Amortization of intangible assets		—			3,079			—			—			3,079
TOTAL COSTS AND EXPENSES		119,106			1,526,454			670			(172,959	)		1,473,271
OPERATING INCOME (LOSS)		53,853			104,718			(41	)		—			158,530
Interest expense		20,698			1,769			(20	)		—			22,447
Interest income and other		(22,607	)		20,653			—			—			(1,954	)
INCOME (LOSS) BEFORE TAXES		55,762			82,296			(21	)		—			138,037
Income tax expense (benefit)		22,077			29,921			—			—			51,998
NET INCOME (LOSS)		33,685			52,375			(21	)		—			86,039
Equity in income of subsidiaries, net of tax		52,354			(21	)		—			(52,333	)		—
NET INCOME (LOSS) ATTRIBUTABLE TO PARENT ISSUER	$	86,039		$	52,354		$	(21	)	$	(52,333	)	$	86,039

F-45

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31, 2009

(Successor)

	Parent Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Condensed Consolidated
	(in thousands)
OPERATING ACTIVITIES
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	49,741		$	119,426		$	259		$	—	$	169,426
INVESTING ACTIVITIES
Purchases of patient service equipment and property, equipment and improvements, exclusive of effects of acquisitions		(19,426	)		(131,138	)		(33	)		—		(150,597	)
Purchases of short-term investments		(37,554	)		—			—			—		(37,554	)
Maturities of short-term investments		13,881			—			—			—		13,881
Proceeds from disposition of assets		—			6,893			—			—		6,893
Cash paid for acquisitions		—			(1,279	)		—			—		(1,279	)
NET CASH USED IN INVESTING ACTIVITIES		(43,099	)		(125,524	)		(33	)		—		(168,656	)
FINANCING ACTIVITIES
Payments on Senior Secured Bridge Credit Agreement		(1,010,000	)		—			—			—		(1,010,000	)
Proceeds from ABL Facility		630			—			—			—		630
Payments on ABL Facility		(6,630	)		—			—			—		(6,630	)
Payments on other long term debt		—			(2,856	)		—			—		(2,856	)
Proceeds from issuance of Series A-1 Notes		700,000			—			—			—		700,000
Proceeds from issuance of Series A-2 Notes		317,500			—			—			—		317,500
Change in book cash overdraft included in accounts payable		—			7,902			—			—		7,902
Debt issuance costs related to Series A-1 and Series A-2 Notes		(19,039	)		—			—			—		(19,039	)
Debt issuance costs related to the ABL Facility		(207	)		—			—			—		(207	)
Equity contribution		2,075			—			—			—		2,075
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(15,671	)		5,046			—			—		(10,625	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(9,029	)		(1,052	)		226			—		(9,855	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		159,393			8,260			365			—		168,018
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	150,364		$	7,208		$	591		$	—	$	158,163

F-46

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Period October 29, 2009 to December 31, 2008

(Successor)

	Parent Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Condensed Consolidated
	(in thousands)
OPERATING ACTIVITIES
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	33,146		$	30,276		$	(85	)	$	—	$	63,337
INVESTING ACTIVITIES
Purchases of patient service equipment and property, equipment and improvements, exclusive of effects of acquisitions		(739	)		(25,440	)		(38	)		—		(26,217	)
Merger related costs		(49,269	)		—			—			—		(49,269	)
Proceeds from disposition of assets		—			20			—			—		20
NET CASH USED IN INVESTING ACTIVITIES		(50,008	)		(25,420	)		(38	)		—		(75,466	)
FINANCING ACTIVITIES
Payments on Predecessor Revolving Credit Facility		(304,000	)		—			—			—		(304,000	)
Proceeds from Senior Secured Bridge Credit Agreement		1,010,000			—			—			—		1,010,000
Payments on Interim Facility		(249,772	)		—			—			—		(249,772	)
Redemption of convertible senior notes		(151	)		—			—			—		(151	)
Proceeds from ABL Facility		36,000			—			—			—		36,000
Payments on ABL Facility		(30,000	)		—			—			—		(30,000	)
Payments on other long term debt		(4,717	)		(528	)		—			—		(5,245	)
Change in book cash overdraft included in accounts payable		—			(850	)		—			—		(850	)
Debt issuance costs related to the Interim Facility		(45,661	)		—			—			—		(45,661	)
Debt issuance costs related to the ABL Facility		(5,250	)		—			—			—		(5,250	)
Equity contribution		673,334			—			—			—		673,334
Repurchases of common stock		(922,935	)		—			—			—		(922,935	)
Change in control payment for options and awards		(23,536	)		—			—			—		(23,536	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		133,312			(1,378	)		—			—		131,934
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		116,450			3,478			(123	)		—		119,805
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		42,943			4,782			488					48,213
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	159,393		$	8,260		$	365		$	—	$	168,018

F-47

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Period January 1, 2008 to October 28, 2008

(Predecessor)

	Parent Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments		Condensed Consolidated
	(in thousands)
OPERATING ACTIVITIES
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	193,096		$	104,443		$	398		$	—	$	297,937
INVESTING ACTIVITIES
Purchases of patient service equipment and property, equipment and improvements, exclusive of effects of acquisitions		(35,682	)		(121,482	)		(19	)		—		(157,183	)
Proceeds from disposition of assets		—			5,295			—			—		5,295
Cash paid for acquisitions		—			(2,605	)		—			—		(2,605	)
NET CASH USED IN INVESTING ACTIVITIES		(35,682	)		(118,792	)		(19	)		—		(154,493	)
FINANCING ACTIVITIES
Proceeds from Predecessor Revolving Credit Facility		18,300			—			—			—		18,300
Payments on Predecessor Revolving Credit Facility		(138,300	)		—			—			—		(138,300	)
Proceeds from Senior Secured Bridge Credit Agreement		250,000			—			—			—		250,000
Payments on Interim Facility		(228	)		—			—			—		(228	)
Redemption of convertible senior notes		(249,772	)		—			—			—		(249,772	)
Payments on other long term debt		(551	)		(2,608	)		—			—		(3,159	)
Change in book cash overdraft included in accounts payable		—			7,771			—			—		7,771
Debt issuance costs related to the Interim Facility		(9,204	)		—			—			—		(9,204	)
Excess tax benefits from share-based compensation		497			—			—			—		497
Issuances of common stock		413			—			—			—		413
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(128,845	)		5,163			—			—		(123,682	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		28,569			(9,186	)		379			—		19,762
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		14,374			13,968			109			—		28,451
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	42,943		$	4,782		$	488		$	—	$	48,213

F-48

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31, 2007

(Predecessor)

	Parent Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Condensed Consolidated
	(in thousands)
OPERATING ACTIVITIES
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	180,799		$	113,228		$	(21	)	$	—	$	294,006
INVESTING ACTIVITIES
Purchases of patient service equipment and property, equipment and improvements, exclusive of effects of acquisitions		(32,083	)		(96,676	)		—			—		(128,759	)
Proceeds from disposition of assets		—			102			—			—		102
Cash paid for acquisitions		—			(354,708	)		130			—		(354,578	)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		(32,083	)		(451,282	)		130			—		(483,235	)
FINANCING ACTIVITIES
Intercompany loan		(350,000	)		350,000			—			—		—
Proceeds from Predecessor Revolving Credit Facility		359,000			—			—			—		359,000
Payments on Predecessor Revolving Credit Facility		(170,000	)		—			—			—		(170,000	)
Payments on other long term debt		(2,716	)		(548	)		—			—		(3,264	)
Change in book cash overdraft included in accounts payable		—			(4,291	)		—			—		(4,291	)
Excess tax benefits from share-based compensation		4,057			—			—			—		4,057
Issuances of common stock		17,521			—			—			—		17,521
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(142,138	)		345,161			—			—		203,023
NET INCREASE IN CASH AND CASH EQUIVALENTS		6,578			7,107			109			—		13,794
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		7,796			6,861			—			—		14,657
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	14,374		$	13,968		$	109		$	—	$	28,451

F-49

APRIA HEALTHCARE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 16—Selected Quarterly Financial Data (unaudited)

	First			Second		Third			Fourth
	(Successor)			(Successor)		(Successor)			(Successor)
	(in thousands)
2009
Net Revenues	$	516,431		$	522,528	$	519,515		$	536,087
Gross Profit		309,387			319,062		273,860			324,793
Operating Income (Loss)		32,970			40,628		(3,748	)		45,483
Net (Loss) Income	$	(477	)	$	4,015	$	(22,981	)	$	15,623

	First		Second		Third		Period October 1, 2008 to October 28, 2008			Period October 29, 2008 to December 31, 2008
	(Predecessor)		(Predecessor)		(Predecessor)		(Predecessor)			(Successor)
	(in thousands)
2008
Net Revenues	$	527,978	$	531,248	$	530,828	$	183,235		$	356,665
Gross Profit		322,708		321,788		327,541		109,915			218,905
Operating Income (Loss)		42,298		43,649		47,264		(12,882	)		24,206
Net Income (Loss)	$	20,772	$	23,155	$	22,100	$	(9,574	)	$	(1,894	)

During the third quarter of 2009, we finalized the valuation of the intangible assets related to the Merger, resulting in adjustments to the value of our capitated relationships, patient backlogs, trade names and goodwill. The adjustments to our capitated relationships and patient backlogs also resulted in additional amortization expense of $35.7 million during the quarter.

NOTE 17—Subsequent Events

We evaluated all subsequent events that occurred after the balance sheet date through July 16, 2010.

F-50

APRIA HEALTHCARE GROUP INC.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

	Balance  at Beginning of Period		Increase Due to Coram Acquisition		Charged to Costs and Expenses		Deductions		Balance at End of Period
	(in thousands)
Year ended December 31, 2009 (Successor) Deducted from asset accounts:
Allowance for doubtful accounts	$	25,271	$	—	$	57,919	$	43,263	$	39,927
Reserve for inventory and patient service equipment shortages	$	6,091	$	—	$	2,327	$	6,241	$	2,177
Period October 29, 2008 to December 31, 2008 (Successor) Deducted from asset accounts:
Allowance for doubtful accounts	$	35,286	$	—	$	14,329	$	24,344	$	25,271
Reserve for inventory and patient service equipment shortages	$	5,914	$	—	$	1,554	$	1,377	$	6,091
Period January 1, 2008 to October 28, 2008 (Predecessor) Deducted from asset accounts:
Allowance for doubtful accounts	$	47,823	$	—	$	33,626	$	46,163	$	35,286
Reserve for inventory and patient service equipment shortages	$	5,366	$	—	$	2,583	$	2,035	$	5,914
Year ended December 31, 2007 (Predecessor) Deducted from asset accounts:
Allowance for doubtful accounts	$	27,324	$	21,557	$	43,138	$	44,196	$	47,823
Reserve for inventory and patient service equipment shortages	$	4,420	$	195	$	3,351	$	2,600	$	5,366

F-51

APRIA HEALTHCARE GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2010			December 31, 2009
	(in thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	133,389		$	158,163
Short-term investments		19,183			23,673
Accounts receivable, less allowance for doubtful accounts of $45,036 and $39,927 at March 31, 2010 and December 31, 2009, respectively		282,608			252,133
Inventories		60,013			68,267
Deferred income taxes		80,407			87,016
Deferred expenses		3,017			3,049
Prepaid expenses and other current assets		30,898			24,362
TOTAL CURRENT ASSETS		609,515			616,663
PATIENT SERVICE EQUIPMENT, less accumulated depreciation of $109,322 and $97,874 at March 31, 2010 and December 31, 2009, respectively		186,366			198,808
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET		79,408			80,227
GOODWILL		759,947			759,197
INTANGIBLE ASSETS, NET		581,352			582,259
DEFERRED DEBT ISSUANCE COSTS, NET		60,558			63,110
OTHER ASSETS		7,124			8,783
TOTAL ASSETS	$	2,284,270		$	2,309,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	90,344		$	123,856
Accrued payroll and related taxes and benefits		54,734			66,842
Other accrued liabilities		126,777			100,768
Deferred revenue		26,806			27,253
Current portion of long-term debt		1,643			1,690
TOTAL CURRENT LIABILITIES		300,304			320,409
LONG-TERM DEBT, net of current portion		1,019,061			1,019,456
DEFERRED INCOME TAXES		252,246			259,030
INCOME TAXES PAYABLE AND OTHER NON-CURRENT LIABILITIES		33,681			31,421
TOTAL LIABILITIES		1,605,292			1,630,316
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value: 1,000 shares authorized; 100 shares issued at March 31, 2010 and December 31, 2009		—			—
Additional paid-in capital		685,495			684,445
Accumulated deficit		(6,517	)		(5,714	)
TOTAL STOCKHOLDERS’ EQUITY		678,978			678,731
	$	2,284,270		$	2,309,047

See notes to unaudited condensed consolidated financial statements.

F-52

APRIA HEALTHCARE GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March  31,
	2010			2009
	(in thousands)
Net revenues:
Fee for service/product arrangements	$	469,836		$	473,822
Capitation arrangements		39,040			42,609
TOTAL NET REVENUES		508,876			516,431
Costs and expenses:
Cost of net revenues:
Product and supply costs		156,833			160,612
Patient service equipment depreciation		25,056			26,400
Home respiratory therapy services		8,193			8,463
Nursing services		9,088			8,844
Other		3,622			2,725
TOTAL COST OF NET REVENUES		202,792			207,044
Provision for doubtful accounts		15,887			11,356
Selling, distribution and administrative		257,738			263,784
Amortization of intangible assets		1,657			1,277
TOTAL COSTS AND EXPENSES		478,074			483,461
OPERATING INCOME		30,802			32,970
Interest expense		32,572			32,422
Interest income and other		(83	)		(155	)
(LOSS) INCOME BEFORE TAXES		(1,687	)		703
Income tax (benefit) expense		(884	)		1,180
NET LOSS	$	(803	)	$	(477	)

See notes to unaudited condensed consolidated financial statements.

F-53

APRIA HEALTHCARE GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2010			2009
	(in thousands)
OPERATING ACTIVITIES
Net loss	$	(803	)	$	(477	)
Items included in net income not requiring cash:
Provision for doubtful accounts		15,887			11,356
Depreciation		31,580			32,681
Amortization of intangible assets		1,657			1,277
Amortization of deferred debt issuance costs		2,552			1,460
Deferred income taxes		(175	)		3,059
Profit interest compensation		1,128			2,308
Loss on disposition of assets and other		4,619			3,813
Changes in operating assets and liabilities:
Accounts receivable		(47,062	)		(24,889	)
Inventories		8,254			1,476
Prepaid expenses and other assets		(5,797	)		(8,681	)
Accounts payable, exclusive of book-cash overdraft		(13,179	)		(7,319	)
Accrued payroll and related taxes and benefits		(12,108	)		(13,164	)
Income taxes payable		381			1,016
Deferred revenue, net of related expenses		(415	)		(3,339	)
Accrued expenses		28,586			29,095
NET CASH PROVIDED BY OPERATING ACTIVITIES		15,105			29,672
INVESTING ACTIVITIES
Purchases of patient service equipment and property, equipment and improvements		(27,319	)		(39,843	)
Purchases of short-term investments		(8,189	)		—
Maturities of short-term investments		12,680			—
Proceeds from disposition of assets		15			251
Cash paid for acquisition		(1,200	)		—
NET CASH USED IN INVESTING ACTIVITIES		(24,013	)		(39,592	)
FINANCING ACTIVITIES
Proceeds from ABL Facility		—			378
Payments on ABL Facility		—			(6,035	)
Payments on other long-term debt		(441	)		(688	)
Change in book-cash overdraft included in accounts payable		(14,137	)		(2,029	)
Debt issuance costs		(1,210	)		(206	)
Equity contributions		—			1,075
Cash paid on profit interest units		(78	)		—
NET CASH USED IN FINANCING ACTIVITIES		(15,866	)		(7,505	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(24,774	)		(17,425	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		158,163			168,018
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	133,389		$	150,593

SUPPLEMENTAL DISCLOSURES—See Note 6 and Note 9 for a discussion of cash paid for interest and income taxes, respectively.

Purchases of patient service equipment and property, equipment and improvements exclude purchases that remain unpaid at the end of the respective quarter. Such amounts are then included in the following period’s purchases when paid. Unpaid purchases were $5,729 and $11,011 at March 31, 2010 and December 31, 2009, respectively.

See notes to unaudited condensed consolidated financial statements.

F-54

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—Summary of Significant Accounting Policies

Basis of Presentation: The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These statements include the accounts of Apria Healthcare Group Inc. (“Apria” or “the Company”) and its subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation.

In the opinion of management, all adjustments, consisting of normal recurring accruals necessary for a fair presentation of the results of operations for the interim periods presented, have been reflected herein. The unaudited results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report for the fiscal year ended December 31, 2009.

On October 28, 2008, the Company completed its merger (the “Merger”) with Sky Merger Sub Corporation (“Merger Sub”), a Delaware corporation and wholly-owned subsidiary of Sky Acquisition LLC, a Delaware limited liability company (“Buyer” or “Sky LLC”). Buyer is controlled by a private investment fund affiliated with The Blackstone Group (the “Sponsor”).

Company Background: Apria operates in the home healthcare segment of the healthcare industry, providing a variety of high-quality clinical patient care management programs, related products and supplies as prescribed by a physician and/or authorized by a case manager as part of a care plan. Essentially all products and services offered by the Company are provided through the Company’s network of approximately 500 locations, which are located throughout the United States. The Company provides services and products in two reportable operating segments: (1) home respiratory therapy and home medical equipment and (2) home infusion therapy. Within these two operating segments there are three core service lines: home respiratory therapy, home medical equipment and home infusion therapy. Both segments provide products and services in the home setting to patients and are primarily paid for by a third-party payor, such as Medicare, Medicaid, managed care or other third-party insurer. Sales for both segments are primarily derived from referral sources such as hospital discharge planners, medical groups or independent physicians.

Use of Accounting Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Among the significant estimates affecting the consolidated financial statements are those related to revenue recognition and the resulting accounts receivable, share-based compensation, income taxes, goodwill and long-lived assets.

Revenue Recognition and Concentration of Credit Risk: Revenues are recognized under fee-for-service/product arrangements for equipment the Company rents to patients, sales of equipment, supplies, pharmaceuticals and other items the Company sells to patients and for capitation payments received from third party payors for services and equipment the Company provides to the patients of these payors. Revenue generated from equipment that the Company rents to patients is recognized over the rental period, typically one month, and commences on delivery of the equipment to the patients. Revenue related to sales of equipment, supplies and pharmaceuticals is recognized on the date of delivery to the patients. Revenues derived from capitation arrangements were approximately 8% of total net revenues for the three months ended March 31, 2010 and the three months ended March 31, 2009. Capitation revenue is earned as a result of entering into a contract with a third party to provide its members certain services without regard to the actual services provided, therefore revenue is recognized in the period that the beneficiaries are entitled to health care services. All revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors,

F-55

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

including private insurers, prepaid health plans, Medicare and Medicaid. For the three months ended March 31, 2010 and 2009, revenues reimbursed under arrangements with Medicare and Medicaid were approximately 30% and 28%, respectively, as a percentage of total revenues. No other third-party payor group represented more than 8% of the Company’s revenues in the three months ended March 31, 2010 or 2009. Rental and sale revenues in the fee-for-service/product arrangement revenue line item were approximately $158.2 million or 33.7% and $311.6 million or 66.3%, respectively, for the three months ended March 31, 2010 and $165.5 million or 34.9% and $308.3 million or 65.1%, respectively, for the three months ended March 31, 2009.

In the Company’s business, there are multiple products that are delivered to patients. These arrangements involve equipment that is rented and related supplies that may be sold that cannot be returned. In arrangements with multiple deliverables, revenue is recognized when each deliverable is provided to the patient. For example, revenues from equipment rental supplies sales are recognized upon delivery of the products, as the supplies sold are considered a separate unit of accounting.

Cash and Cash Equivalents: Cash is maintained with several financial institutions. These financial institutions are located throughout the United States and the Company’s cash management practices limit exposure to any one institution. Book cash overdrafts, which are reported as a component of accounts payable, were $18.4 million and $32.5 million at March 31, 2010 and December 31, 2009, respectively. Management considers all highly liquid instruments purchased with a maturity of less than three months to be cash equivalents.

Short-Term Investments: Certificates of deposit with maturities greater than three months from our purchase date are classified as short-term investments. As of March 31, 2010, the carrying value of the Company’s short-term investments approximates fair value and such investments do not individually exceed FDIC insurance limits.

Accounts Receivable: Included in accounts receivable are earned but unbilled receivables of $49.5 million and $44.6 million at March 31, 2010 and December 31, 2009, respectively. Delays ranging from a day up to several weeks between the date of service and billing can occur due to delays in obtaining certain required payor-specific documentation from internal and external sources. Earned but unbilled receivables are aged from date of service and are considered in the analysis of historical performance and collectibility.

Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required to record total net revenues and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application, claim denial or account review.

Management performs periodic analyses to evaluate accounts receivable balances to ensure that recorded amounts reflect estimated net realizable value. Specifically, management considers historical realization data, accounts receivable aging trends, other operating trends, the extent of contracted business and business combinations. Also considered are relevant business conditions such as governmental and managed care payor claims processing procedures and system changes. Additionally, focused reviews of certain large or problematic payors are performed. Due to continuing changes in the healthcare industry and third-party reimbursement, it is possible that management’s estimates could change in the near term, which could have an adverse impact on operations and cash flows.

F-56

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Accounts receivable are reduced by an allowance for doubtful accounts which provides for those accounts from which payment is not expected to be received, although services were provided and revenue was earned. Upon determination that an account is uncollectible, it is written-off and charged to the allowance.

Deferred Revenue and Deferred Expense: A lessor is required to recognize rental income over the lease term. Rental of patient equipment is billed on a monthly basis beginning on the date the equipment is delivered. Since deliveries can occur on any day during a month, the amount of billings that apply to the next month are deferred. Only the direct costs associated with the initial rental period are deferred.

Inventories: Inventories are stated at the lower of cost (first-in, first-out method) or market and consist primarily of pharmaceuticals and items used in conjunction with patient service equipment. Inventories are written down to fair value for slow moving or obsolete inventory.

Patient Service Equipment: Patient service equipment is stated at cost and consists of medical equipment rented to patients on a month-to-month basis. Depreciation is provided using the straight-line method over the estimated useful lives of the equipment, which range from one to ten years.

Property, Equipment and Improvements: Property, equipment and improvements are stated at cost. Included in property and equipment are assets under capitalized leases which consist of information systems hardware and software. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.

Capitalized Software: Included in property, equipment and improvements are costs related to internally developed and purchased software that are capitalized and amortized over periods that the assets are expected to provide benefit. Capitalized costs include direct costs of materials and services incurred in developing or obtaining internal-use software and payroll and benefit costs for employees directly involved in the development of internal-use software. Additions to capitalized software totaled $2.9 million for the three months ended March 31, 2010.

Goodwill and long-lived assets: Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. The amounts and useful lives assigned to intangible assets acquired, other than goodwill, impact the amount and timing of future amortization.

Goodwill and indefinite-lived intangible assets are not amortized but instead tested at least annually for impairment, or more frequently when events or changes in circumstances indicate that the assets might be impaired. Goodwill is tested for impairment by comparing the carrying value to the fair value of the reporting unit to which the goodwill is assigned. A two-step test is used to identify the potential impairment and to measure the amount of impairment, if any. The first step is to compare the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired; otherwise, goodwill is impaired and the loss is measured by performing step two. Under step two, the impairment loss is measured by comparing the implied fair value of the reporting unit with the carrying amount of goodwill. Management has determined that our two operating segments, home respiratory therapy/home medical equipment and home infusion therapy, are reporting units. The Company performs the annual test for impairment as of the first day of its fourth quarter and determines fair value using the income approach methodology of valuation that includes the discounted cash flow method. During the annual goodwill impairment test in 2009, the Company completed step one and determined that there was no impairment of goodwill since the fair value of the reporting units exceeded the carrying value. Our annual indefinite-lived intangible assets impairment test in 2009 also resulted in no impairment as the fair value of the assets exceeded the carrying value.

F-57

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Long-lived assets, including property and equipment and purchased intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Significant judgment is required in determining whether a potential indicator of impairment of long-lived assets exists and in estimating future cash flows for any necessary impairment tests. Recoverability of assets to be held and used is measured by the comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Purchased intangible assets consist primarily of trade names, patient backlog, capitated relationships and payor relationships resulting from the Merger. Purchased intangible assets that have definite lives are amortized over the estimated useful lives of the related assets, generally ranging from one to twenty years.

Deferred Debt Issuance Costs: Capitalized debt issuance costs include those associated with $700.0 million of the Company’s 11.25% Senior Secured Notes due 2014 (Series A-1) (the “Series A-1 Notes”), $317.5 million of the Company’s 12.375% Senior Secured Notes due 2014 (Series A-2) (the “Series A-2 Notes”) and the Company’s senior secured asset-based revolving credit facility (“ABL Facility”). Such costs are classified as non-current assets. Costs relating to the ABL Facility are amortized through the maturity date in October 2013. Costs relating to the Series A-1 Notes and Series A-2 Notes are amortized from the issuance date through October 2014. See Note 6—Long-term Debt.

Fair Value of Financial Instruments: The carrying value of Apria’s bank debt approximates fair value because the underlying instruments are variable notes that reprice frequently. The fair value of the Series A-1 Notes and Series A-2 Notes, as determined by reference to quoted prices for private transactions of Apria’s issuances, are $758.6 million and $346.5 million at March 31, 2010, respectively. The carrying amounts of cash and cash equivalents, accounts receivable, trade payables and accrued expenses approximate fair value due to their short maturity.

Product and Supply Costs: Product and supply costs presented within cost of total net revenues are comprised primarily of the cost of supplies and equipment provided to patients, infusion drug costs and enteral product costs.

Home Respiratory Therapy Expenses: Home respiratory therapy expenses presented within cost of net revenues are comprised primarily of employee salary and benefit costs or contract fees paid to respiratory therapists and other related professionals who are deployed to service a patient. Home respiratory therapy personnel are also engaged in a number of administrative and marketing tasks, and, accordingly, these costs are included within selling, distribution and administrative expenses and amounted to $6.4 million and $6.1 million for the three-month periods ended March 31, 2010 and 2009, respectively.

Distribution Expenses: Distribution expenses are included in selling, distribution and administrative expenses and totaled $38.8 million and $42.6 million for the three months ended March 31, 2010 and 2009, respectively. Such expenses represent the cost incurred to coordinate and deliver products and services to patients. Included in distribution expenses are leasing, maintenance, licensing and fuel costs for the vehicle fleet; salaries and other costs related to drivers and dispatch personnel; and amounts paid to courier and other outside shipping vendors. Such expenses fall within the definition of “shipping and handling” costs and are classified within selling and administrative expenses and as a result, cost of net revenues may not be comparable to other companies.

Self-Insurance: Coverage for certain employee medical claims and benefits, as well as workers’ compensation, vehicle liability, professional and general liability are self-insured. Accruals for medical claims at

F-58

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2010 and December 31, 2009 were $7.5 million and $7.0 million, respectively. Amounts accrued for costs of the other liability coverages totaled $28.1 million and $27.8 million at March 31, 2010 and December 31, 2009, respectively. All such amounts are classified in other accrued liabilities.

Advertising: Advertising costs are expensed as incurred. Such expenses are included in selling, distribution and administrative expenses and amounted to $1.0 million and $0.7 million for the three months ended March 31, 2010 and 2009, respectively.

Income Taxes: Deferred income tax assets and liabilities are computed for differences between the carrying amounts of assets and liabilities for financial statement and tax purposes. Deferred income tax assets are required to be reduced by a valuation allowance when it is determined that it is more likely than not that all or a portion of a deferred tax asset will not be realized. In determining the necessity and amount of a valuation allowance, management considers our current and past performance, the market environment in which the Company operates, tax planning strategies and the length of tax benefit carryforward periods.

Profit Interest Units: Compensation expense for all profit interest unit awards made to employees is measured and recognized based on estimated fair values on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period in our consolidated financial statements. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Profit interest units expense is recognized on a straight-line basis over the requisite service period. The estimate of fair value of profit interest unit awards on the date of grant is determined through the allocation of all outstanding securities to a business enterprise valuation. The enterprise valuation is based upon a combination of the income approach and the market approach. The income approach is based on discounted cash flows. The market approach uses a selection of comparable companies in determining value. This determination of fair value is affected by assumptions regarding a number of highly complex and subjective variables. Changes in these assumptions can materially affect the estimate of the fair value.

Reclassification: Certain amounts from the prior year have been reclassified on the statements of cash flows to conform with the current year presentation. For the three months ended March 31, 2009, $1.7 million was reclassified from accrued expenses to accrued payroll and related taxes and benefits.

NOTE 2—Recent Developments

Enactment of a Comprehensive Healthcare Reform Package: In March 2010, the Federal government enacted the comprehensive healthcare Reform Package which consists of the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act of 2010. Among many other provisions, the Reform Package expands the Medicaid program, mandates extensive insurance market reforms, creates new health insurance access points (e.g., insurance exchanges), provides certain insurance subsidies (e.g., premiums and cost sharing), imposes individual and employer health insurance requirements and makes a number of changes to the U.S. Internal Revenue Code of 1986, as amended (the “Code”).

There are a number of provisions in the Reform Package that may affect the Company. For example, the Reform Package requires certain pharmaceutical and medical device manufacturers to pay an excise tax to the government, which may, in turn, increase costs for these products. The Reform Package also provides for cuts in some Medicare payments made to certain providers and to Medicare Advantage plans, through which the Company contracts to provide services to Medicare beneficiaries. Also included in the Reform Package are (i) an expansion of the Recovery Audit Contractor Program, (ii) certain fraud and abuse prevention measures and (iii) expanded regulatory authority concerning the types of conduct that can result in additional fines and

F-59

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

penalties for those healthcare providers who do not comply with applicable laws and regulations. Furthermore, the Reform Package grants the Secretary of HHS authority to set a date by which certain providers and suppliers will be required to establish a compliance program.

The Reform Package makes a number of changes to how certain of our products and services will be reimbursed by Medicare. The Reform Package also makes changes to the Medicare durable medical equipment consumer price index adjustment for 2011 and each subsequent year based upon the CPI reduced by a new productivity adjustment which may result in negative updates and includes changes to the Medicare DMEPOS competitive bidding program. Significantly, Round 2 of the competitive bidding program has been expanded from 70 to 91 of the largest MSAs. The Reform Package also gives the Secretary of HHS the authority to apply competitive bid pricing to non-bid areas, but details of that process are unlikely to be understood until after CMS issues guidance or completes a related rulemaking process.

In an effort to further strengthen the integrity of the Medicare program, the Reform Package includes additional requirements concerning physician enrollment and certain mandatory face-to-face patient/physician visits in conjunction with the ordering of durable medical equipment. These provisions are likely to be the subject of rulemaking and are a high priority for the American Association for Homecare and other industry representative organizations. The Company expects the Administration to continue to enhance its oversight efforts, and we strive to incorporate any necessary changes into our overall corporate compliance and internal audit programs on a regular basis.

The effective dates of the various provisions within the Reform Package are staggered over the next several years, with some changes occurring immediately. Much of the interpretation of what the Reform Package requires will be subject to administrative rulemaking, the development of agency guidance and court interpretations. The Company will continue to assess the impact of the Reform Package on our products and services.

Reorganization of the Senior Leadership Structure of our Home Respiratory Therapy and Home Medical Equipment Segment: On February 12, 2010, the Company finalized a decision to reorganize the senior leadership structure of the home respiratory therapy and home medical equipment segment. As part of this reorganization, Lawrence A. Mastrovich, President, Home Respiratory Therapy and Home Medical Equipment segment, resigned and his responsibilities were assumed by other senior executives.

NOTE 3—Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (“FASB”) issued ASC 810, “Consolidation” (“ASC 810”) (originally issued as Statement of Financial Accounting Standard No. 167, “Amendments to FASB Interpretation No. 46(R)”). Among other items, ASC 810 responds to concerns about the application of certain key provisions of FIN 46(R), including those regarding the transparency of the involvement with variable interest entities. ASC 810 is effective for calendar year companies beginning on January 1, 2010. The Company adopted the Standard for the interim period ended March 31, 2010. There was no impact on its financial position, results of operations, cash flows or disclosures.

In October 2009, the FASB issued ASU 2009-13, “Multiple-Deliverable Revenue Arrangements” which amends ASC Topic 605, Revenue Recognition (“ASU 2009-13”) Under this standard, management is no longer required to obtain vendor-specific objective evidence or third party evidence of fair value for each deliverable in an arrangement with multiple elements, and where evidence is not available we may now estimate the proportion of the selling price attributable to each deliverable. ASU 2009-13 will be effective prospectively for revenue arrangements entered into or materially modified in the fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the impact of ASU 2009-13 on its financial position, results of operations, cash flows and disclosures.

F-60

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In January 2010, the FASB issued ASU 2010-6, “Improving Disclosures About Fair Value Measurements” (“ASU 2010-6”) which requires reporting entities to make new disclosures about recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair- value measurements. ASU 2010-6 is effective for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December 15, 2010. We do not expect the adoption of ASU 2010-6 to have a material impact on our consolidated financial statements.

NOTE 4—Business Combinations

The Company periodically acquires complementary businesses in specific geographic markets. The results of operations of the acquired companies are included in the accompanying condensed consolidated statements of operations from the dates of acquisition. During the three months ended March 31, 2010, the Company purchased certain assets of a business for $1.5 million. No acquisitions were made during the three months ended March 31, 2009.

NOTE 5—Goodwill and Intangible Assets

Goodwill activity during the three months ended March 31, 2010 was as follows:

	Home  Infusion Therapy		Home Respiratory Therapy and Home Medical Equipment		Total
	(in thousands)
Balance, December 31, 2009	$	257,823	$	501,374	$	759,197
Acquisition		—		750		750
Balance, March 31, 2010	$	257,823	$	502,124	$	759,947

Intangible assets consist of the following:

	March 31, 2010								December 31, 2009
	Average Life in Years	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Net Book Value
	(dollars in thousands)
Intangible assets subject to amortization:
Patient backlog	—	$	—	$	—		$	—	$	44,000	$	(44,000	)	$	—
Capitated relationships	20.0		40,000		(2,833	)		37,167		40,000		(2,333	)		37,667
Payor relationships	20.0		11,000		(779	)		10,221		11,000		(642	)		10,358
Net favorable leasehold interest	3.2		3,552		(1,588	)		1,964		3,553		(1,319	)		2,234
Subtotal			54,552		(5,200	)		49,352		98,553		(48,294	)		50,259
Intangible assets not subject to amortization:
Trade names	—		525,000		—			525,000		525,000		—			525,000
Accreditations with commissions	—		7,000		—			7,000		7,000		—			7,000
Subtotal	—		532,000		—			532,000		532,000		—			532,000
Total		$	586,552	$	(5,200	)	$	581,352	$	630,553	$	(48,294	)	$	582,259

F-61

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Amortization expense amounted to $1.7 million and $1.3 million for the three months ended March 31, 2010 and 2009, respectively. Estimated amortization expense for each of the fiscal years ending December 31 is presented below:

Year Ending December 31,	(in thousands)
2009	$	4,306
2010		3,474
2011		2,854
2012		2,550
2013		2,550

NOTE 6—Long-Term Debt

Series A-1 Notes and Series A-2 Notes. Series A-1 Notes and Series A-2 Notes were issued by the Company in May 2009 and August 2009, respectively. The Series A-1 Notes and the Series A-2 Notes bear interest at a rate equal to 11.25% per annum and 12.375% per annum, respectively. The indenture governing the Series A-1 Notes and the Series A-2 Notes, among other restrictions, limits the Company’s ability and the ability of its restricted subsidiaries to:

• incur additional debt;

• pay dividends and make other distributions;

• make certain investments;

• repurchase our stock;

• incur certain liens;

• enter into transactions with affiliates;

• merge or consolidate;

• enter into agreements that restrict the ability of our subsidiaries to make dividends or other payments to us; and

• transfer or sell assets.

Subject to certain exceptions, the indenture governing the Series A-1 Notes and the Series A-2 Notes permits Apria and its restricted subsidiaries to incur additional indebtedness, including senior indebtedness and secured indebtedness. The Series A-1 Notes are entitled to a priority of payment over the Series A-2 notes in certain circumstances, including upon any acceleration of the obligations under the Series A-1 Notes, the Series A-2 Notes or any bankruptcy or insolvency event or default with respect to Apria or any guarantor of the Series A-1 Notes and the Series A-2 Notes.

Senior Secured Bridge Credit Agreement: In connection with the Merger on October 28, 2008, the Company entered into a $1,010.0 million senior secured bridge credit agreement (the “senior secured bridge credit agreement”) with Banc of America Securities LLC and Wachovia Capital Markets, LLC, as joint lead arrangers, Banc of America Securities LLC, Wachovia Capital Markets, LLC and Barclays Capital, the investment banking division of Barclays Bank PLC, as joint bookrunners and Banc of America Bridge LLC, as administrative agent and Bank of America, N.A., as collateral agent, and a syndicate of financial institutions and institutional lenders. Proceeds from the issuance of the Series A-1 and Series A-2 Notes, together with cash on hand, were used to repay all borrowings under the senior secured bridge credit agreement and the senior secured bridge credit agreement was terminated.

F-62

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

ABL Facility: In connection with the Merger on October 28, 2008, the Company entered into the ABL Facility with Banc of America Securities LLC and Wachovia Capital Markets, LLC, as joint lead arrangers, Banc of America Securities LLC, Wachovia Capital Markets, LLC and Barclays Capital, the investment banking division of Barclays Bank PLC, as joint bookrunners and Bank of America, N.A., as administrative agent and collateral agent, and a syndicate of financial institutions and institutional lenders.

The ABL Facility provides for revolving credit financing of up to $150.0 million, subject to borrowing base availability, with a maturity of five years, including both a letter of credit and swingline loan sub-facility. The borrowing base at any time is equal to the sum (subject to certain reserves and other adjustments) of 85% of eligible receivables and the lesser of (a) 85% of the net orderly liquidation value of eligible inventory and (b) $20.0 million.

As of March 31, 2010, there were no outstanding borrowings under the ABL Facility, outstanding letters of credit totaled $16.1 million and additional availability under the ABL Facility, subject to the borrowing base, was $133.9 million. As of March 31, 2010, the available borrowing base did not constrain ability to borrow the entire $133.9 million of available borrowings under the ABL Facility. At March 31, 2010, the Company was in compliance with all of the financial covenants required by the credit agreement governing the ABL Facility.

Interest paid on debt totaled $0.5 million and $0.4 million for the three months ended March 31, 2010 and 2009, respectively. Interest expense for the three months ended March 31, 2010 and 2009 was $32.6 million and $32.4 million, respectively.

NOTE 7—Stockholders’ Equity

For the three months ended March 31, 2010, changes to stockholders’ equity were comprised of the following amounts:

Net loss	$	(803	)
Cash paid on profit interest units		(78	)
Profit interest compensation		1,128
	$	247

NOTE 8—Equity-Based Compensation

Profit Interest Units: In November and December of 2008, BP Healthcare Holdings LLC (“BP Holdings”) and Sky LLC, parent entities of the Company affiliated with the Sponsor, granted equity units to the Company’s Chief Executive Officer and the Company’s Chief Financial Officer for purposes of retaining them and enabling such individuals to participate in the long-term growth and financial success of the Company. In addition, in 2009, Sky LLC granted equity units to certain management employees for purposes of retaining them and enabling such individuals to participate in the long-term growth and financial success of the Company. Profit interest units are measured at the grant date, based on the calculated fair value of the award, and are recognized as an expense over the employee’s requisite service period. These equity awards were issued in exchange for services to be performed.

BP Holdings granted the Company’s Chief Executive Officer 38,697,318 Class B units, all of which are subject to vesting terms based on either (i) continued service to BP Holdings or its subsidiaries and/or (ii) performance/market conditions.

F-63

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

• Time-Vesting Units. The portion of the Class B units that vest based on continued service represent 80% of the total Class B units. These units vest ratably over 48 months starting on October 28, 2008 based on continued service, but will become fully vested on an accelerated basis either (x) upon a change in control while the Company’s Chief Executive Officer continues to provide services to BP Holdings or its subsidiaries or (y) if affiliates of the Sponsor receive cash proceeds in respect to 50% of their units in BP Holdings equal to at least 200% of their aggregate capital contributions in respect of such units while the Company’s Chief Executive Officer continues to provide services to BP Holdings or its subsidiaries. In addition, if the Company’s Chief Executive Officer’s services are terminated (a) by the Company without “cause” or (b) by the Chief Executive Officer as a result of “constructive termination,” an additional number of these time-vesting Class B units will vest equal to the number that would have vested over the 24-month period following the applicable termination date. Any of these time-vested Class B units that are unvested on termination of the executive’s services will be forfeited.

• Performance-Vesting Units. The remaining portion of the Class B units that vest based on performance/market conditions represent 20% of the total Class B units. One-half of these units will vest if affiliates of the Sponsor receive cash proceeds equal to at least 200% of their aggregate capital contributions in respect of all of their units in BP Holdings, with the other half eligible to vest if they receive cash proceeds equal to at least 300% of their aggregate capital contributions in respect of all of their units in BP Holdings. Any of these performance-vesting units that are unvested upon a termination of the Company’s Chief Executive Officer’s services (x) by the Company without “cause,” (y) by the executive as a result of “constructive termination” or (z) by the executive for any reason on or following October 28, 2012, will remain outstanding until the second anniversary of the applicable termination date (unless they vest prior to that date). If the units do not vest by such anniversary, then any unvested performance-vesting units shall be immediately forfeited.

Assumptions used were as follows:

Expected Asset Volatility(1)	23.0	%
Risk Free Interest Rate(2)	2.24	%
Expected Life(3)	5.0 years

(1) The expected asset volatility is derived from the asset volatilities of comparable publicly traded companies.

(2) The risk free interest rate is interpolated from the constant maturity treasury rate (“CMT Rate”) as of the valuation date with the maturity matching the contractual life.

(3) The expected life is based on management’s estimate.

The following table summarizes activity for profit interest units for the period October 29, 2008 to March 31, 2009:

	Class B Units	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life
Balance at December 31, 2009	38,697,318	$	0.36
Granted	—
Exercised	—
Forfeited	—
Balance at March 31, 2010	38,697,318			2.6
Vested units at March 31, 2010	9,674,330			2.6

F-64

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The grant date fair value of the B units was $13.9 million.

Sky LLC granted the Company’s Chief Financial Officer 500,000 Class A-2 units, 6,675,287 Class B units and 2,225,096 Class C units, all of which are subject to vesting terms based on either (i) continued service to Sky LLC or its subsidiaries or (ii) performance/market conditions.

• Class A-2 Units. The Class A-2 units vest if an initial public offering (“IPO”) or change of control occurs and the valuation of Class A-1 units of Sky LLC implied by the transaction exceeds 110% of the aggregate capital contributions of affiliates of the Sponsor for the Class A-1 units. The Company’s Chief Financial Officer does not need to be employed at the time of the IPO or change in control to vest. The Class A-2 Units will be forfeited if an IPO or change of control occurs at a valuation that does not result in vesting.

• Time-Vesting Units. The portion of the Class B units that vest based on continued service represent 66 2/3% of the total Class B units. These units vest ratably over 57 months starting on October 28, 2008 based on continued service, but will become fully vested on an accelerated basis upon a change in control while the Company’s Chief Financial Officer continues to provide services to Sky LLC or its subsidiaries. Any of these time-vested Class B units that are unvested on termination of the executive’s services will be forfeited.

• Performance-Vesting Units. The remaining portion of the Class B units and all of the Class C units vest based on performance/market conditions. These units will vest if affiliates of the Sponsor receive cash proceeds equal to at least 200% of their aggregate capital contributions in respect of 25% of their units in Sky LLC while the Company’s Chief Financial Officer continues to provide services to Sky LLC or its subsidiaries.

Assumptions used were as follows:

Expected Asset Volatility(1)	23.0	%
Risk Free Interest Rate(2)	1.35	%
Estimated Life(3)	5.0 years

(1) The expected asset volatility is derived from the asset volatilities of comparable publicly traded companies.

(2) The risk free interest rate is interpolated from the CMT Rate as of the valuation date with the maturity matching the contractual life.

(3) The estimated life is based on management’s estimates.

The following table summarizes activity for profit interest units for the period October 29, 2008 to March 31, 2009:

	Class A-2 Units	Weighted Average Grant Date Fair Value		Class B Units	Weighted Average Grant Date Fair Value		Class C Units	Weighted Average Grant Date Fair Value
Balance at December 31, 2009	500,000	$	0.75	6,675,287	$	0.35	2,225,096	$	0.15
Exercised	—		—	—		—	—		—
Forfeited	—		—	—		—	—		—
Balance at March 31, 2009	500,000			6,675,287			2,225,096
Vested units at March 31, 2010				1,334,924

F-65

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The grant date fair value of the 500,000 A-2 units is $0.4 million, the grant date fair value of the B units is $2.3 million and grant date the fair value of the C units is $0.3 million.

Sky LLC granted certain management employees 38,542,529 Class B units and 12,847,509 Class C units, all of which are subject to vesting terms based on either (i) continued service to Sky LLC or its subsidiaries or (ii) performance/market conditions.

• Time-Vesting Units. The portion of the Class B units that vest based on continued service represent 66 2/3% of the total Class B units. These units vest ratably over 60 months starting on the later of (x) October 28, 2008 and (y) the date the employee commenced employment based on continued service, but will become fully vested on an accelerated basis upon a change in control while the employee continues to provide services to Sky LLC or its subsidiaries. Any of these time-vested Class B units that are unvested on termination of the employee’s services will be forfeited.

• Performance-Vesting Units. The remaining portion of the Class B units and all of the Class C units vest based on performance/market conditions. These units will vest if affiliates of the Sponsor receive cash proceeds equal to at least 200% of their aggregate capital contributions in respect of 25% of their units in Sky LLC while the employee continues to provide services to Sky LLC or its subsidiaries.

Notwithstanding the vesting terms described above, if the employee voluntarily resigns (in the absence of “constructive termination”) then Sky LLC may require the forfeiture of any vested Class B or C units.

Assumptions used were as follows:

Expected Asset Volatility(1)	25.0	%
Risk Free Interest Rate(2)	1.96	%
Estimated Life(3)	5.0 years

(1) The expected asset volatility is derived from the asset volatilities of comparable publicly traded companies.

(2) The risk free interest rate is interpolated from the CMT Rate as of the valuation date with the maturity matching the contractual life.

(3) The estimated life is based on management’s estimate.

The following table summarizes activity for profit interest units for the period January 1, 2009 to March 31, 2009:

	Class A-2 Units	Weighted Average Grant Date Fair Value		Class B Units	Weighted Average Grant Date Fair Value		Class C Units	Weighted Average Grant Date Fair Value
Balance at December 31, 2009	2,075,000	$	0.59	37,280,029	$	0.28	12,426,676	$	0.13
Granted	—		—	—		—	—		—
Exercised	—		—	—		—	—		—
Forfeited	—		—	4,643,678		—	1,547,893		—
Balance at March 31, 2010	2,075,000			32,636,351			10,878,783
Vested units at March 31, 2010				4,500,532

The grant date fair value of the A-2 units is $1.2 million, the grant date fair value of the outstanding B units is $9.1 million and the grant date fair value of the outstanding C units is $1.4 million.

F-66

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Expense recorded related to profit interest units was $1.1 million and $2.3 million in the three months ended March 31, 2010 and 2009, respectively. As of March 31, 2010, total unrecognized profit interest compensation cost related to unvested profit interest units was $6.5 million, which is expected to be expensed over a weighted average period of 3.3 years.

In March 2010, all of the equity securities of Sky LLC held by employee holders were converted or exchanged into equivalent securities of Sky LLC’s indirect parent entity.

NOTE 9—Income Taxes

The Company’s effective tax rate was 52.4% for the three months ended March 31, 2010 compared with 167.8% for the three months ended March 31, 2009.

The Company accounts for its tax uncertainties under generally accepted accounting principles. Accordingly, the Company is required to disclose, within its interim financial statements, material changes to: (a) the gross amounts of unrecognized tax benefits recorded on its balance sheet; (b) the total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate; (c) interest and penalties related to tax uncertainties; (d) amounts and relevant information concerning unrecognized tax benefits for which it is reasonably possible that an increase or decrease would occur during the 12-month rolling period ending March 31, 2010 and (e) disclosure of tax years and major tax jurisdictions which remain subject to examination by taxing authorities. For the three months ended March 31, 2010, no material changes occurred with respect to the Company’s unrecognized tax benefits and the five disclosure categories discussed above.

As of March 31, 2010, federal net operating loss (“NOLs”) carryforwards of approximately $151.2 million were available to offset future federal taxable income. Such NOLs will expire at various times and in varying amounts during our calendar 2010 through 2030 tax years. A significant portion of these NOLS are subject to an annual utilization limitation as required by Section 382 of the Internal Revenue Code of 1986, as amended.

Net income tax refunds received for the three-month period ended March 31, 2010 was $0.7 million. Net income taxes paid for the three-month period ended March 31, 2009 was $0.6 million.

NOTE 10—Commitments and Contingencies

Enactment of a Comprehensive Healthcare Reform Package: In March 2010, the Federal government enacted a comprehensive healthcare Reform Package which consists of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010. See Note 2—Recent Developments—Enactment of a Comprehensive Healthcare Reform Package.

Litigation: The Company is engaged in the defense of certain claims and lawsuits arising out of the ordinary course and conduct of its business, the outcomes of which are not determinable at this time. Insurance policies covering such potential losses, where such coverage is cost effective, are maintained. In the opinion of management, any liability that might be incurred upon the resolution of these claims and lawsuits will not, in the aggregate, have a material adverse effect on the Company’s financial condition or results of operations.

Medicare and Medicaid Reimbursement: There are a number of provisions contained within recent legislation or proposed legislation that affect or may affect Medicare and Medicaid reimbursement polices for items and services provided. The Company cannot be certain of the ultimate impact of all legislated and contemplated changes, and therefore, cannot provide assurance that these changes will not have a material adverse effect on the Company’s financial condition or results of operations.

F-67

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Supplier Concentration: Currently, approximately 63.3% of purchases for patient service equipment and supplies are from five vendors. Although there are a limited number of suppliers, management believes that other vendors could provide similar products on comparable terms. However, a change in suppliers could cause delays in service delivery and possible losses in revenue, which could adversely affect the Company’s financial condition or operating results.

Guarantees and Indemnities: From time to time, certain types of contracts are entered into that contingently require indemnification of parties against third party claims. These contracts primarily relate to (i) certain asset purchase agreements, under which indemnification may be provided to the seller of the business being acquired; (ii) certain real estate leases, which may require indemnification to property owners for environmental or other liabilities and other claims arising from use of the applicable premises; and (iii) certain agreements with officers, directors and employees, which may require indemnification of such persons for liabilities arising out of their relationship with the Company.

The terms of such obligations vary by contract and in most instances a specific or maximum dollar amount is not explicitly stated therein. Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted. Consequently, no liabilities have been recorded for these obligations on the balance sheets for any of the periods presented.

NOTE 11—Segments

The Company has two reportable operating segments (1) home respiratory therapy and home medical equipment and (2) home infusion therapy. Within these two operating segments there are three core service lines: home respiratory therapy, home medical equipment and home infusion therapy. The home respiratory therapy and home medical equipment segment provides services and equipment to assist patients with oxygen systems, sleep apnea, ambulation and general care around the home, as well as to provide respiratory medications and related services. The home infusion therapy segment primarily provides patients with pharmaceuticals and services prescribed in conjunction with the administration of nutrients or medication intravenously or through a gastrointestinal tube.

	Net Revenues
Operating Segment	Three Months Ended March  31, 2010		Three Months Ended March  31, 2009
	(in thousands)
Home Respiratory Therapy and Home Medical Equipment	$	278,316	$	294,651
Home Infusion Therapy		230,560		221,780
Total	$	508,876	$	516,431

	EBIT
Operating Segment	Three Months Ended March  31, 2010		Three Months Ended March  31, 2009
	(in thousands)
Home Respiratory Therapy and Home Medical Equipment	$	9,866	$	23,523
Home Infusion Therapy		20,823		9,396
Total	$	30,689	$	32,919

F-68

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Depreciation and Amortization
Operating Segment	Three Months Ended March  31, 2010		Three Months Ended March  31, 2009
	(in thousands)
Home Respiratory Therapy and Home Medical Equipment	$	29,713	$	30,351
Home Infusion Therapy		3,524		3,607
Total	$	33,237	$	33,958

Our Chief Operating Decision Maker (“CODM”) does not review assets assigned to segments. Therefore, such items are not reflected in the table above.

Earnings before interest and taxes (“EBIT”). EBIT is a measure used by our management to measure operating performance. EBIT is defined as net income (loss) plus interest expense and income taxes. EBIT is not a recognized term under Generally Accepted Accounting Principles (“GAAP”) and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.

The following table provides a reconciliation from net loss to EBIT:

	Three Months Ended March 31, 2010							Three Months Ended March 31, 2009
	Home Respiratory Therapy and Home Medical Equipment		Home Infusion Therapy		Total			Home Respiratory Therapy and Home Medical Equipment		Home Infusion Therapy		Total
	(in thousands)
Net loss					$	(803	)					$	(477	)
Interest expense, net (a)						32,376							32,216
Income tax (benefit) expense						(884	)						1,180
EBIT	$	9,866	$	20,823	$	30,689		$	23,523	$	9,396	$	32,919

(a) Reflects $32.6 million of interest expense, net of $0.2 million of interest income for the three months ended March 31, 2010. Reflects $32.4 million of interest expense, net of $0.2 million of interest income for the three months ended March 31, 2009.

The Company allocates certain expenses that are not directly attributable to a product line based upon segment headcount.

NOTE 12—Certain Relationships and Related Party Transactions

Transaction and Management Fee Agreement: In connection with the Merger, Merger Sub entered into a transaction and management fee agreement with Blackstone Management Partners V L.L.C. (“BMP”). The Company succeeded to and assumed the rights and obligations of Merger Sub pursuant to the transaction and management fee agreement upon the closing of the Merger. Under the transaction and management fee agreement, Merger Sub agreed to pay BMP, at the closing of the Merger, a $18.7 million transaction fee in consideration for BMP undertaking financial and structural analysis, due diligence and other assistance in

F-69

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

connection with the Merger. In addition the Company agreed to reimburse BMP for any out-of-pocket expenses incurred by BMP and its affiliates in connection with the Merger and the provision of services under the transaction and management fee agreement.

In addition, under this agreement, BMP (including through its affiliates) agreed to provide services, including without limitation, (a) advice regarding the structure, distribution and timing of debt and equity offerings and advice regarding relationships with the Company’s lenders and bankers, (b) advice regarding the business and strategy of the Company, including compensation arrangements, (c) advice regarding dispositions and/or acquisitions and (d) such advice directly related or ancillary to the above financial advisory services as may be reasonably requested by the Company. In consideration for the services, the Company pays BMP at the beginning of each fiscal year a management fee equal to the greater of $7.0 million or 2.0% of the Company’s consolidated EBITDA, as defined in the agreement, for the immediately preceding fiscal year. BMP shall have no obligation to provide any other services to the Company absent express agreement. In addition, in the absence of an express agreement to provide investment banking or other financial advisory services to the Company, and without regard to whether such services were provided, BMP is entitled to receive a fee equal to 1.0% of the aggregate transaction value upon the consummation of any acquisition, divestiture, disposition, merger, consolidation, restructuring, refinancing, recapitalization, issuance of private or public debt of equity securities (including an initial public offering of equity securities), financing or similar transaction by the Company.

At any time in connection with or in anticipation of a change of control of the Company, a sale of all or substantially all of the Company’s assets or an initial public offering of common equity of the Company or its successor, BMP may elect to receive, in consideration of BMP’s role in facilitating such transaction and in settlement of the termination of the services, a single lump sum cash payment equal to the then-present value of all then-current and future annual management fees payable under the transaction and management fee agreement, assuming a hypothetical termination date of the agreement to be the twelfth anniversary of such election. The transaction and management fee agreement will continue until the earlier of the twelfth anniversary of the date of the agreement or such date as the Company and BMP may mutually determine. The Company has agreed to indemnify BMP and its affiliates, directors, officers, employees, agents and representatives from and against all liabilities relating to the services contemplated by the transaction and management fee agreement and the engagement of BMP pursuant to, and the performance of BMP and its affiliates of the services contemplated by, the transaction and management fee agreement.

Intelenet Agreement: In May 2009, the Company entered into the Intelenet Agreement with Intelenet, an Indian company affiliated with the Sponsor, regarding the outsourcing of certain functions relating to billing, collections and other administrative and clerical services. A portion of such services to be outsourced were transitioned to Intelenet during 2009. A portion of such services to be outsourced have been transitioned to Intelenet and additional services are expected to be transitioned over the next 18 months. Only certain services are currently subject to the Intelenet Agreement. However, if all services currently planned for outsourcing to Intelenet are in fact handled by Intelenet, the Company expects to make payments to Intelenet of approximately $200.0 million over a seven-year period that began in the second quarter of 2009. One of the members of its board of directors, Mr. Patrick Bourke, is an employee of the Sponsor and also serves on the board of directors of Intelenet. During the three months ended March 31, 2010, the Company paid approximately $4.0 million to Intelenet.

Equity Healthcare Agreement: Effective as of January 1, 2010, the Company entered into an employer health program agreement with Equity Healthcare LLC (“Equity Healthcare”), an affiliate of the Sponsor, pursuant to which Equity Healthcare will provide to the Company certain negotiating, monitoring and other services in connection with our health benefit plans. In consideration for Equity Healthcare’s services, the

F-70

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Company will pay Equity Healthcare a fee of $2 per participating employee per month. As of March 31, 2010, the Company had approximately 6,600 employees enrolled in Equity Healthcare health benefit plans.

NOTE 13—Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries

The Company conducts substantially all of its business through its subsidiaries. Substantially all of the Company’s wholly-owned domestic subsidiaries (the “Guarantors”) fully and unconditionally guarantee the Series A-1 Notes and Series A-2 Notes on a senior secured basis. The Guarantors also guarantee our ABL Facility.

See also Note 6—Long-Term Debt.

The following unaudited condensed consolidated financial statements quantify the financial position as of March 31, 2010 and December 31, 2009 and the operations and cash flows for the three months ended March 31, 2010 and March 31, 2009 present financial information for the parent Company issuer, the guarantor subsidiaries, the non-guarantor subsidiaries and consolidating adjustments, consisting of the entries that eliminate the investment in subsidiaries and intercompany balances and transactions.

F-71

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

March 31, 2010

	Parent Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Adjustments			Condensed Consolidated
	(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	125,277		$	7,391		$	721	$	—		$	133,389
Short-term investments		19,183			—			—		—			19,183
Accounts receivable less allowance for doubtful accounts		—			281,873			735		—			282,608
Inventories, net		—			59,775			238		—			60,013
Deferred income taxes		11,358			69,049			—		—			80,407
Deferred expenses		—			3,017			—		—			3,017
Intercompany		515,215			250,177			—		(765,392	)		—
Prepaid expenses and other current assets		5,162			25,725			11		—			30,898
TOTAL CURRENT ASSETS		676,195			697,007			1,705		(765,392	)		609,515
PATIENT SERVICE EQUIPMENT, less accumulated depreciation		—			186,332			34		—			186,366
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET		30,984			48,402			22		—			79,408
GOOD WILL		—			759,947			—		—			759,947
INTANGIBLE ASSETS, NET		460,000			121,352			—		—			581,352
DEFERRED DEBT ISSUANCE COSTS, NET		60,558			—			—		—			60,558
INTERCOMPANY RECEIVABLE		350,000			2,892			—		(352,892	)		—
INVESTMENT IN SUBSIDIARIES		380,253			619			—		(380,872	)		—
OTHER ASSETS		3,114			4,010			—		—			7,124
	$	1,961,104		$	1,820,561		$	1,761	$	(1,499,156	)	$	2,284,270
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	—		$	90,125		$	219	$	—		$	90,344
Accrued payroll and related taxes and benefits		4,514			50,121			99		—			54,734
Other accrued liabilities		49,563			76,390			824		—			126,777
Deferred revenue		—			26,806			—		—			26,806
Intercompany		19,777			385,615			—		(405,392	)		—
Current portion of long-term debt		77			361,566			—		(360,000	)		1,643
TOTAL CURRENT LIABILITIES		73,931			990,623			1,142		(765,392	)		300,304
LONG-TERM DEBT, net of current portion		1,020,392			351,561			—		(352,892	)		1,019,061
DEFERRED INCOME TAXES		178,356			73,890			—		—			252,246
INCOME TAXES PAYABLE AND OTHER NON-CURRENT LIABILITIES		9,447			24,234			—		—			33,681
TOTAL LIABILITIES		1,282,126			1,440,308			1,142		(1,118,284	)		1,605,292
STOCKHOLDERS’ EQUITY
Common stock		—			1			—		(1	)		—
Additional paid-in capital		685,495			396,766			—		(396,766	)		685,495
(Accumulated deficit) retained earnings		(6,517	)		(16,514	)		619		15,895			(6,517	)
TOTAL STOCKHOLDERS’ EQUITY		678,978			380,253			619		(380,872	)		678,978
	$	1,961,104		$	1,820,561		$	1,761	$	(1,499,156	)	$	2,284,270

F-72

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2009

	Parent Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Adjustments			Condensed Consolidated
	(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	150,364		$	7,208		$	591	$	—		$	158,163
Short-term investments		23,673			—			—		—			23,673
Accounts receivable less allowance for doubtful accounts		7			251,149			977		—			252,133
Inventories, net		—			68,007			260		—			68,267
Deferred income taxes		17,497			69,519			—		—			87,016
Deferred expenses		—			3,049			—		—			3,049
Intercompany		606,473			381,071			—		(987,544	)		—
Prepaid expenses and other current assets		5,213			19,149			—		—			24,362
TOTAL CURRENT ASSETS		803,227			799,152			1,828		(987,544	)		616,663
PATIENT SERVICE EQUIPMENT, less accumulated depreciation		—			198,770			38		—			198,808
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET		28,393			51,805			29		—			80,227
GOODWILL		—			759,197			—		—			759,197
INTANGIBLE ASSETS, NET		460,000			122,259			—		—			582,259
DEFERRED DEBT ISSUANCE COSTS, NET		63,110			—			—		—			63,110
INTERCOMPANY RECEIVABLE		350,000			2,902			—		(352,902	)		—
INVESTMENT IN SUBSIDIARIES		380,455			538			—		(380,993	)		—
OTHER ASSETS		4,911			3,872			—		—			8,783
	$	2,090,096		$	1,938,495		$	1,895	$	(1,721,439	)	$	2,309,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Account payable	$	—		$	123,597		$	259	$	—		$	123,856
Accrued payroll and related taxes and benefits		20,893			45,843			106		—			66,842
Other accrued liabilities		20,799			78,977			992		—			100,768
Deferred revenue		—			27,253			—		—			27,253
Intercompany		157,140			470,404			—		(627,544	)		—
Current portion of long-term debt		77			361,613			—		(360,000	)		1,690
TOTAL CURRENT LIABILITIES		198,909			1,107,687			1,357		(987,544	)		320,409
LONG-TERM DEBT, net of current portion		1,020,402			351,956			—		(352,902	)		1,019,456
DEFERRED INCOME TAXES		183,105			75,925			—		—			259,030
INCOME TAXES PAYABLE AND OTHER NON-CURRENT LIABILITIES		8,949			22,472			—		—			31,421
TOTAL LIABILITIES		1,411,365			1,558,040			1,357		(1,340,446	)		1,630,316
STOCKHOLDERS’ EQUITY
Common stock		—			1			—		(1	)		—
Additional paid-in-capital		684,445			396,766			—		(396,766	)		684,445
(Accumulated deficit) retained earnings		(5,714	)		(16,312	)		538		15,774			(5,714	)
TOTAL STOCKHOLDERS’ EQUITY		678,731			380,455			538		(380,993	)		678,731
	$	2,090,096		$	1,938,495		$	1,895	$	(1,721,439	)	$	2,309,047

F-73

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended March 31, 2010

	Parent Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Condensed Consolidated
	(in thousands)
Operating net revenues	$	—		$	507,155	$	1,721	$	—		$	508,876
Net revenues from subsidiaries		57,215			—		—		(57,215	)		—
TOTAL NET REVENUES		57,215			507,155		1,721		(57,215	)		508,876
TOTAL COST OF NET REVENUES		—			201,889		903		—			202,792
Provision for doubtful accounts		—			15,845		42		—			15,887
Selling, distribution and administrative		51,187			263,148		618		(57,215	)		257,738
Amortization of intangible assets		229			1,428		—		—			1,657
TOTAL COSTS AND EXPENSES		51,416			482,310		1,563		(57,215	)		478,074
OPERATING INCOME		5,799			24,845		158		—			30,802
Interest expense		32,459			113		—		—			32,572
Interest income and other		(15,820	)		15,660		77		—			(83	)
(LOSS) INCOME BEFORE TAXES		(10,840	)		9,072		81		—			(1,687	)
Income tax expense (benefit)		(5,095	)		4,211		—		—			(884	)
NET (LOSS) INCOME		(5,745	)		4,861		81		—			(803	)
Equity in income of subsidiaries, net of tax		4,942			81		—		(5,023	)		—
NET (LOSS) INCOME ATTRIBUTABLE TO PARENT ISSUER	$	(803	)	$	4,942	$	81	$	(5,023	)	$	(803	)

F-74

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

Three Months Ended March 31, 2009

	Parent Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Consolidating Adjustments			Condensed Consolidated
	(in thousands)
Operating net revenues	$	—		$	514,384		$	2,047	$	—		$	516,431
Net revenues from subsidiaries		55,059			—			—		(55,059	)		—
TOTAL NET REVENUES		55,059			514,384			2,047		(55,059	)		516,431
TOTAL COST OF NET REVENUES		—			205,917			1,127		—			207,044
Provision for doubtful accounts		—			11,351			5		—			11,356
Selling, distribution and administrative		39,846			278,378			619		(55,059	)		263,784
Amortization of intangible assets		144			1,133			—		—			1,277
TOTAL COSTS AND EXPENSES		39,990			496,779			1,751		(55,059	)		483,461
OPERATING INCOME		15,069			17,605			296		—			32,970
Interest expense		32,255			167			—		—			32,422
Interest income and other		(23,787	)		23,487			145		—			(155	)
INCOME (LOSS) BEFORE TAXES		6,601			(6,049	)		151		—			703
Income tax expense (benefit)		5,204			(4,024	)		—		—			1,180
NET INCOME (LOSS)		1,397			(2,025	)		151		—			(477	)
Equity in loss of subsidiaries, net of tax		(1,874	)		151			—		1,723			—
NET (LOSS) INCOME ATTRIBUTABLE TO PARENT ISSUER	$	(477	)	$	(1,874	)	$	151	$	1,723		$	(477	)

F-75

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended March 31, 2010

	Parent Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments		Condensed Consolidated
	(in thousands)
OPERATING ACTIVITIES
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES	$	(23,760	)	$	38,733		$	132		$	—	$	15,105
INVESTING ACTIVITIES
Purchases of patient service equipment and property, equipment and improvements, exclusive of effects of acquisitions		(4,530	)		(22,787	)		(2	)		—		(27,319	)
Purchases of short-term investments		(8,189	)		—			—			—		(8,189	)
Maturities of short-term investments		12,680			—			—			—		12,680
Proceeds from disposition of assets		—			15			—			—		15
Cash paid for acquisitions		—			(1,200	)		—			—		(1,200	)
NET CASH USED IN INVESTING ACTIVITIES		(39	)		(23,972	)		(2	)		—		(24,013	)
FINANCING ACTIVITIES
Payments on other long term debt		—			(441	)		—			—		(441	)
Change in book cash overdraft included in accounts payable		—			(14,137	)		—			—		(14,137	)
Debt issuance costs		(1,210	)		—			—			—		(1,210	)
Cash paid on profit interest units		(78	)		—			—			—		(78	)
NET CASH USED IN FINANCING ACTIVITIES		(1,288	)		(14,578	)		—			—		(15,866	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(25,087	)		183			130			—		(24,774	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		150,364			7,208			591			—		158,163
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	125,277		$	7,391		$	721		$	—	$	133,389

F-76

APRIA HEALTHCARE GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended March 31,2009

	Parent Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments		Condensed Consolidated
	(in thousands)
OPERATING ACTIVITIES
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES	$	(4,766	)	$	34,219		$	219		$	—	$	29,672
INVESTING ACTIVITIES
Purchases of patient service equipment and property, equipment and improvements		(4,163	)		(35,666	)		(14	)		—		(39,843	)
Proceeds from disposition of assets		—			251			—			—		251
NET CASH USED IN INVESTING ACTIVITIES		(4,163	)		(35,415	)		(14	)		—		(39,592	)
FINANCING ACTIVITIES
Proceeds from ABL Facility		378			—			—			—		378
Payments on ABL Facility		(6,035	)		—			—			—		(6,035	)
Payments on other long term debt		—			(688	)		—			—		(688	)
Change in book cash overdraft included in accounts payable		—			(2,029	)		—			—		(2,029	)
Debt issuance costs		(206	)		—			—			—		(206	)
Equity contributions		1,075			—			—			—		1,075
NET CASH USED IN FINANCING ACTIVITIES		(4,788	)		(2,717	)		—			—		(7,505	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(13,717	)		(3,913	)		205			—		(17,425	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		159,393			8,260			365			—		168,018
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	145,676		$	4,347		$	570		$	—	$	150,593

NOTE 14—Subsequent Events

The Company evaluated all subsequent events that occurred after the balance sheet date through July 16, 2010.

F-77

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers.

(a) The following entities are incorporated under the laws of Delaware: Apria Healthcare Group Inc., Apria Care Management Systems, Inc., ApriaDirect.Com, Inc., Apria Healthcare, Inc., Coram Healthcare Corporation of Greater D.C., Coram Healthcare Corporation of Utah, Coram Clinical Trials, Inc., Coram Healthcare Corporation of North Texas, Coram Healthcare Corporation of Northern California, Coram Healthcare Corporation of South Carolina, Coram Healthcare Corporation of Southern California, Coram Healthcare Corporation of Southern Florida, Coram Healthcare Corporation of Mississippi, Coram Healthcare Corporation of Nevada, Coram Healthcare Corporation of Indiana, Coram Healthcare Corporation of Alabama, Coram Healthcare Corporation of Florida, Coram Homecare of Minnesota, Inc., Coram Service Corporation, Coram Specialty Infusion Services, Inc., Coram Alternate Site Services, Inc., H.M.S.S., Inc., T² Medical, inc., Coram, Inc. and Coram Healthcare Corporation of Massachusetts (collectively, the “Delaware Corporations”).

Delaware General Corporation Law

Section 145(a) of the Delaware General Corporation Law provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful.

Section 145(b) of the Delaware General Corporation Law provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

Section 145(c) of the Delaware General Corporation Law provides that to the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 145(a) and (b), or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

Section 145(d) of the Delaware General Corporation Law provides that any indemnification under Section 145(a) and (b) (unless ordered by a court) shall be made by the corporation only as authorized in the

II-1

specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 145(a) and (b). Such determination shall be made (1) by a majority vote of the directors who were not parties to such action, suit or proceeding, even though less than a quorum, or (2) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (3) by the stockholders.

Section 145(e) of the Delaware General Corporation Law provides that expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in Section 145. Such expenses (including attorneys’ fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate.

Section 145(f) of the Delaware General Corporation Law provides that the indemnification and advancement of expenses provided by, or granted pursuant to, Section 145 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

Section 145(g) of the Delaware General Corporation Law provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s capacity as such, whether or not the corporation would have the power to indemnify such person against such liability under Section 145.

Section 174 of the Delaware General Corporation Law provides, among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing the minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.

Organizational Documents of Delaware Registrants

The articles of incorporation and/or bylaws of each of the Delaware Corporations provide that, to the fullest extent permitted by the Delaware General Corporation Law, the corporation shall indemnify any current or former Director or officer of the corporation and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the corporation or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the corporation or by reason of the fact that he or she is or was serving, at the request of the corporation, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

(b) Coram Healthcare of Wyoming L.L.C and CoramRX, LLC are limited liability companies organized under the laws of Delaware.

Section 18-108 of the Delaware Limited Liability Company Act empowers a Delaware limited liability company to indemnify and hold harmless any member or manager of the limited liability company from and against any and all claims and demands whatsoever.

II-2

The limited liability company agreements of each of Coram Healthcare of Wyoming L.L.C. and CoramRX, LLC provide that neither the sole member nor any director, officer or employee, or other agent or representative (each a “Covered Person”) shall be liable to the company, the sole member or any other person or entity who or that has an interest in the company for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct. To the full extent permitted by applicable law, each Covered Person shall be entitled to indemnification from the company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity shall be provided out of and to the extent of company assets only, and the sole member shall not have personal liability on account thereof.

(c) Apria Healthcare of New York State, Inc., Coram Healthcare Corporation of Greater New York and Coram Healthcare Corporation of New York (collectively, the “New York Corporations”) are incorporated under the laws of New York.

New York Business Corporation Law

Section 722(a) of the New York Business Corporation Law (“NYBCL”) provides that a corporation may indemnify any officer or director made, or threatened to be made, a party to an action or proceeding (other than one by or in the right of the corporation to procure judgment in its favor), whether civil or criminal, including an action by or in the right of any other corporation, or other enterprise, which any director or officer of the corporation served in any capacity at the request of the corporation, by reason of the fact that he was a director or officer of the corporation, or served such other corporation or other enterprise in any capacity, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in, or, in the case of service for any other corporation or other enterprise, not opposed to, the best interests of the corporation and, in criminal actions or proceedings, had no reasonable cause to believe that his conduct was unlawful.

Section 722(c) of the NYBCL provides that a corporation may indemnify any officer or director made, or threatened to be made, a party to an action by or in the right of the corporation to procure judgment in its favor by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of any other corporation of any type or kind, or other enterprise, against amounts paid in settlement and reasonable expenses, including attorneys’ fees, actually and necessarily incurred by him in connection with the defense or settlement of such action, or in connection with an appeal therein, if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in, or, in the case of service for another corporation or other enterprise, not opposed to, the best interests of the corporation. The corporation may not, however, indemnify any officer or director pursuant to Section 722(c) in respect of (1) a threatened action, or a pending action which is settled or otherwise disposed of, or (2) any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which the action was brought or, if no action was brought, any court of competent jurisdiction, determines upon application, that the person is fairly and reasonably entitled to indemnity for such portion of the settlement and expenses as the court deems proper.

Section 723 of the NYBCL provides that an officer or director who has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character set forth in Section 722 is entitled to indemnification as permitted in such section. Section 724 of the NYBCL permits a court to award the indemnification required by Section 722.

II-3

Section 721 of the NYBCL provides that, in addition to indemnification provided in Article 7 of the NYBCL, a corporation may indemnify a director or officer by a provision contained in the certificate of incorporation or by-laws or by a duly authorized resolution of its shareholders or directors or by agreement, provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that such director or officer personally gained in fact a financial profit or other advantage to which he was not legally entitled.

Section 402(b) of the NYBCL provides that a corporation’s certificate of incorporation may include a provision eliminating or limiting the personal liability of its directors to the corporation or its shareholders for damages for any breach of duty in such capacity, except (i) liability of a director if a judgment or other final adjudication adverse to such director establishes that the director’s acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled or that his acts violated Section 719 of the NYBCL or (ii) liability of any director for any act or omission prior to the adoption of a provision authorized by Section 402(b) of the NYBCL

Organizational Documents of New York Registrants

The articles of incorporation and/or bylaws of each of the New York Corporations provide that, to the fullest extent permitted by the NYBCL, the corporation shall indemnify any current or former Director or officer of the corporation and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the corporation or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the corporation or by reason of the fact that he or she is or was serving, at the request of the corporation, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

(d) AHNY-DME LLC and AHNY-IV LLC are limited liability companies organized under the laws of New York.

Section 420 of the New York Limited Liability Company Law provides that a limited liability company may indemnify and hold harmless, and advance expenses to, any member, manager or other person, or any testator or intestate of such member, manager or other person, from and against any and all claims and demands whatsoever; provided, however, that no indemnification may be made to or on behalf of any member, manager or other person if a judgment or other final adjudication adverse to such member, manager or other person establishes (a) that his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated or (b) that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled.

The limited liability company agreements of each of AHNY-DME LLC and AHNY-IV LLC provide that each Covered Person shall not be liable to the company, the sole member or any other person or entity who or that has an interest in the company for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct. To the full extent permitted by applicable law, each Covered Person shall be entitled to indemnification from the company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim

II-4

incurred by such Covered Person by reason of gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity shall be provided out of and to the extent of company assets only, and the sole member shall not have personal liability on account thereof.

(e) HealthInfusion, Inc. is a corporation incorporated under the laws of Florida.

Florida Business Corporation Act

Under Section 607.0850, Florida Statutes, the Company is entitled to indemnify its directors and officers against reasonable expenses incurred by such persons in certain proceedings by reason of the fact that the person is or was a director or officer of the Company, subject to certain limitations.

Organizational Documents of Florida Registrant

The articles of incorporation and the bylaws of Healthinfusion, Inc. provide that, to the fullest extent permitted by the Florida Business Corporation Act, or otherwise pursuant to applicable Florida law, the corporation shall indemnify any current or former Director or officer of the corporation and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the corporation or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the corporation or by reason of the fact that he or she is or was serving, at the request of the corporation, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

II-5

Item 21. Exhibits and Financial Statement Schedules.

(a)   Exhibits

Exhibit No.	Description
2.1*	Agreement and Plan of Merger, dated as of June 18, 2008, by and among Apria Healthcare Group Inc., Sky Acquisition LLC and Sky Merger Sub Corporation
3.1	Second Amended and Restated Certificate of Incorporation of Apria Healthcare Group Inc.
3.2	Amended and Restated Bylaws of Apria Healthcare Group Inc.
3.3	Amended and Restated Certificate of Incorporation of Apria Healthcare, Inc.
3.4	Amended and Restated Bylaws of Apria Healthcare, Inc.
3.5	Amended and Restated Certificate of Incorporation of ApriaCare Management Systems, Inc.
3.6	Amended and Restated Bylaws of ApriaCare Management Systems, Inc.
3.7	Certificate of Incorporation of ApriaDirect.Com, Inc.
3.8	Amended and Restated Bylaws of ApriaDirect.Com, Inc.
3.9	Restated Certificate of Incorporation of Apria Healthcare of New York State, Inc.
3.10	Amended and Restated Bylaws of Apria Healthcare of New York State, Inc.
3.11	Restated Certificate of Incorporation of Coram Alternate Site Services, Inc.
3.12	Amended and Restated Bylaws of Coram Alternate Site Services, Inc.
3.13	Restated Certificate of Incorporation of Coram Clinical Trials, Inc.
3.14	Amended and Restated Bylaws of Coram Clinical Trials, Inc.
3.15	Restated Certificate of Incorporation of Coram Healthcare Corporation of Alabama
3.16	Amended and Restated Bylaws of Coram Healthcare Corporation of Alabama
3.17	Restated Certificate of Incorporation of Coram Healthcare Corporation of Florida
3.18	Amended and Restated Bylaws of Coram Healthcare Corporation of Florida
3.19	Restated Certificate of Incorporation of Coram Healthcare Corporation of Greater D.C.
3.20	Amended and Restated Bylaws of Coram Healthcare Corporation of Greater D.C.
3.21	Restated Certificate of Incorporation of Coram Healthcare Corporation of Greater New York
3.22	Amended and Restated Bylaws of Coram Healthcare Corporation of Greater New York
3.23	Restated Certificate of Incorporation of Coram Healthcare Corporation of Indiana
3.24	Amended and Restated Bylaws of Coram Healthcare Corporation of Indiana
3.25	Restated Certificate of Incorporation of Coram Healthcare Corporation of Massachusetts
3.26	Amended and Restated Bylaws of Coram Healthcare Corporation of Massachusetts
3.27	Restated Certificate of Incorporation of Coram Healthcare Corporation of Mississippi
3.28	Amended and Restated Bylaws of Coram Healthcare Corporation of Mississippi
3.29	Restated Certificate of Incorporation of Coram Healthcare Corporation of Nevada
3.30	Amended and Restated Bylaws of Coram Healthcare Corporation of Nevada
3.31	Restated Certificate of Incorporation of Coram Healthcare Corporation of New York
3.32	Amended and Restated Bylaws of Coram Healthcare Corporation of New York
3.33	Restated Certificate of Incorporation of Coram Healthcare Corporation of North Texas

II-6

Exhibit No.	Description
3.34	Amended and Restated Bylaws of Coram Healthcare Corporation of North Texas
3.35	Restated Certificate of Incorporation of Coram Healthcare Corporation of Northern California
3.36	Amended and Restated Bylaws of Coram Healthcare Corporation of Northern California
3.37	Restated Certificate of Incorporation of Coram Healthcare Corporation of South Carolina
3.38	Amended and Restated Bylaws of Coram Healthcare Corporation of South Carolina
3.39	Restated Certificate of Incorporation of Coram Healthcare Corporation of Southern California
3.40	Amended and Restated Bylaws of Coram Healthcare Corporation of Southern California
3.41	Restated Certificate of Incorporation of Coram Healthcare Corporation of Southern Florida
3.42	Amended and Restated Bylaws of Coram Healthcare Corporation of Southern Florida
3.43	Restated Certificate of Incorporation of Coram Healthcare Corporation of Utah
3.44	Amended and Restated Bylaws of Coram Healthcare Corporation of Utah
3.45	Certificate of Formation of Coram Healthcare of Wyoming, L.L.C.
3.46	Amended and Restated Limited Liability Company Agreement of Coram Healthcare of Wyoming, L.L.C.
3.47	Restated Certificate of Incorporation of Coram Homecare of Minnesota, Inc.
3.48	Amended and Restated Bylaws of Coram Homecare of Minnesota, Inc.
3.49	Restated Certificate of Incorporation of Coram Specialty Infusion Services, Inc.
3.50	Amended and Restated Bylaws of Coram Specialty Infusion Services, Inc.
3.51	Fourth Amended and Restated Certificate of Incorporation of Coram, Inc.
3.52	Amended and Restated Bylaws of Coram, Inc.
3.53	Certificate of Formation of CoramRx, LLC
3.54	Amended and Restated Limited Liability Company Agreement of CoramRx, LLC
3.55	Restated Certificate of Incorporation of Coram Service Corporation
3.56	Amended and Restated Bylaws of Coram Service Corporation
3.57	Second Restated Certificate of Incorporation of H.M.S.S., Inc.
3.58	Amended and Restated Bylaws of H.M.S.S., Inc.
3.59	Second Amended and Restated Articles of Incorporation of HealthInfusion, Inc. and Corporation Reinstatement
3.60	Amended and Restated Bylaws of HealthInfusion, Inc.
3.61	Second Restated Certificate of Incorporation of T2 Medical, Inc.
3.62	Amended and Restated Bylaws of T2 Medical, Inc.
3.63	Articles of Organization of AHNY-DME LLC
3.64	Limited Liability Company Agreement of AHNY-DME LLC
3.65	Articles of Organization of AHNY-IV LLC
3.66	Limited Liability Company Agreement of AHNY-IV LLC
4.1	Indenture, dated as of May 27, 2009 (the “Indenture”), among Apria Healthcare Group Inc., the guarantors thereto and U.S. Bank National Association, as trustee.
4.2	First Supplemental Indenture, dated as of August 13, 2009, among Apria Healthcare Group Inc., the guarantors thereto and U.S. Bank National Association, as trustee
4.3	Second Supplemental Indenture, dated as of July 13, 2010, among Apria Healthcare Group Inc., the guarantors thereto and U.S. bank National Association

II-7

Exhibit No.	Description
4.4	Registration Rights Agreement, dated as of May 27, 2009, among Apria Healthcare Group Inc., the guarantors named therein and Banc of America Securities LLC, Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC), Barclays Capital Inc. and Scotia Capital (USA) Inc.
4.5	Registration Rights Agreement, dated as of August 13, 2009, among Apria Healthcare Group Inc., the guarantors named therein and Banc of America Securities LLC, Wells Fargo Securities, LLC, Barclays Capital Inc. and Scotia Capital (USA) Inc.
4.6	Form of Note (attached as exhibit to Exhibit 4.1)
5.1	Opinion of Simpson Thacher & Bartlett LLP
5.2	Opinion of Holland & Knight LLP
10.1	Transaction and Management Fee Agreement, dated as of October 28, 2008, among Apria Healthcare Group Inc. (as successor to Sky Merger Sub Corporation) and Blackstone Management Partners V L.L.C.
10.2**	Master Service Agreement (the “Master Service Agreement”), dated as of May 14, 2009, between Apria Healthcare Group Inc. and Intelenet Global Services Private Limited, and amendments thereto
10.3**	Amendment No. 1 to the Master Service Agreement, dated as of September 18, 2009
10.4	Employment Agreement, dated November 21, 2008, among Norman C. Payson, Apria Healthcare Group Inc. and BP Healthcare Holdings LLC
10.5	Employment Agreement, dated December 19, 2008, between Chris A. Karkenny and Apria Healthcare Group Inc.
10.6	Amended and Restated Employment Agreement, effective as of October 24, 2008, between Lawrence A. Mastrovich and Apria Healthcare Group Inc.
10.7	Amendment to Employment Agreement, dated April 3, 2009, between Lawrence A. Mastrovich and Apria Healthcare Group Inc.
10.8	Offer Letter, dated as of March 10, 2009, from Apria Healthcare Group Inc. to James Gallas
10.9	Amended and Restated Executive Severance Agreement, dated as of March 10, 2009, between James Gallas and Apria Healthcare Group Inc.
10.10	Amended and Restated Employment Agreement, dated as of October 24, 2008 between Daniel E. Greenleaf and Apria Healthcare Group Inc.
10.11	Amended and Restated Noncompetition Agreement, dated as of March 7, 2007, between Apria Healthcare Group Inc. and Chris A. Karkenny
10.12	Amended and Restated Noncompetition and Nonsolicitation Agreement, dated as of October 24, 2008, between Apria Healthcare Group Inc. and Daniel E. Greenleaf
10.13	Management Unit Subscription Agreement (Class B Units), dated as of November 21, 2008, between Norman C. Payson and BP Healthcare Holdings LLC
10.14	Management Unit Subscription Agreement (Class A-2 Units, Class B Units and Class C Units), dated as of December 19, 2008, between and Chris A. Karkenny and Sky Acquisition LLC
10.15	Form of Management Unit Subscription Agreement for Class B Units and Class C Units of Apria Holdings LLC
10.16	Assignment and Assumption Agreement, dated as of March 25, 2010, between Sky Acquisition LLC and Apria Holdings LLC

II-8

Exhibit No.	Description
10.17	Form of Annual Executive Bonus Plan of Apria Healthcare Group Inc.
10.18	Credit Agreement, dated as of October 28, 2008 (the “ABL Credit Agreement”), among Apria Healthcare Group Inc., Sky Acquisition LLC, the other borrowers party thereto, Bank of America, N.A. as administrative agent and collateral agent thereunder (the “ABL Collateral Agent”), and the other agents and lenders parties thereto
10.19	Amendment No. 1 to the ABL Credit Agreement, dated as of May 27, 2009
10.20	Supplement No. 1 to the ABL Credit Agreement, dated as of July 13, 2010
10.21	Guaranty, dated as of October 28, 2008 (the “ABL Guaranty”), among Sky Acquisition LLC, certain subsidiaries of Sky Acquisition LLC from time to time party hereto and the ABL Collateral Agent
10.22	Supplement No. 1 to the ABL Guaranty, dated as of July 13, 2010
10.23	Security Agreement, dated as of October 28, 2008 (the “ABL Security Agreement”), among Sky Acquisition LLC, Sky Merger Sub Corporation, Apria Healthcare Group Inc., the other grantors party thereto and the ABL Collateral Agent
10.24	Supplement No. 1 to the ABL Security Agreement, dated as of July 13, 2010
10.25	Security Agreement, dated as of October 28, 2008 (the “Notes Security Agreement”) among Sky Acquisition LLC, Sky Merger Sub Corporation, Apria Healthcare Group Inc., the other grantors party thereto and Bank of America, N.A. Collateral Agent†
10.26	Supplement No. 1 to the Notes Security Agreement, dated as of July 13, 2010, among U.S. Bank National Association, as collateral agent, and the grantors party thereto
10.27	Lien Subordination and Intercreditor Agreement, dated as of October 28, 2008, among the ABL Collateral Agent, the Term Debt Collateral Agent, Sky Acquisition LLC, Sky Merger Sub Corporation, Apria Healthcare Group Inc., and the Guarantors party thereto
10.28***	Certification of Compliance Agreement, dated August 22, 2007, between the Office of Inspector General of the U.S. Department of Health and Human Services and Coram Inc.
12.1	Computation of Ratio of Earnings to Fixed Charges
21.1	Subsidiaries of Apria Healthcare Group Inc.
23.1	Consent of Simpson Thacher & Bartlett LLP (included as part of its opinion filed as Exhibit 5.1 hereto).
23.2	Consent of Holland & Knight LLP (included as part of its opinion filed as Exhibit 5.2 hereto).
23.4	Consent of Deloitte & Touche LLP
24.1	Powers of Attorney (included in signature pages of the initial filing of this Registration Statement).
25.1	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank National Association with respect to the Indenture governing the 11.25% Senior Secured Notes due 2014 (Series A-1) and 12.375% Senior Secured Notes due 2014 (Series A-2)
99.1	Form of Letter of Transmittal
99.2	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
99.3	Form of Letter to Clients
99.4	Form of Notice of Guaranteed Delivery

* Incorporated by reference to Current Report on Form 8-K, dated June 18, 2008, filed on June 20, 2008.

** Portions of this exhibit have been omitted pursuant to a request for confidential treatment.

*** Incorporated by reference to Annual Report on Form 10-K for the fiscal year ended December 31, 2007, filed by the Company on February 29, 2008.

† On August 13, 2009, U.S. Bank National Association succeeded Bank of America, N.A. as the Notes collateral agent.

II-9

(b) Financial Statement Schedules

APRIA HEALTHCARE GROUP INC.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

	Balance  at Beginning of Period		Increase Due to Coram Acquisition		Charged to Costs and Expenses		Deductions		Balance at End of Period
	(in thousands)
Year ended December 31, 2009 (Successor) Deducted from asset accounts:
Allowance for doubtful accounts	$	25,271	$	—	$	57,919	$	43,263	$	39,927
Reserve for inventory and patient service equipment shortages	$	6,091	$	—	$	2,327	$	6,241	$	2,177
Period October 29, 2008 to December 31, 2008 (Successor) Deducted from asset accounts:
Allowance for doubtful accounts	$	35,286	$	—	$	14,329	$	24,344	$	25,271
Reserve for inventory and patient service equipment shortages	$	5,914	$	—	$	1,554	$	1,377	$	6,091
Period January 1, 2008 to October 28, 2008 (Predecessor) Deducted from asset accounts:
Allowance for doubtful accounts	$	47,823	$	—	$	33,626	$	46,163	$	35,286
Reserve for inventory and patient service equipment shortages	$	5,366	$	—	$	2,583	$	2,035	$	5,914
Year ended December 31, 2007 (Predecessor) Deducted from asset accounts:
Allowance for doubtful accounts	$	27,324	$	21,557	$	43,138	$	44,196	$	47,823
Reserve for inventory and patient service equipment shortages	$	4,420	$	195	$	3,351	$	2,600	$	5,366

Item 22. Undertakings.

(a) Each of the undersigned registrants hereby undertakes:

(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

II-10

(2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;

(4) that, for the purpose of determining liability under the Securities Act to any purchaser, if the registrants are subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use; and

(5) that, for the purpose of determining liability of the registrants under the Securities Act to any purchaser in the initial distribution of the securities, each of the undersigned registrants undertakes that in a primary offering of securities of the undersigned registrants pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrants will be sellers to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(b) Each of the undersigned registrants hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(c) Each of the undersigned registrants hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

(d) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of it counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-11

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lake Forest, State of California, on July 16, 2010.

APRIA HEALTHCARE GROUP INC.
By:	/s/  Norman C. Payson
	Name:    Norman C. Payson, M.D.
	Title:      Executive Chairman of the Board of                Directors and Chief Executive Officer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    Norman C. Payson         Norman C. Payson, M.D.	Executive Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)	July 16, 2010
/s/    Chris A. Karkenny         Chris A. Karkenny	Executive Vice-President and Chief Financial Officer (Principal Financial Officer)	July 16, 2010
/s/    Peter A. Reynolds         Peter A. Reynolds	Chief Accounting Officer and Controller (Principal Accounting Officer)	July 16, 2010
/s/    Neil P. Simpkins         Neil P. Simpkins	Director	July 16, 2010
/s/    Michael Dal Bello         Michael Dal Bello	Director	July 16, 2010
/s/    Patrick J. Bourke III         Patrick J. Bourke III	Director	July 16, 2010

II-12

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lake Forest, State of California, on July 16, 2010.

APRIA HEALTHCARE OF NEW YORK STATE, INC.
By:	/s/  NORMAN C. PAYSON, M.D.
	Name:    Norman C. Payson, M.D.
	Title:      Chief Executive Officer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    NORMAN C. PAYSON, M.D.         Norman C. Payson, M.D.	Chief Executive Officer (Principal Executive Officer)	July 16, 2010
/s/    CHRIS A. KARKENNY         Chris A. Karkenny	Executive Vice-President and Chief Financial Officer (Principal Financial Officer)	July 16, 2010
/s/    PETER A. REYNOLDS         Peter A. Reynolds	Chief Accounting Officer and Controller (Principal Accounting Officer)	July 16, 2010
/s/    NORMAN C. PAYSON, M.D.         Norman C. Payson, M.D.	Director	July 16, 2010

II-13

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lake Forest, State of California, on July 16, 2010.

APRIA HEALTHCARE, INC.
By:	/s/  NORMAN C. PAYSON, M.D.
	Name:    Norman C. Payson, M.D.
	Title:      Chief Executive Officer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    NORMAN C. PAYSON, M.D.         Norman C. Payson, M.D.	Chief Executive Officer (Principal Executive Officer)	July 16, 2010
/s/    CHRIS A. KARKENNY         Chris A. Karkenny	Executive Vice-President and Chief Financial Officer (Principal Financial Officer)	July 16, 2010
/s/    PETER A. REYNOLDS         Peter A. Reynolds	Chief Accounting Officer and Controller (Principal Accounting Officer)	July 16, 2010
/s/    NORMAN C. PAYSON, M.D.         Norman C. Payson, M.D.	Director	July 16, 2010

II-14

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lake Forest, State of California, on July 16, 2010.

APRIACARE MANAGEMENT SYSTEMS, INC.
By:	/s/  NORMAN C. PAYSON, M.D.
	Name:    Norman C. Payson, M.D.
	Title:      Chief Executive Officer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    NORMAN C. PAYSON, M.D.          Norman C. Payson, M.D.	Chief Executive Officer (Principal Executive Officer)	July 16, 2010
/s/    CHRIS A. KARKENNY         Chris A. Karkenny	Executive Vice-President and Chief Financial Officer (Principal Financial Officer)	July 16, 2010
/s/    PETER A. REYNOLDS         Peter A. Reynolds	Chief Accounting Officer and Controller (Principal Accounting Officer)	July 16, 2010
/s/    NORMAN C. PAYSON, M.D.         Norman C. Payson, M.D.	Director	July 16, 2010

II-15

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lake Forest, State of California, on July 16, 2010.

APRIADIRECT.COM, INC.
By:	/s/  NORMAN C. PAYSON, M.D.
	Name:    Norman C. Payson, M.D.
	Title:      Chief Executive Officer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    NORMAN C. PAYSON, M.D.          Norman C. Payson, M.D.	Chief Executive Officer (Principal Executive Officer)	July 16, 2010
/s/    CHRIS A. KARKENNY         Chris A. Karkenny	Executive Vice-President and Chief Financial Officer (Principal Financial Officer)	July 16, 2010
/s/    PETER A. REYNOLDS         Peter A. Reynolds	Chief Accounting Officer and Controller (Principal Accounting Officer)	July 16, 2010
/s/    NORMAN C. PAYSON, M.D.         Norman C. Payson, M.D.	Director	July 16, 2010

II-16

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM ALTERNATE SITE SERVICES, INC.
By:	/S/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-17

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM CLINICAL TRIALS, INC.
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-18

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF ALABAMA
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-19

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF FLORIDA
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-20

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF GREATER D.C.
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-21

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN          Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN          Robert T. Allen	Director	July 16, 2010

II-22

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF INDIANA
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-23

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-24

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF MISSISSIPPI
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN          Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-25

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF NEVADA
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-26

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF NEW YORK
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-27

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF NORTH TEXAS
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-28

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-29

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-30

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-31

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-32

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE CORPORATION OF UTAH
By:	/S/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-33

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HEALTHCARE OF WYOMING, L.L.C.
By:	/S/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Manager	July 16, 2010
/S/    MICHAEL E. DELL         Michael E. Dell	Manager	July 16, 2010

II-34

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM HOMECARE OF MINNESOTA, INC.
By:	/S/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-35

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM SERVICE CORPORATION
By:	/S/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-36

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM SPECIALTY INFUSION SERVICES, INC.
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-37

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAM, INC.
By:	/s/  DANIEL E. GREENLEAF
	Name:    Daniel E. Greenleaf
	Title:      President

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    DANIEL E. GREENLEAF         Daniel E. Greenleaf	President (Principal Executive Officer)	July 16, 2010
/s/    CHRIS A. KARKENNY         Chris A. Karkenny	Executive Vice-President and Chief Financial Officer (Principal Financial Officer)	July 16, 2010
/s/    PETER A. REYNOLDS         Peter A. Reynolds	Chief Accounting Officer and Controller (Principal Accounting Officer)	July 16, 2010
/s/    NORMAN C. PAYSON, M.D.         Norman C. Payson, M.D.	Director	July 16, 2010

II-38

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

CORAMRX, LLC
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and            Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN          Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Manager	July 16, 2010
/s/    MICHAEL E. DELL         Michael E. Dell	Manager	July 16, 2010

II-39

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

H.M.S.S., INC.
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN          Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN          Robert T. Allen	Director	July 16, 2010

II-40

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

T2 MEDICAL, INC.
By:	/s/  ROBERT T. ALLEN
	Name:    Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-41

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on July 16, 2010.

HEALTHINFUSION, INC.
By:	/s/ ROBERT T. ALLEN
	Name:     Robert T. Allen
	Title:      President, Chief Financial Officer and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    ROBERT T. ALLEN         Robert T. Allen	President, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	July 16, 2010
/s/    ROBERT T. ALLEN         Robert T. Allen	Director	July 16, 2010

II-42

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lake Forest, State of California, on July 16, 2010.

AHNY-DME LLC
By:	/S/  NORMAN C. PAYSON, M.D.
	Name: Norman C. Payson, M.D.
	Title:   Executive Chairman and             Chief Executive Officer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/S/    NORMAN C. PAYSON, M.D.          Norman C. Payson, M.D.	Executive Chairman and Chief Executive Officer (Principal Executive Officer)	July 16, 2010
/S/    CHRIS A. KARKENNY         Chris A. Karkenny	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	July 16, 2010
/S/    PETER A. REYNOLDS          Peter A. Reynolds	Chief Accounting Officer and Controller (Principal Accounting Officer)	July 16, 2010

II-43

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lake Forest, State of California, on July 16, 2010.

AHNY-IV LLC
By:	/S/  NORMAN C. PAYSON, M.D
	Name: Norman C. Payson, M.D.
	Title:   Executive Chairman and             Chief Executive Officer

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Robert S. Holcombe and Peter A. Reynolds and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign this Registration Statement and any and all amendments (including post-effective amendments) to this Registration Statement, including any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/S/    NORMAN C. PAYSON, M.D.         Norman C. Payson, M.D.	Executive Chairman and Chief Executive Officer (Principal Executive Officer)	July 16, 2010
/S/    CHRIS A. KARKENNY         Chris A. Karkenny	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	July 16, 2010
/S/    PETER A. REYNOLDS          Peter A. Reynolds	Chief Accounting Officer and Controller (Principal Accounting Officer)	July 16, 2010

II-44

EX-3.1

Exhibit 3.1

SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

APRIA HEALTHCARE GROUP INC.

FIRST. The name of the Corporation is Apria Healthcare Group Inc.

SECOND. The registered office and registered agent of the Corporation in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware, 19801.

THIRD. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law or any successor statute.

FOURTH. The total number of shares of stock which the Corporation shall have authority to issue is 1000 shares of common stock, par value $0.01 per share.

FIFTH. The Board of Directors of the Corporation, acting by majority vote, is expressly authorized to make, alter, amend or repeal the By-laws of the Corporation.

SIXTH.

1. To the fullest extent permitted by the Delaware General Corporation Law as the same now exists or may hereafter be amended, the Corporation shall indemnify, and advance expenses to, any person who is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Notwithstanding the preceding sentence, the Corporation shall not be required to indemnify any person in connection with a proceeding (or part thereof) commenced by such person if the commencement of such proceeding (or part thereof) was not authorized by the Board of Directors of the Corporation. The Corporation, by action of its Board of Directors, may provide indemnification or advance expenses to employees and agents of the Corporation or other persons only on such terms and conditions and to the extent determined by the Board of Directors in its sole and absolute discretion.

2. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article Sixth shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any By-law, agreement, contract, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office.

3. The Corporation shall have the power to purchase and maintain insurance to protect itself and any person who is or was a director, officer, employee or agent of the Corporation, or while a director, officer, employee or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and

incurred by him in any such capacity, or arising, out of his status as such, whether or not the Corporation would have the power or the obligation to indemnify him against such liability under the Delaware General Corporation Law or the provisions of this Article Sixth.

4. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article Sixth shall, unless otherwise provided when authorized of ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such officer or director. The indemnification and advancement of expenses that may have been provided to an employee or agent of the Corporation by action of the Board of Directors, pursuant to the last sentence of Paragraph 1 of this Article Sixth, shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be an employee or agent of the Corporations and shall inure to the benefit of the heirs, executors and administrators of such a person, after the time such person has ceased to be an employee or agent of the Corporation, only on such terms and conditions and to the extent determined by the Board of Directors in its sole discretion.

SEVENTH. A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Law as the same exists or may hereafter be amended. If the Delaware General Corporation Law is amended after the effective date of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

Any amendment, modification or repeal of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

EIGHTH. Unless and except to the extent that the By-laws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot.

2

CERTIFICATE OF CHANGE OF REGISTERED AGENT

AND

REGISTERED OFFICE

*******

Apria Healthcare Group Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify as follows:

The present registered agent of the Corporation is The Corporation Trust Company and the present registered office of the Corporation is in the County of New Castle.

The Board of Directors of the Corporation adopted the following resolution on the 12th day of February, 2009:

“RESOLVED, that the registered office of the Corporation in the state of Delaware be and it hereby is changed to National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware, 19904, County of Kent, and the authorities of the present registered agent of the Corporation be and the same is hereby withdrawn and National Registered Agents, Inc., shall be and is hereby constituted and appointed the registered agent of the Corporation at the address of its registered office.”

IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed by Robert S. Holcombe, its Executive Vice President, General Counsel and Secretary, this 12th day of February, 2009.

APRIA HEALTHCARE GROUP INC.

/s/ Robert S. Holcombe

Name:  Robert S. Holcombe

Title:    Executive Vice President, General

             Counsel and Secretary

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

OF

APRIA HEALTHCARE GROUP INC.,

A DELAWARE CORPORATION

(As Amended through February 19, 2008)

ARTICLE I

OFFICES

SECTION 1.1 Registered Office. The registered office of this Corporation shall be in the City of Wilmington, County of New Castle, Delaware and the name of the resident agent in charge thereof is the agent named in the Certificate of Incorporation until changed by the Board of Directors (the “Board”).

SECTION 1.2 Principal Office. The principal office for the transaction of the business of the Corporation shall be at such place as may be established by the Board. The Board is granted full power and authority to change said principal office from one location to another.

SECTION 1.3 Other Offices. The Corporation may also have an office or offices at such other places, either within or without the State of Delaware, as the Board may from time to time designate or the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

SECTION 2.1 Time and Place of Meetings. Meetings of stockholders shall be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

SECTION 2.2 Annual Meetings of Stockholders. The annual meeting of stockholders shall be held on such date and at such time and place as may be fixed by the Board of Directors and stated in the notice of the meeting, for the purpose of electing directors and for the transaction of such other business as is properly brought before the meeting in accordance with these Bylaws. To be properly brought before the annual meeting, business must be either (i) specified in the notice of annual meeting (or any supplement or amendment thereto) given by or at the direction of the Board of Directors, (ii) otherwise brought before the annual meeting by or at the direction of the Board of Directors, (iii) brought before the meeting in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, or (iv) otherwise properly brought before the annual meeting by a stockholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. Subject to the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, to be timely a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred fifty (150) days prior to the meeting; provided, however, that in the event that less than sixty (60) days’

notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by a stockholder, to be timely, must be received no later than the close of business on the tenth (10th) day following the day on which such notice of the data of the annual meeting was mailed or such public disclosure was made, whichever first occurs. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting, (ii) the name and record address of the stockholder proposing such business, (iii) the class, series and number of shares of the Corporation which are beneficially owned by the stockholder, and (iv) any material interest of the stockholder in such business. No business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Article II, Section 2.2. The officer of the Corporation presiding at an annual meeting shall, if the facts warrant, determine and declare to the annual meeting that business was not properly brought before the annual meeting in accordance with the provisions of this Article II, Section 2.2, and if he or she should so determine, such officer shall so declare to the annual meeting and any such business not properly brought before the meeting shall not be transacted.

SECTION 2.3 Special Meetings. Special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time by the Board, or by a committee of the Board that has been duly designated by the Board and whose powers and authority, as provided in a resolution of the Board or in the Bylaws of the Corporation, include the power to call such meetings, and shall be called by the Chairman or Secretary at the request in writing of a majority of the Board, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote, but such special meetings may not be called by any other person or persons; provided, however, that if and to the extent that any special meeting of stockholders may be called by any other person or persons specified in any provisions of the Certificate of Incorporation or any amendment thereto, or any certificate filed under Section 151(g) of the Delaware General Corporation Law (or its successor statute as in effect from time to time hereafter), then such special meeting may also be called by the person or persons in the manner, at the times and for the purposes so specified. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

SECTION 2.4 Stockholder Lists. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or at the place of the meeting, and the list shall also be available at the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

SECTION 2.5 Notice of Meetings. Notice of each meeting of stockholders, whether annual or special, stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which such meeting has been called, shall be given to each stockholder of record entitled to vote at such meeting not less than ten (10) nor more than sixty

2

(60) days before the date of the meeting. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken. Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Notice of any meeting of stockholders shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

SECTION 2.6 Quorum and Adjournment. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for holding all meetings of stockholders, except as otherwise provided by applicable law or by the Certificate of Incorporation; provided, however, that the stockholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal of enough stockholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. If it shall appear that such quorum is not present or represented at any meeting of stockholders, the Chairman of the meeting shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. The Chairman of the meeting may determine that a quorum is present based upon any reasonable evidence of the presence in person or by proxy of stockholders holding a majority of the outstanding votes, including without limitation, evidence from any record of stockholders who have signed a register indicating their presence at the meeting.

SECTION 2.7 Voting. In all matters, when a quorum is present at any meeting, the vote of the holders of a majority of the capital stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of applicable law or of the Certificate of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Such vote may be by voice or by written ballot; provided, however, that the Board may, in its discretion, require a written ballot for any vote, and further provided that all elections for directors must be by written ballot upon demand made by a stockholder at any election and before the voting begins. Unless otherwise provided in the Certificate of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder.

SECTION 2.8 Proxies. Each stockholder entitled to vote at a meeting of stockholders may authorize in writing another person or persons to act for such holder by proxy, but no proxy shall be voted or acted upon after three years from its date, unless the person executing the proxy specifies therein the period of time for which it is to continue in force.

3

SECTION 2.9 Inspectors of Election. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation or the Chairman of the meeting shall appoint one or more alternate inspectors to replace any inspector who fails to act. Each inspector, before undertaking his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall ascertain the number of shares outstanding and the voting power of each, determine the shares represented at the meeting and the validity of the proxies and ballots, count all votes and ballots, determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. Each inspector shall perform his or her duties and shall make all determinations in accordance with the Delaware General Corporation Law including, without limitation, Section 231 of the Delaware General Corporation Law. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, no revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery upon application by a stockholder shall determine otherwise. The appointment of inspectors of election shall be in the discretion of the Board except that so long as the Corporation has a class of voting stock that is (i) listed on a national securities exchange, (ii) authorized for quotation on an interdealer quotation system of a registered national securities association, or (iii) held of record by more than 2,000 stockholders, appointment of inspectors shall be obligatory.

ARTICLE III

DIRECTORS

SECTION 3.1 Powers. The Board shall have the power to manage or direct the management of the property, business and affairs of the Corporation, and except as expressly limited by law, to exercise all of its corporate powers. The Board may establish procedures and rules, or may authorize the Chairman of any meeting of stockholders to establish procedures and rules, for the fair and orderly conduct of any meeting of stockholders including, without limitation, registration of the stockholders attending the meeting, adoption of an agenda, establishing the order of business at the meeting, recessing and adjourning the meeting for the purposes of tabulating any votes and receiving the results thereof, the timing of the opening and closing of the polls, and the physical layout of the facilities for the meeting.

SECTION 3.2 Number, Election and Tenure. The number of directors shall be nine until changed by resolution adopted by the Board. At each annual meeting of stockholders, all directors shall be elected to hold office until the next annual meeting of stockholders. Each director shall hold office until his or her successor is elected and qualified or until his or her earlier resignation. No decrease in the number of directors shall shorten the term of any incumbent director. Except to the extent otherwise provided in Section 3.13 of this Article, each director shall be elected by the vote of the majority of votes cast with respect to the director at any meeting of stockholders duly called for that purpose at which a quorum is present, provided

4

that if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors, For purposes of this Section, a majority of the votes cast means that the number of shares voted “for” a director must exceed fifty percent (50%) of the votes cast with respect to that director. If an incumbent director is not re-elected, the director shall offer to tender his or her resignation to the Board. A committee of the Board, duly charged with appropriate responsibility therefor, will make a recommendation to the Board concerning whether to accept or reject the offer of resignation, or whether other action should be taken. The Board will act on the Committee’s recommendation and publicly disclose its decision within ninety (90) days from the date of the certification of the results of the election. The public disclosure of the decision shall include a brief statement of the reasons upon which the decision of the Board was based. Any director whose offer to resign is being considered under these circumstances shall not participate in the Board’s decision. If, for any cause, no Board members are elected at a meeting of the stockholders called for that purpose, they may be elected as soon thereafter as convenient at a special meeting of the stockholders called in the manner provided in these Bylaws.

SECTION 3.3 Nominations for Election as Director. The power to nominate persons to serve on the Board shall be vested in the Board or a Committee of the Board duly established for that purpose. In addition, the Board may from time to time establish a procedure by which stockholders may nominate persons for election as directors of the Corporation, which procedure, if established, subject to any contrary requirements of applicable law, shall constitute the exclusive means by which stockholders may make such nominations.

SECTION 3.4 Meetings. The Board may hold meetings, both regular and special, either within or outside the State of Delaware.

SECTION 3.5 Annual Meeting. The Board shall meet as soon as practicable after each annual election of directors.

SECTION 3.6 Regular Meetings. Regular meetings of the Board shall be held without call or notice at such time and place as shall from time to time be determined by resolution of the Board.

SECTION 3.7 Special Meetings. Special meetings of the Board may be called at any time, and for any purpose permitted by law, by the Chairman of the Board, or by the Secretary on the written request of any two members of the Board unless the Board consists of only one director in which case the special meeting shall be called on the written request of the sole director, which meetings shall be held at the time and place designated by the person or persons calling the meeting. Notice of the time, place and purpose of any such meeting shall be given to the directors by the Secretary, or in case of the Secretary’s absence, refusal or inability to act, by any other officer. Any such notice may be given by mail, by facsimile, by telephone, by electronic mail, by personal service, or by any combination thereof as to different directors. If the notice is by mail, then it shall be deposited in a United States Post Office at least seventy-two (72) hours before the time of the meeting. If the notice is sent by facsimile, by telephone, electronic mail, or by personal service, it must be communicated or delivered at least twenty-four (24) hours before the time of the meeting. For purposes of this Section, “electronic mail” means

5

any form of “email” type communication through the Internet, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by the recipient through an automated process. To be effective, telephone and facsimile communications must be directed to a number at which the director has consented to receive notice and electronic mail must be directed to an electronic mail address at which the director has consented to receive notice.

SECTION 3.8 Quorum. At all meetings of the Board, a majority of the total number of directors shall be necessary and sufficient to Constitute a quantum for the transaction of business, and the affirmative vote of a majority of the directors present at a meeting at which a quorum is present shall be necessary to constitute the act of the Board. Any meeting of the Board may be adjourned to meet again at a stated day and hour. Even though a quorum is not present, as required in this Article III, Section 3.8, a majority of the directors present at any meeting of the Board, either regular or special, may adjourn from time to time until a quorum is present. Notice of any adjourned meeting need not be given.

SECTION 3.9 Fees and Compensation. Each director and each member of a committee of the Board shall receive such fees and reimbursement of expenses incurred on behalf of the Corporation or in attending meetings as the Board may from time to time determine. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

SECTION 3.10 Meetings by Telephonic Communication. Members of the Board or any committee thereof may participate in a regular or special meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this Article III, Section 3.10 shall constitute presence in person at such meeting.

SECTION 3.11 Committees. The Board may designate committees, each committee to consist of one or more of the directors of the Corporation. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it. Notwithstanding the foregoing, no committee of the Board shall have the power or authority in reference to: (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the Delaware General Corporation Law to be submitted to stockholders for approval or (ii) adopting, amending or repealing any bylaw of the Corporation. Unless the resolution appointing such committee or the Certificate of Incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law. Each committee shall have such name as may be determined from time to time by resolution adopted by the Board. Each committee shall keep minutes of its meetings and report to the Board when required.

6

SECTION 3.12 Action Without Meetings. Unless otherwise restricted by applicable law or by the Certificate of Incorporation or by these Bylaws, any action, required or permitted to be taken at any meeting of the Beard or of any committee thereof may be taken without a meeting if all members of the Board or of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

SECTION 3.13 Filling of Vacancies. Any vacancy on the Board, including any newly crested directorship resulting from an increase in the number of directors, vacancies resulting from the resignation or death of a director, or vacancies resulting from the failure to elect any nominee for election as a director at a meeting of the stockholders called for that purpose, may be idled or nominated by the stockholders of this Corporation, by a majority of the whole Board (not including incumbent directors who failed to be elected at a meeting of stockholders called for that purpose) or by a duly constituted committee of the Board so authorized. The member or members of any committee of the Board authorized to fill vacancies on the Board, or to nominate persons for election as directors at a meeting of the stockholders, as set forth in the immediately preceding sentence that arc present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any absent or disqualified member of such committee.

ARTICLE IV

OFFICERS

SECTION 4.1 Appointment and Salaries. The senior officers of the Corporation shall be appointed by the Board and shall be a Chairman of the Board, a Chief Executive Officer, a President, a Chief Operating Officer, a Treasurer and a Chief Financial Officer. The Board or the Chief Executive Officer may appoint one or more Vice Presidents, a Secretary and such other officers (including assistant secretaries and financial officers) as the Board or the Chief Executive Officer may deem necessary or desirable. The senior officers, and any other officers appointed by the Board, shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. Each other officer appointed by the Chief Executive Officer shall hold office for such term and shall exercise such powers and perform such duties as shall be determined from time to time by the Chief Executive Officer or the Board. The Board shall fix the salaries of all officers appointed by it. Unless prohibited by applicable law or by the Certificate of Incorporation or by these Bylaws, one person may be elected or appointed to serve in more than one official capacity. Any vacancy occurring in any senior office of the Corporation may be fined only by the Board.

SECTION 4.2 Removal and Resignation. Any officer may be removed, either with or without cause, by the Board or, in the case of an officer other than a senior officer, by the Board or the Chief Executive Officer. Any officer may resign at any time by giving notice to the Board, the Chief Executive Officer or the Secretary. Any such resignation shall take effect at the date of receipt of such notice or at any later time specified therein and, unless otherwise specified in such notice, the acceptance of the resignation shall not be necessary to make it effective.

SECTION 4.3 Chairman of the Board. The Chairman of the Board shall, unless otherwise determined by the Board, preside at all meetings of the stockholders and the Board; and shall have such other powers and duties as may from time to time be assigned by the Board.

7

SECTION 4.4 Chief Executive Officer. The Chief Executive Officer shall be the highest ranking executive officer of the Corporation, with the authority to supervise and direct the other officers and employees of the Corporation, and with authority from time to time to delegate to other officers such executive and other powers and duties as he or she shall deem appropriate, subject in all respects to the authority of the Board.

SECTION 4.5 President. If the Chairman of the Board is not the Chief Executive Officer, or if the position of Chief Executive Officer is vacant, the President shall have all of the authority of the Chief Executive Officer of the Corporation. The President shall have such other powers and duties as the Board or Chief Executive Officer may from time to time prescribe.

SECTION 4.6 Chief Operating Officer. Subject to the powers of the Chief Executive Officer, the Chief Operating Officer shall be the principal officer in charge of the operations of the Corporation other than those areas of responsibility as the Board or Chief Executive Officer may from time to time assign to the President.

SECTION 4.7 Vice President. In the absence of the President, or in the event of the President’s inability or refusal to act, the Vice President, if any (or if there be more than one Vice President, the Vice Presidents in the order of their rank or, if of equal rank, then in the order designated by the Board or, in the absence of any designation, then in the order of their appointment), shall perform the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The rank of Vice Presidents in descending order shall be Executive Vice President, Senior Vice President and Vice President. The Vice Presidents shall perform such other duties and have such other powers as the Board or the Chief Executive Officer may from time to time prescribe.

SECTION 4.8 Secretary and Assistant Secretary. The Secretary shall attend all meetings of the Board (unless the Board shall otherwise determine) and all meetings of the stockholders and record all the proceedings of the meetings of the Corporation and of the Board in a book to be kept for that purpose and shall perform like duties for the committees when required. The Secretary shall give, or cause to be given, notice of all meetings of stockholders and special meetings of the Board. The Secretary shall have custody of the corporate seal of the Corporation and shall (as well as any Assistant Secretary) have authority to affix the some to any instrument requiring it and to attest it. The Secretary shall perform such other duties and have such other powers as the Board or the Chief Executive Officer may from time to time prescribe.

SECTION 4.9 Chief Financial Officer. Subject to the powers of the Chief Executive Officer, the Chief Financial Officer shall be the principal officer in charge of the financial affairs of the Corporation and shall perform such other duties and have such other powers as the Board or the Chief Executive Officer from time to time prescribe. The Chief Financial Officer shall perform the duties of the Treasurer at any time that the office of Treasurer is vacant.

SECTION 4.10 Treasurer. Subject to the powers of the Chief Financial Officer, the Treasurer shall lave custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. Subject to the powers of the Chief Financial

8

Officer, the Treasurer may disburse the funds of the Corporation as may be ordered by the Beard, taking proper vouchers for such disbursements, and shall render to the Board at its regular meetings, or when the Board so requires, an account of transactions and of the financial condition of the Corporation. The Treasurer shall perform such other duties and have such other powers as the Board or the Chief Executive Officer may from time to time prescribe.

SECTION 4.11 Bonds. If required by the Board and at the expense of the Corporation, the Chief Financial Officer, the Treasurer, and the Assistant Treasurer, if any, shall give the Corporation a bond (which shall be renewed at such times as specified by the Board) in such sum and with such surety or sureties as shall be satisfactory to the Board for the faithful performance of the duties of such person’s office and for the restoration to the Corporation, in case of such person’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in such person’s possession or under such person’s control belonging to the Corporation.

SECTION 4.12 Assistant Officers. An assistant officer shall, in the absence of the officer to whom such person is an assistant or in the event of such officer’s inability or refusal to act (or, if there be more than one such assistant officer, the assistant officers in the order designated by the Board, in the absence of any designation, then in the order of their appointment), perform the duties and exercise the powers of such officer. An assistant officer shall perform such other duties and have such other powers as the Board or the officer appointing any such assistant officer may from time to time prescribe.

ARTICLE V

SEAL

It shall not be necessary to the validity of any instrument executed by any authorized officer or officers of the Corporation that the execution of such instrument be evidenced by the corporate seal, and all documents, instruments, contracts and writings of all kinds signed on behalf of the Corporation by any authorized officer or officers shall be as effectual and binding on the Corporation without the corporate seal, as if the execution of the same had been evidenced by affixing the corporate seal thereto. The Board may give general authority to any officer to affix the seal of the Corporation and to attest the affixing by signature.

ARTICLE VI

FORM OF STOCK CERTIFICATE

Shares of stock in the Corporation may be certificated or uncertificated; provided, however, every holder of stock in the Corporation shall be entitled upon request to have a certificate signed by, or in the name of, the Corporation by the Chairman of the Board or Vice-Chairman of the Board, if any, or by the President or a Vice-President; and by the Treasurer or an Assistant Treasurer or the Chief Financial Officer, or the Secretary or an Assistant Secretary certifying the number of shares owned of the Corporation. Any or all of the signatures on the certificate, if any, may be a facsimile signature. If any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at

9

the date of the issuance. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, to the extent a certificate is issued to represent any shares of such class of stock or series of stock, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences or rights shall be set forth in full or summarized on the face or back of the certificate that the Corporation may issue to represent such class or series of stock. Except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate, if any, a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.

ARTICLE VII

REPRESENTATION OF SHARES OF OTHER CORPORATIONS

Any and all shares of any other corporation or corporations standing in the name of the Corporation shall be voted, and all rights incident thereto shall be represented and exercised on behalf of the Corporation, as follows: (i) as the Board of the Corporation may determine from time to time, or (ii) in the absence of such determination, by the Chief Executive Officer or each other officer as may be designated from time to time by the Chief Executive Officer. The foregoing authority may be exercised either by any such officer in person or by any other person authorized so to do by proxy or power of attorney duly executed by said officer.

ARTICLE VIII

TRANSFERS OF STOCK

Upon surrender of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, or upon a request to transfer uncertificated shares accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate in respect of such shares (to the extent the person entitled thereto requests a certificate) or uncertificated shares to the person entitled thereto, cancel the old certificate, if any, and record the transaction upon its books.

ARTICLE IX

LOST, STOLEN OR DESTROYED CERTIFICATES

The Board may direct a new certificate or certificates be issued in place of any certificate theretofore issued alleged to have been lost, stolen or destroyed, upon the making of an affidavit of the fact by the person claiming the certificate to be lost, stolen or destroyed. Unless specifically requested otherwise by the stockholder, the Board may also direct that the shares represented by such alleged lost, stolen or destroyed certificate be uncertificated. When authorizing such issue of a replacement certificate (or that such shares be uncertificated), the Board may, in its discretion and as a condition precedent to the issuance, require the owner of such alleged lost, stolen or destroyed certificate, or such person’s legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the lost, stolen or destroyed certificate.

10

ARTICLE X

RECORD DATE

The Board may fix in advance a date, which shall not be more than sixty (60) days nor less than ten (10) days preceding the date of any meeting of stockholders, nor more than sixty (60) days prior to any other action, as a record date for the determination of stockholders entitled to notice of or to vote at any such meeting and any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise the rights in respect of any change, conversion or exchange of stock, and in such case such stockholders, and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof; or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid.

ARTICLE XI

REGISTERED STOCKHOLDERS

The Corporation shall be entitled to treat the holder of record of any share or shares of stock of the Corporation as the holder in fact thereof and shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof; except as expressly provided by applicable law.

ARTICLE XII

FISCAL YEAR

The fiscal year of the Corporation shall be fixed by resolution of the Board.

ARTICLE XIII

AMENDMENTS

Subject to any contrary or limiting provisions contained in the Certificate of Incorporation, these Bylaws may be amended or repealed, or new Bylaws may be adopted (i) by the affirmative vote of the holders of at least a majority of the Common Stock of the Corporation, or (ii) by the affirmative vote of the majority of the whole Board at any regular or special meeting. Any Bylaws adopted or amended by the stockholders may be amended or repealed by the Board or the stockholders.

ARTICLE XIV

DIVIDENDS

SECTION 14.1 Declaration. Dividends on the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board at any regular or special meeting, pursuant to law, and may be paid in cash, in property or in shares of capital stock.

11

SECTION 14.2 Set Aside Funds. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall determine to be in the best interest of the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE XV

INDEMNIFICATION AND INSURANCE

SECTION 15.1 Right to Indemnification. Each person who was or is a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action or inaction in an official capacity or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the laws of the State of Delaware, as the same exist or may hereafter be amended, against all costs, charges, expenses, liabilities and losses (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board. The right to indemnification conferred in this Article shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the Delaware General Corporation Law requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to en employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article XV, Section 15.1 or otherwise. The Corporation may, by action of the Board, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of directors and officers.

12

SECTION 15.2 Right of Claimant to Bring Suit. If a claim under Article XV, Section 15.1 is not paid in full by the Corporation within thirty (30) days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has failed to meet a standard of conduct which makes it permissible under Delaware law for the Corporation to indemnify the claimant for the amount claimed. Neither the failure of the Corporation (including its Board, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is permissible in the circumstances because he or she has met such standard of conduct, nor an actual determination by the Corporation (including its Board, independent legal counsel, or its stockholders) that the claimant has not met such standard of conduct, shall be a defense to the action or create a presumption that the claimant has failed to meet such standard of conduct.

SECTION 15.3 Non-Exclusivity of Rights. The right to, indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

SECTION 15.4 Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under Delaware law.

SECTION 15.5 Expenses as a Witness. To the extent that any director, officer, employee or agent of the Corporation, is by reason of such position, or a position with another entity at the request of the Corporation, a witness in any action, suit or proceeding, he or she shall be indemnified against all costs and expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.

SECTION 15.6 Indemnity Agreements. The Corporation may enter into agreements with any director, officer, employee or agent of the Corporation providing for indemnification to any extent permitted by Delaware law.

13

EX-3.3

Exhibit 3.3

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

APRIA HEALTHCARE, INC.

Apria Healthcare, Inc., a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Apria Healthcare, Inc. The Corporation was incorporated under the name “National Medical Homecare, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on March 30, 1984.

2. This Amended and Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Corporation and by the sole stockholder of the Corporation in accordance with Sections 242 and 245 of the General Corporation Law of Delaware.

3. This Amended and Restated Certificate of Incorporation restates and integrates and further amends the Certificate of Incorporation, as heretofore amended and supplemented.

4. The text of the Certificate of Incorporation is hereby amended and restated to read in its entirety as follows:

FIRST: The name of the corporation is Apria Healthcare, Inc.

SECOND: The address of its registered office in the State of Delaware is 160 Greentree Drive, Suite 101, in the City of Dover 19904, County of Kent. The name of its registered agent at such address is National Registered Agents, Inc.

THREE: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of stock which the corporation shall have authority to issue is One Thousand (1,000) and the par value of each of such shares is One Cent ($.01) amounting in the aggregate to Ten Dollars ($10.00).

FIFTH: The board of directors is authorized to make, alter or repeal the by-laws of the corporation. Election of directors need not be by written ballot.

SIXTH.

1. To the fullest extent permitted by the Delaware General Corporation Law as the same now exists or may hereafter be amended, the Corporation shall indemnify, and advance expenses to, any person who is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Notwithstanding the preceding sentence, the Corporation shall not be required to indemnify any person in connection with a proceeding (or part thereof) commenced by such person if the commencement of such proceeding (or part thereof) was not authorized by the Board of Directors of the Corporation. The Corporation, by action of its Board of Directors, may provide indemnification or advance expenses to employees and agents of the Corporation or other persons only on such terms and conditions and to the extent determined by the Board of Directors in its sole and absolute discretion.

2. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article Sixth shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any Bylaw, agreement, contract, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office.

3. The Corporation shall have the power to purchase and maintain insurance to protect itself and any person who is or was a director, officer, employee or agent of the Corporation, or while a director, officer, employee or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising, out of his status as such, whether or not the Corporation would have the power or the obligation to indemnify him against such liability under the Delaware General Corporation Law or the provisions of this Article Sixth.

4. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article Sixth shall, unless otherwise provided when authorized of ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such officer or director. The indemnification and advancement of expenses that may have been provided to an employee or agent of the Corporation by action of the Board of Directors, pursuant to the last sentence of Paragraph 1 of this Article Sixth, shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be an employee or agent of the Corporations and shall inure to the benefit of the heirs, executors and administrators of such a person, after the time such person has ceased to be an employee or agent of the Corporation, only on such terms and conditions and to the extent determined by the Board of Directors in its sole discretion.

SEVENTH. A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Law as the same exists or may hereafter be amended. If the Delaware General Corporation Law is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

Any amendment, modification or repeal of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

2

IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert S. Holcombe
Name:	Robert S. Holcombe
Title:	Executive Vice-President,
	General Counsel and Secretary

[Apria Healthcare, Inc.]

EX-3.4

Exhibit 3.4

AMENDED AND RESTATED BYLAWS

OF

APRIA HEALTHCARE, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Apria Healthcare, Inc. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the Chief Executive Officer for any purpose and shall be called by the Chief Executive Officer or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the Chief Executive Officer and shall be called by the Chief Executive Officer or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a Chief Executive Officer, one or more Executive Vice Presidents, a Chief Financial Officer, a Chief Accounting Officer and Controller, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the Chief Executive Officer with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.5

Exhibit 3.5

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

APRIACARE MANAGEMENT SYSTEMS, INC.

ApriaCare Management Systems, Inc., a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is ApriaCare Management Systems, Inc. The Corporation was incorporated under the name “Apria Number One, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on June 23, 1995.

2. This Amended and Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Corporation and by the sole stockholder of the Corporation in accordance with Sections 242 and 245 of the General Corporation Law of Delaware.

3. This Amended and Restated Certificate of Incorporation restates and integrates and further amends the Certificate of Incorporation, as heretofore amended and supplemented.

4. The text of the Certificate of Incorporation is hereby amended and restated to read in its entirety as follows:

ARTICLE I

The name of the Corporation is ApriaCare Management Systems, Inc.

ARTICLE II

The name and address of the registered agent of the Corporation in the State of Delaware is:

National Registered Agents, Inc.

160 Greentree Drive, Suite 101, in the City of Dover 19904, County of Kent, Delaware

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV

The total number of shares which the Corporation is authorized to issue is one thousand (1,000) shares of Common Stock, par value $.01 per share.

ARTICLE V

Except as otherwise provided (i) by law, (ii) by this Certificate of Incorporation as amended from time to time, or (iii) by resolutions of the Board of Directors fixing the powers and preferences of any class or series of shares as to which the Board of Directors has been expressly vested with authority to fix the powers and preferences, (a) the Common Stock shall possess the full voting power of the Corporation and (b) the number of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote.

ARTICLE VI

The number of directors constituting the Board of Directors shall be fixed, initially, by the Bylaws of the Corporation; thereafter the number of directors shall be fixed or altered exclusively by resolutions adopted by the Board of Directors. No decrease in the number of directors shall shorten the term of any incumbent director. Elections of directors need not be by ballot unless the Bylaws so provide. The Board of Directors shall have the power to adopt, amend or repeal the Bylaws of the Corporation.

ARTICLE VII

To the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended, a director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. The liability of a director of the Corporation to the Corporation or its stockholders for monetary damages shall be eliminated to the fullest extent permissible under applicable law in the event it is determined that Delaware law does not apply. The Corporation shall, to the fullest extent permitted by law, indemnify its directors and officers against any liabilities, losses or related expenses which they may incur by reason of serving or having served as directors or officers of the Corporation, or serving or having served at the request of the Corporation as directors, officers, trustees, partners, employees or agents of any entity in which the Corporation has an interest. The Corporation is authorized to provide by Bylaw, agreement or otherwise for indemnification of directors, officers, employees and agents in excess of the indemnification otherwise permitted by applicable law. Any repeal or modification of this Article shall not result in any liability of a director, or any change or reduction in the indemnification to which a director, officer, employee or agent would otherwise be entitled, with respect to any action or omission occurring prior to such repeal or modification.

2

ARTICLE VIII

Any action required or permitted to be taken by holders of stock of the Corporation must be taken at a meeting of such holders and may not be taken by consent in writing, except (i) as permitted by resolutions of the Board of Directors fixing the powers and preferences of any class or series of shares as to which the Board of Directors has been expressly vested with authority to fix the powers and preferences, or (ii) for the purpose of approving, authorizing or adopting any action or proposal theretofore approved, authorized or adopted by the Board of Directors.

3

IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert S. Holcombe
Name:	Robert S. Holcombe
Title:	Executive Vice-President,
	General Counsel and Secretary

[ApriaCare Management Systems, Inc.]

EX-3.6

Exhibit 3.6

AMENDED AND RESTATED BYLAWS

OF

APRIACARE MANAGEMENT SYSTEMS, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of ApriaCare Management Systems, Inc. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the Chief Executive Officer for any purpose and shall be called by the Chief Executive Officer or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the Chief Executive Officer and shall be called by the Chief Executive Officer or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a Chief Executive Officer, one or more Executive Vice Presidents, a Chief Financial Officer, a Chief Accounting Officer and Controller, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the Chief Executive Officer with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.7

Exhibit 3.7

CERTIFICATE OF INCORPORATION

OF

APRIADIRECT.COM, INC.

ARTICLE I

NAME OF CORPORATION

The name of the Corporation (the “Corporation”) is:

ApriaDirect.Com, Inc.

ARTICLE II

REGISTERED OFFICE

The address of the registered office of the Corporation in the State of Delaware is 160 Greentree Drive, Suite 101, in the City of Dover 19904, County of Kent, and the name of its registered agent at that address is National Registered Agents, Inc.

ARTICLE III

PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which Corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV

AUTHORIZED CAPITAL STOCK

The Corporation shall be authorized to issue one class of stock to be designated Common Stock; the total number of shares which the Corporation shall have authority to issue is 1,000, and each such share shall have a par value of $0.01.

ARTICLE V

BOARD POWER REGARDING BYLAWS

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind the bylaws of the Corporation.

ARTICLE VI

ELECTION OF DIRECTORS

Elections of directors need not be by written ballot unless the bylaws of the Corporation shall so provide.

ARTICLE VII

LIABILITY

A director of the Corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

ARTICLE VIII

CORPORATE POWER

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the trimmer now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.

ARTICLE IX

INCORPORATOR

The name and mailing address of the incorporator of the Corporation is:

Louie Hopkins

c/o Gibson, Dunn & Crutcher LLP

333 S. Grand Avenue, Suite 4716

Los Angeles, CA 90071

2

THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of incorporating and organizing a corporation under the General Corporation Law of the State of Delaware, does make and file this Certificate of Incorporation.

Dated: November 6, 2007

/s/ Louie Hopkins

Louie Hopkins, Incorporator

3

EX-3.8

Exhibit 3.8

AMENDED AND RESTATED BYLAWS

OF

APRIADIRECT.COM, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of ApriaDirect.Com, Inc. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the Chief Executive Officer for any purpose and shall be called by the Chief Executive Officer or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the Chief Executive Officer and shall be called by the Chief Executive Officer or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a Chief Executive Officer, one or more Executive Vice Presidents, a Chief Financial Officer, a Chief Accounting Officer and Controller, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the Chief Executive Officer with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.9

Exhibit 3.9

RESTATED CERTIFICATE OF INCORPORATION

OF

APRIA HEALTHCARE OF NEW YORK STATE, INC.

Under Section 807 of the New York Business Corporation Law (the “Business Corporation Law”)

Apria Healthcare of New York State, Inc., a New York corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Apria Healthcare of New York State, Inc. The Corporation was incorporated under the name “Onondaga Medical Instruments, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of New York on July 22, 1974.

2. Pursuant to Section 807 of the Business Corporation Law of the State of New York, as duly adopted by the Board of Directors of the Corporation and by the sole stockholder in accordance with Section 803 Business Corporation Law of the State of New York, (i) Article THIRD of the Certificate of Incorporation, relating to the location of the office of the Corporation, is hereby amended and (ii) a new Article (6), relating to indemnification of directors, officers and certain other persons, is inserted in the Certificate of Incorporation, and the text of the Certificate of Incorporation is amended and restated to read in its entirety as follows:

FIRST: The name of the corporation is Apria Healthcare of New York State, Inc.

SECOND: The purpose or purposes for which this corporation is formed is to engage in any lawful act or activity for which corporations may be organized under the Business Corporation Law of New York. The corporation will not be formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

THIRD: The office of the corporation is to be located in the County of New York, State of New York.

FOURTH: The aggregate number of shares which the corporation shall have authority to issue is 300 shares no par common stock.

FIFTH: The Secretary of State is designated as the agent of the corporation upon whom process against the corporation may be served. The post office address within the State of New York to which the Secretary of state shall mail a copy of any process against the corporation served upon him is: c/o National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501, New York, NY 10001. The name and the address of the registered agent of the corporation are National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501, New York, NY 10001.

SIXTH: The corporation shall, to the fullest extent permitted by permitted Article 7 of the Business Corporation Law of the State of New York, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said Article from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said Article, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which any person may be entitled under any Bylaw, resolution of shareholders; resolution of directors, agreement, or otherwise, as permitted by said Articles, as to action in any capacity in which he served at the request of the corporation.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert S. Holcombe
Name:	Robert S. Holcombe
Title:	Executive Vice-President General Counsel and Secretary

[Apria Healthcare of New York State, Inc.]

EX-3.10

Exhibit 3.10

AMENDED AND RESTATED BYLAWS

OF

APRIA HEALTHCARE OF NEW YORK STATE, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Apria Healthcare of New York State, Inc. (the “Company”) shall be held at such place either within or without the State of New York as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the Chief Executive Officer for any purpose and shall be called by the Chief Executive Officer or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the Chief Executive Officer and shall be called by the Chief Executive Officer or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a Chief Executive Officer, one or more Executive Vice Presidents, a Chief Financial Officer, a Chief Accounting Officer and Controller, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the Chief Executive Officer with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the Business Corporation Law of the State of New York, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.11

Exhibit 3.11

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM ALTERNATE SITE SERVICES, INC.

Coram Alternate Site Services, Inc., a Delaware corporation (the “Corporation”), does hereby certify as follows:

A. The name of the Corporation is Coram Alternate Site Services, Inc. The Corporation was incorporated under the name “Curaflex Infusion Services, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on December 23, 1986.

B. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

C. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

D. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

E. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

1. The name of the corporation is Coram Alternate Site Services, Inc.

2. The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of its registered agent at such address is Corporation Service Company.

3. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

4. The total number of shares of stock which the corporation shall have authority to issue is 100 and the par value of each of such shares is $1.00, amounting in the aggregate of $100.00.

5. The board of directors is authorized to make, alter or al the bylaws of the corporation. Election of directors need not be by ballot.

6. The corporation reserves the right to amend and repeal any provision contained in this Certificate of Incorporation in the manner prescribed by the laws of the State of Delaware. All rights herein conferred are granted subject to this reservation.

7. No former, future, or current director of the Corporation shall be liable to the Corporation, any of its stockholders, or any other director or third party, for monetary damages for breach of his or her fiduciary duty at a director; provided, that this Section 7 shall not eliminate or limit the liability of director (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. It is the intent of the Corporation to exempt the persons referred to in this Section 7 from personal liability to the fullest extent permitted by law.

8. The number of initial directors who will serve until the first annual meeting of shareholders or until their successors are elected and qualified is one.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Alternate Site Services, Inc.]

EX-3.12

Exhibit 3.12

AMENDED AND RESTATED BYLAWS

OF

CORAM ALTERNATE SITE SERVICES, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Alternate Site Services, Inc. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.13

Exhibit 3.13

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM CLINICAL TRIALS, INC.

Coram Clinical Trials, Inc., a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Clinical Trials, Inc. The Corporation was incorporated under the name “Coram Physician Services, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on February 9, 1995.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Clinical Trials, Inc.

SECOND: The address of the registered office of Coram Clinical Trials, Inc. (hereinafter, the “Corporation”) in the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification stall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the lime prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Clinical Trials, Inc.]

EX-3.14

Exhibit 3.14

AMENDED AND RESTATED BYLAWS

OF

CORAM CLINICAL TRIALS, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Clinical Trials, Inc. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.15

Exhibit 3.15

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF ALABAMA

Coram Healthcare Corporation of Alabama, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Alabama. The Corporation was incorporated under the name “Center Acquisition No. 16, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on October 18, 1988.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is: Coram Healthcare Corporation of Alabama.

SECOND: The address of the registered office of Coram Healthcare Corporation of Alabama (hereinafter, the “Corporation”) in the state of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $0.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Alabama]

3

EX-3.16

Exhibit 3.16

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF ALABAMA

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Alabama (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.17

Exhibit 3.17

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF FLORIDA

Coram Healthcare Corporation of Florida, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Florida. The Corporation was incorporated under the name “SHT Acquisition, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on July 16, 1991.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Healthcare Corporation of Florida.

SECOND: The address of the registered office of Coram Healthcare Corporation of Florida (hereinafter, the “Corporation”) in the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful-act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Florida]

EX-3.18

Exhibit 3.18

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF FLORIDA

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Florida (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.19

Exhibit 3.19

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF GREATER D.C.

Coram Healthcare Corporation of Greater D.C., a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Greater D.C. The Corporation was incorporated under the name “Baltimore Acquisition, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on March 2, 1993.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Healthcare Corporation of Greater D.C.

SECOND: The address of the registered office of Coram Healthcare Corporation of Greater D.C. (hereinafter, the “Corporation”) in the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole. Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force. may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Greater D.C.]

EX-3.20

Exhibit 3.20

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF GREATER D.C.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Greater D.C. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.21

Exhibit 3.21

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK

Under Section 807 of the New York Business Corporation Law (the “Business Corporation Law”)

Coram Healthcare Corporation of Greater New York, a New York corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Greater New York. The Corporation was incorporated under the name “NYHT Acquisition, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of New York on August 28, 1991.

2. Pursuant to Section 807 of the Business Corporation Law of the State of New York, as duly adopted by the Board of Directors of the Corporation and by the sole stockholder in accordance with Section 803 Business Corporation Law of the State of New York, Article THIRD of the Certificate of Incorporation, relating to the location of the office of the Corporation, is hereby amended, and the text of the Certificate of Incorporation is amended and restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Healthcare Corporation of Greater New York.

SECOND: The corporation is formed for the following purpose or purposes:

To engage in any lawful act or activity for which corporations may be organized under the Business Corporation Law, provided that the corporation is not formed to engage in any act or activity requiring the consent or approval of any state official, department, board, agency or other body without such consent or approval first being obtained.

THIRD: The office of the corporation is to be located in the County of Albany, State of New York.

FOURTH: The aggregate number of shares which the corporation shall have authority to issue is Five Hundred (500), all of which are of a par value of One Cent ($.01) each and all of which are of the same class.

FIFTH: The Secretary of State is designated as the agent of the corporation upon whom process against the corporation may be served. The post office address within the State of New York to which the Secretary of state shall mail a copy of any process against the corporation served upon him is: c/o Corporation Service Company, 80 State Street, Albany, NY 12207-2543.

The name and the address of the registered agent of the corporation are Corporation Service Company, 80 State Street, Albany, NY 12207-2543.

Said registered agent is to be the agent of the corporation upon whom or upon which process against the corporation may be served.

SIXTH: The duration of the corporation shall be perpetual.

SEVENTH: The corporation shall, to the fullest extent permitted-by permitted by Article 7 of the Business Corporation Law of the State of New York, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said Article from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said Article, and the indemnification provided for herein shall not be deemed exclusive of-any other rights to which any person may be entitled under any Bylaw, resolution of shareholders; resolution of directors, agreement, or otherwise, as permitted by said Articles, as to action in any capacity in which he served at the request of the corporation.

EIGHTH: The personal liability of the directors of the corporation is eliminated to the fullest extent permitted by the provisions of paragraph (b) of Section 402 of the Business Corporation Law of New York, as the same may be amended and supplemented.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Greater New York]

EX-3.22

Exhibit 3.22

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Greater New York (the “Company”) shall be held at such place either within or without the State of New York as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the New York Business Corporation Law, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.23

Exhibit 3.23

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF INDIANA

Coram Healthcare Corporation of Indiana, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Indiana. The Corporation was incorporated under the name “Center Acquisition No. 10, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on October 18, 1988.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Healthcare Corporation of Indiana.

SECOND: The address of the registered office of Coram Healthcare Corporation of Indiana (hereinafter, the “Corporation”) in the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $0.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and .as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provision of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Indiana]

3

EX-3.24

Exhibit 3.24

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF INDIANA

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Indiana (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.25

Exhibit 3.25

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS

Coram Healthcare Corporation of Massachusetts, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Massachusetts. The Corporation was incorporated under the name “Clinical Homecare Ltd.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on June 25, 1990.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

1. The name of the corporation is Coram Healthcare Corporation of Massachusetts (the “Corporation”).

2. The address of the Corporation’s registered office in the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at that address is Corporation Service Company.

3. The nature of the business of the corporation and the objects or purposes to be transacted, promoted or carried on by it are as follows: to engage in any lawful act or activity for which corporations may be organized under the General Corporations Law of the State of Delaware.

4. The total number of shares of all classes of the stock that the corporation is authorized to issue is ONE THOUSAND (1,000) shares of Common Stock with a par value of ONE TENTH OF ONE CENT ($0.001) per share.

5. The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation and for further definition, limitation and regulation of the powers of the Corporation, its directors and stockholders:

(a) Whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action by any provision of the General Corporation Law of the State of Delaware, the meeting and vote of stockholders may be dispensed with if two-thirds of the stockholders who would have been entitled to vote upon the action if such meeting were held shall consent in writing to such corporate action being taken, provided that prompt notice be given to all stockholders of the taking of corporate action without a meeting and by less than unanimous written consent.

(b) Meetings of stockholders may be held within or without the State of Delaware as the by-laws may provide.

(c) The books of the Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the by-laws of the Corporations.

(d) The Corporation shall, to the full extent permitted by Section 145 of the Delaware General Corporation Law, as amended from time to time or by any other law, indemnify all persons whom it may indemnify pursuant thereto.

(e) The number of directors of the Corporation shall be not fewer than three (3) nor greater than eleven (11), and shall be fixed by resolution of the Board of Directors. Election of directors need not be by written ballot unless the by-laws of the Corporation so provide.

(f) The Board of Directors shall have power without the assent or vote of the stockholders to make, alter, amend, change, add to or repeal the by-laws of the Corporation; to fix and vary the amount to be reserved for any proper purpose; to authorize and cause to be executed mortgages and liens upon all or any part of the property of the Corporation; to determine the use and disposition of any surplus or net profits; to fix the times for the declaration and payment of dividends; to fill (by the affirmative role of a majority of the remaining directors even if less than a quorum) vacancies in the Board resulting from an increase in the number of directors, death, resignation, removal or other cause; and to determine from time to time whether, and to what extent, and at what times and places, and under what conditions and regulations, the accounts and books of the Corporation (other than the stock ledger) or any of them, shall be open to the inspection of the stockholders.

(g) The directors in their discretion may submit any contract or act for approval or ratification at any annual meeting of the stockholders or at any meeting of the stockholders called for the purpose of considering any such act or contract, and any contract or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of the Corporation which is represented in person or by proxy at such meeting and entitled to vote thereat (provided

2

that a lawful quorum of stockholders be there represented in person or by proxy) shall be as valid and as binding upon the Corporation and upon all the stockholders as though it had been approved or ratified by every stockholder of the Corporation, whether or not the contract or act would otherwise be open to legal attack because of directors’ interest, or for any other reason.

(h) In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation; subject, nevertheless, to the provisions of the statutes of Delaware, of this Certificate of Incorporation, and to any by-laws from time to time made by the stockholders; provided, however, that no by-laws so made shall invalidate any prior act of the directors which would have been valid if such by-law had not been made.

6. No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation Law is amended after the filing of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

7. The Corporation reserves the right to alter, amend or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by the laws of the State of Delaware. All rights herein conferred are granted subject to this reservation.

3

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/  Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Massachusetts]

4

EX-3.26

Exhibit 3.26

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Massachusetts (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.27

Exhibit 3.27

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF MISSISSIPPI

Coram Healthcare Corporation of Mississippi, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Mississippi. The Corporation was incorporated under the name “Center Acquisition No. 20, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on October 18, 1988.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Healthcare Corporation of Mississippi.

SECOND: The address of the registered office of Coram Healthcare Corporation of Mississippi (hereinafter, the “Corporation”) in the state of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: Tice total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred 500) shares of common stock, $0,01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may he, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation, provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/   Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Mississippi]

EX-3.28

Exhibit 3.28

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF MISSISSIPPI

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Mississippi (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.29

Exhibit 3.29

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF NEVADA

Coram Healthcare Corporation of Nevada, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Nevada. The Corporation was incorporated under the name “TPN, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on January 13, 1992.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Healthcare Corporation of Nevada.

SECOND: The address of the registered office of Coram Healthcare Corporation of Nevada (hereinafter, the “Corporation”) in the state of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $.01 par value per share (The “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/  Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Nevada]

3

EX-3.30

Exhibit 3.30

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF NEVADA

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Nevada (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.31

Exhibit 3.31

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF NEW YORK

Under Section 807 of the New York Business Corporation Law (the “Business Corporation Law”)

Coram Healthcare Corporation of New York, a New York corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of New York. The Corporation was incorporated under the name “Curaflex of New York.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of New York on June 22, 1989.

2. Pursuant to Section 807 of the Business Corporation Law of the State of New York, as duly adopted by the Board of Directors of the Corporation and by the sole stockholder in accordance with Section 803 Business Corporation Law of the State of New York, a new Article (6), relating to indemnification of directors, officers and certain other persons, is inserted in the Certificate of Incorporation, and the text of the Certificate of Incorporation is amended and restated to read in its entirety as follows:

(1) The name of the corporation is:

CORAM HEALTHCARE CORPORATION OF NEW YORK

(2) The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized pursuant to the Business Corporation Law of the State of New York. The Corporation is not to engage in any act or activity requiring any consents or approvals by law without such consent or approval first being obtained.

For the accomplishment of the aforesaid purposes, and in furtherance thereof, the Corporation shall have and may exercise, all of the powers conferred by the Business Corporation Law upon corporations formed thereunder, subject to any limitations contained in Article 2 of said law or in accordance with the provisions of any other statute of the State of New York.

(3) The number of shares which the corporation shall have the authority to issue is 200 shares, no par value.

(4) The principal office of the corporation is to be located in the County of Albany, State of New York.

(5) The Secretary of State is designated as agent of the Corporation upon whom process against it may be served. The post office address within the State of New York to which the Secretary of State shall mail a copy of any process against the corporation served upon him is c/o Corporation Service Company, 80 State Street, Albany NY 12207-2543. The name and the address of the registered agent of the corporation are Corporation Service Company, 80 State Street, Albany NY 12207-2543.

(6) The corporation shall, to the fullest extent permitted by permitted Article 7 of the Business Corporation Law of the State of New York, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said Article from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said Article, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which any person may be entitled under any Bylaw, resolution of shareholders; resolution of directors, agreement, or otherwise, as permitted by said Articles, as to action in any capacity in which he served at the request of the corporation.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of New York]

3

EX-3.32

Exhibit 3.32

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF NEW YORK

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of New York (the “Company”) shall be held at such place either within or without the State of New York as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the New York Business Corporation Law, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.33

Exhibit 3.33

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF NORTH TEXAS

Coram Healthcare Corporation of North Texas, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of North Texas. The Corporation was incorporated under the name “Curaflex Acquisition Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on April 5, 1993.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

1. The name of the Corporation is Coram Healthcare Corporation of North Texas.

2. The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of its registered agent at such address is Corporation Service Company.

3. The nature of the business of the Corporation and the objects or purposes to be transacted, promoted or carried on by it are as follows: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

4. The total number of shares of all classes of stock that the Corporation is authorized to issue is ONE THOUSAND (1,000) shares of Common Stock with a par value of ONE TENTH OF ONE CENT ($0.001) per share.

5. The board of directors is expressly authorized to make, alter, or repeal the bylaws of the Corporation.

6. Elections of directors need not be by written ballot unless the bylaws of the Corporation shall so provide.

7. Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof, or en the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors of class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner at the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation am a consequence of such Compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which they said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.

8. The Corporation reserves the right to amend alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

9. To the fullest extent permitted by Delaware statutory or decisional law, as amended or interpreted, no director of this Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. This Article 9 does not affect the availability of equitable remedies for breach of fiduciary duties.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of North Texas]

3

EX-3.34

Exhibit 3.34

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF NORTH TEXAS

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of North Texas (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.35

Exhibit 3.35

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA

Coram Healthcare Corporation of Northern California, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Northern California. The Corporation was incorporated under the name “Lifesource Acquisition, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on December 5, 1991.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Healthcare Corporation of Northern California.

SECOND: The address of the registered office of Coram Healthcare Corporation of Northern California (hereinafter, the “Corporation”) in the state of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the state of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Northern California]

3

EX-3.36

Exhibit 3.36

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Northern California (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.37

Exhibit 3.37

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA

Coram Healthcare Corporation of South Carolina, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of South Carolina. The Corporation was incorporated under the name “Center Acquisition No. 7, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on October 18, 1988.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Healthcare Corporation of South Carolina.

SECOND: The address of the registered office of Coram Healthcare Corporation of South Carolina (hereinafter, the “Corporation”) in the state of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $0.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of South Carolina]

3

EX-3.38

Exhibit 3.38

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of South Carolina (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.39

Exhibit 3.39

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA

Coram Healthcare Corporation of Southern California, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Southern California. The Corporation was incorporated under the name “SCHT Acquisition, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on August 13, 1992.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is: Coram Healthcare Corporation of Southern California.

SECOND: The address of the registered office of Coram Healthcare Corporation of Southern California (hereinafter, the “Corporation”) in the state of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and the regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only once class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

2

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

3

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Southern California]

4

EX-3.40

Exhibit 3.40

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Southern California (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.41

Exhibit 3.41

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA

Coram Healthcare Corporation of Southern Florida, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Southern Florida. The Corporation was incorporated under the name “SWFHT Acquisition, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on July 16, 1991.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Healthcare Corporation of Southern Florida.

SECOND: The address of the registered office of Coram Healthcare Corporation of Southern Florida (hereinafter, the “Corporation”) in the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Southern Florida]

3

EX-3.42

Exhibit 3.42

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Southern Florida (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.43

Exhibit 3.43

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HEALTHCARE CORPORATION OF UTAH

Coram Healthcare Corporation of Utah, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Healthcare Corporation of Utah. The Corporation was incorporated under the name “Curaflex Acquisition Subsidiary, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on August 31, 1993.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the Corporation is Coram Healthcare Corporation of Utah (which is hereinafter referred to as the “Corporation”).

SECOND: The name and address, including the street, number, city and county, in the State of Delaware of the Corporation’s registered office and agent are:

Name	Address
Corporation Service Company	2711 Centerville Road, Suite 400 City of Wilmington 19808, County of New Castle

THIRD: The purpose for which the Corporation is organized is to engage in any or all related lawful business for which corporations may be organized under the General Corporation Law of Delaware and to exercise all the powers, rights, and privileges granted to business corporations under such law.

FOURTH: The aggregate number of shares which the Corporation is authorized to issue is one thousand (1,000) shares of common stock, with each share having a par value of $0.001 per share. All or any part of such shares may be issued by the Corporation from time to time, as may be determined by the Board of Directors, as provided by law.

FIFTH: The number of directors constituting the initial Board of Directors of the Corporation is one (1). The Board of Directors may be expanded in accordance with the General Corporation Law of Delaware. The Board of Directors is empowered to adopt, amend or repeal the Bylaws of the Corporation.

SIXTH: A director of this corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts of omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (ii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Healthcare Corporation of Utah]

3

EX-3.44

Exhibit 3.44

AMENDED AND RESTATED BYLAWS

OF

CORAM HEALTHCARE CORPORATION OF UTAH

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Healthcare Corporation of Utah (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.45

Exhibit 3.45

CERTIFICATE OF FORMATION

OF

CORAM HEALTHCARE OF WYOMlNG, L.L.C.

1. The name of the limited liability company is Coram Healthcare of Wyoming, L.L.C.

2. The address of its registered office in the State of Delaware is 9 East Loockerman Street, in the City of Dover, County of Kent. The name of its registered agent at such address is National Registered Agents., Inc.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of CORAM HEALTHCARE OF WYOMING, L.L.C. this 28th day of May, 1998.

/s/ R. Bruce Miller

R. Bruce Miller

An Authorized Person

Certificate Amendment to Certificate of Formation

of

CORAM HEALTHCARE OF WYOMlNG, L.L.C.

It is hereby certified that:

1. The name of the limited liability company (hereinafter the “limited liability company”) is:

CORAM HEALTHCARE OF WYOMlNG, L.L.C.

2. The certificate of formation of the limited liability company is hereby amended by striking out the statement relating to the limited liability company’s registered agent and registered office and substituting in lieu thereof the following new statement:

The address of the registered office and the name and the address of the registered agent of the limited liability company required to be maintained by Section 18-104 of the Delaware Limited Liability Company Act are Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, DE 19808.”

Executed on October 3, 2005.

Name:	/s/ Michael E. Dell
Title:	Authorized Person

2

EX-3.46

Exhibit 3.46

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

of

CORAM HEALTHCARE OF WYOMING, L.L.C.

This Limited Liability Company Agreement (this “Agreement”) of CORAM HEALTHCARE OF WYOMING, L.L.C., a Delaware limited liability company (the “Company”), is entered into as of July 1, 2010, by Coram Specialty Infusion Services, Inc. as its sole member (the “Sole Member”).

WHEREAS, on May 28, 1998, the Company was formed as a limited liability company under the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.), as amended from time to time (the “Act”) by the filing of the Certificate of Formation of the Company (the “Certificate”) with the office of the Secretary of State of the State of Delaware;

WHEREAS, on June 30, 1998, the Sole Member executed the Limited Liability Company Agreement of the Company (the “Original Agreement”) and ratified the filing of the Certificate of Formation with the office of the Secretary of State of the State of Delaware; and

WHEREAS, the Sole Member of the Company, pursuant to the Original Agreement, desires to amend and restate the Original Agreement.

NOW, THEREFORE, the Sole Member hereby agrees as follows:

1. Name. The name of the Company is Coram Healthcare of Wyoming, L.L.C. or such other name as the Sole Member may from time to time hereafter designate.

2. Definitions. Capitalized terms not otherwise defined herein shall have the meanings set forth therefor in the Act.

3. Formation. The Company has been formed as a Delaware limited liability company by the filing and execution of the Certificate with the Secretary of State of the State of Delaware on May 28, 1998.

4. Fiscal Year. The fiscal year of the Company (the “Fiscal Year”) shall end on December 31 of each year. The Company shall have the same fiscal year for income tax and for financial and accounting purposes.

5. Purpose. The Company is formed for the purpose of engaging in any lawful business permitted by the Act or the laws of any jurisdiction in which the Company may do business. The Company shall have the power to engage in all activities and transactions which the Sole Member deems necessary or advisable in connection with the foregoing.

6. Offices. The registered office of the Company in the State of Delaware shall be located at 2711 Centerville Road, Suite 400, Wilmington, DE 19808 and its registered agent for service of process on the Company at such address is Corporation Service Company. The principal place of business of the Company shall be located at such place or places as the Sole Member may determine.

7. Members. The Sole Member is hereby designated as an authorized person, within the meaning of the Act, to do and perform, or cause to be done and performed, all such acts, deeds and things and to make, execute and deliver, or cause to be made, executed and delivered, all such agreements, undertakings, documents, instruments or certificates in the name and on behalf of the Company or otherwise as she may deem necessary or appropriate in furtherance of the ordinary course of business of the Company. Coram Specialty Infusion Services, Inc. is hereby designated as the Sole Member of the Company, and shall initially have such initial ownership percentage of the Company as set forth on Annex A hereto. The Company has no other members on the date hereof. The Sole Member shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Delaware. Specifically, the Sole Member is hereby designated as an authorized person, within the meaning of the Act, to execute, deliver and file the Certificate of Formation of the Company (and any amendments and/or restatements thereof) and any applications necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

8. Capital Contributions. The Sole Member shall make capital contributions to the Company at such times, and in such amounts, as the Sole Member shall determine in its sole discretion.

9. Allocations, Distributions, Profits and Losses. Allocations and distributions of cash or other assets of the Company shall be made at such times and in such amounts as the Sole Member shall determine in its sole discretion. The Sole Member may withhold from any distributions amounts necessary to pay or establish reserves for expenses and liabilities (contingent or otherwise) of the Company. Distributions will be subject to the requirements of the Act and other applicable law.

10. Term. The Company shall continue in full force and effect until terminated by operation of the Act or upon the sole election of the Sole Member.

11. Additional Members. The Company may, at the Sole Member’s sole discretion, issue additional membership interests to other persons and admit them to the Company as members.

12. Liability. The personal liability of the Sole Member to the Company is eliminated or limited to the fullest extent permitted under the Act, and the Sole Member shall have no liability to the Company except as expressly required by the Act.

13. Exculpation and Indemnification. Neither the Sole Member nor any director, officer or employee, or other agent or representative (each a “Covered Person”) shall be liable to the Company, the Sole Member or any other person or entity who or that has an interest in the Company for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct. To the full extent permitted by applicable law, each Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section 13 shall be provided out of and to the extent of Company assets only, and the Sole Member shall not have personal liability on account thereof.

14. Dissolution. The Company shall be dissolved and its affairs wound up upon the first to occur of the following: (a) the written consent of the Sole Member; (b) at any time that there is no member of the Company, unless the Company is continued pursuant to the Act; or (c) the occurrence of an event causing a dissolution of the Company under Section 18-801 of the Act.

15. Books and Records. The Company shall keep or cause to be kept full and accurate accounts of the transactions of the Company in proper books and records of account which shall set forth all information required by the Act. Such books and records shall be maintained on the basis utilized in preparing the Company’s United States federal income tax returns.

16. Severability. Every term and provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such term or provision will be enforced to the maximum extent permitted by law and, in any event, such illegality or invalidity shall not affect the validity or the remainder of this Agreement.

17. Benefits of Agreement. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or by any creditor of the Sole Member.

18. Amendment. This Agreement may be amended and/or restated at any time with the consent of the Sole Member.

19. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of July 1, 2010.

SOLE MEMBER:
CORAM SPECIALTY INFUSION SERVICES, INC.
/s/ Michael E. Dell
Name:	Michael E. Dell
Title:	Vice President, General
	Counsel and Secretary

[Signature Page to Coram Healthcare of Wyoming, L.L.C. Limited Liability Company Agreement]

Annex A

Membership

Name of Member	Ownership Percentage
Coram Specialty Infusion Services, Inc.	100	%

EX-3.47

Exhibit 3.47

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM HOMECARE OF MINNESOTA, INC.

Coram Homecare of Minnesota, Inc., a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Homecare of Minnesota, Inc. The Corporation was incorporated under the name “Atlantic Coast Home Therapeutics, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on September 28, 1990.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Homecare of Minnesota, Inc.

SECOND: The address of the registered office of Coram Homecare of Minnesota, Inc. (hereinafter, the “Corporation”) in the state of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is One Thousand (1,000) shares of common stock, $.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Homecare of Minnesota, Inc.]

3

EX-3.48

Exhibit 3.48

AMENDED AND RESTATED BYLAWS

OF

CORAM HOMECARE OF MINNESOTA, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Homecare of Minnesota, Inc. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.49

Exhibit 3.49

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM SPECIALTY INFUSION SERVICES, INC.

Coram Specialty Infusion Services, Inc., a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Specialty Infusion Services, Inc. The Corporation was incorporated under the name “Center Acquisition No. 14, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on October 18, 1988.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is: Coram Specialty Infusion Services, Inc.

SECOND: The address of the registered office of Coram Specialty Infusion Services, Inc. (hereinafter, the “Corporation”) in the state of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Hundred (500) shares of common stock, $0.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Specialty Infusion Services, Inc.]

3

EX-3.50

Exhibit 3.50

AMENDED AND RESTATED BYLAWS

OF

CORAM SPECIALTY INFUSION SERVICES, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Specialty Infusion Services, Inc. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.51

Exhibit 3.51

FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM, INC.

Coram, Inc., a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram, Inc. The Corporation was incorporated under the name “Coram Holdings, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on March 13, 1995.

2. This Fourth Amended and Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Corporation and by the sole stockholder of the Corporation in accordance with Sections 242 and 245 of the General Corporation Law of Delaware.

3. This Fourth Amended and Restated Certificate of Incorporation restates and integrates and further amends the Certificate of Incorporation, as heretofore amended and supplemented.

4. The text of the Certificate of Incorporation is hereby amended and restated to read in its entirety as follows:

ARTICLE I

NAME OF CORPORATION

The name of the Corporation (the “Corporation”) is Coram, Inc.

ARTICLE II

REGISTERED OFFICE

The address of the registered office of the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington 19808, County of New Castle, and the name of its registered agent at that address is Corporation Service Company.

ARTICLE III

PURPOSE

The purpose of the organization is to engage in any lawful act or activity for which Corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV

AUTHORIZED CAPITAL STOCK

The Corporation shall be authorized to issue one class of stock to be designated Common Stock; the total number of shares which the Corporation shall have authority to issue is 1,000, and each such share shall have a par value of $0.01.

ARTICLE V

BOARD POWER REGARDING BYLAWS

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind the bylaws of the Corporation.

ARTICLE VI

ELECTION OF DIRECTORS

Elections of directors need not be by written ballot unless the bylaws of the Corporation shall so provide.

ARTICLE VII

LIABILITY

                A director of the Corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or the limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

ARTICLE VIII

CORPORATE POWER

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.

IN WITNESS WHEREOF, the Corporation has caused this Fourth Amended and Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Michael E. Dell
Name:	Michael E. Dell
Title:	Vice President, Associate General Counsel and Secretary

[Coram, Inc.]

2

EX-3.52

Exhibit 3.52

AMENDED AND RESTATED BYLAWS

OF

CORAM, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram, Inc. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.53

Exhibit 3.53

CORAMRX, LLC

Certificate of Formation

Pursuant to Section 18-201

of the

Delaware Limited Liability Company Act

The undersigned person, authorized on behalf of CORAMRX, LLC to present this CERTIFICATE OF FORMATION to the Office of the Secretary of State of the State of Delaware for filing thereby, hereby certifies that:

1. The name of the limited liability company is CoramRx, LLC (the “Company”).

2. The address of the registered office of the Company in the State of Delaware is 160 Greentree Drive, Suite 101, in the City of Dover, Delaware 19904, County of Kent.

3. The name of the registered agent of the Company for service of process at such address is National Registered Agents, Inc.

IN WITNESS WHEREOF, the undersigned authorized person has executed this CERTIFICATE OF FORMATION on August 8, 2005.

/s/ Scott R. Danitz

Scott R. Danitz, Authorized Person

Certificate Amendment to Certificate of Formation

of

CORAMRX, LLC

It is hereby certified that:

1. The name of the limited liability company (hereinafter the “limited liability company”) is:

CORAMRX, LLC

2. The certificate of formation of the limited liability company is hereby amended by striking out the statement relating to the limited liability company’s registered agent and registered office and substituting in lieu thereof the following new statement:

The address of the registered office and the name and the address of the registered agent of the limited liability company required to be maintained by Section 18-104 of the Delaware Limited Liability Company Act are Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, DE 19808.”

Executed on October 3, 2005.

Name:	/s/ Michael E. Dell
Title:	Authorized Person

2

EX-3.54

Exhibit 3.54

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

of

CORAMRX, LLC

This Limited Liability Company Agreement (this “Agreement”) of CORAMRX, LLC, a Delaware limited liability company (the “Company”), is entered into as of July 1, 2010, by Coram Specialty Infusion Services, Inc. as its sole member (the “Sole Member”).

WHEREAS, on August 8, 2005, the Company was formed as a limited liability company under the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.), as amended from time to time (the “Act”) by the filing of the Certificate of Formation of the Company (the “Certificate”) with the office of the Secretary of State of the State of Delaware;

WHEREAS, on August 8, 2005, the Sole Member executed the Limited Liability Company Operating Agreement of the Company (the “Original Agreement”) and ratified the filing of the Certificate of Formation with the office of the Secretary of State of the State of Delaware; and

WHEREAS, the Sole Member of the Company, pursuant to the Original Agreement, desires to amend and restate the Original Agreement.

NOW, THEREFORE, the Sole Member hereby agrees as follows:

1. Name. The name of the Company is CORAMRX, LLC or such other name as the Sole Member may from time to time hereafter designate.

2. Definitions. Capitalized terms not otherwise defined herein shall have the meanings set forth therefor in the Act.

3. Formation. The Company has been formed as a Delaware limited liability company by the filing and execution of the Certificate with the Secretary of State of the State of Delaware on August 8, 2005.

4. Fiscal Year. The fiscal year of the Company (the “Fiscal Year”) shall end on December 31 of each year. The Company shall have the same fiscal year for income tax and for financial and accounting purposes.

5. Purpose. The Company is formed for the purpose of engaging in any lawful business permitted by the Act or the laws of any jurisdiction in which the Company may do business. The Company shall have the power to engage in all activities and transactions which the Sole Member deems necessary or advisable in connection with the foregoing.

6. Offices. The registered office of the Company in the State of Delaware shall be located at 2711 Centerville Road, Suite 400, Wilmington, DE 19808 and its registered agent for service of process on the Company at such address is Corporation Service Company. The principal place of business of the Company shall be located at such place or places as the Sole Member may determine.

7. Members. The Sole Member is hereby designated as an authorized person, within the meaning of the Act, to do and perform, or cause to be done and performed, all such acts, deeds and things and to make, execute and deliver, or cause to be made, executed and delivered, all such agreements, undertakings, documents, instruments or certificates in the name and on behalf of the Company or otherwise as she may deem necessary or appropriate in furtherance of the ordinary course of business of the Company. Coram Specialty Infusion Services, Inc. is hereby designated as the Sole Member of the Company, and shall initially have such initial ownership percentage of the Company as set forth on Annex A hereto. The Company has no other members on the date hereof. The Sole Member shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Delaware. Specifically, the Sole Member is hereby designated as an authorized person, within the meaning of the Act, to execute, deliver and file the Certificate of Formation of the Company (and any amendments and/or restatements thereof) and any applications necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

8. Capital Contributions. The Sole Member shall make capital contributions to the Company at such times, and in such amounts, as the Sole Member shall determine in its sole discretion.

9. Allocations, Distributions, Profits and Losses. Allocations and distributions of cash or other assets of the Company shall be made at such times and in such amounts as the Sole Member shall determine in its sole discretion. The Sole Member may withhold from any distributions amounts necessary to pay or establish reserves for expenses and liabilities (contingent or otherwise) of the Company. Distributions will be subject to the requirements of the Act and other applicable law.

10. Term. The Company shall continue in full force and effect until terminated by operation of the Act or upon the sole election of the Sole Member.

11. Additional Members. The Company may, at the Sole Member’s sole discretion, issue additional membership interests to other persons and admit them to the Company as members.

12. Liability. The personal liability of the Sole Member to the Company is eliminated or limited to the fullest extent permitted under the Act, and the Sole Member shall have no liability to the Company except as expressly required by the Act.

13. Exculpation and Indemnification. Neither the Sole Member nor any director, officer or employee, or other agent or representative (each a “Covered Person”) shall be liable to the Company, the Sole Member or any other person or entity who or that has an interest in the Company for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct. To the full extent permitted by applicable law, each Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section 13 shall be provided out of and to the extent of Company assets only, and the Sole Member shall not have personal liability on account thereof.

14. Dissolution. The Company shall be dissolved and its affairs wound up upon the first to occur of the following: (a) the written consent of the Sole Member; (b) at any time that there is no member of the Company, unless the Company is continued pursuant to the Act; or (c) the occurrence of an event causing a dissolution of the Company under Section 18-801 of the Act.

15. Books and Records. The Company shall keep or cause to be kept full and accurate accounts of the transactions of the Company in proper books and records of account which shall set forth all information required by the Act. Such books and records shall be maintained on the basis utilized in preparing the Company’s United States federal income tax returns.

16. Severability. Every term and provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such term or provision will be enforced to the maximum extent permitted by law and, in any event, such illegality or invalidity shall not affect the validity or the remainder of this Agreement.

17. Benefits of Agreement. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or by any creditor of the Sole Member.

18. Amendment. This Agreement may be amended and/or restated at any time with the consent of the Sole Member.

19. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of July 1, 2010.

SOLE MEMBER:
CORAM SPECIALTY INFUSION SERVICES, INC.
/s/ Michael E. Dell
Name:	Michael E. Dell
Title:	Vice President, General
	Counsel and Secretary

[Signature Page to CoramRX, LLC Limited Liability Company Agreement]

Annex A

Membership

Name of Member	Ownership Percentage
Coram Specialty Infusion Services, Inc.	100	%

EX-3.55

Exhibit 3.55

RESTATED CERTIFICATE OF INCORPORATION

OF

CORAM SERVICE CORPORATION

Coram Service Corporation, a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Coram Service Corporation. The Corporation was incorporated under the name “Metropolitan Home Therapeutics II, Inc.” The original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on March 9, 1990.

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

FIRST: The name of the corporation is Coram Service Corporation.

SECOND: The address of the registered office of Coram Service Corporation (hereinafter, the “Corporation”) in the state of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

THIRD: The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of capital stock which the Corporation is authorized to issue is Five Thousand (5,000) shares of common stock, $0.01 par value per share (the “Common Stock”).

FIFTH: The existence of the Corporation shall be perpetual.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation, and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided:

1. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws.

2. After the original or other Bylaws of the Corporation have been adopted, amended, or repealed, as the case may be, in accordance with the provisions of Section 109 of the General Corporation Law of the State of Delaware, and, after the Corporation has received any payment for any of its stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by the Board of Directors of the Corporation; provided, however, that any provision for the classification of directors of the Corporation for staggered terms pursuant to the provisions of subsection (d) of Section 141 of the General Corporation Law of the State of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the Corporation unless provisions for such classification shall be set forth in this certificate of incorporation.

3. Whenever the Corporation shall be authorized to issue only one class of stock, each outstanding share shall entitle the holder thereof to notice of, and the right to vote at, any meeting of stockholders.

SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same may be amended and supplemented.

EIGHTH: The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

NINTH: From time to time any of the provisions of this certificate of incorporation may be amended, altered, or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this certificate of incorporation are granted subject to the provisions of this Article Ninth.

TENTH: Pursuant to Section 211(e) of the General Corporation Law of Delaware, the Directors of the Corporation shall not be required to be elected by written ballots.

2

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[Coram Service Corporation]

3

EX-3.56

Exhibit 3.56

AMENDED AND RESTATED BYLAWS

OF

CORAM SERVICE CORPORATION

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of Coram Service Corporation (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.57

Exhibit 3.57

SECOND RESTATED

CERTIFICATE OF INCORPORATION

OF

H.M.S.S., INC.

H.M.S.S., Inc., a Delaware corporation (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is H.M.S.S., Inc, which is the name under which the Corporation was originally incorporated. The date of filing of the original Certificate of Incorporation of the Corporation with the Delaware Secretary of State is May 27, 1982 (as amended, the “Certificate of Incorporation”).

2. Pursuant to Section 245 of the General Corporation Law of Delaware, this Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

3. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

4. The terms and provisions of this Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

5. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

ARTICLE I

NAME OF CORPORATION

The name of this corporation is H.M.S.S., Inc.

ARTICLE II

REGISTERED OFFICE

The address of the registered office of the corporation in the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle, and the name of its registered agent at that address is Corporation Service Company.

ARTICLE III

PURPOSE

The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. The corporation shall have perpetual existence.

ARTICLE IV

AUTHORIZED CAPITAL STOCK

The corporation shall be authorized to issue one class of stock to be designated Common Stock; the total number of shares which the corporation shall have authority to issue is Ten Thousand (10,000), and each such share shall have a par value of one cent ($0.01).

ARTICLE V

BYLAWS

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind the bylaws of this corporation.

ARTICLE VI

NUMBER AND ELECTION OF DIRECTORS

The number of directors of the corporation shall be fixed by the bylaws of the corporation, as they may be amended from time to time. Elections of directors need not be by written ballot unless the bylaws of the corporation shall so provide.

ARTICLE VII

LIMITATION OF DIRECTOR LIABILITY

To the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, a director of the corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the Delaware General Corporation Law is amended after the date of the filing of this Second Restated Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended from time to time. No repeal or modification of this Article Seven by the stockholders shall adversely affect any right or protection of a director of the corporation existing by virtue of this Article Seven at the time of such repeal or modification.

ARTICLE VIII

AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Second Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.

2

IN WITNESS WHEREOF, the Corporation has caused this Second Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[H.M.S.S., Inc.]

3

EX-3.58

Exhibit 3.58

AMENDED AND RESTATED BYLAWS

OF

H.M.S.S., INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of H.M.S.S., Inc. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.59

Exhibit 3.59

SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF

HEALTHINFUSION, INC.

1. The name of the corporation is HEALTHINFUSION, INC.

2. The address of its registered office in the State of Florida is 1200 S. Pine Island Road, Plantation, Florida 33324. The name of the registered agent at such address is The CT Corporation System.

3. The mailing address of the corporation is 5200 Blue Lagoon Drive, Suite 200, Miami, Florida 33126.

4. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the Florida Business Corporation Act of the State of Florida.

5. The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) shares of common stock, $1.00 par value per share.

6. The corporation is to have perpetual existence.

7. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal the bylaws of the corporation.

8. Meetings of shareholders may be held within or without the State of Florida, as the bylaws may provide. The books of the corporation may be kept (subject to any provision contained in the bylaws) outside the State of Florida at such place or places as may be designated from time to time by the Board of Directors or in the bylaws of the corporation. Elections of directors need not be by written ballot unless the bylaws of the corporation shall so provide.

9. The corporation reserves the right to amend, alter, change or repeal any provision contained in these Articles of Incorporation, in the manner now or hereafter prescribed by law, and all rights conferred upon the stockholders herein are granted subject to this reservation.

10. The corporation shall, to the fullest extent to which it is empowered to do so by the Florida Business Corporation Act of the State of Florida or any other applicable laws, as they may from time to time be in effect, indemnify any person who was or is threatened to be made a party to any threatened, pending or completed action, suit or proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys’ fees), judgments, fines and amounts incurred by him in connection with such action, suit or proceeding.

HEALTHINFUSION, INC.
By:	/s/ Miles E. Gilman
	Name:  Miles E. Gilman Title:    President

2

PLEASE READ ALL INSTRUCTIONS BEFORE COMPLETING THIS FORM

CORPORATION

REINSTATEMENT [GRAPHICS APPEARS HERE] FLORIDA DEPARTMENT OF STATE

Secretary of State

DIVISION OF CORPORATIONS

DOCUMENT # L38116 .

1.Corporation Name

Health infusion,Inc.

2. Principal Office Address-No P.O.Box#

1675 Broadway

3. Mailing Office Address

1675 Broadway

Suite,Apt #etc.

Suite 900

Suite,Apt#etc.

Suite 900

4. Date Incorporated or Qualified To Do Business in Florida 12/22/1989

City & State

Denver,CO

City & State

Denver,CO

5. FEI Number

Not Applicable

Zip 80202 Country USA Zip 80202 Country USA

7. Name and Address of Current Registered Agent

The reinstatement fee is imposed, except in circumstances which the entity did not receive the prior notices. By checking this box, you are certifying the prior notices were not received and requesting the reinstatement fee be waived.

Name Corporation Service Company Street Address(P.O. Box Number is Not Acceptable) 1201 Hays Street

Suite, Apt #, Etc.

City

Tallahassee

State

FL

Zip Code

32301

8. I, being appointed the registered agent of the above named corporation, am familiar with and accept the obligations of section 607.0505 or 617.0505. F.S.

Signature of

Registered Agent [GRAPHIC APPEARS HERE] Jeanine Reynolds

as its agent Date 10/17/2008

REGISTERED AGENT MUST SIGN

9. Names and Street Addresses of Each Officer and/or Director(Florida nonprofit corporations must

Liar at least 3 directors)

Titles

Name of Officers and/or Directors

Street Address of Each Officers and/or Director

City/State/Zip

Dir.

Robert T. Allen

1675 Broadway, Suite 900

Denver, CO 80202

Dir.

Vito Ponzio, Jr.

1675 Broadway, Suite 900

Denver, CO 80202

10. I certify that I am an officer or director or the receiver or trustee empowered to execute this application as provided for inchapter 607 or 617, F.S. I further certify that when filing this reinstatement application, the reason for dissolution has been

eliminated, the corporate name satisfies the requirements of section 607.0401 or 617.0401,F.S. that all fees owned by the corporation have been paid and the names of individuals listed on this form do not qualify for an exemption contained in

Chapter 119. F.S. The information indicated on this application is true and accurate, and my signature shall have the same legal effect as if made under oath.

SIGNATURE: [GRAPHIC APPEARS HERE] Vito Ponzio, Jr. 10/17/208 303-292-4973

SIGNATURE AND TYPE FOR PRINTED NAME OF SIGNING OFFICER OR DIRECTOR Date Daytime Phone #

Florida Department of State

Division of Corporations

Public Access System

Electronic Filing Cover Sheet

Note: Please print this page and use it as a cover sheet. Type the fax audit

number (shown below) on the top and bottom of all pages of the document.

(((H08000238944 3)))

Graphics appears here

Note: DO NOT hit the REFRESH/RELOAD button on your browser from this

page. Doing so will generate another cover sheet.

To:

Division of Corporations

Fax Number : (850)617-6384

From:

Account Name : CORPORATION SERVICE COMPANY

Account Number : I20000000195

Phone : (850)521-1000

Fax Number : (850)558-1575

CORPORATION REINSTATEMENT

HEALTHINFUSION, INC.

Certificate of Status

1

Certified Copy

0

Page Count

02

Estimated Charge

$758.75

Electronic Filing Menu Corporate Filing Menu Help

https://efile.sunbiz.org/scripts/efilcovr.exe 10/20/2008

EX-3.60

Exhibit 3.60

AMENDED AND RESTATED BYLAWS

OF

HEALTHINFUSION, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of HealthInfusion, Inc. (the “Company”) shall be held at such place either within or without the State of Florida as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the Florida Business Corporation Act, or otherwise pursuant to applicable Florida Law, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.61

Exhibit 3.61

SECOND RESTATED CERTIFICATE OF INCORPORATION

OF

T² MEDICAL, INC.

T² Medical, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

A. The name of the corporation is T² Medical, Inc. The Corporation was originally incorporated under the same name, and the original Certificate of Incorporation (as amended, the “Certificate of Incorporation”) of the Corporation was filed with the Secretary of State of the State of Delaware on December 14, 1987.

B. Pursuant to Section 245 of the General Corporation Law of Delaware, this Second Restated Certificate of Incorporation integrates into a single instrument all of the provisions of the Certificate of Incorporation which are in effect and operative as a result of having theretofore been filed with the Secretary of State of the State of Delaware as certificates of amendment to the Certificate of Incorporation.

C. This Second Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as theretofore amended, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

D. The terms and provisions of this Second Restated Certificate of Incorporation have been duly adopted pursuant to the provisions of Section 245 of the General Corporation Law of Delaware.

E. The text of the Certificate of Incorporation is hereby restated to read in its entirety as follows:

1. The name of the corporation is

T² MEDICAL, INC.

2. The address of the corporation’s registered office in the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of its registered agent at such address is Corporation Service Company.

3. The nature of the business or purposes to be conducted or promoted by the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

4. The total number of shares of stock which the corporation shall have authority to issue is one thousand (1,000) shares of common stock, $1.00 par value per share.

5. The corporation is to have perpetual existence.

6. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal the bylaws of the corporation.

7. Meetings of stockholders may be held within or without the State of Delaware, as the bylaws may provide. The books of the corporation may kept (subject in any provision contained in the bylaws) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the bylaws of the corporation. Elections of directors need not be by written ballot unless the bylaws of the corporation shall so provide.

8. The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by law, and all rights conferred upon the stockholders herein are granted subject to this reservation.

9. The corporation shall, to the fullest extent to which it is empowered to do so and under the circumstances permitted by the General Corporation Law of the State of Delaware or any other applicable laws, as they may from time to time be in effect, indemnify any past, present or future director, officer or employee of the corporation or a designated officer or employee of an operating division of the corporation who was made or is threatened to be made party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the corporation or designated officer of an operating division of the corporation, or is or was an employee or agent of the corporation, or is or was serving at the specific request of the corporation as a director, officer, employee or agent of another company or other corporation, partnership, joint venture, trust or other enterprise (including, without limitation, any employer benefit plan) in which the corporation should own, directly or indirectly, an equity interest or of which it may be a creditor, and may take such steps as may be deemed appropriate by the Board of Directors, including purchasing and maintaining insurance, entering into contracts (including, without limitation, contracts of indemnification between the corporation and its directors and officers), creating a trust fund, granting security interests or using other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect such indemnification.

10. The liability of the directors of this corporation for monetary damages for breach of fiduciary duty as a director shall be eliminated to the fullest extent permissible by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended.

2

IN WITNESS WHEREOF, the Corporation has caused this Second Restated Certificate of Incorporation to be duly executed this July 1, 2010.

By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President, Chief Financial Officer and Treasurer

[T² Medical, Inc.]

3

EX-3.62

Exhibit 3.62

AMENDED AND RESTATED BYLAWS

OF

T² MEDICAL, INC.

as of July 1, 2010

ARTICLE I

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meeting and Notice. Meetings of the stockholders of T² Medical, Inc. (the “Company”) shall be held at such place either within or without the State of Delaware as the Board of Directors may determine.

Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by (i) the President for any purpose and shall be called by the President or (ii) the Secretary if directed by the Board of Directors.

Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder.

Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present.

Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Company’s issued and outstanding capital stock.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall be not less than one nor more than nine. The number of Directors of the Board of Directors on the date of the adoption and effectiveness of these Bylaws shall be one. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or by the stockholders. The Directors shall be elected by the stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the number of Directors may be filled by a majority of the Directors then in office, although less than a quorum, or by the sole remaining Director or by the stockholders. A Director may be removed with or without cause by the stockholders.

Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Special meetings of the Board of Directors may be held at any time upon the call of the President and shall be called by the President or Secretary if directed by the Board of Directors. Telegraphic, facsimile or written notice (which includes electronic mail) of each special meeting of the Board of Directors shall be sent to each Director not less than two days before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors.

Section 3. Quorum. A majority of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Company, these Bylaws or any contract or agreement to which the Company is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.

Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including without limitation an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another Director to act at the meeting in place of any such absent or disqualified member.

Section 5. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all Directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.

Section 6. Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a consent in writing shall be signed by all the directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

ARTICLE III

OFFICERS

The officers of the Company shall consist of a President, one or more Executive Vice Presidents, a Chief Financial Officer, a Treasurer, a Secretary and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Company may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause.

ARTICLE IV

INDEMNIFICATION

To the fullest extent permitted by the General Corporation Law of the State of Delaware, the Company shall indemnify any current or former Director or officer of the Company and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Company against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the Company or otherwise, to which he or she was or is a party or is threatened to be made a party by reason of his or her current or former position with the Company or by reason of the fact that he or she is or was serving, at the request of the Company, as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person).

ARTICLE V

GENERAL PROVISIONS

Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these Bylaws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Company, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by facsimile or telegram. A waiver of such notice in writing signed by the person or persons entitled thereto, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 2. Fiscal Year. The fiscal year of the Company shall be fixed by the Board of Directors.

EX-3.63

Exhibit 3.63

ARTICLES OF ORGANIZATION

OF

AHNY-DME LLC

Under Section 203 of the Limited Liability Company Law

FIRST: The name of the limited liability company is: AHNY-DME LLC.

SECOND: The county within this state in which the principal office of the limited liability company is to be located is: New York County.

THIRD: The secretary of state is designated as agent of the limited liability company upon whom process against it may be served. The post office address within or without this state to which the secretary of state shall mail a copy of any process against the limited liability company served upon him or her is: c/o National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501, New York, New York 10001.

FOURTH: The name and street address within this state of the registered agent of the limited liability company upon whom and at which process against the limited liability company can be served is: National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501, New York, New York 10001.

FIFTH: These Articles of Organization shall be effective upon filing.

/s/ Salvatore Gagliardi

Salvatore Gagliardi

Organizer

EX-3.64

Exhibit 3.64

LIMITED LIABILITY COMPANY AGREEMENT

of

AHNY-DME LLC

This LIMITED LIABILITY COMPANY AGREEMENT, dated as of June 30, 2010 (the “Agreement”), of AHNY-DME LLC, a New York limited liability company (the “Company”), is entered into by its sole member Apria Healthcare of New York State, Inc., a New York corporation (the “Sole Member”), pursuant to the provisions of the New York Limited Liability Company Law, § 101, et seq. (consol. 1994) (the “Act”).

1. Name. The name of the Company is AHNY-DME LLC or such other name as the Sole Member may from time to time hereafter designate.

2. Definitions. Capitalized terms not otherwise defined herein shall have the meanings set forth therefor in the Act.

3. Formation. The Company has been formed as a New York limited liability company pursuant to the Act. The Articles of Organization of the Company were filed with the Department of State of New York on June 30, 2010.

4. Fiscal Year. The fiscal year of the Company (the “Fiscal Year”) shall end on December 31 of each year. The Company shall have the same fiscal year for income tax and for financial and accounting purposes.

5. Purpose. The Company is formed for the purpose of engaging in any lawful business permitted by the Act or the laws of any jurisdiction in which the Company may do business. The Company shall have the power to engage in all activities and transactions which the Sole Member deems necessary or advisable in connection with the foregoing.

6. Offices. The registered office of the Company in the State of New York shall be located at c/o National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501. New York, NY 10001 and its registered agent for service of process on the Company at such address is National Registered Agents, Inc. The principal place of business of the Company shall be located at such place or places as the Sole Member may determine.

7. Members. The Sole Member is hereby designated as an authorized person, within the meaning of the Act, to do and perform, or cause to be done and performed, all such acts, deeds and things and to make, execute and deliver, or cause to be made, executed and delivered, all such agreements, undertakings, documents, instruments or certificates in the name and on behalf of the Company or otherwise as she may deem necessary or appropriate in furtherance of the ordinary course of business of the Company. Apria Healthcare of New York State, Inc. is hereby designated as the Sole Member of the Company, and shall initially have the number of units set forth on Annex A hereto. The Company has no other members on the date hereof. The Sole Member shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise,

possessed by members of a limited liability company under the laws of the State of New York. Specifically, the Sole Member is hereby designated as an authorized person, within the meaning of the Act, to execute, deliver and file the Articles of Organization of the Company (and any amendments and/or restatements thereof) and any applications necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

8. Capital Contributions. The Sole Member shall make capital contributions to the Company at such times, and in such amounts, as the Sole Member shall determine in its sole discretion.

9. Allocations, Distributions, Profits and Losses. Allocations and distributions of cash or other assets of the Company shall be made at such times and in such amounts as the Sole Member shall determine in its sole discretion. The Sole Member may withhold from any distributions amounts necessary to pay or establish reserves for expenses and liabilities (contingent or otherwise) of the Company. Distributions will be subject to the requirements of the Act and other applicable law.

10. Term. The Company shall continue in full force and effect until terminated by operation of the Act or upon the sole election of the Sole Member.

11. Additional Members. The Company may, at the Sole Member’s sole discretion, issue additional membership interests to other persons and admit them to the Company as members.

12. Liability. The personal liability of the Sole Member to the Company is eliminated or limited to the fullest extent permitted under the Act, and the Sole Member shall have no liability to the Company except as expressly required by the Act.

13. Exculpation and Indemnification. Neither the Sole Member nor any director, officer or employee, or other agent or representative (each a “Covered Person”) shall be liable to the Company, the Sole Member or any other person or entity who or that has an interest in the Company for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct. To the full extent permitted by applicable law, each Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage of claim incurred by such Covered Person by reason of gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section 19 shall be provided out of and to the extent of Company assets only, and the Sole Member shall not have personal liability on account thereof.

14. Books and Records. The Company shall keep or cause to be kept full and accurate accounts of the transactions of the Company in proper books and records of account which shall set forth all information required by the Act. Such books and records shall be maintained on the basis utilized in preparing the Company’s United States federal income tax returns.

15. Severability. Every term and provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such term or provision will be enforced to the maximum extent permitted by law and, in any event, such illegality or invalidity shall not affect the validity or the remainder of this Agreement.

16. Amendment. This Agreement may be amended and/or restated at any time with the consent of the Sole Member.

17. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of New York, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of June 30, 2010.

SOLE MEMBER:
APRIA HEALTHCARE OF NEW YORK STATE, INC.
/s/ Robert S. Holcombe
Name:	Robert S. Holcombe
Title:	Executive Vice President, General Counsel and Secretary

[Signature Page to AHNY-DME LLC Limited Liability Company Agreement]

Annex A

Membership Units

Name of Member	Deemed Capital Contribution		Membership Units
Apria Healthcare of New York State, Inc.	$	100	100

EX-3.65

Exhibit 3.65

ARTICLES OF ORGANIZATION

OF

AHNY-IV LLC

Under Section 203 of the Limited Liability Company Law

FIRST: The name of the limited liability company is: AHNY-IV LLC.

SECOND: The county within this state in which the principal office of the limited liability company is to be located is: New York County.

THIRD: The secretary of state is designated as agent of the limited liability company upon whom process against it may be served. The post office address within or without this state to which the secretary of state shall mail a copy of any process against the limited liability company served upon him or her is: c/o National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501, New York, New York 10001.

FOURTH: The name and street address within this state of the registered agent of the limited liability company upon whom and at which process against the limited liability company can be served is: National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501, New York, New York 10001.

FIFTH: These Articles of Organization shall be effective upon filing.

/s/ Salvatore Gagliardi

Salvatore Gagliardi

Organizer

EX-3.66

Exhibit 3.66

LIMITED LIABILITY COMPANY AGREEMENT

of

AHNY-IV LLC

This LIMITED LIABILITY COMPANY AGREEMENT, dated as of June 30, 2010 (the “Agreement”), of AHNY-IV LLC, a New York limited liability company (the “Company”), is entered into by its sole member Apria Healthcare, Inc., a Delaware corporation (the “Sole Member”), pursuant to the provisions of the New York Limited Liability Company Law, § 101, et seq. (consol. 1994) (the “Act”).

1. Name. The name of the Company is AHNY-IV LLC or such other name as the Sole Member may from time to time hereafter designate.

2. Definitions. Capitalized terms not otherwise defined herein shall have the meanings set forth therefor in the Act.

3. Formation. The Company has been formed as a New York limited liability company pursuant to the Act. The Articles of Organization of the Company were filed with the Department of State of New York on June 30, 2010.

4. Fiscal Year. The fiscal year of the Company (the “Fiscal Year”) shall end on December 31 of each year. The Company shall have the same fiscal year for income tax and for financial and accounting purposes.

5. Purpose. The Company is formed for the purpose of engaging in any lawful business permitted by the Act or the laws of any jurisdiction in which the Company may do business. The Company shall have the power to engage in all activities and transactions which the Sole Member deems necessary or advisable in connection with the foregoing.

6. Offices. The registered office of the Company in the State of New York shall be located at c/o National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501. New York, NY 10001 and its registered agent for service of process on the Company at such address is National Registered Agents, Inc. The principal place of business of the Company shall be located at such place or places as the Sole Member may determine.

7. Members. The Sole Member is hereby designated as an authorized person, within the meaning of the Act, to do and perform, or cause to be done and performed, all such acts, deeds and things and to make, execute and deliver, or cause to be made, executed and delivered, all such agreements, undertakings, documents, instruments or certificates in the name and on behalf of the Company or otherwise as she may deem necessary or appropriate in furtherance of the ordinary course of business of the Company. Apria Healthcare, Inc. is hereby designated as the Sole Member of the Company, and shall initially have the number of units set forth on Annex A hereto. The Company has no other members on the date hereof. The Sole Member shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited

liability company under the laws of the State of New York. Specifically, the Sole Member is hereby designated as an authorized person, within the meaning of the Act, to execute, deliver and file the Articles of Organization of the Company (and any amendments and/or restatements thereof) and any applications necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

8. Capital Contributions. The Sole Member shall make capital contributions to the Company at such times, and in such amounts, as the Sole Member shall determine in its sole discretion.

9. Allocations, Distributions, Profits and Losses. Allocations and distributions of cash or other assets of the Company shall be made at such times and in such amounts as the Sole Member shall determine in its sole discretion. The Sole Member may withhold from any distributions amounts necessary to pay or establish reserves for expenses and liabilities (contingent or otherwise) of the Company. Distributions will be subject to the requirements of the Act and other applicable law.

10. Term. The Company shall continue in full force and effect until terminated by operation of the Act or upon the sole election of the Sole Member.

11. Additional Members. The Company may, at the Sole Member’s sole discretion, issue additional membership interests to other persons and admit them to the Company as members.

12. Liability. The personal liability of the Sole Member to the Company is eliminated or limited to the fullest extent permitted under the Act, and the Sole Member shall have no liability to the Company except as expressly required by the Act.

13. Exculpation and Indemnification. Neither the Sole Member nor any director, officer or employee, or other agent or representative (each a “Covered Person”) shall be liable to the Company, the Sole Member or any other person or entity who or that has an interest in the Company for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct. To the full extent permitted by applicable law, each Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage of claim incurred by such Covered Person by reason of gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section 19 shall be provided out of and to the extent of Company assets only, and the Sole Member shall not have personal liability on account thereof.

14. Books and Records. The Company shall keep or cause to be kept full and accurate accounts of the transactions of the Company in proper books and records of account which shall set forth all information required by the Act. Such books and records shall be maintained on the basis utilized in preparing the Company’s United States federal income tax returns.

15. Severability. Every term and provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such term or provision will be enforced to the maximum extent permitted by law and, in any event, such illegality or invalidity shall not affect the validity or the remainder of this Agreement.

16. Amendment. This Agreement may be amended and/or restated at any time with the consent of the Sole Member.

17. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of New York, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of June 30, 2010.

SOLE MEMBER:
APRIA HEALTHCARE, INC.
	/s/ Robert S. Holcombe
Name:	Robert S. Holcombe
Title:	Executive Vice President, General Counsel and Secretary

[Signature Page to AHNY-IV LLC Limited Liability Company Agreement]

Annex A

Membership Units

Name of Member	Deemed Capital Contribution		Membership Units
Apria Healthcare, Inc.	$	100	100

EX-4.1

Exhibit 4.1

EXECUTION COPY

INDENTURE

Dated as of May 27, 2009

Among

APRIA HEALTHCARE GROUP INC.,

THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO,

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

11.25% SENIOR SECURED NOTES DUE 2014 (Series A-1)

SENIOR SECURED NOTES DUE 2014 (Series A-2)

Reference is made to: (i) the Lien Subordination and Intercreditor Agreement, dated as of October 28, 2008, among Bank of America, N.A., as collateral agent for the Revolving Facility Secured Parties referred to therein, Bank of America, N.A., as Notes/Term Collateral Agent, Sky Acquisition LLC, Apria Healthcare Group Inc., and the other subsidiaries of Apria Healthcare Group Inc. named therein (the “ABL Intercreditor Agreement”) and (ii) the Intercreditor and Collateral Agency Agreement, dated as of May 27, 2009, among Apria Healthcare Group Inc., Banc of America Bridge LLC, as Bridge Loan Agent, Bank of America, N.A., as Notes/Term Collateral Agent, and U.S. Bank National Association, as Trustee (the “Notes/Term Intercreditor Agreement”). Each Holder, by its acceptance of a Note, (a) consents to the subordination of Liens provided for in the ABL Intercreditor Agreement, (b) consents to the priority of payment provisions as between the Series A-1 Notes and the Series A-2 Debt in the Notes/Term Intercreditor Agreement, (c) agrees that it will be bound by and will take no actions contrary to the provisions of the ABL Intercreditor Agreement or the Notes/Term Intercreditor Agreement and (d) authorizes and instructs the Notes/Term Collateral Agent to enter into the ABL Intercreditor Agreement and the Notes/Term Intercreditor Agreement as collateral agent on behalf of such Holder and the other holders of Series A-2 Debt. The foregoing provisions of the ABL Intercreditor Agreement are intended as an inducement to the lenders under the ABL Facility to extend credit and such lenders are intended third party beneficiaries of such provisions and the provisions of the ABL Intercreditor Agreement.

CROSS-REFERENCE TABLE*

Trust Indenture Act Section	Indenture Section
310    (a)(1)	7.10
(a)(2)	7.10
(a)(3)	N.A.
(a)(4)	N.A.
(a)(5)	7.10
(b)	7.10
(c)	N.A.
311    (a)	7.11
(b)	7.11
(c)	N.A.
312    (a)	2.05
(b)	14.03
(c)	14.03
313    (a)	7.06; 10.04
(b)(1)	7.06; 10.04
(b)(2)	7.06; 7.07
(c)	7.06; 14.02
(d)	7.06
314    (a)	4.03;10.04;14.02;14.05
(b)	10.02
(c)(1)	14.04
(c)(2)	14.04
(c)(3)	N.A.
(d)	10.03; 10.04; 10.05
(e)	14.05
(f)	N.A.
315    (a)	7.01
(b)	7.05;14.02
(c)	7.01
(d)(1)	7.01
(d)(2)	7.01
(d)(3)	N.A.
(e)	6.14
316    (a)(last sentence)	2.09
(a)(1)(A)	N.A.
(a)(1)(B)	N.A.
(a)(2)	N.A.
(b)	6.07
(c)	2.12;9.05
317    (a)(1)	6.08
(a)(2)	6.12
(b)	2.04
318    (a)	14.01
(b)	N.A.
(c)	14.01

N.A. means not applicable.

* This Cross-Reference Table is not part of the Indenture.

TABLE OF CONTENTS

ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01	Definitions.	1
Section 1.02	Other Definitions.	37
Section 1.03	Incorporation by Reference of Trust Indenture Act.	38
Section 1.04	Rules of Construction.	38
Section 1.05	Acts of Holders.	39
Section 1.06	Timing of Payment.	40
ARTICLE 2
THE NOTES
Section 2.01	Form and Dating; Terms.	40
Section 2.02	Execution and Authentication.	42
Section 2.03	Registrar and Paying Agent.	43
Section 2.04	Paying Agent to Hold Money in Trust.	43
Section 2.05	Holder Lists.	43
Section 2.06	Transfer and Exchange.	44
Section 2.07	Replacement Notes.	56
Section 2.08	Outstanding Notes.	57
Section 2.09	Treasury Notes.	57
Section 2.10	Temporary Notes.	57
Section 2.11	Cancellation.	58
Section 2.12	Defaulted Interest.	58
Section 2.13	CUSIP and ISIN Numbers.	58
ARTICLE 3
REDEMPTION
Section 3.01	Notices to Trustee.	59
Section 3.02	Selection of Notes to Be Redeemed or Purchased.	59
Section 3.03	Notice of Redemption.	59
Section 3.04	Effect of Notice of Redemption.	60
Section 3.05	Deposit of Redemption or Purchase Price.	60
Section 3.06	Notes Redeemed or Purchased in Part.	61
Section 3.07	Optional Redemption.	61
Section 3.08	Mandatory Redemption.	62
Section 3.09	Offers to Repurchase by Application of Excess Proceeds.	62

i

ARTICLE 4
COVENANTS
Section 4.01	Payment of Notes.	64
Section 4.02	Maintenance of Office or Agency.	64
Section 4.03	Reports and Other Information.	65
Section 4.04	Compliance Certificate.	66
Section 4.05	Taxes.	67
Section 4.06	Stay, Extension and Usury Laws.	67
Section 4.07	Limitation on Restricted Payments.	67
Section 4.08	Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.	74
Section 4.09	Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.	76
Section 4.10	Asset Sales.	82
Section 4.11	Transactions with Affiliates.	85
Section 4.12	Liens.	87
Section 4.13	Corporate Existence.	88
Section 4.14	Offer to Repurchase Upon Change of Control.	88
Section 4.15	Events of Loss	90
Section 4.16	Limitation on Guarantees of Indebtedness by Restricted Subsidiaries.	91
Section 4.17	Reserved.	91
Section 4.18	Impairment of Security Interests.	91
Section 4.19	After-Acquired Property.	92
Section 4.20	Information Regarding Collateral.	92
Section 4.21	Further Assurances.	92
ARTICLE 5
SUCCESSORS
Section 5.01	Merger, Consolidation or Sale of All or Substantially All Assets.	93
Section 5.02	Successor Corporation Substituted.	95
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01	Events of Default.	96
Section 6.02	Acceleration.	98
Section 6.03	Other Remedies.	99
Section 6.04	Waiver of Past Defaults.	99
Section 6.05	Control by Majority.	100
Section 6.06	Limitation on Suits.	100
Section 6.07	Rights of Holders of Notes to Receive Payment.	101

ii

Section 6.08	Collection Suit by Trustee.	101
Section 6.09	Restoration of Rights and Remedies.	101
Section 6.10	Rights and Remedies Cumulative.	101
Section 6.11	Delay or Omission Not Waiver.	101
Section 6.12	Trustee May File Proofs of Claim.	102
Section 6.13	Priorities.	102
Section 6.14	Undertaking for Costs.	103
ARTICLE 7
TRUSTEE
Section 7.01	Duties of Trustee.	103
Section 7.02	Rights of Trustee.	104
Section 7.03	Individual Rights of Trustee.	105
Section 7.04	Trustee’s Disclaimer.	106
Section 7.05	Notice of Defaults.	106
Section 7.06	Reports by Trustee to Holders of the Notes.	106
Section 7.07	Compensation and Indemnity.	106
Section 7.08	Replacement of Trustee.	107
Section 7.09	Successor Trustee by Merger, etc.	108
Section 7.10	Eligibility; Disqualification.	108
Section 7.11	Preferential Collection of Claims Against Company.	108
Section 7.12	Intercreditor Agreements, Security Agreement and Other Collateral Documents.	109
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01	Option to Effect Legal Defeasance or Covenant Defeasance.	109
Section 8.02	Legal Defeasance and Discharge.	109
Section 8.03	Covenant Defeasance.	110
Section 8.04	Conditions to Legal or Covenant Defeasance.	110
Section 8.05	Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions.	112
Section 8.06	Repayment to Company.	112
Section 8.07	Reinstatement.	113
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01	Without Consent of Holders of Notes.	113
Section 9.02	With Consent of Holders of Notes.	115
Section 9.03	Class Voting.	117

iii

Section 9.04	Compliance with Trust Indenture Act.	117
Section 9.05	Revocation and Effect of Consents.	117
Section 9.06	Notation on or Exchange of Notes.	117
Section 9.07	Trustee to Sign Amendments, etc.	118
Section 9.08	Payment for Consent.	118
ARTICLE 10
COLLATERAL DOCUMENTS
Section 10.01	Collateral and Collateral Documents.	118
Section 10.02	Recordings and Opinions.	120
Section 10.03	Release of Collateral.	120
Section 10.04	Permitted Releases Not To Impair Lien; Trust Indenture Act Requirements.	121
Section 10.05	Certificates of the Trustee.	122
Section 10.06	Suits To Protect the Collateral.	122
Section 10.07	Authorization of Receipt of Funds by the Trustee Under the Collateral Documents.	122
Section 10.08	Purchaser Protected.	122
Section 10.09	Powers Exercisable by Receiver or Trustee.	123
Section 10.10	Release Upon Termination of the Company’s Obligations.	123
Section 10.11	Notes/Term Collateral Agent.	123
Section 10.12	Designations.	126
ARTICLE 11
GUARANTEES
Section 11.01	Guarantee.	126
Section 11.02	Limitation on Guarantor Liability.	128
Section 11.03	Execution and Delivery.	128
Section 11.04	Subrogation.	128
Section 11.05	Benefits Acknowledged.	129
Section 11.06	Release of Guarantees.	129
ARTICLE 12
[RESERVED]
ARTICLE 13
SATISFACTION AND DISCHARGE
Section 13.01	Satisfaction and Discharge.	130
Section 13.02	Application of Trust Money.	131

iv

ARTICLE 14
MISCELLANEOUS
Section 14.01	Trust Indenture Act Controls.	131
Section 14.02	Notices.	131
Section 14.03	Communication by Holders of Notes with Other Holders of Notes.	132
Section 14.04	Certificate and Opinion as to Conditions Precedent.	132
Section 14.05	Statements Required in Certificate or Opinion.	133
Section 14.06	Rules by Trustee and Agents.	133
Section 14.07	No Personal Liability of Directors, Officers, Employees and Stockholders.	133
Section 14.08	Governing Law.	133
Section 14.09	Waiver of Jury Trial.	134
Section 14.10	Force Majeure.	134
Section 14.11	No Adverse Interpretation of Other Agreements.	134
Section 14.12	Successors.	134
Section 14.13	Severability.	134
Section 14.14	Counterpart Originals.	134
Section 14.15	Table of Contents, Headings, etc.	134
Section 14.16	Qualification of Indenture.	134
Section 14.17	Intercreditor Agreements Govern.	135

EXHIBITS
Exhibit A	Form of Series A-1 Note
Exhibit B	Form of Certificate of Transfer
Exhibit C	Form of Certificate of Exchange
Exhibit D	Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors
Exhibit E	Form of Supplemental Indenture for the Issuance of Series A-2 Notes
Annex A	Form of Series A-2 Note
Schedule A	Unrestricted Subsidiaries as of the Issue Date

v

INDENTURE, dated as of May 27, 2009, among APRIA HEALTHCARE GROUP INC., a Delaware corporation (the “Company”), the Guarantors (as defined herein) listed on the signature pages hereto, and U.S. Bank National Association, as trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has duly authorized the creation of an issue of $700,000,000 initial aggregate principal amount of 11.25% Senior Secured Notes due 2014 (Series A-1) (the “Initial Series A-1 Notes”);

WHEREAS, the Company may issue up to $310,000,000 initial aggregate principal amount of Senior Secured Notes due 2014 (Series A-2) (plus up to an additional $15.0 million in the circumstances described elsewhere herein) (the “Initial Series A-2 Notes” and, together with the Initial Series A-1 Notes, the “Initial Notes”), which the Company may issue at any time and from time to time pursuant to a board resolution or the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E; and

WHEREAS, the Company and each of the Guarantors has duly authorized the execution and delivery of this Indenture.

NOW, THEREFORE, the Company, each of the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01 Definitions.

“144A Global Note” means a Global Note substantially in the form of, in the case of Series A-1 Notes, Exhibit A attached hereto and, in the case of Series A-2 Notes (if issued), the form approved in the board resolution authorizing such Series A-2 Note or Annex A attached to the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Series A-1 Notes and Series A-2 Notes, as applicable, sold in reliance on Rule 144A.

“ABL Collateral” means “Revolving Facility First Lien Collateral” as defined in the ABL Intercreditor Agreement.

“ABL Collateral Agent” means Bank of America, N.A. and any successor collateral agent under the ABL Facility, or if there is no ABL Facility, the “ABL Collateral Agent” designated pursuant to the terms of the ABL Lenders Debt.

“ABL Facility” means the Credit Facility dated as of October 28, 2008, by and among the Company, the other borrowers from time to time party thereto, the Guarantors, the lenders party thereto in their capacities as lenders thereunder and Bank of America, N.A., as Administrative Agent, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof and any indentures or credit facilities or commercial

1

paper facilities with banks or other institutional lenders or investors that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under Section 4.09 hereof).

“ABL Intercreditor Agreement” means the Lien Subordination and Intercreditor Agreement, dated as of October 28, 2008, among the ABL Collateral Agent, the Notes/Term Collateral Agent, Sky Acquisition LLC, Sky Merger Sub Corporation, the Company and each Guarantor, as it may be amended from time to time in accordance with this Indenture.

“ABL Lenders Debt” means (i) any Indebtedness outstanding from time to time under the ABL Facility, (ii) any Indebtedness which has a senior priority security interest relative to the Series A-1 Notes and Series A-2 Debt in the ABL Collateral, (iii) all obligations with respect to such Indebtedness and any Hedging Obligations directly related to any ABL Lenders Debt entered into with any lender (or its affiliates) under the ABL Facility and (iv) all Bank Products entered into with any lender (or its affiliates) under the ABL Facility.

“Acquired Indebtedness” means, with respect to any specified Person,

(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted Subsidiary of such specified Person, and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Acquisition” means the acquisition of the Company by the Investors on October 28, 2008 and the related transactions contemplated by the Transaction Agreement.

“Additional Interest” means all additional interest then owing pursuant to the Registration Rights Agreement.

“Additional Notes” means additional Notes (other than the Initial Notes and other than Exchange Notes for such Initial Notes) issued from time to time under this Indenture in accordance with Sections 2.01, 4.09 and 4.12 hereof. Additional Notes may be Series A-1 Notes and/or Series A-2 Notes.

“Additional Note Obligations” means Obligations of the Company with respect to Additional Notes permitted to be incurred under this Indenture which are secured by a Lien on the Collateral equally and ratably with the Initial Notes, provided that such Lien is permitted to be incurred under this Indenture.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

2

“After-Acquired Property” means any and all assets or property (other than Excluded Assets) acquired after the Issue Date, including any property or assets acquired by the Company or a Guarantor from another Guarantor, which in each case constitutes Collateral.

“Agent” means any Registrar or Paying Agent.

“Agent’s Message” means a message transmitted by DTC to, and received by, the Depositary and forming a part of the Book-Entry Confirmation, which states that DTC has received an express acknowledgment from each participant in DTC tendering the Notes that such participants have received the Letter of Transmittal and agree to be bound by the terms of the Letter of Transmittal and the Company may enforce such agreement against such participants.

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and/or Clearstream that apply to such transfer or exchange.

“Asset Sale” means:

(1) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of the Company or any of its Restricted Subsidiaries (each referred to in this definition as a “disposition”); or

(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than Preferred Stock of Restricted Subsidiaries issued in compliance with Section 4.09 hereof), whether in a single transaction or a series of related transactions;

in each case, other than:

(a) any disposition of Cash Equivalents or Investment Grade Securities or surplus, obsolete or worn out equipment in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale in the ordinary course of business or any disposition of ABL Collateral;

(b) the disposition of all or substantially all of the assets of the Company governed by, and in a manner permitted pursuant to, the provisions described under Section 5.01 hereof or any disposition that constitutes a Change of Control pursuant to this Indenture;

(c) the making of any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.07 hereof;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of transactions with an aggregate fair market value of less than $15.0 million;

(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary of the Company to the Company or by the Company or a Restricted Subsidiary of the Company to another Restricted Subsidiary of the Company;

3

(f) to the extent allowable under Section 1031 of the Internal Revenue Code of 1986 or comparable law or regulation, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(g) the lease, assignment or sub-lease of any real or personal property in the ordinary course of business;

(h) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(i) foreclosures, condemnations or any similar action on assets;

(j) sales of accounts receivable, or participations therein, in connection with any Receivables Facility;

(k) any financing transaction with respect to the acquisition or construction of property by the Company or any Restricted Subsidiary after the Issue Date, including Sale and Lease-Back Transactions and asset securitizations permitted by this Indenture; and

(l) the licensing and sub-licensing of intellectual property or other general intangibles in the ordinary course of business or consistent with past practice.

“Bank Products” means any facilities or services related to cash management, including treasury, depository, overdraft, credit or debit card, purchase card, electronic funds transfer and other cash management arrangements.

“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

“Borrowing Base” means, as of any date, an amount equal to:

(1) 50% of the value of all net accounts receivable owned by the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date; plus

(2) 50% of the value of all net inventory owned by the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date;

all calculated on a consolidated basis and in accordance with GAAP.

“Bridge Loan Agent” means Banc of America Bridge LLC, in its capacity as “Bridge Loan Agent” under the Notes/Term Intercreditor Agreement, and any successor thereto in such capacity.

“Broker-Dealer” has the meaning set forth in the Registration Rights Agreement.

“Business Day” means each day which is not a Legal Holiday.

“Capital Stock” means:

(1) in the case of a corporation, corporate stock;

4

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

“Cash Equivalents” means:

(1) United States dollars;

(2) (a) €, or any national currency of any participating member state of the EMU; or

(b) such local currencies held by the Company or any Restricted Subsidiary from time to time in the ordinary course of business;

(3) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government (or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of the U.S. government) with maturities of 24 months or less from the date of acquisition;

(4) certificates of deposit, time deposits and Eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus of not less than $500.0 million in the case of U.S. banks and $100.0 million (or the U.S. dollar equivalent as of the date of determination) in the case of non-U.S. banks;

(5) repurchase obligations for underlying securities of the types described in clauses (3) and (4) entered into with any financial institution meeting the qualifications specified in clause (4) above;

(6) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P and in each case maturing within 24 months after the date of creation thereof;

(7) marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof;

5

(8) investment funds investing 95% of their assets in securities of the types described in clauses (1) through (7) above;

(9) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having an Investment Grade Rating from either Moody’s or S&P with maturities of 24 months or less from the date of acquisition;

(10) Indebtedness or Preferred Stock issued by Persons with a rating of “A” or higher from S&P or “A2” or higher from Moody’s with maturities of 24 months or less from the date of acquisition; and

(11) Investments with average maturities of 24 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) and (2) above, provided that such amounts are converted into any currency listed in clauses (1) and (2) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.

“Casualty” means any casualty, loss, damage, destruction or other similar loss with respect to real or personal property or improvements.

“Change of Control” means the occurrence of any of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person other than a Permitted Holder; or

(2) the Company becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies.

“Clearstream” means Clearstream Banking, Société Anonyme.

“Collateral” means all of the assets and properties subject to the Liens created by the Collateral Documents.

“Collateral Documents” means, collectively, the security agreements, pledge agreements, mortgages, collateral assignments, deeds of trust and all other pledges, agreements, financing statements, patent, trademark or copyright filings, mortgages or other filings or documents that create or purport to create a Lien in the Collateral in favor of the Notes/Term Collateral Agent and/or the Trustee

6

(for the benefit of the Holders of Series A-1 Notes and Series A-2 Notes), the ABL Intercreditor Agreement and the Notes/Term Intercreditor Agreement, in each case as they may be amended from time to time, and any instruments of assignment, control agreements, lockbox letters or other instruments or agreements executed pursuant to the foregoing.

“Company” has the meaning set forth in the recitals hereto until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

“Company Order” means a written request or order signed on behalf of the Company by an Officer of the Company, who must be the principal executive officer, the principal financial officer, the treasurer, the principal accounting officer or an executive vice president of the Company, and delivered to the Trustee.

“Condemnation” means any taking by a Governmental Authority of property or assets, or any part thereof or interest therein, for public or quasi-public use under the power of eminent domain, by reason of any public improvement or condemnation or in any other manner.

“Condemnation Award” means all proceeds of any Condemnation or transfer in lieu thereof.

“Consolidated Depreciation and Amortization Expense” means with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

“Consolidated Interest Expense” means, with respect to any Person for any period, without duplication, the sum of:

(1) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (a) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (c) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations and (e) net payments, if any, pursuant to interest rate Hedging Obligations with respect to Indebtedness and excluding (u) accretion or accrual of discounted liabilities not constituting Indebtedness, (v) any expense resulting from the discounting of any outstanding Indebtedness in connection with the application of purchase accounting in connection with any acquisition, (w) any Additional Interest, (x) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses, (y) any expensing of bridge, commitment and other financing fees and (z) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Facility); plus

(2) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

(3) interest income for such period.

7

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income, of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided, however, that, without duplication,

(1) any after-tax effect of extraordinary, non-recurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses (including relating to the Transaction), severance, relocation costs and curtailments or modifications to pension and post-retirement employee benefit plans and other restructuring costs shall be excluded,

(2) the cumulative effect of a change in accounting principles during such period shall be excluded,

(3) any after-tax effect of income (loss) from disposed, abandoned, transferred, closed or discontinued operations and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations shall be excluded,

(4) any after-tax effect of gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business, as determined in good faith by the Company, shall be excluded,

(5) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of the Company shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period,

(6) solely for the purpose of determining the amount available for Restricted Payments under clause (3)(a) of Section 4.07(a) hereof, the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived, provided that Consolidated Net Income of the Company will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) or Cash Equivalents to the Company or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein,

(7) effects of adjustments (including the effects of such adjustments pushed down to the Company and its Restricted Subsidiaries) in the property and equipment,

8

inventory and other intangible assets, deferred revenue and debt line items in such Person’s consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to the Transaction or any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded,

(8) any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments shall be excluded,

(9) any impairment charge or asset write-off, in each case, pursuant to GAAP and the amortization of intangibles arising pursuant to GAAP shall be excluded,

(10) any non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights shall be excluded,

(11) any fees and expenses incurred during such period, or any amortization thereof for such period, in connection with any acquisition, disposition, recapitalization, Investment, Asset Sale, issuance or repayment of Indebtedness, issuance of Equity Interests, refinancing transaction or amendment or modification of any debt instrument (in each case, including any such transaction consummated prior to the Issue Date and any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction shall be excluded, and

(12) accruals and reserves that are established or adjusted within twelve months of the Issue Date that are so required to be established or adjusted as a result of the Transaction in accordance with GAAP or changes as a result of a modification of accounting policies shall be excluded.

Notwithstanding the foregoing, for the purpose of Section 4.07 hereof only (other than clause (3)(d) of Section 4.07(a) hereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Company and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Company and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by the Company or any of its Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under clause (3)(d) of Section 4.07(a) hereof.

“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent,

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(2) to advance or supply funds

(a) for the purchase or payment of any such primary obligation, or

9

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

“Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in Section 14.02 hereof or such other address as to which the Trustee may give notice to the Holders and the Company.

“Coram Acquisition” means the acquisition by the Company of Coram, Inc. completed on December 3, 2007.

“Credit Facilities” means, with respect to the Company or any of its Restricted Subsidiaries, one or more debt facilities, including the ABL Facility and the Term Loan Facility, or other financing arrangements (including, without limitation, commercial paper facilities or indentures), providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof and any indentures or credit facilities or commercial paper facilities that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount permitted to be borrowed thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under Section 4.09 hereof) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, lender or group of lenders.

“Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06(c) hereof, substantially in the form of, in the case of Series A-1 Notes, Exhibit A attached hereto, and, in the case of Series A-2 Notes (if issued), the form approved in the board resolution authorizing such Series A-2 Notes or Annex A attached to the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E, except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

“Designated Non-cash Consideration” means the fair market value of non-cash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth the

10

basis of such valuation, executed by the principal financial officer of the Company, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

“Designated Preferred Stock” means Preferred Stock of the Company or any parent corporation thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate executed by the principal financial officer of the Company or the applicable parent corporation thereof, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof.

“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than solely as a result of a change of control or asset sale) pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale), in whole or in part, in each case prior to the date 91 days after the maturity date of the Notes of the applicable series;

provided, however, that if such Capital Stock is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

“EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period

(1) increased (without duplication) by:

(a) provision for taxes based on income or profits or capital gains, including, without limitation, state, franchise and similar taxes and foreign withholding taxes of such Person paid or accrued during such period to the extent the same was deducted (and not added back) in computing Consolidated Net Income; plus

(b) Fixed Charges of such Person for such period (including (x) net losses on Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk and (y) costs of surety bonds in connection with financing activities, in each case, to the extent included in Fixed Charges) to the extent the same was deducted (and not added back) in calculating such Consolidated Net Income; plus

(c) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent the same were deducted (and not added back) in computing Consolidated Net Income; plus

(d) the amount of any integration costs or other business optimization expenses or reserves deducted (and not added back) in such period in computing Consolidated Net Income, including any one-time costs incurred in connection with acquisitions after the Issue Date and costs related to the closure and/or consolidation of facilities; plus

11

(e) any other non-cash charges, including any write-offs or write-downs, reducing Consolidated Net Income for such period (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period); plus

(f) the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly-Owned Subsidiary deducted (and not added back) in such period in calculating Consolidated Net Income; plus

(g) the amount of management, monitoring, consulting and advisory fees and related expenses paid in such period to the Investors to the extent otherwise permitted under Section 4.11 hereof; plus

(h) the amount of net cost savings and synergies projected by the Company in good faith to be realized as a result of specified actions taken or with respect to which substantial steps have been taken (in the good faith determination of the Company) and which are expected to be realized within 12 months of the date thereof in connection with the Acquisition, future acquisitions and cost saving, restructuring and other similar initiatives (which cost savings shall be added to EBITDA until fully realized and calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that such cost savings are reasonably identifiable and factually supportable (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definition of “Fixed Charge Coverage Ratio”) (notwithstanding the foregoing, all net cost savings and synergies described in the Offering Memorandum may be added back to EBITDA); plus

(i) the amount of loss on sale of receivables and related assets to the Receivables Subsidiary in connection with a Receivables Facility; plus

(j) any costs or expense incurred by the Company or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of the Company or net cash proceeds of an issuance of Equity Interests of the Company (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof.

(2) decreased by (without duplication) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period; and

12

(3) increased or decreased by (without duplication):

(a) any net gain or loss resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards No. 133; plus or minus, as applicable,

(b) any net gain or loss resulting in such period from currency translation gains or losses related to currency remeasurements of Indebtedness (including any net loss or gain resulting from hedge agreements for currency exchange risk).

“EMU” means economic and monetary union as contemplated in the Treaty on European Union.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

“Equity Offering” means any public or private sale of common stock or Preferred Stock of the Company (excluding Disqualified Stock) or any of its direct or indirect parent companies to the extent the proceeds thereof are contributed to the Company as equity (other than Disqualified Stock), other than:

(1) public offerings with respect to the Company’s or any direct or indirect parent company’s common stock registered on Form S-8;

(2) issuances to any Subsidiary of the Company; and

(3) any such public or private sale that constitutes an Excluded Contribution.

“€” means the single currency of participating member states of the EMU.

“Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear system.

“Event of Loss” means, with respect to any Collateral, any (1) Casualty of such Collateral, (2) Condemnation or seizure (other than pursuant to foreclosure or confiscation or requisition of the use of such Collateral) or (3) settlement in lieu of clause (2) above, in each case having a fair market value in excess of $10.0 million.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Exchange Notes” means the Exchange Series A-1 Notes and the Exchange Series A-2 Notes.

“Exchange Series A-1 Notes” means the Series A-1 Notes issued in the Exchange Offer pursuant to Section 2.06(f) hereof.

“Exchange Series A-2 Notes” means the Series A-2 Notes issued in the Exchange Offer pursuant to Section 2.06(f) hereof.

13

“Exchange Offer” has the meaning set forth in the applicable Registration Rights Agreement.

“Exchange Offer Registration Statement” has the meaning set forth in the applicable Registration Rights Agreement.

“Excluded Assets” means the collective reference to: (1) any property or assets owned by any Foreign Subsidiary; (2) Excluded Contracts; (3) Excluded Equipment; (4) any interest in fee-owned real property of the Company and the Guarantors if the greater of its cost and book value is less than $5.0 million; (5) any interest in leased real property of the Company and the Guarantors; (6) motor vehicles and other assets subject to certificates of title; (7) letter of credit rights; (8) commercial tort claims of less than $20.0 million; (9) assets requiring perfection through control agreements (other than with respect to assets consisting of Equity Interests of the Company or any of its Subsidiaries); (10) pledges and security interests prohibited by law; (11) assets to the extent a security interest in such assets would result in material adverse tax consequences as reasonably determined by the Company; and (12) proceeds and products from any and all of the foregoing excluded collateral described in clauses (1) through (11), unless such proceeds or products would otherwise constitute Collateral; provided, however, that Excluded Assets shall not include any asset which secures obligations with respect to ABL Lenders Debt.

“Excluded Contract” means at any date any rights or interest of the Company or any Guarantor in any assets or under any agreement, contract, license, instrument, document or other general intangible (referred to solely for purposes of this definition as a “Contract”) to the extent that such Contract by the terms of a restriction in favor of a Person who is not the Company or any Guarantor, or any requirement of law, prohibits, or requires any consent or establishes any other condition for or would terminate because of an assignment thereof or a grant of a security interest therein by the Company or a Guarantor; provided that: (i) rights to payment under any such Contract otherwise constituting an Excluded Contract by virtue of this definition shall be included in the Collateral to the extent permitted thereby or by Section 9-406 or Section 9-408 of the Uniform Commercial Code and (ii) all proceeds paid or payable to any of the Company or any Guarantor from any sale, transfer or assignment of such Contract and all rights to receive such proceeds shall be included in the Collateral.

“Excluded Contribution” means net cash proceeds, marketable securities or Qualified Proceeds received by the Company from

(1) contributions to its common equity capital, and

(2) the sale (other than to a Subsidiary of the Company or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Company) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Company,

in each case after the Issue Date and in each case designated as Excluded Contributions pursuant to an officer’s certificate executed by the principal financial officer of the Company on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof.

“Excluded Equipment” means at any date any equipment or other assets of the Company or any Guarantor which is subject to, or secured by, a Capitalized Lease Obligation or a purchase money obligation if and to the extent that (i) a restriction in favor of a Person who is not the Company or a Restricted Subsidiary contained in the agreements or documents granting or governing

14

such Capitalized Lease Obligation or purchase money obligation prohibits, or requires any consent or establishes any other conditions for or would result in the termination of such agreement or document because of an assignment thereof, or a grant of a security interest therein, by the Company or any Guarantor and (ii) such restriction relates only to the asset or assets acquired by the Company or any Guarantor with the proceeds of such Capitalized Lease Obligation or purchase money obligation and attachments thereto, improvements thereof or substitutions therefor; provided that all proceeds paid or payable to any of the Company or any Guarantor from any sale, transfer or assignment or other voluntary or involuntary disposition of such assets and all rights to receive such proceeds shall be included in the Collateral to the extent not otherwise required to be paid to the holder of any Capitalized Lease Obligations or purchase money obligations secured by such assets.

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Company or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than Indebtedness incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Fixed Charge Coverage Ratio Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, consolidations and disposed operations (as determined in accordance with GAAP) that have been made by the Company or any of its Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis, assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and disposed operations (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Company or any of its Restricted Subsidiaries since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation or disposed operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or disposed operation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to an Investment, acquisition, disposition, merger or consolidation (including the Transaction and the Coram Acquisition) or any other transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company (and may include, for the avoidance of doubt and without duplication, cost savings, synergies and operating expense resulting from such Investment, acquisition, disposition, merger or consolidation (including the Transaction and the Coram Acquisition) or other transaction, in each case calculated in the manner described in the definition of “EBITDA” herein). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the

15

Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period except as set forth in the first paragraph of this definition. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

“Fixed Charges” means, with respect to any Person for any period, the sum of:

(1) Consolidated Interest Expense of such Person for such period;

(2) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock of any Restricted Subsidiary during such period; and

(3) all dividends or other distributions accrued (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.

“Foreign Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof, or the District of Columbia and any Restricted Subsidiary of such Foreign Subsidiary.

“GAAP” means generally accepted accounting principles in the United States which are in effect on the Issue Date.

“Global Note Legend” means the legend set forth in Section 2.06(g)(2) hereof, which is required to be placed on all Global Notes issued under this Indenture.

“Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of, in the case of Series A-1 Notes, Exhibit A attached hereto, and, in the case of Series A-2 Notes (if issued), the form approved in the board resolution authorizing such Series A-2 Notes or Annex A attached to the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E, issued in accordance with Section 2.01, 2.06(b), 2.06(d) or 2.06(f) hereof.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government including any supra national bodies such as the European Union or the European Central bank).

“Government Securities” means securities that are:

(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or

(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

16

which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

“Grantors” means the Company and the Guarantors.

“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

“Guarantee” means the guarantee by any Guarantor of the Company’s Obligations under this Indenture.

“Guarantor” means each Restricted Subsidiary that Guarantees the Notes in accordance with the terms of this Indenture and its successors and assigns, until released from its obligations under its Guarantee in accordance with the terms of this Indenture.

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer, modification or mitigation of interest rate, commodity or currency risks either generally or under specific contingencies.

“Holder” means the Person in whose name a Note of a particular series is registered on the Registrar’s books.

“Holdings” means Sky Acquisition LLC, a Delaware limited liability company.

“Indebtedness” means, with respect to any Person, without duplication:

(1) any indebtedness of such Person, whether or not contingent:

(a) in respect of borrowed money;

(b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof);

(c) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP; or

17

(d) representing net obligations under any Hedging Obligations;

if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise on, the obligations of the type referred to in clause (1) of a third Person (whether or not such items would appear upon the balance sheet of the such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and

(3) to the extent not otherwise included, the obligations of the type referred to in clause (1) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person;

provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (a) Contingent Obligations incurred in the ordinary course of business or (b) obligations under or in respect of Receivables Facilities.

“Indenture” means this Indenture, as amended or supplemented from time to time.

“Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged.

“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

“Initial Notes” has the meaning set forth in the recitals hereto.

“Initial Purchasers” means Banc of America Securities LLC, Wachovia Capital Markets, LLC, Barclays Capital Inc. and Scotia Capital (USA) Inc.

“Intercreditor Agreements” means, collectively, the ABL Intercreditor Agreement and the Notes/Term Intercreditor Agreement.

“Interest Payment Date” means, as applicable, the Series A-1 Notes Interest Payment Date and, if any Series A-2 Notes are issued, the Series A-2 Notes Interest Payment Date.

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

“Investment Grade Securities” means:

(1) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents);

18

(2) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among the Company and its Subsidiaries;

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment or distribution; and

(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, advances to customers, commission, travel and similar advances to officers and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of the Company in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.07 hereof:

(1) “Investments” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to:

(a) the Company’s “Investment” in such Subsidiary at the time of such redesignation; less

(b) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Company.

“Investors” means The Blackstone Group and each of its Affiliates, but not including any of its portfolio companies.

“Issue Date” means May 27, 2009.

“Legal Holiday” means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York.

19

“Letter of Transmittal” means the letter of transmittal to be prepared by the Company and sent to all Holders of the applicable Notes for use by such Holders in connection with the applicable Exchange Offer.

“Lien” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed to constitute a Lien.

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

“Net Loss Proceeds” means, with respect to any Event of Loss, the proceeds in the form of (a) cash or Cash Equivalents, (b) insurance proceeds, (c) Condemnation Awards or (d) damages awarded by any judgment, in each case received by the Company or any of its Restricted Subsidiaries from such Event of Loss, net of:

(1) reasonable out-of-pocket expenses and fees relating to such Event of Loss (including without limitation legal, accounting and appraisal or insurance adjuster fees);

(2) taxes paid or payable after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements;

(3) any repayment of Indebtedness that is secured by, or directly related to, the property or assets that are the subject of such Event of Loss;

(4) amounts required to be paid to any Person (other than the Company or any Restricted Subsidiary) owning a beneficial interest in the assets subject to the Event of Loss or having a Lien thereon; and

(5) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Event of Loss and retained by the Company or any Restricted Subsidiary, as the case may be, after such Event of Loss, including, without limitation, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Event of Loss.

“Net Proceeds” means the aggregate cash proceeds and Cash Equivalents received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale, including any cash and Cash Equivalents received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment

20

banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of Indebtedness secured by a Lien on such assets (other than as required by clause (1) of Section 4.10(b) hereof) and any deduction of appropriate amounts to be provided by the Company or any of its Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Company or any of its Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

“Non-U.S. Person” means a Person who is not a U.S. Person.

“Notes” means the Initial Notes and any other Note authenticated and delivered under this Indenture. For all purposes of this Indenture, the term “Notes” shall also include any Additional Notes that may be issued under a supplemental indenture. For purposes of this Indenture, all references to Notes to be issued or authenticated upon transfer, replacement or exchange shall be deemed to refer to Notes of the applicable series. For the avoidance of doubt, no Series A-1 Note, or any interest therein, may be transferred, replaced or exchanged for a Series A-2 Note, or any interest therein, and no Series A-2 Note, or any interest therein, may be transferred, replaced or exchanged for a Series A-1 Note, or any interest therein.

“Notes/Term Collateral” means “Senior Secured Term Debt First Lien Collateral” as defined in the ABL Intercreditor Agreement.

“Notes/Term Collateral Agent” means Bank of America, N.A., in its capacity as the “Term Debt Collateral Agent” under the ABL Intercreditor Agreement, and in its capacity as the “Collateral Agent” under the Notes/Term Intercreditor Agreement and the other Collateral Documents, and any successor thereto in such capacities. The Trustee will succeed Bank of America, N.A. as Notes/Term Collateral Agent if there are no loans under the Term Loan Facility outstanding.

“Notes/Term Intercreditor Agreement” means the Intercreditor and Collateral Agency Agreement, dated as of the Issue Date, among the Company, Banc of America Bridge LLC, as Bridge Loan Agent, Bank of America, N.A., as Notes/Term Collateral Agent, and U.S. Bank National Association, as Trustee, and as it may be amended from time to time in accordance with this Indenture. The Notes/Term Intercreditor Agreement will remain in full force and effect with respect to the Series A-1 Notes and Series A-2 Notes whether or not any Indebtedness under the Term Loan Facility remains outstanding and whether or not the Bridge Loan Agent remains a party thereto.

“Obligations” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

“Offering Memorandum” means the offering memorandum, dated May 21, 2009, relating to the sale of the Initial Series A-1 Notes.

21

“Officer” means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Company or a Guarantor.

“Officer’s Certificate” means a certificate signed on behalf of the Company by an Officer of the Company or on behalf of a Guarantor by an Officer of such Guarantor, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company or any officer of such Guarantor that meets the requirements set forth in this Indenture.

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, a Subsidiary of the Company or the Trustee.

“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

“Perfection Certificate” means the Perfection Certificate substantially in the form of Exhibit B to the Security Agreement.

“Permitted Asset Swap” means the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the Company or any of its Restricted Subsidiaries and another Person; provided, that any cash or Cash Equivalents received must be applied in accordance with Section 4.10 hereof; provided further that the assets received are pledged as Collateral to the extent required by the Collateral Documents to the extent that the assets disposed of constituted Collateral.

“Permitted Holders” means each of the Investors and members of management of the Company (or its direct or indirect parent or Subsidiary) on the Issue Date who are holders of Equity Interests of the Company (or any of its direct or indirect parent companies) and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the foregoing are members; provided that, in the case of such group and without giving effect to the existence of such group or any other group, such Investors and members of management, collectively, have beneficial ownership of more than 50% of the total voting power of the Voting Stock of the Company or any of its direct or indirect parent companies.

“Permitted Investment” means:

(1) any Investment in the Company or any of its Restricted Subsidiaries;

(2) any Investment in cash and Cash Equivalents or Investment Grade Securities;

(3) any Investment by the Company or any of its Restricted Subsidiaries in a Person that is engaged in a Similar Business if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary; or

(b) such Person, in one transaction or a series of related transactions, is merged or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary, and, in each case, any Investment held by such Person; provided, that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer;

22

(4) any Investment in securities or other assets, including earnouts, not constituting cash and Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.10 hereof or any other disposition of assets not constituting an Asset Sale;

(5) any Investment existing on the Issue Date;

(6) any Investment acquired by the Company or any of its Restricted Subsidiaries:

(a) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable; or

(b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(7) Hedging Obligations permitted under clause (10) of Section 4.09(b) hereof;

(8) [intentionally omitted];

(9) Investments the payment for which consists of Equity Interests (exclusive of Disqualified Stock) of the Company, or any of its direct or indirect parent companies; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of Section 4.07(a) hereof;

(10) guarantees of Indebtedness of the Company and any Restricted Subsidiary permitted under Section 4.09 hereof;

(11) any transaction to the extent it constitutes an Investment that is permitted and made in accordance with the provisions of Section 4.11(b) hereof (except transactions described in clauses (2), (5) and (9) of Section 4.11(b) hereof);

(12) Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment;

(13) additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (13) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities), not to exceed the greater of (x) $95.0 million and (y) 3.5% of Total Assets at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

23

(14) Investments relating to a Receivables Subsidiary that, in the good faith determination of the Company are necessary or advisable to effect any Receivables Facility;

(15) loans and advances to officers, directors and employees, in each case incurred in the ordinary course of business or consistent with past practices or to fund such Person’s purchase of Equity Interests of the Company or any direct or indirect parent company thereof;

(16) Investments (including debt obligations and Equity Interests) received in connection with the bankruptcy or reorganization of suppliers and customers or in settlement of delinquent obligations of, or other disputes with, customers and suppliers arising in the ordinary course of business or upon the foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment; and

(17) Investments in joint ventures of the Company or any of its Restricted Subsidiaries existing on the Issue Date or created after the Issue Date in an aggregate amount not to exceed $20.0 million.

“Permitted Liens” means, with respect to any Person:

(1) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business;

(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(3) Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(4) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental, to the conduct of the business of such

24

Person or to the ownership of its properties which were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(6) Liens (including Liens on Collateral) securing Indebtedness permitted to be incurred pursuant to clauses (4), (10) and (12)(b) of Section 4.09(b) hereof; provided, however, that Liens securing Indebtedness permitted to be incurred pursuant to such clause (12)(b) shall not secure such Indebtedness in excess of $100.0 million at any one time outstanding;

(7) Liens existing on the Issue Date;

(8) Liens on property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided further, however, that such Liens may not extend to any other property owned by the Company or any of its Restricted Subsidiaries;

(9) Liens on property at the time the Company or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into the Company or any of its Restricted Subsidiaries; provided, however, that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition; provided further, however, that the Liens may not extend to any other property owned by the Company or any of its Restricted Subsidiaries;

(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary permitted to be incurred in accordance with Section 4.09 hereof;

(11) Liens securing Hedging Obligations so long as related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on the same property securing such Hedging Obligations;

(12) Liens on specific items of inventory of other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(13) leases, subleases, licenses or sublicenses granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries and do not secure any Indebtedness;

(14) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business;

(15) Liens in favor of the Company or any Guarantor;

25

(16) Liens on equipment of the Company or any of its Restricted Subsidiaries granted in the ordinary course of business to the Company’s clients;

(17) Liens on accounts receivable and related assets incurred in connection with a Receivables Facility;

(18) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (7), (8) and (9); provided, however, that (a) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (7), (8) and (9) at the time the original Lien became a Permitted Lien under this Indenture, and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(19) deposits made in the ordinary course of business to secure liability to insurance carriers;

(20) other Liens (including Liens on Collateral) securing obligations not to exceed $100.0 million at any one time outstanding;

(21) Liens securing Indebtedness of any Foreign Subsidiary permitted to be incurred under this Indenture, to the extent such Liens relate only to the assets and properties of such Foreign Subsidiary;

(22) Liens securing judgments for the payment of money not constituting an Event of Default under clause (5) under Section 6.01(a) hereof so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

(23) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

(24) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code or any comparable or successor provision on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

(25) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 4.09 hereof; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

26

(26) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

(27) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Company or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Company and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(28) (a) Liens (including Liens on Collateral) securing the Series A-1 Notes and the related Guarantees of the Series A-1 Notes (and exchange notes in respect thereof), up to $150.0 million of Additional Notes or Term Loans or a combination thereof and up to $150.0 million of Additional Notes or Term Loans or a combination thereof the proceeds of which will be used solely to finance acquisitions (solely to the extent the Fixed Charge Coverage Ratio following any such acquisition and debt incurrence would have been at least 3.50 to 1.00, determined on a pro forma basis) and (b) Liens (including Liens on Collateral) securing the Series A-2 Debt, in an amount no greater than $310.0 million (plus up to an additional $15.0 million of Series A-2 Notes), so long as the Series A-1 Notes are equally and ratably secured and such Series A-2 Debt is subject to the priority of payment provisions contained in the Notes/Term Intercreditor Agreement;

(29) Liens securing (x) Indebtedness and other obligations permitted to be incurred under Credit Facilities, including any letter of credit facility relating thereto, that was incurred pursuant to clause (1) of Section 4.09(b) hereof in an amount up to the greater of (A) $175.0 million and (B) the Borrowing Base, and (y) obligations of the Company or any Subsidiary in respect of any Bank Products provided by any lender party to the ABL Facility or any Affiliate of such lender (or any Person that was a lender or an Affiliate of a lender at the time the applicable agreements pursuant to which such Bank Products are provided were entered into); provided, however, that any Liens on Notes/Term Collateral granted pursuant to this clause (29) must be junior in priority to the Liens on such Collateral granted in favor of the Notes/Term Collateral Agent for the benefit of the Trustee and the holders of the Series A-1 Notes and the Series A-2 Notes and the benefit of the Term Loan Lenders and the holders of the Term Loans pursuant to the Collateral Documents and the terms of such junior interest may be no more favorable to the beneficiaries thereof than the terms contained in the Intercreditor Agreements; and provided, further, that no Liens may be granted pursuant to this clause (29) unless the Series A-1 Notes, the Series A-2 Notes and the Term Loans are secured by a second-priority Lien that is junior in priority to the Liens on such Collateral but senior in priority to any other Liens granted on such Collateral;

(30) Liens on the Collateral to secure obligations in respect of any Indebtedness permitted to be incurred pursuant to Section 4.09(a) hereof; provided, however, that such Liens on the Collateral are junior in priority to the Liens granted to holders of the Series A-1 Notes, the Series A-2 Notes and the Term Loans;

27

(31) any encumbrance or restriction (including put and call arrangements) with respect to capital stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(32) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business; and

(33) Liens solely on any cash earnest money deposits made by the Company or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder.

For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Preferred Stock” means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.

“Private Placement Legend” means the legend set forth in Section 2.06(g)(1) hereof to be placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Qualified Proceeds” means assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business; provided that the fair market value of any such assets or Capital Stock shall be determined by the Company in good faith.

“Rating Agencies” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the applicable series of Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company which shall be substituted for Moody’s or S&P or both, as the case may be.

“Receivables Facility” means any of one or more receivables financing facilities as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the Obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Company or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) pursuant to which the Company or any of its Restricted Subsidiaries sells its accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any accounts receivable or participation interest therein issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Facility.

28

“Receivables Subsidiary” means any Subsidiary formed for the purpose of, and that solely engages only in one or more Receivables Facilities and other activities reasonably related thereto.

“Record Date” means the Series A-1 Notes Record Date and, if any Series A-2 Notes are issued, the Series A-2 Notes Record Date, as applicable.

“Registration Rights Agreement” means (x) the Registration Rights Agreement with respect to the Series A-1 Notes dated as of the Issue Date, among the Company, the Guarantors and the Initial Purchasers, as such agreement may be amended, modified or supplemented from time to time, (y) with respect to any Additional Notes, one or more registration rights agreements among the Company and the other parties thereto, as such agreement(s) may be amended, modified or supplemented from time to time, relating to rights given by the Company to the purchasers of Additional Notes to register such Additional Notes under the Securities Act, and (z) with respect to the Series A-2 Notes, a registration rights agreement among the Company, the Guarantors and the other parties thereto, as such agreement may be amended, modified or supplemented from time to time, relating to rights given by the Company to the holders of Series A-2 Notes to register the Series A-2 Notes under the Securities Act.

“Regulation S” means Regulation S promulgated under the Securities Act.

“Regulation S Global Note” means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as applicable.

“Regulation S Permanent Global Note” means a permanent Global Note in the form of, in the case of Series A-1 Notes, Exhibit A attached hereto, and, in the case of Series A-2 Notes (if issued), the form approved in the board resolution authorizing such Series A-2 Notes or Annex A attached to the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the applicable Regulation S Temporary Global Note upon expiration of the Restricted Period.

“Regulation S Temporary Global Note” means a temporary Global Note in the form of, in the case of Series A-1 Notes, Exhibit A attached hereto, and, in the case of Series A-2 Notes (if issued), the form approved in the board resolution authorizing such Series A-2 Notes or Annex A attached to the board resolution authorizing such Note or the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E, bearing the Global Note Legend, the Private Placement Legend and the Regulation S Temporary Global Note Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Series A-1 Notes and Series A-2 Notes, as applicable, initially sold in reliance on Rule 903.

“Regulation S Temporary Global Note Legend” means the legend set forth in Section 2.06(g)(3) hereof.

“Related Business Assets” means assets (other than cash or Cash Equivalents) used or useful in a Similar Business, provided that any assets received by the Company or a Restricted Subsidiary in exchange for assets transferred by the Company or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

29

“Related Person” means, with respect to any specified Person, such Person’s Affiliates, and the respective officers, directors, employees, agents, advisors and attorneys-in-fact of such Person and its Affiliates.

“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

“Restricted Global Note” means a Global Note bearing the Private Placement Legend.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.

“Restricted Subsidiary” means, at any time, any direct or indirect Subsidiary of the Company (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided, however, that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary.”

“Rule 144” means Rule 144 promulgated under the Securities Act.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“Rule 903” means Rule 903 promulgated under the Securities Act.

“Rule 904” means Rule 904 promulgated under the Securities Act.

“S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

“Sale and Lease-Back Transaction” means any arrangement providing for the leasing by the Company or any of its Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to a third Person in contemplation of such leasing.

“SEC” means the U.S. Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries secured by a Lien.

“Secured Parties” means (a) the Holders, (b) the Trustee, (c) the Notes/Term Collateral Agent, (d) the beneficiaries of each indemnification obligation undertaken by the Company or any Guarantor under the Indenture, the Notes, the Security Agreement, the Intercreditor Agreements or the other Collateral Documents and (e) the successors and assigns of each of the foregoing.

30

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Security Agreement” means the Security Agreement dated as of October 28, 2008 among the Company, certain subsidiaries of the Company named therein and the Notes/Term Collateral Agent.

“Senior Indebtedness” means:

(1) all Indebtedness of the Company or any Guarantor outstanding under the ABL Facility, any Term Loan Facility or the Notes (including interest accruing on or after the filing of any petition in bankruptcy or similar proceeding or for reorganization of the Company or any Guarantor (at the rate provided for in the documentation with respect thereto, regardless of whether or not a claim for post-filing interest is allowed in such proceedings)), and any and all other fees, expense reimbursement obligations, indemnification amounts, penalties, and other amounts (whether existing on the Issue Date or thereafter created or incurred) and all obligations of the Company or any Guarantor to reimburse any bank or other Person in respect of amounts paid under letters of credit, acceptances or other similar instruments;

(2) all Hedging Obligations (and guarantees thereof) owing to a Lender (as defined in the ABL Facility) or any Affiliate of such Lender (or any Person that was a Lender or an Affiliate of such Lender at the time the applicable agreement giving rise to such Hedging Obligation was entered into), provided that such Hedging Obligations are permitted to be incurred under the terms of this Indenture;

(3) all Series A-2 Debt;

(4) any other Indebtedness of the Company or any Guarantor permitted to be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinate in right of payment to the Notes of the applicable series or any related Guarantee; and

(5) all Obligations with respect to the items listed in the preceding clauses (1), (2), (3) and (4);

provided, however, that Senior Indebtedness shall not include:

(a) any obligation of such Person to the Company or any of its Subsidiaries;

(b) any liability for federal, state, local or other taxes owed or owing by such Person;

(c) any accounts payable or other liability to trade creditors arising in the ordinary course of business;

31

(d) any Indebtedness or other Obligation of such Person which is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; or

(e) that portion of any Indebtedness which at the time of incurrence is incurred in violation of this Indenture; provided, however that such Indebtedness shall be deemed not to have been incurred in violation of this Indenture for purposes of this clause if the holder(s) of such Indebtedness or their agent or representative (i) had no actual knowledge at the time of incurrence that the incurrence of such Indebtedness violated this Indenture and (ii) shall have received a certificate from an officer of the Company to the effect that the incurrence of such Indebtedness does not violate the provisions of this Indenture.

“Series A-1 Notes” means the Initial Series A-1 Notes and any other Series A-1 Note authenticated and delivered under this Indenture.

“Series A-1 Notes Applicable Premium” means, with respect to any Series A-1 Note on any Series A-1 Notes Redemption Date, the greater of:

(1) 1.0% of the principal amount of such Series A-1 Note; and

(2) the excess, if any, of (a) the present value at such Series A-1 Notes Redemption Date of (i) the redemption price of such Series A-1 Note at November 1, 2011 (each such redemption price being set forth in Section 3.07(e) hereof), plus (ii) all required interest payments due on such Series A-1 Note through November 1, 2011 (excluding accrued but unpaid interest to the Series A-1 Notes Redemption Date), computed using a discount rate equal to the Series A-1 Notes Treasury Rate as of such Series A-1 Notes Redemption Date plus 50 basis points; over (b) the principal amount of such Series A-1 Note.

“Series A-1 Notes Interest Payment Date” means May 1 and November 1 of each year to stated maturity.

“Series A-1 Notes Record Date” for the interest or Additional Interest, if any, payable on any Series A-1 Notes Interest Payment Date means April 15 and October 15 (whether or not a Business Day) next preceding such Series A-1 Notes Interest Payment Date.

“Series A-1 Notes Treasury Rate” means, as of any Series A-1 Notes Redemption Date, the yield to maturity as of such Series A-1 Notes Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Series A-1 Notes Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Series A-1 Notes Redemption Date to November 1, 2011; provided, however, that if the period from the Series A-1 Notes Redemption Date to November 1, 2011 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

“Series A-2 Debt” means (i) any Indebtedness outstanding from time to time under the Term Loan Facility, including without limitation any “Rollover Loans” as defined therein, (ii) any Series A-2 Notes, and (iii) all obligations with respect to such Indebtedness and any Hedging Obligations permitted under any Series A-2 Debt owed or owing to any lender (or its affiliates) under the Term Loan Facility or ABL Facility which qualifies as a “Secured Hedge Agreement” under the Term Loan Facility.

32

“Series A-2 Notes” means the Initial Series A-2 Notes and any other Series A-2 Note authenticated and delivered under this Indenture.

“Series A-2 Notes Applicable Premium” means, with respect to any Series A-2 Note on any Series A-2 Notes Redemption Date, the greater of:

(1) 1.0% of the principal amount of such Series A-2 Note; and

(2) the excess, if any, of (a) the present value at such Series A-2 Notes Redemption Date of (i) the redemption price of such Series A-2 Note at November 1, 2011 (each such redemption price being set forth in a board resolution or supplemental indenture entered into pursuant to 9.01(16) of this Indenture providing for the issuance of the Series A-2 Notes), plus (ii) all required interest payments due on such Series A-2 Note through November 1, 2011 (excluding accrued but unpaid interest to the Series A-2 Notes Redemption Date), computed using a discount rate equal to the Series A-2 Notes Treasury Rate as of such Series A-2 Notes Redemption Date plus 50 basis points; over (b) the principal amount of such Series A-2 Note.

“Series A-2 Notes Interest Payment Date” means May 1 and November 1 of each year to stated maturity.

“Series A-2 Notes Record Date” for the interest or Additional Interest, if any, payable on any Series A-2 Notes Interest Payment Date means April 15 and October 15 (whether or not a Business Day) next preceding such Series A-2 Notes Interest Payment Date.

“Series A-2 Notes Treasury Rate” means, as of any Series A-2 Notes Redemption Date, the yield to maturity as of such Series A-2 Notes Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Series A-2 Notes Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Series A-2 Notes Redemption Date to November 1, 2011; provided, however, that if the period from the Series A-2 Notes Redemption Date to November 1, 2011 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

“Series of Debt” means, separately, each of the Series A-1 Notes, the Series A-2 Notes and the Term Loans.

“Series of Notes” means either the Series A-1 Notes or the Series A-2 Notes.

“Shelf Registration Statement” means the Shelf Registration Statement as defined in the applicable Registration Rights Agreement.

“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.

33

“Similar Business” means any business conducted or proposed to be conducted by the Company and its Restricted Subsidiaries on the Issue Date or any business that is similar, reasonably related, incidental or ancillary thereto.

“Sponsor Management Agreement” means the management agreement between certain of the management companies associated with the Investors and the Company and/or one of its direct or indirect parent companies as in effect on the Issue Date.

“Subordinated Indebtedness” means, with respect to the Notes,

(1) any Indebtedness of the Company which is by its terms subordinated in right of payment to the Notes, and

(2) any Indebtedness of any Guarantor which is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.

For the avoidance of doubt, the Series A-2 Debt is not “Subordinated Indebtedness” hereunder by virtue of the provisions contained in the Notes/Term Intercreditor Agreement.

“Subsidiary” means, with respect to any Person:

(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof or is consolidated under GAAP with such Person at such time; and

(2) any partnership, joint venture, limited liability company or similar entity of which

(a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and

(b) such Person or any Restricted Subsidiary of such Person is a general partner or otherwise controls such entity.

“Term Loans” means loans made pursuant to and in accordance with the Term Loan Facility, including the Rollover Loans as defined therein.

“Term Loan Lenders” means the lenders under the Term Loan Facility.

“Term Loan Facility” means the Senior Secured Bridge Credit Agreement, dated as of October 28, 2008, by and among the Company, the Guarantors, the lenders party thereto in their capacities as lenders thereunder, Bank of America Bridge LLC, as Administrative Agent, and

34

the other parties thereto, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof and any indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under Section 4.09 hereof).

“Total Assets” means the total assets of the Company, except where expressly provided otherwise, and its Restricted Subsidiaries on a consolidated basis, as shown on the most recent balance sheet of the Company; provided, however, that in no event at any time shall Total Assets be deemed to equal an amount less than the amount of total assets of the Company and its Restricted Subsidiaries on a consolidated basis as of the Issue Date.

“Transaction” means the merger contemplated by the Transaction Agreement, the issuance of the Notes, and borrowings under the ABL Facility and the Term Loan Facility on October 28, 2008 in order to finance the merger and repay certain debt as described in the Offering Memorandum under “The Transactions.”

“Transaction Agreement” means the Agreement and Plan of Merger, dated as of June 18, 2008, by and among Apria Healthcare Group Inc., Sky Acquisition LLC and Sky Merger Sub Corporation, as the same may be amended on or prior to October 28, 2008.

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-777bbbb).

“Trustee” means the party named as the “Trustee” in the preamble of this Indenture until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

“Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.

“Unrestricted Global Note” means a permanent Global Note, substantially in the form of, in the case of Series A-1 Notes, Exhibit A attached hereto, and, in the case of Series A-2 Notes (if issued), the form approved in the board resolution authorizing such Series A-2 Notes or Annex A attached to the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E, that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing Series A-1 Notes and Series A-2 Notes, as applicable, that do not bear the Private Placement Legend.

“Unrestricted Subsidiary” means:

(1) (A) each subsidiary of the Company listed on Schedule A attached hereto as an Unrestricted Subsidiary and (B) any Subsidiary of the Company which at the time of determination is an Unrestricted Subsidiary (as designated by the Company, as provided below); and

(2) any Subsidiary of an Unrestricted Subsidiary.

35

The Company may designate any Subsidiary of the Company (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, the Company or any Subsidiary of the Company (other than solely any Subsidiary of the Subsidiary to be so designated); provided that

(1) any Unrestricted Subsidiary must be an entity of which the Equity Interests entitled to cast at least a majority of the votes that may be cast by all Equity Interests having ordinary voting power for the election of directors or Persons performing a similar function are owned, directly or indirectly, by the Company;

(2) such designation complies with Section 4.07 hereof; and

(3) each of:

(a) the Subsidiary to be so designated; and

(b) its Subsidiaries

has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any Restricted Subsidiary.

The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, no Default shall have occurred and be continuing and either:

(1) the Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof; or

(2) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation.

Any such designation by the Company shall be notified by the Company to the Trustee by promptly filing with the Trustee a copy of the resolution of the board of directors of the Company or any committee thereof giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

“U.S. Person” means a U.S. person as defined in Rule 902(k) under the Securities Act.

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing:

(1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment; by

36

(2) the sum of all such payments.

“Wholly-Owned Subsidiary” of any Person means a Subsidiary of such Person, 100% of the outstanding Equity Interests of which (other than directors’ qualifying shares) shall at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person.

Section 1.02 Other Definitions.

Term	Defined in Section
“Acceptable Commitment”	4.10
“Affiliate Transaction”	4.11
“Asset Sale Offer”	4.10
“Authentication Order”	2.02
“Change of Control Offer”	4.14
“Change of Control Payment”	4.14
“Change of Control Payment Date”	4.14
“Covenant Defeasance”	8.03
“DTC”	2.03
“Event of Default”	6.01
“Excess Proceeds”	4.10
“Excess Loss Proceeds”	4.15
“incur”	4.09
“incurrence”	4.09
“Indemnified Parties”	7.07
“Indemnified Party”	7.07
“Initial Lien”	4.12
“Initial Notes”	Preamble
“Initial Series A-1 Notes”	Preamble
“Initial Series A-2 Notes”	Preamble
“Legal Defeasance”	8.02
“Loss Proceeds Offer”	4.15
“Note Register”	2.03
“Offer Amount”	3.09
“Offer Period”	3.09
“Original Issue Discount Legend”	2.06
“Pari Passu Indebtedness”	4.10
“Paying Agent”	2.03
“Purchase Date”	3.09
“Refinancing Indebtedness”	4.09
“Refunding Capital Stock”	4.07
“Registrar”	2.03
“Restricted Payments”	4.07
“Rule 3-16”	10.01
“Series A-1 Notes Redemption Date”	3.07
“Successor Company”	5.01
“Successor Person”	5.01
“Treasury Capital Stock”	4.07

37

Section 1.03 Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture.

The following Trust Indenture Act terms used in this Indenture have the following meanings:

“indenture securities” means the Notes;

“indenture security Holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes and the Guarantees means the Company and the Guarantors, respectively, and any successor obligor upon the Notes and the Guarantees, respectively.

All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule under the Trust Indenture Act have the meanings so assigned to them.

Notwithstanding any of the foregoing, the Trust Indenture Act and the terms and provisions thereof shall not apply to this Indenture until the Company and the Guarantors qualify this Indenture under the Trust Indenture Act.

Section 1.04 Rules of Construction.

Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(c) “or” is not exclusive;

(d) words in the singular include the plural, and in the plural include the singular;

(e) “will” shall be interpreted to express a command;

(f) provisions apply to successive events and transactions;

(g) references to sections of, or rules under, the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(h) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture; and

38

(i) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision.

Section 1.05 Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01 hereof) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Note.

(e) The Company may, in the circumstances permitted by the Trust Indenture Act, set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, a Holder, including DTC that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in

39

writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and DTC as the Holder of a Global Note may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

(h) The Company may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

Section 1.06 Timing of Payment.

Notwithstanding anything herein to the contrary, if the date on which any payment is to be made pursuant to this Indenture or the Notes is not a Business Day, the payment otherwise payable on such date shall be payable on the next succeeding Business Day with the same force and effect as if made on such scheduled date and (provided such payment is made on such succeeding Business Day) no interest shall accrue on the amount of such payment from and after such scheduled date to the time of such payment on such next succeeding Business Day and the amount of any such payment that is an interest payment will reflect accrual only through the original payment date and not through the next succeeding Business Day.

ARTICLE 2

THE NOTES

Section 2.01 Form and Dating; Terms.

(a) General. The Notes and the Trustee’s certificate of authentication shall be substantially in the form of, in the case of Series A-1 Notes, Exhibit A attached hereto, and, in the case of Series A-2 Notes (if issued), the form approved in the board resolution authorizing such Series A-2 Notes or Annex A attached to the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E. The Notes may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The terms of the Series A-2 Notes may be set forth in a board resolution or in an indenture supplemental hereto in the form of Exhibit E. The terms of the Series A-2 Notes shall include the terms included in Annex A attached to Exhibit E hereto and/or such other terms approved by the board of directors of the Issuer, which may be in addition to, different then, or inconsistent with the terms of this Indenture and the terms included in Annex A attached to Exhibit E hereto.

(b) Global Notes. Notes issued in global form shall be substantially in the form of, in the case of Series A-1 Notes, Exhibit A attached hereto, and, in the case of Series A-2 Notes (if issued), the form approved in the board resolution authorizing such Series A-2 Notes or Annex A attached to the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the

40

Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of, in the case of Series A-1 Notes, Exhibit A attached hereto, and, in the case of Series A-2 Notes (if issued), the form approved in the board resolution authorizing such Series A-2 Notes or Annex A attached to the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchanges of Interests in the Global Note” attached thereto and each shall provide that it shall represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

(c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Restricted Period shall be terminated upon the receipt by the Trustee of:

(1) a written certificate from the Depositary, if available, together with copies of certificates from Euroclear and Clearstream, if available, certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of the Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(b) hereof); and

(2) an Officer’s Certificate from the Company.

Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

(d) Terms. The aggregate principal amount of Initial Series A-1 Notes that may be authenticated and delivered under this Indenture is $700,000,000 and the aggregate principal amount of Initial Series A-2 Notes that may be authenticated and delivered under this Indenture is $310,000,000 (plus up to an additional $15.0 million of Series A-2 Notes); provided that Additional Notes may be issued in accordance with the fifth paragraph of this Section 2.01(d).

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

41

However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

The Notes shall be subject to repurchase by the Company pursuant to an Asset Sale Offer as provided in Section 4.10 hereof or a Change of Control Offer as provided in Section 4.14 hereof. The Notes shall not be redeemable, other than, with respect to the Series A-1 Notes, as provided in Article 3, and with respect to the Series A-2 Notes, as set forth in an appropriate board resolution or supplemental indenture hereto in the form of Exhibit E.

Additional Notes may be either Series A-1 Notes or Series A-2 Notes. Additional Notes which are Series A-1 Notes will rank pari passu with the Initial Series A-1 Notes, may be created and issued from time to time by the Company without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Series A-1 Notes and shall have the same terms as to status, redemption or otherwise as the Initial Series A-1 Notes; Additional Notes which are Series A-2 Notes will rank pari passu with the Initial Series A-2 Notes, may be created and issued from time to time by the Company without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Series A-2 Notes and shall have the same terms as to status, redemption or otherwise as the Initial Series A-2 Notes; provided that the aggregate principal amount of Additional Notes that may be authenticated and delivered under this Indenture is limited to (i) $150.0 million of Additional Notes, plus (ii) $150.0 million of Additional Notes the proceeds of which shall be used solely to finance acquisitions (solely to the extent the Fixed Charge Coverage Ratio following any such acquisition and debt incurrence would have been at least 3.50 to 1.00, determined on a pro forma basis); provided, further, that the Company’s ability to issue Additional Notes shall be subject to the Company’s compliance with Section 4.09 hereof. Any Additional Notes shall be issued with the benefit of an indenture supplemental to this Indenture.

(e) Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Notes and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Clearstream.

Section 2.02 Execution and Authentication.

At least one Officer of the Company shall execute the Notes on behalf of the Company by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of, in the case of Series A-1 Notes, Exhibit A attached hereto, and, in the case of Series A-2 Notes (if issued), the form approved in the board resolution authorizing such Series A-2 Notes or Annex A attached to the Form of Supplemental Indenture for the Issuance of Series A-2 Notes attached hereto as Exhibit E, as the case may be, by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

42

On the Issue Date, the Trustee shall, upon receipt of a Company Order (an “Authentication Order”), authenticate and deliver the Initial Series A-1 Notes. In addition, at any time, from time to time, the Trustee shall upon an Authentication Order authenticate and deliver the Series A-2 Notes and any Additional Notes and Exchange Notes for an aggregate principal amount specified in such Authentication Order for such Series A-2 Notes or Additional Notes or Exchange Notes issued hereunder.

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company.

Section 2.03 Registrar and Paying Agent.

The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar shall keep a register of the Notes (“Note Register”) and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without prior notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07 hereof. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.

The Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes.

The Company initially appoints the Trustee to act as the Paying Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

Section 2.04 Paying Agent to Hold Money in Trust.

The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or Additional Interest, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes.

Section 2.05 Holder Lists.

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with Trust Indenture Act Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee

43

at least five Business Days before each applicable Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with Trust Indenture Act Section 312(a).

Section 2.06 Transfer and Exchange.

(a) Transfer and Exchange of Global Notes. Except as otherwise set forth in this Section 2.06, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor Depositary or a nominee of such successor Depositary. A beneficial interest in a Global Note may not be exchanged for a Definitive Note unless (i) the Depositary (x) notifies the Company that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days or (ii) there shall have occurred and be continuing an Event of Default with respect to the Notes. Upon the occurrence of any of the preceding events in (i) or (ii) above, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the preceding events in (i) or (ii) above and pursuant to Section 2.06(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); provided, however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(1).

(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) hereof, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the

44

Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(2) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

(3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(2) hereof and the Registrar receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; or

(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof.

(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2) hereof and:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;

45

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.

(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events in paragraph (1) or (2) of Section 2.06(a) hereof and receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

46

(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;

(E) if such beneficial interest is being transferred to the Company or any of its Restricted Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof; or

(F) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof,

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

(2) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) of the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.

47

(3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events in subsection (1) or (2) of Section 2.06(a) hereof and if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events in subsection (1) or (2) of Section 2.06(a) hereof and satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the

48

Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) shall not bear the Private Placement Legend.

(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.

(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;

(E) if such Restricted Definitive Note is being transferred to the Company or any of its Restricted Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof; or

(F) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof,

the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global Note, in the case of clause (B) above, the applicable 144A Global Note, and in the case of clause (C) above, the applicable Regulation S Global Note.

49

(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

(2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(2), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

50

(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (2)(B), (2)(D) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e):

(1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

(A) if the transfer will be made pursuant to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transfer will be made pursuant to Rule 903 or Rule 904 then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or

(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications required by item (3) thereof, if applicable.

(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;

51

(B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

(2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal or through an Agent’s Message through the DTC Automated Tender Offer Program that (x) they are not Broker-Dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the Exchange Offer and (ii) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not Broker-Dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the Exchange Offer. Concurrently with the issuance

52

of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and mail to the Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the applicable principal amount. Any Notes of a series that remain outstanding after the consummation of the Exchange Offer, and Exchange Notes of that series issued in connection with the Exchange Offer, shall be treated as a single class of securities under this Indenture.

(g) Legends. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture:

(1) Private Placement Legend.

(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

“THE SECURITY EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.”

53

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

(2) Global Note Legend. Each Global Note shall bear a legend in substantially the following form:

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

(3) Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note shall bear a legend in substantially the following form:

“THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).”

(4) Original Issue Discount Legend.

(A) Except as provided in subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form (the “Original Issue Discount Legend”):

54

“THE FOLLOWING INFORMATION IS PROVIDED PURSUANT TO TREAS. REG. SEC. 1.1275-3:

THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT.

THE CHIEF FINANCIAL OFFICER OF THE COMPANY, AS A REPRESENTATIVE OF THE COMPANY, WILL PROMPTLY MAKE AVAILABLE TO HOLDER(S) OF THIS NOTE UPON REQUEST THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY OF THIS NOTE. THE ADDRESS OF THE CHIEF FINANCIAL OFFICER IS C/O APRIA HEALTHCARE GROUP INC., 26220 ENTERPRISE COURT, LAKE FOREST, CALIFORNIA 92630.”

(B) Notwithstanding the foregoing, any Global Note or Definitive Note (and all Notes issued in exchange therefor or substitution thereof) issued without “original issue discount”, as defined in Section 1273(a) of the Internal Revenue Code of 1986, as amended, shall not bear the Original Issue Discount Legend.

(h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(1) General Provisions Relating to Transfers and Exchanges.

(2) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

(3) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.06 hereof).

(4) Neither the Registrar nor the Company shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

55

(5) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(6) The Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between an applicable Record Date and the next succeeding applicable Interest Payment Date.

(7) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest (including Additional Interest, if any) on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.

(8) Upon surrender for registration of transfer of any Note at the office or agency of the Company designated pursuant to Section 4.02 hereof, the Company shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

(9) At the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.02 hereof.

(10) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

Section 2.07 Replacement Notes.

If any mutilated Note is surrendered to the Trustee, the Registrar or the Company and the Trustee receives evidence to its satisfaction of the ownership and destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company and the Trustee may charge for their expenses in replacing a Note.

56

Every replacement Note is a contractual obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

Section 2.08 Outstanding Notes.

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

Section 2.09 Treasury Notes.

In determining whether the Holders of the required principal amount of Notes (and/or Term Loans, if applicable) have concurred in any direction, waiver or consent, Notes (and/or Term Loans, if applicable) owned by the Company, or by any Affiliate of the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned shall be so disregarded. Notes (and/or Term Loans, if applicable) so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to the Notes (and/or Term Loans, if applicable) and that the pledgee is not the Company or any obligor upon the Notes (and/or Term Loans, if applicable) or any Affiliate of the Company or of such other obligor.

Section 2.10 Temporary Notes.

Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

57

Section 2.11 Cancellation.

The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall be delivered to the Company. The Company may not issue new Notes to replace Notes that they have paid or that have been delivered to the Trustee for cancellation.

Section 2.12 Defaulted Interest.

If the Company defaults in a payment of interest on the Notes of any series, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest to the Persons who are Holders of Notes of such series on a subsequent special record date, in each case at the rate provided in the Notes of such series and in Section 4.01 hereof. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than ten days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Company of such special record date. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed, first-class postage prepaid, to each Holder of Notes of such series a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.

Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

Section 2.13 CUSIP and ISIN Numbers.

The Company in issuing the Notes may use CUSIP and/or ISIN numbers (if then generally in use) and, if so, the Trustee shall use CUSIP and/or ISIN numbers in notices of redemption as a convenience to Holders; provided, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will as promptly as practicable notify the Trustee of any change in the CUSIP or the ISIN numbers.

58

ARTICLE 3

REDEMPTION

Section 3.01 Notices to Trustee.

If the Company elects to redeem Notes of any series pursuant to Section 3.07 hereof or pursuant to the terms of any Notes issued hereunder, it shall furnish to the Trustee, at least two Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 3.03 hereof but not more than 60 days before a redemption date, an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.

Section 3.02 Selection of Notes to Be Redeemed or Purchased.

If less than all of the Notes of any series are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes of such series to be redeemed or purchased (a) if the Notes of such series are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which such Notes are listed or (b) on a pro rata basis or, to the extent that selection on a pro rata basis is not practicable, by lot or by such other similar method in accordance with the procedures of DTC. In the event of partial redemption or purchase by lot, the particular Notes of such series to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than 30 days nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes of such series not previously called for redemption or purchase.

The Trustee shall promptly notify the Company in writing of the Notes of such series selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected shall be in an integral multiple of $1,000 (but in a minimum amount of $2,000); no Notes of $2,000 or less can be redeemed in part, except that if all of the Notes of such series of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes of such series held by such Holder, even if not a multiple of $1,000 (or a minimum amount of $2,000), shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

Section 3.03 Notice of Redemption.

Subject to Section 3.09 hereof, the Company shall mail or cause to be mailed by first-class mail notices of redemption at least 30 days but not more than 60 days prior to the redemption date to each Holder of Notes to be redeemed at such Holder’s registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 hereof. Except as set forth in Section 3.07(c) hereof, notices of redemption may not be conditional.

The notice shall identify the Notes to be redeemed and shall state:

(a) the redemption date;

(b) the redemption price;

59

(c) if any Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the Notes upon cancellation of the original Note;

(d) the name and address of the Paying Agent;

(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

(g) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes; and

(i) if in connection with a redemption pursuant to Section 3.07(c) hereof, any condition to such redemption.

At the Company’s’ request, the Trustee shall give the notice of redemption in the name of the Company and at its expense; provided that the Company shall have delivered to the Trustee, at least two Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

Section 3.04 Effect of Notice of Redemption.

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price (except as provided for in Section 3.07(c) hereof). The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 3.05 hereof, on and after the redemption date, interest ceases to accrue on Notes or portions of Notes called for redemption.

Section 3.05 Deposit of Redemption or Purchase Price.

Prior to 10:00 a.m. (New York City time) on the redemption or purchase date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest (including Additional Interest, if any) on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed or purchased.

60

If the Company complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after an applicable Record Date but on or prior to the related applicable Interest Payment Date, then any accrued and unpaid interest to the redemption or purchase date shall be paid to the Person in whose name such Note was registered at the close of business on such applicable Record Date. If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption or purchase date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06 Notes Redeemed or Purchased in Part.

Upon surrender of a Note that is redeemed or purchased in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

Section 3.07 Optional Redemption.

(a) The optional redemption provisions of Series A-1 Notes are set forth herein. The optional redemption provisions of any Series A-2 Notes issued hereunder will be included in the Series A-2 Notes or in any board resolution or supplemental indenture pursuant to which such Series A-2 Notes are issued. The Company may elect to redeem only Series A-1 Notes, only Series A-2 Notes or all Notes collectively, to the extent permitted by the redemption provisions contained herein and in the Notes.

(b) At any time prior to November 1, 2011, the Company may redeem all or a part of the Series A-1 Notes, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail to the registered address of each Holder or otherwise delivered in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Series A-1 Notes redeemed plus the Series A-1 Notes Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption (the “Series A-1 Notes Redemption Date”), subject to the rights of Holders on the relevant Series A-1 Notes Record Date to receive interest due on the relevant Series A-1 Notes Interest Payment Date.

(c) Until November 1, 2011, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Series A-1 Notes issued by it at a redemption price equal to 111.25% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Series A-1 Notes Redemption Date, subject to the right of Holders of Series A-1 Notes of record on the relevant Series A-1 Notes Record Date to receive interest due on the relevant Series A-1 Notes Interest Payment Date, with the net cash proceeds of one or more Equity Offerings; provided that at least 65% of the aggregate principal amount of Series A-1 Notes originally issued under this Indenture and any Additional Notes that are Series A-1 Notes issued under this Indenture after the Issue Date (excluding Series A-1 Notes and Additional Notes that are Series A-1 Notes held by the Company or Subsidiaries or Affiliates of the Company) remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption

61

occurs within 180 days of the date of closing of each such Equity Offering. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to, the completion of the related Equity Offering.

(d) Except pursuant to clause (b) or (c) of this Section 3.07, the Series A-1 Notes will not be redeemable at the Company’s option prior to November 1, 2011.

(e) On and after November 1, 2011, the Company may redeem the Series A-1 Notes, in whole or in part, upon not less than 30 nor more than 60 days prior notice by first-class mail, postage prepaid, with a copy to the Trustee, to each Holder at the address of such Holder appearing in the security register, at the redemption prices (expressed as percentages of principal amount of the Series A-1 Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Series A-1 Notes Redemption Date, subject to the right of Holders of record on the relevant Series A-1 Notes Record Date to receive interest due on the relevant Series A-1 Notes Interest Payment Date, if redeemed during the twelve-month period beginning on November 1 of each of the years indicated below:

Year	Percentage
2011	105.625	%
2012	102.813	%
2013 and thereafter	100.000	%

(f) Any redemption pursuant to this Section 3.07 or pursuant to the terms of any Series A-2 Notes shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

Section 3.08 Mandatory Redemption.

The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

Section 3.09 Offers to Repurchase by Application of Excess Proceeds.

(a) In the event that, pursuant to Section 4.10 hereof, the Company shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below. Any Asset Sale Offer will be made to Holders of Series A-1 Notes and, if Series A-2 Notes are issued, Holders of Series A-2 Notes.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than five Business Days after the termination of the Offer Period (the “Purchase Date”), the Company shall apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and, if required, Pari Passu Indebtedness (on a pro rata basis, if applicable), or, if less than the Offer Amount has been tendered, all Notes and Pari Passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after an applicable Record Date and on or before the related applicable Interest Payment Date, any accrued and unpaid interest and Additional Interest, if any, up to but excluding the Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such applicable Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

62

(d) Upon the commencement of an Asset Sale Offer, the Company shall send, by first-class mail, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and holders of Pari Passu Indebtedness. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

(2) the Offer Amount, the purchase price and the Purchase Date;

(3) that any Note not tendered or accepted for payment shall continue to accrue interest;

(4) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date;

(5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 (but in a minimum amount of $2,000);

(6) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer by book-entry transfer, to the Company, the Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

(7) that Holders shall be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(8) that, if the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall select the Notes and such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $2,000, or integral multiples of $1,000 in excess thereof, shall be purchased); and

(9) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased.

63

(e) On or before the Purchase Date, the Company shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.

(f) The Company, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased; provided, that each such new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof.

ARTICLE 4

COVENANTS

Section 4.01 Payment of Notes.

The Company shall pay or cause to be paid the principal of, premium, if any, Additional Interest, if any, and interest on the Notes of the applicable series on the dates and in the manner provided in such Notes. Principal, premium, if any, Additional Interest, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary, holds as of noon Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.

The Company shall pay all Additional Interest, if any, with respect to Notes of an applicable series in the same manner on the dates and in the amounts set forth in the applicable Registration Rights Agreement.

The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the applicable series of Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.02 Maintenance of Office or Agency.

The Company shall maintain in the Borough of Manhattan in the City of New York an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or

64

co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

The Company may also from time to time designate one or more other offices or agencies where the Notes of any series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan in the City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 hereof.

Section 4.03 Reports and Other Information.

(a) Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Company shall file with the SEC (and make available to the Trustee and Holders of the Notes (without exhibits), without cost to any Holder, within 15 days after the Company files them with the SEC) from and after the Issue Date,

(1) within 90 days (or any other time period then in effect under the rules and regulations of the Exchange Act with respect to the filing of a Form 10-K by a non-accelerated filer) after the end of each fiscal year, annual reports on Form 10-K, or any successor or comparable form, containing the information required to be contained therein, or required in such successor or comparable form;

(2) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, reports on Form 10-Q containing all quarterly information that would be required to be contained in Form 10-Q, or any successor or comparable form;

(3) promptly from time to time after the occurrence of an event required to be therein reported, such other reports on Form 8-K, or any successor or comparable form; and

(4) any other information, documents and other reports which the Company would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

in each case, in a manner that complies in all material respects with the requirements specified in such form; provided that the Company shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event the Company shall make available such information to prospective purchasers of Notes, in addition to providing such information to the Trustee and the Holders of the Notes, in each case within 15 days after the time the Company would be required to file such

65

information with the SEC, if it were subject to Section 13 or 15(d) of the Exchange Act. In addition, to the extent not satisfied by the foregoing, for so long as any Notes are outstanding, the Company shall furnish to Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(b) In the event that any direct or indirect parent company of the Company becomes a guarantor of the Notes, the Company may satisfy its obligations under this Section 4.03 with respect to financial information relating to the Company by furnishing financial information relating to such parent company; provided that the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Company and its Restricted Subsidiaries on a standalone basis, on the other hand.

(c) Notwithstanding the foregoing, the requirements of this Section 4.03 shall be deemed satisfied prior to the commencement of the Exchange Offer or the effectiveness of the Shelf Registration Statement (but in no event later than the date specified in the applicable Registration Rights Agreement by which the applicable Exchange Offer must be consummated) (1) by the filing with the SEC of the Exchange Offer Registration Statement or Shelf Registration Statement (or any other registration statement), and any amendments thereto, with such financial information that satisfies Regulation S-X of the Securities Act or (2) by posting reports that would be required to be filed substantially in the form required by the SEC on the Company’s website (or on the website of any of its parent companies) or providing such reports to the Trustee, with financial information that satisfied Regulation S-X of the Securities Act, subject to exceptions consistent with the presentation of financial information in the Offering Memorandum, to the extent filed within the times specified above.

(d) Notwithstanding anything herein to the contrary, the Company shall not be deemed to have failed to comply with any of its obligations hereunder for purposes of Section 6.01(a)(3) hereof until 90 days after the date any report hereunder is due.

Section 4.04 Compliance Certificate.

(a) The Company and each Guarantor (to the extent that such Guarantor is so required under the Trust Indenture Act) shall deliver to the Trustee, within 90 days after the end of each fiscal year ending after the Issue Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of the Company and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every condition and covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto).

(b) When any Default has occurred and is continuing under this Indenture, or if the Trustee or the holder of any other evidence of Indebtedness of the Company or any of their respective Subsidiaries gives any notice or takes any other action with respect to a claimed Default, the Company shall promptly (which shall be no more than 30 days) deliver to the Trustee by registered or certified mail or by facsimile transmission an Officer’s Certificate specifying such event and what action the Company proposes to take with respect thereto.

66

Section 4.05 Taxes.

The Company shall pay, and the Company shall cause each of its Restricted Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate negotiations or proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes of the applicable series.

Section 4.06 Stay, Extension and Usury Laws.

The Company and the Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.07 Limitation on Restricted Payments.

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

(I) declare or pay any dividend or make any payment or distribution on account of the Company’s, or any of its Restricted Subsidiaries’ Equity Interests, including, without limitation, payable in connection with any merger or consolidation other than:

(A) dividends or distributions by the Company payable solely in Equity Interests (other than Disqualified Stock) of the Company; or

(B) dividends, payments or distributions by a Restricted Subsidiary so long as, in the case of any dividend, payment or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly-Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;

(II) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Company, or any direct or indirect parent of the Company, including, without limitation, in connection with any merger or consolidation;

(III) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value in each case, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness, other than (a) Indebtedness permitted under clauses (7) and (8) of the covenant described under Section 4.09(b) or (b) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or

(IV) make any Restricted Investment

67

(all such payments and other actions set forth in clauses (I) through (IV) above (other than any exceptions thereof) being collectively referred to as “Restricted Payments”), unless, at the time of such Restricted Payment:

(1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

(2) immediately after giving effect to such transaction on a pro forma basis, the Company could incur $1.00 of additional Indebtedness under Section 4.09(a); and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), (2) (with respect to the payment of dividends on Refunding Capital Stock pursuant to clause (b) thereof only), (6)(c), (7), (9) and (14) (to the extent not deducted in calculating Consolidated Net Income) of Section 4.07(b), but excluding all other Restricted Payments permitted by Section 4.07(b)), is less than the sum of (without duplication):

(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) beginning October 1, 2008 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit; plus

(b) 100% of the aggregate net cash proceeds and the fair market value, as determined in good faith by the Company, of marketable securities or other property (other than assets or Equity Interests constituting entire portfolio companies owned by the Permitted Holders) received by the Company since immediately after the Issue Date (other than net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (12)(a) of Section 4.09(b) hereof) from the issue or sale of:

(i) (A) Equity Interests of the Company, including Treasury Capital Stock, but excluding cash proceeds and the fair market value, as determined in good faith by the Company, of marketable securities or other property received from the sale of:

(x) Equity Interests to employees, directors or consultants of the Company, any direct or indirect parent company of the Company and the Company’s Subsidiaries after the Issue Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of Section 4.07(b) hereof; and

(y) Designated Preferred Stock; and

(B) to the extent such net cash proceeds are actually contributed to the Company as equity (other than Disqualified Stock), Equity Interests of any of the Company’s direct or indirect parent companies (excluding contributions of the proceeds from the sale of Designated Preferred

68

Stock of any such companies or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of Section 4.07(b) hereof); or

(ii) debt securities of the Company that have been converted into or exchanged for such Equity Interests of the Company;

provided, however, that this clause (b) shall not include the proceeds from (W) Refunding Capital Stock, (X) Equity Interests or debt securities of the Company sold to a Restricted Subsidiary, as the case may be, (Y) Disqualified Stock or debt securities that have been converted into Disqualified Stock or (Z) Excluded Contributions; plus

(c) 100% of the aggregate amount of cash and the fair market value, as determined in good faith by the Company, of marketable securities or other property (other than assets or Equity Interests constituting entire portfolio companies owned by the Permitted Holders) contributed to the capital of the Company (other than as Disqualified Stock) following the Issue Date (other than (i) net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (12)(a) of Section 4.09(b) hereof, (ii) contributions from a Restricted Subsidiary or (iii) any Excluded Contribution); plus

(d) 100% of the aggregate amount received in cash and the fair market value, as determined in good faith by the Company, of marketable securities or other property (other than assets or Equity Interests constituting entire portfolio companies owned by the Permitted Holders) received by the Company or any Restricted Subsidiary by means of:

(i) the sale or other disposition (other than to the Company or a Restricted Subsidiary) of Restricted Investments made by the Company or its Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Company or its Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees, which constitute Restricted Investments by the Company or its Restricted Subsidiaries, in each case after the Issue Date; or

(ii) the sale (other than to the Company or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary (other than to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to clause (7) of Section 4.07(b) hereof or to the extent such Investment constituted a Permitted Investment) or a distribution or dividend from an Unrestricted Subsidiary, in each case, after the Issue Date; plus

(e) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary after the Issue Date, the fair market value of the Investment in such Unrestricted Subsidiary, as determined by the Company in good faith or if, in the case of an Unrestricted Subsidiary, such fair market value may exceed $35.0 million, in writing by an Independent Financial Advisor, at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary other than an Unrestricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to clause (7) of Section 4.07(b) hereof or to the extent such Investment constituted a Permitted Investment;

69

provided, however, that for purposes of determining the fair market value of such other property received by the Company or any Restricted Subsidiary or contributed to the capital of the Company, as the case may be, pursuant to clauses (3)(b), (c) and (d) above, the Company shall deliver to the Trustee an Officer’s Certificate signed by the Chief Financial Officer of the Company certifying as to the fair market value of such other property and, if the fair market value is at least $75.0 million, a written opinion of a recognized independent expert stating the fair market value of such other property.

(b) The foregoing provisions of Section 4.07(a) hereof shall not prohibit:

(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration thereof or the giving of the irrevocable redemption notice, as applicable, if at the date of declaration or notice such payment would have complied with the provisions of this Indenture;

(2) (a) the redemption, repurchase, defeasance, retirement or other acquisition of any Equity Interests (“Treasury Capital Stock”) or Subordinated Indebtedness of the Company or any Equity Interests of any direct or indirect parent company of the Company, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary) of, Equity Interests of the Company or any direct or indirect parent company of the Company to the extent contributed to the Company (in each case, other than any Disqualified Stock or Designated Preferred Stock) (“Refunding Capital Stock”) and (b) if immediately prior to the retirement of Treasury Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this Section 4.07(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of the Company) in an aggregate amount no greater than the aggregate amount per year of dividends per annum that were declarable and payable on such Treasury Capital Stock immediately prior to such retirement;

(3) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of the Company or a Guarantor made in exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Company or a Guarantor, as the case may be, which is incurred in compliance with Section 4.09 hereof so long as:

(a) the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired for value, plus the amount of any reasonable premium to be paid (including reasonable premiums) and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness;

(b) such new Indebtedness is subordinated to the Notes of the applicable series or the applicable Guarantee at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value;

70

(c) such new Indebtedness has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired; and

(d) such new Indebtedness has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired;

(4) a Restricted Payment to pay for the repurchase, redemption or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Company or any of its direct or indirect parent companies held by any future, present or former employee, director or consultant of the Company, any of its Restricted Subsidiaries or any of its direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, including any Equity Interests rolled over by management of the Company in connection with the Transaction, (x) upon the death or disability of such employee, director or consultant or (y) upon the resignation or other termination of employment of such employee, director or consultant; provided, however, that the aggregate Restricted Payments made under this clause (4) do not exceed in any calendar year $15.0 million (which shall increase to $25.0 million subsequent to the consummation of an underwritten public Equity Offering by the Company or any direct or indirect parent corporation of the Company) (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $25.0 million in any calendar year (which shall increase to $40.0 million subsequent to the consummation of an underwritten public Equity Offering by the Company or any direct or indirect parent of the Company)); provided further that such amount in any calendar year may be increased by an amount not to exceed:

(a) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the Company and, to the extent contributed to the Company, Equity Interests of any of the Company’s direct or indirect parent companies, in each case to members of management, directors or consultants of the Company, any of its Subsidiaries or any of its direct or indirect parent companies that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (3) of Section 4.07(a) hereof; plus

(b) the cash proceeds of key man life insurance policies received by the Company or its Restricted Subsidiaries after the Issue Date; less

(c) the amount of any Restricted Payments previously made with the cash proceeds described in clauses (a) and (b) of this clause (4);

and provided further that cancellation of Indebtedness owing to the Company or any of its Restricted Subsidiaries from members of management of the Company, any of the Company’s direct or indirect parent companies or any of the Company’s Subsidiaries in connection with a

71

repurchase of Equity Interests of the Company or any of its direct or indirect parent companies will not be deemed to constitute a Restricted Payment for purposes of this Section 4.07 or any other provision of this Indenture;

(5) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company or any of its Restricted Subsidiaries and of Preferred Stock of any Restricted Subsidiary issued in accordance with Section 4.09 hereof to the extent such dividends are included in the definition of “Fixed Charges”;

(6) (a) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by the Company after the Issue Date;

(b) the declaration and payment of dividends to a direct or indirect parent company of the Company, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of such parent corporation issued after the Issue Date, provided that the amount of dividends paid pursuant to this clause (b) shall not exceed the aggregate amount of cash actually contributed to the Company from the sale of such Designated Preferred Stock; or

(c) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this Section 4.07(b);

provided, however, in the case of each of (a), (b) and (c) of this clause (6), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or the declaration of such dividends on Refunding Capital Stock that is Preferred Stock, after giving effect to such issuance or declaration on a pro forma basis, the Company and its Restricted Subsidiaries on a consolidated basis would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

(7) Investments in Unrestricted Subsidiaries having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (7) that are at the time outstanding, without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash or marketable securities, not to exceed the greater of (x) $30.0 million and (y) 1.0% of Total Assets at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(8) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(9) the declaration and payment of dividends on the Company’s common stock (or payments of dividends to any direct or indirect parent entity to fund payments of dividends on such entity’s common stock), following the consummation of an underwritten public offering of the Company’s common stock or the common stock of any of its direct or indirect parent companies after the Issue Date, of up to 6% per annum of the net cash proceeds received by or contributed to the Company in or from any such public offering, other than public offerings with respect to the Company’s common stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

72

(10) Restricted Payments in an aggregate amount equal to the amount of Excluded Contributions previously received by the Company and its Restricted Subsidiaries;

(11) other Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (11) not to exceed the greater of (x) $30.0 million and (y) 1.0% of Total Assets at the time made;

(12) distributions or payments of Receivables Fees;

(13) any Restricted Payment made as part of the Transaction (including payments made after the Issue Date in respect of long-term incentive plans or tax gross-ups or other deferred compensation), and the fees and expenses related thereto, or used to fund amounts owed to Affiliates (including dividends to any direct or indirect parent of the Company to permit payment by such parent of such amounts), in each case to the extent permitted by (or, in the case of a dividend to fund such payment, to the extent such payment, if made by the Company, would be permitted by) Section 4.11 hereof;

(14) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness in accordance with the provisions similar to those described under Sections 4.10 and Section 4.14 hereof; provided that all Notes of any applicable series tendered in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have first been repurchased, redeemed or acquired for value;

(15) the declaration and payment of dividends by the Company to, or the making of loans to, any direct or indirect parent in amounts required for any direct or indirect parent companies to pay, in each case without duplication:

(a) franchise and excise taxes and other fees, taxes and expenses, in each case to the extent required to maintain their corporate existence;

(b) federal, state and local income taxes, to the extent such income taxes are attributable to the income of the Company and its Restricted Subsidiaries and, to the extent of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in any fiscal year does not exceed the amount that the Company and its Restricted Subsidiaries would be required to pay in respect of federal, state and local taxes for such fiscal year were the Company, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent entity;

(c) customary salary, bonus and other benefits payable to officers and employees of any direct or indirect parent company of the Company to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Company and its Restricted Subsidiaries;

73

(d) general corporate operating and overhead costs and expenses of any direct or indirect parent company of the Company to the extent such costs and expenses are attributable to the ownership or operation of the Company and its Restricted Subsidiaries; and

(e) fees and expenses other than to Affiliates of the Company related to any unsuccessful equity or debt offering of such parent entity; and

(16) the distribution, by dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Company or a Restricted Subsidiary by Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are cash and/or Cash Equivalents or were contributed to such Unrestricted Subsidiary in anticipation of such distribution, dividend or other payment);

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (7), (11) and (16) of this Section 4.07(b), no Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) The Company shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the last sentence of the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation shall be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to Section 4.07(a) hereof or under clause (7), (10) or (11) of Section 4.07(b) hereof, or pursuant to the definition of “Permitted Investment,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries that are not Guarantors to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary that is not a Guarantor to:

(1) (A) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or

(B) pay any liabilities owed to the Company or any of its Restricted Subsidiaries;

(2) make loans or advances to the Company or any of its Restricted Subsidiaries; or

(3) sell, lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.

(b) The restrictions in Section 4.08(a) hereof shall not apply to encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the ABL Facility, the Term Loan Facility and the related documentation;

74

(2) this Indenture and the Notes;

(3) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature discussed in clause (3) of Section 4.08(a) hereof on the property so acquired;

(4) applicable law or any applicable rule, regulation or order;

(5) any agreement or other instrument of a Person acquired by the Company or any Restricted Subsidiaries in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;

(6) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Company pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(7) Secured Indebtedness otherwise permitted to be incurred pursuant to Section 4.09 hereof and Section 4.12 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(8) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(9) other Indebtedness, Disqualified Stock or Preferred Stock of Foreign Subsidiaries permitted to be incurred subsequent to the Issue Date pursuant to the provisions of Section 4.09 hereof;

(10) customary provisions in joint venture agreements and other similar agreements relating solely to such joint venture;

(11) customary provisions contained in leases or licenses of intellectual property and other agreements, in each case, entered into in the ordinary course of business;

(12) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) hereof imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (11) of this Section 4.08(b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company, no more restrictive with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing; and

75

(13) restrictions created in connection with any Receivables Facility that, in the good faith determination of the Company are necessary or advisable to effect the transactions contemplated under such Receivables Facility.

Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company shall not issue any shares of Disqualified Stock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and subject to the second proviso in this Section 4.09(a), any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided further, that Restricted Subsidiaries that are not Guarantors may not incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to this Section 4.09(a) if, after giving pro forma effect to such incurrence or issuance (including a pro forma application of the net proceeds therefrom), the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock of Restricted Subsidiaries that are not Guarantors incurred or issued pursuant to this Section 4.09(a) would exceed $25.0 million.

(b) The provisions of Section 4.09(a) hereof shall not apply to:

(1) the incurrence of Indebtedness under Credit Facilities by the Company or any of its Restricted Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to an aggregate principal amount at any one time outstanding not to exceed the greater of (x) $175.0 million and (y) the Borrowing Base;

(2) the incurrence by the Company and any Guarantor of (a) Indebtedness represented by the Series A-1 Notes (including any Guarantee) (other than any Additional Notes) and any notes (including Guarantees thereof) issued in exchange for the Series A-1 Notes pursuant to the Registration Rights Agreement or similar agreement and (b) Indebtedness under the Term Loan Facility and/or Series A-2 Notes (including Guarantees thereof) (other than any Additional Notes) and any notes (including Guarantees thereof) issued in exchange for the Series A-2 Notes pursuant to a registration rights agreement, up to an aggregate principal amount of $310.0 million (plus up to an additional $15.0 million of Series A-2 Notes);

(3) Indebtedness of the Company and its Restricted Subsidiaries in existence on the Issue Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));

76

(4) Indebtedness (including Capitalized Lease Obligations) and Disqualified Stock incurred or issued by the Company or any of its Restricted Subsidiaries, and Preferred Stock issued by any of the Company’s Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (other than software) that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount at the date of such incurrence (including all Refinancing Indebtedness incurred to refinance any other Indebtedness incurred pursuant to this Section 4.09(b)(4)) not to exceed 4.0% of Total Assets; provided, however, that such Indebtedness exists at the date of such purchase or transaction or is created within 270 days thereafter (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (4) shall cease to be deemed incurred or outstanding for purposes of this Section 4.09(b)(4) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09(a) hereof without reliance on this Section 4.09(b)(4));

(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that

(A) such Indebtedness is not reflected on the balance sheet of the Company, or any of its Restricted Subsidiaries (Contingent Obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this subclause (A)); and

(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;

(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in the Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (7);

77

(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of the applicable series of such Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a person other than the Company or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (8);

(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary, provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of Preferred Stock not permitted by this clause (9);

(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness of the Company or any Restricted Subsidiary permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;

(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary equal to 100.0% of the net cash proceeds received by the Company since immediately after the Issue Date from the issue or sale of Equity Interests of the Company or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(b) and (3)(c) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this Section 4.09(b)(12)(b), does not at any one time outstanding exceed the greater of (x) $150.0 million and (y) 5.0% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this Section 4.09(b)(12)(b) shall cease to be deemed incurred or outstanding for purposes of this Section 4.09(b)(12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09(a) without reliance on this Section 4.09(b)(12)(b));

78

(13) the incurrence or issuance by the Company or any Restricted Subsidiary of Indebtedness or Disqualified Stock, and the issuance by any Restricted Subsidiary of Preferred Stock, in each case which serves to refund, refinance, replace, renew, extend or defease any Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund, refinance, replace, renew, extend or defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:

(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced, replaced, renewed, extended or defeased,

(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes of the applicable series or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes of the applicable series or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively, and

(C) shall not include (i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor that refinances Indebtedness or Disqualified Stock of the Company, (ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor, or (iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

provided further that subclause (A) of this clause (13) will not apply to any refunding or refinancing of any Secured Indebtedness;

(14) (x) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary, incurred or issued to finance an acquisition or (y) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Company or any Restricted Subsidiary or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that in the case of (x) and (y) after giving effect to such acquisition or merger, either (a) the Company would be permitted to incur at least $1.00 of additional

79

Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof, or (b) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is greater than immediately prior to such acquisition or merger;

(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within two Business Days of its incurrence;

(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;

(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or

(B) any guarantee by a Restricted Subsidiary of Indebtedness of the Company provided that such guarantee is incurred in accordance with Section 4.16 hereof,

(18) Indebtedness of Foreign Subsidiaries of the Company in an amount not to exceed, at any one time outstanding and together with any other Indebtedness incurred under this clause (18) of Section 4.09(b) hereof, the greater of (x) $50.0 million and (y) 10.0% of the total assets of the Foreign Subsidiaries on a consolidated basis as shown on the Company’s most recent balance sheet (it being understood that any Indebtedness incurred pursuant to this clause (18) of Section 4.09(b) hereof shall cease to be deemed incurred or outstanding for purposes of this clause (18) of Section 4.09(b) hereof but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or its Restricted Subsidiaries could have incurred such Indebtedness under Section 4.09(a) hereof without reliance on this clause (18) of Section 4.09(b) hereof);

(19) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business; and

(20) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to current or former officers, directors and employees thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent company of the Company to the extent described in clause (4) of Section 4.07(b) hereof.

(c) For purposes of determining compliance with this Section 4.09:

(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in

80

clauses (1) through (20) of Section 4.09(b) hereof or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company, in its sole discretion, shall classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and shall only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in one of the above clauses; and

(2) at the time of incurrence, the Company shall be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Sections 4.09(a) and 4.09(b) hereof; provided that all Indebtedness outstanding under the Credit Facilities on the Issue Date will be treated as incurred on the Issue Date under clause (1) of Section 4.09(b) hereof.

Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount, the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional Disqualified Stock or Preferred Stock, as applicable, shall in each case not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.09.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

The Company shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is subordinated or junior in right of payment to any Indebtedness of the Company or such Guarantor, as the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes of the applicable series or such Guarantor’s Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Guarantor, as the case may be.

Unsecured Indebtedness shall not be treated as subordinated or junior to Secured Indebtedness merely because it is unsecured. Senior Indebtedness shall not be treated as subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral.

81

Section 4.10 Asset Sales.

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to consummate an Asset Sale, unless:

(1) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (as determined in good faith by the Company or, if $40.0 million or more, the board of directors of the Company) of the assets sold or otherwise disposed of;

(2) except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that the following shall be deemed to be cash for purposes of this Section 4.10 and for no other purpose:

(A) any liabilities (as reflected in the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto) of the Company or such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes of the applicable series or liabilities to the extent owed to the Company or any Affiliate of the Company) that are assumed by the transferee of any such assets and for which the Company and all of its Restricted Subsidiaries have been validly released by all applicable creditors in writing;

(B) any securities, notes or other similar obligations received by the Company or such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received) within 180 days following the closing of such Asset Sale;

(C) any Designated Non-cash Consideration received by the Company or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (C) that is at that time outstanding, not to exceed the greater of (i) $50.0 million and (ii) 2.5% of Total Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value; and

(3) to the extent that any assets received by the Company and its Restricted Subsidiaries in such Asset Sale constitute securities or may be used or useful in a Similar Business, such assets are concurrently with their acquisition added to the Notes/Term Collateral securing the Notes, other than Excluded Assets and subject to the limitations and exclusions described in Section 10.01(b) hereof.

(b) Within 365 days after the receipt of any Net Proceeds of any Asset Sale, the Company or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale,

(1) to permanently reduce Indebtedness as follows:

(A) if the assets subject of such Asset Sale constitute Notes/Term Collateral, to permanently reduce (or offer to reduce, as applicable) Obligations under the Series A-1 Notes and the Series A-2 Debt on a pro rata basis; provided further that all reductions of obligations under the Notes shall be made as provided under Section 3.07 hereof with respect to Series A-1 Notes and as provided by the optional redemption provisions of any Series A-2 Notes with respect to the Series A-2 Notes, through open-market purchases (to the extent such purchases are at or above 100% of the principal amount thereof plus accrued unpaid interest) or by making an offer (in accordance with the procedures set forth under Section 4.10(c) hereof for an Asset Sale Offer) to all Holders of Notes to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;

82

(B) if the assets subject of such Asset Sale do not constitute Collateral, but constitute collateral for other Senior Indebtedness, which Lien is permitted by this Indenture, to permanently reduce Obligations under such other Senior Indebtedness that is secured by a Lien, which Lien is permitted by this Indenture, and to correspondingly reduce commitments with respect thereto;

(C) if the assets subject of such Asset Sale do not constitute Collateral, to permanently reduce Obligations under other Senior Indebtedness (and to correspondingly reduce commitments with respect thereto), provided that the Company shall equally and ratably reduce (or offer to reduce, as applicable) Obligations under the Series A-1 Notes and the Series A-2 Debt on a pro rata basis; provided further that all reductions of Obligations under the Notes shall be made as provided under Section 3.07 hereof with respect to Series A-1 Notes and as provided by the optional redemption provisions of any Series A-2 Notes with respect to the Series A-2 Notes, through open-market purchases (to the extent such purchases are at or above 100% of the principal amount thereof plus accrued and unpaid interest) or by making an offer (in accordance with the procedures set forth under Section 4.10(c) hereof) to all Holders of Notes to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid; or

(D) if the assets subject of such Asset Sale do not constitute Collateral, to permanently reduce Indebtedness of a Restricted Subsidiary that is not a Guarantor, other than Indebtedness owed to the Company or any Restricted Subsidiary;

(2) to make (A) an Investment in any one or more businesses; provided that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Company or another of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (B) capital expenditures or (C) acquisitions of other assets, in each of (A), (B) and (C), used or useful in a Similar Business provided that the assets (including Capital Stock) acquired with the Net Proceeds of a disposition of Collateral are pledged as Collateral to the extent required under the Collateral Documents, or

83

(3) to make an investment in (A) any one or more businesses; provided that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Company or another of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (B) properties or (C) acquisitions of other assets that, in each of (A), (B) and (C), replace the businesses, properties and/or assets that are the subject of such Asset Sale provided that the assets (including Capital Stock) acquired with the Net Proceeds of a disposition of Collateral are pledged as Collateral to the extent required under the Collateral Documents;

provided that, in the case of clauses (2) and (3) above, a binding commitment entered into not later than such 365 ^th day shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as the Company, or such other Restricted Subsidiary enters into such commitment with the good faith expectation that such Net Proceeds shall be applied to satisfy such commitment within 120 days of such commitment (an “Acceptable Commitment”) and, in the event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, or such Net Proceeds are not actually so invested or paid in accordance with clauses (2) or (3) above by the end of such 120-day period, then such Net Proceeds shall constitute Excess Proceeds.

(c) Any Net Proceeds from the Asset Sale that are not invested or applied as provided and within the time period set forth in Section 4.10(b) shall be deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $30.0 million, the Company shall make an offer to all Holders of the Notes of the applicable series and, if required by the terms of any Indebtedness that is pari passu with the Notes of such series or any Guarantee (“Pari Passu Indebtedness”), to the holders of such Pari Passu Indebtedness (an “Asset Sale Offer”), to purchase the maximum aggregate principal amount of the Notes of such series and such Pari Passu Indebtedness that is an integral multiple of $1,000 (but in minimum amounts of $2,000) that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Company shall commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $30.0 million by mailing the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. The Company may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the relevant 365 days or with respect to Excess Proceeds of $30.0 million or less.

To the extent that the aggregate amount of Notes of such series and such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes, subject to other covenants contained in this Indenture. If the aggregate principal amount of Notes of such series or the Pari Passu Indebtedness surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes of such series and such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes of such series or such Pari Passu Indebtedness tendered. Additionally, the Company may, at its option, make an Asset Sale Offer using proceeds from any Asset Sale at any time after consummation of such Asset Sale. Upon consummation of any Asset Sale Offer, any Net Proceeds not used to purchase Notes of such series in such Asset Sale Offer shall not be deemed Excess Proceeds and the Company may use any Net Proceeds not required to be used for general corporate purposes, subject to other covenants contained in this Indenture. To the extent the Asset Sale giving rise to the Asset Sale Offer involves Notes/Term Collateral, the Asset Sale Offer shall be made first to Holders of Series A-1 Notes and holders of Series A-2 Debt and, if any Excess Proceeds remain, second to holders of other Pari Passu Indebtedness.

84

(d) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Indebtedness outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.

(e) Notwithstanding the foregoing, any Indebtedness secured by a Permitted Lien as permitted under the Indenture may share in the proceeds of any Collateral securing such Permitted Lien in a manner consistent with the Notes/Term Intercreditor Agreement and ABL Intercreditor Agreement and the definition of Permitted Liens to the extent then applicable.

(f) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes of the applicable series pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in this Indenture by virtue thereof.

(g) If any Series A-2 Notes are issued under this Indenture, the provisions described in this Section will apply to the Series A-1 Notes and the Series A-2 Notes collectively on a pro rata basis.

Section 4.11 Transactions with Affiliates.

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each of the foregoing, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $12.5 million, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Company or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis; and

(2) the Company delivers to the Trustee, with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $25.0 million, a resolution adopted by the majority of the board of directors of the Company approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a).

(b) The provisions of Section 4.11(a) hereof shall not apply to the following:

(1) transactions between or among the Company or any of its Restricted Subsidiaries;

85

(2) Restricted Payments permitted by Section 4.07 hereof and the definition of “Permitted Investment”;

(3) the payment of management, consulting, monitoring and advisory fees and related expenses to the Investors pursuant to the Sponsor Management Agreement in an aggregate amount in any fiscal year not to exceed the greater of $7.0 million and 2.0% of EBITDA for such fiscal year (calculated, solely for the purpose of this clause (3), assuming (a) that such fees and related expenses had not been paid, when calculating Net Income, and (b) without giving effect to clause (g) of the definition of EBITDA) (plus any unpaid management, consulting, monitoring and advisory fees and related expenses within such amount accrued in any prior year) and the termination fees pursuant to the Sponsor Management Agreement not to exceed the amount set forth in the Sponsor Management Agreement as in effect on the Issue Date or any amendment thereto (so long as any such amendment is not disadvantageous to the Holders when taken as a whole as compared to the Sponsor Management Agreement in effect on the Issue Date);

(4) the payment of reasonable and customary fees paid to, and indemnities provided for the benefit of, former, current or future officers, directors, employees or consultants of the Company, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(5) transactions in which the Company or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or stating that such terms are not materially less favorable to the Company or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis;

(6) any agreement as in effect as of the Issue Date, or any amendment thereto (so long as any such amendment is not disadvantageous to the Holders when taken as a whole as compared to the applicable agreement as in effect on the Issue Date);

(7) the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Company or any of its Restricted Subsidiaries of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (7) to the extent that the terms of any such amendment or new agreement are not otherwise disadvantageous to the Holders when taken as a whole;

(8) the Transaction and the payment of all fees and expenses related to the Transaction;

(9) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture which are fair to the Company and its

86

Restricted Subsidiaries, in the reasonable determination of the board of directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(10) the issuance of Equity Interests (other than Disqualified Stock) of the Company to any Permitted Holder or to any director, officer, employee or consultant;

(11) sales of accounts receivable, or participations therein, in connection with any Receivables Facility;

(12) payments by the Company or any of its Restricted Subsidiaries to any of the Investors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures which payments are approved by a majority of the board of directors of the Company in good faith;

(13) payments or loans (or cancellation of loans) to employees or consultants of the Company, any of its direct or indirect parent companies or any of its Restricted Subsidiaries and employment agreements, stock option plans and other similar arrangements with such employees or consultants which, in each case, are approved by the Company in good faith;

(14) investments by the Investors in securities of the Company or any of its Restricted Subsidiaries so long as (i) the investment is being offered generally to other investors on the same or more favorable terms and (ii) the investment constitutes less than 5.0% of the proposed or outstanding issue amount of such class of securities; and

(15) the pledge of Equity Interests of any Unrestricted Subsidiary to lenders to support the Indebtedness of such Unrestricted Subsidiary owed to such lenders.

Section 4.12 Liens.

The Company shall not, and shall not permit any Guarantor to, directly or indirectly, create, incur, assume or otherwise cause or suffer to exist any Lien (except Permitted Liens) that secures obligations under any Indebtedness or any related Guarantee of the Company or any Guarantor (any such Lien, the “Initial Lien”), on any asset or property of the Company or any Guarantor, or any income or profits therefrom, or assign or convey any right to receive income therefrom except, in the case of any asset or property that does not constitute Collateral, any Initial Lien if the Notes of the applicable series are equally and ratably secured with (or on a senior basis to, in the case such Initial Lien secures any Subordinated Indebtedness) the obligations secured by such Initial Lien.

Any Lien created for the benefit of the Holders of the Notes of any series pursuant to the last clause of the preceding paragraph shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Initial Lien which release and discharge in the case of any sale of any such asset or property shall not affect any Lien that the Notes/Term Collateral Agent may have on the proceeds from such sale.

87

Section 4.13 Corporate Existence.

Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Company and its Restricted Subsidiaries; provided that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Restricted Subsidiaries, if the Company in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole.

Section 4.14 Offer to Repurchase Upon Change of Control.

(a) If a Change of Control occurs, unless the Company has previously or concurrently mailed a redemption notice with respect to all the outstanding Notes of a particular series as described under Section 3.07 hereof with respect to Series A-1 Notes or the optional redemption provisions of any Series A-2 Notes with respect to the Series A-2 Notes, the Company shall make an offer to purchase all of the Notes of such series pursuant to the offer described below (the “Change of Control Offer”) at a price in cash (the “Change of Control Payment”) equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, subject to the right of Holders of the Notes of record on the relevant applicable Record Date to receive interest due on the relevant applicable Interest Payment Date. Within 30 days following any Change of Control, the Company shall send notice of such Change of Control Offer by first-class mail, with a copy to the Trustee, to each Holder of Notes of such series to the address of such Holder appearing in the security register or otherwise in accordance with the procedures of DTC with a copy to the Trustee, with the following information:

(1) that a Change of Control Offer is being made pursuant to this Section 4.14 and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Company;

(2) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”);

(3) that any Note not properly tendered will remain outstanding and continue to accrue interest;

(4) that unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the paying agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) that Holders shall be entitled to withdraw their tendered Notes and their election to require the Company to purchase such Notes; provided that the

88

paying agent receives, not later than the close of business on the expiration date of the Change of Control Offer, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

(7) that if the Company is repurchasing less than all of the Notes of any series, the remaining Notes of such series will be equal in principal amount to the unpurchased portion of the Notes surrendered. The unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess thereof;

(8) the other instructions, as determined by the Company, consistent with this Section 4.14, that a Holder must follow; and

(9) if such notice is mailed prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional upon the occurrence of such Change of Control.

The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (a) the notice is mailed in a manner herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.14, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.14 by virtue thereof.

(b) On the Change of Control Payment Date, the Company shall, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer,

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered, and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to, and purchased by, the Company.

(c) The Company shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.14 applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

89

(d) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05 and 3.06 hereof.

Section 4.15 Events of Loss

(a) Subject to the ABL Intercreditor Agreement and the other Collateral Documents, in the case of an Event of Loss with respect to any Notes/Term Collateral, the Company or the affected Restricted Subsidiary, as the case may be, will apply the Net Loss Proceeds from such Event of Loss, within 365 days after receipt, at its option to:

(1) permanently reduce Obligations under the Series A-1 Notes and the Series A-2 Debt in accordance with Section 4.10(b)(1)(A);

(2) rebuild, repair, replace or construct improvements to the affected property or facility (or enter into a binding agreement to do so, provided that (x) such rebuilding, repair, replacement or construction has been completed within six months after the date of such binding agreement and (y) if such rebuilding, repair, replacement or construction is not consummated within the period set forth in subclause (x), the Net Loss Proceeds not so applied will be deemed to be Excess Loss Proceeds); or

(3) invest in assets and properties as described in Section 4.10(b)(2) and Section 4.10(b)(3), substituting the term “Event of Loss” for the term “Asset Sale,” the term “Net Loss Proceeds” for the term “Net Proceeds” and the term “Excess Loss Proceeds” for the term “Excess Proceeds.”

(b) In case of clauses (a)(2) or (a)(3) of this Section 4.15, any replacement assets or property shall be pledged as Notes/Term Collateral, in accordance with the Collateral Documents and otherwise in compliance with Section 4.19.

(c) Any Net Loss Proceeds from an Event of Loss that are not applied or invested as provided in Section 4.15(a) hereof will be deemed to constitute “Excess Loss Proceeds.” When the aggregate amount of Excess Loss Proceeds exceeds $30.0 million, the Company will make an offer (a “Loss Proceeds Offer”) to all Holders of Series A-1 Notes and holders of Series A-2 Debt to purchase the maximum principal amount of Series A-1 Notes and Series A-2 Debt that may be purchased out of such Excess Loss Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Series A-1 Notes and the Series A-2 Debt plus accrued and unpaid interest thereon, if any, to the date of purchase. If any Excess Loss Proceeds remain after consummation of a Loss Proceeds Offer, such Excess Loss Proceeds may be used for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Series A-1 Notes and Series A-2 Debt tendered into such Loss Proceeds Offer exceeds the amount of Excess Loss Proceeds, then the Series A-1 Notes and the Series A-2 Debt will be purchased on a pro rata basis based on the principal amount of Series A-1 Notes and Series A-2 Debt tendered. The Company may satisfy the foregoing obligations with respect to any Net Loss Proceeds from an Event of Loss by making a Loss Proceeds Offer with respect to such Net Loss Proceeds prior to the expiration of the relevant 365 days or with respect to Net Loss Proceeds of $30.0 million or less.

(d) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to a Loss Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in this Indenture by virtue thereof.

90

Section 4.16 Limitation on Guarantees of Indebtedness by Restricted Subsidiaries.

The Company shall not permit any of its Wholly-Owned Subsidiaries that are Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities), other than a Guarantor or a Foreign Subsidiary guaranteeing Indebtedness of another Foreign Subsidiary, to guarantee the payment of any Indebtedness of the Company or any other Guarantor unless:

(1) such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, providing for a Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of the Company or any Guarantor:

(i) if such Indebtedness is by its express terms subordinated in right of payment to the Notes of the applicable series or such Guarantor’s Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes of the applicable series; and

(ii) such Restricted Subsidiary waives and shall not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against the Company or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guarantee; and

(2) such Restricted Subsidiary within 30 days executes and delivers a joinder agreement to the Collateral Documents providing for a pledge of its assets as Collateral for the Notes of the applicable series to the same extent as set forth in the Indenture and the Collateral Documents;

provided that this Section 4.16 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.

Section 4.17 Reserved.

Section 4.18 Impairment of Security Interests.

Subject to the rights of the holders of Permitted Liens, the Company shall not, and shall not permit any of its Restricted Subsidiaries to take, or knowingly or negligently omit to take, any action which action or omission would or could reasonably be expected to have the result of materially impairing the security interest with respect to the Collateral for the benefit of the Trustee and Holders of the Notes, subject to limited exceptions. The Company shall not amend, modify or supplement, or permit or consent to any amendment, modification or supplement of, the Collateral Documents in any manner that would be adverse to the Holders of the Notes in any material respect, except as permitted under Article IX or X hereof, the Security Agreement or the Intercreditor Agreements.

91

Section 4.19 After-Acquired Property.

Promptly following the acquisition by the Company or any Guarantor of any After-Acquired Property (but subject to the limitations, if applicable, set forth in Section 10.01 hereof or otherwise included in the Collateral Documents), the Company or such Guarantor shall execute and deliver such mortgages, deeds of trust, security instruments, financing statements and certificates and opinions of counsel as shall be reasonably necessary to vest in the Notes/Term Collateral Agent a perfected security interest in such After-Acquired Property and to have such After-Acquired Property added to the Notes/Term Collateral or the ABL Collateral, as applicable, and thereupon all provisions of this Indenture relating to the Notes/Term Collateral or the ABL Collateral, as applicable, shall be deemed to relate to such After-Acquired Property to the same extent and with the same force and effect.

Section 4.20 Information Regarding Collateral.

The Company shall furnish to the Notes/Term Collateral Agent, with respect to the Company or any Guarantor, prompt written notice of any change in such Person’s (i) corporate name, (ii) jurisdiction of organization or formation, (iii) identity or corporate structure or (iv) Federal Taxpayer Identification Number. The Company shall not effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code of the applicable jurisdiction or otherwise that are required in order for the Notes/Term Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral. The Company also shall promptly notify the Notes/Term Collateral Agent in writing if any material portion of the Collateral is damaged or destroyed. Each year, at the time of delivery of the annual financial statements with respect to the preceding fiscal year, the Company shall deliver to the Notes/Term Collateral Agent a certificate of a financial officer setting forth the information required pursuant to the Perfection Certificate or confirming that there has been no change in such information since the date of the prior delivered Perfection Certificate.

Section 4.21 Further Assurances.

The Company and the Guarantors shall execute any and all further documents, financing statements, agreements and instruments, and take all further action that may be required under applicable law, or that the Trustee may reasonably request, in order to grant, preserve, protect and perfect the validity and priority of the security interests created or intended to be created by the Collateral Documents in the Collateral. In addition, from time to time, the Company shall reasonably promptly secure the obligations under this Indenture and the Collateral Documents by pledging or creating, or causing to be pledged or created, perfected security interests with respect to the Collateral. Such security interests and Liens will be created under the Collateral Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance reasonably satisfactory to the Notes/Term Collateral Agent (as to which the Notes/Term Collateral Agent will be entitled to receive and rely upon, without liability on its part, the advice of counsel and/or such direction as it may deem necessary or advisable from Holders of a majority of the outstanding principal amount of the Notes). Notwithstanding anything to the contrary set forth in this Indenture, the Company and its subsidiaries shall not be required to obtain any landlord waivers, estoppels or collateral access letters.

92

ARTICLE 5

SUCCESSORS

Section 5.01 Merger, Consolidation or Sale of All or Substantially All Assets.

(a) Company. The Company shall not, directly or indirectly, consolidate or merge with or into or wind up into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the Company’s properties or assets, in one or more related transactions, to any Person unless:

(1) either: (x) the Company is the surviving corporation; or (y) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership (including a limited partnership), trust or limited liability company organized or existing under the laws of the jurisdiction of organization of the Company or the laws of the United States, any state thereof, the District of Columbia or any territory thereof (such Person, as the case may be, being herein called the “Successor Company”); provided that in the case where the Successor Company is not a corporation, a co-obligor of the Notes is a corporation;

(2) the Successor Company, if other than the Company, expressly assumes all the obligations of the Company under the Notes and the Collateral Documents pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee, and the Registration Rights Agreement if the exchange offer contemplated therein has not been consummated or if the Company continues to have an obligation to file or maintain the effectiveness of a shelf registration statement as provided under such agreement;

(3) immediately after such transaction, no Default or Event of Default exists;

(4) immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable four-quarter period,

(A) the Company or the Successor Company, as applicable, would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof, or

(B) the Fixed Charge Coverage Ratio for the Company (or, if applicable, the Successor Company) and its Restricted Subsidiaries would be greater than such Ratio for the Company and its Restricted Subsidiaries immediately prior to such transaction;

(5) each Guarantor, unless it is the other party to the transactions described above, in which case Section 5.01(c)(1)(B) hereof shall apply, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under this Indenture, the Notes, the Collateral Documents and the Registration Rights Agreement if the exchange offer contemplated therein has not been consummated or if the Company continues to have an obligation to file or maintain the effectiveness of a shelf registration statement as provided under such agreement;

93

(6) the Company (or, if applicable, the Successor Company) shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with this Indenture;

(7) the Collateral transferred to the Successor Company shall (a) continue to constitute Collateral under the Indenture and the Collateral Documents, (b) be subject to the Lien in favor of the Notes/Term Collateral Agent for the benefit of the holders of the Notes, and (c) not be subject to any Lien, other than Liens permitted by the terms of the Indenture; and

(8) to the extent that the assets of the Person which is merged or consolidated with or into the Successor Company are assets of the type which would constitute Collateral under the Collateral Documents, the Successor Company shall take such actions as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Collateral Documents in the manner and to the extent required in the Indenture.

(b) The Successor Company shall succeed to, and be substituted for the Company, as the case may be, under this Indenture, the Guarantees and the Notes, as applicable. Notwithstanding clauses (3) and (4) of Section 5.01(a) hereof,

(1) any Restricted Subsidiary may consolidate with or merge into or transfer all or part of its properties and assets to the Company, and

(2) the Company may merge with an Affiliate of the Company, as the case may be, solely for the purpose of reincorporating the Company in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

(c) Guarantors. Subject to certain limitations described in this Indenture governing release of a Guarantee upon the sale, disposition or transfer of a guarantor, no Guarantor shall, and the Company shall not permit any Guarantor to, consolidate or merge with or into or wind up into (whether or not the Company or Guarantor is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(1) (A) such Guarantor is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership, trust or limited liability company organized or existing under the laws of the jurisdiction of organization of such Guarantor, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the “Successor Person”);

94

(B) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under this Indenture, such Guarantor’s related Guarantee and the Collateral Documents pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default or Event of Default exists;

(D) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with this Indenture;

(E) the Collateral transferred to the Successor Person shall (i) continue to constitute Collateral under the Indenture and the Collateral Documents, (ii) be subject to the Lien in favor of the Notes/Term Collateral Agent for the benefit of the holders of the Notes, and (iii) not be subject to any Lien, other than Liens permitted by the terms of this Indenture; and

(F) to the extent that the assets of the Person which is merged or consolidated with or into the Successor Person are assets of the type which would constitute Collateral under the Collateral Documents, the Successor Person will take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Collateral Documents in the manner and to the extent required in this Indenture; or

(2) the transaction is made in compliance with Section 4.10 hereof.

(d) Subject to certain limitations described in this Indenture, the Successor Person shall succeed to, and be substituted for, such Guarantor under this Indenture and such Guarantor’s Guarantee. Notwithstanding the foregoing, any Guarantor may (i) merge into or transfer all or part of its properties and assets to another Guarantor or the Company, (ii) merge with an Affiliate of the Company solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof or (iii) convert into a corporation, partnership, limited partnership, limited liability company or trust organized under the laws of the jurisdiction of organization of such Guarantor, in each case without regard to the requirements set forth in Section 5.01(c) hereof.

Section 5.02 Successor Corporation Substituted.

Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Company or any Guarantor in accordance with Section 5.01 hereof, the successor corporation formed by such consolidation or into or with which the Company or such Guarantor, as the case may be, is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the Company or such Guarantor, as the case may be, shall refer instead to the successor corporation and not to the Company or such Guarantor, as the case may be), and may exercise every right and power of the Company or such Guarantor, as the case may be, under this Indenture with the same effect as if such successor Person had been named as the Company or such Guarantor, as the case may be, herein; provided that the predecessor, as the case may be, shall not be

95

relieved from the obligation to pay the principal of and interest and Additional Interest, if any, on the Notes except in the case of a sale, assignment, transfer, conveyance or other disposition of all of the assets of the Company or such Guarantor, as the case may be, that meets the requirements of Section 5.01 hereof.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01 Events of Default.

(a) An “Event of Default” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) default in payment when due and payable (whether at maturity, upon redemption, acceleration or otherwise), of principal of, or premium, if any, on (A) with respect to Holders of the Series A-1 Notes, the Series A-1 Notes and (B) with respect to Holders of any Series A-2 Notes, the Series A-2 Notes;

(2) default for 30 days or more in the payment when due of interest or Additional Interest on or with respect to (A) with respect to Holders of the Series A-1 Notes, the Series A-1 Notes and (B) with respect to Holders of any Series A-2 Notes, the Series A-2 Notes;

(3) failure by the Company or any Guarantor for 60 days after receipt of written notice given by the Trustee or the holders of not less than 25% of the aggregate principal amount of all then outstanding Series of Debt (unless such failure affects some but not all Series of Debt, in which case the notice of such failure may be given by the Trustee or the holders of not less than 25% of the aggregate principal amount of the then outstanding Series of Debt that are affected by such failure) to comply with any of its obligations, covenants or agreements (other than a default referred to in clauses (1) and (2) above) contained in the Indenture, the Notes or the Collateral Documents;

(4) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries, other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both:

(a) such default either results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or relates to an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated maturity; and

96

(b) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at stated final maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, aggregate $50.0 million or more at any one time outstanding;

(5) failure by the Company or any Significant Subsidiary to pay final judgments aggregating in excess of $50.0 million, which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;

(6) the Company or any Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

(i) commences proceedings to be adjudicated bankrupt or insolvent;

(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;

(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due;

(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Company or any Significant Subsidiary, in a proceeding in which the Company or any Significant Subsidiary is to be adjudicated bankrupt or insolvent;

(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Significant Subsidiary, or for all or substantially all of the property of the Company or any Significant Subsidiary; or

(iii) orders the liquidation of the Company or any Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days;

(8) the Guarantee of any Significant Subsidiary shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer

97

of any Guarantor that is a Significant Subsidiary, as the case may be, denies that it has any further liability under its Guarantee or gives notice to such effect, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture; or

(9) any of the Collateral Documents ceases to be in full force and effect, or any of the Collateral Documents ceases to give the holders of the Notes the Liens purported to be created thereby, or any of the Collateral Documents is declared null and void or the Company or any Restricted Subsidiary denies in writing that it has any further liability under any Collateral Document or gives written notice to such effect (in each case, other than in accordance with the terms of this Indenture or the terms of the Collateral Documents), provided that if a failure of the sort described in this clause (9) is susceptible of cure, no Event of Default shall arise under this clause (9) with respect thereto until 30 days after notice of such failure shall have been given to the Company by the Trustee or the holders of not less than 25% of the aggregate principal amount of all then outstanding Series of Debt (unless such failure affects some but not all Series of Debt, in which case the notice of such failure may be given by the holders of not less than 25% of the aggregate principal amount of the then outstanding Series of Debt that are affected by such failure).

(b) In the event of any Event of Default specified in clause (4) of Section 6.01(a) hereof, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose:

(1) the Indebtedness or Guarantee that is the basis for such Event of Default has been discharged; or

(2) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or

(3) the default that is the basis for such Event of Default has been cured.

Section 6.02 Acceleration.

If any Event of Default (other than an Event of Default specified in clause (6) or (7) of Section 6.01(a) hereof) occurs and is continuing under this Indenture, the Trustee or the holders of not less than 25% of the aggregate principal amount of all then outstanding Series of Debt (unless such Event of Default affects some but not all Series of Debt, in which case the holders of not less than 25% of the aggregate principal amount of the then outstanding Series of Debt that are affected by such Event of Default) may (subject to the terms and conditions of the Notes/Term Intercreditor Agreement) declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately; provided, however, that (i) with respect to any Event of Default specified in clause (1) or (2) of Section 6.01(a) hereof with respect to the Series A-1 Notes but not the Series A-2 Notes (if issued) or the Term Loans, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Series A-1 Notes may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Series A-1 Notes to be due and payable immediately and (ii) with respect to any Event of Default specified in clause (1) or (2) of Section 6.01(a) hereof with respect to the Series A-2 Notes (if issued), but not the Series A-1 Notes or the Term Loans,

98

the Trustee or the holders of at least 25% in principal amount of the then outstanding Series A-2 Notes may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Series A-2 Notes to be due and payable immediately.

Upon the effectiveness of such declaration, such principal and interest shall be due and payable immediately. The Trustee shall have no obligation to accelerate the Notes if and so long as a committee of its Responsible Officers in good faith determines acceleration is not in the best interest of the Holders.

Notwithstanding the foregoing, in the case of an Event of Default arising under clause (6) or (7) of Section 6.01(a) hereof, all outstanding Notes shall be due and payable immediately without further action or notice.

The holders of a majority of the aggregate principal amount of all then outstanding Series of Debt (unless such Event of Default affects some but not all Series of Debt, in which case the holders of a majority of the aggregate principal amount of the then outstanding Series of Debt that are affected by such Event of Default), by notice to the Trustee, may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest, Additional Interest, if any, or premium that has become due solely because of the acceleration) have been cured or waived; provided that any rescission of acceleration of the Series A-1 Notes, which acceleration resulted from an Event of Default specified in clause (1) or (2) of Section 6.01(a) hereof, must be approved by the Holders of more than 50% in principal amount of the then outstanding Series A-1 Notes, and any rescission of acceleration of the Series A-2 Notes (if issued), which acceleration resulted from an Event of Default specified in clause (1) or (2) of Section 6.01(a) hereof, must be approved by the Holders of more than 50% in principal amount of the then outstanding Series A-2 Notes.

Section 6.03 Other Remedies.

If an Event of Default occurs and is continuing with respect to any series of Notes, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes of such series or to enforce the performance of any provision of the Notes of such series or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

In addition to the right of acceleration set forth in Section 6.02 hereof, if an Event of Default occurs and is continuing under this Indenture, the Trustee or the Notes/Term Collateral Agent, as applicable, shall, subject to the provisions contained in the Intercreditor Agreements, have the right to exercise remedies with respect to the Collateral such as foreclosure, as are available under this Indenture, the Collateral Documents and at law.

Section 6.04 Waiver of Past Defaults.

The holders of a majority of the aggregate principal amount of all then outstanding Series of Debt (unless such Event of Default affects some but not all Series of Debt, in which case the holders of a majority of the aggregate principal amount of the then outstanding Series of Debt

99

that are affected by such Event of Default), by notice to the Trustee, may waive any existing Default and its consequences under the Indenture or the Collateral Documents except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder and rescind any acceleration with respect to the Notes and its consequences (provided such rescission would not conflict with any judgment of a court of competent jurisdiction); provided that any rescission of acceleration of the Series A-1 Notes, which acceleration resulted from an Event of Default specified in clause (1) or (2) of Section 6.01(a) hereof, must be approved by the Holders of more than 50% in principal amount of the then outstanding Series A-1 Notes, and any rescission of acceleration of the Series A-2 Notes (if issued), which acceleration resulted from an Event of Default specified in clause (1) or (2) of Section 6.01(a) hereof, must be approved by the holders of more than 50% in principal amount of the then outstanding Series A-2 Notes. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05 Control by Majority.

Subject to the other provisions of this Article 6 and restrictions contained in the Intercreditor Agreements, Holders of a majority in principal amount of the then outstanding Series A-1 Notes (together with any Series A-2 Notes, if issued) may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability and the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. In case an Event of Default shall occur (which shall not be cured), the Trustee shall be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of its own affairs under the circumstances. Notwithstanding any provision to the contrary in this Indenture, the Trustee is under no obligation to exercise any of its rights or powers under this Indenture unless the Trustee shall have received indemnity, security or pre-funding to its satisfaction, against any loss, liability or expense.

Section 6.06 Limitation on Suits.

Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless, subject to the provisions of the Intercreditor Agreements:

(1) such Holder has previously given the Trustee written notice that an Event of Default is continuing;

(2) holders of at least 25% in aggregate principal amount of all then outstanding Series of Notes (or, in the case of an Event of Default that affects some but not all Series of Notes, holders of at least 25% in the aggregate principal amount of the then outstanding Series of Notes that are affected by such Event of Default) have requested the Trustee to pursue the remedy;

(3) Holders of the Notes have offered the Trustee and the Trustee shall have received, if requested, reasonable security, indemnity or pre-funding against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of such security, indemnity or pre-funding; and

100

(5) holders of a majority in principal amount of all then outstanding Series of Notes (or, in the case of an Event of Default that affects some but not all Series of Notes, holders of a majority in principal amount of the then outstanding Series of Notes that are affected by such Event of Default) have not given the Trustee a direction inconsistent with such request within such 60-day period.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

Section 6.07 Rights of Holders of Notes to Receive Payment.

Notwithstanding any other provision of this Indenture or the Intercreditor Agreements, the right of any Holder of a Note to receive payment of principal, premium, if any, and Additional Interest, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08 Collection Suit by Trustee.

If an Event of Default specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, and Additional Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09 Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding has been instituted.

Section 6.10 Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.11 Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

101

Section 6.12 Trustee May File Proofs of Claim.

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes including the Guarantors), its creditors or its property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.13 Priorities.

If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order:

(i) to the Trustee firstly and the Notes/Term Collateral Agent secondly, their respective agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the Notes/Term Collateral Agent and the costs and expenses of collection;

(ii) subject to the terms of the Notes/Term Intercreditor Agreement, to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and Additional Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and Additional Interest, if any, and interest, respectively; and

(iii) to the Company or to such party as a court of competent jurisdiction shall direct, including a Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.13.

102

Section 6.14 Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

Section 7.01 Duties of Trustee.

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee (it being agreed that the permissive right of the Trustee to take actions enumerated in this Indenture shall not be construed as a duty); and

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this paragraph (c) does not limit the effect of paragraph (b) of this Section 7.01;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

103

(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee and the Trustee shall have received, if requested, reasonable indemnity, pre-funding or security against any loss, liability or expense.

(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

Section 7.02 Rights of Trustee.

(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

104

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

(h) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) In the event the Company is required to pay Additional Interest, the Company will provide written notice to the Trustee of the Company’s obligation to pay Additional Interest no later than 15 days prior to the next applicable Interest Payment Date, which notice shall set forth the amount of the Additional Interest to be paid by the Company. The Trustee shall not at any time be under any duty or responsibility to any Holders to determine whether the Additional Interest is payable and the amount thereof.

(k) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the Holders of not less than a majority in principal amount of the Notes at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney, at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation.

(l) The Trustee may request that the Company deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any Person authorized to sign an Officer’s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.

(m) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; loss or malfunction of utilities, computer (hardware or software) or communication services; strikes or similar labor disputes; and acts of civil or military authorities and governmental action.

Section 7.03 Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

105

Section 7.04 Trustee’s Disclaimer.

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05 Notice of Defaults.

If a Default with respect to a series of Notes occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of Notes of such series a notice of the Default within 90 days after it occurs. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. The Trustee shall not be deemed to know of any Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is such a Default is received by the Trustee at the Corporate Trust Office of the Trustee.

Section 7.06 Reports by Trustee to Holders of the Notes.

Within 60 days after each May 15, beginning with the May 15 following the date of this Indenture, and for so long as Notes of any series remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with Section 313(a) of the Trust Indenture Act (but if no event described in Section 313(a) of the Trust Indenture Act has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with Section 313(b) of the Trust Indenture Act. The Trustee shall also transmit by mail all reports as required by Section 313(c) of the Trust Indenture Act.

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with Section 313(d) of the Trust Indenture Act. The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange.

Section 7.07 Compensation and Indemnity.

For the purposes of this Section 7.07, the Trustee and the Notes/Term Collateral Agent are referred to collectively as the “Indemnified Parties,” and each as an “Indemnified Party.” The Company and the Guarantors, jointly and severally, shall pay to each Indemnified Party from time to time such compensation (with respect to the Trustee, for its acceptance of this Indenture and services hereunder, and with respect to the Notes/Term Collateral Agent, for its acceptance of the Notes/Term Intercreditor Agreement and services thereunder) as the parties shall agree in writing from time to time. Neither Indemnified Party’s compensation shall be limited by any law on compensation of a trustee of an express trust. The Company and the Guarantors, jointly and severally, shall reimburse each Indemnified Party promptly upon request for all reasonable disbursements, advances and expenses (including costs of

106

collection) incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of each Indemnified Party’s agents, experts and counsel.

The Company and the Guarantors, jointly and severally, shall indemnify each Indemnified Party for, and hold each Indemnified Party harmless against, any and all loss, damage, claims, liability or expense (including attorneys’ fees) incurred by it in connection with the acceptance or administration of this trust (in the case of the Trustee) and the performance of its duties hereunder or under the Collateral Documents (including the costs and expenses of enforcing this Indenture or the Collateral Documents against the Company or any of the Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Company or any Guarantor, or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder or under the Collateral Documents). Each Indemnified Party shall notify the Company promptly of any claim for which it may seek indemnity. Failure by such Indemnified Party to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and such Indemnified Party may have separate counsel and the Company shall pay the fees and expenses of such counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by such Indemnified Party through such Indemnified Party’s own willful misconduct or gross negligence.

The obligations of the Company under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Indemnified Parties.

Notwithstanding anything to the contrary in Section 4.12 hereof, to secure the payment obligations of the Company and the Guarantors in this Section 7.07, the Indemnified Parties shall have a Lien prior to the Notes on all money or property held or collected by the Indemnified Parties, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When an Indemnified Party incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(6) or (7) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

Each Indemnified Party shall comply with the provisions of Section 313(b)(2) of the Trust Indenture Act to the extent applicable.

Section 7.08 Replacement of Trustee.

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10 hereof;

(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

107

(c) a custodian or public officer takes charge of the Trustee or its property; or

(d) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Company’s expense), the Company or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

Section 7.09 Successor Trustee by Merger, etc.

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

Section 7.10 Eligibility; Disqualification.

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of Sections 310(a)(1), (2) and (5) of the Trust Indenture Act. The Trustee is subject to Section 310(b) of the Trust Indenture Act.

Section 7.11 Preferential Collection of Claims Against Company.

The Trustee is subject to Section 311(a) of the Trust Indenture Act, excluding any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent indicated therein.

108

Section 7.12 Intercreditor Agreements, Security Agreement and Other Collateral Documents.

The Trustee is hereby directed and authorized by the Holders of Notes to execute and deliver, or cause the Notes/Term Collateral Agent to execute and deliver, the Intercreditor Agreements, the Security Agreement and any other Collateral Documents to the extent it is named as a party therein. Whether or not so expressly stated therein, in entering into, or taking (or forbearing from) any action under or pursuant to, the Intercreditor Agreements, the Security Agreement or any other Collateral Documents, the Trustee and the Notes/Term Collateral Agent each shall have all of the rights, immunities, indemnities and other protections granted to it under this Indenture (in addition to those that may be granted to it under the terms of such other agreement or agreements). The Trustee and each Holder of Series A-1 Notes (and, if issued, each Holder of Series A-2 Notes) hereby authorizes the Notes/Term Collateral Agent to execute and deliver the Notes/Term Intercreditor Agreement for the benefit of the Holders of Notes and agrees to be bound by all of the provisions of the Notes/Term Intercreditor Agreement. In addition, each of the Trustee and each Holder of Series A-1 Notes (and, if issued, each Holder of Series A-2 Notes) acknowledges and agrees that the Notes/Term Collateral Agent has entered into the ABL Intercreditor Agreement, the Security Agreement and other Collateral Documents for the benefit of the Holders of Notes and agrees to be bound by all of the provisions thereof. In addition, each Holder of Series A-1 Notes (and, if issued, each Holder of Series A-2 Notes) hereby authorizes the Trustee to replace the Notes/Term Collateral Agent as a party to each document to which the Notes/Term Collateral Agent is a party, including at such time as there are no Term Loans outstanding.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.

The Company may, at its option and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8. To the extent the Company exercises its option under Section 8.02 or 8.03 hereof, such election may be made by the Company with respect to only the Series A-1 Notes, only the Series A-2 Notes (if issued), or both Series of Notes collectively.

Section 8.02 Legal Defeasance and Discharge.

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes of the applicable series and related Guarantees on the date the conditions set forth below are satisfied (“Legal Defeasance”). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes of the applicable series, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (a) and (b) below, and to have satisfied all their other obligations with respect to the Notes of such series under such Notes, this Indenture, including that of the Guarantors, and the Collateral Documents (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders of Notes of such series to receive payments in respect of the principal of, premium, if any, and interest on the Notes of such series when such payments are due solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;

109

(b) the Company’s obligations with respect to Notes of such series concerning issuing temporary Notes of such series, registration of such Notes, mutilated, destroyed, lost or stolen Notes of such series and the maintenance of an office or agency for payment and money for security payments held in trust;

(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Company’s obligations in connection therewith;

(d) this Section 8.02; and

(e) the priority of payment provisions between the Series A-1 Notes and the Series A-2 Debt contained in the Notes/Term Intercreditor Agreement.

Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

Section 8.03 Covenant Defeasance.

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20 and 4.21 hereof and clauses (4) and (5) of Section 5.01(a), Sections 5.01(c) and 5.01(d) hereof with respect to the outstanding Notes of a particular series on and after the date the conditions set forth in Section 8.04 hereof are satisfied (“Covenant Defeasance”), and the Notes of such series shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes of such series, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(a)(3), 6.01(a)(4), 6.01(a)(5), 6.01(a)(6) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(a)(7) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(a)(8) and 6.01(a)(9) hereof shall not constitute Events of Default with respect to the Notes of such series.

110

Section 8.04 Conditions to Legal or Covenant Defeasance.

The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes of a particular series:

In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes of a particular series:

(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes of such series, cash in U.S. dollars, Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes of such series on the stated maturity date or on the redemption date, as the case may be, of such principal, premium, if any, or interest on such Notes and the Company must specify whether such Notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,

(a) the Company has received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(b) since the issuance of the Notes of such series, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes of such series will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Notes of such series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that resulting from borrowing funds to be applied to make the deposit required to effect such Legal Defeasance or Covenant Defeasance and any similar and simultaneous deposit relating to other Indebtedness, and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, the ABL Facility, the Term Loan Facility or any other material agreement or instrument (other than this Indenture only if all Notes are to be defeased) to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound (other than that resulting with respect to any Indebtedness being defeased from any borrowing of funds to be applied to make the deposit required to effect such Legal Defeasance or Covenant Defeasance and any similar and simultaneous deposit relating to such Indebtedness, and the granting of Liens in connection therewith);

111

(6) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

(7) the Company shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or any Guarantor or others; and

(8) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Section 8.05 Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 8.06 hereof, all money and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Notes of the applicable series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including a Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Additional Interest, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes of the applicable series.

Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04 hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06 Repayment to Company.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium and Additional Interest, if any, or interest on any Note of the applicable series and remaining unclaimed for two years after such principal, and premium and Additional Interest, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the

112

Holder of such Note shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease.

Section 8.07 Reinstatement.

If the Trustee or Paying Agent is unable to apply any United States dollars or Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture with respect to the Notes of a particular series and the Notes of such series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Company makes any payment of principal of, premium and Additional Interest, if any, or interest on any Note of such series following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes of such series to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01 Without Consent of Holders of Notes.

Notwithstanding Section 9.02 hereof, the Company, any Guarantor (with respect to a Guarantee or this Indenture) and the Trustee (and to the extent applicable, the Notes/Term Collateral Agent) may amend or supplement this Indenture, the Collateral Documents and any Guarantee or Notes without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes of such series in addition to or in place of certificated Notes;

(3) to comply with Section 5.01 hereof;

(4) to provide for the assumption of the Company’s or any Guarantor’s obligations to the Holders;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under this Indenture of any such Holder;

(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Company or any Guarantor;

(7) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act;

(8) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee thereunder pursuant to the requirements thereof;

113

(9) to provide for the issuance of exchange notes or private exchange notes, which are identical to exchange notes except that they are not freely transferable;

(10) to provide for the issuance of Additional Notes in accordance with this Indenture and to secure Additional Note Obligations, if any;

(11) to add a Guarantor under this Indenture or to release a Guarantor in accordance with the terms of this Indenture;

(12) to conform the text of this Indenture, Guarantees or the Notes to any provisions of the “Description of Series A-1 Notes” section of the Offering Memorandum (or any similar description with respect to the Series A-2 Notes) to the extent such provision in such “Description of Series A-1 Notes” section (or any description of the Series A-2 Notes) was intended to be a verbatim recitation of a provision of this Indenture, Guarantee or Notes;

(13) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided, however, that (i) compliance with this Indenture as so amended would not result in the Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer the Notes; or

(14) to provide for the succession of any parties to the Collateral Documents or the Intercreditor Agreements (and other amendments that are administrative or ministerial in nature) in connection with an amendment, renewal, extension, substitution, refinancing, restructuring, replacement, supplementing or other modification from time to time of the ABL Facility, the Term Loan Facility or any other agreement that is not prohibited by this Indenture;

(15) to provide for the release or addition of Collateral or Guarantees in accordance with the terms of this Indenture and the Collateral Documents;

(16) to provide for the issuance of the Series A-2 Notes in a manner consistent with the terms of this Indenture, whether through a board resolution or supplemental indenture; or

(17) to provide for the succession of the Trustee as collateral agent under this Indenture, the ABL Intercreditor Agreement, the Notes/Term Intercreditor Agreement and the other Collateral Documents.

Upon the request of the Company accompanied by a resolution of its boards of directors authorizing the execution of any such amendment or supplement, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee and the Notes/Term Collateral Agent shall join with the Company and the Guarantors in the execution of any amendment or supplement authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee and the Notes/Term Collateral Agent shall not be obligated to enter into such amendment or supplement that affects its own rights, duties or immunities under this Indenture or otherwise. Notwithstanding the foregoing, no Opinion of Counsel shall be required in connection with the addition of a Guarantor under this Indenture upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, and delivery of an Officer’s Certificate.

114

Section 9.02 With Consent of Holders of Notes.

Except as provided below in this Section 9.02, and subject to the provisions of the Intercreditor Agreements, the Company and the Trustee (and the Notes/Term Collateral Agent to the extent a party to the applicable documents) may amend or supplement this Indenture, the Notes, the Guarantees and the Collateral Documents with the consent of the holders of at least a majority in aggregate principal amount of the Series A-1 Notes and the Series A-2 Notes (if any) (in each case, including Additional Notes, if any) and the Term Loans then outstanding, collectively, voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium and Additional Interest, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Notes, the Guarantees or the Collateral Documents may be waived with the consent of the holders of a majority in aggregate principal amount of the Series A-1 Notes and the Series A-2 Notes (if any) (in each case, including Additional Notes, if any) and the Term Loans then outstanding, collectively, voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes); provided that any provision or Default that affects some but not all Series of Debt may be amended, supplemented or waived, as the case may be, with the consent of the holders of a majority in aggregate principal amount of the then outstanding Series of Debt that are affected by such provision or Default. Section 2.08 hereof and Section 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

Upon the request of the Company accompanied by a resolution of its boards of directors authorizing the execution of any such amendment or supplement, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the holders of the applicable Series of Debt, as applicable, as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee (and the Notes/Term Collateral Agent to the extent a party to the applicable document) shall join with the Company in the execution of such amendment or supplement unless such amendment or supplement directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amendment or supplement.

It shall not be necessary for the consent of the holders of the applicable Series of Debt, as applicable, under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver.

Without the consent of each affected Holder of Notes of a particular series, an amendment or waiver under this Section 9.02 may not (with respect to any Notes of such series held by a non-consenting Holder):

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

115

(2) reduce the principal of or change the fixed final maturity of any such Note or alter or waive the provisions with respect to the redemption of such Notes (other than provisions relating to Section 3.09, Section 4.10 and Section 4.14 hereof to the extent that any such amendment or waiver does not have the effect of reducing the principal of or changing the fixed final maturity of any such Note or altering or waiving the provisions with respect to the redemption of such Notes);

(3) reduce the rate of or change the time for payment of interest on any Note of such series;

(4) (A) waive a Default in the payment of principal of or premium, if any, or interest on the Notes of the applicable series, except a rescission of acceleration of the Notes of such series by the holders of a majority in aggregate principal amount of all then outstanding Series of Debt (or, in the case of a Default that affects some but not all Series of Debt, by the holders of a majority in aggregate principal amount of the then outstanding Series of Debt that are affected by such Default), and a waiver of the payment default that resulted from such acceleration, or (B) waive a Default in respect of a covenant or provision contained in the Indenture or any Guarantee which cannot be amended or modified without the consent of all Holders of Notes of the applicable series;

(5) make any Note of such series payable in money other than U.S. dollars;

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of or premium, if any, or interest or Additional Interest on the Notes of such series;

(7) make any change in these amendment and waiver provisions;

(8) impair the right of any Holder to receive payment of principal of, premium, if any, or interest on such Holder’s Notes of such series on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes of such series or the Guarantees;

(9) make any change to or modify the ranking of the Notes of the applicable series that would adversely affect the Holders of the Notes of such series;

(10) except as expressly permitted by this Indenture, modify the Guarantees of any Significant Subsidiary in any manner adverse to the Holders of the Notes of such series;

(11) release the Liens created by the Collateral Documents on all or substantially all the Collateral (other than in accordance with the terms of the ABL Facility, the Term Loan Facility and the Collateral Documents); or

(12) make any change in the provisions of this Indenture or any Collateral Document dealing with the application of proceeds of the Collateral (including, without limitation, the provisions in Section 4.05 of the Notes/Term Intercreditor Agreement) that would adversely affect the Holders of Notes of the applicable series.

116

Section 9.03 Class Voting.

Holders of Series A-1 Notes, holders of Series A-2 Notes (if issued) and holders of any Term Loans then outstanding will vote as a single class for all purposes under this Indenture and the Term Loan Facility and the Collateral Documents, including waivers, supplements and amendments, except that the holders of each Series of Debt then outstanding which is affected thereby will each vote separately with respect to:

(1) matters that propose to amend or otherwise modify the priority of payment provisions and other intercreditor arrangements in Section 4.05 of the Notes/Term Intercreditor Agreement; and

(2) any matter that adversely and disproportionately affects the rights or obligations of one Series of Debt as compared to any other Series of Debt.

Section 9.04 Compliance with Trust Indenture Act.

Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the Trust Indenture Act as then in effect.

Section 9.05 Revocation and Effect of Consents.

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. Once an amendment, supplement or waiver becomes effective in accordance with its terms and the terms hereof, it thereafter binds every subsequent Holder.

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.

Section 9.06 Notation on or Exchange of Notes.

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

117

Section 9.07 Trustee to Sign Amendments, etc.

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment, supplement or waiver until the board of directors approves it. In executing any amendment, supplement or waiver, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 14.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company and any Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.04 hereof). Notwithstanding the foregoing, no Opinion of Counsel will be required for the Trustee to execute any amendment or supplement adding a new Guarantor under this Indenture.

Section 9.08 Payment for Consent.

Neither the Company nor any Affiliate of the Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture, the Notes or the Collateral Documents unless such consideration is offered to all Holders and is paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.

ARTICLE 10

COLLATERAL DOCUMENTS

Section 10.01 Collateral and Collateral Documents.

(a) The due and punctual payment of the principal of and interest (including Additional Interest, if any) on the Notes when and as the same shall be due and payable, whether on an Interest Payment Date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of and interest (including Additional Interest, if any) on the Notes and performance of all other Obligations of the Company and the Guarantors to the Holders, the Trustee or the Notes/Term Collateral Agent under this Indenture, the Notes, the Intercreditor Agreements and the Collateral Documents, according to the terms hereunder or thereunder, shall be secured as provided in the Collateral Documents, which define the terms of the Liens that secure the Notes and such other Obligations, subject to the terms of the Intercreditor Agreements. The Trustee and the Company hereby acknowledge and agree that the Notes/Term Collateral Agent holds the Collateral in trust for the benefit of the Trustee and the Holders, in each case pursuant to the terms of the Collateral Documents and the Intercreditor Agreements. Each Holder, by accepting a Note, consents and agrees to the terms of the Collateral Documents (including the provisions providing for the possession, use, release and foreclosure of Collateral) and the Intercreditor Agreements as the same may be in effect or may be amended from time to time in accordance with their terms and this Indenture and the Intercreditor Agreements, and authorizes and directs the Notes/Term Collateral Agent to enter into the Collateral Documents and the Intercreditor Agreements and to perform its obligations and exercise its rights thereunder in accordance therewith; provided, however, that if any of the provisions of the Collateral Documents limit, qualify or conflict with the duties imposed by the provisions of the Trust Indenture Act, the Trust Indenture Act shall control. The Company shall deliver to the Notes/Term Collateral Agent copies of all documents pursuant to the Collateral Documents, and will do or cause to be done all such acts and things as may be reasonably

118

required by the next sentence of this Section 10.01, to assure and confirm to the Notes/Term Collateral Agent the security interest in the Collateral contemplated hereby, by the Collateral Documents or any part thereof, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes secured hereby, according to the intent and purposes herein expressed. The Company shall, and shall cause the Subsidiaries of the Company to, use its and their commercially reasonable efforts to take any and all actions reasonably required to cause the Collateral Documents to create and maintain, as security for the Obligations under the Notes, a valid and enforceable perfected Lien and security interest in and on all of the Collateral (subject to the terms of the Intercreditor Agreements), in favor of the Notes/Term Collateral Agent for the benefit of the Secured Parties.

(b) Notwithstanding the foregoing,

(1) the Capital Stock and other securities of the Subsidiaries of the Company that are owned by the Company or any Guarantor will constitute Notes/Term Collateral only to the extent that such Capital Stock and other securities can secure the Series A-1 Notes and the Series A-2 Debt without Rule 3-16 of Regulation S-X under the Securities Act (“Rule 3-16”) (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the SEC (or any other governmental agency);

(2) in the event that either Rule 3-16 requires or is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary (other than the Company) due to the fact that such Subsidiary’s Capital Stock and other securities secure the Series A-1 Notes and/or the Series A-2 Debt, then the Capital Stock and other securities of such Subsidiary shall automatically be deemed not to be part of the Notes/Term Collateral, but only to the extent necessary to not be subject to such requirement (and, in such event, the Collateral Documents may be amended or modified, without the consent of any holder of the Series A-1 Notes and the Series A-2 Debt, to the extent necessary to release the security interests in the shares of Capital Stock and other securities that are so deemed to no longer constitute part of the Notes/Term Collateral); and

(3) in the event that either Rule 3-16 is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Subsidiary’s Capital Stock and other securities to secure the Series A-1 Notes and the Series A-2 Debt in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Capital Stock and other securities of such Subsidiary shall automatically be deemed to be a part of the Notes/Term Collateral but only to the extent necessary to not be subject to any such financial statement requirement (and, in such event, the Collateral Documents may be amended or modified, without the consent of any Holder of the Notes, to the extent necessary to subject to the Liens under the Collateral Documents such additional Capital Stock and other securities).

(c) In addition to the limitations described in Section 10.01(b), the Notes/Term Collateral will not include (i) property or assets as to which the Notes/Term Collateral Agent has notified any Grantor in writing that it has reasonably determined that the costs of obtaining a security interest are excessive in relation to the value of the security to be afforded thereby and (ii) the Excluded Assets.

119

(d) In the case of any Foreign Subsidiary, the Notes/Term Collateral will be limited to 65% of the Capital Stock of first-tier Foreign Subsidiaries.

Section 10.02 Recordings and Opinions.

The Company will comply with the provisions of § 314(b) of the Trust Indenture Act following qualification of this Indenture pursuant to the Trust Indenture Act, except to the extent not required as set forth in any SEC regulation or interpretation (including any no-action letter issued by the Staff of the SEC, whether issued to the Company or any other Person), subject to the requirements of the Trust Indenture Act. Following such qualification, to the extent the Company is required to furnish to the Trustee an Opinion of Counsel pursuant to Trust Indenture Act Section 314(b)(2), the Company will furnish such opinion as required by such Section.

Section 10.03 Release of Collateral.

(a) Subject to Sections 10.03(b) and 10.04 hereof, Collateral may be released from the Lien and security interest created by the Collateral Documents at any time or from time to time in accordance with the provisions of the Collateral Documents, the Intercreditor Agreements or as provided hereby. The Company and the Guarantors will be entitled to a release of property and other assets included in the Collateral from the Liens securing the Notes, and the Trustee (subject to its receipt of an Officer Certificate and Opinion of Counsel as provided below) shall release, or instruct the Notes/Term Collateral Agent to release, as applicable, the same from such Liens at the Company’s sole cost and expense, under one or more of the following circumstances:

(1) to enable the Company or any Guarantor to sell, exchange or otherwise dispose of any of the Collateral to the extent not prohibited under Section 4.10 hereof;

(2) in the case of a Guarantor that is released from its Guarantee with respect to all of the Notes, the release of the property and assets of such Guarantor;

(3) pursuant to an amendment or waiver in accordance with Article 9 hereof;

(4) if all of the Notes have been defeased pursuant to Article 8 hereof or discharged pursuant to Article 13 hereof; or

(5) upon payment in full of the principal of, together with accrued and unpaid interest (including Additional Interest, if any) on, all of the Notes and all other Obligations related thereto under this Indenture, the Guarantees and the Collateral Documents that are due and payable at or prior to the time such principal, together with accrued and unpaid interest (including Additional Interest, if any) are paid.

(b) Subject to the provisions contained in the Intercreditor Agreements, the second-priority lien on the ABL Collateral securing the Series A-1 Notes and the Series A-2 Debt shall remain in full force and effect notwithstanding the termination and repayment in full of the ABL Facility and the release by the ABL Collateral Agent of the first-priority liens on the ABL Collateral. The second-priority lien on the ABL Collateral securing the Series A-1 Notes and the Series A-2 Debt shall terminate

120

and be released automatically if the first-priority liens on the ABL Collateral are released by the ABL Collateral Agent (unless, at the time of such release of such first-priority liens, an Event of Default shall have occurred and be continuing under this Indenture). Notwithstanding the existence of an Event of Default, the second-priority lien on the ABL Collateral securing the Series A-1 Notes and the Series A-2 Debt shall also terminate and be released automatically to the extent the first-priority liens on the ABL Collateral are released by the ABL Collateral Agent in connection with a sale, transfer or disposition of ABL Collateral that is either not prohibited under this Indenture and the Series A-2 Debt or occurs in connection with the foreclosure of, or other exercise of remedies with respect to, such ABL Collateral by the ABL Collateral Agent (except with respect to any proceeds of such sale, transfer or disposition that remain after satisfaction in full of the ABL Lenders Debt). The liens on the Collateral securing the Series A-1 Notes and the Series A-2 Debt that otherwise would have been released pursuant to the second sentence of this paragraph but for the occurrence and continuation of an Event of Default shall be released when such Event of Default and all other Events of Default under this Indenture and the Series A-2 Debt cease to exist.

(c) Upon receipt of an Officer’s Certificate and an Opinion of Counsel certifying that all conditions precedent under this Indenture and the Collateral Documents (and Section 314(d) of the Trust Indenture Act), if any, to such release have been met and any necessary or proper instruments of termination, satisfaction or release prepared by the Company, the Trustee shall, or shall cause the Notes/Term Collateral Agent, to execute, deliver or acknowledge (at the Company’s expense) such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to this Indenture or the Collateral Documents or the Intercreditor Agreements. Neither the Trustee nor the Notes/Term Collateral Agent shall be liable for any such release undertaken in good faith in reliance upon any such Officer’s Certificate or Opinion of Counsel, and notwithstanding any term hereof or in any Collateral Document to the contrary, the Trustee and Notes/Term Collateral Agent shall not be under any obligation to release any such Lien and security interest, or execute and deliver any such instrument of release, satisfaction or termination, unless and until it receives such Officer’s Certificate and Opinion of Counsel.

Section 10.04 Permitted Releases Not To Impair Lien; Trust Indenture Act Requirements.

(a) To the extent applicable, the Company will cause § 313(b) of the Trust Indenture Act, relating to reports, and § 314(d) of the Trust Indenture Act, relating to the release of property or securities subject to the Lien of the Collateral Documents, to be complied with.

(b) Any release of Collateral permitted by Section 10.03 hereof will be deemed not to impair the Liens under this Indenture, the Security Agreement and the other Collateral Documents in contravention thereof. Any certificate or opinion required by § 314(d) of the Trust Indenture Act may be made by an officer or legal counsel, as applicable, of the Company except in cases where § 314(d) of the Trust Indenture Act requires that such certificate or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other expert selected by or reasonably satisfactory to the Trustee.

(c) Notwithstanding anything to the contrary in this Section 10.04, the Company will not be required to comply with all or any portion of § 314(d) of the Trust Indenture Act if it determines, in good faith based on the written advice of counsel, a copy of which written advice shall be provided to the Trustee, that under the terms of § 314(d) of the Trust Indenture Act or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including “no action” letters or exemptive orders, all or any portion of § 314(d) of the Trust Indenture Act is inapplicable to any release or series of releases of Collateral.

121

Section 10.05 Certificates of the Trustee.

In the event that the Company wishes to release Collateral in accordance with this Indenture, the Collateral Documents and the Intercreditor Agreements and the Company has delivered the certificates and documents required by the Collateral Documents and Section 10.03 hereof, if § 314(d) of the Trust Indenture Act is applicable to such releases (the applicability of which will be established to the reasonable satisfaction of the Trustee pursuant to Section 10.04 hereof or otherwise), the Trustee shall determine whether it has received all documentation required by § 314(d) of the Trust Indenture Act in connection with such release (which determination may be based upon the Opinion of Counsel hereafter described) and, based on an Opinion of Counsel pursuant to Section 14.04 hereof, will deliver a certificate to the Notes/Term Collateral Agent setting forth such determination. The Trustee, however, shall have no duty to confirm the legality, genuineness, accuracy, contents or validity of such documents (or any signature appearing therein), its sole duty being to certify its receipt of such documents which, on their face (and assuming that they are what they purport to be), conform to § 314(d) of the Trust Indenture Act.

Section 10.06 Suits To Protect the Collateral.

Subject to the provisions of Article 7 hereof and the Intercreditor Agreements, the Trustee in its sole discretion and without the consent of the Holders, on behalf of the Holders, may direct the Notes/Term Collateral Agent to take all actions it deems necessary or appropriate in order to:

(1) enforce any of the terms of the Collateral Documents; and

(2) collect and receive any and all amounts payable in respect of the Obligations hereunder.

Subject to the provisions of the Collateral Documents and the Intercreditor Agreements, the Trustee shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of any of the Collateral Documents or this Indenture, and such suits and proceedings as the Trustee, in its sole discretion, may deem expedient to preserve or protect its interests and the interests of the Holders in the Collateral (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the Lien on the Collateral or be prejudicial to the interests of the Holders or the Trustee). Nothing in this Section 10.06 shall be considered to impose any such duty or obligation to act on the part of the Trustee.

Section 10.07 Authorization of Receipt of Funds by the Trustee Under the Collateral Documents.

Subject to the provisions of the Intercreditor Agreements, the Trustee is authorized to receive any funds for the benefit of the Holders distributed under the Collateral Documents, and to make further distributions of such funds to the Holders according to the provisions of this Indenture.

Section 10.08 Purchaser Protected.

In no event shall any purchaser in good faith of any property purported to be released hereunder be bound to ascertain the authority of the Notes/Term Collateral Agent or the Trustee to execute the release or to inquire as to the satisfaction of any conditions required by the provisions

122

hereof for the exercise of such authority or to see to the application of any consideration given by such purchaser or other transferee; nor shall any purchaser or other transferee of any property or rights permitted by this Article 10 to be sold be under any obligation to ascertain or inquire into the authority of the Company or the applicable Guarantor to make any such sale or other transfer.

Section 10.09 Powers Exercisable by Receiver or Trustee.

In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article 10 upon the Company or a Guarantor with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Company or a Guarantor or of any officer or officers thereof required by the provisions of this Article 10; and if the Trustee shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee.

Section 10.10 Release Upon Termination of the Company’s Obligations.

In the event that the Company delivers to the Trustee, in form and substance reasonably acceptable to it, an Officer’s Certificate certifying that (i) payment in full of the principal of, together with accrued and unpaid interest (including Additional Interest, if any) on, all of the Notes and all other Obligations under this Indenture, the Guarantees and the Collateral Documents that are due and payable at or prior to the time such principal, together with accrued and unpaid interest (including Additional Interest, if any), are paid or (ii) the Company shall have exercised its legal defeasance option or its covenant defeasance option, in compliance with the provisions of Article 8, or its discharge option, in compliance with the provisions of Article 13 hereof, in each case with respect to all of the Notes, the Trustee shall deliver to the Company and the Notes/Term Collateral Agent a notice stating that the Trustee, on behalf of the Holders, disclaims and gives up any and all rights it has in or to the Collateral (other than with respect to funds held by the Trustee pursuant to Article 8 and Article 13), and any rights it has under the Collateral Documents, and upon receipt by the Notes/Term Collateral Agent of such notice, the Notes/Term Collateral Agent shall be deemed not to hold a Lien in the Collateral on behalf of the Trustee and shall do or cause to be done all acts reasonably necessary to release such Lien as soon as is reasonably practicable.

Section 10.11 Notes/Term Collateral Agent.

(a) The Trustee and each of the Holders by acceptance of the Notes hereby designates and appoints the Notes/Term Collateral Agent as its agent under this Indenture, the Security Agreement, the Collateral Documents and the Intercreditor Agreements and the Trustee and each of the Holders by acceptance of the Notes hereby irrevocably authorizes the Notes/Term Collateral Agent to take such action on its behalf under the provisions of this Indenture, the Security Agreement, the Collateral Documents and the Intercreditor Agreements and to exercise such powers and perform such duties as are expressly delegated to the Notes/Term Collateral Agent by the terms of this Indenture, the Security Agreement, the Collateral Documents and the Intercreditor Agreements, together with such powers as are reasonably incidental thereto. The provisions of this Section 10.11 are solely for the benefit of the Notes/Term Collateral Agent and none of the Trustee, any of the Holders nor any of the Grantors shall have any rights as a third party beneficiary of any of the provisions contained herein other than as expressly provided in Section 10.03. Notwithstanding any provision to the contrary contained elsewhere in this Indenture, the Security Agreement, the Collateral Documents and the Intercreditor Agreements, the Notes/Term Collateral Agent shall not have any duties or responsibilities hereunder nor shall the Notes/Term Collateral Agent have or be deemed to have any fiduciary relationship with the Trustee, any Holder or any Grantor, and no implied covenants, functions, responsibilities, duties, obligations or

123

liabilities shall be read into this Indenture, the Security Agreement, the Collateral Documents and the Intercreditor Agreements or otherwise exist against the Notes/Term Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Indenture with reference to the Notes/Term Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. Except as expressly otherwise provided in this Indenture, the Notes/Term Collateral Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions which the Notes/Term Collateral Agent is expressly entitled to take or assert under this Indenture, the Security Agreement, the Collateral Documents and the Intercreditor Agreements, including the exercise of remedies pursuant to Article 6, and any action so taken or not taken shall be deemed consented to by the Trustee and the Holders.

(b) None of the Notes/Term Collateral Agent or any of its respective Affiliates shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Indenture or the transactions contemplated hereby (except for its own gross negligence or willful misconduct) or under or in connection with the Security Agreement, any Collateral Document or the Intercreditor Agreements or the transactions contemplated thereby (except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Trustee or any Holder for any recital, statement, representation, warranty, covenant or agreement made by the Company or any Grantor or Affiliate of any Grantor, or any officer or Related Person thereof, contained in this or any Indenture, or in any certificate, report, statement or other document referred to or provided for in, or received by the Notes/Term Collateral Agent under or in connection with, this or any other Indenture, the Security Agreement, the Collateral Documents or the Intercreditor Agreements, or the validity, effectiveness, genuineness, enforceability or sufficiency of this or any other Indenture, the Security Agreement, the Collateral Documents or the Intercreditor Agreements, or for any failure of any Grantor or any other party to this Indenture, the Security Agreement, the Collateral Documents or the Intercreditor Agreements to perform its obligations hereunder or thereunder. None of the Notes/Term Collateral Agent or any of its respective Affiliates shall be under any obligation to the Trustee or any Holder to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this or any other Indenture, the Security Agreement, the Collateral Documents or the Intercreditor Agreements or to inspect the properties, books, or records of any Grantor or any Grantor’s Affiliates.

(c) The Notes/Term Collateral Agent and its respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with any Grantor and its Affiliates as though it was not the Notes/Term Collateral Agent hereunder and without notice to or consent of the Trustee. The Trustee and the Holders acknowledge that, pursuant to such activities, the Notes/Term Collateral Agent or its respective Affiliates may receive information regarding any Grantor or its Affiliates (including information that may be subject to confidentiality obligations in favor of any such Grantor or such Affiliate) and acknowledge that the Notes/Term Collateral Agent shall not be under any obligation to provide such information to the Trustee or the Holders. Nothing herein shall impose or imply any obligation on the part of the Notes/Term Collateral Agent to advance funds.

(d) The Notes/Term Collateral Agent is authorized and directed to (i) enter into the Security Agreement and the Collateral Documents, (ii) enter into the Intercreditor Agreements, (iii) bind the Holders on the terms as set forth in the Security Agreement and the Collateral Documents and the Intercreditor Agreements and (iv) perform and observe its obligations under the Security Agreement and the Collateral Documents and the Intercreditor Agreements.

124

(e) The Trustee agrees that it shall not (and shall not be obliged to), and shall not instruct the Notes/Term Collateral Agent to, unless specifically requested to do so by a majority of the Holders, take or cause to be taken any action to enforce its rights under this Indenture or against any Grantor, including the commencement of any legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

If at any time or times the Trustee shall receive (i) by payment, foreclosure, set-off or otherwise, any proceeds of Collateral or any payments with respect to the Obligations arising under, or relating to, this Indenture, except for any such proceeds or payments received by the Trustee from the Notes/Term Collateral Agent pursuant to the terms of this Indenture, or (ii) payments from the Notes/Term Collateral Agent in excess of the amount required to be paid to the Trustee pursuant to Article 6, the Trustee shall promptly turn the same over to the Notes/Term Collateral Agent, in kind, and with such endorsements as may be required to negotiate the same to the Notes/Term Collateral Agent.

(f) The Trustee is each Holder’s agent for the purpose of perfecting the Holders’ security interest in assets which, in accordance with Article 9 of the Uniform Commercial Code can be perfected only by possession. Should the Trustee obtain possession of any such Collateral, upon request from the Company, the Trustee shall notify the Notes/Term Collateral Agent thereof, and, promptly upon the Notes/Term Collateral Agent’s request therefor shall deliver such Collateral to the Notes/Term Collateral Agent or otherwise deal with such Collateral in accordance with the Notes/Term Collateral Agent’s instructions.

(g) The Notes/Term Collateral Agent shall have no obligation whatsoever to the Trustee or any of the Holders to assure that the Collateral exists or is owned by any Grantor or is cared for, protected, or insured or has been encumbered, or that the Notes/Term Collateral Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, maintained or enforced or are entitled to any particular priority, or to determine whether all or the Grantor’s property constituting collateral intended to be subject to the Lien and security interest of the Collateral Documents has been properly and completely listed or delivered, as the case may be, or the genuineness, validity, marketability or sufficiency thereof or title thereto, or to exercise at all or in any particular manner or under any duty of care, disclosure, or fidelity, or to continue exercising, any of the rights, authorities, and powers granted or available to the Notes/Term Collateral Agent pursuant to this Indenture, any Collateral Document or the Intercreditor Agreements, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, the Notes/Term Collateral Agent may act in any manner it may deem appropriate, in its sole discretion given the Notes/Term Collateral Agent’s own interest in the Collateral and that the Notes/Term Collateral Agent shall have no other duty or liability whatsoever to the Trustee or any Holder as to any of the foregoing.

(h) No provision of this Indenture, the Security Agreement, the Intercreditor Agreements or any Collateral Document shall require the Notes/Term Collateral Agent (or the Trustee) to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or thereunder or to take or omit to take any action hereunder or thereunder or take any action at the request or direction of Holders (or the Trustee in the case of the Notes/Term Collateral Agent) if it shall have reasonable grounds for believing that repayment of such funds is not assured to it.

(i) The Notes/Term Collateral Agent (i) shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers, or for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Notes/Term Collateral Agent was grossly negligent in ascertaining the pertinent facts, (ii) shall not be liable for interest on any money received by it except as the Notes/Term Collateral Agent may agree in writing with the Company (and money held in trust by the Notes/Term Collateral Agent need not be

125

segregated from other funds except to the extent required by law), (iii) the Notes/Term Collateral Agent may consult with counsel of its selection and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it in good faith and in accordance with the advice or opinion of such counsel. The grant of permissive rights or powers to the Notes/Term Collateral Agent shall not be construed to impose duties to act.

(j) Neither the Notes/Term Collateral Agent nor the Trustee shall be liable for delays or failures in performance resulting from acts beyond its control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters. Neither the Notes/Term Collateral Agent nor the Trustee shall be liable for any indirect, special or consequential damages (included but not limited to lost profits) whatsoever, even if it has been informed of the likelihood thereof and regardless of the form of action.

(k) The Trustee agrees that at such time when no loans under the Term Loan Facility are outstanding, or in the event that the Notes/Term Collateral Agent resigns or is removed from its role as collateral agent, the Trustee shall act as Notes/Term Collateral Agent under the Intercreditor Agreements and other Collateral Documents for the benefit of the Trustee and the Holders of the Series A-1 Notes and the Series A-2 Debt.

Section 10.12 Designations.

Except as provided in the next sentence, for purposes of the provisions hereof and the Intercreditor Agreements requiring the Company to designate Indebtedness for the purposes of the term “ABL Lenders Debt” or any other such designations hereunder or under the Intercreditor Agreements, any such designation shall be sufficient if the relevant designation is set forth in writing, signed on behalf of the Company by an Officer and delivered to the Trustee, the Notes/Term Collateral Agent and the ABL Collateral Agent. For all purposes hereof and the Intercreditor Agreements, the Company hereby designates the Obligations pursuant to the ABL Facility as “ABL Lenders Debt.”

ARTICLE 11

GUARANTEES

Section 11.01 Guarantee.

Subject to this Article 11, from and after the Issue Date, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (a) the principal of, premium or interest on, or Additional Interest in respect of the Notes shall be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

126

The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that this Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, this Indenture and the Collateral Documents.

Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantees.

Each Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation, reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes or Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of any Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

127

The Guarantee issued by any Guarantor shall be a general senior secured obligation of such Guarantor, and shall be pari passu in right of payment with all existing and future Senior Indebtedness of such Guarantor, if any, and senior in right of payment to all existing and future Subordinated Indebtedness of such Guarantor.

Each payment to be made by a Guarantor in respect of its Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 11.02 Limitation on Guarantor Liability.

Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law. Each Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

Section 11.03 Execution and Delivery.

To evidence its Guarantee set forth in Section 11.01 hereof, each Guarantor hereby agrees that this Indenture shall be executed on behalf of such Guarantor by its President, one of its Vice Presidents or one of its Assistant Vice Presidents.

Each Guarantor hereby agrees that its Guarantee set forth in Section 11.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors.

If required by Section 4.16 hereof, the Company shall cause any newly created or acquired Restricted Subsidiary that is not a Guarantor to comply with the provisions of Section 4.16 hereof, Section 4.17 hereof and this Article 11, to the extent applicable.

Section 11.04 Subrogation.

Each Guarantor shall be subrogated to all rights of Holders of Notes against the Company in respect of any amounts paid by any Guarantor pursuant to the provisions of Section 11.01

128

hereof; provided that, if an Event of Default has occurred and is continuing, no Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Company under this Indenture or the Notes shall have been paid in full.

Section 11.05 Benefits Acknowledged.

Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Guarantee are knowingly made in contemplation of such benefits.

Section 11.06 Release of Guarantees.

A Guarantee by a Guarantor shall be automatically and unconditionally released and discharged with respect to any Series of Notes, and no further action by such Guarantor, the Company or the Trustee is required for the release of such Guarantor’s Guarantee, upon:

(1) (A) any sale, exchange or transfer (by merger or otherwise) of the Capital Stock of such Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary, if such sale, exchange or transfer is made in compliance with the applicable provisions of this Indenture;

(B) the release or discharge of the guarantee by such Guarantor of the ABL Facility or the guarantee which resulted in the creation of such Guarantee, except a discharge or release by or as a result of payment under such guarantee;

(C) the proper designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with Section 4.07 hereof and the definition of “Unrestricted Subsidiary” in Section 1.01 hereof; or

(D) the Company exercising its Legal Defeasance option or Covenant Defeasance option with respect to the Notes of such series in accordance with Article 8 hereof or the Company’s obligations under this Indenture with respect to the Notes of such series being discharged in accordance with the terms of this Indenture; and

(2) such Guarantor delivering to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in this Indenture relating to such transaction have been complied with.

129

ARTICLE 12

[RESERVED]

ARTICLE 13

SATISFACTION AND DISCHARGE

Section 13.01 Satisfaction and Discharge.

This Indenture shall be discharged and shall cease to be of further effect as to only the Series A-1 Notes, only the Series A-2 Notes (if issued) or both Series of Notes collectively, when:

(1) either

(a) all Series A-1 Notes and/or Series A-2 Notes, as applicable, theretofore authenticated and delivered, except lost, stolen or destroyed Series A-1 Notes and/or Series A-2 Notes, as applicable, which have been replaced or paid and Series A-1 Notes and/or Series A-2 Notes, as applicable, for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or

(b) all Series A-1 Notes and/or Series A-2 Notes, as applicable, not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, shall become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders of the Series A-1 Notes and/or Series A-2 Notes, as applicable, cash in U.S. dollars, Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on the Series A-1 Notes and/or Series A-2 Notes, as applicable, not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;

(2) no Default (other than that resulting from borrowing funds to be applied to make such deposit or any similar and simultaneous deposit relating to other Indebtedness) with respect to this Indenture or the Series A-1 Notes and/or Series A-2 Notes, as applicable, shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under the ABL Facility, the Term Loan Facility or any other material agreement or instrument (other than this Indenture) to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound (other than resulting from any borrowing of funds to be applied to make such deposit and any similar deposit relating to other Indebtedness and the granting of liens in connection therewith);

(3) the Company has paid or caused to be paid all sums payable by it under this Indenture; and

130

(4) the Company has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Series A-1 Notes and/or Series A-2 Notes, as applicable, at maturity or the redemption date, as the case may be.

In addition, the Company must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section 13.01, the provisions of Section 13.02 and Section 8.06 hereof shall survive.

Section 13.02 Application of Trust Money.

Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 13.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Series A-1 Notes and/or Series A-2 Notes, as applicable, and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium and Additional Interest, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 13.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s and any Guarantor’s obligations under this Indenture and the Series A-1 Notes and/or Series A-2 Notes, as applicable, shall be revived and reinstated as though no deposit had occurred pursuant to Section 13.01 hereof; provided that if the Company has made any payment of principal of, premium and Additional Interest, if any, or interest on any Series A-1 Notes and/or Series A-2 Notes, as applicable, because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Series A-1 Notes and/or Series A-2 Notes, as applicable, to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

ARTICLE 14

MISCELLANEOUS

Section 14.01 Trust Indenture Act Controls.

Subject to Section 14.16 hereof, if any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Section 318(c) of the Trust Indenture Act, the imposed duties shall control.

Section 14.02 Notices.

Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), fax or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Company and/or any Guarantor:

c/o Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: General Counsel

Fax No.: (949) 639-4332

131

If to the Trustee:

U.S. Bank, National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Attention: Corporate Trust Services, Raymond S. Haverstock

Fax No.: (651) 495-8097

The Company, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; when receipt acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof.

Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in Section 313(c) of the Trust Indenture Act, to the extent required by the Trust Indenture Act. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

Section 14.03 Communication by Holders of Notes with Other Holders of Notes.

Holders may communicate pursuant to Section 312(b) of the Trust Indenture Act with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of Section 312(c) of the Trust Indenture Act.

Section 14.04 Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Company or any of the Guarantors to the Trustee to take any action under this Indenture, the Company or such Guarantor, as the case may be, shall furnish to the Trustee:

(a) An Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

132

(b) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 14.05 Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof or Section 314(a)(4) of the Trust Indenture Act) shall comply with the provisions of Section 314(e) of the Trust Indenture Act and shall include:

(a) a statement that the Person making such certificate or opinion has read such covenant or condition;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

Section 14.06 Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 14.07 No Personal Liability of Directors, Officers, Employees and Stockholders.

No director, officer, employee, incorporator or stockholder of the Company or any Guarantor or any of their parent companies shall have any liability for any obligations of the Company or the Guarantors under the Notes, the Guarantees, this Indenture or the Collateral Documents or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 14.08 Governing Law.

THIS INDENTURE, THE NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

133

Section 14.09 Waiver of Jury Trial.

EACH OF THE COMPANY, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 14.10 Force Majeure.

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

Section 14.11 No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Restricted Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 14.12 Successors.

All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind their successors. All agreements of each Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 11.06 hereof.

Section 14.13 Severability.

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 14.14 Counterpart Originals.

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 14.15 Table of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 14.16 Qualification of Indenture.

The Company and the Guarantors shall qualify this Indenture under the Trust Indenture Act in accordance with the terms and conditions of the Registration Rights Agreement and shall

134

pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Company, the Guarantors and the Trustee) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Notes and printing this Indenture and the Notes. The Trustee shall be entitled to receive from the Company and the Guarantors any such Officer’s Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the Trust Indenture Act. The Trust Indenture Act shall not apply to this Indenture prior to such qualification, and all references herein to compliance with the Trust Indenture Act refer to such compliance following any such qualification.

The Company has elected to exclude the provisions of Section 315(d)(3) and 316(a)(1) of the Trust Indenture Act from this Indenture. Following the qualification of this Indenture under the Trust Indenture Act, to the extent any Term Loans remain outstanding at that time, and to the extent any of the voting provisions set forth in Articles 6 and 9 hereof are deemed by any court or governmental authority to be inconsistent with the Trust Indenture Act, any action under this Indenture that requires the vote or participation of the holders of the then outstanding Term Loans shall be taken without the participation of the holders of the Term Loans.

Section 14.17 Intercreditor Agreements Govern.

Reference is made to the ABL Intercreditor Agreement. Each Holder of a Note, by its acceptance of a Note, (a) consents to the subordination of Liens provided for in the ABL Intercreditor Agreement, (b) agrees that it will be bound by and will take no actions contrary to the provisions of the ABL Intercreditor Agreement and (c) authorizes and instructs the Notes/Term Collateral Agent to enter into the ABL Intercreditor Agreement as “Term Debt Collateral Agent,” and on behalf of such Holder. The foregoing provisions are intended as an inducement to the lenders under the ABL Facility to extend credit and such lenders are intended third party beneficiaries of such provisions and the provisions of the ABL Intercreditor Agreement.

Reference is made to the Notes/Term Intercreditor Agreement. Each Holder of a Note, by its acceptance of a Note, (a) consents to the terms of the Notes/Term Intercreditor Agreement, including the priority of payment provisions provided for in the Notes/Term Intercreditor Agreement, (b) agrees that it will be bound by and will take no actions contrary to the provisions of the Notes/Term Intercreditor Agreement and (c) authorizes and instructs the Notes/Term Collateral Agent to enter into the Notes/Term Intercreditor Agreement as “Notes/Term Collateral Agent,” and on behalf of such Holder.

[Signatures on following page]

135

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

Very truly yours,
APRIA HEALTHCARE GROUP INC.
By	/s/ Chris A. Karkenny
	Name:	Chris A. Karkenny
	Title:	Executive Vice President and Chief Financial Officer
APRIA HEALTHCARE OF NEW YORK STATE, INC.
APRIA HEALTHCARE, INC.
APRIACARE MANAGEMENT SYSTEMS, INC.
APRIADIRECT.COM, INC.
CORAM, INC.
By	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	Executive Vice President General Counsel and Secretary

Signature Page to Senior Secured Indenture

CORAM ALTERNATE SITE SERVICES, INC.
CORAM CLINICAL TRIALS, INC.
CORAM HEALTHCARE CORPORATION OF ALABAMA
CORAM HEALTHCARE CORPORATION OF FLORIDA
CORAM HEALTHCARE CORPORATION OF GREATER D.C.
CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK
CORAM HEALTHCARE CORPORATION OF INDIANA
CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS
CORAM HEALTHCARE CORPORATION OF MICHIGAN
CORAM HEALTHCARE CORPORATION OF MISSISSIPPI
CORAM HEALTHCARE CORPORATION OF NEVADA
CORAM HEALTHCARE CORPORATION OF NEW YORK
CORAM HEALTHCARE CORPORATION OF NORTH TEXAS
CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA
CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA
CORAM HEALTHCARE CORPORATION OF UTAH
CORAM HEALTHCARE OF WYOMING, L.L.C.
CORAM HOMECARE OF MINNESOTA, INC.
CORAM SERVICE CORPORATION
CORAM SPECIALTY INFUSION SERVICES, INC.
CORAMRX, LLC
H.M.S.S., INC.
HEALTHINFUSION, INC.
T2 MEDICAL, INC.
By	/s/ Michael E. Dell
Name:	Michael E. Dell
Title:	V.P., General Counsel & Secretary

Signature Page to Senior Secured Indenture

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:	/s/ Raymond S. Haverstock
	Name:	Raymond S. Haverstock
	Title:	Vice President

Signature Page to Senior Secured Indenture

EXHIBIT A

[Face of Note]

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Regulation S Temporary Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Original Issue Discount Legend, if applicable pursuant to the provisions of the Indenture]

A-1

CUSIP	[037933 AD0]
ISIN	[US037933AD09]

[[RULE 144A][REGULATION S] GLOBAL NOTE

representing up to

$[            ]

11.25% Senior Secured Notes due 2014 (Series A-1)

(“Series A-1 Notes”)

No. [    ] [$                    ]

APRIA HEALTHCARE GROUP INC.

promises to pay to CEDE & CO. or registered assigns, the principal sum [of                      United States Dollars] [, as revised by the Schedule of Exchanges of Interests in the Global Note attached hereto,] on November 1, 2014.

Series A-1 Notes Interest Payment Dates: May 1 and November 1

Series A-1 Notes Record Dates: April 15 and October 15

A-2

IN WITNESS HEREOF, Apria Healthcare Group Inc. has caused this instrument to be duly executed.

Dated:

APRIA HEALTHCARE GROUP INC.
By:
	Name:
	Title:

A-3

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Series A-1 Notes referred to in the within-mentioned Indenture:

Dated:

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
	Authorized Signatory

A-4

[Back of Note]

11.25% Senior Secured Notes due 2014 (Series A-1)

(“Series A-1 Notes”)

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Apria Healthcare Group Inc., a Delaware corporation, promises to pay interest on the principal amount of this Series A-1 Note at 11.25% per annum from May 27, 2009 until maturity and shall pay the Additional Interest, if any, payable pursuant to the Registration Rights Agreement referred to below. The Company will pay interest and Additional Interest, if any, semi-annually in arrears on May 1 and November 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, a “Series A-1 Notes Interest Payment Date”). Interest on the Series A-1 Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that the first Series A-1 Notes Interest Payment Date shall be November 1, 2009. The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Series A-1 Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest, if any (without regard to any applicable grace periods) from time to time on demand at the interest rate on the Series A-1 Notes to the extent lawful. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Company will pay interest on the Series A-1 Notes and Additional Interest, if any, to the Persons who are registered Holders of Series A-1 Notes at the close of business on the April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding the Series A-1 Notes Interest Payment Date, even if such Series A-1 Notes are cancelled after such record date and on or before such Series A-1 Notes Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Payment of interest and Additional Interest, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Additional Interest, if any, on, all Global Notes and all other Series A-1 Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. PAYING AGENT AND REGISTRAR. Initially U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to the Holders. The Company or any of its Subsidiaries may act in any such capacity.

4. INDENTURE. The Company issued the Series A-1 Notes under an Indenture, dated as of May 27, 2009 (the “Indenture”), among Apria Healthcare Group Inc., the Guarantors named therein and the Trustee. This Series A-1 Note is one of a duly authorized issue of notes of the Company, designated as its 11.25% Senior Secured Notes due 2014 (Series A-1). The Company shall be entitled to issue Additional Notes that are Series A-1 Notes pursuant to Section 2.01, Section 4.09 and Section 4.12 of the Indenture. The terms of the Series A-1 Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). The Series A-1 Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of such terms. To the extent any provision of this Series A-1 Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

A-5

5. OPTIONAL REDEMPTION.

(a) Except as described below under clauses 5(b) and 5(c) hereof, the Series A-1 Notes will not be redeemable at the Company’s option prior to November 1, 2011.

(b) At any time prior to November 1, 2011, the Company may redeem all or a part of the Series A-1 Notes, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail to the registered address of each Holder or otherwise delivered in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Series A-1 Notes redeemed plus the Series A-1 Notes Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption (the “Series A-1 Notes Redemption Date”), subject to the rights of Holders on the relevant Series A-1 Notes Record Date to receive interest due on the relevant Series A-1 Notes Interest Payment Date.

(c) Until November 1, 2011, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Series A-1 Notes issued by it at a redemption price equal to 111.25% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Series A-1 Notes Redemption Date, subject to the right of Holders of Series A-1 Notes of record on the relevant Series A-1 Notes Record Date to receive interest due on the relevant Series A-1 Notes Interest Payment Date, with the net cash proceeds of one or more Equity Offerings; provided that at least 65% of the aggregate principal amount of Series A-1 Notes originally issued under the Indenture and any Additional Notes that are Series A-1 Notes issued under the Indenture after the Issue Date (excluding Series A-1 Notes and Additional Notes that are Series A-1 Notes held by the Company or Subsidiaries or Affiliates of the Company) remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 180 days of the date of closing of each such Equity Offering. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to, the completion of the related Equity Offering.

(d) On and after November 1, 2011, the Company may redeem the Series A-1 Notes, in whole or in part, upon not less than 30 nor more than 60 days prior notice by first-class mail, postage prepaid, with a copy to the Trustee, to each Holder of Series A-1 Notes at the address of such Holder appearing in the security register, at the redemption prices (expressed as percentages of principal amount of the Series A-1 Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Series A-1 Notes Redemption Date, subject to the right of Holders of Series A-1 Notes of record on the relevant Series A-1 Notes Record Date to receive interest due on the relevant Series A-1 Notes Interest Payment Date, if redeemed during the twelve-month period beginning on November 1 of each of the years indicated below:

Year	Percentage
2011	105.625	%
2012	102.813	%
2013 and thereafter	100.000	%

A-6

(e) If the Company redeems less than all of the outstanding Series A-1 Notes, the Trustee shall select the Series A-1 Notes to be redeemed in the manner described under Section 3.02 of the Indenture.

(f) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

6. MANDATORY REDEMPTION. The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Series A-1 Notes.

7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days prior to the redemption date (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 of the Indenture) to each Holder whose Series A-1 Notes are to be redeemed at its registered address. Series A-1 Notes in denominations larger than $2,000 may be redeemed in part but only in integral multiples of $1,000 in excess thereof, unless all of the Series A-1 Notes held by a Holder are to be redeemed. Subject to Section 3.05 of the Indenture, on and after the redemption date, interest will cease to accrue on Series A-1 Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) Upon the occurrence of a Change of Control, the Company shall make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of each Holder’s Series A-1 Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Additional Interest thereon, if any, to the date of purchase (the “Change of Control Payment”), subject to the right of the Holders of the Series A-1 Notes of record on the relevant applicable Record Date to receive interest due on the relevant applicable Interest Payment Date. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Company or any of its Restricted Subsidiaries consummates an Asset Sale, within ten Business Days of each date that the aggregate amount of Excess Proceeds exceeds $30.0 million, the Company shall make an offer to all Holders of the Series A-1 Notes and, if required by the terms of any Indebtedness that is pari passu with the Series A-1 Notes or any Guarantee (including any Series A-2 Debt) (“Pari Passu Indebtedness”), to the holders of such Pari Passu Indebtedness (an “Asset Sale Offer”), to purchase the maximum aggregate principal amount of Series A-1 Notes (including any Additional Notes which are Series A-1 Notes) and such other Pari Passu Indebtedness that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest thereon, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. The Asset Sale Offer shall be made in accordance with Sections 3.09 and 4.10 of the Indenture.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Series A-1 Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Series A-1 Notes may be registered and Series A-1 Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Series A-1 Notes or portion of a Series A-1 Note selected for redemption, except for the unredeemed portion of any Series A-1 Notes being redeemed in part.

A-7

Also, the Company need not exchange or register the transfer of any Series A-1 Notes for a period of 15 days before a selection of Series A-1 Notes to be redeemed.

10. SECURITY. The Series A-1 Notes will be secured by the Collateral on the terms and subject to the conditions set forth in the Indenture and the Collateral Documents. The Notes/Term Collateral Agent holds the Collateral in trust for the benefit of the Secured Parties pursuant to the Collateral Documents and the Intercreditor Agreements. Each Holder, by accepting this Series A-1 Note, consents and agrees to the terms of the Collateral Documents (including the provisions providing for the foreclosure and release of Collateral) and the Intercreditor Agreements as the same may be in effect or may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the Trustee and/or the Notes/Term Collateral Agent, as applicable, to enter into the Collateral Documents and the Intercreditor Agreements, and to perform its obligations and exercise its rights thereunder in accordance therewith.

11. PERSONS DEEMED OWNERS. The registered Holder of a Series A-1 Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Collateral Documents, the Guarantees or the Series A-1 Notes may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. If an Event of Default with respect to the Series A-1 Notes shall occur and be continuing, the principal, premium, if any, interest and any other monetary obligations on all then outstanding Series A-1 Notes may be declared due and payable in the manner and with the effect provided in the Indenture.

14. PRIORITIES OF PAYMENT AS BETWEEN SERIES A-1 NOTES AND SERIES A-2 DEBT. The Series A-1 Notes, the Series A-2 Notes (if issued) and any Term Loans then outstanding will vote together as a single class for all purposes under the Indenture to the extent provided in Article 6 and Article 9 thereof. The Holders of the Series A-1 Notes shall be entitled to a priority of payment over the holders of the Series A-2 Debt in the circumstances described in the Notes/Term Intercreditor Agreement. The Holders of Series A-1 Notes, the Bridge Loan Agent, the holders of Series A-2 Debt, the Trustee, the Notes/Term Collateral Agent and the Company have agreed (or are deemed to have agreed) to certain other intercreditor arrangements in the Notes/Term Intercreditor Agreement pursuant to which Holders of Notes are bound.

15. GUARANTEES. The Company’s obligations under the Series A-1 Notes are fully and unconditionally guaranteed, jointly and severally, by the Guarantors.

16. AUTHENTICATION. This Series A-1 Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Series A-1 Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes, in each case, that are Series A-1 Notes, shall have all the rights set forth in the Registration Rights Agreement, dated as of May 27, 2009, among Apria Healthcare Group Inc., the Guarantors named therein and the other parties named on the signature pages thereof (the “Registration Rights Agreement”), including the right to receive Additional Interest (as defined in the Registration Rights Agreement).

A-8

18. GOVERNING LAW. THE INDENTURE, THE SERIES A-1 NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

19. CUSIP AND ISIN NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP and ISIN numbers to be printed on the Series A-1 Notes and the Trustee may use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Series A-1 Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to the Company at the following address:

c/o Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Facsimile: (949) 639-4332

Attention: General Counsel

A-9

ASSIGNMENT FORM

To assign this Series A-1 Note, fill in the form below:

(I) or (we) assign and transfer this Series A-1 Note to:
	(Insert assignee’ legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint

to transfer this Series A-1 Note on the books of the Company. The agent may substitute another to act for him.

Date:                     

Your Signature:
	(Sign exactly as your name appears on the face of this Series A-1 Note)

Signature Guarantee:*

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

A-10

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Series A-1 Note purchased by the Company pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

¨  Section 4.10     ¨  Section 4.14

If you want to elect to have only part of this Series A-1 Note purchased by the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$                                                             

Date:                     

Your Signature:
	(Sign exactly as your name appears on the face of this Series A-1 Note)

Tax Identification No.:

Signature Guarantee:*

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

A-11

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $[            ]. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

Date of Exchange Amount of
Decrease in
Principal Amount Amount of
Increase in
Principal Amount
of this Global
Note Principal Amount
of this Global
Note following
such Decrease or
Increase Signature of
Authorized
Officer of Trustee
or Custodian

* This schedule should be included only if the Series A-1 Note is issued in global form.

A-12

EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: General Counsel

Fax No.: (949) 639-4332

U.S. Bank, National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Fax No.: (651) 495-8097

Attention: Corporate Trust Services

Re: [Series A-1 Notes] [Series A-2 Notes]

Reference is hereby made to the Indenture, dated as of May 27, 2009 (the “Indenture”), among Apria Healthcare Group Inc., the Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

(the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A and/or Annex B hereto, in the principal amount of $ in such Note[s] or interests (the “Transfer”), to (the “Transferee”), as further specified in Annex A and/or Annex B hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1.    ¨    CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.

2.    ¨    CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the

B-1

requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Indenture and the Securities Act.

3.    ¨    CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a)    ¨    such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

or

(b)    ¨    such Transfer is being effected to the Company or a subsidiary thereof;

or

(c)    ¨    such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act.

4.    ¨    CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

(a)    ¨    CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(b)    ¨    CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

B-2

(c)    ¨    CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

[Insert Name of Transferor]
By:
	Name:
	Title:

Dated:                     

B-3

ANNEX A TO CERTIFICATE OF TRANSFER

1.	The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
	(a)	¨	a beneficial interest in the:
		(i)	¨	144A Global Note representing Series A-1 Notes (CUSIP 037933AD0), or
		(ii)	¨	Regulation S Global Note representing Series A-1 Notes (CUSIP U03846AB5), or
	(b)	¨	a Restricted Definitive Note representing Series A-1 Notes.
2.	After the Transfer the Transferee will hold:
[CHECK ONE]
	(a)	¨	a beneficial interest in the:
		(i)	¨	144A Global Note representing Series A-1 Notes (CUSIP 037933AD0), or
		(ii)	¨	Regulation S Global Note representing Series A-1 Notes (CUSIP U03846AB5), or
		(iii)	¨	Unrestricted Global Note representing Series A-1 Notes (CUSIP 037933AE8); or
	(b)	¨	a Restricted Definitive Note representing Series A-1 Notes, or
	(c)	¨	an Unrestricted Definitive Note representing Series A-1 Notes, in accordance with the terms of the Indenture.

B-4

ANNEX B TO CERTIFICATE OF TRANSFER

1.	The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
	(a)	¨	a beneficial interest in the:
		(i)	¨	144A Global Note representing Series A-2 Notes (CUSIP [        ]), or
		(ii)	¨	Regulation S Global Note representing Series A-2 Notes (CUSIP [        ]).
	(b)	¨	a Restricted Definitive Note representing Series A-2 Notes.
2.	After the Transfer the Transferee will hold:
[CHECK ONE]
	(a)	¨	a beneficial interest in the:
		(i)	¨	144A Global Note representing Series A-2 Notes (CUSIP [        ]), or
		(ii)	¨	Regulation S Global Note representing Series A-2 Notes (CUSIP [        ]), or
		(iii)	¨	Unrestricted Global Note representing Series A-2 Notes (CUSIP [        ]).
	(b)	¨	a Restricted Definitive Note representing Series A-2 Notes.
	(c)	¨	an Unrestricted Definitive Note representing Series A-2 Notes, in accordance with the terms of the Indenture.

B-5

EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: General Counsel

Fax No.: (949) 639-4332

U.S. Bank, National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Fax No.: (651) 495-8097

Attention: Corporate Trust Services

Re: [Series A-1 Notes] [Series A-2 Notes]

Reference is hereby made to the Indenture, dated as of May 27, 2009 (the “Indenture”), among Apria Healthcare Group Inc., the Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. NO SERIES A-1 NOTE, OR ANY INTEREST THEREIN, MAY BE TRANSFERRED, REPLACED OR EXCHANGED FOR A SERIES A-2 NOTE, OR ANY INTEREST THEREIN, AND NO SERIES A-2 NOTE, OR ANY INTEREST THEREIN, MAY BE TRANSFERRED, REPLACED OR EXCHANGED FOR A SERIES A-1 NOTE, OR ANY INTEREST THEREIN.

[                                         ] (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified in Annex A or Annex B hereto, in the principal amount of $             in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

1) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE

a)    ¨    CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

b)    ¨    CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for

C-1

an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

c)    ¨    CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

d)    ¨    CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES

a)    ¨    CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

b)    ¨    CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] [    ] 144A Global Note [    ] Regulation S Global Note, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in

C-2

accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company and are dated [                    ].

[Insert Name of Transferor]
By:
	Name:
	Title:

Dated:                     

C-3

ANNEX A TO CERTIFICATE OF EXCHANGE

1.	The Owner owns and proposes to exchange the following:
[CHECK ONE OF (a) OR (b)]
	(a)	¨	a Restricted Global Note representing Series A-1 Notes, or
	(b)	¨	a Restricted Definitive Note representing Series A-1 Notes.
2.	After the Exchange the Owner will hold:
[CHECK ONE]
	(a)	¨	an Unrestricted Global Note representing Series A-1 Notes, or
	(b)	¨	an Unrestricted Definitive Note representing Series A-1 Notes, or
	(c)	¨	a Restricted Definitive Note representing Series A-1 Notes, or
	(d)	¨	144A Global Note representing Series A-1 Notes (CUSIP 037933AD0), or
	(e)	¨	Regulation S Global Note representing Series A-1 Notes (CUSIP U03846AB5).

C-4

ANNEX B TO CERTIFICATE OF EXCHANGE

1.	The Owner owns and proposes to exchange the following:
[CHECK ONE OF (a) OR (b)]
	(a)	¨	a Restricted Global Note representing Series A-2 Notes, or
	(b)	¨	a Restricted Definitive Note representing Series A-2 Notes.
2.	After the Exchange the Owner will hold:
[CHECK ONE]
	(a)	¨	an Unrestricted Global Note representing Series A-2 Notes, or
	(b)	¨	an Unrestricted Definitive Note representing Series A-2 Notes, or
	(c)	¨	a Restricted Definitive Note representing Series A-2 Notes, or
	(d)	¨	144A Global Note representing Series A-2 Notes (CUSIP 037933AD0), or
	(e)	¨	Regulation S Global Note representing Series A-2 Notes (CUSIP U03846AB5).

C-5

EXHIBIT D

[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

Supplemental Indenture (this “Supplemental Indenture”), dated as of             , among (the “Guaranteeing Subsidiary”), a subsidiary of Apria Healthcare Group Inc., a Delaware corporation (the “Company”), and U.S. Bank National Association, as trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, Apria Healthcare Group Inc. and each of the Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of May 27, 2009, providing for the issuance of 11.25% Senior Secured Notes due 2014 (Series A-1) (the “Series A-1 Notes”) and Senior Secured Notes due 2014 (Series A-2) (the “Series A-2 Notes” and, together with the Series A-1 Notes, the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “Guarantee”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with all Guarantors named in the Indenture, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:

(i) the principal of and interest, premium and Additional Interest, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated

D-1

maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.

(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.

(c) The following is hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever.

(d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture, the Collateral Documents and this Supplemental Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

(i) Pursuant to Section 11.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any applicable Bankruptcy Law or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article 11 of the Indenture, this new Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Guarantee will not constitute a fraudulent transfer or conveyance.

D-2

(j) This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation, reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes and Guarantee, whether as a “voidable preference”, “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Note shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(k) In case any provision of this Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(l) This Guarantee shall be a general senior secured obligation of such Guaranteeing Subsidiary, ranking pari passu with any other future Senior Indebtedness of the Guaranteeing Subsidiary, if any, and senior in right of payment to all existing and future Subordinated Indebtedness of the Guaranteeing Subsidiary.

(m) Each payment to be made by the Guaranteeing Subsidiary in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery. The Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets.

(a) Except as otherwise provided in Section 5.01(c) of the Indenture, the Guaranteeing Subsidiary may not consolidate or merge with or into or wind up into (whether or not the Company or Guaranteeing Subsidiary is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(i) (A) the Guaranteeing Subsidiary is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership, trust or limited liability company organized or existing under the laws of the jurisdiction of organization of the Guaranteeing Subsidiary, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Guaranteeing Subsidiary or such Person, as the case may be, being herein called the “Successor Person”);

D-3

(B) the Successor Person, if other than the Guaranteeing Subsidiary, expressly assumes all the obligations of the Guaranteeing Subsidiary under the Indenture, the Guaranteeing Subsidiary’s related Guarantee and the Collateral Documents pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default or Event of Default exists;

(D) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture;

(E) the Collateral transferred to the Successor Person shall (i) continue to constitute Collateral under the Indenture and the Collateral Documents, (ii) be subject to the Lien in favor of the Trustee for the benefit of the holders of the Notes, and (iii) not be subject to any Lien, other than Liens permitted by the terms of the Indenture; and

(F) to the extent that the assets of the Person which is merged or consolidated with or into the Successor Person are assets of the type which would constitute Collateral under the Collateral Documents, the Successor Person will take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Collateral Documents in the manner and to the extent required in the Indenture; or

(ii) the transaction is made in compliance with Section 4.10 of the Indenture.

(b) Subject to certain limitations described in the Indenture, the Successor Person will succeed to, and be substituted for, the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s Guarantee. Notwithstanding the foregoing, the Guaranteeing Subsidiary may (i) merge into or transfer all or part of its properties and assets to another Guarantor or the Company (ii) merge with an Affiliate of the Company solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof or (iii) convert into a corporation, partnership, limited partnership, limited liability company or trust organized under the laws of the jurisdiction of organization of such Guarantor, in each case without regard to the requirements set forth in Section 5.01(c) of the Indenture.

(5) Releases.

The Guarantee of the Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by the Guaranteeing Subsidiary, the Company or the Trustee is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(1) (A) any sale, exchange or transfer (by merger or otherwise) of the Capital Stock of the Guaranteeing Subsidiary after which the Guaranteeing Subsidiary is no longer a Restricted Subsidiary, if such sale, exchange or transfer is made in compliance with the applicable provisions of the Indenture;

D-4

(B) the release or discharge of the guarantee by the Guaranteeing Subsidiary of the ABL Facility or the guarantee which resulted in the creation of the Guarantee, except a discharge or release by or as a result of payment under such guarantee;

(C) the proper designation of the Guaranteeing Subsidiary as an Unrestricted Subsidiary in accordance with Section 4.07 of the Indenture and the definition of “Unrestricted Subsidiary” in Section 1.01 of the Indenture; or

(D) the Company exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Company’s obligations under the Indenture being discharged in accordance with the terms of the Indenture; and

(2) the Guaranteeing Subsidiary delivering to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.

(6) No Recourse Against Others. No director, officer, employee, incorporator or stockholder of the Guaranteeing Subsidiary shall have any liability for any obligations of the Company or the Guarantors (including the Guaranteeing Subsidiary) under the Notes, any Guarantees, the Indenture, the Collateral Documents or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law. THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(8) Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

(9) Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

(10) The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(11) Subrogation. The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Company in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 11.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Company under the Indenture or the Notes shall have been paid in full.

(12) Benefits Acknowledged. The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

D-5

(13) Successors. All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Section 2(k) hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

[GUARANTEEING SUBSIDIARY]
By:
	Name:
	Title:
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
	Name:
	Title:

D-6

EXHIBIT E

[FORM OF SUPPLEMENTAL INDENTURE

FOR THE ISSUANCE OF THE SERIES A-2 NOTES]

Supplemental Indenture (this “Supplemental Indenture”), dated as of             , among APRIA HEALTHCARE GROUP INC., a Delaware corporation (the “Company”), the Guarantors (as defined in the Indenture) listed on the signature pages hereto, and U.S. Bank National Association, as trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, Apria Healthcare Group Inc. and each of the Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of May 27, 2009, providing for the issuance of 11.25% Senior Secured Notes due 2014 (Series A-1) (the “Series A-1 Notes”) and Senior Secured Notes due 2014 (Series A-2) (the “Series A-2 Notes” and, together with the Series A-1 Notes, the “Notes”);

WHEREAS, Section 9.01(16) of the Indenture provides that the Company and the Trustee may at any time and from time to time enter into an indenture supplemental thereto, in form satisfactory to the Trustee, to establish the form and additional terms of the Series A-2 Notes as permitted under the Indenture;

WHEREAS, the Company has duly authorized the issuance of the Series A-2 Notes;

WHEREAS, the Company proposes by this Supplemental Indenture to supplement and amend in certain respects the Indenture insofar as it will apply to the Series A-2 Notes (and not the Series A-1 Notes) to provide for the form and additional terms and other provisions of the Series A-2 Notes as a separate series of securities to be issued under the Indenture; and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Series A-2 Notes as follows:

ARTICLE 1

DEFINITIONS

Section 1.01 Capitalized Terms.

All capitalized terms contained in this Supplemental Indenture shall, except as specifically provided for herein and except as the context may otherwise require, have the meanings given to such terms in the Indenture. In the event of any inconsistency between the Indenture and the Supplemental Indenture, this Supplemental Indenture shall govern.

E-1

Section 1.02 Section References.

Section references contained in this Supplemental Indenture are to sections in this Supplemental Indenture unless the context requires otherwise.

ARTICLE 2

Section 2.01 General.

(a) The initial aggregate principal amount of the Series A-2 Notes shall be $[            ].

(b) The Series A-2 Notes shall accrue interest at an annual interest rate of [    ]%.

(c) Interest shall be payable to the Holders of Series A-2 Notes on the applicable Series A-2 Notes Record Date on each Series A-2 Notes Interest Payment Date.

(d) The Series A-2 Notes will mature on November 1, 2014.

ARTICLE 3

REDEMPTION

Section 3.01 Optional Redemption.

(a) At any time prior to November 1, 2011, the Company may redeem all or a part of the Series A-2 Notes, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail to the registered address of each Holder or otherwise delivered in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Series A-2 Notes redeemed plus the Series A-2 Notes Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption (the “Series A-1 Notes Redemption Date”), subject to the rights of Holders on the relevant Series A-2 Notes Record Date to receive interest due on the relevant Series A-2 Notes Interest Payment Date.

(b) Until November 1, 2011, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Series A-2 Notes issued by it at a redemption price equal to [    ]% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Series A-2 Notes Redemption Date, subject to the right of Holders of Series A-2 Notes of record on the relevant Series A-2 Notes Record Date to receive interest due on the relevant Series A-2 Notes Interest Payment Date, with the net cash proceeds of one or more Equity Offerings; provided that at least 65% of the aggregate principal amount of Series A-2 Notes originally issued under this Indenture (excluding Series A-2 Notes held by the Company or Subsidiaries or Affiliates of the Company) remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 180 days of the date of closing of each such Equity Offering. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to, the completion of the related Equity Offering.

(c) Except pursuant to clause (a) or (b) of this Section 2.01, the Series A-2 Notes will not be redeemable at the Company’s option prior to November 1, 2011.

E-2

(d) On and after November 1, 2011, the Company may redeem the Series A-2 Notes, in whole or in part, upon not less than 30 nor more than 60 days prior notice by first-class mail, postage prepaid, with a copy to the Trustee, to each Holder at the address of such Holder appearing in the security register, at the redemption prices (expressed as percentages of principal amount of the Series A-2 Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Series A-2 Notes Redemption Date, subject to the right of Holders of record on the relevant Series A-2 Notes Record Date to receive interest due on the relevant Series A-2 Notes Interest Payment Date, if redeemed during the twelve-month period beginning on November 1 of each of the years indicated below:

Year	Percentage
2011	[	]%
2012	[	]%
2013 and thereafter	100.000	%

Any redemption pursuant to this Section 3.01 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

ARTICLE 4

MISCELLANEOUS

Section 4.01 Ratification of Indenture.

The Indenture, as supplemented and amended by this Supplemental Indenture, is ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Indenture with respect to the Series A-2 Notes in the manner and to the extent herein and therein provided. If any provision of this Supplemental Indenture is inconsistent with a provision of the Indenture, the terms of this Supplemental Indenture shall control with respect to the Series A-2 Notes. The Indenture, together with this Supplemental Indenture, shall govern the Series A-2 Notes.

Section 4.02 No Personal Liability of Directors, Officers, Employees and Stockholders.

No director, officer, employee, incorporator or stockholder of the Company or any Guarantor or any of their parent companies shall have any liability for any obligations of the Company or the Guarantors under the Series A-2 Notes, the Guarantees, the Indenture, this Supplemental Indenture or the Collateral Documents or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Series A-2 Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Series A-2 Notes.

Section 4.03 Governing Law.

THIS SUPPLEMENTAL INDENTURE, THE SERIES A-2 NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 4.04 Waiver of Jury Trial.

EACH OF THE COMPANY, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE

E-3

LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE, THE SERIES A-2 NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 4.05 Severability.

In case any provision in this Supplemental Indenture or in the Series A-2 Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 4.06 Counterpart Originals.

The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

APRIA HEALTHCARE GROUP INC.
By:
	Name:
	Title:
[GUARANTORS]
By:
	Name:
	Title:
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
	Name:
	Title:

E-4

ANNEX A

[Face of Note]

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Regulation S Temporary Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Original Issue Discount Legend, if applicable pursuant to the provisions of the Indenture]

E-5

CUSIP	[                    ]
ISIN	[                    ]

[[RULE 144A][REGULATION S] GLOBAL NOTE

representing up to

$[            ]

[    ]% Senior Secured Notes due 2014 (Series A-2)

(“Series A-2 Notes”)

No. [    ] [$                    ]

APRIA HEALTHCARE GROUP INC.

promises to pay to CEDE & CO. or registered assigns, the principal sum [of                      United States Dollars] [, as revised by the Schedule of Exchanges of Interests in the Global Note attached hereto,] on [            ], 2014.

Series A-2 Notes Interest Payment Dates: [            ] and [            ]

Series A-2 Notes Record Dates: [            ] and [            ]

E-6

IN WITNESS HEREOF, Apria Healthcare Group Inc. has caused this instrument to be duly executed.

Dated:

APRIA HEALTHCARE GROUP INC.
By:
	Name:
	Title:

E-7

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Series A-2 Notes referred to in the within-mentioned Indenture:

Dated:

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
	Authorized Signatory

E-8

[Back of Note]

[    ]% Senior Secured Notes due 2014 (Series A-2)

(“Series A-2 Notes”)

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Apria Healthcare Group Inc., a Delaware corporation, promises to pay interest on the principal amount of this Series A-2 Note at [    ]% per annum from [                    ] until maturity and shall pay the Additional Interest, if any, payable pursuant to the Registration Rights Agreement referred to below. The Company will pay interest and Additional Interest, if any, semi-annually in arrears on May 1 and November 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, a “Series A-2 Notes Interest Payment Date”). Interest on the Series A-2 Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that the first Series A-2 Notes Interest Payment Date shall be [                    ]. The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Series A-2 Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest, if any (without regard to any applicable grace periods) from time to time on demand at the interest rate on the Series A-2 Notes to the extent lawful. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Company will pay interest on the Series A-2 Notes and Additional Interest, if any, to the Persons who are registered Holders of Series A-2 Notes at the close of business on the April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding the Series A-2 Notes Interest Payment Date, even if such Series A-2 Notes are cancelled after such record date and on or before such Series A-2 Notes Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Payment of interest and Additional Interest, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Additional Interest, if any, on, all Global Notes and all other Series A-2 Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. PAYING AGENT AND REGISTRAR. Initially U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to the Holders. The Company or any of its Subsidiaries may act in any such capacity.

4. INDENTURE. The Company issued the Series A-2 Notes under an Indenture, dated as of May 27, 2009 (the “Indenture”), among Apria Healthcare Group Inc., the Guarantors named therein and the Trustee. This Series A-2 Note is one of a duly authorized issue of notes of the Company, designated as its [    ]% Senior Secured Notes due 2014 (Series A-2). The Company shall be entitled to issue Additional Notes that are Series A-2 Notes pursuant to Section 2.01, Section 4.09 and Section 4.12 of the Indenture. The terms of the Series A-2 Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). The Series A-2 Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of such terms. To the extent any provision of this Series A-2 Note (other than paragraph 5 below) conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

E-9

5. OPTIONAL REDEMPTION.

(a) Except as described below under clauses 5(b) and 5(c) hereof, the Series A-2 Notes will not be redeemable at the Company’s option prior to November 1, 2011.

(b) At any time prior to November 1, 2011, the Company may redeem all or a part of the Series A-2 Notes, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail to the registered address of each Holder or otherwise delivered in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Series A-2 Notes redeemed plus the Series A-2 Notes Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption (the “Series A-2 Notes Redemption Date”), subject to the rights of Holders on the relevant Series A-2 Notes Record Date to receive interest due on the relevant Series A-2 Notes Interest Payment Date.

(c) Until November 1, 2011, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Series A-2 Notes issued by it at a redemption price equal to [    ]% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Series A-2 Notes Redemption Date, subject to the right of Holders of Series A-2 Notes of record on the relevant Series A-2 Notes Record Date to receive interest due on the relevant Series A-2 Notes Interest Payment Date, with the net cash proceeds of one or more Equity Offerings; provided that at least 65% of the aggregate principal amount of Series A-2 Notes originally issued under the Indenture and any Additional Notes that are Series A-2 Notes issued under the Indenture after the Issue Date (excluding Series A-2 Notes and Additional Notes that are Series A-2 Notes held by the Company or Subsidiaries or Affiliates of the Company) remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 180 days of the date of closing of each such Equity Offering. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to, the completion of the related Equity Offering.

(d) On and after November 1, 2011, the Company may redeem the Series A-2 Notes, in whole or in part, upon not less than 30 nor more than 60 days prior notice by first-class mail, postage prepaid, with a copy to the Trustee, to each Holder of Series A-2 Notes at the address of such Holder appearing in the security register, at the redemption prices (expressed as percentages of principal amount of the Series A-2 Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Series A-2 Notes Redemption Date, subject to the right of Holders of Series A-2 Notes of record on the relevant Series A-2 Notes Record Date to receive interest due on the relevant Series A-2 Notes Interest Payment Date, if redeemed during the twelve-month period beginning on November 1 of each of the years indicated below:

Year	Percentage
2011	[	]%
2012	[	]%
2013 and thereafter	100.000	%

E-10

(e) If the Company redeems less than all of the outstanding Series A-2 Notes, the Trustee shall select the Series A-2 Notes to be redeemed in the manner described under Section 3.02 of the Indenture.

(f) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

6. MANDATORY REDEMPTION. The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Series A-2 Notes.

7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days prior to the redemption date (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 of the Indenture) to each Holder whose Series A-2 Notes are to be redeemed at its registered address. Series A-2 Notes in denominations larger than $2,000 may be redeemed in part but only in integral multiples of $1,000 in excess thereof, unless all of the Series A-2 Notes held by a Holder are to be redeemed. Subject to Section 3.05 of the Indenture, on and after the redemption date, interest will cease to accrue on Series A-2 Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) Upon the occurrence of a Change of Control, the Company shall make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of each Holder’s Series A-2 Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Additional Interest thereon, if any, to the date of purchase (the “Change of Control Payment”), subject to the right of the Holders of the Series A-2 Notes of record on the relevant applicable Record Date to receive interest due on the relevant applicable Interest Payment Date. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Company or any of its Restricted Subsidiaries consummates an Asset Sale, within ten Business Days of each date that the aggregate amount of Excess Proceeds exceeds $30.0 million, the Company shall make an offer to all Holders of the Series A-2 Notes and, if required by the terms of any Indebtedness that is pari passu with the Series A-2 Notes or any Guarantee (including any Series A-1 Notes) (“Pari Passu Indebtedness”), to the holders of such Pari Passu Indebtedness (an “Asset Sale Offer”), to purchase the maximum aggregate principal amount of Series A-2 Notes (including any Additional Notes which are Series A-2 Notes) and such other Pari Passu Indebtedness that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest thereon, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. The Asset Sale Offer shall be made in accordance with Sections 3.09 and 4.10 of the Indenture.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Series A-2 Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Series A-2 Notes may be registered and Series A-2 Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Series A-2 Notes or portion of a Series A-2 Note selected for redemption, except for the unredeemed portion of any Series A-2 Notes being redeemed in part.

E-11

Also, the Company need not exchange or register the transfer of any Series A-2 Notes for a period of 15 days before a selection of Series A-2 Notes to be redeemed.

10. SECURITY. The Series A-2 Notes will be secured by the Collateral on the terms and subject to the conditions set forth in the Indenture and the Collateral Documents. The Notes/Term Collateral Agent holds the Collateral in trust for the benefit of the Secured Parties pursuant to the Collateral Documents and the Intercreditor Agreements. Each Holder, by accepting this Series A-2 Note, consents and agrees to the terms of the Collateral Documents (including the provisions providing for the foreclosure and release of Collateral) and the Intercreditor Agreements as the same may be in effect or may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the Trustee and/or the Notes/Term Collateral Agent, as applicable, to enter into the Collateral Documents and the Intercreditor Agreements, and to perform its obligations and exercise its rights thereunder in accordance therewith.

11. PERSONS DEEMED OWNERS. The registered Holder of a Series A-2 Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Collateral Documents, the Guarantees or the Series A-2 Notes may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. If an Event of Default with respect to the Series A-2 Notes shall occur and be continuing, the principal, premium, if any, interest and any other monetary obligations on all then outstanding Series A-2 Notes may be declared due and payable in the manner and with the effect provided in the Indenture.

14. PRIORITIES OF PAYMENT AS BETWEEN SERIES A-1 NOTES AND SERIES A-2 DEBT. The Series A-1 Notes, the Series A-2 Notes (if issued) and any Term Loans then outstanding will vote together as a single class for all purposes under the Indenture to the extent provided in Article 6 and Article 9 thereof. The Holders of the Series A-1 Notes shall be entitled to a priority of payment over the holders of the Series A-2 Debt in the circumstances described in the Notes/Term Intercreditor Agreement. The Holders of Series A-1 Notes, the Bridge Loan Agent, the holders of Series A-2 Debt, the Trustee, the Notes/Term Collateral Agent and the Company have agreed (or are deemed to have agreed) to certain other intercreditor arrangements in the Notes/Term Intercreditor Agreement pursuant to which Holders of Notes are bound.

15. GUARANTEES. The Company’s obligations under the Series A-2 Notes are fully and unconditionally guaranteed, jointly and severally, by the Guarantors.

16. AUTHENTICATION. This Series A-2 Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Series A-2 Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes, in each case, that are Series A-2 Notes, shall have all the rights set forth in the Registration Rights Agreement, dated as of [                    ], among Apria Healthcare Group Inc., the Guarantors named therein and the other parties named on the signature pages thereof (the “Registration Rights Agreement”), including the right to receive Additional Interest (as defined in the Registration Rights Agreement).

E-12

18. GOVERNING LAW. THE INDENTURE, THE SERIES A-2 NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

19. CUSIP AND ISIN NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP and ISIN numbers to be printed on the Series A-2 Notes and the Trustee may use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Series A-2 Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to the Company at the following address:

c/o Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Facsimile: (949) 639-4332

Attention: General Counsel

E-13

ASSIGNMENT FORM

To assign this Series A-2 Note, fill in the form below:

(I) or (we) assign and transfer this Series A-2 Note to:
	(Insert assignee’ legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint

to transfer this Series A-2 Note on the books of the Company. The agent may substitute another to act for him.

Date:                     

Your Signature:
	(Sign exactly as your name appears on the face of this Series A-2 Note)

Signature Guarantee:*

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

E-14

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Series A-2 Note purchased by the Company pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

¨  Section 4.10     ¨  Section 4.14

If you want to elect to have only part of this Series A-2 Note purchased by the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$                                                             

Date:                     

Your Signature:
	(Sign exactly as your name appears on the face of this Series A-2 Note)

Tax Identification No.:

Signature Guarantee:*

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

E-15

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $[            ]. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

Date of Exchange Amount of
Decrease in
Principal Amount Amount of
Increase in
Principal Amount
of this Global
Note Principal Amount
of this Global
Note following
such Decrease or
Increase Signature of
Authorized
Officer of Trustee
or Custodian

* This schedule should be included only if the Series A-2 Note is issued in global form.

E-16

SCHEDULE A

UNRESTRICTED SUBSIDIARIES AS OF THE ISSUE DATE

Coram Healthcare Ltd.

Coram Healthcare/Carolina Home Therapeutics

Coram International Holdings Ltd.

EX-4.2

Exhibit 4.2

EXECUTION COPY

SUPPLEMENTAL INDENTURE

FOR THE ISSUANCE OF THE SERIES A-2 NOTES

Supplemental Indenture (this “Supplemental Indenture”), dated as of August 13, 2009, among APRIA HEALTHCARE GROUP INC., a Delaware corporation (the “Company”), the Guarantors (as defined in the Indenture) listed on the signature pages hereto, and U.S. Bank National Association, as trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, Apria Healthcare Group Inc. and each of the Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of May 27, 2009, providing for the issuance of 11.25% Senior Secured Notes due 2014 (Series A-1) (the “Series A-1 Notes”) and Senior Secured Notes due 2014 (Series A-2) (the “Series A-2 Notes” and, together with the Series A-1 Notes, the “Notes”);

WHEREAS, Section 9.01(16) of the Indenture provides that the Company and the Trustee may at any time and from time to time enter into an indenture supplemental thereto, in form satisfactory to the Trustee, to establish the form and additional terms of the Series A-2 Notes as permitted under the Indenture;

WHEREAS, the Company has duly authorized the issuance of the Series A-2 Notes;

WHEREAS, the Company proposes by this Supplemental Indenture to supplement and amend in certain respects the Indenture insofar as it will apply to the Series A-2 Notes (and not the Series A-1 Notes) to provide for the form and additional terms and other provisions of the Series A-2 Notes as a separate series of securities to be issued under the Indenture; and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Series A-2 Notes as follows:

ARTICLE 1

DEFINITIONS

Section 1.01 Capitalized Terms.

All capitalized terms contained in this Supplemental Indenture shall, except as specifically provided for herein and except as the context may otherwise require, have the meanings given to such terms in the Indenture. In the event of any inconsistency between the Indenture and the Supplemental Indenture, this Supplemental Indenture shall govern.

Section 1.02 Section References.

Section references contained in this Supplemental Indenture are to sections in this Supplemental Indenture unless the context requires otherwise.

ARTICLE 2

Section 2.01 General.

(a) The initial aggregate principal amount of the Series A-2 Notes shall be $317,500,000.

(b) The Series A-2 Notes shall accrue interest at an annual interest rate of 12.375%.

(c) Interest shall be payable to the Holders of Series A-2 Notes on the applicable Series A-2 Notes Record Date on each Series A-2 Notes Interest Payment Date.

(d) The Series A-2 Notes will mature on November 1, 2014.

ARTICLE 3

REDEMPTION

Section 3.01 Optional Redemption.

(a) At any time prior to November 1, 2011, the Company may redeem all or a part of the Series A-2 Notes, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail to the registered address of each Holder or otherwise delivered in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Series A-2 Notes redeemed plus the Series A-2 Notes Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption (the “Series A-1 Notes Redemption Date”), subject to the rights of Holders on the relevant Series A-2 Notes Record Date to receive interest due on the relevant Series A-2 Notes Interest Payment Date.

(b) Until November 1, 2011, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Series A-2 Notes issued by it at a redemption price equal to 112.375% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Series A-2 Notes Redemption Date, subject to the right of Holders of Series A-2 Notes of record on the relevant Series A-2 Notes Record Date to receive interest due on the relevant Series A-2 Notes Interest Payment Date, with the net cash proceeds of one or more Equity Offerings; provided that at least 65% of the aggregate principal amount of Series A-2 Notes originally issued under this Indenture (excluding Series A-2 Notes held by the Company or Subsidiaries or Affiliates of the Company) remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 180 days of the date of closing of each such Equity Offering. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to, the completion of the related Equity Offering.

(c) Except pursuant to clause (a) or (b) of this Section 3.01, the Series A-2 Notes will not be redeemable at the Company’s option prior to November 1, 2011.

(d) On and after November 1, 2011, the Company may redeem the Series A-2 Notes, in whole or in part, upon not less than 30 nor more than 60 days prior notice by first-class mail, postage prepaid, with a copy to the Trustee, to each Holder at the address of such Holder appearing in the security register, at the redemption prices (expressed as percentages of principal amount of the Series A-2 Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable Series A-2 Notes Redemption Date, subject to the right of Holders of record on the relevant Series A-2 Notes Record Date to receive interest due on the relevant Series A-2 Notes Interest Payment Date, if redeemed during the twelve-month period beginning on November 1 of each of the years indicated below:

Year	Percentage
2011	106.188	%
2012	103.094	%
2013 and thereafter	100.000	%

Any redemption pursuant to this Section 3.01 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

ARTICLE 4

MISCELLANEOUS

Section 4.01 Ratification of Indenture.

The Indenture, as supplemented and amended by this Supplemental Indenture, is ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Indenture with respect to the Series A-2 Notes in the manner and to the extent herein and therein provided. If any provision of this Supplemental Indenture is inconsistent with a provision of the Indenture, the terms of this Supplemental Indenture shall control with respect to the Series A-2 Notes. The Indenture, together with this Supplemental Indenture, shall govern the Series A-2 Notes.

Section 4.02 No Personal Liability of Directors, Officers, Employees and Stockholders.

No director, officer, employee, incorporator or stockholder of the Company or any Guarantor or any of their parent companies shall have any liability for any obligations of the Company or the Guarantors under the Series A-2 Notes, the Guarantees, the Indenture, this Supplemental Indenture or the Collateral Documents or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Series A-2 Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Series A-2 Notes.

Section 4.03 Governing Law.

THIS SUPPLEMENTAL INDENTURE, THE SERIES A-2 NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 4.04 Waiver of Jury Trial.

EACH OF THE COMPANY, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE

LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE, THE SERIES A-2 NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 4.05 Severability.

In case any provision in this Supplemental Indenture or in the Series A-2 Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 4.06 Counterpart Originals.

The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

APRIA HEALTHCARE GROUP INC.
By:	/s/ Chris A. Karkenny
	Name:	Chris A. Karkenny
	Title:	Executive Vice President and Chief Financial Officer
GUARANTORS:
APRIA HEALTHCARE OF NEW YORK STATE, INC.
APRIA HEALTHCARE, INC.
APRIACARE MANAGEMENT SYSTEMS, INC.
APRIADIRECT.COM, INC.
CORAM, INC.
By:	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	Executive Vice President General Counsel and Secretary

Signature Page to Supplemental Indenture

CORAM ALTERNATE SITE SERVICES, INC.
CORAM CLINICAL TRIALS, INC.
CORAM HEALTHCARE CORPORATION OF ALABAMA
CORAM HEALTHCARE CORPORATION OF FLORIDA
CORAM HEALTHCARE CORPORATION OF GREATER D.C.
CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK
CORAM HEALTHCARE CORPORATION OF INDIANA
CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS
CORAM HEALTHCARE CORPORATION OF MICHIGAN
CORAM HEALTHCARE CORPORATION OF MISSISSIPPI
CORAM HEALTHCARE CORPORATION OF NEVADA
CORAM HEALTHCARE CORPORATION OF NEW YORK
CORAM HEALTHCARE CORPORATION OF NORTH TEXAS
CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA
CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA
CORAM HEALTHCARE CORPORATION OF UTAH
CORAM HEALTHCARE OF WYOMING, L.L.C.
CORAM HOMECARE OF MINNESOTA, INC.
CORAM SERVICE CORPORATION
CORAM SPECIALTY INFUSION SERVICES, INC.
CORAMRX, LLC
H.M.S.S., INC.
HEALTHINFUSION, INC.
T2 MEDICAL, INC.
By:	/s/ Robert T. Allen
	Name:	Robert T. Allen
	Title:	President

Signature Page to Supplemental Indenture

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:	/s/ Raymond S. Haverstock
	Name:	Raymond S. Haverstock
	Title:	Vice President

Signature Page to Supplement Indenture

EX-4.3

Exhibit 4.3

Execution Version

Second Supplemental Indenture (this “Supplemental Indenture”), dated as of July 13, 2010 among AHNY-DME LLC and AHNY-IV LLC (each, a “Guaranteeing Subsidiary” and collectively, the “Guaranteeing Subsidiaries”), subsidiaries of Apria Healthcare Group Inc., a Delaware corporation (the “Company”), and U.S. Bank National Association, as trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, Apria Healthcare Group Inc. and each of the Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture dated as of May 27, 2009 (as amended by the Supplemental Indenture dated August 13, 2009, the “Indenture”), providing for the issuance of 11.25% Senior Secured Notes due 2014 (Series A-1) (the “Series A-1 Notes”) and Senior Secured Notes due 2014 (Series A-2) (the “Series A-2 Notes” and, together with the Series A-1 Notes, the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a supplemental indenture pursuant to which each Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “Guarantee”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee. Each Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with all Guarantors named in the Indenture, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:

(i) the principal of and interest, premium and Additional Interest, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated

maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors and such Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.

(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.

(c) The following is hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever.

(d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture, the Collateral Documents and this Supplemental Indenture, and such Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors (including such Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) Such Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between such Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by such Guaranteeing Subsidiary for the purpose of this Guarantee.

(h) Such Guaranteeing Subsidiary shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

(i) Pursuant to Section 11.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any applicable Bankruptcy Law or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article 11 of the Indenture, this new Guarantee shall be

limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Guarantee will not constitute a fraudulent transfer or conveyance.

(j) This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation, reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes and Guarantee, whether as a “voidable preference”, “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Note shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(k) In case any provision of this Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(l) This Guarantee shall be a general senior secured obligation of such Guaranteeing Subsidiary, ranking pari passu with any other future Senior Indebtedness of such Guaranteeing Subsidiary, if any, and senior in right of payment to all existing and future Subordinated Indebtedness of such Guaranteeing Subsidiary.

(m) Each payment to be made by such Guaranteeing Subsidiary in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery. Each Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets.

(a) Except as otherwise provided in Section 5.01(c) of the Indenture, each Guaranteeing Subsidiary may not consolidate or merge with or into or wind up into (whether or not the Company or such Guaranteeing Subsidiary is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(i) (A) such Guaranteeing Subsidiary is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership, trust or limited liability company organized or existing under the laws of the jurisdiction of organization of such Guaranteeing Subsidiary, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guaranteeing Subsidiary or such Person, as the case may be, being herein called the “Successor Person”);

(B) the Successor Person, if other than such Guaranteeing Subsidiary, expressly assumes all the obligations of such Guaranteeing Subsidiary under the Indenture, such Guaranteeing Subsidiary’s related Guarantee and the Collateral Documents pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default or Event of Default exists;

(D) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture;

(E) the Collateral transferred to the Successor Person shall (i) continue to constitute Collateral under the Indenture and the Collateral Documents, (ii) be subject to the Lien in favor of the Trustee for the benefit of the holders of the Notes, and (iii) not be subject to any Lien, other than Liens permitted by the terms of the Indenture; and

(F) to the extent that the assets of the Person which is merged or consolidated with or into the Successor Person are assets of the type which would constitute Collateral under the Collateral Documents, the Successor Person will take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Collateral Documents in the manner and to the extent required in the Indenture; or

(ii) the transaction is made in compliance with Section 4.10 of the Indenture.

(b) Subject to certain limitations described in the Indenture, the Successor Person will succeed to, and be substituted for, such Guaranteeing Subsidiary under the Indenture and such Guaranteeing Subsidiary’s Guarantee. Notwithstanding the foregoing, such Guaranteeing Subsidiary may (i) merge into or transfer all or part of its properties and assets to another Guarantor or the Company (ii) merge with an Affiliate of the Company solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof or (iii) convert into a corporation, partnership, limited partnership, limited liability company or trust organized under the laws of the jurisdiction of organization of such Guarantor, in each case without regard to the requirements set forth in Section 5.01(c) of the Indenture.

(5) Releases.

The Guarantee of each Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by such Guaranteeing Subsidiary, the Company or the Trustee is required for the release of such Guaranteeing Subsidiary’s Guarantee, upon:

(1) (A) any sale, exchange or transfer (by merger or otherwise) of the Capital Stock of such Guaranteeing Subsidiary after which such Guaranteeing Subsidiary is no longer a Restricted Subsidiary, if such sale, exchange or transfer is made in compliance with the applicable provisions of the Indenture;

(B) the release or discharge of the guarantee by such Guaranteeing Subsidiary of the ABL Facility or the guarantee which resulted in the creation of the Guarantee, except a discharge or release by or as a result of payment under such guarantee;

(C) the proper designation of such Guaranteeing Subsidiary as an Unrestricted Subsidiary in accordance with Section 4.07 of the Indenture and the definition of “Unrestricted Subsidiary” in Section 1.01 of the Indenture; or

(D) the Company exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Company’s obligations under the Indenture being discharged in accordance with the terms of the Indenture; and

(2) such Guaranteeing Subsidiary delivering to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.

(6) No Recourse Against Others. No director, officer, employee, incorporator or stockholder of the Guaranteeing Subsidiaries shall have any liability for any obligations of the Company or the Guarantors (including the Guaranteeing Subsidiaries) under the Notes, any Guarantees, the Indenture, the Collateral Documents or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law. THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(8) Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

(9) Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

(10) The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each Guaranteeing Subsidiary.

(11) Subrogation. Each Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Company in respect of any amounts paid by such Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 11.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, such Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Company under the Indenture or the Notes shall have been paid in full.

(12) Benefits Acknowledged. Each Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. Each Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

(13) Successors. All agreements of each Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Section 2(k) hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

AHNY DME-LLC
By:	/s/ Robert S. Holcombe
Name:	Robert S. Holcombe
Title:	Executive Vice President, General Counsel and Secretary
AHNY-IV LLC
By:	/s/ Robert S. Holcombe
Name:	Robert S. Holcombe
Title:	Executive Vice President, General Counsel and Secretary
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:	/s/ Raymond S. Haverstock
Name:	Raymond S. Haverstock
Title:	Vice President

[Second Supplemental Indenture]

EX-4.4

Exhibit 4.4

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

by and among

Apria Healthcare Group Inc.,

the Guarantors Named Herein

and

Banc of America Securities LLC

Wachovia Capital Markets, LLC

Barclays Capital Inc. and

Scotia Capital (USA) Inc.

Dated as of May 27, 2009

This Registration Rights Agreement (this “Agreement”) is made and entered into as of May 27, 2009, by and among Apria Healthcare Group Inc., a Delaware corporation (the “Issuer”), the Guarantors listed on Schedule A hereto (the “Guarantors”), and Banc of America Securities LLC, Wachovia Capital Markets, LLC, Barclays Capital Inc. and Scotia Capital (USA) Inc. (collectively, the “Initial Purchasers”), who have agreed to purchase the Issuer’s 11.25% Senior Secured Notes due 2014 (Series A-1) (the “Initial Series A-1 Notes”) and the related guarantees (the “Initial Guarantees”) pursuant to the Purchase Agreement (as defined below).

This Agreement is made pursuant to the Purchase Agreement, dated as of May 21, 2009 (the “Purchase Agreement”), by and among the Issuer, the Guarantors and the Initial Purchasers, (i) for the benefit of the Initial Purchasers and (ii) for the benefit of the holders from time to time of the Series A-1 Notes (as hereinafter defined) (including the Initial Purchasers). In order to induce the Initial Purchasers to purchase the Initial Series A-1 Notes, the Issuer and the Guarantors have agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 5(g) of the Purchase Agreement.

The parties hereby agree as follows:

SECTION 1. Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings:

Additional Interest: As defined in Section 5 hereof.

Advice: As defined in the last paragraph of Section 6(c) hereof.

Agreement: As defined in the preamble hereto.

Broker-Dealer: Any broker or dealer registered under the Exchange Act.

Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions in the City of New York are authorized or obligated to be closed.

Closing Date: The date of this Agreement.

Commission: The Securities and Exchange Commission.

Consummate: A Series A-1 Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the delivery by the Issuer to the Registrar under the Indenture of Exchange Series A-1 Notes in the same aggregate principal amount as the aggregate principal amount of Initial Series A-1 Notes that were tendered by Holders thereof pursuant to the Series A-1 Exchange Offer.

Effectiveness Period: As defined in Section 4(a) hereof.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Exchange Guarantees: The guarantees to be issued by the Guarantors, relating to the Exchange Series A-1 Notes.

Exchange Series A-1 Notes: The 11.25% Senior Secured Notes due 2014 (Series A-1), of the same series under the Indenture as the Initial Series A-1 Notes, to be issued to Holders in exchange for Transfer Restricted Securities pursuant to this Agreement.

FINRA: The Financial Industry Regulatory Authority

Holder: As defined in Section 2(b) hereof.

Indemnified Holder: As defined in Section 8(a) hereof.

Indenture: The Indenture, dated as of May 27, 2009, among the Issuer, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”), pursuant to which the Series A-1 Notes are to be issued, as such Indenture may be amended or supplemented from time to time in accordance with the terms thereof.

Initial Guarantees: As defined in the preamble hereto.

Initial Series A-1 Notes: As defined in the preamble hereto.

Initial Placement Date: The date of the issuance and sale by the Issuer of the Initial Series A-1 Notes to the Initial Purchasers pursuant to the Purchase Agreement.

Initial Purchasers: As defined in the preamble hereto.

Interest Payment Date: As defined in the Indenture and the Series A-1 Notes.

Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

Private Exchange: As defined in Section 3(c) hereof.

Private Exchange Series A-1 Notes: As defined in Section 3(c) hereof.

Prospectus: The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

Registration Deadline: The date that is (1) if Series A-2 Notes are issued within 90 days after the Initial Placement Date, 450 days after the last issue date of Series A-2 Notes during such 90 day period, or (2) if the Series A-2 Notes are not issued within 90 days after the Initial Placement Date, 365 days after the last issue date of Series A-2 Notes, but in no event later than April 28, 2011.

Registration Default: As defined in Section 5 hereof.

Registration Statement: Any registration statement of the Issuer and the Guarantors relating to (a) an offering of Exchange Series A-1 Notes pursuant to a Series A-1 Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.

Securities Act: The Securities Act of 1933, as amended.

Series A-1 Exchange Offer: The registration by the Issuer and the Guarantors under the Securities Act of the Exchange Series A-1 Notes pursuant to a Registration Statement pursuant to which the Issuer and the Guarantors offer the Holders of all outstanding Transfer Restricted Securities the

3

opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for Exchange Series A-1 Notes and the Exchange Guarantees in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders.

Series A-1 Exchange Offer Registration Statement: The Registration Statement relating to the Series A-1 Exchange Offer, including the related Prospectus.

Series A-1 Notes: The Initial Series A-1 Notes and the Exchange Series A-1 Notes.

Series A-2 Notes: Senior Secured Notes due 2014 (Series A-2) and the related guarantees that may be issued pursuant to the Indenture at the request of the Initial Purchasers.

Shelf Registration Statement: As defined in Section 4 hereof.

Shelf Suspension Period: As defined in Section 4(a) hereof.

Transfer Restricted Securities: Each Initial Series A-1 Note and the related Initial Guarantees, until the earliest to occur of (a) the date on which such Initial Series A-1 Note and the related Initial Guarantees are exchanged in the Series A-1 Exchange Offer and entitled to be resold to the public by the Holders thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Initial Series A-1 Note and the related Initial Guarantees have been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement, and (c) the date on which such Initial Series A-1 Note and the related Initial Guarantees are distributed to the public pursuant to Rule 144 under the Securities Act or by a Broker-Dealer pursuant to the “Plan of Distribution” contemplated by the Series A-1 Exchange Offer Registration Statement (including delivery of the Prospectus contained therein).

Trust Indenture Act: The Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa - 77bbbb) as in effect on the date of the Indenture.

Underwritten Registration or Underwritten Offering: A registration in which securities of the Issuer are sold to an underwriter for reoffering to the public.

SECTION 2. Securities Subject to This Agreement.

(a) Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.

(b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”) whenever such Person owns Transfer Restricted Securities.

SECTION 3. Registered Exchange Offer.

(a) Unless the Series A-1 Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), the Issuer and the Guarantors shall (i) prepare and file with the Commission a Series A-1 Exchange Offer Registration Statement under the Securities Act, (ii) use their reasonable efforts to cause such Series A-1 Exchange Offer Registration Statement to become effective under the Securities Act, (iii) in connection with the foregoing, file (A) all pre-effective

4

amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430A under the Securities Act and (C) all necessary filings in connection with the registration and qualification of the Exchange Series A-1 Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Series A-1 Exchange Offer, and (iv) upon the effectiveness of such Registration Statement, commence the Series A-1 Exchange Offer. The Series A-1 Exchange Offer shall be on the appropriate form permitting registration of the Exchange Series A-1 Notes to be offered in exchange for the Transfer Restricted Securities and to permit resales of Series A-1 Notes held by Broker-Dealers as contemplated by Section 3(c) below.

(b) The Issuer and the Guarantors shall use their reasonable best efforts to cause the Series A-1 Exchange Offer Registration Statement to be effective continuously and shall keep the Series A-1 Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Series A-1 Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days after the date notice of the Series A-1 Exchange Offer is mailed to the Holders. The Issuer and the Guarantors shall cause the Series A-1 Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Series A-1 Notes and, at the Issuer’s option, the Series A-2 Notes shall be included in the Series A-1 Exchange Offer Registration Statement. The Issuer and the Guarantors shall use commercially reasonable efforts to cause the Series A-1 Exchange Offer to be Consummated on or before the Registration Deadline.

(c) If, prior to consummation of the Series A-1 Exchange Offer, the Initial Purchasers hold any Initial Series A-1 Notes acquired by them that have the status of an unsold allotment in the initial distribution, the Issuer, upon the request of the Initial Purchasers, shall simultaneously with the delivery of the Exchange Series A-1 Notes issue and deliver to the Initial Purchasers, in exchange (the “Private Exchange”) for such Initial Series A-1 Notes held by any such Holder, a like principal amount of notes (the “Private Exchange Series A-1 Notes”) of the Issuer, guaranteed by the Guarantors, that are identical in all material respects to the Exchange Series A-1 Notes except for the placement of a restrictive legend on such Private Exchange Series A-1 Notes. The Private Exchange Series A-1 Notes shall be issued pursuant to the same indenture as the Exchange Series A-1 Notes and bear the same CUSIP number as the Exchange Series A-1 Notes if permitted by the CUSIP Service Bureau.

(d) The Issuer shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Series A-1 Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Series A-1 Notes that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Issuer), may exchange such Initial Series A-1 Notes pursuant to the Series A-1 Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Series A-1 Notes received by such Broker-Dealer in the Series A-1 Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Series A-1 Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Series A-1 Notes held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement.

5

The Issuer and the Guarantors shall use their reasonable best efforts to keep the Series A-1 Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) below to the extent necessary to ensure that it is available for resales of Series A-1 Notes acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 90 days from the date on which the Series A-1 Exchange Offer Registration Statement is declared effective, (ii) the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities and (iii) the date on which all the Series A-1 Notes covered by such Series A-1 Exchange Offer Registration Statement have been sold pursuant to such Series A-1 Exchange Offer Registration Statement.

The Issuer shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such 90-day (or shorter as provided in the foregoing sentence) period in order to facilitate such resales.

SECTION 4. Shelf Registration.

(a) Shelf Registration. If (1) because of any change in law or in currently prevailing interpretations of the staff of the Commission, the Issuer is not permitted to effect the Series A-1 Exchange Offer, (2) the Series A-1 Exchange Offer is not Consummated on or before the Registration Deadline, (3) any holder of Private Exchange Notes so requests in writing to the Issuer at any time within 30 days after the consummation of the Exchange Offer, or (4) in the case of any Holder that participates in the Series A-1 Exchange Offer, such Holder does not receive Exchange Securities on or before the date of the exchange that may be sold without restriction under state and federal securities laws (other than due solely to the status of such Holder as an affiliate of the Issuer within the meaning of the Securities Act) and so notifies the Issuer within 30 days after such Holder first becomes aware of such restrictions, in the case of each of clauses (1) to and including clause (3) of this sentence, then, upon such Holder’s request, the Issuer and the Guarantors shall (unless the Series A-1 Notes are eligible for resale under Rule 144, without regard to volume, manner of sale or other restrictions contained in Rule 144 under the Securities Act (or any successor rule)):

(x) use their reasonable best efforts to file a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Series A-1 Exchange Offer Registration Statement (in either event, the “Shelf Registration Statement”) as soon as practicable after the filing obligation arises, which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and

(y) use commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective promptly by the Commission.

The Issuer and the Guarantors shall use their reasonable best efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Series A-1 Notes by the Holders of Transfer Restricted Securities entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules

6

and regulations of the Commission as announced from time to time, until the earliest of (i) two years after the Initial Placement Date of the Initial Series A-1 Notes, (ii) such time as all of the Initial Series A-1 Notes have been sold thereunder or (iii) the date upon which all Initial Series A-1 Notes covered by such Shelf Registration Statement become eligible for resale under Rule 144, without regard to volume, manner of sale or other restrictions contained in Rule 144 under the Securities Act (or any successor rule) (the “Effectiveness Period”).

Notwithstanding anything to the contrary in this Agreement, at any time, the Issuer may delay the filing of any Shelf Registration Statement or delay or suspend the effectiveness thereof, for a reasonable period of time, but not in excess of 60 consecutive days or more than three (3) times during any calendar year (each, a “Shelf Suspension Period”), if the Board of Directors of the Company determines reasonably and in good faith that the filing of any such Initial Shelf Registration Statement or the continuing effectiveness thereof would require the disclosure of non-public material information that, in the reasonable judgment of the Board of Directors of the Company, would be detrimental to the Issuer if so disclosed or would otherwise materially adversely affect a financing, acquisition, disposition, merger or other material transaction or such action is required by applicable law.

(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Issuer in writing, within 20 Business Days after receipt of a request therefor, such information as the Issuer may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Issuer all information required to be disclosed in order to make the information previously furnished to the Issuer by such Holder not materially misleading.

SECTION 5. Additional Interest.

If (a) the Series A-1 Exchange Offer has not been Consummated or a Shelf Registration Statement has not been declared effective by the Commission on or prior to the Registration Deadline, or (b) if applicable, a Shelf Registration Statement has been declared effective but shall thereafter cease to be effective during the Effectiveness Period (other than because of the sale of all of the Transfer Restricted Securities registered thereunder) (each such event referred to in clauses (a) and (b), a “Registration Default”), then additional interest (“Additional Interest”) shall accrue on the principal amount of the Series A-1 Notes at a rate of 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default (which rate will be increased by an additional 0.25% per annum for each subsequent 90-day period that such Additional Interest continues to accrue; provided that the rate which such Additional Interest accrues may in no event exceed 1.00% per annum) (such Additional Interest to be calculated by the Issuer) commencing on the (x) first day after the Registration Deadline, in the case of clause (a) above, or (y) the day such Shelf Registration ceases to be effective in the case of clause (b) above; provided, however, that upon the exchange of the Exchange Series A-1 Notes for all Transfer Restricted Securities tendered, or upon the effectiveness of the applicable Shelf Registration Statement which had ceased to remain effective, Additional Interest on the Series A-1 Notes in respect of which such events relate as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue. Notwithstanding any other provisions of this Section 5, the Issuer shall not be obligated to pay Additional Interest provided in this Section 5 during a Shelf Suspension Period permitted by Section 4(a) hereof.

7

SECTION 6. Registration Procedures.

(a) Series A-1 Exchange Offer Registration Statement. In connection with the Series A-1 Exchange Offer, the Issuer and each of the Guarantors shall comply with all of the provisions of Section 6(c) below, shall use their best efforts to effect such exchange to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:

(i) If in the reasonable opinion of counsel to the Issuer there is a question as to whether the Series A-1 Exchange Offer is permitted by applicable law and it is advisable to do so, the Issuer and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Issuer and the Guarantors to Consummate a Series A-1 Exchange Offer for such Initial Series A-1 Notes. The Issuer and the Guarantors each hereby agree to pursue the issuance of such a decision to the Commission staff level but shall not be required to take action to effect a change of Commission policy. The Issuer and the Guarantors each hereby agree, however, to (A) participate in telephonic conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to the Issuer setting forth the legal bases, if any, upon which such counsel has concluded that such a Series A-1 Exchange Offer should be permitted and (C) diligently pursue a resolution by the Commission staff of such submission.

(ii) As a condition to its participation in the Series A-1 Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Issuer, prior to the Consummation thereof, a written representation to the Issuer (which may be contained in the letter of transmittal contemplated by the Series A-1 Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Issuer, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Exchange Series A-1 Notes to be issued in the Series A-1 Exchange Offer and (C) it is acquiring the Exchange Series A-1 Notes in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise cooperate in the Issuer’s preparations for the Series A-1 Exchange Offer. Each Holder, including any Holder that is a Broker-Dealer, shall acknowledge and agree that any such Holder using the Series A-1 Exchange Offer to participate in a distribution of the securities to be acquired in the Series A-1 Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley & Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of Exchange Series A-1 Notes obtained by such Holder in exchange for Initial Series A-1 Notes acquired by such Holder directly from the Issuer.

8

(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, the Issuer and each of the Guarantors shall comply with all the provisions of Section 6(c) below.

(c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Series A-1 Notes by Broker-Dealers), the Issuer and the Guarantors shall:

(i) use their reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements including, if required by the Securities Act or any regulation thereunder, financial statements of the Guarantors; upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Issuer and the Guarantors shall file promptly an appropriate amendment to such Registration Statement or supplement to the Prospectus or document incorporated by reference, in the case of clause (A), correcting any such misstatement or omission, and, in the case of an amendment, use their reasonable best efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

(ii) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Securities Act, as applicable, in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

(iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any

9

additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Issuer and the Guarantors shall use their reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time;

(iv) furnish without charge to counsel for the Initial Purchasers, each selling Holder named in any Registration Statement, and each of the underwriter(s), if any, at least one copy before filing with the Commission of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including, if requested in writing by any such Person, all documents incorporated by reference after the initial filing of such Registration Statement, if not available on the Commission’s EDGAR database), which Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus will be subject to the review of the Initial Purchasers and such Holders and underwriter(s) in connection with such sale, if any, for a reasonable period, and the Issuer will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus to which the Initial Purchasers or the underwriter(s), if any, shall reasonably object in writing after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period). The objection of an Initial Purchaser or an underwriter, if any, shall be deemed to be reasonable if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading;

(v) make reasonably available for inspection by the Initial Purchasers, any managing underwriter participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such Initial Purchaser or any of the underwriter(s), all material financial and other records, pertinent corporate documents and properties of the Issuer and the Guarantors and cause the Issuer’s and the Guarantors’ officers and employees to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement subsequent to the filing thereof and prior to its effectiveness, in each case, as shall be reasonably necessary to enable such persons to conduct an investigation within the meaning of Section 11 of the Securities Act; provided, however, (A) that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers by Fried, Frank, Harris, Shriver & Jacobson LLP and on behalf of any other parties by one counsel designated by and on behalf of such other parties as described in Section 7 hereof, and (B) that any information that is reasonably and in good faith designated by the Issuer in writing as confidential at the time of delivery of such information shall be kept confidential by the Initial Purchasers, the Holders, or any such underwriter, attorney, accountant or other agent, unless (1) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (2) disclosure of such information is required by law (including any disclosure requirements pursuant to federal securities laws in connection with the filing of such Registration Statement or the use of any Prospectus), (3) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard such information by such person or (4) such information becomes available

10

to such Initial Purchaser, Holder, underwriter, attorney, accountant or other agent from a source other than the Issuer and such source is not known, after due inquiry, by the relevant Initial Purchaser, Holder, underwriter, attorney, accountant or other agent to be bound by a confidentiality agreement or is not otherwise under a duty of trust to the Issuer.

(vi) if requested in writing by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Issuer is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(vii) use commercially reasonable efforts to confirm that the ratings assigned to the Initial Series A-1 Notes will apply to the Transfer Restricted Securities covered by the Registration Statement, if so requested by the Holders of a majority in aggregate principal amount of Series A-1 Notes covered thereby or the underwriter(s), if any;

(viii) furnish to each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules and, if requested in writing, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

(ix) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Issuer and the Guarantors hereby consent to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;

(x) enter into such agreements (including an underwriting agreement), make such representations and warranties, and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by an Initial Purchaser or by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Shelf Registration Statement contemplated by this Agreement; and, whether or not an underwriting agreement is entered into and whether or not such registration is an Underwritten Registration, the Issuer and the Guarantors shall:

(A) furnish to the Initial Purchasers, each selling Holder and each underwriter, if any, in such substance and scope as they may request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the effectiveness of the Shelf Registration Statement:

(1) a certificate, dated the date of the effectiveness of the Shelf Registration Statement signed by (y) the President or any Vice President and (z) a principal financial or accounting officer of the Issuer, confirming, as of the date thereof, the matters set forth in paragraphs (i), (ii) and (iii) of Section 5(f) of the Purchase Agreement and such other matters as such parties may reasonably request;

11

(2) an opinion, dated the date of the effectiveness of the Shelf Registration Statement of counsel for the Issuer and the Guarantors, in form, scope and substance reasonably satisfactory to the managing underwriter, addressed to the underwriters covering the matters customarily covered in opinions, reasonably requested in underwritten offerings, and in any event including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Issuer and the Guarantors, representatives of the independent public accountants for the Issuer and the Guarantors, the Initial Purchasers’ representatives and the Initial Purchasers’ counsel in connection with the preparation of such Registration Statement and the related Prospectus and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing (relying as to materiality to a large extent upon facts provided to such counsel by officers and other representatives of the Issuer and the Guarantors and without independent check or verification), no facts came to such counsel’s attention that caused such counsel to believe that the Shelf Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Registration Statement as of its date contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial data included in any Registration Statement contemplated by this Agreement or the related Prospectus; and

(3) customary comfort letters, dated as of the date of the effectiveness of the Shelf Registration Statement in form, scope and substance reasonably satisfactory to the managing underwriter from (a) the Issuer’s and the Guarantors’ independent accountants and (b) the independent accountants of any other Person for which financial statements are included in or incorporated by reference in to such Shelf Registration Statement, in the customary form and covering matters of the type customarily covered in comfort letters by underwriters in connection with primary underwritten offerings;

12

(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and

(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with clause (A) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Issuer or the Guarantors pursuant to this clause (x), if any.

If at any time the representations and warranties of the Issuer and the Guarantors contemplated in clause (A)(1) above cease to be true and correct, the Issuer or the Guarantors shall so advise the Initial Purchasers and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;

(xi) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s) may reasonably request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however, that neither the Issuer nor the Guarantors shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not then so subject;

(xii) shall issue, upon the request of any Holder of Initial Series A-1 Notes covered by and sold pursuant to the Shelf Registration Statement, Exchange Series A-1 Notes, having an aggregate principal amount equal to the aggregate principal amount of Initial Series A-1 Notes surrendered to the Issuer by such Holder in exchange therefor; such Exchange Series A-1 Notes to be registered in the name of the purchaser of such Series A-1 Notes; in return, the Initial Series A-1 Notes held by such Holder shall be surrendered to the Issuer for cancellation;

(xiii) cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Transfer Restricted Securities made by such underwriter(s);

(xiv) use commercially reasonable efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xi) above;

(xv) if any fact or event contemplated by clause (c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration

13

Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

(xvi) provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of the Registration Statement and provide the Trustee under the Indenture with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with the Depository Trust Company;

(xvii) cooperate and assist in any filings required to be made with the FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of the FINRA, and use their reasonable best efforts to cause such Registration Statement to become effective and approved by such governmental agencies or authorities as may be necessary to enable the Holders selling Transfer Restricted Securities to consummate the disposition of such Transfer Restricted Securities;

(xviii) otherwise use their reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to the Issuer’s security holders, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Securities are sold to underwriters in a firm or best efforts underwritten offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Issuer’s first fiscal quarter commencing after the effective date of the Registration Statement;

(xix) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with, and cause the Guarantors to cooperate with, the Trustee and the Holders of Series A-1 Notes to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute, and cause the Guarantors to execute, and use their reasonable best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and

(xx) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act.

Each Holder shall agree by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Issuer of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof, or until it is advised in writing (the “Advice”) by the Issuer that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by

14

the Issuer, each Holder will deliver to the Issuer (at the Issuer’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Issuer shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or shall have received the Advice; however, no such extension shall be taken into account in determining whether Additional Interest is due pursuant to Section 5 hereof or the amount of such Additional Interest.

SECTION 7. Registration Expenses.

(a) All expenses incident to the Issuer’s or the Guarantors’ performance of or compliance with this Agreement will be borne by the Issuer and the Guarantors, regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses (including filings made by the Initial Purchasers or Holders with the FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of the FINRA)); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Issuer, the Guarantors and, subject to Section 7(b) below, the Holders of Transfer Restricted Securities; (v) all fees and disbursements of independent certified public accountants of the Issuer and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance); and (vi) all fees and expenses of the trustee and the exchange agent and their counsel.

The Issuer and the Guarantors will, in any event, bear their internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Issuer or the Guarantors.

(b) In connection with any Shelf Registration Statement required by this Agreement, the Issuer and the Guarantors will reimburse the Initial Purchasers and the Holders of Transfer Restricted Securities being registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Fried, Frank, Harris, Shriver & Jacobson LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Shelf Registration Statement is being prepared.

SECTION 8. Indemnification.

(a) The Issuer agrees and the Guarantors, jointly and severally, agree to indemnify and hold harmless (i) each Holder and (ii) each person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the persons referred to in this clause (ii) being hereinafter referred to as a “controlling person”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “Indemnified Holder”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including without

15

limitation and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), joint or several, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Issuer and the Guarantors by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability which the Issuer or any Guarantor may otherwise have.

In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Issuer or any Guarantor, such Indemnified Holder (or the Indemnified Holder controlled by such controlling person) shall promptly notify the Issuer and the Guarantors in writing (provided that the failure to give such notice shall not relieve the Issuer or the Guarantors of their respective obligations pursuant to this Agreement except to the extent they are materially prejudiced as a proximate result of such failure). In case any such action is brought against any Indemnified Holder and such Indemnified Holder seeks or intends to seek indemnity from the Issuer or the Guarantors, the Issuer or the Guarantors will be entitled to participate in and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the Indemnified Holder promptly after receiving the aforesaid notice from such Indemnified Holder, to assume the defense thereof with counsel reasonably satisfactory to such Indemnified Holder; provided, however, if the defendants in any such action include both the Indemnified Holder and the Issuer or the Guarantors and the Indemnified Holder shall have reasonably concluded (based on the advice of counsel) that a conflict may arise between the positions of the Issuer or the Guarantors and the Indemnified Holder in conducting the defense of any such action or that there may be legal defenses available to it and/or other Indemnified Holders which are different from or additional to those available to the Issuer or the Guarantors, the Indemnified Holder or Holders shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such Indemnified Holder or Holders. Upon receipt of notice from the Issuer or Guarantors to such Indemnified Holder of the Issuer’s or the Guarantors’ election so to assume the defense of such action and approval by the Indemnified Holder of counsel, the Issuer or the Guarantors will not be liable to such Indemnified Holder under this Section 8 for any legal or other expenses subsequently incurred by such Indemnified Holder in connection with the defense thereof unless (i) the Indemnified Holder shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the Issuer or the Guarantors shall not be liable for the expenses of more than one separate counsel (together with local counsel), approved by the Issuer or the Guarantors, representing the Indemnified Holders who are parties to such action) or (ii) the Issuer or the Guarantors shall not have employed counsel satisfactory to the Indemnified Holder to represent the Indemnified Holder within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the Issuer or the Guarantors. It is understood and agreed that the Issuer or the Guarantors shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (together with any local counsel) for all Indemnified

16

Holders. Each Indemnified Holder, as a condition to indemnification hereunder, shall use all reasonable efforts to cooperate with the Issuer or the Guarantors in the defense of any such action or claim. The Issuer shall not be liable for any settlement of any such action or proceeding effected without the Issuer’s prior written consent, but if settled with such consent or there be a final judgment for the plaintiff, the Issuer and the Guarantors agree to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment. The Issuer and the Guarantors shall not, without the prior written consent of each Indemnified Holder, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding.

(b) Each Holder of Transfer Restricted Securities shall, severally and not jointly, indemnify and hold harmless the Issuer, the Guarantors and their respective officers, directors, partners, employees, representatives and agents, and any person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Issuer and the Guarantors, and the respective officers, directors, partners, employees, representatives and agents of each such person, to the same extent as the foregoing indemnity from the Issuer and the Guarantors to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement. In case any action or proceeding shall be brought against the Issuer, the Guarantors, any such controlling person, or their respective officers, directors, partners, employees, representatives and agents in respect of which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall have the rights and duties given the Issuer and the Guarantors and the Issuer, the Guarantors, such controlling person and their respective officers, directors, partners, employees, representatives and agents shall have the rights and duties given to each Indemnified Holder by Section 8(a). In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Series A-1 Notes giving rise to such indemnification obligation.

(c) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof (other than by reason of exceptions provided in those Sections, including by reason of failure to notify the Issuer and the Guarantors of indemnification obligations thereunder to the extent that they are materially prejudiced as a proximate result of such failure) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Issuer and the Guarantors, on the one hand, and the Holders, on the other hand, from the Initial Placement (which in the case of the Issuer shall be deemed to be equal to the total gross proceeds from the Initial Placement as set forth on the cover page of the Offering Memorandum) or if such allocation is not permitted by applicable law, the relative fault of the Issuer and the Guarantors on the one hand, and of the Indemnified Holder, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Issuer on the one hand and of the Indemnified Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer or by the

17

Indemnified Holder and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

The Issuer and the Guarantors agree and each Holder of Transfer Restricted Securities shall agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds received by such Holder from the sale of the Series A-1 Notes pursuant to a Registration Statement exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(c) are several in proportion to the respective principal amount of Initial Series A-1 Notes held by each of the Holders hereunder and not joint.

SECTION 9. Rule 144A.

The Issuer and the Guarantors each hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A.

SECTION 10. Participation in Underwritten Registrations.

No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

SECTION 11. Selection of Underwriters.

The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided that such investment bankers and managers must be reasonably satisfactory to the Issuer.

18

SECTION 12. Miscellaneous.

(a) Remedies. The Issuer and the Guarantors each hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

(b) No Inconsistent Agreements. The Issuer will not, and will cause the Guarantors to not, on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Neither the Issuer nor any of the Guarantors has entered into any agreement granting any registration rights with respect to its securities to any Person pursuant to which any such Person would have the right to include any securities in any Registration Statement to be filed with the Commission as required under this Agreement. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuer’s securities under any agreement in effect on the date hereof.

(c) Adjustments Affecting the Series A-1 Notes. The Issuer and the Guarantors will not take any action, or permit any change to occur, with respect to the Series A-1 Notes that would materially and adversely affect their ability to Consummate the Series A-1 Exchange Offer.

(d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Issuer has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Series A-1 Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Series A-1 Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered; provided that, with respect to any matter that directly or indirectly affects the rights of the Initial Purchasers hereunder, the Issuer shall obtain the written consent of the Initial Purchasers with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.

(e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery:

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

19

(ii) If to the Initial Purchasers:

Banc of America Securities LLC

One Bryant Park

New York, New York 10036

Facsimile: (212) 901-7897

Attention: Legal Department

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Facsimile: (212) 859-4000

Attention: Valerie Ford Jacob, Esq.

If to the Issuer or the Guarantors:

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, CA 92630

Facsimile: (949) 639-4332

Attention: General Counsel

with a copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Facsimile: (212) 455-2502

Attention: Edward P. Tolley III, Esq.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

(f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder.

(g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

20

(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(k) Entire Agreement. This Agreement together with the Purchase Agreement and the Indenture (as defined in the Purchase Agreement) is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Issuer and the Guarantors with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

[Signature Page Follows]

21

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

Very truly yours,
APRIA HEALTHCARE GROUP INC.
By	/s/ Chris A. Karkenny
	Name:	Robert S. Holcombe
	Title:	Executive Vice President and Chief Financial Officer
APRIA HEALTHCARE OF NEW YORK STATE, INC.
APRIA HEALTHCARE, INC.
APRIACARE MANAGEMENT SYSTEMS, INC.
APRIADIRECT.COM, INC.
CORAM, INC.
By	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	Executive Vice President General Counsel and Secretary

Signature Page to the Registration Rights Agreement

CORAM ALTERNATE SITE SERVICES, INC.
CORAM CLINICAL TRIALS, INC.
CORAM HEALTHCARE CORPORATION OF ALABAMA
CORAM HEALTHCARE CORPORATION OF FLORIDA
CORAM HEALTHCARE CORPORATION OF GREATER D.C.
CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK
CORAM HEALTHCARE CORPORATION OF INDIANA
CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS
CORAM HEALTHCARE CORPORATION OF MICHIGAN
CORAM HEALTHCARE CORPORATION OF MISSISSIPPI
CORAM HEALTHCARE CORPORATION OF NEVADA
CORAM HEALTHCARE CORPORATION OF NEW YORK
CORAM HEALTHCARE CORPORATION OF NORTH TEXAS
CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA
CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA
CORAM HEALTHCARE CORPORATION OF UTAH
CORAM HEALTHCARE OF WYOMING, L.L.C.
CORAM HOMECARE OF MINNESOTA, INC.
CORAM SERVICE CORPORATION
CORAM SPECIALTY INFUSION SERVICES, INC.
CORAMRX, LLC
H.M.S.S., INC.
HEALTHINFUSION, INC.
T2 MEDICAL, INC.
By	/s/ Michael E. Dell
Name:	Michael E. Dell
Title:	V.P., General Counsel & Secretary

Signature Page to the Registration Rights Agreement

The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written:

BANC OF AMERICA SECURITIES LLC
WACHOVIA CAPITAL MARKETS, LLC
BARCLAYS CAPITAL INC.
SCOTIA CAPITAL (USA) INC.
By:	Banc of America Securities LLC
By	/s/ John McCusker
	Name:	John McCusker
	Title:	Managing Director

Signature Page to the Registration Rights Agreement

SCHEDULE A

Guarantors

Subsidiary	Jurisdiction of Organization
Apria Healthcare of New York State, Inc.	New York
Apria Healthcare, Inc.	Delaware
ApriaCare Management Systems, Inc.	Delaware
ApriaDirect.Com, Inc.	Delaware
Coram Alternate Site Services, Inc.	Delaware
Coram Clinical Trials, Inc.	Delaware
Coram Healthcare Corporation of Alabama	Delaware
Coram Healthcare Corporation of Florida	Delaware
Coram Healthcare Corporation of Greater D.C.	Delaware
Coram Healthcare Corporation of Greater New York	New York
Coram Healthcare Corporation of Indiana	Delaware
Coram Healthcare Corporation of Massachusetts	Delaware
Coram Healthcare Corporation of Michigan	Delaware
Coram Healthcare Corporation of Mississippi	Delaware
Coram Healthcare Corporation of Nevada	Delaware
Coram Healthcare Corporation of New York	New York
Coram Healthcare Corporation of North Texas	Delaware
Coram Healthcare Corporation of Northern California	Delaware
Coram Healthcare Corporation of Southern California	Delaware
Coram Healthcare Corporation of South Carolina	Delaware
Coram Healthcare Corporation of Southern Florida	Delaware
Coram Healthcare Corporation of Utah	Delaware
Coram Healthcare of Wyoming, L.L.C.	Delaware
Coram Homecare of Minnesota, Inc.	Delaware
Coram Specialty Infusion Services, Inc.	Delaware
Coram, Inc.	Delaware
CoramRx, LLC	Delaware
H.M.S.S., Inc.	Delaware
HealthInfusion, Inc.	Florida
T2 Medical, Inc.	Delaware

A-1

EX-4.5

Exhibit 4.5

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

by and among

Apria Healthcare Group Inc.,

the Guarantors Named Herein

and

Banc of America Securities LLC

Wells Fargo Securities, LLC

Barclays Capital Inc. and

Scotia Capital (USA) Inc.

Dated as of August 13, 2009

This Registration Rights Agreement (this “Agreement”) is made and entered into as of August 13, 2009, by and among Apria Healthcare Group Inc., a Delaware corporation (the “Issuer”), the Guarantors listed on Schedule A hereto (the “Guarantors”), and Banc of America Securities LLC, Wells Fargo Securities, LLC, Barclays Capital Inc. and Scotia Capital (USA) Inc. (collectively, the “Initial Purchasers”), who have agreed to purchase the Issuer’s 12.375% Senior Secured Notes due 2014 (Series A-2) (the “Initial Series A-2 Notes”) and the related guarantees (the “Initial Guarantees”) pursuant to the Purchase Agreement (as defined below).

This Agreement is made pursuant to the Purchase Agreement, dated as of August 10, 2009 (the “Purchase Agreement”), by and among the Issuer, the Guarantors and the Initial Purchasers, (i) for the benefit of the Initial Purchasers and (ii) for the benefit of the holders from time to time of the Series A-2 Notes (as hereinafter defined) (including the Initial Purchasers). In order to induce the Initial Purchasers to purchase the Initial Series A-2 Notes, the Issuer and the Guarantors have agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 5(g) of the Purchase Agreement.

The parties hereby agree as follows:

SECTION 1. Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings:

Additional Interest: As defined in Section 5 hereof.

Advice: As defined in the last paragraph of Section 6(c) hereof.

Agreement: As defined in the preamble hereto.

Broker-Dealer: Any broker or dealer registered under the Exchange Act.

Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions in the City of New York are authorized or obligated to be closed.

Closing Date: The date of this Agreement.

Commission: The Securities and Exchange Commission.

Consummate: A Series A-2 Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the delivery by the Issuer to the Registrar under the Indenture of Exchange Series A-2 Notes in the same aggregate principal amount as the aggregate principal amount of Initial Series A-2 Notes that were tendered by Holders thereof pursuant to the Series A-2 Exchange Offer.

Effectiveness Period: As defined in Section 4(a) hereof.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Exchange Guarantees: The guarantees to be issued by the Guarantors, relating to the Exchange Series A-2 Notes.

Exchange Series A-2 Notes: The 12.375% Senior Secured Notes due 2014 (Series A-2), of the same series under the Indenture as the Initial Series A-2 Notes, to be issued to Holders in exchange for Transfer Restricted Securities pursuant to this Agreement.

FINRA: The Financial Industry Regulatory Authority

Holder: As defined in Section 2(b) hereof.

Indemnified Holder: As defined in Section 8(a) hereof.

Indenture: The Indenture, dated as of May 27, 2009, among the Issuer, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented and amended by the Supplemental Indenture, dated as of August 13, 2009, pursuant to which the Series A-2 Notes are to be issued, as such Indenture may be further amended or supplemented from time to time in accordance with the terms thereof.

Initial Guarantees: As defined in the preamble hereto.

Initial Series A-2 Notes: As defined in the preamble hereto.

Initial Placement Date: The date of the issuance and sale by the Issuer of the Initial Series A-2 Notes to the Initial Purchasers pursuant to the Purchase Agreement.

Initial Purchasers: As defined in the preamble hereto.

Interest Payment Date: As defined in the Indenture and the Series A-2 Notes.

Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

Private Exchange: As defined in Section 3(c) hereof.

Private Exchange Series A-2 Notes: As defined in Section 3(c) hereof.

Prospectus: The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

Registration Deadline: The date that is 450 days after the Initial Placement Date.

Registration Default: As defined in Section 5 hereof.

Registration Statement: Any registration statement of the Issuer and the Guarantors relating to (a) an offering of Exchange Series A-2 Notes pursuant to a Series A-2 Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.

Securities Act: The Securities Act of 1933, as amended.

Series A-2 Exchange Offer: The registration by the Issuer and the Guarantors under the Securities Act of the Exchange Series A-2 Notes pursuant to a Registration Statement pursuant to which the Issuer and the Guarantors offer the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for Exchange Series A-2 Notes and the Exchange Guarantees in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders.

3

Series A-2 Exchange Offer Registration Statement: The Registration Statement relating to the Series A-2 Exchange Offer, including the related Prospectus.

Series A-1 Notes: 11.25% Senior Secured Notes due 2014 (Series A-1) and the related guarantees issued pursuant to the Indenture on May 27, 2009.

Series A-2 Notes: The Initial Series A-2 Notes and the Exchange Series A-2 Notes.

Shelf Registration Statement: As defined in Section 4 hereof.

Shelf Suspension Period: As defined in Section 4(a) hereof.

Transfer Restricted Securities: Each Initial Series A-2 Note and the related Initial Guarantees, until the earliest to occur of (a) the date on which such Initial Series A-2 Note and the related Initial Guarantees are exchanged in the Series A-2 Exchange Offer and entitled to be resold to the public by the Holders thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Initial Series A-2 Note and the related Initial Guarantees have been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement, and (c) the date on which such Initial Series A-2 Note and the related Initial Guarantees are distributed to the public pursuant to Rule 144 under the Securities Act or by a Broker-Dealer pursuant to the “Plan of Distribution” contemplated by the Series A-2 Exchange Offer Registration Statement (including delivery of the Prospectus contained therein).

Trust Indenture Act: The Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa - 77bbbb) as in effect on the date of the Indenture.

Underwritten Registration or Underwritten Offering: A registration in which securities of the Issuer are sold to an underwriter for reoffering to the public.

SECTION 2. Securities Subject to This Agreement.

(a) Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.

(b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”) whenever such Person owns Transfer Restricted Securities.

SECTION 3. Registered Exchange Offer.

(a) Unless the Series A-2 Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), the Issuer and the Guarantors shall (i) prepare and file with the Commission a Series A-2 Exchange Offer Registration Statement under the Securities Act, (ii) use their reasonable efforts to cause such Series A-2 Exchange Offer Registration Statement to become effective under the Securities Act, (iii) in connection with the foregoing, file (A) all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) if applicable, a post-effective amendment to such

4

Registration Statement pursuant to Rule 430A under the Securities Act and (C) all necessary filings in connection with the registration and qualification of the Exchange Series A-2 Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Series A-2 Exchange Offer, and (iv) upon the effectiveness of such Registration Statement, commence the Series A-2 Exchange Offer. The Series A-2 Exchange Offer shall be on the appropriate form permitting registration of the Exchange Series A-2 Notes to be offered in exchange for the Transfer Restricted Securities and to permit resales of Series A-2 Notes held by Broker-Dealers as contemplated by Section 3(c) below.

(b) The Issuer and the Guarantors shall use their reasonable best efforts to cause the Series A-2 Exchange Offer Registration Statement to be effective continuously and shall keep the Series A-2 Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Series A-2 Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days after the date notice of the Series A-2 Exchange Offer is mailed to the Holders. The Issuer and the Guarantors shall cause the Series A-2 Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Series A-2 Notes and, at the Issuer’s option, the Series A-1 Notes shall be included in the Series A-2 Exchange Offer Registration Statement. The Issuer and the Guarantors shall use commercially reasonable efforts to cause the Series A-2 Exchange Offer to be Consummated on or before the Registration Deadline.

(c) If, prior to consummation of the Series A-2 Exchange Offer, the Initial Purchasers hold any Initial Series A-2 Notes acquired by them that have the status of an unsold allotment in the initial distribution, the Issuer, upon the request of the Initial Purchasers, shall simultaneously with the delivery of the Exchange Series A-2 Notes issue and deliver to the Initial Purchasers, in exchange (the “Private Exchange”) for such Initial Series A-2 Notes held by any such Holder, a like principal amount of notes (the “Private Exchange Series A-2 Notes”) of the Issuer, guaranteed by the Guarantors, that are identical in all material respects to the Exchange Series A-2 Notes except for the placement of a restrictive legend on such Private Exchange Series A-2 Notes. The Private Exchange Series A-2 Notes shall be issued pursuant to the same indenture as the Exchange Series A-2 Notes and bear the same CUSIP number as the Exchange Series A-2 Notes if permitted by the CUSIP Service Bureau.

(d) The Issuer shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Series A-2 Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Series A-2 Notes that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Issuer), may exchange such Initial Series A-2 Notes pursuant to the Series A-2 Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Series A-2 Notes received by such Broker-Dealer in the Series A-2 Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Series A-2 Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Series A-2 Notes held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement.

5

The Issuer and the Guarantors shall use their reasonable best efforts to keep the Series A-2 Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) below to the extent necessary to ensure that it is available for resales of Series A-2 Notes acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 90 days from the date on which the Series A-2 Exchange Offer Registration Statement is declared effective, (ii) the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities and (iii) the date on which all the Series A-2 Notes covered by such Series A-2 Exchange Offer Registration Statement have been sold pursuant to such Series A-2 Exchange Offer Registration Statement.

The Issuer shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such 90-day (or shorter as provided in the foregoing sentence) period in order to facilitate such resales.

SECTION 4. Shelf Registration.

(a) Shelf Registration. If (1) because of any change in law or in currently prevailing interpretations of the staff of the Commission, the Issuer is not permitted to effect the Series A-2 Exchange Offer, (2) the Series A-2 Exchange Offer is not Consummated on or before the Registration Deadline, (3) any holder of Private Exchange Notes so requests in writing to the Issuer at any time within 30 days after the consummation of the Exchange Offer, or (4) in the case of any Holder that participates in the Series A-2 Exchange Offer, such Holder does not receive Exchange Securities on or before the date of the exchange that may be sold without restriction under state and federal securities laws (other than due solely to the status of such Holder as an affiliate of the Issuer within the meaning of the Securities Act) and so notifies the Issuer within 30 days after such Holder first becomes aware of such restrictions, in the case of each of clauses (1) to and including clause (3) of this sentence, then, upon such Holder’s request, the Issuer and the Guarantors shall (unless the Series A-2 Notes are eligible for resale under Rule 144, without regard to volume, manner of sale or other restrictions contained in Rule 144 under the Securities Act (or any successor rule)):

(x) use their reasonable best efforts to file a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Series A-2 Exchange Offer Registration Statement (in either event, the “Shelf Registration Statement”) as soon as practicable after the filing obligation arises, which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and

(y) use commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective promptly by the Commission.

The Issuer and the Guarantors shall use their reasonable best efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Series A-2 Notes by the Holders of Transfer Restricted Securities entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, until the earliest of (i) two years after the Initial Placement Date of the Initial Series A-2 Notes, (ii) such time as all of the Initial Series A-2 Notes have been sold thereunder or (iii) the date upon which all Initial Series A-2 Notes covered by such

6

Shelf Registration Statement become eligible for resale under Rule 144, without regard to volume, manner of sale or other restrictions contained in Rule 144 under the Securities Act (or any successor rule) (the “Effectiveness Period”).

Notwithstanding anything to the contrary in this Agreement, at any time, the Issuer may delay the filing of any Shelf Registration Statement or delay or suspend the effectiveness thereof, for a reasonable period of time, but not in excess of 60 consecutive days or more than three (3) times during any calendar year (each, a “Shelf Suspension Period”), if the Board of Directors of the Company determines reasonably and in good faith that the filing of any such Initial Shelf Registration Statement or the continuing effectiveness thereof would require the disclosure of non-public material information that, in the reasonable judgment of the Board of Directors of the Company, would be detrimental to the Issuer if so disclosed or would otherwise materially adversely affect a financing, acquisition, disposition, merger or other material transaction or such action is required by applicable law.

(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Issuer in writing, within 20 Business Days after receipt of a request therefor, such information as the Issuer may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Issuer all information required to be disclosed in order to make the information previously furnished to the Issuer by such Holder not materially misleading.

SECTION 5. Additional Interest.

If (a) the Series A-2 Exchange Offer has not been Consummated or a Shelf Registration Statement has not been declared effective by the Commission on or prior to the Registration Deadline, or (b) if applicable, a Shelf Registration Statement has been declared effective but shall thereafter cease to be effective during the Effectiveness Period (other than because of the sale of all of the Transfer Restricted Securities registered thereunder) (each such event referred to in clauses (a) and (b), a “Registration Default”), then additional interest (“Additional Interest”) shall accrue on the principal amount of the Series A-2 Notes at a rate of 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default (which rate will be increased by an additional 0.25% per annum for each subsequent 90-day period that such Additional Interest continues to accrue; provided that the rate which such Additional Interest accrues may in no event exceed 1.00% per annum) (such Additional Interest to be calculated by the Issuer) commencing on the (x) first day after the Registration Deadline, in the case of clause (a) above, or (y) the day such Shelf Registration ceases to be effective in the case of clause (b) above; provided, however, that upon the exchange of the Exchange Series A-2 Notes for all Transfer Restricted Securities tendered, or upon the effectiveness of the applicable Shelf Registration Statement which had ceased to remain effective, Additional Interest on the Series A-2 Notes in respect of which such events relate as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue. Notwithstanding any other provisions of this Section 5, the Issuer shall not be obligated to pay Additional Interest provided in this Section 5 during a Shelf Suspension Period permitted by Section 4(a) hereof.

7

SECTION 6. Registration Procedures.

(a) Series A-2 Exchange Offer Registration Statement. In connection with the Series A-2 Exchange Offer, the Issuer and each of the Guarantors shall comply with all of the provisions of Section 6(c) below, shall use their best efforts to effect such exchange to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:

(i) If in the reasonable opinion of counsel to the Issuer there is a question as to whether the Series A-2 Exchange Offer is permitted by applicable law and it is advisable to do so, the Issuer and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Issuer and the Guarantors to Consummate a Series A-2 Exchange Offer for such Initial Series A-2 Notes. The Issuer and the Guarantors each hereby agree to pursue the issuance of such a decision to the Commission staff level but shall not be required to take action to effect a change of Commission policy. The Issuer and the Guarantors each hereby agree, however, to (A) participate in telephonic conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to the Issuer setting forth the legal bases, if any, upon which such counsel has concluded that such a Series A-2 Exchange Offer should be permitted and (C) diligently pursue a resolution by the Commission staff of such submission.

(ii) As a condition to its participation in the Series A-2 Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Issuer, prior to the Consummation thereof, a written representation to the Issuer (which may be contained in the letter of transmittal contemplated by the Series A-2 Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Issuer, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Exchange Series A-2 Notes to be issued in the Series A-2 Exchange Offer and (C) it is acquiring the Exchange Series A-2 Notes in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise cooperate in the Issuer’s preparations for the Series A-2 Exchange Offer. Each Holder, including any Holder that is a Broker-Dealer, shall acknowledge and agree that any such Holder using the Series A-2 Exchange Offer to participate in a distribution of the securities to be acquired in the Series A-2 Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley & Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of Exchange Series A-2 Notes obtained by such Holder in exchange for Initial Series A-2 Notes acquired by such Holder directly from the Issuer.

(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, the Issuer and each of the Guarantors shall comply with all the provisions of Section 6(c) below.

8

(c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Series A-2 Notes by Broker-Dealers), the Issuer and the Guarantors shall:

(i) use their reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements including, if required by the Securities Act or any regulation thereunder, financial statements of the Guarantors; upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Issuer and the Guarantors shall file promptly an appropriate amendment to such Registration Statement or supplement to the Prospectus or document incorporated by reference, in the case of clause (A), correcting any such misstatement or omission, and, in the case of an amendment, use their reasonable best efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

(ii) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Securities Act, as applicable, in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

(iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Issuer and the Guarantors shall use their reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time;

9

(iv) furnish without charge to counsel for the Initial Purchasers, each selling Holder named in any Registration Statement, and each of the underwriter(s), if any, at least one copy before filing with the Commission of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including, if requested in writing by any such Person, all documents incorporated by reference after the initial filing of such Registration Statement, if not available on the Commission’s EDGAR database), which Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus will be subject to the review of the Initial Purchasers and such Holders and underwriter(s) in connection with such sale, if any, for a reasonable period, and the Issuer will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus to which the Initial Purchasers or the underwriter(s), if any, shall reasonably object in writing after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period). The objection of an Initial Purchaser or an underwriter, if any, shall be deemed to be reasonable if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading;

(v) make reasonably available for inspection by the Initial Purchasers, any managing underwriter participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such Initial Purchaser or any of the underwriter(s), all material financial and other records, pertinent corporate documents and properties of the Issuer and the Guarantors and cause the Issuer’s and the Guarantors’ officers and employees to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement subsequent to the filing thereof and prior to its effectiveness, in each case, as shall be reasonably necessary to enable such persons to conduct an investigation within the meaning of Section 11 of the Securities Act; provided, however, (A) that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers by Fried, Frank, Harris, Shriver & Jacobson LLP and on behalf of any other parties by one counsel designated by and on behalf of such other parties as described in Section 7 hereof, and (B) that any information that is reasonably and in good faith designated by the Issuer in writing as confidential at the time of delivery of such information shall be kept confidential by the Initial Purchasers, the Holders, or any such underwriter, attorney, accountant or other agent, unless (1) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (2) disclosure of such information is required by law (including any disclosure requirements pursuant to federal securities laws in connection with the filing of such Registration Statement or the use of any Prospectus), (3) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard such information by such person or (4) such information becomes available to such Initial Purchaser, Holder, underwriter, attorney, accountant or other agent from a source other than the Issuer and such source is not known, after due inquiry, by the relevant Initial Purchaser, Holder, underwriter, attorney, accountant or other agent to be bound by a confidentiality agreement or is not otherwise under a duty of trust to the Issuer.

(vi) if requested in writing by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a

10

supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Issuer is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(vii) use commercially reasonable efforts to confirm that the ratings assigned to the Initial Series A-2 Notes will apply to the Transfer Restricted Securities covered by the Registration Statement, if so requested by the Holders of a majority in aggregate principal amount of Series A-2 Notes covered thereby or the underwriter(s), if any;

(viii) furnish to each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules and, if requested in writing, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

(ix) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Issuer and the Guarantors hereby consent to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;

(x) enter into such agreements (including an underwriting agreement), make such representations and warranties, and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by an Initial Purchaser or by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Shelf Registration Statement contemplated by this Agreement; and, whether or not an underwriting agreement is entered into and whether or not such registration is an Underwritten Registration, the Issuer and the Guarantors shall:

(A) furnish to the Initial Purchasers, each selling Holder and each underwriter, if any, in such substance and scope as they may request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the effectiveness of the Shelf Registration Statement:

(1) a certificate, dated the date of the effectiveness of the Shelf Registration Statement signed by (y) the President or any Vice President and (z) a principal financial or accounting officer of the Issuer, confirming, as of the date thereof, the matters set forth in paragraphs (i), (ii) and (iii) of Section 5(f) of the Purchase Agreement and such other matters as such parties may reasonably request;

11

(2) an opinion, dated the date of the effectiveness of the Shelf Registration Statement of counsel for the Issuer and the Guarantors, in form, scope and substance reasonably satisfactory to the managing underwriter, addressed to the underwriters covering the matters customarily covered in opinions, reasonably requested in underwritten offerings, and in any event including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Issuer and the Guarantors, representatives of the independent public accountants for the Issuer and the Guarantors, the Initial Purchasers’ representatives and the Initial Purchasers’ counsel in connection with the preparation of such Registration Statement and the related Prospectus and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing (relying as to materiality to a large extent upon facts provided to such counsel by officers and other representatives of the Issuer and the Guarantors and without independent check or verification), no facts came to such counsel’s attention that caused such counsel to believe that the Shelf Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Registration Statement as of its date contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial data included in any Registration Statement contemplated by this Agreement or the related Prospectus; and

(3) customary comfort letters, dated as of the date of the effectiveness of the Shelf Registration Statement in form, scope and substance reasonably satisfactory to the managing underwriter from (a) the Issuer’s and the Guarantors’ independent accountants and (b) the independent accountants of any other Person for which financial statements are included in or incorporated by reference in to such Shelf Registration Statement, in the customary form and covering matters of the type customarily covered in comfort letters by underwriters in connection with primary underwritten offerings;

(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and

(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with clause (A) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Issuer or the Guarantors pursuant to this clause (x), if any.

12

If at any time the representations and warranties of the Issuer and the Guarantors contemplated in clause (A)(1) above cease to be true and correct, the Issuer or the Guarantors shall so advise the Initial Purchasers and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;

(xi) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s) may reasonably request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however, that neither the Issuer nor the Guarantors shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not then so subject;

(xii) shall issue, upon the request of any Holder of Initial Series A-2 Notes covered by and sold pursuant to the Shelf Registration Statement, Exchange Series A-2 Notes, having an aggregate principal amount equal to the aggregate principal amount of Initial Series A-2 Notes surrendered to the Issuer by such Holder in exchange therefor; such Exchange Series A-2 Notes to be registered in the name of the purchaser of such Series A-2 Notes; in return, the Initial Series A-2 Notes held by such Holder shall be surrendered to the Issuer for cancellation;

(xiii) cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Transfer Restricted Securities made by such underwriter(s);

(xiv) use commercially reasonable efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xi) above;

(xv) if any fact or event contemplated by clause (c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

13

(xvi) provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of the Registration Statement and provide the Trustee under the Indenture with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with the Depository Trust Company;

(xvii) cooperate and assist in any filings required to be made with the FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of the FINRA, and use their reasonable best efforts to cause such Registration Statement to become effective and approved by such governmental agencies or authorities as may be necessary to enable the Holders selling Transfer Restricted Securities to consummate the disposition of such Transfer Restricted Securities;

(xviii) otherwise use their reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to the Issuer’s security holders, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Securities are sold to underwriters in a firm or best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Issuer’s first fiscal quarter commencing after the effective date of the Registration Statement;

(xix) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with, and cause the Guarantors to cooperate with, the Trustee and the Holders of Series A-2 Notes to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute, and cause the Guarantors to execute, and use their reasonable best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and

(xx) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act.

Each Holder shall agree by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Issuer of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof, or until it is advised in writing (the “Advice”) by the Issuer that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Issuer, each Holder will deliver to the Issuer (at the Issuer’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Issuer shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date

14

of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or shall have received the Advice; however, no such extension shall be taken into account in determining whether Additional Interest is due pursuant to Section 5 hereof or the amount of such Additional Interest.

SECTION 7. Registration Expenses.

(a) All expenses incident to the Issuer’s or the Guarantors’ performance of or compliance with this Agreement will be borne by the Issuer and the Guarantors, regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses (including filings made by the Initial Purchasers or Holders with the FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of the FINRA)); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Issuer, the Guarantors and, subject to Section 7(b) below, the Holders of Transfer Restricted Securities; (v) all fees and disbursements of independent certified public accountants of the Issuer and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance); and (vi) all fees and expenses of the trustee and the exchange agent and their counsel.

The Issuer and the Guarantors will, in any event, bear their internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Issuer or the Guarantors.

(b) In connection with any Shelf Registration Statement required by this Agreement, the Issuer and the Guarantors will reimburse the Initial Purchasers and the Holders of Transfer Restricted Securities being registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Fried, Frank, Harris, Shriver & Jacobson LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Shelf Registration Statement is being prepared.

SECTION 8. Indemnification.

(a) The Issuer agrees and the Guarantors, jointly and severally, agree to indemnify and hold harmless (i) each Holder and (ii) each person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the persons referred to in this clause (ii) being hereinafter referred to as a “controlling person”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “Indemnified Holder”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including without limitation and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), joint or several, directly or

15

indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Issuer and the Guarantors by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability which the Issuer or any Guarantor may otherwise have.

In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Issuer or any Guarantor, such Indemnified Holder (or the Indemnified Holder controlled by such controlling person) shall promptly notify the Issuer and the Guarantors in writing (provided that the failure to give such notice shall not relieve the Issuer or the Guarantors of their respective obligations pursuant to this Agreement except to the extent they are materially prejudiced as a proximate result of such failure). In case any such action is brought against any Indemnified Holder and such Indemnified Holder seeks or intends to seek indemnity from the Issuer or the Guarantors, the Issuer or the Guarantors will be entitled to participate in and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the Indemnified Holder promptly after receiving the aforesaid notice from such Indemnified Holder, to assume the defense thereof with counsel reasonably satisfactory to such Indemnified Holder; provided, however, if the defendants in any such action include both the Indemnified Holder and the Issuer or the Guarantors and the Indemnified Holder shall have reasonably concluded (based on the advice of counsel) that a conflict may arise between the positions of the Issuer or the Guarantors and the Indemnified Holder in conducting the defense of any such action or that there may be legal defenses available to it and/or other Indemnified Holders which are different from or additional to those available to the Issuer or the Guarantors, the Indemnified Holder or Holders shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such Indemnified Holder or Holders. Upon receipt of notice from the Issuer or Guarantors to such Indemnified Holder of the Issuer’s or the Guarantors’ election so to assume the defense of such action and approval by the Indemnified Holder of counsel, the Issuer or the Guarantors will not be liable to such Indemnified Holder under this Section 8 for any legal or other expenses subsequently incurred by such Indemnified Holder in connection with the defense thereof unless (i) the Indemnified Holder shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the Issuer or the Guarantors shall not be liable for the expenses of more than one separate counsel (together with local counsel), approved by the Issuer or the Guarantors, representing the Indemnified Holders who are parties to such action) or (ii) the Issuer or the Guarantors shall not have employed counsel satisfactory to the Indemnified Holder to represent the Indemnified Holder within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the Issuer or the Guarantors. It is understood and agreed that the Issuer or the Guarantors shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (together with any local counsel) for all Indemnified Holders. Each Indemnified Holder, as a condition to indemnification hereunder, shall use all reasonable efforts to cooperate with the Issuer or the Guarantors in the defense of any such action or claim. The Issuer shall not be liable for any settlement of any such action or proceeding effected without the Issuer’s prior written consent, but if settled with such consent or there be a

16

final judgment for the plaintiff, the Issuer and the Guarantors agree to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment. The Issuer and the Guarantors shall not, without the prior written consent of each Indemnified Holder, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding.

(b) Each Holder of Transfer Restricted Securities shall, severally and not jointly, indemnify and hold harmless the Issuer, the Guarantors and their respective officers, directors, partners, employees, representatives and agents, and any person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Issuer and the Guarantors, and the respective officers, directors, partners, employees, representatives and agents of each such person, to the same extent as the foregoing indemnity from the Issuer and the Guarantors to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement. In case any action or proceeding shall be brought against the Issuer, the Guarantors, any such controlling person, or their respective officers, directors, partners, employees, representatives and agents in respect of which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall have the rights and duties given the Issuer and the Guarantors and the Issuer, the Guarantors, such controlling person and their respective officers, directors, partners, employees, representatives and agents shall have the rights and duties given to each Indemnified Holder by Section 8(a). In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Series A-2 Notes giving rise to such indemnification obligation.

(c) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof (other than by reason of exceptions provided in those Sections, including by reason of failure to notify the Issuer and the Guarantors of indemnification obligations thereunder to the extent that they are materially prejudiced as a proximate result of such failure) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Issuer and the Guarantors, on the one hand, and the Holders, on the other hand, from the Initial Placement (which in the case of the Issuer shall be deemed to be equal to the total gross proceeds from the Initial Placement as set forth on the cover page of the Offering Memorandum) or if such allocation is not permitted by applicable law, the relative fault of the Issuer and the Guarantors on the one hand, and of the Indemnified Holder, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Issuer on the one hand and of the Indemnified Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer or by the Indemnified Holder and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

17

The Issuer and the Guarantors agree and each Holder of Transfer Restricted Securities shall agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds received by such Holder from the sale of the Series A-2 Notes pursuant to a Registration Statement exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(c) are several in proportion to the respective principal amount of Initial Series A-2 Notes held by each of the Holders hereunder and not joint.

SECTION 9. Rule 144A.

The Issuer and the Guarantors each hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A.

SECTION 10. Participation in Underwritten Registrations.

No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

SECTION 11. Selection of Underwriters.

The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided that such investment bankers and managers must be reasonably satisfactory to the Issuer.

18

SECTION 12. Miscellaneous.

(a) Remedies. The Issuer and the Guarantors each hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

(b) No Inconsistent Agreements. The Issuer will not, and will cause the Guarantors to not, on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Neither the Issuer nor any of the Guarantors has entered into any agreement granting any registration rights with respect to its securities to any Person pursuant to which any such Person would have the right to include any securities in any Registration Statement to be filed with the Commission as required under this Agreement. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuer’s securities under any agreement in effect on the date hereof.

(c) Adjustments Affecting the Series A-2 Notes. The Issuer and the Guarantors will not take any action, or permit any change to occur, with respect to the Series A-2 Notes that would materially and adversely affect their ability to Consummate the Series A-2 Exchange Offer.

(d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Issuer has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Series A-2 Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Series A-2 Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered; provided that, with respect to any matter that directly or indirectly affects the rights of the Initial Purchasers hereunder, the Issuer shall obtain the written consent of the Initial Purchasers with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.

(e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery:

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

(ii) If to the Initial Purchasers:

Banc of America Securities LLC

One Bryant Park

New York, New York 10036

Facsimile: (212) 901-7897

Attention: Legal Department

19

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Facsimile: (212) 859-4000

Attention: Valerie Ford Jacob, Esq.

If to the Issuer or the Guarantors:

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, CA 92630

Facsimile: (949) 639-4332

Attention: General Counsel

with a copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Facsimile: (212) 455-2502

Attention: Edward P. Tolley III, Esq.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

(f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder.

(g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

20

(j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(k) Entire Agreement. This Agreement together with the Purchase Agreement, the Indenture and the Supplemental Indenture (as defined in the Purchase Agreement) is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Issuer and the Guarantors with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

[Signature Page Follows]

21

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

Very truly yours,
APRIA HEALTHCARE GROUP INC.
By:	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	Executive Vice President General Counsel and Secretary
APRIA HEALTHCARE OF NEW YORK STATE, INC.
APRIA HEALTHCARE, INC.
APRIACARE MANAGEMENT SYSTEMS, INC.
APRIADIRECT.COM, INC.
CORAM, INC.
By:	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	Executive Vice President General Counsel and Secretary

Signature Page to the Registration Rights Agreement

CORAM ALTERNATE SITE SERVICES, INC.
CORAM CLINICAL TRIALS, INC.
CORAM HEALTHCARE CORPORATION OF ALABAMA
CORAM HEALTHCARE CORPORATION OF FLORIDA
CORAM HEALTHCARE CORPORATION OF GREATER D.C.
CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK
CORAM HEALTHCARE CORPORATION OF INDIANA
CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS
CORAM HEALTHCARE CORPORATION OF MICHIGAN
CORAM HEALTHCARE CORPORATION OF MISSISSIPPI
CORAM HEALTHCARE CORPORATION OF NEVADA
CORAM HEALTHCARE CORPORATION OF NEW YORK
CORAM HEALTHCARE CORPORATION OF NORTH TEXAS
CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA
CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA
CORAM HEALTHCARE CORPORATION OF UTAH
CORAM HEALTHCARE OF WYOMING, L.L.C.
CORAM HOMECARE OF MINNESOTA, INC.
CORAM SERVICE CORPORATION
CORAM SPECIALTY INFUSION SERVICES, INC.
CORAMRX, LLC
H.M.S.S., INC.
HEALTHINFUSION, INC.
T2 MEDICAL, INC.
By:	/s/ Robert T. Allen
Name:	Robert T. Allen
Title:	President

Signature Page to the Registration Rights Agreement

The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written:

BANC OF AMERICA SECURITIES LLC
WELLS FARGO SECURITIES, LLC
BARCLAYS CAPITAL INC.
SCOTIA CAPITAL (USA) INC.
By:	Banc of America Securities LLC
By	/s/ John McCusker
	Name:	John McCusker
	Title:	Managing Director

Signature Page to the Registration Rights Agreement

SCHEDULE A

Guarantors

Subsidiary	Jurisdiction of Organization
Apria Healthcare of New York State, Inc.	New York
Apria Healthcare, Inc.	Delaware
ApriaCare Management Systems, Inc.	Delaware
ApriaDirect.Com, Inc.	Delaware
Coram Alternate Site Services, Inc.	Delaware
Coram Clinical Trials, Inc.	Delaware
Coram Healthcare Corporation of Alabama	Delaware
Coram Healthcare Corporation of Florida	Delaware
Coram Healthcare Corporation of Greater D.C.	Delaware
Coram Healthcare Corporation of Greater New York	New York
Coram Healthcare Corporation of Indiana	Delaware
Coram Healthcare Corporation of Massachusetts	Delaware
Coram Healthcare Corporation of Michigan	Delaware
Coram Healthcare Corporation of Mississippi	Delaware
Coram Healthcare Corporation of Nevada	Delaware
Coram Healthcare Corporation of New York	New York
Coram Healthcare Corporation of North Texas	Delaware
Coram Healthcare Corporation of Northern California	Delaware
Coram Healthcare Corporation of Southern California	Delaware
Coram Healthcare Corporation of South Carolina	Delaware
Coram Healthcare Corporation of Southern Florida	Delaware
Coram Healthcare Corporation of Utah	Delaware
Coram Healthcare of Wyoming, L.L.C.	Delaware
Coram Homecare of Minnesota, Inc.	Delaware
Coram Service Corporation	Delaware
Coram Specialty Infusion Services, Inc.	Delaware
Coram, Inc.	Delaware
CoramRx, LLC	Delaware
H.M.S.S., Inc.	Delaware
HealthInfusion, Inc.	Florida
T2 Medical, Inc.	Delaware

A-1

EX-5.1

Exhibit 5.1

SIMPSON THACHER & BARTLETT LLP

425 LEXINGTON AVENUE

NEW YORK, N.Y. 10017-3954

(212) 455-2000

FACSIMILE (212) 455-2502

July 16, 2010

Apria Healthcare Group Inc.

260 Enterprise Court

Lake Forest, CA, 92630

Ladies and Gentlemen:

We have acted as special counsel to Apria Healthcare Group Inc., a Delaware corporation (the “Company”), and to the subsidiaries of the Company listed on Schedule I hereto (the “Guarantors”) in connection with the Registration Statement on Form S-4 (the “Registration Statement”) filed by the Company and the Guarantors with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, relating to the issuance by the Company of $700,000,000 aggregate principal amount of 11.25% Senior Secured Notes due 2014 (Series A-1) (the “Series A-1 Notes”) and $317,500,000 aggregate principal amount of 12.375% Senior Secured Notes due 2014 (Series A-2) (the “Series A-2 Notes” and, together with the Series A-1 Notes, the “Exchange Securities”) and the issuance by the Guarantors of guarantees (the “Guarantees”) with respect to the Exchange Securities. The Exchange Securities and the Guarantees will be issued under an Indenture (the “Base Indenture”), dated as of May 27, 2009, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee (the “Trustee”), as amended by the First Supplemental Indenture, dated as of August 13, 2009, among the Company, the guarantors named therein and U.S. Bank National Association (the “First Supplemental Indenture”) and by the Second Supplemental Indenture, dated as of July 13, 2010, among the Company, the guarantors named therein and U.S. Bank National Association (the “Second Supplemental Indenture” and, together with the First Supplemental Indenture and the Base Indenture, the “Indenture”). The Exchange Securities will be offered by the Company in exchange (the “Exchange”) for $700,000,000 aggregate principal amount of its outstanding 11.25% Senior Secured Notes due 2014 (Series A-1) and $317,500,000 aggregate principal amount of its outstanding 12.375% Senior Secured Notes due 2014 (Series A-2), as applicable.

Apria Healthcare Group Inc. -2- July 16, 2010

We have examined the Registration Statement and the Indenture which has been filed with the Commission as an exhibit to the Registration Statement. We also have examined the originals, or duplicates or certified or conformed copies, of such corporate and other records, agreements, documents and other instruments and have made such other investigations as we have deemed relevant and necessary in connection with the opinions hereinafter set forth. As to questions of fact material to this opinion, we have relied upon certificates or comparable documents of public officials and of officers and representatives of the Company and the Guarantors.

In rendering the opinions set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies and the authenticity of the originals of such latter documents. We also have assumed that the Indenture is the valid and legally binding obligation of the Trustee.

Based upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that:

        1. When the Exchange Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture upon the Exchange, the Exchange Securities will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms.

        2. When (a) the Exchange Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture upon the Exchange and (b) the Guarantees have been duly issued, the Guarantees will constitute valid and legally binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms.

Our opinions set forth above are subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing.

Apria Healthcare Group Inc. -3- July 16, 2010

We express no opinion as to the validity, legally binding effect or enforceability of any provision of the Indenture that requires or relates to payment of interest at a rate or in an amount that a court would determine in the circumstances under applicable law to be commercially unreasonable or a penalty or a forfeiture. In addition, we express no opinion as to the validity, legally binding effect or enforceability of (i) the waivers of rights and defenses contained in Sections 11.01 and 14.07 of the Base Indenture, Section 4.02 of the First Supplemental Indenture and Sections 2 and 6 of the Second Supplemental Indenture and (ii) Section 14.13 of the Base Indenture, Section 4.05 of the First Supplemental Indenture and Section 2 of the Second Supplemental Indenture relating to the severability of provisions of the Guarantees, the Notes and the Indenture.

Insofar as the opinions expressed herein relate to or are dependent upon matters governed by the law of the State of Florida, we have relied upon the opinion of Holland & Knight LLP, which is being filed as an exhibit to the Registration Statement.

We do not express any opinion herein concerning any law other than the law of the State of New York, the federal law of the United States, the Delaware General Corporation Law and the Delaware Limited Liability Company Act (including the statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting the foregoing) and, to the extent set forth herein, the law of the State of Florida.

We hereby consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement and to the use of our name under the caption “Legal matters” in the Prospectus included in the Registration Statement.

Very truly yours,

/s/ Simpson Thacher & Bartlett LLP

SIMPSON THACHER & BARTLETT LLP

SCHEDULE I

Guarantors

Subsidiary	Jurisdiction of Organization
Apria Healthcare of New York State, Inc.	New York
Apria Healthcare, Inc.	Delaware
ApriaCare Management Systems, Inc.	Delaware
ApriaDirect.Com, Inc.	Delaware
Coram Alternate Site Services, Inc.	Delaware
Coram Clinical Trials, Inc.	Delaware
Coram Healthcare Corporation of Alabama	Delaware
Coram Healthcare Corporation of Florida	Delaware
Coram Healthcare Corporation of Greater D.C.	Delaware
Coram Healthcare Corporation of Greater New York	New York
Coram Healthcare Corporation of Indiana	Delaware
Coram Healthcare Corporation of Massachusetts	Delaware
Coram Healthcare Corporation of Mississippi	Delaware
Coram Healthcare Corporation of Nevada	Delaware
Coram Healthcare Corporation of New York	New York
Coram Healthcare Corporation of North Texas	Delaware
Coram Healthcare Corporation of Northern California	Delaware
Coram Healthcare Corporation of South Carolina	Delaware
Coram Healthcare Corporation of Southern California	Delaware
Coram Healthcare Corporation of Southern Florida	Delaware
Coram Healthcare Corporation of Utah	Delaware
Coram Healthcare of Wyoming, L.L.C.	Delaware
Coram Homecare of Minnesota, Inc.	Delaware
Coram Service Corporation	Delaware
Coram Specialty Infusion Services, Inc.	Delaware
Coram, Inc.	Delaware
CoramRx, LLC	Delaware
H.M.S.S., Inc.	Delaware
T2 Medical, Inc.	Delaware
HealthInfusion, Inc.	Florida
AHNY-DME LLC	New York
AHNY-IV LLC	New York

EX-5.2

Exhibit 5.2

Holland & Knight

100 North Tampa Street, Suite 4100  |  Tampa, FL 33602  |  T 813.227.8500  |  F 813.229.0134

Holland & Knight LLP  |  www.hklaw.com

July 15, 2010

Apria Healthcare Group Inc.

260 Enterprise Court

Lake Forest, CA 92630

and

HealthInfusion, Inc.

555 17^th Street, Suite 1500

Denver, CO, 80202

Ladies and Gentlemen:

We have acted as special Florida counsel for HealthInfusion, Inc., a Florida corporation (the “Guarantor”), in connection with the Registration Statement on Form S-4 (the “Registration Statement”) by Apria Healthcare Group Inc. (the “Company”), the Guarantor and certain other subsidiaries of the Company under the Securities Act of 1933, as amended (the “Securities Act”), relating to the issuance by the Company of $700,000,000 aggregate principal amount of 11.25% Senior Secured Notes due 2014 (Series A-1) (the “Series A-1 Notes”) and $317,500,000 aggregate principal amount of 12.375% Senior Secured Notes due 2014 (Series A-2) (the “Series A-2 Notes” and, together with the Series A-1 Notes, the “Exchange Securities”) and the issuance by the Guarantor of the guarantee (the “Guarantee”) with respect to the Exchange Securities as provided in the Indenture (as defined herein). The Exchange Securities and the Guarantee will be issued under an Indenture, dated as of May 27, 2009, as amended by the Supplemental Indenture for the Issuance of the Series A-2 Notes, dated as of August 13, 2009, both among the Company, the Guarantor, the other guarantors named therein, and U.S. Bank National Association, as trustee (the “Trustee”) (collectively, together with the Second Supplemental Indenture dated as of July 13, 2010 among the Company, the Trustee, and certain guarantors named therein, the “Indenture”). The Exchange Securities will be offered by the Company in exchange for $700,000,000 aggregate principal amount of its outstanding 11.25% Senior Secured Notes due 2014 (Series A-1) and $317,500,000 aggregate principal amount of its outstanding 12.375% Senior Secured Notes due 2014 (Series A-2), as applicable. Capitalized terms not defined in this opinion letter have the meanings ascribed to them in the Indenture.

For purposes of this opinion letter, we have examined and are relying upon the following: (1) the Indenture, including the Guarantee set forth in Section 11 of the Indenture; (2) the articles of incorporation and bylaws of the Guarantor (the “Organizational Documents”); (3) the resolutions adopted by the Board of Directors of the Guarantor dated as of May 20, 2009 and August 13, 2009 (collectively, the “Resolutions”); (4) a certificate of legal existence and active status dated July 1, 2010 regarding the Guarantor issued by the Florida Secretary of State (the “Status Certificate”); and (5) the Officer’s Certificate executed by an officer of the Guarantor and delivered to us in connection with this opinion letter and the Registration Statement dated as of July 15, 2010 (the “Officer’s Certificate”), as to the Organizational Documents, the Resolutions, and as to certain other matters to support our opinions herein, and containing an incumbency certification as to the officers of the Guarantor that executed the Indenture, and their signatures (the “Incumbency Certificate”).

Except as may be otherwise specifically noted in this opinion letter, the opinions expressed herein relate solely to the documents listed above, and not to any other documents, including any documents that are referred to in, incorporated by reference into, or listed as attachments, exhibits, or schedules to any of the documents listed above. With your consent, we have assumed that certificates of public officials dated earlier than the date of this opinion letter remain accurate from such earlier dates through and including the date of this opinion letter. As to matters of fact underlying the opinions expressed herein, we have relied on the representations and warranties made by the parties in the documents listed above, and in the Officer’s Certificate, and we have relied on the statements of third parties contained in the Status Certificate. We have made no independent investigation of the accuracy or completeness of such matters of fact. Except to the extent expressly set forth herein, and with your permission, we have not undertaken any independent investigation (including without limitation review of the books, records, or files of the Guarantor or review of any governmental records or court dockets) to determine the existence or absence of any facts or other information, and no inference as to our knowledge or the existence or absence of any such facts or other information should be drawn from the fact of our representation of the Guarantor as special counsel.

In rendering the opinions herein, we have relied, without independent investigation, upon the following assumptions effective as of the date hereof and as of the date that each of the Exchange Notes are duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture upon the exchange described therein:

(a) Each party to the Indenture (other than the Guarantor) is organized and is validly existing and in good standing in its jurisdiction of organization;

(b) Each party to the Indenture (other than the Guarantor) has the power and authority to execute, deliver and perform its obligations under the Indenture, the Indenture has been duly authorized by all necessary action by each party to the Indenture (other than the Guarantor), and has been duly executed and delivered by each such party, and all exhibits, attachments, and schedules referenced in the Indenture have been attached thereto;

(c) The Indenture, including without limitation the procedure set forth in Article 11.03 regarding execution and delivery of the Guarantee, constitutes the valid and binding obligation of each party thereto under New York law, enforceable against each such party under New York law in accordance with its terms, and remains in full force and effect in the form provided to us;

(d) Each natural person executing the Indenture or any other document referred to herein is legally competent to do so;

(e) Each party to the Indenture (other than the Guarantor) has complied with all legal requirements pertaining to its status, as such status relates to its rights to enforce the Indenture, as the case may be (including, but not limited to, qualifying to do business, if required, in the relevant jurisdiction);

(f) Each document submitted to us for review is accurate and complete, each such document that is an original is authentic, each such document that is a copy or a draft conforms to an authentic original, and all signatures on each such document are genuine;

(g) There has not been any mutual mistake of fact or misunderstanding, fraud, duress, or undue influence in connection with the negotiation, execution, or delivery of the Indenture;

2

(h) Each person who has taken any action relevant to any of our opinions in the capacity of director or officer was duly elected or appointed to or otherwise occupied that director or officer position and held that position when such action was taken;

(i) Each of the persons named in the Incumbency Certificate: (i) was duly elected or appointed to the offices indicated therein and held such office or offices at the time of execution and delivery of the Indenture, and the signatures set forth opposite their names in the Incumbency Certificate are true and genuine signatures; and (ii) one or more of such persons has signed the Indenture on behalf of the Guarantor, and the Indenture has been left in the possession of the Trustee without reservation, escrow, or condition, and with the intent of creating binding agreements and obligations on the part of the Guarantor;

(j) All relevant laws, regulations, and agency actions are constitutional and valid, unless a reported case has otherwise held or widespread concern has been expressed by commentators as reflected in materials which lawyers routinely consult;

(k) All statutes, judicial and administrative decisions, and rules and regulations of governmental agencies constituting law are generally available (i.e. in terms of access and distribution following publication or other release) to lawyers practicing in the State of Florida and are in a format that makes legal research reasonably feasible;

(l) All conditions precedent set forth in the Indenture have been, or contemporaneously with the delivery hereof, or upon the execution, delivery, authentication and issuance of the Exchange Notes will be, fully satisfied, or waived;

(m) Legally sufficient consideration has been given to support the enforceability of the Guarantee and all other obligations of the Guarantor under the Indenture;

(n) The Exchange Securities constitute “Exchange Notes” as defined in the Indenture, and the Exchange Notes constitute “Notes” as defined in the Indenture; and

(o) The Guarantor does not have any setoffs, counterclaims, or defenses to the enforcement of its obligations under the Indenture arising from the actions of any other party thereto.

Based on and subject to the foregoing and subject to the exceptions, qualifications, and limitations herein set forth, we express the following opinions:

1. The Indenture has been duly authorized, executed and delivered by the Guarantor.

2. The Guarantee: (a) has been duly authorized; and (b) when the Exchange Notes are duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture upon the exchange described herein, will have been duly issued by the Guarantor.

3. Neither the execution and delivery of the Indenture (including the Guarantee) by the Guarantor nor the performance by the Guarantor of its obligations under the terms thereof violates the Applicable Law (as defined herein) of the State of Florida.

This opinion letter is based as to matters of law solely on such internal law of the State of Florida and such Federal law that, in each case in our experience, is normally applicable both to entities that are not engaged in regulated business activities and to transactions of the type contemplated by the Indenture and to the parties thereto, without our having made any special investigation concerning any other law, rule, or regulation, and which are not the subject of a specific opinion herein referring expressly to a particular law or laws (“Applicable Law”).

3

Without limiting the generality of the foregoing paragraph, and in some cases in addition thereto, and notwithstanding anything to the contrary contained herein, we express no opinion as to: (a) any law, rule, or regulation relating to (i) taxation, usury, choice-of-law provisions, antitrust or trade regulation, banking, securities, or labor or employee rights and benefits laws, including the Employee Retirement Income Security Act of 1974, as amended; (ii) planning, zoning, historic preservation, condominiums, cooperatives, subdivisions, wetland matters, air, water, or noise pollution, effluent waste disposal, hazardous substances, environmental contamination, fire, life safety, or building codes, occupational safety, health or health care, or the Americans with Disabilities Act, as amended; (iii) corrupt practices, including, without limitation, the Foreign Corrupt Practices Act of 1977, as amended; or (iv) the USA Patriot Act of 2001 (Public Law 107-56)), the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq., the Trading with the Enemy Act, 50 U.S.C. app. I et seq., or any other law, rule or regulation designed to combat terrorism or money laundering; (b) laws, rules, or regulations of any county, municipality, or similar political subdivision or any agency or instrumentality thereof; or (c) the creation, perfection, constructive notice, or priority of any security interest, lien, or other encumbrance on any real or personal property.

Our opinion on each legal issue addressed herein represents our judgment concerning how that issue would be resolved were it to be considered by the highest court of the jurisdiction upon whose law our opinion on that issue is based. The manner in which any particular issue would be treated in any actual court case would depend in part on facts and circumstances particular to the case, and our opinions are not a guaranty of an outcome of any legal dispute which may arise with regard to the Indenture.

This opinion letter speaks as of the date hereof. We disclaim any obligation to provide you with any subsequent opinion or advice by reason of any future changes or events which may affect or alter any opinion rendered herein. Our opinion letter is limited to the matters stated herein, and no opinion is implied or to be inferred beyond the matters stated herein.

By acceptance of this opinion letter, you hereby acknowledge and agree that, with respect to any of the affairs of the Guarantor, including, without limitation, the transactions contemplated by the Indenture, you have not looked to or relied upon any representations, warranty, statement or information provided by Holland & Knight LLP, whether orally or in writing, except as expressly set forth in this opinion letter with and subject to the assumptions and qualifications set forth herein.

This opinion letter may be relied upon by the Trustee and by Simpson Thacher & Bartlett LLP. We hereby consent to the filing of this opinion letter as Exhibit 5.2 to the Registration Statement, and to the use of our name under the caption “Legal Matters” in the Prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we are included within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission issued thereunder.

Very truly yours,

/s/ Holland & Knight LLP

HOLLAND & KNIGHT LLP

4

EX-10.1

Exhibit 10.1

EXECUTION COPY

This TRANSACTION AND MANAGEMENT FEE AGREEMENT (this “Agreement”) is dated as of October 28, 2008 and is between Sky Merger Sub Corporation, a Delaware corporation (together with its successors, the “Company”), and Blackstone Management Partners V L.L.C., a Delaware limited liability company (“BMP”).

BACKGROUND

1. The Company has entered into an Agreement and Plan of Merger, dated as of June 18, 2008, as it may be amended, supplemented or modified (the “Merger Agreement”), by among Sky Acquisition LLC, a Delaware limited liability company (“Parent”), the Company, and Apria Healthcare Group Inc., a Delaware corporation (“Apria”).

2. In accordance with the Merger Agreement, the Company is merging with and into Apria (the “Merger”), with Apria surviving the Merger. As a result, Apria shall succeed to and assume all the rights and obligations of the Company in accordance with the Merger, including the obligations set forth in this Agreement. References in this Agreement to the Company encompass Apria after the Merger.

3. BMP has expertise in the areas of finance, strategy, investment, acquisitions and other matters relating to the Company, Apria and their business and has facilitated the Merger and certain other related transactions (collectively, the “Transactions”) through its provision of financial and structural analysis, due diligence investigations, other advice and negotiation assistance with all relevant parties to the Transactions. BMP has also provided advice and negotiation assistance with relevant parties in connection with the financing of the Transactions as contemplated by the Merger Agreement.

4. The Company desires to avail itself, for the term of this Agreement, of BMP’s expertise in providing financial and structural analysis, due diligence investigations, corporate strategy, other advice and negotiation assistance, which the Company believes will be beneficial to it, and BMP desires to provide the services to the Company as set forth in this Agreement in consideration of the payment of the fees described below.

5. The rendering by BMP of the services described in this Agreement has been made and will be made on the basis that the Company will pay, or cause to be paid, the fees described below.

In consideration of the premises and agreements contained herein and of other good and valuable consideration, the sufficiency of which are hereby acknowledged, the parties agree as follows:

AGREEMENT

SECTION 1. Transaction and M&A Management Fees. In consideration of BMP undertaking financial and structural analysis, due diligence investigations, corporate strategy and other advice and negotiation assistance necessary in order to enable the Transactions to be consummated, the Company will pay BMP at the closing of the Merger (the “Closing” and the date of such Closing, the “Closing Date”) a non-refundable and irrevocable transaction fee of $18,733,969.22.

SECTION 2. Appointment. The Company hereby engages BMP to render the Services (as defined in Section 3(a), below) on the terms and subject to the conditions of this Agreement.

SECTION 3. Services.

(a) BMP agrees that until the Termination Date (as defined below) or the earlier termination of its obligations under this Section 3(a) pursuant to Section 4(f) hereof, it will render to the Company, by and through itself and its affiliates and such of their respective officers, employees, representatives, agents and third parties as BMP in its sole discretion may designate from time to time (“Representatives”), monitoring, advisory and consulting services in relation to the affairs of the Company and its subsidiaries, including, without limitation, (i) advice regarding the structure, distribution and timing of private or public debt or equity offerings and advice regarding relationships with the Company’s and its subsidiaries’ lenders and bankers, including in relation to the selection, retention and supervision of independent auditors, outside legal counsel, investment bankers or other financial advisors or consultants, (ii) advice regarding the strategy of the Company and its subsidiaries, (iii) advice regarding the structuring and implementation of equity participation plans, employee benefit plans and other incentive arrangements for certain key executives of the Company, (iv) general advice regarding dispositions and/or acquisitions, (v) advice regarding the business of the Company and its subsidiaries and (vi) such other advice directly related or ancillary to the above financial advisory services as may be reasonably requested by the Company (collectively, the “Services”). BMP will have no obligation to provide any other services to the Company absent an agreement between BMP and the Company over the scope of such other services and the payment therefor.

(b) It is expressly agreed that the Services to be rendered hereunder will not include investment banking or other financial advisory services which may be provided by BMP or any of its affiliates to the Company, or any of its affiliates, in connection with any specific acquisition, divestiture, disposition, merger, consolidation, restructuring, refinancing, recapitalization, issuance of private or public debt or equity securities (including, without limitation, an initial public offering of equity securities), financing or similar transaction by the Company or any of its subsidiaries. BMP may be entitled to receive additional compensation for providing services of the type specified in the preceding sentence by mutual agreement of the Company or such subsidiary, on the one hand, and BMP or its relevant affiliate, on the other hand. In the absence of an express agreement regarding the provision by BMP or its affiliate of such services and the compensation therefor in connection with any such transaction specified in this Section 3(b), in lieu of being engaged to provide such services on mutually agreeable terms and without regard to whether any such services were performed, BMP shall be entitled to receive upon consummation of:

(i) any such acquisition, divestiture, disposition, merger, consolidation, restructuring or recapitalization, a non-refundable and irrevocable fee equal to (x) 1% of the aggregate enterprise value of the acquired, divested, disposed of, merged, consolidated, restructured or recapitalized entity (calculated, on a consolidated basis for such entity, as the sum of (1) the market value of its common equity (or the fair market value thereof if not publicly traded), (2) the value of its preferred stock (at liquidation value), (3) the book value of its minority interests and (4) its aggregate long- and short-term debt, less its cash and cash equivalents), or (y) if such transaction is structured as an asset purchase or sale, 1% of the consideration paid for or received in respect of the assets acquired or disposed of;

(ii) any such refinancing, a non-refundable and irrevocable fee equal to 1% of the aggregate value of the securities subject to such refinancing; and

(iii) any such issuance, a non-refundable and irrevocable fee equal to 1% of the aggregate value of the securities subject to such issuance.

(c) Without affecting the rights of BMP under Section 3(b) hereof, if the Company or any of its subsidiaries determines that it is advisable for the Company or such subsidiary to hire a financial advisor, consultant, investment banker or any similar advisor in connection with any acquisition, divestiture, disposition, merger, consolidation, restructuring, refinancing, recapitalization, issuance of private or public debt or equity securities (including, without limitation, an initial public offering of equity securities), financing or similar transaction, it will notify BMP of such determination in writing. Promptly thereafter, upon the request of BMP, the parties will negotiate in good faith to agree upon appropriate services, compensation and indemnification for the Company or such subsidiary to hire BMP or one of its affiliates for such services. The Company and its subsidiaries may not hire any person, other than BMP or one of its affiliates to perform any such services unless all of the following conditions have been satisfied: (i) the parties are unable to agree upon the terms of the engagement of BMP or its affiliate to render such services after 30 days following receipt by BMP of such written notice; (ii) such other person has a reputation that is at least equal to the reputation of BMP or its affiliate in respect of such services; (iii) ten business days have elapsed after the Company or such subsidiary provides a written notice to BMP of its intention to hire such other person, which notice shall identify such other person and shall describe in reasonable detail the nature of the services to be provided, the compensation to be paid and the indemnification to be provided; (iv) the compensation to be paid is not more than BMP or its affiliate was willing to accept in the negotiations described above; and (v) the indemnification to be provided is not more favorable to the Company or the applicable subsidiary than the indemnification that BMP or its affiliate was willing to accept in the negotiations described above.

SECTION 4. Management Fee.

(a) In consideration of the Services being rendered by BMP, the Company will pay, or will cause to be paid, to BMP an annual non-refundable and irrevocable management fee (the “Management Fee”; the term “Management Fee” as used in this Agreement with respect to any annual period means all amounts payable with respect to such annual period pursuant to Sections 4(b) or (c) hereof, as applicable; provided that notwithstanding anything to the contrary contained in this Agreement, except as set forth in Section 4(b) below, the minimum annual Management Fee payable to BMP shall be $7,000,000).

(b) The Management Fee for the year ending December 31, 2008 shall be equal to $1,227,397.26, which shall be paid, or caused to be paid, by the Company at the Closing in respect of Services to be rendered from the Closing Date to December 31, 2008. On the first business day of January in each year, beginning in January 2009, the Company shall pay to BMP the Management Fee in respect of the fiscal year then beginning.

(c) The Management Fee for fiscal year 2009 and each subsequent year shall be equal to the greater of (x) $7,000,000 (adjusted as provided below) or (y) 2.0% of Consolidated EBITDA (as defined in the Credit Agreement dated as of the Closing Date by and among Parent, the Company, the other borrowers from time to time party thereto, Bank of America, N.A., as Administrative Agent and Collateral Agent, the other agents listed therein and the lenders from time to time party thereto) for the immediately preceding fiscal year (the “EBITDA Amount”). The EBITDA Amount for purposes of determining the initial payment of the Management Fee will be based on management’s then most recent estimate. Following the availability of audited financial statements for the fiscal year ending December 31, 2008 and each subsequent fiscal year, the Company shall recalculate the EBITDA Amount and the Management Fee, and based on such recalculation, (A) if the applicable recalculated Management Fee is more than the Management Fee previously paid by the Company to BMP in respect of the then-current fiscal year, the Company shall pay to BMP the difference between such amounts and (B) if the applicable recalculated Management Fee is less than the Management Fee previously paid by the Company to BMP in respect of the then-current fiscal

year, then BMP shall pay to the Company the difference between such recalculated Management Fee and the Management Fee received from the Company in respect of such fiscal year. Any payment required by the preceding sentence shall be paid by the Company or BMP, as applicable, promptly following the determination of the amount of such payment.

(d) In the event the Company or any of its subsidiaries enters into a business combination transaction with another entity that is large enough to constitute a “significant subsidiary” of the Company under any of the relevant tests contained in Regulation S-X as promulgated by the Securities and Exchange Commission, the Company and BMP will mutually agree, following good faith negotiations, on an appropriate increase in the minimum annual Management Fee as warranted by the increase in the Company’s size. Such increase will be based on the percentage increase in the Company’s Consolidated EBITDA determined on a pro forma basis giving effect to such business combination transaction.

(e) To the extent the Company cannot pay, or cause to be paid, the Management Fee for any reason, including by reason of any prohibition on such payment pursuant to any applicable law or the terms of any debt financing of the Company or its subsidiaries, the payment by the Company or any of its subsidiaries to BMP of the accrued and payable Management Fee will be deferred and will be payable immediately on the earlier of (i) the first date on which the payment of such deferred Management Fee is no longer prohibited under any contract applicable to the Company and the Company or its subsidiaries, as applicable, is otherwise able to make such payment, or cause such payment to be made and (ii) total or partial liquidation, dissolution or winding up of the Company. Notwithstanding anything to the contrary herein, under any applicable law or under any contract applicable to the Company or its subsidiaries, any forbearance of collection of the Management Fee by BMP shall not be deemed to be a subordination of such payments to any other person, entity or creditor of the Company or its subsidiaries. Any such forbearance shall be at BMP’s sole option and discretion and shall in no way impair BMP’s right to collect such payments. Any installment of the Management Fee not paid on the scheduled due date will bear interest, payable in cash on each scheduled due date, at an annual rate of 10%, compounded quarterly, from the date due until paid.

(f) Notwithstanding anything to the contrary contained in this Agreement, BMP may elect, in its sole discretion by the delivery of written notice to the Company, at any time in connection with or in anticipation of a change of control of the Company, a sale of all or substantially all of the Company’s assets or an initial public offering of the equity of the Company or its successor or any controlling person thereof (or at any time thereafter) to receive, in consideration of BMP’s role in facilitating the same and in settlement of the termination of the Services, (i) any remaining accrued and unpaid Management Fees payable by the Company under this Agreement and (ii) in addition to any fees owing to BMP in connection with such transaction pursuant to Section 3(b) hereof, a single lump sum non-refundable and irrevocable cash payment (the “Lump Sum Fee”) equal to the then present value (using a discount rate equal to the yield to maturity on the date of such written notice of the class of outstanding U.S. government bonds having a final maturity closest to the twelfth anniversary of the date of such election (the “Discount Rate”)) of all then current and future Management Fees payable under this Agreement, assuming the Termination Date is the twelfth anniversary of the date of such election and assuming that the EBITDA Amount continues to grow at the rate it grew (using the 12 months ended December 31, 2007 as a benchmark, during the subsequent 12 month periods) ending prior to the payment of such Termination Fee. Promptly after the receipt of such written notice, the Company shall pay the Lump Sum Fee and any accrued and unpaid Management Fees to BMP by wire transfer in same-day funds to the bank account or accounts designated by BMP, which payment shall not be refundable under any circumstances. Upon the giving of such notice, the obligation of BMP to provide the Services hereunder, and the obligations of the Company to pay Management Fees (except as provided in this Section 4(f)), shall be terminated, but all other provisions of this Agreement shall continue unaffected.

(g) To the extent the Company does not pay, or cause to be paid, any portion of the Lump Sum Fee by reason of any prohibition on such payment pursuant to any applicable law, the terms of any agreement or indenture governing indebtedness of the Company or its subsidiaries, any unpaid portion of the Lump Sum Fee shall be paid to BMP immediately on the earlier of (i) the first date on which the payment of such unpaid amount is no longer prohibited pursuant to such applicable law or under any such agreement or indenture applicable to the Company and the Company or its subsidiaries, as applicable, is otherwise able to make such payment, or cause such payment to be made and (ii) a total or partial liquidation, dissolution or winding up of the Company. Notwithstanding anything to the contrary herein, under any applicable law or under any contract applicable to the Company or its subsidiaries, any forbearance of collection of the Lump Sum Fee by BMP shall not be deemed to be a subordination of such payments to any other person, entity or creditor of the Company or its subsidiaries. Any such forbearance shall be at BMP’s sole option and discretion and shall in no way impair BMP’s right to collect such payments. Any portion of the Lump Sum Payment not paid on the scheduled due date shall bear interest at an annual rate equal to the Discount Rate, compounded quarterly, from the date due until paid.

SECTION 5. Reimbursements. In addition to the fees payable pursuant to this Agreement, the Company will pay, or cause to be paid, directly, or reimburse BMP and each of its affiliates for, their respective Out-of-Pocket Expenses (as defined below). For the purposes of this Agreement, the term “Out-of-Pocket Expenses” means the out-of-pocket costs and expenses incurred by BMP and its affiliates in connection with the Transactions and the Services or other services provided by them under this Agreement (including prior to the Closing), or in order to make Securities and Exchange Commission and other legally required filings relating to the ownership of equity securities of the Company or its successor by BMP or its affiliates, or otherwise incurred by BMP or its affiliates from time to time in the future in connection with the ownership or subsequent sale or transfer by BMP or its affiliates of capital stock of the Company or its successor, including, without limitation, (a) fees and disbursements of any independent professionals and organizations, including independent accountants, outside legal counsel or consultants, retained by BMP or any of its affiliates, (b) costs of any outside services or independent contractors such as financial printers, couriers, business publications, on-line financial services or similar services, retained or used by BMP or any of its affiliates, and (c) transportation, per diem costs, word processing expenses or any similar expense not associated with BMP or its affiliates’ ordinary operations. All payments or reimbursements for Out-of-Pocket Expenses will be made by wire transfer in same-day funds promptly upon or as soon as practicable following request for payment or reimbursement in accordance with this Agreement, to the bank account indicated to the Company by the relevant payee.

SECTION 6. Indemnification.

The Company will indemnify and hold harmless BMP, its affiliates and their respective partners (both general and limited), members (both managing and otherwise) and Representatives (each such person being an “Indemnified Party”) from and against any and all actions, suits, investigations, losses, claims, damages and liabilities, including in connection with seeking indemnification, whether joint or several (the “Liabilities”), related to, arising out of or in connection with the Transactions, the Services or other services contemplated by this Agreement or the engagement of BMP pursuant to, and the performance by BMP of the Services or other services contemplated by, this Agreement, whether or not pending or threatened, whether or not an Indemnified Party is a party, whether or not resulting in any liability and whether or not such action, claim, suit, investigation or proceeding is initiated or brought by the Company. The Company will reimburse any Indemnified Party for all reasonable costs and expenses (including reasonable attorneys’ fees and expenses and any other litigation-related expenses) as they are incurred in connection with investigating, preparing, pursuing, defending or assisting in the defense of any action, claim, suit, investigation or proceeding for which the

Indemnified Party would be entitled to indemnification under the terms of the previous sentence, or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto. The Company agrees that it will not, without the prior written consent of the Indemnified Party, settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated hereby (if any Indemnified Party is a party thereto or has been threatened to be made a party thereto) unless such settlement, compromise or consent includes an unconditional release of the Indemnified Party from all liability, without future obligation or prohibition on the part of the Indemnified Party, arising or that may arise out of such claim, action or proceeding, and does not contain an admission of guilt or liability on the part of the Indemnified Party. The Company will not be liable under the foregoing indemnification provision with respect to any particular loss, claim, damage, liability, cost or expense of an Indemnified Party that is determined by a court, in a final judgment from which no further appeal may be taken, to have resulted solely from the gross negligence or willful misconduct of such Indemnified Party. The attorneys’ fees and other expenses of an Indemnified Party shall be paid by the Company as they are incurred upon receipt, in each case, of an undertaking by or on behalf of the Indemnified Party to repay such amounts if it is finally judicially determined that the Liabilities in question resulted solely from the gross negligence or willful misconduct of such Indemnified Party.

The rights of an Indemnified Party to indemnification hereunder will be in addition to any other rights and remedies any such person may have under any other agreement or instrument to which each Indemnified Party is or becomes a party or is or otherwise becomes a beneficiary or under any law or regulation.

SECTION 7. Accuracy of Information. The Company shall furnish or cause to be furnished to BMP such information as BMP believes reasonably appropriate to rendering the Services and other services contemplated by this Agreement and to comply with the Securities and Exchange Commission or other legal requirements relating to the beneficial ownership by BMP or its affiliates and their respective members, officers and employees of equity securities of the Company (all such information so furnished, the “Information”). The Company recognizes and confirms that BMP (a) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the Services and other services contemplated by this Agreement without having independently verified the same, (b) does not assume responsibility for the accuracy or completeness of the Information and such other information and (c) is entitled to rely upon the Information without independent verification.

SECTION 8. Term. This Agreement will become effective as of the Effective Time (as defined in the Merger Agreement) and (except as otherwise provided herein) will continue until the “Termination Date,” which is the earlier of (i) the twelfth anniversary of the date hereof and (ii) such earlier date as the Company and BMP may mutually agree upon in writing; provided, that (x) the occurrence of the Termination Date will not affect the obligations of the Company to pay, or cause to be paid, any amounts accrued but not yet paid as of such date, (y) Section 5 hereof will remain in effect after the Termination Date with respect to Out-of-Pocket Expenses that were incurred prior to or within a reasonable period of time after the Termination Date, but which have not been paid to BMP or its affiliates in accordance with Section 5 hereof, and (z) the provisions of Sections 4(e), 4(g), 6, 7, 8, 9 and 10 hereof will survive after the Termination Date. The Management Fee will accrue and be payable with respect to the entire fiscal year of the Company in which the Termination Date occurs.

SECTION 9. Disclaimer, Opportunities, Release and Limitation of Liability.

(a) Disclaimer; Standard of Care. BMP makes no representations or warranties, express or implied, in respect of the Services to be provided hereunder. In no event shall BMP or any Indemnified Party be liable to the Company or any of its affiliates for any act,

alleged act, omission or alleged omission that does not constitute gross negligence or willful misconduct of BMP as determined by a final, non-appealable determination of a court of competent jurisdiction.

(b) Freedom to Pursue Opportunities. In recognition that BMP and its affiliates currently have, and will in the future have or will consider acquiring, investments in numerous companies with respect to which BMP or its affiliates may serve as an advisor, a director or in some other capacity, in recognition that BMP and its affiliates have myriad duties to various investors and partners, in anticipation that the Company, on the one hand, and BMP (or one or more affiliates, associated investment funds or portfolio companies), on the other hand, may engage in the same or similar activities or lines of business and have an interest in the same areas of corporate opportunities, in recognition of the benefits to be derived by the Company hereunder, and in recognition of the difficulties which may confront any advisor who desires and endeavors fully to satisfy such advisor’s duties in determining the full scope of such duties in any particular situation, the provisions of this Section 9(b) are set forth to regulate, define and guide the conduct of certain affairs of the Company as they may involve BMP. Except as BMP may otherwise agree in writing after the date hereof:

(i) BMP and its affiliates (including one or more associated investments funds or portfolio companies) shall have the right: (A) to directly or indirectly engage in any business (including, without limitation, any business activities or lines of business that are the same as or similar to those pursued by, or competitive with, the Company and its subsidiaries); (B) to directly or indirectly do business with any client or customer of the Company and its subsidiaries; (C) to take any other action that BMP believes in good faith is necessary to or appropriate to fulfill its obligations as described in the first sentence of this Section 9(b); and (D) not to present potential transactions, matters or business opportunities to the Company or any of its subsidiaries, and to pursue, directly or indirectly, any such opportunity for themselves, and to direct any such opportunity to another person.

(ii) BMP and its affiliates shall have no duty (contractual or otherwise) to communicate or present any corporate opportunities to the Company or any of its affiliates or to refrain from any actions specified in Section 9(b)(i) hereof, and the Company, on its own behalf and on behalf of its affiliates, hereby irrevocably waives any right to require BMP or any of its affiliates to act in a manner inconsistent with the provisions of this Section 9(b).

(iii) Neither BMP nor any of its affiliates shall be liable to the Company or any of its affiliates for breach of any duty (contractual or otherwise) by reason of any activities or omissions of the types referred to in this Section 9(b) or of any such person’s participation therein.

(c) Release. The Company hereby irrevocably and unconditionally releases and forever discharges BMP and its affiliates and their respective partners (both general and limited), members (both managing and otherwise), and Representatives from any and all liabilities, claims and causes of action related to or arising out of or in connection with the Transactions, the Services or other services contemplated by this Agreement or the engagement of BMP pursuant to, and the performance by BMP of the Services or other services contemplated by, this Agreement that the Company may have suffered or incurred, or may claim to have suffered or incurred, on or after the date hereof, except with respect to any act or omission that constitutes gross negligence or willful misconduct as determined by a final, non-appealable determination of a court of competent jurisdiction.

(d) Limitation of Liability. In no event will BMP or any Indemnified Party be liable to the Company or any of its affiliates (i) for any indirect, special, incidental or consequential damages, including, without limitation, lost profits or savings, whether or not such damages are foreseeable, or for any third-party claims (whether based in contract, tort or otherwise), related to or arising out of or in connection with the Transactions, the Services or other services contemplated by this Agreement or the engagement of BMP pursuant to, and the performance by BMP of the Services or other services contemplated by, this Agreement that the Company may have suffered or incurred, or may claim to have suffered or incurred, on or after the date hereof, except with respect to any act or omission that constitutes gross negligence or willful misconduct as determined by a final, non-appealable determination of a court of competent jurisdiction or (ii) for an amount in excess of the fees actually received by BMP hereunder.

SECTION 10. Miscellaneous.

(a) No amendment or waiver of any provision of this Agreement, or consent to any departure by any party hereto from any such provision, will be effective unless it is in writing and signed by each of the parties hereto. Any amendment, waiver or consent will be effective only in the specific instance and for the specific purpose for which given. The waiver by any party of any breach of this Agreement will not operate as or be construed to be a waiver by such party of any subsequent breach.

(b) Any notices or other communications required or permitted hereunder shall be made in writing and will be sufficiently given if delivered personally or sent by facsimile with confirmed receipt, or by overnight courier, addressed as follows or to such other address of which the parties may have given written notice:

if to BMP:

c/o The Blackstone Group L.P.

345 Park Avenue

New York, New York 10154

Attention: Neil P. Simpkins

Facsimile: (212) 583-5712

with a copy (which copy shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: William R. Dougherty

Facsimile: (212) 455-2502

if to the Company:

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: General Counsel

Facsimile: (949) 639-4332

Unless otherwise specified herein, such notices or other communications will be deemed received (i) on the date delivered, if delivered personally or sent by facsimile with confirmed receipt, and (ii) one business day after being sent by overnight courier.

(c) This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof, and supersedes all previous oral and written (and all contemporaneous oral) negotiations, commitments, agreements and understandings relating hereto.

(d) This Agreement will be governed by, and construed in accordance with, the laws of the State of New York.

(e) Each party to this Agreement, by its execution hereof, (i) hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York for the purpose of any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof, (ii) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, and agrees not to allow any of its subsidiaries to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such proceeding brought in one of the above-named courts is improper, or that this Agreement or the subject matter hereof or thereof may not be enforced in or by such court and (iii) hereby agrees not to commence or maintain any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof or thereof other than before one of the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation to any court other than one of the above-named courts whether on the grounds of inconvenient forum or otherwise. Notwithstanding the foregoing, to the extent that any party hereto is or becomes a party in any litigation in connection with which it may assert indemnification rights set forth in this agreement, the court in which such litigation is being heard shall be deemed to be included in clause (i) above. Notwithstanding the foregoing, any party to this Agreement may commence and maintain an action to enforce a judgment of any of the above-named courts in any court of competent jurisdiction. Each party hereto hereby consents to service of process in any such proceeding in any manner permitted by New York law, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 10(b) hereof is reasonably calculated to give actual notice.

(f) Neither this Agreement nor any of the rights or obligations hereunder may be assigned by the Company without the prior written consent of BMP; provided, however, that BMP may assign or transfer its duties or interests hereunder to any of its affiliates at the sole discretion of BMP. Subject to the foregoing, the provisions of this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the next sentence, no person or party other than the parties hereto and their respective successors or permitted assigns is intended to be a beneficiary of this Agreement. The parties acknowledge and agree that BMP and its affiliates and their respective partners (both general and limited), members (both managing and otherwise), officers, directors, employees, agents and representatives are intended to be third-party beneficiaries under Section 6 hereof.

(g) This Agreement may be executed by one or more parties to this Agreement on any number of separate counterparts (including by facsimile), and all of said counterparts taken together will be deemed to constitute one and the same instrument.

(h) Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction.

(i) Each payment made by the Company pursuant to this Agreement shall be paid by wire transfer of immediately available federal funds to such account or accounts as specified by BMP to the Company prior to such payment.

[signature page follows]

IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Transaction and Management Fee Agreement as of the date first written above.

BLACKSTONE MANAGEMENT PARTNERS V L.L.C.
By:	/s/ Neil P. Simpkins
	Name:	Neil P. Simpkins
	Title:	Senior Managing Director
SKY MERGER SUB CORPORATION
By:	/s/ Kearnon O’Molony
	Name:	Kearnon O’Molony
	Title:	Vice President and Secretary

[Transaction and Management Fee Agreement]

EX-10.2

Exhibit 10.2

MASTER SERVICE AGREEMENT

Between

INTELENET GLOBAL SERVICES PRIVATE LIMITED

and

APRIA HEALTHCARE, INC.

May 14, 2009

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

MASTER SERVICES AGREEMENT

THIS MASTER SERVICES AGREEMENT (this “Agreement”) is made and entered into this 14th day of May, 2009, and is effective as of May 14, 2009 (the “Effective Date”) by and between Intelenet Global Services Private Limited, a company incorporated under the Indian Companies Act 1956, with its registered office at Intelenet Towers, 1406-A/28, Mindspace, Malad (West), Mumbai—400 064, India (“Provider”) and Apria Healthcare, Inc., a company incorporated under the laws of the State of Delaware, with office at 26220 Enterprise Court, Lake Forest, CA 92630 (“Customer”). Provider and Customer also may be referred to individually as a “Party” and collectively as the “Parties.”

WHEREAS, Customer desires to outsource to Provider certain services that are currently performed by Customer personnel;

WHEREAS, Provider, which is in the business of providing, among other services, customer contact center and back-office transaction processing services, desires to provide such services to Customer upon the terms and conditions provided herein; and

WHEREAS, the Parties desire to enter into this Agreement to set forth the terms and conditions that will govern Provider’s provision of the Services to Customer.

THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, upon the general terms and subject to the conditions set forth in this Agreement and intending to be legally bound, the Parties hereto agree as follows:

1. DEFINITIONS

1.1 Unless and except to the extent otherwise defined in the relevant provisions of the Agreement or any SOW, all capitalized terms shall have the meanings assigned to them below (equally applicable for singular and plural forms of the terms defined):

“Account Manager” has the meaning provided in Section 5.3 hereof.

“Administrative Manuals” shall mean the manuals developed by Customer in consultation with Provider and periodically amended, which manuals set forth the policies and procedures for the provision of the Services under the applicable SOWs and the operational policies and procedures to implement this Agreement, including without limitation, utilization management, quality assurance, billing, service delivery, account management, reporting, and other operational requirements.

“Affiliates” of a Party shall mean any entity that is controlled by, in control of or under common control with such Party. For purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or

cause the direction of the management and policies of a Party, whether through ownership of voting securities or otherwise.

“Agreement” means this Master Services Agreement, including all Annexures, Statements of Work and Schedules hereto.

“Annexures” means the annexures referenced in, appended to and made a part of this Agreement.

“Applicable Taxes”, “Income Taxes” and “Ad Valorem Taxes” have the meanings provided in Section 15.6 hereof.

“Authorized Representative of a Party means (a) as to Customer, its Chief Executive Officer, Executive Vice President, Revenue Management or Executive Vice President, Chief Administrative Officer, and (b) as to Provider, its Chief Executive Officer, Executive Vice President, Chief Operating Officer, Head Legal or Chief Marketing Officer.

“BAA” means that certain HIPAA Business Associate Agreement, effective as of February 1, 2009, between Provider and Customer.

“Business Days” means the Customer days of operation, excluding weekends and holidays, in the State of California, United States of America, unless otherwise specified in a SOW.

“Change” has the meaning provided in Section 4.5 hereof. “Change Order” has the meaning provided in Section 4.5 hereof.

“Competitor” means any of the persons or entities specified in Schedule 25.1 hereof or any Affiliate of such person.

“Confidential Information” has the meaning provided in Section 14.1 hereof.

“Controlled Migration Period” has the meaning provided in Section 22.3.2 hereof.

“Customer Data” means all information, whether or not Confidential Information, entered in Software or Equipment by or on behalf of Customer or Provider and information derived from such information, including as stored in or processed through the Equipment or Software.

“Customer Default” has the meaning provided in Section 22.1.2 hereof.

“Customer Marks” means the Marks of Customer, its Affiliates and/or its licensors.

“Customer Property” means all existing and future proprietary materials (including Intellectual Property relating thereto) and other Confidential Information of Customer including without limitation: any and all compositions,

articles of manufacture, processes, apparatus; know-how, data, writings, drawings and all other works of authorship (including without limitation software, protocols, program codes, audiovisual effects created by program code, and documentation related thereto), mask works, other tangible items (including, without limitation, materials, samples, components, tools and operating devices), any business or technical information; and any deliverable, business or technical information, ideas, inventions, innovations or developments conceived, developed or made by Provider pursuant to or in connection with (i) a letter of engagement between the Parties in anticipation of and as a prelude to this Agreement or (ii) this Agreement.

“Customer Software” means those certain proprietary software applications owned or licensed by Customer and made available for use by Provider in order to perform the Services as specifically identified on Schedule 1.1 hereto or in a SOW and as either may be amended by Customer from time to time with respect to such Customer Software.

“De Facto Termination for Convenience” has the meaning provided in Section 3.3.3 hereof.

“Deferral Period” has the meaning provided in Section 22.3.1 hereof.

“Direct” / “Directed” / “Directing” / “Directions” means written instructions by Customer to Provider on how to perform a particular task or as described in a SOW or Change Order.

“Dispute” has the meaning provided in Section 24.1 hereof.

“Equipment” means the computer, telecommunications and all other equipment (without regard to the entity owning or leasing such equipment) used by Provider to provide the Services. Equipment includes, without limitation, the following: (i) computer equipment, including associated attachments, features, accessories, peripheral devices, front end devices, and other computer equipment, and including direct access storage devices (“DASD”); and (ii) telecommunications equipment, including all networking, multiplexors, modems, CSUs/DSUs, hubs, bridges, routers, switches, printers and other telecommunications equipment.

“Excluded Party” means a person who has been debarred, suspended or otherwise become ineligible to participate as a supplier, provider, contractor or other participant in any one or more United States federal programs. For reference purposes, the list of Excluded Parties can be found at https://www.epls.gov/, as such may be updated from time to time.

“Extended Term” has the meaning provided in Section 3.1.2 hereof. “Force Majeure Event” has the meaning provided in Section 21.1 hereof.

“FTE” means a Provider Personnel working on a full-time basis (i.e. at least 7.5 hours of logged on time) or the equivalent thereof.

“HIPAA” has the meaning provided in Section 17.3.3 hereof. “Initial Term” has the meaning provided in Section 3.1.1 hereof.

“Governance Board” means a committee composed of one representative of each of Customer and Provider, as described in Article 5 of this Agreement.

“Intellectual Property Rights” means all of the rights with respect to patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice) and any reissue, continuation, continuation-in-part, revision, extension or reexamination thereof; Marks together with all goodwill associated therewith, including, without limitation, all translations, adaptations, derivatives and combinations of the foregoing, and registrations, applications and renewals related thereto; copyrights and copyrightable works; mask rights, and proprietary know-how; and all registrations, applications and renewals for any of the foregoing; trade secrets; other intellectual property rights; and all copies and tangible embodiments of the foregoing (in whatever form or medium).

“Joint Steering Committee” or “JSC” means a committee composed of an equal number of representatives of Customer and Provider, as described in Article 5 of this Agreement.

“Key Provider Personnel” has the meaning provided in Section 12.1.1 hereof.

“Key Provider Positions” has the meaning provided in Section 12.1.1 hereof.

“Licensed Software” means any software licensed by Customer and made available for use by Provider in order to perform the Services, including, but not limited to, any software contained in, delivered with, utilized by or comprising any Product, as specifically identified on Schedule 1.1 hereto or in a SOW and as either may be amended by Customer from time to time with respect to such Licensed Software.

“Major Increase” has the meaning provided in Section 3.3.4 hereof.

“Marks” means trademarks, service marks, trade names, service names, insignia, internet domain names, logos and corporate names.

“Medicaid” means that certain means-tested entitlement program under Title XIX of the Social Security Act that provides U.S. federal grants to states for medical assistance based on specific eligibility criteria. (Social Security Act of 1965, Title XIX, P.L. 89-87 as amended; 42 U.S.C. 1396 et seq.)

“Medicaid Regulations” means, collectively: (i) all U.S. federal statutes (whether set forth in Title XIX of the Social Security Act of elsewhere) affecting the medical assistance program established by Title XIX of the Social Security Act and any statutes succeeding thereto; (ii) all applicable provisions of all U.S. federal rules, regulations, manuals and orders of all governmental authorities

promulgated pursuant to or in connection with the statutes described in clause (i) above; (iii) all U.S. federal administrative, reimbursement and other guidelines of all governmental authorities having the force of law promulgated pursuant to or in connection with the statutes and provisions described in clauses (i) and (ii) above; and (iv) all applicable provisions of all rules, regulations, manuals and orders of all governmental authorities promulgated pursuant to or in connection with the statutes described in clause (i) above and all state administrative, reimbursement and other guidelines of all governmental authorities having the force of law promulgated pursuant to or in connection with the statutes described in clause (i) above, in each case as may be amended, supplemented or otherwise modified from time to time.

“Medicare” means that certain U.S. government-sponsored entitlement program under Title XVIII of the Social Security Act that provides for a health insurance system for eligible elderly and disabled individuals. (Social Security Act of 1965, Title XVIII, P.L. 89-87 as amended; 42 U.S.C. 1395 et seq.).

“Medicare Regulations” means, collectively, all U.S. federal statutes (whether set forth in title XVIII of the Social Security Act or elsewhere) affecting the health insurance program for the aged and together with all applicable provisions of all rules, regulations, manuals and orders and administrative, reimbursement and other guidelines having the force of law of all governmental authorities (including, without limitation, the Department of Health and Human Services (“HHS”), the Centers for Medicare and Medicaid Services, the Office of the Inspector General for HHS, or any person succeeding to the functions of any of the foregoing) promulgated pursuant to

“Minor Administrative Manual Practice or Procedure” has the meaning provided in Section 4.5.5 hereof.

“Payor” means any third party entity or organization to which claims for payment or reimbursement are submitted in connection with the provision of health care services by Customer.

“Performance Standards” has the meaning provided in Schedule 7.1 hereto.

“Planning Period” has the meaning provided in Schedule 4.2 hereto.

“Products” means those products, equipment and hardware provided by Customer to Provider in connection with Provider’s performance of the Services under this Agreement. “Products” shall also include the Licensed Software and the Customer Software.

“Processing Norms” has the meaning provided in Section 6.2 hereof.

“Provider Default” has the meaning provided in Section 22.1.1 hereof.

“Provider Performance Default” has the meaning provided in Section 22.2 hereof.

“Provider Facility” has the meaning provided in Schedule 12.2 hereto.

“Provider Marks” means the Marks of Provider, its Affiliates and/or its licensors.

“Provider Personnel” means those employees, subcontractors or agents used by Provider in respect of, or in connection with, the Services to be rendered by Provider pursuant to this Agreement.

“Provider Property” means all existing and future proprietary materials (including Intellectual Property relating thereto) and other Confidential Information of Provider, including without limitation: any and all compositions, articles of manufacture, processes, apparatus; know-how; data; writings, drawings and all other works of authorship (including without limitation software, protocols, program codes, audiovisual effects created by program code, and documentation related thereto); mask works; other tangible items (including without limitation materials, samples, components, tools and operating devices), tools, processes, utilities, and methodology thereof used in the provision of Services; provided, however, Provider Property shall exclude any deliverable, business or technical information, ideas, inventions, innovations or developments conceived, developed or made by Provider pursuant to (i) a letter of engagement between the Parties in anticipation of and as a prelude to this Agreement, (ii) this Agreement or any SOW.

“Provider Software” means all software used by Provider in providing the Services, other than Customer Software and Licensed Software.

“Ramp Up Period” has the meaning provided in Schedule 4.2 hereto.

“Relief Event” means, as further provided in Section 22.9 below, any failure by Customer to perform an obligatory act or task, which failure does not constitute a breach by Customer or a Customer Default but does relieve Provider of its performance obligations under this Agreement to the extent and for so long as and to the extent such failure renders Provider to be unable or impairs Provider’s ability to perform the affected Services.

“Restricted Party” means any individual or entity identified on the Specially Designated Nationals and Blocked Persons list (“SDN List”) administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or any similar lists maintained by other countries as applicable to this Agreement. For reference purposes, OFAC’s SDN List can be found at: http://www.treas.gov/offices/enforcement/ofac/sdn /index.html, as such may be updated from time to time.

“RU Commencement Date” has the meaning provided in Schedule 4.2 hereto.

“RU Rates” has the meaning provided in Section 15.4 hereof.

“Schedules” means the schedules referenced in, appended to and made a part of this Agreement.

“Service Levels” has the meaning provided in Schedule 7.1 hereto.

“Service Recipients” has the meaning provided in Section 4.6.1 hereof.

“Services” means the services, functions and responsibilities to be provided by Provider as described in the SOWS, as they may be modified, replaced or supplemented in accordance with this Agreement.

“Significant Cost Increase” shall be deemed to have been incurred by Provider if *.

“SLA Bonuses” means the service level bonuses that are assessed under the service level provisions contained in each SOW.

“SLA Credits” means the service level credits that are assessed under the service level provisions contained in each SOW.

“Software” means Customer Software, Provider Software and Licensed Software unless a more specific reference is required.

“SOW Effective Date” has the meaning provided in Schedule 4.2 hereto.

“SOW Term” has the meaning provided in Section 3.2 hereof.

“SS Commencement Date” has the meaning provided in Schedule 4.2 hereto.

“SS Rate” has the meaning provided in Section 15.4 hereof.

“Statement of Work” or “SOW” means each document described as a statement of work, a sample form of which is included as Annexure 1 to this Agreement, which shall govern the specific Services to be performed by Provider under this Agreement and the terms thereof.

“Steady State Implementation Order” or “SSIO” means the Change Order to a SOW that sets out the supplementary or revised terms under which Provider will provide a Service during the Steady State Period of such Service.

“Steady State Period” means, with respect to each SOW, the period that commences after the end of the Ramp Up Period as provided in Schedule 4.2 and in each SOW.

“Term” means, individually and collectively, the Initial Term and any Extended Term.

“Terminated Services” has the meaning provided in Section 3.3.1 hereof.

“Termination for Convenience Effective Date” has the meaning provided in Section 3.3 hereof.

“Termination for Convenience Fee” has the meaning provided in Section 3.3 hereof.

“U.S. Business Hours” means 8:30 a.m. until 8:30 p.m. Eastern Standard (or Daylight if then in effect) Time in the United States, unless otherwise specified in a SOW.

2. AGREEMENT AND SOW

2.1 Agreement

This Agreement contains the general contractual terms and conditions applicable to the Services to be provided by Provider to Customer.

2.2 Statement of Work (SOW)

2.2.1 The Parties shall, from time to time during the Term of this Agreement, enter into individual SOWs to govern the specific Services to be performed by Provider under this Agreement and the terms hereof.

2.2.2 The JSC will determine the content of each SOW in accordance with the terms set forth in Schedules 4.2, 7.1 and 15.1. Each SOW shall be executed by an Authorized Representative of each of Customer and Provider. Each SOW shall, upon full execution thereof, be deemed to be a part of this Agreement and governed by the provisions hereof and the additional provisions set forth in such Statement of Work.

3. TERM

3.1 Term of this Agreement

3.1.1 This Agreement shall commence on the Effective Date and shall continue, unless earlier terminated in accordance with the provisions of this Agreement, for a period of seven (7) years (the “Initial Term”). Unless otherwise provided, the termination or expiration of a Statement of Work shall not automatically terminate this Agreement, but the termination or expiration of this Agreement shall automatically terminate all Statements of Work. Notwithstanding the foregoing, in accordance with Section 26.18 below, any obligation undertaken hereunder by either Party that, by its nature or its terms, is intended to extend beyond the Term shall survive the termination hereof.

3.1.2 Should a Party wish to continue this Agreement after the Initial Term or the then existing Term, such Party shall give the other Party a request in writing to renew this Agreement no later than seven (7) months prior to the expiration of Initial Term or the then-existing Term, as the case may be. Upon receipt of such request

to extend the Term of the Agreement, the other Party shall have thirty (30) days in which to accept, in writing, such request for extension. A failure to accept such request within the specified period shall be deemed to be a rejection, in which case neither Party shall have any obligation to negotiate any type of extension of the Term of this Agreement. If the other Party accepts an extension request, the Parties will thereafter negotiate in good faith the terms and conditions that will apply during the extended term (each an “Extended Term”) with a goal of reaching mutual agreement at least six (6) months prior to the expiration of the then-existing Term.

3.2 Term of Statement of Work

Each SOW shall set forth the applicable term for the SOW (each, a “SOW Term”), which SOW Term shall continue for the Term of this Agreement unless the Parties mutually agree in writing otherwise, except that all SOWs, unless sooner terminated, shall terminate at the expiration or termination of the Term of this Agreement.

3.3 Termination For Convenience

Customer may terminate this Agreement, in whole or in part as to any SOW or portion thereof, for convenience and without cause at any time by giving Provider at least * prior written notice designating the termination date (the “Termination for Convenience Effective Date”), in which event this Agreement or the relevant SOW (or portion thereof) shall terminate as if the date so specified were the originally scheduled date of termination. In the event that a purported termination for cause by Customer under Section 22.1 is determined by a competent authority not to be properly a termination for cause, then such termination by Customer shall be deemed to be a termination for convenience with adequate prior notice under this Section 3.3. In the event of a termination by Customer for convenience pursuant to this Section 3.3, then Customer shall pay to Provider a termination fee, for each SOW or portion thereof so terminated under Section 3.3, determined as follows (the “Termination for Convenience Fee”):

3.3.1 In the event that the Customer-designated Termination for Convenience Effective Date takes place before the end of * set forth in each SOW or portion thereof so terminated under Section 3.3 for the Service(s) that are the subject of Customer’s termination for convenience notice (the “Terminated Services”) then the Termination for Convenience Fee shall be equal to the amount of fees Customer paid or has become obligated to pay to Provider for those Terminated Services under the Agreement for the * period immediately preceding the Termination for Convenience Effective Date; provided, however, that if Customer has paid or become obligated to pay less than * of fees immediately preceding the Termination for Convenience Effective Date, then the Termination for Convenience Fee shall be equal to the aggregate amount of fees that Customer paid or became obligated to pay to Provider for those Terminated Services as to each * for which fees were paid or became payable for the * after the relevant SS Commencement Date plus a projected amount based on the average * amount of the fees paid or payable for the * during the period when fees were in fact paid for

each additional * necessary to bring the total number of * for which the Termination for Convenience Fee is paid to *.

3.3.2 The number of * for which the Termination for Convenience Fee described in Section 3.3.1 above shall be payable shall decrease by * and on each successive * of the relevant SS Commencement Date after a Termination for Convenience Effective Date takes place. For example, if a Customer-designated Termination for Convenience Effective Date takes place between the * of the relevant SS Commencement Date, then the Termination for Convenience Fee shall be equal to the amount of fees Customer paid or became obligated to pay to Provider for the Terminated Services under the Agreement during the * immediately preceding the applicable Termination for Convenience Effective Date, and, if the Termination for Convenience Effective Date takes place between the * of the relevant SS Commencement Date, then the Termination for Convenience Fee shall be equal to the amount of fees Customer paid or became obligated to pay to Provider for the Terminated Services under the Agreement during the * immediately preceding the Termination for Convenience Effective Date, with the * reductions to continue in a like manner, except that in no event shall the Termination for Convenience Fee be less than * fees paid or payable by Customer to Provider, irrespective of the Termination for Convenience Effective Date.

3.3.3 In the event of a De Facto Termination for Convenience (as such term is defined below) by Customer, Customer shall pay a Termination for Convenience Fee based on when the Termination for Convenience Effective Date takes place as provided in Sections 3.3.1 through 3.3.2 above only for the average * shortfall of those Services or category of Services under a given SOW that are considered to have suffered a De Facto Termination for Convenience (i.e., the volume of Services terminated beyond the * threshold described below). For purposes of this Section 3.3.3, a “De Facto Termination for Convenience” means a sustained decrease over each of * following the SS Commencement Date in the volume of one or more Services under a given SOW for which Customer is obligated to pay (based on the number of transactions available for Provider to perform) that is greater than * of the * average of the same over the * immediately preceding the period of decreased volume. For example, if the * average volume of transactions during months * following the * of the relevant SS Commencement Date is * transactions and the volume of transactions that Customer makes available to Provider to perform during months * is *, respectively, then Customer shall be deemed to have committed a De Facto Termination for Convenience for exceeding the * variance threshold of * transactions (* % of *) for * and shall be obligated to pay Provider a Termination for Convenience Fee equal to * worth of fees associated with the average * shortfall of * transactions. Notwithstanding the foregoing, under no circumstances shall Customer be deemed to have committed a De Facto Termination for Convenience if Provider is otherwise able to redeploy the Provider Personnel who would otherwise have been idled by the shortfall in volume of Services required to perform other Services on behalf of Customer. In addition, for purposes of clarification and to avoid any misunderstanding, any portion of a Service for which Customer is obligated to pay (even if such Service

is not utilized) shall not constitute a shortfall and applied in determining whether the * variance threshold has been exceeded or the amount of the Termination for Convenience Fee for a De Facto Termination for Convenience.

3.3.4 Notwithstanding anything to the contrary contained in this Section 3.3, in the event that in any * during the Initial Term, Customer demands, and Provider meets such demand for, a Major Increase (as such Term is defined below) in Services, then the formula for determining the applicable Termination for Convenience Fee shall “reset” and revert to the amount specified in Section 3.3.1, as may be subsequently reduced by * fees for the Terminated Service each year thereafter as provided in Section 3.3.2. For purposes of this Section 3.3.4, a “Major Increase” means a sustained increase in the volume of a Service demanded by Customer after the relevant SS Commencement Date during each of * that is greater than * of the * average over the * immediately preceding the period of increased volume, which increase requires Provider to incur additional capital costs and/or enter into additional binding commitments in order to meet Customer’s demands that, in aggregate, exceed by more than * the pre-existing costs or commitments incurred by Provider immediately prior to Customer’s demand for such Major Increase.

4. SERVICES

4.1 Provision of Services

Provider will provide to Customer, and Customer will receive from Provider, the Services specified in this Agreement and the Statements of Work.

4.2 Implementation and Commencement of Services

The Services will be implemented and will commence in accordance with the terms set forth on Schedule 4.2 attached hereto and the applicable SOW.

4.3 Implied Services

If any services, functions or responsibilities not specifically described in this Agreement are required for the proper performance and provision of the Services, they shall be deemed to be implied by and included within the scope of the Services to the same extent and in the same manner as if specifically described in this Agreement; provided, however, if such Implied Services will cause Provider to incur a Significant Cost Increase, then Provider shall be entitled to submit a written request to the JSC and/or the Governance Board for Customer to provide additional compensation to Provider for such additional costs. Failure by Provider to submit such written request prior to its incurring such additional costs shall constitute a waiver by Provider of its right to seek additional compensation therefor. If the JSC and the Governance Board fail to agree on the resolution of such request, then it may be submitted to dispute resolution in accordance with Article 24 of this Agreement.

4.4 Resources Generally

Except as otherwise expressly provided in this Agreement, Provider shall be responsible for providing all of the resources necessary to provide the Services, including, without limitation, facilities, personnel, software and equipment. In this regard, Provider shall maintain the Equipment and Software used to provide the Services, including (a) maintaining Equipment in good operating condition; (b) undertaking repairs and preventive maintenance on Equipment in accordance with the applicable Equipment manufacturer’s recommendations; and (c) performing Software maintenance, other than with respect to Customer Software maintained by Customer, in accordance with the applicable Software vendor’s documentation and recommendations. Further, Provider agrees to maintain the compatibility of the Equipment, Provider Software, Licensed Software, and other technologies used by Provider in performing the Services (and for which Provider is responsible) with those used by Customer in order for Provider to provide, and Customer to utilize, the Services.

4.5 Changes

4.5.1 Either Party may request a change in or addition to the scope, processes, service levels, service recipients, implementation plan or other changes to a SOW (each, a “Change”), but except as provided in Section 4.5.3, no Change shall be effective and binding unless such Change has been documented in a written change of control document and signed by an Authorized Representative of each Party (each, a “Change Order”). Each Change Order shall be substantially in the form contained in Schedule 4.5 hereto, depending on the nature of the Change. If either Party desires to propose a Change, such Party shall deliver to the relevant Account Manager of the other Party a change request in writing, describing the Change(s) proposed. The Party receiving the request shall respond within ten (10) days following its receipt thereof. If the receiving Party is amenable to the change request, it shall notify the requesting Party, and the requesting Party shall submit a Change Order in draft form for the consideration and approval of the other Party. A Change Order shall include, among other items as appropriate, an estimate of additional or reduced charges to Customer, if applicable, any additional equipment or software or other material required to implement the Change and any expected impact on the project schedule or service-levels under the applicable SOW. Upon execution, including signature by an Authorized Representative of each Party, the Change Order shall become effective and the applicable SOW shall be deemed to have been amended by the Change Order. If the Parties are unable to agree on a Change, then the issue may be referred by the requesting Party to the JSC for resolution.

4.5.2 Without limiting the generality of Section 4.5.1 above, the Change Order procedures provided in Section 4.5.1 shall also apply to (i) any requested modification, amendment or alteration to any Administrative Manual practice or procedure that does not qualify as a Minor Administrative Manual Practice or Procedure, (ii) any acknowledgement of the achievement of a SOW milestone event (e.g. the RU Commencement Date and the SS Commencement Date) and (iii) any acknowledgement of the occurrence of an operational event that results in the assessment of a SLA Credit or SLA Bonus, as the case may be, or relieves

either Party of its obligations hereunder such as a Relief Event for a Force Majeure Event.

4.5.3 Any changes to the legal, regulatory or Payor contract requirements that Provider is required to meet pursuant to the terms of this Agreement shall not be dependent on the execution and approval of a Change Order and shall be effective upon the date of receipt by Provider of written notice thereof signed by an Authorized Representative of Customer, unless such written notice provides for a later effective date; provided that such changes shall still be reviewed and memorialized by the JSC in accordance with the Change Order procedures set forth in Section 4.5.1 above.

4.5.4 Any requested modification, amendment or alteration to any term of this Agreement shall be subject to the terms set forth in Section 26.15 below.

4.5.5 Notwithstanding Sections 4.5.1 and 4.5.2 above, the Parties’ designated Account Managers may jointly recommend approval of modifications, amendments or alterations to Minor Administrative Manual Practices or Procedures, which recommendations, if adopted, will take immediate effect; provided, however, that such modifications, amendments or alterations cannot and shall not amend or waive any provision of this Agreement or any portion hereof and the effectiveness of such modifications, amendments or alterations may be suspended or nullified by the JSC at any time. For purposes of this Section 4.5, a “Minor Administrative Manual Practice or Procedure” change shall mean a change that does not (i) significantly alter the existing work flow currently in process (i.e. the change does not have any impact on the productivity and average handling time of the process), (ii) alter existing technology currently deployed for the process, and (iii) have any impact on the number of resources (agents and/ or supervisors) required to run the process after the change—including additional resources that may be required to manage any associated regulatory or compliance related requirements that may be a result of such change. In addition, for the sake of clarity, operationally, a Minor Administrative Manual Practice or Procedure change should result in simple dissemination of information to Provider Personnel by either the supervisors and/ or trainers on the process floor, and should not require more than one (1) hour of additional training of such Provider Personnel.

4.5.6 For the avoidance of doubt, as noted in Section 4.5.2 above, any requested modification, amendment or alteration to any Administrative Manual practice or procedure other than as specified in Section 4.5.3 that does not qualify as a Minor Administrative Manual Practice or Procedure shall be required to follow the Change Order procedures set forth in this Section 4.5 and memorialized using the Change Order forms set out in Schedule 4.5 hereto.

4.6 Recipients of Services

4.6.1 As of the Effective Date, Provider shall provide the Services to Customer, to Customer’s Affiliates, and on Customer’s behalf to those entities to whom and

under circumstances similar to those under which services similar to the Services were being provided immediately prior to the Effective Date (collectively “Service Recipients”); provided, however, that any Services provided to Customer’s Affiliates or entities designated by Customer shall be pursuant to a separate SOW that takes into account the additional costs, if any, associated with the provision of the Services to such third parties. At Customer’s option, Provider shall also perform the Services for the following, which, during such extended period of time as follows, shall be deemed to be “Service Recipients”, provided that such extended period shall not continue beyond the Term of this Agreement: (i) an entity which is an Affiliate of Customer shall continue to receive the Services for up to * (and longer if agreed by the Parties) after the date it ceases to be controlled by Customer; (ii) the purchaser of all or substantially all the assets of any line of business of Customer or its Affiliates shall continue to receive Services for up to * (and longer if agreed by the Parties) after the date of purchase, but only with respect to the business acquired. During the Term, Provider shall also provide the Services on Customer’s behalf to such other entities (e.g., doctors, hospitals, home care and home medical equipment companies, and other medical institutions) as Customer may designate from time to time. Notwithstanding the previous sentence, Customer may utilize the Services in support of or as part of Customer’s business operations and offerings, provided that if Customer requires use of the Services in connection with entities that are not Service Recipients and not Customer Affiliates and as a result Provider would incur additional costs to a third party (e.g., additional third party license fees) in an amount representing a Significant Cost Increase, then there will be an equitable adjustment to the charges to accommodate such costs as herein provided.

4.6.2 If Customer Directs Provider to provide the Services to an entity pursuant to Section 4.6.1(ii) above and such entity is a Competitor, then Customer shall be deemed to have waived Provider’s compliance with the non-competition obligations under Section 25 below solely with respect to the acquired business. Notwithstanding the foregoing, if a purchaser of all or substantially all the assets of any line of business of Customer or its Affiliates seeks to novate the applicable SOW, then Provider will negotiate such novation in good faith.

4.6.3 For purposes of this Agreement, (i) the Services provided to the entities referenced in this Section 4.6 shall be deemed to be Services provided to Customer and (ii) all references to “Customer” with respect to receipt of the Services shall be deemed to include the entities referenced in this Section 4.6.

5. PROJECT AND CONTRACT MANAGEMENT

5.1 Governance Board

5.1.1 The Parties shall form a Governance Board to establish and resolve major policy decisions concerning operations under this Agreement, consider requests for Changes and any other matters relating to this Agreement, any SOW and the

operations of the Parties affected thereby which are not resolved by the JSC. The Governance Board shall be comprised of two representatives. One representative shall be designated by Provider and one representative shall be designated by Customer. Upon execution of this Agreement, the initial Customer Governance Board representative shall be *, and the initial Provider Governance Board representative shall be *, each of whom shall have full authority to act on behalf of Provider but collectively shall count as a single representative. Thereafter, each Party shall notify the other in writing as to changes in its appointee to the Governance Board. Each such appointee shall serve at the pleasure of the appointing Party. A Party may designate a substitute representative in the event that a designated representative is unable to attend or participate in a Governance Board meeting. All decisions of the Governance Board, whether reached by consensus or by the decision of the Customer representative on the Board as provided below, shall be final and binding upon the Parties.

5.1.2 The Governance Board shall convene in person or by electronic means as necessary, but no less than once every six (6) months, for purposes related to the administration of this Agreement and the Services provided hereunder, including oversight and monitoring of compliance with Performance Standards, promulgating and implementing necessary amendments to this Agreement or any SOW, resolution of disputes between the Parties that have reached impasse at the JSC level and other matters related to the administration of this Agreement. All meetings of the Governance Board shall be held during U.S. Business Hours on a Business Day as agreed by the Parties, or on no less than three (3) Business Days’ prior written notice if the Parties do not agree otherwise.

5.1.3 The Parties desire that decisions of the Governance Board be reached by consensus, if possible. However, if the members of the Governance Board are unable to agree, Customer’s representative on the Governance Board shall be entitled to make the determination on behalf of the Governance Board unilaterally and, if necessary, to amend this Agreement and any SOW accordingly and impose any policy or procedure subject only to the restrictions set forth in Section 5.1.4 below.

5.1.4 Notwithstanding the provisions of Section 5.1.3 above, Customer shall not be entitled to impose any amendment to this Agreement, policy or procedure which (i) would cause Provider to be in violation of any applicable law, regulation, or insurance requirement, any agreement entered into in good faith with a third party on an arm’s length basis for purposes not relating to the evasion of this Agreement, or any order of a court or other judicial body to which Provider is or may become subject, or (ii) would unreasonably interfere with Provider’s ability to perform its obligations hereunder. In addition, if any such action on Customer’s part is not provided for in this Agreement or in any applicable SOWs in effect immediately prior to such action, and such action would cause Provider to incur a Significant Cost Increase, then Provider shall be entitled to request the JSC and/or the Governance Board to determine whether Provider is entitled to any additional compensation for its additional costs. If the matter can not be resolved by the JSC

or Governance Board, then it may be submitted to dispute resolution in accordance with Article 24 of this Agreement.

5.2 Joint Steering Committee

5.2.1 The Parties shall form a JSC to facilitate communications between them and establish policies and procedures governing the operations of the Parties under this Agreement and any SOWs. The JSC shall be composed of a senior management representative of both Customer and Provider, and such other persons as may be mutually agreed by the Parties, with both Parties to be equally represented. The JSC shall provide general oversight and guidance to the Parties, including serving as the arbiter with respect to issues arising during and from meetings, committees, and work groups formed by the Parties (e.g., change request, reliability, service and performance issues). Upon execution of this Agreement, the initial Customer JSC representatives shall be *; and the initial Provider JSC representatives shall be *, as a non-voting representative. Thereafter, each Party shall notify the other in writing as to changes in its representatives to the JSC. Each such representative shall serve at the pleasure of the designating Party. A Party may (a) designate a substitute representative in the event that a designated representative is unable to participate in a JSC meeting and (b) assign the vote of a representative unable to attend a JSC meeting to a representative who is able to participate in that JSC meeting.

5.2.2 The JSC shall be responsible for overseeing day-to-day matters in connection with the Services, and shall report to, and be subject to the authority of, the Governance Board.

5.2.3 The JSC shall convene in person or by electronic means as necessary, but no less than quarterly (unless both Parties agree in writing that a particular quarterly meeting is unnecessary), to consider and address such implementation, administration and performance issues as they may deem appropriate, resolve requests for Changes pursuant to Section 4.5, coordinate the performance of each Party’s duties and obligations, and address any issues of common concern. The JSC shall notify the Governance Board of any issue which has or is likely to have significant impact, or be of major concern, or with regard to which the JSC has been unable to reach a decision. Either Customer or Provider may call for a special meeting of the JSC, and add any issue of concern to the committee agenda. The JSC shall maintain a record of the issues considered and any decisions reached, and such decisions, as appropriate, shall be set forth in consecutively numbered amendments or Change Orders to this Agreement or applicable SOWS, as appropriate. The JSC may designate one of its members to serve as the chairperson of the committee for purposes of maintaining records, calling and noticing meetings, and performing necessary administrative functions required by the committee.

5.2.4 Each Party’s designees to the JSC shall have the knowledge, authority, and responsibility in respect to the Services such as to enable the JSC to make

necessary and appropriate decisions to implement this Agreement and any SOW and to resolve any matters needing to be resolved at the operational level. Decisions of the JSC shall be made by the affirmative vote of no less than * of the total JSC members, with at least one affirmative vote being that of a representative of Customer and at least one affirmative vote being that of a representative of Provider. In the event that the JSC fails to resolve an issue, either Party may request that it be referred to the Governance Board for resolution.

5.3 Account Manager

Each Party shall designate an “Account Manager” who shall be the principal point of contact between the Parties for all matters relating to Services provided under a particular SOW. Each SOW shall contain initial designation of an Account Manager for each Party. A Party may designate a new Account Manager by written notice to the other Party. Any changes in the Account Manager shall be notified to the other Party in advance. A Party may, in its sole discretion, designate the same individual as its Account Manager under more than one SOW.

5.4 Meetings and Reports

During the Term, the Parties shall hold such meetings, and Provider shall deliver to Customer such reports as are described in Schedule 5.4 hereto.

5.5 Policies and Procedures

Provider shall perform all Services in accordance with the procedures set forth in Schedule 5.5 attached hereto or in the Administrative Manual, any policies or procedures adopted by the JSC or Governance Board and those listed in the applicable SOW.

6. CUSTOMER’S OBLIGATIONS

6.1 Relief Event

Customer acknowledges and agrees that there may be instances in which Provider will be unable to perform the Services without assistance from Customer. Consequently, Customer will provide to Provider, in a timely manner, such resources specified in each SOW, to enable Provider to perform the Services. Examples of such resources may include connectivity support, documentation, knowledge base, hardware, software, support personnel and trainers. Failure of Customer to provide any such assistance or resources specified in the applicable SOW will not constitute a breach by Customer or Customer Default but will merely be a Relief Event to the extent, and only for so long as, such failure persists and actually causes Provider to be unable or impairs Provider’s ability to provide the affected Services. Provider shall be obligated to perform any Services which are unaffected by such failure on the part of Customer, and Provider shall continue to provide even affected Services to the maximum extent that it is feasible to do so. Any resources not specifically identified in a SOW as Customer’s responsibility to obtain or provide shall be deemed to be Provider’s responsibility.

6.2 Processing Norms

Customer acknowledges and agrees that Provider is relying on the accuracy of the written information and Directions supplied by Customer, and other requirements specified by Customer in writing (cumulatively, the “Processing Norms”), to perform the Services. In the event the Processing Norms are not accurate or are found to be inadequate, the Party discovering such fact shall promptly notify the other Party of any such deficiency and the Parties shall cooperate with each other to remedy the situation in a timely manner. So long as Provider is not otherwise aware of or does not have any reason to believe the Processing Norms supplied by Customer are inaccurate or inadequate or, if Provider is aware of or has reason to believe the Processing Norms supplied by Customer are inaccurate or inadequate, notifies Customer in writing of such fact, Provider shall (i) be entitled to rely on and act in accordance with the Processing Norms, (ii) not incur any liability for claims, losses or damages that arise as a result of Provider’s compliance with the Processing Norms and (iii) be entitled to payment for its performance, and be excused from its poor performance or non-performance of, the Services, to the extent Provider’s performance is predominantly affected by such inaccurate Processing Norms supplied by Customer.

6.3 Use of Software

Customer grants, or will arrange for third party licensors to grant, to Provider a limited, non-exclusive license to access and use the Customer Software and the Licensed Software in accordance with the terms and conditions set forth on Schedule 6.3 hereto, as they may be amended by Customer or the third party licensors from time to time solely in connection with the performance of Provider’s obligations under this Agreement and under any applicable SOW.

6.4 License to Use Marks

Customer hereby grants to Provider a limited non-exclusive license to use Customer Marks solely in connection with the performance of Provider’s obligations under this Agreement, including the right to use Customer’s name over the telephone, the internet and in written materials in performing the Services. Such use of Customer Marks must conform to any written instructions provided by Customer to Provider in this regard, as may be further specified in the applicable SOW. Customer has the right to require Provider to furnish from time to time samples of Provider’s use of Customer Marks.

7. PERFORMANCE STANDARDS AND SERVICE LEVELS

The Parties will work together and extend their full cooperation in arriving at the performance standards and service levels for the Services to be performed under each Statement of Work in accordance with the standards developed under Schedule 4.2 hereto and the terms set forth in Schedule 7.1 hereto.

8. BUSINESS CONTINUITY / DISASTER RECOVERY

The Parties recognize that the Services are vital to Customer’s business and, therefore, it is of paramount importance to Customer that Provider’s provision of the Services remain continuous and disruption-free. In the event Provider’s provision of the Services is disrupted for any reason, it is of corresponding importance to Customer that they be restored rapidly and in a manner that minimizes the impact on Customer’s operations and business. Accordingly, Provider agrees to

undertake the business continuity / disaster recovery steps described below and in Schedule 8.1 hereto.

8.1 Business Continuity Plan / Disaster Recovery Plan

During the Term of this Agreement, Provider shall maintain the capabilities and follow the recovery strategies and other measures set forth in Provider’s standard Business Continuity Plan / Disaster Recovery Plan as attached hereto as Schedule 8.1. To the extent requested by Customer, the Parties will work together to modify or supplement such Plan as it pertains to the Services offered under a SOW and include such modified or supplementary plans in such SOW along with any incremental costs associated therewith. Any change to the Business Continuity Plan / Disaster Recovery Plan under any SOW shall be subject to review and approval by the Governance Board. All Business Continuity Plans / Disaster Recovery Plans shall, among other things, specify the alternative location or facility from which the said Services will be rendered.

8.2 Preparation of Personnel

Provider shall familiarize all Provider Personnel with and train Key Provider Personnel in the recovery strategies and procedures set forth in the relevant Business Continuity Plan / Disaster Recovery Plan, particularly as they relate to disaster prevention measures, alternative means of operation and the notification process.

8.3 Disaster Recovery Sites

If a Provider Facility becomes unavailable (and subject to the applicable disaster recovery provisions of this Agreement and the relevant SOW) or Provider’s ability to provide the Services therefrom is significantly impaired, it is contemplated that Provider will shift some or all of the work to the second Provider Facility from which the Service is provided. If an additional and temporary facility is required in order to provide the Services, the Parties agree that:

8.3.1 The charges payable by Customer for the Services provided from the temporary Provider Facility shall be at the same rate as if such Services were being provided prior to the disaster event at the originally planned Facility (i.e., as if such Services were being provided from the now-unavailable Provider Facility);

8.3.2 The Services shall be provided from the temporary Provider Facility only for such time as the recovery requires and until the original Provider Facility can be rendered fit for providing the Services; and

8.3.3 If the original Provider Facility is permanently unavailable, a permanent site shall be reasonably proposed by Provider and subject to Customer’s approval. Provider’s Disaster Recovery Plan shall specify the location of any back-up facilities.

9. COMPLIANCE WITH LAWS

9.1 General

Each Party shall perform its obligations in a manner that complies with all applicable federal, state, provincial and local laws, regulations, ordinances and codes of the United States and India (including but not limited to the FTC “Red Flags Rules” relating to identity theft prevention as set forth in 16 C.F.R. Part 681), which compliance shall include identifying and procuring required permits, certificates, approvals and inspections. Provider shall be responsible for implementation of, and shall implement, all health care legal and regulatory mandates, including, without limitation, Medicaid Regulations and Medicare Regulations and Payor contract requirements relating to Provider’s performance hereunder, to the extent provided by and Directed by Customer. If a charge occurs of noncompliance of a Party with any such laws, regulations, ordinances or codes, the Party so charged shall promptly notify the other Party of such charges in writing.

9.2 Fraudulent Conduct or Ethical Violations

9.2.1 Provider shall post notices at the Provider Facilities notifying Provider Personnel of (i) their ongoing obligation to report immediately any fraudulent conduct or any violation or suspected violation of any ethical and/or regulatory requirements to the following website, www.ethicspoint.com, and (ii) that any reporting Personnel complying with such obligation will be protected from retribution of any kind;

9.2.2 Similarly, Provider shall have an affirmative duty to notify Customer promptly in writing if Provider becomes aware or otherwise has reason to believe that any such violation has occurred and to identify all Provider Personnel involved with such incident, even if Provider believes the situation has been corrected and/or has already taken all necessary corrective actions. Notwithstanding anything to the contrary contained herein, Customer shall have the right to require Provider to immediately suspend or remove any such Provider Personnel from the provision of the Services to Customer; and

9.2.3 Provider shall take all necessary steps to protect any Provider Personnel who report fraudulent conduct or violations of ethical or regulatory requirements in accordance with Section 9.2.1 above from any direct or indirect harassment or retribution of any kind. Except with the prior written consent of Customer, Provider shall not disclose or attempt to determine or divulge the identity of any such Provider Personnel or attempt to investigate the alleged incident independently.

9.3 Failure to Comply with Requirements

If Customer Directs Provider to perform the Services in a particular manner in order to comply with applicable regulatory or Payor contract requirements, and if Provider fails to so perform the Services in such manner, Customer may claim as damages, and Provider shall be responsible for, and indemnify Customer against, any and all fines, penalties, interest, and similar financial obligations levied against Customer for violations of such requirements, if and to the extent they result from Provider’s failure. Any such indemnification by Provider shall be in accordance with Section 18 below.

9.4 Maintenance of Authorizations, Registrations and Licenses

Customer shall hold and maintain at all times during the term of this Agreement all licenses, consents, authorizations and registrations necessary for it to lawfully receive the Services in the country in which Customer operates; and Provider shall hold and maintain at all times during the term of this Agreement, and shall be responsible for ensuring that any Affiliates and/or contractors engaged by Provider hold and maintain at all such times, all licenses, consents, authorizations and registrations necessary for it to lawfully provide the Services from its offshore locations.

9.5 Foreign Corrupt Practices Act

Without limiting the generality of the foregoing, Provider hereby represents, warrants and covenants that it shall comply with the requirements of the U.S. Foreign Corrupt Practices Act, U.S. and any other applicable foreign or domestic anti-bribery and anti-corruption laws, and other laws governing improper payments. Specifically, Provider further represents, warrants, and covenants that, in connection with its activities under this Agreement, it will not offer, promise, authorize or otherwise act in furtherance or, or pay, anything of value, directly or indirectly, to a Government Official (as such term is hereinafter defined), or political party or party official, candidate for political office, or official of a public international organization. For purposes of this Agreement, the term “Government Official” shall mean and include any official or employee of national, local or provincial or state government department, agency, or instrumentality, as well as an official in the judicial, legislative, or military, anyone acting in an official capacity for any government, or any immediate family member of such persons. Any such offer, promise, authorization, act in furtherance, or payment shall constitute a Provider Default, extinguish any right to compensation that otherwise might be due and owing to Provider by Customer, and give rise to the right of Customer to recover any funds it has already paid to Provider.

9.5.1 Provider hereby represents that no owner or principal of Provider is a Government Official and hereby covenants to notify the Customer in writing if there is any change in respect of this representation.

9.5.2 Provider shall provide such information, reports and certifications as Customer may reasonably require from time to time hereunder as to its books, records and accounts pertaining to the Services, its compliance with the laws identified in this Section 9.5, and its compliance with other obligations under this Agreement.

9.6 OFAC Regulations

In connection with the provision of Services under this Agreement, Provider’s use of subcontractors to the extent permitted in Section 10 of this Agreement and Provider’s hiring and employment of Provider Personnel, Provider represents and warrants that it shall not take any action involving a Restricted Party or that would cause Customer to be in non-compliance with OFAC’s economic sanctions regulations. For reference purposes, information on OFAC’s economic sanctions regulations are found at http://www.treas.gov/offices/enforcement/ofac/.

10. SUBCONTRACTING

10.1 Subcontracting Generally

Provider shall not subcontract any portion of the Services to subcontractors without receiving the prior written consent of Customer, which consent may be withheld or conditioned by Customer in its sole discretion; provided, however, Customer’s prior written consent shall not be required if Provider chooses to subcontract the provision of the Services to its Affiliates, and Provider shall only be required to provide Customer with at least thirty (30) days prior written notice of any such subcontract. Notwithstanding anything to the contrary contained herein, under no circumstances shall any subcontracting by Provider relieve Provider of any of its obligations under this Agreement.

10.2 Restricted/Excluded Party

Provider shall not subcontract any portion of the Services to any person(s) (i) who is a Restricted Party, (ii) who is an Excluded Party; (iii) who is working for or otherwise affiliated with any Competitor; (iv) who is not experienced or otherwise qualified to perform the Services that Provider seeks to subcontract; or (v) who is unwilling to comply with the terms of this Agreement.

10.3 Compliance with Agreement

In the event that Provider subcontracts any portion of the Services to subcontractors pursuant to this Section 10, Provider hereby represents, warrants and covenants that it shall conduct appropriate due diligence processes in advance on such agents, subcontracts, or third-parties to determine in advance their suitability to abide by Section 9.5 of this Agreement, and that it shall by written agreement specifically require such subcontractors to abide by Section 9 and all other provisions applicable to Provider under this Agreement and any applicable SOW.

11. CONDUCT

11.1 Other Party’s Premises

Each Party will ensure that while on any premises of the other Party in connection with this Agreement, its employees, agents, subcontractors, and representatives, if any, will:

11.1.1 Make every reasonable effort to cause as little interference with and inconvenience to the business of the other Party as is reasonably possible, subject to such Party’s other obligations under this Agreement and each SOW;

11.1.2 At all times comply with the general safety and security rules applicable in the other Party’s premises; and

11.1.3 Conform to the other Party’s codes of staff and security practice provided that the other Party will have provided copies of such codes to the visiting Party’s employees, agents, subcontractors, or representatives.

11.2 Access to Records of Other Customers

Notwithstanding anything contained in this Agreement, neither Customer nor any of its Affiliates, representatives, employees, agents, or auditors shall be entitled to inspect, or have access to, any information, documents, reports and/or materials of any nature whatsoever which relate to or contain information relating to any other customer of Provider to the extent Provider represents to Customer in writing that such inspection or access will cause Provider to be in breach of its confidentiality obligations to such other customer and proposes alternative arrangements reasonably satisfactory to Customer that will enable Customer to exercise all of its rights hereunder.

12. PERSONNEL, FACILITIES AND EQUIPMENT

12.1 Provider Personnel

12.1.1 Each Provider Personnel that is serving in a Key Provider Position (individually, a “Key Provider Personnel”) will be subject to the performance standards, qualification requirements and other terms set forth on Schedule 12.1.1. The “Key Provider Positions” shall be the positions set forth in such Schedule. Unless otherwise specified in this Agreement, all Provider Personnel holding Key Provider Positions shall be dedicated solely to performing Services pursuant to this Agreement; provided, however, that Provider’s Account Manager may spend up to * of his business time on matters not related to provision of Services to Customer under this Agreement.

12.1.2 Provider shall abide by all applicable laws, treaties and regulations concerning its treatment of Provider Personnel and contractors and their work environment, including without limitation, such standards as provided by the International Labour Organization, and shall maintain decent and productive working conditions respecting the freedom, security and human dignity of all Provider Personnel and personnel of any contractors utilized by Provider in performing the Services. Schedule 12.1.2 hereto sets forth the qualifications, standards and other requirements applicable to all Provider Personnel. Provider shall consult and cooperate with Customer in order to address any situations involving poor interaction between Provider Personnel and Customer personnel or any customers or patients of Customer.

12.1.3 Provider shall ensure that it has sufficient Provider Personnel to perform the Services at all times, and shall maintain adequate staffing to quickly adjust to any increases or decreases in the volume of applicable work performed as part of the Services.

12.2 Facilities

Provider shall cause the Services to be performed from a facility or a portion of a facility which is specifically dedicated to Provider’s provision of the Services. Schedule 12.2 sets forth the requirements regarding facilities to be used by Provider in providing the Services.

12.3 Equipment

Provider shall only use Equipment in providing the Services that meets Customer’s specifications and is compatible with Customer’s equipment. Provider shall comply with the requirements set forth in Schedule 12.3 regarding Equipment to be used by Provider in providing the Services.

12.4 Non-Solicitation

During each SOW Term and for a period of one (1) year following the termination, cancellation or expiration thereof for any reason, except with the prior written consent of the other Party, (i) Provider agrees not to directly or indirectly entice, solicit, divert or hire, or attempt to entice, solicit, divert or hire, any person employed by Customer (whether or not such employee is a full-time, contractual or temporary employee, and whether or not its employment is pursuant to a written agreement, is for a determined period, or is terminable at will), and (ii) Customer agrees not to directly or indirectly entice, solicit, divert or hire, or attempt to entice, solicit, divert or hire, any person occupying, or who previously occupied, a Key Provider Position. Notwithstanding the foregoing, Customer shall have no obligations or restrictions under this Section 12.4 if this Agreement is terminated pursuant to Sections 21 (Force Majeure), 22.1.1 (Provider Default) or 22.7 (Regulatory Change), and Provider shall have no obligations or restrictions under this Section 12.4 if this Agreement is terminated pursuant to Section 22.1.2 (Customer Default).

13. PROPRIETARY RIGHTS

13.1 No Implied Transfer of Customer Property

Customer shall retain all right, title and interest in the Customer Property, Customer Products, Customer Marks, its Confidential Information, and all its intellectual property rights thereto, supplied by Customer to Provider under this Agreement. Nothing in this Agreement shall effect a transfer of Customer’s intellectual property rights from Customer to Provider, or otherwise be construed to confer any license to Provider under such intellectual property rights, except as expressly set forth in this Agreement.

13.2 No Implied Transfer of Provider Property

Provider shall retain all right, title and interest in the Provider Property, Provider Marks, its Confidential Information, and all its intellectual property rights thereto, supplied by Provider to Customer under this Agreement. Nothing in this Agreement shall effect a transfer of Provider’s intellectual property rights from Provider to Customer, or otherwise be construed to confer any license to Customer under such intellectual property rights, except as expressly set forth in this Agreement.

13.3 New Intellectual Property

The terms and conditions set forth on Schedule 13.3 attached hereto shall apply to any new intellectual property conceived, developed or created by Provider, its Affiliates, its subcontractors, or any of their respective employees, during the Term.

13.4 Residual Rights

Each Party acknowledges that, subject to the confidentiality provisions of this Agreement, the other Party and its employees may utilize for any purposes any information in non-tangible form that is or may be retained in the personal memory by persons who have performed Services hereunder or otherwise have access to the Confidential Information of the other Party, including ideas, concepts, know-how or techniques contained therein. Nothing contained in this clause shall relieve either Party of its confidentiality obligations with respect to the proprietary and Confidential Information or material of the other Party.

13.5 Third Party Materials and Payor Websites

Unless stated otherwise in the applicable SOW, Provider shall be responsible for obtaining appropriate licenses for any third-party products or materials to be provided or used in connection with the Services under a SOW and for paying the applicable license fees. Provider shall also be responsible for complying with all registration and other access and use requirements of Payor websites that Provider will need to access in order to perform certain of the Services. To the extent Provider incurs incidental costs in connection with such compliance efforts, Customer shall reimburse Provider for such costs as may be mutually agreed between the Parties. Customer will render reasonable assistance to Provider in connection with such compliance efforts as necessary.

14. CONFIDENTIALITY

14.1 Confidential Information.

Provider and Customer each acknowledge that they may be furnished with, receive or otherwise have access to information of or concerning the other Party which such Party considers to be confidential. As used in this Agreement, “Confidential Information” means all information, in any form, furnished or made available directly or indirectly by one Party, or to which either Party gains access in the course of or incidental to the performance of this Agreement, and that should reasonably have been understood by the recipient (because of legends or other markings, the circumstances of disclosure, or the nature of the information itself) to be confidential to the disclosing Party, an Affiliate of the disclosing Party, or a third party. The terms and conditions of this Agreement and all SOWs shall be deemed Confidential Information. Confidential Information also shall include, whether or not designated “Confidential Information,” (i) Customer Data; (ii) the specifications, designs, documents, correspondence, software, documentation, data and other materials and work products produced by or for either Party under this Agreement; (iii) all information concerning the operations, affairs and businesses of the other Party, the financial affairs of the other Party, and the relations of the other Party with its customers, patients, referral sources, employees, providers, subscribers, business partners, vendors, consultants, brokers and service providers (including customer lists, customer information, account information and consumer markets); (iv) Software provided to a Party by or through the other Party; (v) Protected Health Information; and (vi) other information or data stored on magnetic media or otherwise or communicated orally, and obtained, received, transmitted, processed, stored, archived or maintained by either Party under this Agreement.

14.2 Obligations

Subject to Schedule 14.5:

14.2.1 Customer and Provider shall each use at least the same degree of care as it employs to avoid unauthorized disclosure of its own information, but in any event no less than commercially reasonable efforts, to prevent disclosing to unauthorized parties the Confidential Information of the other Party, provided that Provider may disclose such information (except for the terms and conditions of this Agreement) to properly authorized subcontractors as and to the extent necessary for performance of the Services, and Customer may disclose such information (except for the terms and conditions of this Agreement) to third parties as and to the extent necessary for the conduct of its business, where in each such case, the receiving entity first agrees in writing to the obligations described in this Section 14. Any disclosure to such entities shall be under terms and conditions contained in a written agreement containing substantially the same terms and conditions as those provided herein.

14.2.2 As requested by Customer, upon expiration or any termination of this Agreement, or completion of Provider’s obligations under this Agreement, Provider shall return or destroy, as Customer may Direct, all material in any medium that contains, refers to, relates to, or is derived from Confidential Information of Customer, and retain no copies except as may otherwise be agreed to by Customer.

14.2.3 As requested by Provider, upon expiration or any termination of this Agreement, or completion of Provider’s obligations under this Agreement, Customer shall return or destroy, as Provider may direct in writing, all material in any medium that contains, refers to, relates to, or is derived from Confidential Information of Provider, and retain no copies except as may otherwise be agreed to by Provider.

14.2.4 Each Party shall use commercially reasonable efforts so that its respective personnel comply with these confidentiality provisions, and each Party shall cause each of its personnel to annually certify that he/she is complying with terms and conditions substantially the same as those provided herein.

14.2.5 In the event of any actual or suspected misuse, disclosure or loss of, or inability to account for, any Confidential Information of the furnishing Party, the receiving Party promptly shall (A) notify the furnishing Party upon becoming aware thereof; (B) promptly furnish to the other Party full details of the unauthorized possession, use, or knowledge, or attempt thereof, and use reasonable efforts to assist the other Party in investigating or preventing the reoccurrence of any unauthorized possession, use, or knowledge, or attempt thereof, of Confidential Information; (C) take such actions as may be necessary or reasonably requested by the furnishing Party to minimize the violation; and (D) cooperate in all reasonable respects with the furnishing Party to minimize the violation and any damage resulting therefrom.

14.2.6 The Parties’ obligations respecting Confidential Information shall survive expiration or termination of this Agreement for a period of five (5) years, except: (A) for medical, provider, subscriber and customer information, which shall survive indefinitely, and (B) as otherwise provided by law.

14.3 Exclusions

The following is subject to Schedule 14.5:

14.3.1 Section 14.2 shall not apply to any particular information which Provider or Customer can demonstrate: (A) was, at the time of disclosure to it, in the public domain; (B) after disclosure to it, is published or otherwise becomes part of the public domain through no fault of the receiving Party; (C) was in the possession of the receiving Party at the time of disclosure to it without obligation of confidentiality; (D) was received after disclosure to it from a third party who had a lawful right to disclose such information to it without any obligation to restrict its further use or disclosure; or (E) was independently developed by the receiving Party without reference to Confidential Information (including unaided mental impressions) of the furnishing Party. In addition, a Party shall not be considered to have breached its obligations by disclosing Confidential Information of the other Party (I) as required by law, except with respect to those laws and regulations described in item (II), to satisfy any legal requirement of a competent government body; provided that, immediately upon receiving any such request and to the extent that it may legally do so, such Party advises the other Party of the request prior to making such disclosure in order that the other Party may interpose an objection to such disclosure, take action to assure confidential handling of the Confidential Information, or take such other action as it deems appropriate to protect the Confidential Information; or (II) as required pursuant to any listing agreement with or rules of any national securities exchange or interdealer quotation system or federal or state securities laws or insurance or health regulations; provided that the Parties shall cooperate to minimize disclosure (e.g., redaction) consistent with such agreements, rules, laws, and regulations, including that the disclosing Party shall notify the other Party before such disclosure.

14.3.2 Further, a Party shall not be considered to have breached its obligations under this Section 14 for disclosing Confidential Information to its attorneys, auditors and other professional advisors in connection with services rendered by such advisors, provided that such Party has confidentiality agreements with such professional advisors and/or such advisors owe professional confidentiality obligations to such Party.

14.4 No Implied Rights

Each Party’s Confidential Information shall remain the property of that Party. Nothing contained in this Section 14 shall be construed as obligating a Party to disclose its Confidential Information to the other Party, or as granting to or conferring on a Party, expressly or impliedly, any rights or

license to the Confidential Information of the other Party, and any such obligation or grant shall only be as provided by other provisions of this Agreement.

14.5 Data Security and Privacy Requirements

Provider shall further comply with the data security and privacy requirements set forth in Schedule 14.5 attached hereto.

14.6 BAA

Notwithstanding anything to the contrary set forth in this Agreement, the Parties hereby agree that the BAA is incorporated herein by reference, shall remain in full force and effect and shall not be superseded by this Agreement; provided, however, that in the event of any irreconcilable conflict between any terms set forth in this Agreement and any terms in the BAA, the applicable terms in this Agreement shall control.

15. CHARGES AND PAYMENTS

15.1 General Payment Obligation.

Customer shall pay Provider for the performance of the Services all the amounts in accordance with the terms specified hereunder and the terms specified in the applicable SOW. The procedures for establishing the level of compensation due to Provider under a particular SOW are set forth in Schedule 4.2, Schedule 15.1 and Schedule 15.4 hereto. All compensation and other charges hereunder shall be invoiced and payable in U.S. Dollars only.

15.2 Third Party Expenses

Unless otherwise specified in a SOW or by other written agreement of the Parties, all third party expenses incurred by Provider in the course of its performance hereunder shall be borne by and remain the sole responsibility of Provider.

15.3 Invoices

Provider shall submit monthly invoices by the tenth (10th) Business Day of each month to Customer for the Services performed by Provider during the previous month. All invoices shall be in a format approved by the JSC and shall be accompanied by reasonably detailed descriptions of the Services performed during the preceding month by SOW, the fees related thereto, and the reimbursable disbursements and out-of-pocket expenses, if any, as specified in each SOW, and to support the calculation of any SLA Bonuses and Credits.

15.4 RU and SS Rates

Except as otherwise provided in a SOW, the rates, fees and charges applicable during (i) the Ramp Up Period of a Service are set forth in Schedule 15.1 hereto (the “RU Rates”), as such RU Rates may be adjusted from time to time in accordance with Schedule 15.4 hereto, and (ii) the Steady State Period of a Service are set forth in each SOW (collectively, the “SS Rates”), as such SS Rates may be adjusted from time to time in accordance with Schedule 15.4 hereto.

15.5 Payment of Invoices

Each invoice will be paid by Customer within thirty (30) calendar days from receipt of the invoice. If Customer is delinquent in the payment of any undisputed portion of a valid invoice and fails to remedy the delinquency within thirty (30) Business Days after receipt of written notice from Provider that Customer has failed to make such payment, Provider may suspend the Services for which Customer is delinquent in payment until such delinquency is remedied, subject to the conditions and requirements set forth in Section 22.1.2 below. In addition, if Customer is delinquent in paying any undisputed invoice amount for more than thirty (30) calendar days after the due date, Customer may be charged interest on the undisputed amount from the date due until the date paid at the rate of 1.5% (one and one-half percent) per month or the highest rate allowed by law of all past due and outstanding balances on a monthly basis, whichever is less. If Customer in good faith disputes any portion of any invoice, Customer shall submit to Provider following receipt of invoice, written documentation identifying and substantiating the disputed amount. Provider and Customer each agree to use commercially reasonable efforts to resolve any dispute so identified within fifteen (15) Business Days after Provider receives written notice of dispute from Customer. If the Parties are unable to resolve the dispute, it shall be referred to the JSC for resolution; if the JSC shall fail to resolve the dispute within ten (10) Business Days, the issue shall be submitted to the Governance Board for resolution; and if the Governance Board shall fail to resolve the dispute within ten (10) Business Days, the issue shall be submitted for Level III Dispute Resolution in accordance with Section 24.3. Any disputed amounts resolved in favor of Customer shall be noted on the next invoice following resolution of the dispute; any disputed amounts determined to be payable to Provider shall be due within seven (7) Business Days of the resolution of the dispute. Notwithstanding anything contained herein, all payments in respect of undisputed portions of each invoice and undisputed invoices shall be payable by Customer within thirty (30) calendar days of its receipt of each respective invoice.

15.6 Taxes

15.6.1 Customer shall be responsible for all applicable federal, state or local use, excise, sales or other taxes, fees, assessments, surcharges or similar governmental charges that may be imposed, levied, collected or assessed by or within the United States of America or any political subdivision thereof in connection with Provider’s provision of the Services to Customer hereunder (collectively, “Applicable Taxes”); provided, however, Customer shall have no responsibility or liability for any Applicable Taxes that are (i) based on or attributable to Provider’s income, whether gross or net (“Income Taxes”), or (ii) ad valorem or property taxes with respect to any real or personal property or other asset owned, leased, or used by Provider (“Ad Valorem Taxes”). Notwithstanding anything to the contrary contained herein, Provider shall be solely responsible for, and shall indemnify and hold Customer harmless from, any Income Taxes or Ad Valorem Taxes.

15.6.2 If Customer is required by law to make any deduction or withholding of Income Taxes or Ad Valorem Taxes from any payment due to Provider under this Agreement, Customer will (i) prepare and submit any necessary filings and remit such Taxes to the appropriate taxing authority, and (ii) provide Provider with evidence of Customer’s withholding and payment to the appropriate taxing authorities. The Parties acknowledge and agree, however, that no such deduction or withholding shall apply if Provider has provided Customer with a timely, appropriate and duly executed Internal Revenue Service Form W-9, W 8BEN or W-8ECI, or an official alternate, substitute or replacement form, as the case may be, that substantiates an exemption from such Taxes. Under no circumstances shall Customer be required or obligated (a) to allow Provider an exemption from any Applicable Taxes (i.e. not make a required deduction or withholding and remittance) if Provider fails to provide Customer with such timely, appropriate and executed exemption certificate and any extensions or updates required thereto or (b) gross up any Income Taxes or Ad Valorem Taxes that Customer is required by law to deduct or withhold from any payment due to Provider hereunder.

15.6.3 Either Party is entitled to contest the amount or validity of the imposition of any Applicable Taxes, and each Party agrees to furnish reasonable cooperation to the contesting Party in any proceeding contesting the amount or validity of imposition of such Applicable Taxes.

15.7 Set Off

Customer may set off, as a credit against any monthly charges payable to Provider under this Agreement, any SLA Credits owed to Customer pursuant to any SOW, any mutually agreed amounts to be paid, reimbursed, credited or otherwise owed or owing to Customer by Provider under this Agreement and any amounts that are determined to be owed to Customer in accordance with Section 24.3; provided that with respect to fees or services already paid by Customer that Customer later disputes, Customer must set off such amounts within ninety (90) days after payment of such disputed fees or services. Notwithstanding the ninety (90) day limitation above, Customer may set off (pursuant to this Section 15.7) any amounts owing to Customer, as identified in audits performed pursuant to this Agreement.

15.8 Accountability

At all times while this Agreement is in effect and for at least five (5) years following its expiration or termination, Provider shall keep and maintain its books, records and accounts in reasonable detail to accurately, completely and fairly reflect its activities and transactions hereunder, including the recipient and nature of every payment or expenditure in connection with Provider’s activities to perform its obligations under this Agreement. Without limiting the foregoing, Provider shall maintain complete and accurate records of and supporting documentation for the amounts billable to and payments made by Customer hereunder, to the extent required to comply with Section 16 and in accordance with generally accepted accounting principles applied on a consistent basis. Provider agrees to provide Customer with documentation and other information with respect to each invoice as may be reasonably requested by Customer to verify accuracy and compliance with the provisions of this Agreement.

15.9 Proration

Except as may be otherwise provided in this Agreement, all periodic charges under this Agreement shall be computed on a calendar month basis, and shall be prorated for any partial month.

15.10 Refunds and Credits

If Provider should receive a refund, credit or other rebate for goods or services previously paid for by Customer, Provider shall promptly notify Customer of such refund, credit or rebate and shall promptly pay the full amount of such refund, credit or rebate, as the case may be, to Customer.

16. AUDIT RIGHTS

Customer shall have the right to perform regular audits and other oversight activities as provided in Schedule 16.1 attached hereto. In the event of any audit or oversight conducted by Customer or any governmental entity, Provider shall fully cooperate with any such auditor.

17. REPRESENTATIONS AND WARRANTIES

17.1 Mutual Representations and Warranties

Each Party to this Agreement represents and warrants to the other Party that:

17.1.1 it is an entity which has been duly formed and is validly existing and in good standing under the laws of the jurisdiction where it is formed;

17.1.2 it has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and each SOW in accordance with their respective terms;

17.1.3 the execution, delivery and performance of this Agreement and each SOW (a) has been duly authorized by its requisite officials, (b) shall not conflict with, result in a breach of, or constitute a default under any other agreement to which it is a party or by which it is bound, and shall not constitute an event that would, with notice and/or lapse of time, constitute such a default, and (c) to its knowledge, will not result in a violation of or conflict with any applicable law, and (d) there is no proceeding pending or, to the knowledge of the Party, threatened, which challenges or may have a material adverse affect on this Agreement or the transactions contemplated by this Agreement;

17.1.4 it is duly licensed, authorized or qualified to do business and is in good standing in every jurisdiction in which a license, authorization or qualification is required for the ownership or leasing of its assets or the transaction of business of the character transacted by it, except where the failure to be so licensed, authorized or qualified would not have a material adverse effect on its ability to fulfill its obligations under this Agreement or any SOW;

17.1.5 there is no outstanding (or, to the best of its knowledge, pending or threatened) litigation, arbitrated matter or other dispute to which it is a Party that if, decided unfavourably to it, would reasonably be expected to have a material adverse effect on its ability to fulfill its obligations under this Agreement or any SOW; and

17.1.6 it has not violated any applicable laws or regulations.

17.2 Customer Representations and Warranties

Customer represents and warrants to Provider that:

17.2.1 it is the legal and beneficial owner of all right, title and interest in and to its Products, having good title thereto, or that it is a licensee of the Products with the authority to utilize the Products as contemplated by this Agreement, and it has full power and authority to grant the licenses and perform its obligations under this Agreement; and

17.2.2 the Products, and their use and operation, to Customer’s knowledge, do not infringe or misappropriate any patent, copyright, trade secret, or other intellectual property right of any third party.

17.3 Provider Representations and Warranties

Provider represents and warrants to Customer that:

17.3.1 Non-Infringement. Provider shall perform the Services in a manner that, to its knowledge after prudent inquiry, will not infringe or misappropriate the patent, copyright, trademark, trade secret or other intellectual property rights of any third-party. This non-infringement warranty shall not apply to the extent that an infringement claim arises as a result of (a) use, modification, alteration or revision by Customer other than in accordance with any applicable specifications or documentation provided under the applicable SOW, (b) use by Customer in combination with other products or systems not reasonably anticipated in the applicable SOW, or (c) information, data, design, Customer Software, Licensed Software, components, specifications or other materials (including, without limitation, Processing Norms) provided to Provider by or on behalf of Customer.

17.3.2 Compliance with Terms of Agreement. Provider will perform the Services in accordance with all terms and conditions set forth in this Agreement and the applicable SOWs.

17.3.3 Compliance With Laws and Contract Requirements. Provider and its operations hereunder are, and at all times during the Term of this Agreement shall, remain in full compliance with all applicable federal, state, provincial and local laws, rules and regulations, and that it shall perform the Services hereunder and manage its operations in a manner which is compliant with all laws, rules, regulations and contractual requirements to which Provider or Customer is subject and applicable thereto including, but not limited to (i) those regarding licensure and certification

for the provision of the Services, (ii) those relating to performance of the Services in compliance with this Agreement, Medicare and Medicaid regulations, and the applicable requirements of Payors, (iii) the False Claims Act, 31 U.S.C. §§ 3729-3733, (iv) the Civil Monetary Penalties Act, 42 U.S.C. § 1320a-7a, (v) Section 114 of the Fair and Accurate Credit Transactions Act of 2003, also known as the RED FLAG RULES, (vi) the requirements of the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191 and its corresponding regulations—see, 45 C.F.R. Parts 160, 162 and 164—as they may be amended or modified from time to time (collectively, “HIPAA”), (vii) state laws concerning the confidentiality of patient information and billing, and (viii) any other similar laws, regulations or requirements that may from time to time relate to the performance of the Services hereunder. In addition, Provider agrees to implement and comply with all policies and procedures relating to such matters as Customer may Direct and to implement its own compliance programs and policies as reasonably necessary to comply with all of the foregoing.

17.3.4 Work Standards, Efficiency and Cost Effectiveness. Provider will render the Services with promptness, efficiency and diligence and in a workmanlike and cost-effective manner in accordance with the practices and high professional standards used in well-managed operations performing services similar to the Services. Provider shall use adequate numbers of qualified individuals with suitable training, education, experience and skill to perform the Services.

17.3.5 Technology. If instructed to do so by the JSC, Provider shall investigate, consult with Customer and provide information concerning possible upgrades in technology that would allow Provider to realize the benefits of any applicable increases in efficiency and productivity in its provision of the Services and similar services to other customers; provided that if any such upgrade would enhance only Provider’s provision of the Services and Customer desires Provider to effect such upgrade, the Parties shall enter into a Change Order setting forth the allocation of costs and benefits resulting from such upgrade.

17.3.6 Inducements. Provider has not violated any policies of Customer of which it has been provided written notice, regarding the offering of unlawful or prohibited inducements to Customer or any other party in connection with this Agreement. If at any time during the Term, Customer determines on the basis of reasonable evidence that the foregoing warranty is materially inaccurate, then Customer shall notify Provider in writing of the fact that it has made such a determination and of the evidence upon which the determination was based. Provider shall have ten (10) days following receipt of such notification within which Provider may present Customer with any information or evidence Provider may have indicating that Customer’s determination was incorrect, and Customer agrees to consider any such information provided. However, if, after the expiration of such ten (10) day period, Customer nevertheless determines, in its sole discretion that its initial determination was correct, then Customer, in addition to any other rights Customer may have at law or in equity, shall have the right and option to

terminate this Agreement for cause pursuant to Section 22.1.1.2 and without cost, without affording Provider any further opportunity to cure.

17.3.7 Restricted or Excluded Parties. Provider represents that neither Provider, nor any officer or director of Provider, is a Restricted Party or an Excluded Party and that Provider shall not utilize, employ or subcontract with any Restricted Party or Excluded Party in the performance of the Services hereunder. Notwithstanding any other provision of this Agreement, if Customer determines that Provider, or any officer or director of Provider, or employee or subcontractor of Provider performing any portion of the Services hereunder, is, or becomes, a Restricted Party or an Excluded Party during the Term, then Provider shall be deemed to have committed a default hereunder, and Customer, in addition to and without waiving any other right or remedy it may have for such default, may terminate this Agreement immediately pursuant to Section 22.1.1.2.

17.3.8 Viruses. Provider shall use commercially reasonable efforts so that no Viruses are coded or introduced into the systems used to provide the Services. “Virus” shall mean (a) program code or programming instruction or set of instructions intentionally designed to disrupt, disable, harm, interfere with or otherwise adversely affect computer programs, data files or operations; or (b) other code typically described as a virus or by similar terms, including Trojan horse, worm or backdoor. Virus does not include Disabling Code (as such term is defined below).

17.3.8.1 In the event a Virus is found to have been introduced into the systems used to provide the Services, Provider shall (i) provide all cooperation and assistance reasonably requested by Customer or the JSC to (including assisting Customer in its efforts to) eliminate the effects of the Virus, and (ii) if the Virus causes a loss of operational efficiency or loss of data, assist Customer to the same extent to mitigate and restore such losses.

17.3.8.2 In the event that a Virus is introduced by a Customer system, Provider’s efforts as provided in Section 17.3.8.1: (i) shall be at no additional charge to Customer, to the extent available Provider Personnel are utilized, and (ii) shall be at Customer’s cost, to the extent additional resources are utilized, provided that Customer shall have the right to approve use of all such additional resources. Under these circumstances, additional resources shall not include Provider’s general support personnel but shall include personnel reassigned by Provider from the servicing of other specific accounts. In addition, Provider shall be excused from meeting required service levels to the extent that problems caused by the virus impair Provider’s ability to perform.

17.3.8.3 In the event that a Virus is introduced by a Provider system: (i) Provider’s efforts as set forth in Section 17.3.8.1 shall be at no additional charge to Customer; (ii) Provider shall engage additional resources, at Provider’s cost, as necessary; (iii) Provider shall not be excused with respect to any required service levels affected, unless Provider’s efforts to meet such affected service levels would cause or allow the Virus to spread, and (iv) Provider shall pay to Customer an amount equal to

all of Customer’s costs of any data restoration, the cost to Customer of any business disruption, and any other losses or liabilities of Customer resulting from such Virus.

17.3.9 Disabling Code. Without the prior written consent of Customer, Provider shall not insert into any of the Software any code which would have the effect of disabling or otherwise shutting down all or any portion of the Services (“Disabling Code”); provided, however, that “Disabling Code” shall not include programming code, programming instruction or set of instructions that is distributed as part of hardware or software to ensure that the purchaser or licensee uses the product in accordance with the acquisition or license agreement (such code “Commercially-Provided Disabling Code”) and which Software already contains such Commercially-Provided Disabling Code. Provider further represents and warrants that, with respect to any Disabling Code and Commercially-Provided Disabling Code that may be part of any Software, Provider shall not invoke such Disabling Code or Commercially-Provided Disabling Code at any time, including upon expiration or termination of this Agreement for any reason, without Customer’s prior written consent.

17.3.10 EXCEPT FOR THE EXPRESS WARRANTIES MADE OR REFERENCED IN THIS AGREEMENT AND IN ANY SOW, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT, AND EACH PARTY HEREBY DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND/OR FITNESS OF THE SERVICES FOR A PARTICULAR PURPOSE, QUALITY, COURSE OF DEALINGS, USAGE OF TRADE, ACCURACY, QUIET ENJOYMENT OR NONINFRINGEMENT, ALL OF WHICH ARE EXPRESSLY DISCLAIMED. PROVIDER AND CUSTOMER HAVE RELIED ON THIS NEGOTIATED ALLOCATION OF RISK IN AGREEING TO THE PRICING IN THIS AGREEMENT.

18. INDEMNIFICATION

18.1 Provider Indemnification

Provider agrees to defend, indemnify and hold harmless Customer and its Affiliates, and all of their respective officers, directors, agents, employees, successors and permitted assigns from and against any and all third party suits, proceedings, claims, liabilities, losses, actions, judgments, fines, penalties (including without limitation, civil monetary penalties, interest and similar financial obligations levied against Customer for violations of regulatory requirements), refund obligations, costs and expenses (including reasonable attorneys fees) of any kind or nature (each a “Claim” and collectively, the “Claims”), to the extent they arise out of or result from:

(i) Provider’s negligence or willful misconduct;

(ii) Provider’s breach of any term of this Agreement, including without limitation, Provider’s breach of its obligation to comply with laws in accordance with Article 9, Provider’s breach of its obligations relating to Taxes under Section 15.6 and Provider’s breach of any of its representations and warranties provided in Section 17.3;

(iii) Any actual or alleged violation, infringement, unauthorized use or misappropriation of any third party’s copyright, patent, trademark, or other intellectual property right; provided, however, that such third party claim is not based upon the underlying Product(s) or materials furnished by Customer hereunder or compliance of the Services with Customer’s specifications or other requirements set forth in the SOW under this Agreement;

(iv) Any claims of whatever nature asserted by any of the Provider Personnel; and/or

(v) Any agreements or alleged agreements made or entered into by Provider to effectuate the terms of this Agreement.

18.2 Customer Indemnification

Customer agrees to defend, indemnify and hold harmless Provider and its Affiliates, and all of their respective officers, directors, agents and employees from and against any and all third-party Claims, to the extent they arise out of or result from:

(i) Customer’s negligence or willful misconduct;

(ii) Provider’s compliance with the Processing Norms under Section 6.2;

(iii) Customer’s breach of any term of this Agreement, including without limitation, Customer’s breach of its obligation to comply with laws in accordance with Article 9, Customer’s breach of its obligations relating to Taxes under Section 15.6 and Customer’s breach of any of its representations and warranties provided in Section 17;

(iv) Any actual or alleged violation, infringement, unauthorized use or misappropriation of any third party’s U.S. copyright, patent, trademark, or other intellectual property right arising from Provider’s use of Customer’s Products, Licensed Software, Customer Software or other materials furnished hereunder by Customer, to the extent that such use is in the contemplated manner and in full compliance with this Agreement and applicable SOW.

18.3 Mutual Indemnification

Each Party (in the capacity as Indemnifying Party) will defend, indemnify and hold harmless the other Party, its Affiliates and all of their respective officers, directors, agents and employees (in the capacity of Indemnified Party) from and against any and all Claims relating to or based on

any personal injury, death or damage to property caused by the negligence or willful misconduct of the Indemnifying Party or its agents and representatives, the performance of this Agreement.

18.4 Indemnification Procedures

The Party seeking indemnification under Sections 18.1, 18.2 or 18.3 above, as the case may be (the “Indemnified Party”), will give prompt written notice to the other Party (the “Indemnifying Party”) of a Claim that is subject to such indemnification. (The failure by an Indemnified Party to give notice as provided above shall not relieve the Indemnifying Party of its obligation under this Section, except to the extent that such failure results in material adverse affect to the Indemnifying Party). In addition, the Indemnified Party will allow the Indemnifying Party to direct the defense and settlement of any such Claim, with counsel of the Indemnifying Party’s choosing subject to the Indemnified Party’s reasonable approval, so long as such defense is pursued diligently, and will provide the Indemnifying Party, at the Indemnifying Party’s expense, with information and assistance that is reasonably necessary for the defense and settlement of the Claim; provided, however, that the Indemnifying Party shall not admit fault in any settlement or settle any claim other than for money without the Indemnified Party’s prior written consent. The Indemnified Party shall have the right to employ separate counsel and to participate in (but not control) any such action.

19. INSURANCE

Each Party will, at its own expense, maintain insurance policies that cover the Party’s activities under this Agreement and the activities of the Party’s employees, agents and representatives, including, but not limited to, workmen compensation insurance (wherever applicable) and comprehensive general liability and errors and omissions liability. Upon the request of the other Party, the Party to which the request is made shall cause its insurer(s) or insurance broker to provide the requesting Party with a certificate of insurance evidencing such coverages. Without limiting the generality of the foregoing, Provider shall carry such insurance as provided in Schedule 19.1 hereto.

20. LIMITATIONS ON LIABILITY

20.1 Liability Cap

Except for each Party’s indemnification obligations under Section 18 above, and Claims arising out of or related to a Party’s gross negligence, willful misconduct, or breach of obligations with respect to Confidential Information, in no event shall either Party’s total cumulative liability under this Agreement, whether based on breach of contract, tort (including negligence) or otherwise, exceed the *; provided, however, that in the event that a Claim arises during the * after the Effective Date, then the maximum aggregate amount of such Party’s liability shall be equal to the total amount of payments projected to be made by Customer under this Agreement during the * after the Effective Date. Provider and Customer further acknowledge and agree that they are entering in to this Agreement on the understanding that the fees for the Services to be provided under this Agreement have been set to reflect the fact that the liability and remedies shall be limited as expressly set forth in this Agreement.

20.2 Consequential Damages

Except for each Party’s indemnification obligations under Section 18 above, neither Party shall be liable to the other for any indirect, incidental, punitive, special or consequential loss, damage, cost or expense including, without limitation, loss of profits, loss of data, and loss of revenues, of any kind whatsoever and however caused, whether arising under contract, tort (including negligence or breach of statutory duty) or otherwise, even if that Party has been advised of its possibility. For the avoidance of doubt, the Parties agree that any damages resulting from a Party’s failure to fulfill its obligations in accordance with this Agreement in the form of fines, penalties refund obligations and other financial costs levied or imposed on Customer as a result of Provider’s failure to perform the Services in accordance with the requirements of this Agreement shall be considered direct damages and shall not be considered consequential damages.

21. FORCE MAJEURE

21.1 Force Majeure Events

Except to the extent provided in this Agreement, no Party shall be liable for any default or delay in the performance of its obligations under this Agreement (i) if and to the extent such default or delay is caused, directly or indirectly, by acts of terrorism, fire, flood, earthquake, elements of nature or acts of God, riots, civil disorders, or any other such similar cause beyond the reasonable control of such Party, and (ii) provided the non-performing Party is without fault in causing such default or delay, and such default or delay could not have been prevented by reasonable precautions and could not reasonably be circumvented by the non-performing Party through the use of alternate sources, workaround plans or other means (including with respect to Provider, by Provider meeting its obligations for performing disaster recovery services as described in this Agreement). Any such event or occurrence as described in this Section 21.1 shall be deemed a “Force Majeure Event.”

21.2 Excused Performance

Upon notification to the other Party of the occurrence of a Force Majeure Event, the non-performing Party, except to the extent provided in this Agreement, shall be excused from further performance or observance of the obligations so affected for as long as such circumstances prevail and such Party continues to use commercially reasonable efforts to recommence performance or observance without delay. Any Party so delayed in its performance shall immediately notify the Party to whom performance is due by telephone (to be confirmed in writing within twenty-four (24) hours of the inception of such delay) and describe at a reasonable level of detail the circumstances causing such delay.

21.3 Force Majeure Remedies

Notwithstanding any other provision of this Agreement, Provider agrees that no Force Majeure Event that affects Provider’s performance hereunder shall relieve Provider from its obligations for a period of more than three (3) days from the date on which Provider notifies or should have notified Customer of a Force Majeure Event. After the elapse of such period, all SLAs and other covenants applicable to Provider’s performance under this Agreement or any SOW shall again be in full force and effect. In addition, if any Force Majeure Event substantially prevents, hinders or

delays Provider’s performance of the Services such that it substantially interferes with Customer’s business for more than twenty four (24) hours, then Provider shall immediately shift its provision of the Services from the affected Facility to a Disaster Recovery Site described in Section 8 above (if Provider has not done so already). If the Force Majeure Event continues for more than three (3) consecutive days and Provider’s performance falls below the Catastrophic Failure Service threshold with respect to a Service, which for this purpose shall be no lower than 80% of the baseline Service Level specified in an applicable SOW (as supplemented by the SSIO thereto) with respect to any Service, then Customer may, at its option and without violation of the volume obligations under such SOW, procure such Service from an alternate source, and Provider shall be liable for payment for such Service from the alternate source, less any amounts that Customer did not pay to Provider as the result of Services not being rendered, for the lesser of (i) the period of time in which Provider’s performance remains so impaired, and (ii) thirty (30) days. Finally, effective beginning seven (7) days after Provider’s notification of the Force Majeure Event, in the event Provider’s performance remains below the Catastrophic Failure Service threshold with respect to a Service, which for this purpose shall be no lower than 80% of the baseline Service Level specified in an applicable SOW (as supplemented by the SSIO thereto) with respect to any Service, Customer may (x) terminate any portion of this Agreement so affected in whole or in part without penalty or fee, and the charges payable hereunder shall be equitably adjusted to reflect those terminated Services; or (y) terminate this Agreement in whole without liability to Provider, as of a date specified by Customer in a written notice of termination to Provider. Subject to the preceding sentence, Provider shall not have the right to any additional payments from Customer for costs or expenses incurred by Provider as a result of any Force Majeure Event. For the avoidance of doubt, the Parties agree the foregoing rights of Customer shall be in addition to and not in lieu of any other remedies available to Customer hereunder or under law or equity.

21.4 Conditions on Provider’s Response

In addition to Customer’s rights set forth in this Section 21, the following conditions shall apply to Provider’s response to a Force Majeure Event:

21.4.1 Whenever a Force Majeure Event causes Provider to allocate limited resources between or among Provider’s customers, Provider shall allocate such resources in an equitable manner and shall not disadvantage Customer with respect to such allocation; and

21.4.2 In no event shall Provider re-deploy or reassign any Key Provider Personnel filling Key Provider Positions on the Customer account to another Provider customer, in the event of a Force Majeure Event.

22. TERMINATION

22.1 Termination Due to Breach

22.1.1 Termination by Customer. Customer shall have the right to terminate this Agreement or any SOW, in whole or in part, or exercise the interim remedy described in Section 22.3 below by giving the specified written notice to Provider

and without further obligation or liability on the part of Customer, upon the occurrence of any of the following events of default (each, a “Provider Default”):

22.1.1.1 Upon ten (10) days notice if Provider commits a Provider Performance Default (as such term is defined in Section 22.2 below);

22.1.1.2 immediately upon notice if Provider violates (i) its non-compete obligations set forth in Section 25 below, (ii) any of its obligations relating to Customer Confidential Information or Customer Data, (iii) its compliance with applicable laws obligations relating to anti-corruption (Section 9.5), Restricted or Excluded Parties (Sections 10.2 and 17.3.7) or OFAC’s economic sanctions regulations (Section 9.6); or

22.1.1.3 upon thirty (30) days notice (or immediately if the material breach cannot reasonably be cured within such thirty (30) days) if Provider commits a material breach of any other provision of this Agreement.

22.1.2 Termination by Provider. Provider shall have the right to terminate this Agreement by giving at least thirty (30) days’ prior written notice to Customer in the event that Customer fails to pay Provider when due charges totaling at least three (3) months’ charges under any SOW (excluding (i) amounts set off pursuant to Section 15.7, and (ii) disputed payments withheld pursuant to Section 15.5) and Customer fails to remedy the delinquency within thirty (30) Business Days of its receipt of such written notice (a “Customer Default”).

22.2 Termination Due to Failure to Meet Performance Standards

Provider shall be deemed to have committed a “Provider Performance Default” if:

22.2.1.1 Provider is liable to pay Major SLA Credits (as such term is defined in each SOW) under any SOW in any three (3) consecutive months or in any five (5) months within a rolling twelve (12) consecutive month period; or

22.2.1.2 A Catastrophic Failure (as such term is defined in each SOW) occurs.

22.3 Deferral and Assumption of Control Options

22.3.1 Upon the occurrence of a Provider Default, Customer may, at its sole option, defer its exercise of its termination rights under Section 22.1 above to dispatch Customer personnel to enter Provider’s facilities used to provide the Services and assist Provider with specific advice and instructions on how to improve its operations in performing the Services for up to * from the date Provider receives notice of a Provider Default (the “Deferral Period”). Provider shall cooperate fully with such assistance by Customer and implement any such Customer advice and instructions promptly.

22.3.2 If, at any time within the Deferral Period, Customer determines in its sole discretion that such limited assistance by Customer is insufficient to prevent a

recurrence of a Provider Default, Customer may, by giving written notice to Provider, discontinue the foregoing deferral of its exercise of termination rights and terminate this Agreement or any SOW, in whole or in part, and assume operational control over all of Provider’s facilities used to provide the Services, the Provider Property, the Equipment, the Provider Software and the Provider Personnel for up to * from the date of such notice (the “Controlled Migration Period”) for purposes of ensuring the proper performance of the Services and facilitating a smooth migration of the Services back to Customer or to Customer’s designee. During such Controlled Migration Period, Customer shall have the full authority previously held by Provider to manage the operations and supervise the Provider Personnel used to provide the Services. Provider shall cooperate fully with, and take all necessary steps to effect, such assumption of control by Customer, the continued performance of the Services and the migration of the Services back to Customer or to Customer’s designee. Without limiting the generality of the foregoing, on Customer’s behalf and as Directed by Customer, Provider shall enforce all subcontracts and other third party contracts used in providing the Services or shall appoint Customer as Provider’s agent for the purpose of enforcing such contracts during the Controlled Migration Period.

22.4 Charges Upon Partial Termination

In the event of any termination in part by Customer, as provided in this Agreement, the charges payable under this Agreement for Services will be equitably adjusted to reflect those Services that are terminated. Upon termination of any or all Services under any SOW or this Agreement, Provider will be owed payment for Services completed up until the date of termination notice expiration, subject to any set-offs in accordance with Section 15.7 above.

22.5 Termination For Insolvency

Customer shall have the option, but not the obligation, to terminate this Agreement in its entirety (including all SOWs) if Provider: (a) becomes insolvent or is unable to meet its debts or obligations; (b) files a voluntary petition in bankruptcy; (c) has an involuntary petition in bankruptcy filed against it that is not challenged within fifteen (15) days and dismissed within thirty (30) days; (d) is adjudicated a bankrupt; (e) has a receiver or trustee appointed for its assets; (f) makes a general assignment for the benefit of creditors; (g) has any significant portion of its assets attached.

22.6 Termination due to Change of Control

If Provider (or its ultimate parent entity) is subject to a “Change of Control” (as such term is defined below), Provider shall notify Customer thereof no later than ten (10) days after the Change of Control takes place.

22.6.1 Following the first such notice of a Change of Control, if (a) immediately prior to the Change of Control, the Parties were no longer under the common control of the same parent company, and (b) following the Change of Control, Provider is materially less financially sound, has materially less resources, willingness or

capability to provide the Services, or is controlled by a Competitor, then for a period of * from the date of notice, Customer shall have the right to terminate this Agreement upon * written notice but without liability (except as otherwise provided herein) to Provider, unless Customer received notice of the proposed Change of Control at least * prior to its consummation and consented in writing thereto within * of its receipt thereof. In the event Provider provides such prior notice of a proposed Change of Control to Customer, Customer may grant, withhold or condition its consent in its sole and absolute discretion within said * period. Provider prefers that Customer communicate its decision in writing to Provider and Customer shall attempt in good faith to accommodate such preference, but failure by Customer to provide its written consent within said * period shall be deemed to be a decision by Customer to withhold its consent.

22.6.2 In the event that Provider provides a second or subsequent notice of a Change of Control, then Customer shall have all termination and consent rights as provided in Section 22.6.1, regardless of Provider’s financial health, resources, willingness or capability or any other criteria.

22.6.3 For purposes of this section, “Change of Control” means any merger, consolidation, share exchange, recapitalization or sale or transfer of equity securities of Provider (or its ultimate parent entity), in each case in which any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934), other than Provider or an Affiliate, acquires beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of fifty percent (50%) or more of the combined voting power of the then-outstanding or fully diluted voting securities of Provider or its ultimate parent entity or the right to appoint the majority of the board of directors of either Provider or its ultimate parent.

22.7 Termination Due to Material Adverse Regulatory Change

22.7.1 Provider shall have the right to terminate this Agreement, in whole but not in part, by giving at least four (4) months’ prior written notice to Customer in the event of a change in the U.S. tax or regulatory environment applicable to Provider and the offshore outsourcing industry generally, which change has a material adverse effect on Provider’s ability or cost to provide the Services. In the event Provider terminates this Agreement pursuant to this Section 22.7, Provider shall pay to Customer a termination fee equal to the amount of fees Customer paid to Provider under the Agreement for the six (6) full calendar months period immediately preceding the termination; provided, however, that if Customer has paid less than six (6) months of fees immediately preceding the termination, then the termination fee shall be equal to the aggregate amount of fees that Customer paid or became obligated to pay to Provider as to each month for which fees were paid or became payable for the first six (6) months plus a projected amount based on the average monthly amount of the fees paid or payable for the months during the period when fees were in fact paid for each additional month necessary to bring the total number of months for which the termination fee is paid to six (6).

22.7.2 The number of months for which the termination fee described in Section 22.7.1 above shall be payable shall decrease by one month on the first anniversary and on each successive anniversary of the Agreement after a termination takes place. For example, if the Provider termination takes place between the first and the second anniversary of the Term of the Agreement, then the termination fee shall be equal to the amount of fees Customer paid to Provider under the Agreement during the five (5) full calendar months immediately preceding the applicable termination by Provider under Section 22.7, and, if the termination by Provider takes place between the second and the third anniversary of the Term of the Agreement, then the termination fee shall be equal to the amount of fees Customer paid to Provider for under the Agreement during the four (4) full calendar months immediately preceding the termination by Provider, with the annual reductions to continue in a like manner, except that in no event shall the termination fee be less than one month’s fees paid or payable by Customer to Provider, irrespective of the date of termination by Provider.

22.8 Savings Clause

Due to the impact any termination of this Agreement would have on Customer’s business, Customer’s failure to perform its responsibilities set forth in this Agreement shall not be deemed to be grounds for termination by Provider. Provider acknowledges that Customer would not be willing to enter into this Agreement without assurance that it may not be terminated by Provider and that Provider may not suspend performance except, and only to the extent, pursuant to Section 15.5 or Section 22.1.2. Provider’s nonperformance of its obligations under this Agreement shall be excused if and to the extent (a) such Provider nonperformance results directly from a Relief Event comprised of Customer’s failure to perform its responsibilities; and (b) Provider provides Customer with reasonable notice of such nonperformance and (if requested by Customer) uses commercially reasonable efforts to perform, notwithstanding Customer’s failure (with Customer reimbursing Provider for its out-of-pocket expenses for such efforts).

22.9 Relief Events

22.9.1 In addition to any other provisions in this context that may be contained in this Agreement (and without in any way prejudicing or limiting them), Provider will not be in breach of this Agreement or the applicable SOW or liable for SLA Credits to the extent its failure to perform an obligation under this Agreement or the applicable SOW is solely a direct result of a Relief Event, subject to Provider:

22.9.1.1 providing Customer as soon as reasonably practicable with notice of the Relief Event where the Provider is aware or should reasonably have been aware of such Relief Event;

22.9.1.2 using all reasonable endeavours to perform the Services, notwithstanding the Relief Event; and

22.9.1.3 cooperating with and assisting Customer to correct Customer’s failure that gave rise to the Relief Event.

22.9.2 Provider shall not be entitled to rely on a Relief Event to avoid liability for breach of this Agreement, including payment of SLA Credits, if it fails to satisfy any of the conditions set out in Sections 22.9.1.1 to 22.9.1.3 above.

22.9.3 If Provider incurs a Significant Cost Increase to perform the Services pursuant to any SOW as a sole and direct result of any Relief Event, it shall be entitled to recover such additional direct costs from Customer, provided that Provider must obtain Customer’s prior written consent before incurring costs in excess of $500 per month or such other sum as may be specified in the applicable SOW.

22.9.4 Provided that Provider has complied with the provisions of Sections 22.9.1 and 22.9.2, Provider shall be entitled to an extension of the schedule for completion of the Services under the relevant SOW, and the period of the extension shall be at least equal to the reasonable delay caused solely and directly by such Relief Event.

22.9.5 The provisions of this Section 22.9 are Provider’s exclusive remedy for any Relief Event.

23. EFFECTS OF TERMINATION

23.1 Wind-Up Events

Except as may be required in connection with any post-expiration or post-termination provision of the Services, upon the expiration or termination of this Agreement for any reason, (i) all licenses and other rights granted to Customer or Provider hereunder will terminate and become null and void, (ii) all materials, including without limitation, Confidential Information, provided by either Party to the other hereunder will be returned within thirty (30) days after the effective date of expiration or termination or shall be destroyed if so requested by the disclosing Party, and (iii) all earned and unpaid fees and expenses will become immediately due and payable.

23.2 Termination/Expiration Assistance

23.2.1 Provision of Services Prior to Termination/Expiration Date. Commencing (i) * prior to the scheduled expiration of this Agreement or a SOW, (ii) on such earlier date as Customer may request, or (iii) immediately upon any notice of termination or partial termination, as the case may be, including notice based upon a Provider Default or a Customer Default or a notice of non-renewal of this Agreement, and continuing through the effective date of expiration or, if applicable, of termination of this Agreement, Provider shall provide to Customer, or at Customer’s request to Customer’s designee, the reasonable termination/expiration assistance requested by Customer to allow the Services to continue in accordance with the terms of this Agreement and to facilitate the orderly migration of the Services to Customer or its designee (the “Termination/Expiration Assistance”). In the event of any partial termination, the provision of Termination/Expiration Assistance shall be provided by Provider only as applicable to the Services terminated. The Termination/Expiration Assistance shall include but not be limited to the assistance described in Schedule 23.2.1 hereto.

23.2.2 Provision of Services After Termination/Expiration Date. In addition to the Termination/Expiration Assistance set forth in the preceding paragraph:

23.2.2.1 Upon expiration of the Term of this Agreement, for up to a period of * thereafter, Provider shall continue to provide, at Customer’s written request made at least * prior to such expiration, any or all of the Services being performed by Provider prior to such expiration date, including the Termination/Expiration Assistance.

23.2.2.2 In the event that Customer terminates this Agreement pursuant to Sections 21.3 (Force Majeure), 22.1.1 (Provider Default), 22.2 (Provider Performance Default), 22.5 (Insolvency), or 22.6 (Change of Control), then either (i) for up to a period of * following the effective date of termination of this Agreement, Provider shall continue to provide, at Customer’s request, any or all of the Services being performed by Provider prior to such effective date, including the Termination/Expiration Assistance, or (ii) Customer may exercise its rights under Section 22.3.1 above (if applicable).

23.2.2.3 In the event that Customer terminates this Agreement pursuant to Section 3.3 (Termination for Convenience), then for up to a period of * following the effective date of termination of this Agreement, Provider shall continue to provide, at Customer’s request, any or all of the Services being performed by Provider prior to such effective date, including the Termination/Expiration Assistance.

23.2.2.4 In the event that Provider terminates this Agreement pursuant to Section 22.1.2 (Non-Payment), then for up to a period of * following the effective date of termination of this Agreement, Provider shall continue to provide, at Customer’s request, any or all of the Services being performed by Provider prior to such effective date, including the Termination/Expiration Assistance; provided, however, in the event of termination pursuant to Section 22.1.2, Provider shall only have the foregoing obligations to the extent that Customer prepays all fees for such Services (equal to the fees determined under this Agreement during the Term) on a month-by-month basis.

23.2.2.5 In the event that Provider terminates this Agreement pursuant to Section (Material Adverse Regulatory Change), then for up to a period of * following the effective date of termination of this Agreement, Provider shall continue to provide, at Customer’s request, any or all of the Services being performed by Provider prior to such effective date, including the Termination/Expiration Assistance; provided, however, that, upon the execution of an appropriate Change Order, Provider may provide such Services from any of its offices located worldwide, which Change Order shall also specify the allocation of any additional costs that may be incurred by Provider in providing such Services from such other location.

23.2.3 To the extent Provider is to perform Services pursuant to Section 23.2.2 which were being performed prior to the termination/expiration date of this Agreement, the provisions of this Agreement shall be applicable as such provisions would

have been applicable to the Services prior to the effective date of termination. The charges for such activities that are provided without cessation by Provider after termination of the Agreement shall be: (i) for those Services for which there is a charge in the Agreement, such charges as were in effect immediately prior to the termination date, and (ii) for those Services for which there is no charge in the Agreement, at such rates as may be considered equitable by the JSC under the circumstances.

23.2.4 Cooperation. In the process of evaluating whether to allow the expiration, termination or renewal of this Agreement, Customer may consider obtaining, or determine to obtain, offers for performance of services similar to the Services prior to or following the termination/expiration of this Agreement. As and when reasonably requested by Customer for use in such a process, Provider shall provide to Customer such information and other cooperation regarding performance of the Services as would be reasonably necessary for a third party to prepare an informed, non-qualified offer for such services. Provider’s support in this respect shall include providing information regarding Equipment, Software, staffing and other matters as are necessary for the preparation of any such offer. Such cooperation shall include, including upon any termination in whole or in part, providing Customer and its designee (including third party vendors who shall transition the Services from Provider): (i) descriptions of hardware, software and services configurations, and (ii) reasonable access to Provider facilities utilized to provide the Services, provided however that Provider shall not be required to house any such third party personnel at such Provider facilities and subject to Provider’s generally applicable confidentiality and security requirements.

23.2.5 Each Party’s termination rights set forth in this Agreement are cumulative and are in addition to all other rights and remedies available to the Parties.

23.3 Post Termination Rights and Obligations

Termination of this Agreement or any SOW hereunder (howsoever occasioned) shall not affect the any accrued rights or liabilities of either Party nor shall it affect the coming in to force or the continuance in force of any position hereof which is expressly or by implication intended to come into or continue in force on or after such termination. In addition, in the event of a termination of a SOW, such termination shall not affect the obligations of the Parties under other SOWS. For the avoidance of doubt, in accordance with Section 26.19 below, all clauses, which by their nature ought or intend to survive the expiration or termination of this Agreement, shall continue to so survive or operate following the expiration or termination of the Agreement.

24. DISPUTE RESOLUTION

24.1 Level 1

Any dispute relating to the interpretation of, arising out of, relating to or in connection with this Agreement or any SOW, including any question regarding its existence, validity or termination

(a “Dispute”), will be referred in the first instance to the JSC for resolution, which will in good faith attempt to resolve a Dispute within *.

24.2 Level 2

If a Dispute is not resolved as per Level 1 above, then it shall be referred to the Governance Board for resolution which will in good faith attempt to resolve the Dispute within a further *.

24.3 Level 3

24.3.1 If a Dispute is not resolved as per Level 2 above, then either Party may initiate binding arbitration administered by the International Centre for Dispute Resolution of the American Arbitration Association (the “AAA”) in accordance with its International Arbitration Rules by providing written notice to the other Party informing the other Party of such intention and the issues to be resolved.

24.3.2 The arbitral panel shall consist of one arbitrator (where the amount in dispute is not more than US$ *), and three arbitrators (where the amount is more than US$ *). If there is to be only one arbitrator, that person will be selected in accordance with the AAA procedures referred to above. If there are to be three arbitrators, they will be selected as follows: each Party shall appoint one arbitrator within fifteen (15) days after the notice of arbitration is received, and within fifteen (15) days of the appointment of both such Party-appointed arbitrators, such two arbitrators shall discuss and select a chairman. If the two Party-appointed arbitrators are unable to agree on the chairman within such period, then the chairman shall be selected in accordance with the applicable rules of the AAA. Each arbitrator shall be independent of each of the Parties. The Parties shall use their commercially reasonable efforts to conclude the arbitration within three (3) months after all three arbitrators have been appointed. Each arbitrator shall be required, prior to his or her appointment, to acknowledge his or her intention and availability to meet the Parties’ desire that a final decision be issued with respect to the dispute within the time period specified in the preceding sentence.

24.3.3 The Parties will be entitled to conduct documentary discovery and depositions, the scope of which shall be set by arbitrators. Discovery shall be conducted consistent with the International Bar Association Rules on the Taking of Evidence in International Arbitration.

24.3.4 The language of arbitration shall be English, and the place of arbitration shall be Los Angeles, California, in the United States. The costs of arbitration, including administrative and arbitrator fees, shall be shared equally by the Parties, provided that each Party shall bear the expenses of its witnesses, counsel and other experts. Notwithstanding the foregoing, in the event that an arbitration is initiated for any Dispute and results in an arbitral award that is valued at less than $*, then the Party that initiated such arbitration shall be responsible for paying both Parties’ arbitration costs (including all administrative and arbiter fees as well as the

expenses of witnesses, counsel and other experts of both Parties), regardless of which Party ultimately prevailed in such Dispute.

24.3.5 The award or decision of the arbitrators shall be in writing, shall set forth the basis for such award and shall be final and binding upon the Parties. Judgment upon the award or decision may be entered in any court of competent jurisdiction, or application may be made to such court for judicial acceptance of the award and/or an order of enforcement, as the case may be.

24.3.6 Nothing in this Agreement shall be deemed as preventing any Party from seeking preliminary injunctive relief, temporary equitable relief or any other provisional remedy in aid of arbitration from any court of competent jurisdiction. The Parties hereby agree and acknowledge that Part I (except Section 9) of the Arbitration and Conciliation Act, 1996, of India shall not apply and no Party to any Dispute shall claim the application of Part I (except Section 9) of the Arbitration and Conciliation Act, 1996.

24.4 Continued Performance

Each Party agrees to continue performing its obligations under this Agreement while a Dispute is being resolved, except to the extent the issue in dispute precludes performance (it being agreed that a Dispute over payment shall not be deemed to preclude performance) and without limiting either Party’s right to terminate this Agreement as provided in Section 22.

25. NON-COMPETE OBLIGATIONS

25.1 No Services to Competitors

In recognition and acknowledgement of the fact that (i) Provider currently lacks experience and knowledge in providing services to the home healthcare industry in the United States, (ii) Customer will be providing substantial training and imparting Customer and industry-specific information to Provider and the Provider Personnel during the Term hereof as well as investing considerable resources in outsourcing the Services to Provider, and (iii) Provider and the Provider Personnel will benefit tremendously from receiving such training and infusion of information and Customer’s investment, Provider hereby agrees and undertakes that during the *, unless otherwise agreed by Customer, Provider shall not, and shall cause the Provider Personnel not to: (1) render services to or otherwise assist or support any Competitor; or (2) or carry on or engage directly or indirectly, whether through partnership or as a shareholder, joint venture partner, collaborator, consultant, employee, or agent or in any other manner whatsoever, whether for profit or otherwise, any business undertaken by any Competitor.

25.2 Provider Personnel

In addition, Provider shall take all legally permissible steps to subject the Provider Personnel, including, without limitation, those persons occupying Key Provider Positions, to the same restrictions. Provider shall, within thirty (30) days of execution of this Agreement, provide copies of letters signed by each of the Provider Personnel occupying Key Provider Positions agreeing to be bound by the provisions of this Section 25 and specifically stating that in the event

the Provider Personnel commits a breach of the provisions hereof, then a significant proportion of his or her annual remuneration that has been, is being or will be withheld by Provider will be forfeited.

26. GENERAL

26.1 Governing Law

This Agreement and all matters and Disputes relating to it shall be governed by and construed in accordance with the laws of the State of Delaware (excluding its conflict of laws statutes and principles) and applicable United States federal law.

26.2 [Reserved]

26.3 Relationship Of The Parties

The relationship between Provider and Customer is that of independent contractors.

26.3.1 Neither Party shall be deemed to be the legal representative of the other Party nor will anything contained in this Agreement create or imply an agency, joint venture, partnership or other fiduciary relationship between Provider and Customer.

26.3.2 Neither Party’s agents, employees or servants shall be considered an agent, employee or servant of the other Party.

26.3.3 Each Party agrees to assume complete responsibility for its own employees with regard to federal or state employer’s liability and withholding taxes, worker’s compensation, social security, unemployment insurance, and occupational health and safety requirements and other federal, state and local laws.

26.4 Severability

If at any time any clause or part of this Agreement, is found by any court, tribunal or administrative body of competent jurisdiction to be wholly or partly illegal, invalid or unenforceable in any respect, such provision will be deemed restated, in accordance with applicable law, to reflect as nearly as possible the original intention of the parties, and the remainder of the Agreement will continue in full force and effect.

26.5 Entire Agreement

26.5.1 This Agreement, together with all applicable SOW(s), Schedules and Annexure(s) attached hereto, is the complete and exclusive Agreement between the Parties with respect to the subject matter hereof, superseding any prior agreements and communications (both written and oral) regarding such subject matter except to the extent provisions of other agreements are incorporated herein by reference.

26.5.2 For purposes of interpreting the meaning and intent of this Agreement, the main text of this Agreement and the Schedules attached hereto shall, together, be considered to be a single and fully integrated agreement. In the event of an irreconcilable conflict between the provisions contained in this main text of this Agreement together with the Schedules on the one hand, and the specific provisions set forth in a SOW or Annexure on the other hand, the provisions of the main text of this Agreement together with the Schedules shall control unless the provisions of the SOW or Annexure specifically reference the provisions of the main text of this Agreement or the Schedules that are inconsistent therewith, in which case the SOW or Annexure shall control those provisions only.

26.6 Binding Nature and Assignment

This Agreement shall be binding on the Parties hereto and their respective successors and assigns. Provider may not assign this Agreement without the prior written consent of Customer, which consent Customer may withhold or condition in its sole and absolute discretion. Any assignment by operation of law, order of any court, or pursuant to any plan of merger, consolidation or liquidation, shall be deemed an assignment for which prior written consent is required. Any assignment made without Customer’s consent as required above shall be null and void and of no effect as between the Parties.

26.7 Mutually Negotiated

Each Party acknowledges that the terms and conditions of this Agreement (including any perceived ambiguity herein) shall not be construed in favor of or against any Party by reason of the extent to which any Party or its professional advisors participated in the preparation of the original or any further drafts of this Agreement, as each Party has been represented by counsel in its negotiation of this agreement and it represents their mutual efforts.

26.8 Public Disclosures

All media releases, public announcements and public disclosures by either Party relating to this Agreement or the subject matter of this Agreement, including promotional or marketing material, but not including announcements intended solely for internal distribution or disclosures to the extent required to meet legal or regulatory requirements beyond the reasonable control of the disclosing Party, shall be coordinated with and approved by the other Party prior to release. Notwithstanding the foregoing, Provider may list Customer as a customer and describe in general terms the services provided by Provider under this Agreement in proposals and other marketing materials.

26.9 No Third Party Beneficiaries

This Agreement is intended for the sole and exclusive benefit of the signatories and is not intended to benefit any third party. Only the Parties to this Agreement may enforce it.

26.10 Counterparts

This Agreement may be executed in counterparts, each of which shall constitute an original and all of which shall constitute one agreement.

26.11 Headings

The headings in this Agreement are for convenience of reference only and have no legal effect.

26.12 Rights Cumulative

26.12.1 The rights and remedies of the Parties under this Agreement are cumulative and not exclusive of any rights or remedies to which either Party is entitled by law.

26.12.2 The exercise by either Party of any right or remedy under this Agreement or under applicable law will not preclude that Party from exercising any other right or remedy under this Agreement or to which that Party is entitled by law.

26.13 Schedules and Exhibits

All references herein to Exhibits, Schedules or Annexures hereto refer to documents attached or intended to be attached to this Agreement and are incorporated herein as fully as if they were set forth herein verbatim, whether or not they are actually attached.

26.14 Waivers

26.14.1 The failure to exercise or delay in exercising a right or remedy provided by this Agreement or by law does not constitute a waiver of such right or remedy or a waiver of other rights or remedies.

26.14.2 A waiver of a breach of any of the terms of this Agreement or of a default under this Agreement does not constitute a waiver of any other breach or default and will not affect the other terms of this Agreement.

26.14.3 waiver of a breach of any of the terms of this Agreement or of a default under this Agreement will not prevent a Party from subsequently requiring compliance with the waived obligation.

26.14.4 No waiver will have effect unless made in writing.

26.14.5 Any waiver by either Party of a breach of any provision of this Agreement will not be considered as a waiver of any subsequent breach of the same or of any other provision thereof.

26.15 Amendments

26.15.1 Except as specified herein or in Article 5 of this Agreement, no modification, amendment to, or alteration of this Agreement, including, without limitation, any Schedules referred to herein and attached hereto, or any SOW, shall be effective unless such modification, amendment or alteration is reduced to writing, states the

clear intent of the Parties to modify, amend or alter the specified provisions of this Agreement and is signed by all Parties, except for a change of address provided by one Party to the other. Notwithstanding the foregoing, Customer may at its sole discretion, from time to time, unilaterally amend any Payor contract to which it is a party and, subject to Section 4.5, its procedures as they relate to Provider’s performance hereunder, and (where not prohibited by law or elsewhere in this Agreement) the Administrative Manuals. Customer shall promptly notify Provider of any changes, which may have a substantial impact on the terms and conditions of this Agreement or Provider’s obligations hereunder.

26.15.2 Notwithstanding the provisions of Section 26.15.1, if any governmental agency requires any modification of this Agreement in order for this Agreement to be in conformity with United States federal or State law, either Party shall: (i) provide a copy of such communication from the governmental agency to the other Party (or if the modification is orally required by a representative of the governmental agency, then the name and telephone number of the official requiring the modification); and (ii) a copy of the proposed amendment to this Agreement, which amendment shall modify this Agreement solely to the extent necessary to address the requirement of the governmental agency. If such modification is required by the regulatory agency with respect to fewer than all of the SOWS, the modification shall be to the applicable SOW(s) only. The modification shall be effective upon its delivery to the other Party, provided that the notifying Party shall in good faith consider and entertain any objections of the other Party to the proposed modification. If the other Party disagrees with the modification, such Party may seek review of the proposed modification by, as applicable, the JSC, and the Governance Board, provided that the modification shall be in force and effect pending such process.

26.16 Consents and Approval

Except where expressly provided as being in the discretion of a Party, where approval, acceptance, consent or similar action by either Party is required under this Agreement, such action shall not be unreasonably delayed or withheld. An approval or consent given by a Party under this Agreement shall not relieve the other Party from responsibility for complying with the requirements of this Agreement, nor shall it be construed as a waiver of any rights under this Agreement, except as and to the extent otherwise expressly provided in such approval or consent.

26.17 Further Assurances

Each Party shall, at the request of the other Party, perform those actions, including executing additional documents and instruments, reasonably necessary to give full effect to the terms of this Agreement.

26.18 Survival

Any provision of this Agreement which contemplates performance or observance subsequent to termination or expiration of this Agreement shall survive termination or expiration of this Agreement and continue in full force and effect.

26.19 [Reserved]

26.20 Notices

26.20.1 Unless otherwise stated, all notices required under this Agreement shall be in writing and shall be considered given: (a) When delivered personally, (b) Five (5) days after mailing, when sent certified mail, return receipt requested and postage prepaid, (c) Upon receipt when sent via a commercial overnight carrier, fees prepaid or, (d) Upon receipt when sent by facsimile transmission confirmed by telephone, and retaining copy of transmission confirmation receipt.

26.20.2 All communications will be addressed as follows (unless changed by written notice):

To Provider:	To Customer:
Mr. Ramachandran Panickar, CFO Intelenet Global Services Private Limited Intelenet Towers, 1406-A/ 28 Mindspace, Malad (West) Mumbai – 400 064, India Fax: +91.22.66778210 With a copy to: Amit Gupta, Head of Legal Intelenet Global Services Private Limited 219 Okhla Industrial Estate Phase III New Delhi – 110 020 Fax: +91.11.26332760	Apria Healthcare, Inc. 26220 Enterprise Court Lake Forest, CA 92630 Attention: Mr. James G. Gallas Executive Vice President and Chief Administrative Officer Fax: +01.949.462.8089 With a copy to: Apria Healthcare, Inc. 26220 Enterprise Court Lake Forest, CA 92630 Attention: Legal Department Fax: +01.949.639.4332

[Rest of page intentionally left blank]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives.

Intelenet Global Services Private Limited	Apria Healthcare, Inc.
By: /s/ Susir Kumar Name: Susir Kumar Title: CEO Date: 14-5-2009 Place of Execution: Mumbai	By: /s/ James G. Gallas Name: James G. Gallas Title: EVP and CAO Date: May 10, 2009 Date: Place of Execution: USA

Annexure 1

SAMPLE STATEMENT OF WORK

SOW NO. [            ]

This Statement of Work (“SOW”) is made and entered into as of [                    ]

(the “SOW Effective Date”) and describes the work to be performed by Intelenet Global Services Private Limited (“Provider”) on behalf of (“Customer”) for the provision of services as detailed in this SOW.

This SOW authorizes Provider to provide the work described below. This SOW is made and entered into pursuant to the Master Services Agreement by and between Provider and Customer made on [ ] with an effective date of [ ] (the “Agreement”).

[The SOW shall include at least the following clauses]

1. Transition and Implementation Plan

2. Description of Services

3. Ramp Up Period

4. Location

5. SOW Term

6. Key Performance Indicators, and other Service Levels

7. Volume Forecasts

8. SLA Credits and Bonuses

9. Account Managers

10. RU Rates, SS Rates and other applicable charges

11. Contact for Billing

12. Hardware, Software and Equipment, and its maintenance: to be provided by Provider, by Customer, and/or by third-party

13. Key Support Required of Customer

14. Business Continuity Plan

Schedule 1.1

Customer Software and Licensed Software

Customer Software

*

Licensed Software

*

Schedule 4.2

Migration / Implementation

Unless otherwise agreed to between the Parties, the following process shall be utilized by the Parties for purposes of (i) identifying the scope of Services to be provided under each SOW, each task to be included in the Services and the practices, policies and procedures to be adhered to in providing such Services, (ii) establishing the baseline levels of staffing to be utilized in providing such Services based on the historical volumes and productivity over at least a six-month period prior to the Ramp Up Period as processed by Customer or, if such historical data is unavailable, the actual volume of transactions and the actual productivity of the Provider Personnel during the Ramp Up Period, (iii) establishing the method and level of compensation to be paid to Provider in connection with such Services, (iv) establishing Performance Standards and Service Levels applicable to such Services, and (v) establishing thresholds for the different levels of Service Failures (Minor, Major and Catastrophic) and Service Excellence (Minor and Major) and the values of SLA Credits and SLA Bonuses, respectively, associated with each.

1. Pre-Services Migration Plan. Prior to the execution of each SOW, the JSC shall prepare and the Governance Board shall approve a plan for the migration of the Services covered by the SOW from Customer’s work force to Provider’s work force (the “Pre-Services Migration Plan”). The Pre-Services Migration Plan will include the following elements unless the JSC and Governance Board determine otherwise:

(a) Planning Period. During this initial period (the “Planning Period”), the JSC, Governance Board and other representatives of the Parties, as appropriate, will discuss in concept the Services which will be the subject of the SOW. If such representatives of the Parties concur that the Services under discussion are appropriate for outsourcing to Provider, Customer will provide Provider with the following:

• A written description of the Services in question and a description of how the Services are currently being performed by Customer;

• Customer’s policies and procedures and standard operating practices relating to the Services in question;

• The anticipated volume of transactions comprising the Services in question;

• Estimates of how long it takes to complete each such transaction as currently performed by Customer personnel;

• The number of Customer employees currently devoted to the performance of such Services; and

2

• To the extent such data exists and is readily available, details regarding the Customer’s baseline data for the previous six months.

Based upon the foregoing information, Provider will prepare and submit to the JSC for approval a draft SOW that will include, among other things, a proposed staffing plan specifying the number of FTEs required to provide the Service (which, in any event, shall be no greater than ninety percent (90%) of the number of full-time Customer employees currently devoted to the performance of the same Service) and the Provider Personnel who will occupy the Key Provider Positions as well as the proposed RU Rates for the Ramp Up Period pertaining to each proposed Service. If the JSC and Governance Board approve the draft SOW, the Parties will then memorialize their understanding in a finalized SOW. Unless otherwise specified in the SOW, the SOW shall be effective upon execution by an Authorized Representative of each Party (the “SOW Effective Date”)

In the event that Customer is unable to provide the baseline data for the previous six months, then Provider, if requested by Customer, or Customer will perform a base-lining exercise for validation of the SLA targets during the Ramp Up Period and thereafter submit to the JSC for approval a proposed Steady State Implementation Order for such SOW that includes, at a minimum, the proposed SS Rates and SLA terms for the Steady State Period pertaining to each proposed Service. If the JSC and Governance Board approve the SSIO, the Parties will then memorialize their understanding in accordance with the Change Order procedures described in Section 4.5 of the main text of the Agreement.

(b) Other Pre-Services Migration Plan Provisions. The Pre-Services Migration Plan shall also include:

(i) a description of the Services being migrated;

(ii) a description of the methods and procedures, personnel (including skill sets and allocation) and organization Provider will use to perform the Migration;

(iii) a training methodology plan to manage the transfer of knowledge from Customer to Provider Personnel, which plan may include travel by such Personnel to Customer facilities or Customer personnel traveling to Provider facilities, or both;

(iv) a schedule of Migration activities, including a project plan from beginning until production cutover, including milestones, risks and risk management plans;

(v) Provider Personnel information, such as years worked and years with business process outsourcing experience and other relevant qualifications, for the key Provider Personnel as reasonably specified by Customer;

(vi) a detailed description of the respective roles and responsibilities of Customer and Provider; and

3

(vii) such other information and planning as are necessary to ensure that the Migration takes place on schedule and without unplanned disruption to Customer operations.

(c) Provider shall be responsible for revising and finalizing the base project plan under the Pre-Services Migration Plan in consultation with Customer Account Manager or the JSC, provided that: (i) Provider shall cooperate and work closely with Customer in making changes to the Pre-Services Migration Plan, if so requested by Customer; and (ii) any changes to the Pre-Services Migration Plan and subsequent versions of the Pre-Services Migration Plan shall be subject to mutual written agreement by the Parties and any such changes shall be made pursuant to the Change Order procedures described in Section 4.5 of the main text of the Agreement.

(d) *

(e) *

(f) *

2. Volume Forecasts. During the Steady State Period, Customer will provide Provider with rolling ninety (90) day volume forecasts at least sixty (60) days in advance of each month, starting with the first full month after the SS Commencement Date (the “Volume Forecasts”); provided, however, that the initial two (2) Volume Forecasts shall not be subject to the foregoing 60-day advance provision requirement. The Volume Forecasts shall be binding on Customer forty-five (45) days after Customer provides the Volume Forecast to Provider. Each Volume Forecast shall be signed by the Customer Account Manager and acknowledged in writing by the Provider Account Manager.

If the actual volume of transactions during a particular month does not deviate more than * from the binding Volume Forecast for that month (the “Acceptance Forecast Variance”), Customer will pay Provider for the actual volume of transactions processed during such month, subject to any applicable SLA Credits or SLA Bonuses. If the actual volume of transactions is less than the binding Volume Forecast for that month by more than *, then, in addition to paying for the actual volume of transactions, Customer shall pay Provider for the number of transactions that fall below the Acceptable Forecast Variance (the “Shortfall Transactions”) for that month such that, when such Shortfall Transactions are added to the actual volume for the month, the sum shall be equal to * of the applicable binding Volume Forecast. If the actual volume of transactions are greater than the Volume Forecast by more than *, Customer shall pay Provider for the actual volume processed, subject to any applicable SLA Credits or Bonuses, provided that Provider shall not be responsible for maintaining service levels agreed upon in the relevant SOW (or liable for SLA Credits thereon) for the volume of transactions that exceed the Acceptable Forecast Variance (the “Surplus Transactions”). Notwithstanding the foregoing sentence relating to Surplus Transactions, to the extent applicable, a SOW may also specify the maximum volume of transactions that Provider can process in one day.

4

(a) For example, if the binding Volume Forecast for the month of March is * transactions:

(i) If the actual volume of transactions processed for March is * transactions, Customer shall pay Provider for such * transactions as well as an additional * transactions because such * transactions represent the number of Shortfall Transactions for such month.

(ii) If the actual volume of transactions processed for March is * transactions, Customer shall pay Provider for * transactions and Provider will not be responsible for maintaining the service levels agreed upon in the relevant SOW (or liable for SLA Credits thereon) for * transactions because such * transactions represent the number of Surplus Transactions for such month.

(iii) If the actual volume of transactions processed for March is * transactions, Customer shall pay Provider for * transactions because the actual volume is within the Acceptable Forecast Variance.

3. Provider’s Responsibilities.

(a) Provider’s responsibilities with respect to the Migration, as set forth in this Schedule, are referred to as the “Provider Migration Responsibilities.” Such Provider Migration Responsibilities include:

(i) maintaining without unplanned disruption the Services and not otherwise unnecessarily disrupting Customer’s business operations;

(ii) hiring and training Provider Personnel, preparing the appropriate number of physical seats with the necessary technology and bandwith on the communication links from India to the Provider’s point of presence in the United States and paying all costs associated therewith; and

(iii) otherwise performing such migration tasks as are necessary to enable Provider to provide the Services, including following the Migration.

(b) Provider will designate an individual who will be authorized to act as Customer’s primary contact with respect to the Migration (the “Provider Migration Manager”). Provider will not remove the individual serving as the Provider Migration Manager without Customer’s consent during such period of time from the Effective Date of the SOW through the completion of the Migration, unless any such individual (i) voluntarily leaves Provider; (ii) is removed because of performance reasons; (iii) has breached his or her employment agreement; or (iv) is physically unable to perform the tasks required (e.g., because of sickness or accident).

(c) Except (i) as authorized by the JSC, or (ii) if necessary in the event of an emergency such that it would be impractical for Provider to consult with Customer (and solely for so long as the emergency continues), Provider shall

5

perform the Migration in accordance with the Migration Plan. Customer shall cooperate and provide reasonable assistance with respect to the Migration as specified in the Migration Plan or as otherwise requested reasonably in advance by Provider.

(d) During the Migration, the Provider Migration Manager shall report weekly to Customer Migration Manager (as such term is defined below) regarding the status of the Migration.

(e) If the Migration is not completed on or before the SS Commencement Date, then to the extent that such failure is due to the fault of Provider or its subcontractors or factors within their control, or due to causes beyond the reasonable control of Provider and Customer, Provider shall continue to take any and all actions, at Provider’s expense, necessary to cause the Services to be provided to Customer until such time as the incomplete portion of the Migration is complete and Provider is able to provide the Services to Customer. In addition, Customer shall have the right to terminate the SOW upon written notice to Provider without further liability to Provider thereunder.

However, if the Migration is not completed on or before the SS Commencement Date, then to the extent that such failure is due to the fault of Customer or other Service Recipients or factors within their control or due to causes beyond the reasonable control of Customer, upon Customer’s written request, Provider shall continue to take any and all actions, at Customer’s expense (at the applicable RU Rates), necessary to cause the Services to be provided to Customer until such time as the incomplete portion of the Migration is complete.

4. Customer’s Responsibilities.

(a) Customer’s responsibilities with respect to the Migration, as set forth in this Schedule, are referred to as the “Customer Migration Responsibilities.” Such Migration Responsibilities include:

(i) establishing communications lines and network connections from Customer facilities to Provider’s point of presence (POP) in the United States, as required for Provider to access necessary Customer systems;

(ii) otherwise performing such migration tasks as are necessary to enable Provider to provide the Services, including following the Migration.

(b) Customer will designate an individual who will be authorized to act as Provider’s primary contact with respect to the Migration (the “Customer Migration Manager”).

5. Schedule of Migration. It is anticipated that the Migration shall take place as a phased process with discrete groups of Services transferring to Provider at different times pursuant to an SOW for each such group (referred to herein as a “Wave”). The schedule for migration of Services as presently contemplated by the Parties is set forth below.

6

Either Party may decline to enter into or delay entering into a SOW for any Wave without penalty, other than as may be specifically provided in this Schedule. In addition, any description of the Services and the implementation dates described below are included for illustrative purposes only and will be superseded by the provisions of the applicable SOWs.

Wave	Services	Anticipated RU Commencement Date
	*

7

Schedule 4.5

CHANGE ORDER FORMAT — Number 1

Master Service Agreement between Intelenet Global Services Private Limited and Apria

Healthcare, Inc. dated _____________ (the “Agreement”)

Reference No:                                                   Date:                                                  

Originator:

Description of Change(s):

Reason(s) for Change(s):

Amount and Nature of Significant Cost Increase (if applicable) as a result of the Change(s):

Timetable for implementation of the Change(s):

Expected impact of the Change(s) on project schedule or Service Levels under the SOW:

Process of Implementation (if applicable):

Other information:

All capitalized terms used in this Change Order will have the meanings given to them in the SOW or the Agreement unless otherwise defined in this Change Order.

1

The modifications, amendments or alterations set forth in this Change Order do not amend or waive any other provision of the Agreement or any SOW thereunder.

Print Name:

Title:

Date:

Print Name:

Title:

Date:

2

Form of Steady State Implementation Order (SSIO) — Number 2

Sub Process : Hand Keyed Claims

SSIO REFERENCE NUMBER: 0001

THIS Steady State Implementation Order is effective as of [INSERT DATE] (the “SS Commencement Date”) by and between Apria Healthcare, Inc., a Delaware corporation (“Customer”); and Intelenet Global Services Private Limited (registered number U99999MH2000PTC129112), a company registered in India under the Companies Act, 1956 (“Provider”). Unless otherwise provided herein, all capitalized terms shall have the meanings set forth in the Agreement and the applicable SOW.

BACKGROUND

1. This SSIO is entered into pursuant to the Master Services Agreement executed by the Parties on May 14, 2009, (the “Agreement”), which set out the terms and conditions under which Provider will provide certain services to Customer as described and set out in greater detail in separate statements of work that may be entered into by the Parties from time to time, and the SOW executed by the Parties on [INSERT DATE];

2. The execution of this SSIO deems that the particular services to be provided by the Provider to the Customer in accordance with the provisions of the Agreement and SOW have been provided to the satisfaction of the Customer during the Ramp Up period and now have been moved into Steady State as of the SSIO commencement date.

I. Changes to SOW (through Change Order described in Section 4.5 of the main text of Agreement)

II. SS Rate

a. Service to be moved to Steady State                                                  

b. Number of FTE required in Ramp Up Period                                                  

c. Operating days and hours for the process in Steady State Period

d. Volumes received by Provider in 30 days immediately prior to SS Commencement Date                                                  

e. Volumes processed by Provider in 30 days immediately prior to SS Commencement Date                                                  

f. Total FTE hours expended in processing volumes in (e) above is                         

g. The service level 1 (e.g. Productivity) achieved is                         

h. The service level 2 (e.g. TAT) achieved is                         

i. The service level 3 (e.g. Quality) achieved is                         

j. The applicable RU rate for the Service is                         

3

k. The applicable per hour rate is (j/12)/143.33

The SS Rate applicable to the Service in (a) above is (as determined in accordance with Section IV of Schedule 15.1):

The above SS Rate is applicable and in effect until the first anniversary of the SS Commencement Date, at which time the SS Rate will adjust in accordance with Schedule 15.4. All SS Rate inclusions and exclusions as detailed in Section IV.2. of Schedule 15.1 to the Agreement will apply to the SS Rate calculated above.

III. Steady State Volume Forecast

The provisions of Section 2 of Schedule 4.2 to the Agreement will apply to all volumes forecasts for the Services identified in Section II.a. above effective immediately from this SS Commencement Date.

Customer agrees as follows

a. To provide volumes forecasts to Provider for the first 3 months of the Steady State Period no later than 1 Business Day of SS Commencement Date.

b. The schedule for volumes forecasts and forecast binding for the period up to the first anniversary of the Steady State period is provided in the table below [need to put in actual dates when signing the SSIO]

Months in Steady State Period for Volume Forecast provision	Acceptable date for Volume Forecast Provision	Forecast Binding Dates
1st, 2nd & 3rd month	1st Business Day after SS Commencement Date
2nd, 3rd & 4th month	1st Business Day of 1st month of Steady State Period
3rd, 4 th & 5th month	1st Business Day of 2nd month of Steady State Period
4th, 5th & 6th month	1st Business Day of 3rd month of Steady State Period
5th, 6th & 7th month	1st Business Day of 4th month of Steady State Period
6th, 7th & 8th month	1st Business Day of 5th month of Steady State Period
7th, 8th & 9th month	1st Business Day of 6th month of Steady State Period
8th, 9th & 10th month	1st Business Day of 7th month of Steady State Period
9th, 10th & 11th month	1st Business Day of 8th month of Steady State Period

4

Months in Steady State Period for Volume Forecast provision	Acceptable date for Volume Forecast Provision	Forecast Binding Dates
10th, 11th & 12th month	1st Business Day of 9th month of Steady State Period
11th, 12th & 13th month	1st Business Day of 10th month of Steady State Period
12th , 13th & 14th month	1st Business Day of 11th month of Steady State Period

IV. Steady State Performance Standards

a. Definition of performance standards: The performance standards, definition of performance standards, targets, source of data, collection frequency, sample size, type of measurement display, reporting frequency and dependency pursuant to this SSIO are detailed in the table below. [These are illustrative only.]

*

b. Baseline gathered during Planning & Ramp Up Period : [Data for performance standards listed above, gathered during the Planning Period (with historical baseline) and Ramp Up Period to be populated here]

c. Performance Standard tolerance : The thresholds for performance tolerance, levels for Minor Service Excellence, Minor Service Failure, Major Service Excellence, Major Service Failure and Catastrophic Service Failure are captured in the table below: [These are illustrative only.]

*

d. Service credits & service bonuses: The applicable service bonuses and service credits pursuant to the services covered under this SSIO are detailed in the table below. The service bonuses and service credits reflected in the table below will be applied on the monthly invoice amount of the provider. [These are illustrative only.]

*

e. SLA Credits and SLA Bonus Cap : [To be detailed]

IN WITNESS WHEREOF, the Parties have caused this SSIO to be executed by their duly authorized representatives.

Intelenet Global Services Private Limited	Apria Healthcare, Inc.
By:	By:
Name:	Name:

5

Title:	Title:
Date:	Date:

6

Schedule 5.4

Reports and Meetings

1. Reports

1.1 As of the SOW Effective Date, Provider shall provide Customer the periodic reports set forth in subsection 1.2 of this Schedule 5.4, and within thirty (30) days after the SOW Effective Date, the Parties shall determine (as discussed below) additional periodic reports to be issued by Provider to Customer. Such reports shall be issued at the frequency reasonably requested by Customer. All Customer reports which were web-enabled by Customer prior to the SOW Effective Date shall be provided by Customer to Provider, along with the data collection plan used to prepare such reports. The Provider will web-enable such reports and Provider shall provide Customer access to such information as of the SOW Effective Date.

1.2 As one such report, Provider shall provide a monthly performance report, which shall be delivered to Customer within fifteen (15) days after the end of each month, describing Provider’s performance of the Services in the preceding month (the “Monthly Performance Report”). Such Report shall:

a. separately address Provider’s performance in each area of the Services;

b. for each area of the Services, assess the degree to which Provider has attained or failed to attain the pertinent objectives in that area, including with respect to the Service Levels (as such term is defined in Schedule 7.1);

c. explain deviations from the Service Levels and include recommendations on how either Party or both Parties can correct or ameliorate such deviations;

d. describe the status of problem resolution efforts, ongoing projects, and other initiatives, and the status of Provider’s performance with respect to change requests and highlight to the JSC similar activities by Customer;

e. set forth a record of the material Equipment, Software and Provider Personnel changes that pertain to the Services and describe planned changes during the upcoming month that may affect the Services; and

f. include such documentation and other information as Customer may reasonably request to verify compliance with, and meeting the objectives of, the Agreement.

1.3 No later than thirty (30) days after the SOW Effective Date, the JSC shall determine additional periodic reports that shall be issued by Provider to Customer relating to the Services provided under the SOW and the formats of such reports.

1

After the JSC has determined the report format, which shall not be more than ninety (90) days after the SOW Effective Date, Provider shall commence providing such additional reports to Customer.

2. Meetings

2.1 Within thirty (30) days after the SOW Effective Date, the JSC shall determine an appropriate set of meetings (to the extent practicable, any meeting provided for in this Schedule or the Agreement may be held by teleconference or other electronic means) to be held between representatives of the Parties, including a specific schedule of meetings of the Governance Board, the JSC and the Account Managers. Provider shall prepare and circulate an agenda sufficiently in advance of each such meeting to give the participants an opportunity to prepare for the meeting. Provider shall incorporate into such agenda items that Customer desires to discuss. Provider shall prepare and circulate minutes promptly after a meeting, which shall be reviewed and approved by the JSC prior to the next meeting. Upon the approval of the JSC (or the Governance Board, in the case of Governance Board meetings), such minutes shall be binding upon both Parties. As of the SOW Effective Date, such meetings shall include the following:

a. a weekly meeting of the Account Managers to discuss day-to-day operations and such other matters as appropriate, including but not limited to change requests, connectivity and access issues, identified performance issues and other operational concerns that the Parties need to address;

b. a weekly senior management team meeting;

c. monthly, or as requested by Customer, meetings of each of the JSC and Governance Board to review the reports for the quarter, review Provider’s overall performance under the Agreement, review progress on the resolution of issues, discuss and attempt to resolve any issues arising under the Agreement (as provided in Section 5.1 of the main text), and discuss such other matters as appropriate; and

d. such other meetings between Customer representatives and Provider Personnel reasonably requested by either Party as necessary to address performance of the Services.

2

Schedule 5.5

Operating Procedures

1. Administrative Manuals

1.1 The Administrative Manuals shall describe how Provider shall perform and deliver the Services under the Agreement and each SOW, the Equipment and Software (including Provider Software, Customer Software and Licensed Software) being used, and the documentation (e.g., operations manuals, user guides, specifications) which provide further details of such activities. The Administrative Manuals shall also describe any actions required by Customer in its receipt of the Services. The Administrative Manuals shall describe the activities Provider proposes to undertake in order to provide the Services, including those direction, supervision, monitoring, staffing, reporting, planning and oversight activities normally undertaken to provide services of the type Provider is to provide under the Agreement. The Administrative Manuals also shall include descriptions of the acceptance testing and quality assurance procedures approved by Customer, Provider’s problem management and escalation procedures, and the other standards and procedures of Provider pertinent to Customer’s interaction with Provider in obtaining the Services. Each Administrative Manual shall be based on the template attached hereto as Appendix 1 and cover an entire category of Services.

1.2 At a minimum, the Administrative Manual(s) for each SOW shall include the operating procedures and best practices developed by Customer and Provider from the training materials during the Planning Period for each SOW and existing Customer policies and procedures and standard operating practices. Except for the initial wave of tasks scheduled to commence in May, 2009, within thirty (30) days prior to the SOW Effective Date for each SOW, Provider shall deliver an initial draft Administrative Manual to Customer relating to the SOW in question for Customer’s comments and review, including additional details regarding such procedures and practices. Customer will review such drafts and provide comments and corrections to Provider for incorporation into the Administrative Manual. Provider shall incorporate such comments or suggestions of Customer and shall finalize the Administrative Manuals within ten (10) days after Provider’s receipt of comments from Customer. The final Administrative Manuals shall be agreed upon by the ]SC prior to the relevant SOW Effective Date. As necessary updates and revisions to the Administrative Manuals are determined during the Ramp Up Period, Provider shall prepare such updates and revisions in draft form and submit them to Customer for approval. Provider shall also periodically update the Administrative Manuals on an as-needed basis to reflect changes in the operations or procedures described therein. Before any such updates become final and incorporated in the Administrative Manuals, they shall be agreed upon by the Vice President of Revenue Cycle Vendor Management of Customer and the Head of Operations or Account Manager of Provider.

3

1.3 Provider shall perform the Services at all times in accordance with the Administrative Manuals, as such Manuals and any updates or revisions thereto are finalized and approved in accordance with this Schedule 5.5.

2. Additional Practices and Procedures

In addition to the Administrative Manuals, each SOW may include a description of additional practices and procedures, to be mutually agreed upon by both Parties, that apply specifically to the Services to be provided thereunder. Unless expressly indicated, such additional practices and procedures shall supplement, and not replace, those set forth in the Administrative Manuals.

3. No Amendment of Agreement

For the avoidance of doubt and notwithstanding anything to the contrary contained herein, the Administrative Manuals or any updates or revisions thereto shall not be used to amend or waive, and shall not amend or waive, the Agreement or any portion thereof. In the event of any irreconciliable conflict between the provisions of the Agreement and the Administrative Manuals, the Agreement shall prevail.

4. Delivery and Exchange of Copies of Administrative Manuals

Provider shall deliver any drafts or final versions of the Administrative Manuals or any portions thereof to Customer by email or other electronic transmission from Provider’s headquarters location in India to Customer’s headquarters location in California. Any attempt to deliver the foregoing items by any other means shall be null and void and shall not constitute delivery in accordance with the terms of the Agreement.

5. Payment for Administrative Manuals

The Administrative Manuals are primarily for use of Provider and will document pre-existing Customer policies and procedures as adapted for performance by Provider of its obligations under the Agreement. Customer, within * following receipt of an invoice therefor, will pay Provider $* for the time spent by Provider in preparing each Adminstrative Manual that Customer approves for the category of Services to be performed by Provider under the Agreement.

4

Appendix 1 to Schedule 5.5

Administrative Manual Template

1. Purpose of the Document.

2. Scope

2.1 Introductions

2.2 In/Out of Scope.

2.3 Scope of considerations.

3. Business Goals, Objective and design principles.

3.1 Business goals.

3.2 Business Objectives.

3.3 Design Requirements/Principles.

3.4 Design Considerations.

4. Current Operational Overview

4.1 Hand Keyed Claims

4.1.1 Process Overview

4.1.2 Process flow Chart

4.1.3 P & P

4.1.4 Standard Operating procedures

4.1.5 Process Exceptions

4.1.6 Work Flow Management

4.1.7 Document Prep

4.1.8 Distribution & Allocation

4.1.9 Re routing transactions

4.1.10 Real-time monitoring & Queue management

4.2 Applications

4.2.1 ACIS

4.2.2 Work flow tool

4.2.3 Clearing houses

4.2.4 PPI tool

4.2.5 Others

4.3 Volumes

4.3.1 Trends - Peaks & Troughs

4.3.2 Volumes per CPU/Clearing house.

4.3.3 Historic Volumes - Projecting transaction volumes in order to insure sufficient capacity exists to meet service requirements at an optimal efficiency

5

4.4 Organizational Design.

4.4.1 Organizational Structure.

4.4.2 Shift Patterns & Hours.

4.4.3 Roles & Responsibilities, Skill sets

4.5 Management Information.

4.5.1 Reconciliation & Computation of processed transactions.

4.5.2 Average TAT calculations/Transaction.

4.5.3 Attrition and Absenteeism.

4.6 Quality & Performance Management.

4.6.1 Quality Monitoring process

4.6.2 Quality Monitoring form

4.6.3 Parameter wise error tracking and Top Error Analysis

4.6.4 Associate Performance Management.

4.6.5 Corrective Action plan

4.7 Service Levels.

4.7.1 General Overview.

4.7.2 Systems Usage & Availability

4.8 Support Model.

4.8.1 Process Support.

4.8.2 Forecasting, staffing and scheduling.

4.8.3 Incident Management.

4.8.4 Change Management.

4.8.5 User Administration.

4.9 Training.

4.10 Compliance

4.11 Business Continuity.

4.11.1 Types and level of Incidents

4.11.2 Business recovery strategy

4.11.3 Approach to repatriation

6

Schedule 6.3

Terms and Conditions of Software Licenses

1. Customer Software. Customer hereby grants a limited, non-exclusive, non-transferable and royalty-free license to Provider to access and use the Customer Software solely to the extent necessary for performing the Services. In addition, Provider shall comply with the following terms and conditions in connection with its exercise of such license rights:

a. Sublicenses. Provider may not sublicense the Customer Software to any third party other than to those permitted subcontractors (permitted as provided in Section 10 of the main text of the Agreement) that demonstrate a need to use the Customer Software for purposes of providing any Services.

b. Permitted Use. Provider shall use the Customer Software solely for the purpose of providing the Services as set forth in the Agreement and each applicable SOW and Provider shall not use the Customer Software to process information for third parties, or otherwise provide services to any person or entity other than Customer. Any other use of the Customer Software by any person, business, corporation, government organization or any other entity, or permitting any other use, whether intentional or unintentional, is strictly forbidden and is a violation of the Agreement.

c. Copies. Provider may make one copy of the electronic media used to install (the installation files) the Customer Software for archival purposes, but unless otherwise agreed to expressly in writing by Customer, Provider shall not make any copies or otherwise duplicate the Customer Software. In addition, no copies shall be made except under the following circumstances:

• Customer shall send each item to be copied to Provider email or other electronic means to India; and

• Provider will copy the item so received in India.

Under no circumstances shall Provider copy any information in the United States.

Under no circumstances shall Customer make copies for Provider or provide Provider with a disk or other hardware copy of any Customer Software.

d. Installation. Provider may install the Customer Software, as applicable, on one server or on the workstations operated by Provider Personnel. If any Customer Software is installed on a server, such Customer Software may be transferred by Provider to other computer servers owned by and for the use of Provider at that address or other addresses to which Provider may move, provided the Customer Software is simultaneously deleted from each prior computer server when so transferred.

1

e. Software Modification. Except as permitted by law, Provider shall not, nor shall it permit any other party to, modify, disassemble, decompile, translate, adapt or reverse engineer the Customer Software or any part thereof, or undertake any other efforts to create, discover or disclose the Customer Software’s source code or methods or concepts embedded therein. Provider shall not publish, display, disclose, rent, lease, modify, loan or distribute the Customer Software, or create derivative works (including but not limited to translating any part of the Customer Software into any other file format or language) based on the Customer Software, or any part thereof. No identifying marks, copyright or proprietary right notices may be deleted from any copies of the Customer Software made by or for Provider.

2. Licensed Software. Customer shall grant, or cause the third party licensor to grant, a limited, non-exclusive and royalty-free license to Provider to access and use the Licensed Software solely to the extent necessary for performing the Services. Provider (a) shall comply with the terms and conditions, including use restrictions and nondisclosure obligations, imposed on Customer by the licenses for such Licensed Software, and (B) shall not violate or seek to modify or otherwise revoke such terms and conditions. Provider shall be operationally and administratively responsible for the access to and use of Licensed Software by Provider Personnel.

3. Proprietary Rights. Provider acknowledges that Customer is the owner of or otherwise has all rights to the Customer Software and the Licensed Software, other than as expressly provided in the Agreement and this Schedule 6.3. The Customer Software contains material that is protected by United States Copyright Law and trade secret law, and by international treaty provisions. All rights not granted to Provider herein are expressly reserved by Customer. Provider shall not directly or indirectly remove any identifying marks, copyright or other proprietary right notice of Customer or any of its licensors from any copy of the Customer Software or Licensed Software. Customer retains title to the Customer Software and all related documentation provided under this Agreement, and any improvements, modifications or derivatives thereto. Any and all trademarks and trade names which Customer uses in connection with the Customer Software are and shall remain the exclusive property of Customer.

4. No Warranties. Customer provides no warranties or conditions, express or implied, with respect to the Customer Software or Licensed Software, including, without limitation, warranties of merchantability, fitness for a particular purpose or non-infringement (except to the extent Customer is aware of such infringement). Customer specifically disclaims any warranty or representation that the Customer Software or Licensed Software will meet Provider’s requirements or that the operation of the Customer Software and Licensed Software and/or their use will be uninterrupted or error-free, or that defects in the Customer Software or Licensed Software, if any, will be correctable or corrected, or that the Customer Software or Licensed Software is compatible with any platform other than that explicitly listed in documentation provided by Customer.

5. Term. The term of all licenses to Provider of Customer Software, and Licensed Software shall expire automatically upon expiration or termination of the Agreement or the SOW

2

to which they apply (if only one) for any reason except to the extent that Provider needs to continue utilizing the same in order to perform any continuing obligations under the Agreement or any applicable SOWs.

6. Effect of Termination. Upon such termination, Provider will (a) deliver to Customer any and all materials embodying the Licensed Software, the Customer Software and any Enhancements (defined below) in Provider’s possession, (b) permanently delete the Licensed Software, the Customer Software and any Enhancements from any and all storage devices, (c) retain no copies of the Licensed Software, Customer Software and any Enhancements, and (d) at the request of Customer, certify in writing that provisions (a) through (c) of this Section have been complied with.

7. Enhancements to Customer Software. All Enhancements of the Customer Software, whether or not created by Provider, shall be the sole and exclusive property of Customer and shall become part of the Customer Software for purposes of the Agreement and shall be subject to all of the terms and conditions of the Agreement, including, without limitation, Schedule 13.3. “Enhancements” shall mean all patches, bug fixes, updates, upgrades, new versions, new releases, enhancements, modifications, revisions, additions, derivative works, replacements, conversions, or similar items for the Customer Software in any form.

8. Enhancements to Licensed Software. As between the Parties, all Enhancements of the Licensed Software, whether or not created by Provider, shall be the sole and exclusive property of Customer and shall become part of the Licensed Software for purposes of the Agreement and shall be subject to all of the terms and conditions of the Agreement, including, without limitation, Schedule 13.3.

3

Schedule 7.1

Performance Standards

1. General

The Parties will establish specific quantitative performance standards (each, a “Performance Standard”) for certain of the Services (the “Service Levels”) in accordance with Section 7.1 of the main text of the Agreement. After the relevant SS Commencement Date, Provider’s level of performance shall at all times be at least equal to the Service Levels set forth in the applicable SOW.

2. General Standards Regarding Availability of Services

Unless otherwise provided in a SOW,

(a) Normal Working Days. Provider will provide the Services during U.S. Business Hours; provided, however, that with Customer’s prior written approval, certain Services may be performed after or before U.S. Business Hours.

(b) Availability Standard. Provider will ensure that the Services, Equipment and Software are current and available during Scheduled Hours of Availability at least * of the time in any given month.

3. Service Levels; SLA Credits and Bonuses

The Performance Standards and Service Levels applicable to the Services shall be developed during the Planning and Ramp Up Periods pursuant to Schedule 4.2 and set forth in the relevant SOWs.

(a) Acceptable Variance. Each SOW shall define what constitutes an acceptable variance from the baseline Service Level. So long as Provider’s performance falls within the acceptable variance, no Service Failure or Service Excellence shall be deemed to have occurred and, consequently, no SLA Credits or SLA Bonuses shall apply.

(b) Service Failures. Each SOW shall define what constitutes a Minor Service Failure, a Major Service Failure and a Catastrophic Service Failure under the SOW and the thresholds for each. Upon the occurrence of any such Service Failure, Provider will be assessed SLA Credits in the amounts and according to the formulas set forth in the SOW.

(c) Service Excellence. Each SOW shall define what shall constitute a Minor Service Excellence and a Major Service Excellence. Upon Provider’s achievement of a Service Excellence, Provider will be assessed SLA Bonuses in the amounts and according to the formulas set forth in the SOW.

1

(d) Service Failure and Service Excellence Thresholds. The Service Failure and Service Excellence thresholds in each SOW will be mirrored. For example suppose the baseline SLA is * accuracy and the acceptable variance is * (* to * accuracy). If the Service Excellence and Service Failure level 1 threshold is, say, * then the Service Excellence level 1 would be * and the Service Failure level 1 would be *. If the Service Excellence and Service Failure level 2 threshold is, say, *, then the Service Excellence level 2 would be * and the Service Failure level 2 would be *. For the avoidance of doubt, the Parties will determine jointly the Catastrophic Service Failure threshold, which threshold will not be mirrored by a corresponding Service Excellence threshold.

(e) SLA Credits and SLA Bonuses. Each SOW shall assign the amount of SLA Credits payable by Provider to Customer for each Service Failure level and the amount of SLA Bonuses payable by Customer to Provider for each Service Excellence level, provided that within any mirrored level, the amount of the SLA Credits shall be at least twice the amount of the SLA Bonuses for the given Service.

(f) SLA Credit and SLA Bonus Cap. Each SOW may specify the maximum amount of SLA Credits payable by Provider to Customer (a “SLA Credits Cap”) and SLA Bonuses payable by Customer to Provider (a “SLA Bonuses Cap”) in a given month, provided that in any event the SLA Credits Cap shall be at least twice the amount of any SLA Bonuses Cap for the given Service. Unless otherwise specified in a SOW or adjusted pursuant to subsection (g) below, the SLA Credits Cap shall not exceed * of the monthly invoice for such Service during the first year following the Effective Date of the Agreement and * of the monthly invoice for such Service after the first anniversary of such Effective Date and the SLA Bonuses Cap shall not exceed * of the monthly invoice for such Service during the first year following the Effective Date of the Agreement and * of the monthly invoice for such Service after the first anniversary of such Effective Date.

(g) Annual Review. The JSC shall review the Performance Standards and the Service Levels, including the Service Failure and Service Excellence thresholds, the SLA Credit and SLA Bonus amounts applicable at each threshold and the SLA Credits Cap and SLA Bonuses Cap, for all of the Services on an annual basis in light of Provider’s performance over the preceding year and to reflect improved performance capabilities associated with advances in the technology and methods used to perform the Services. The Parties shall then make such adjustments in the relevant SOWS as they deem appropriate in their reasonable discretion. The Parties expect and understand that the Service Levels will improve over time.

(h) Steady State. Unless otherwise specified in the relevant SOW, no Performance Standards or SLA Bonuses or Credits will apply until the Steady State Period.

(i) Relief Event. Upon the occurrence of a Relief Event, no SLA Credits will be assessed in connection with Provider’s provision of the affected Service.

2

4. Failure to Perform

(a) In the event Provider fails to meet a Performance Standard, Provider shall (i) investigate, assemble and preserve pertinent information with respect to, and report on the causes of, the problem, including performing a root cause analysis of the problem; (ii) advise Customer, as and to the extent requested by Customer, of the status of remedial efforts being undertaken with respect to such problem; (iii) minimize the impact of the problem, use commercially reasonable efforts to correct the problem, and begin meeting the Performance Standard (if impacted); and (iv) take appropriate preventive measures so that the problem does not recur. As part of such efforts, Provider Personnel shall work in collaboration with Customer to identify the offending system(s), procedures or Personnel contributing to such Service Failures.

(b) In the event that any Provider Service Failure under the Agreement results in Customer being assessed any type of monetary fine or penalty, then Provider shall be responsible for the full amount of such fine or penalty in accordance with the indemnification provisions contained in Section 18 of the main text of the Agreement.

5. Measurement and Monitoring Tools

Initially, Provider shall have access to and use measurement and monitoring tools as utilized and implemented by Customer immediately prior to the Effective Date. Provider shall implement and utilize the necessary measurement and monitoring tools and procedures required to measure and report Provider’s performance of the Services against the Service Levels. To the extent the measurement and monitoring tools and procedures are not specified in a SOW, Customer shall have the right to approve such measurement and monitoring tools and procedures prior to their implementation by Provider. Such measurement and monitoring shall permit reporting at a level of detail sufficient to verify compliance with the Service Levels, and shall be subject to audit by Customer. Provider shall provide Customer with information and access to such tools and procedures upon request, for purposes of verification.

6. Customer Survey

Provider and Customer shall conduct a survey, at Customer’s cost, each year of (i) Customer’s customers and (ii) internal Customer users, which survey is designed to determine the level of satisfaction with the Services performed by Provider. Provider and Customer will mutually agree on the form and content of the surveys, which shall include representative samples of each major category of customer of, or user within, Customer and an agreed upon number of in-depth face-to-face or telephone interviews. The Parties will jointly review the results of the surveys, and in those areas where users are dissatisfied, Provider will develop and implement a plan to improve user satisfaction. Customer’s satisfaction shall be an element of each Provider Personnel’s performance measurements and a key factor in determining business unit success. In addition, once the results of the initial survey have been compiled, such results shall (i) serve as the baseline

3

against which the results of subsequent surveys are compared and SLA Credits or Bonuses are assessed, and (ii) be reflected in the relevant SOW(s) via the Change Order process described in Section 4.5 of the main text of the Agreement.

4

Schedule 8.1

Business Continuity / Disaster Recovery

1. Inherent Resilience Inbuilt In Our Solution

a. Multiple Sites

Provider and Customer have agreed that the Services will be provided from two geographically dispersed locations in India, one in Delhi and one in Mumbai. Any category of Services for which more than * FTEs are utilized by Provider, shall be divided between the two sites so that approximately one half of the FTEs performing the Services in the category are located at each site. For each category of Services which has been divided between the two sites, Provider shall maintain excess capacity and utilize personnel so that the volume of Services within the category performed at a site can be expanded immediately from * to no less than * to * of the total.

b. Recovery Plans and Implementation

For each site Provider will at all times maintain the capacity to implement recovery strategies for Power & Utilities, Transport & Catering, Fire Emergencies, IT Support services as described Table 1 below and shall implement the same as necessary to maintain full capacity to provide the Services as required by the Agreement and any SOW.

c. IT Failure Within Site

IT Failure within Site—100% Bandwidth, Two points of presence, Resilience for LAN/WAN Setup, Diverse routing, Different cable systems, Different service providers, Well Defined Network & Desktop Backup as described in the Table below.

d. Temporary Relief From Exclusive Facility Requirement

Customer agrees that Provider shall be relieved of its obligation to perform the Services from dedicated facilities (or portions of facilities) under Section 12.2 of the Agreement and allowed to utilize shared facilities on a temporary basis (no longer than *) if a business interruption makes it necessary to do so in order to maintain continuity of operations under the Agreement. However, Provider shall be required to take appropriate steps to maintain the privacy of patient records and personal health information as required by law and Customer’s policies and procedures.

1

2. Infrastructure Components—Recovery Strategy:

Table 1:        Infrastructure & Strategy

Infrastructure	Recovery Strategy
Power & Utilities
	þ       Recovery Strategies in an event of Loss of Power: -
	þ       Auxiliary power available
	þ       Multiple back-up options to enable us to run the facility without main power supply on an uninterrupted basis.
	þ       Electrical supply into the facility is controlled through an auto-change over panel.
	þ       Power backup is provided by 2 diesel-generating sets with the required fuel storage to keep the facility running on a continuous basis. Tie-ups with local vendors for fuel supply.
	þ       All power supply to computers is provided from main UPS with n+1 redundancy arrangement.
	þ       Servers are redundant across CPU, storage and power supply.
Transport & Catering	þ       Recovery Strategies in an event of Loss of Transport and Catering:
	þ       Transport facility is outsourced to multiple vendors for redundancy.
	þ       Dedicated vendors for catering services within agreed delivery timelines during contingency situations.
Fire Emergencies	þ       Recovery Strategies in an event of Fire and Medical Emergencies: -
	þ       Arrangements with hospitals (24X7) a few miles from the office. Contact details are maintained at multiple points for nearby fire stations, blood banks, police station, 24-hour pharmacies etc.
	þ       All fire safety arrangements are in place - Extinguishers, Fire Alarm system and Fire Hydrants within the facility with fire pump on stand by. There are multiple exits in the facility.
Weather-related Site Shut Downs	þ       Recovery Strategies in an event of Natural Emergencies: -
	þ       Arrangements for Employee staying at work already in place to cater to situations like floods or Terrorist attack.
	þ       Facilities are RCC structures, thus they are resistant to any cyclonic influence and Earthquakes

2

3. Technology Components—Recovery Strategy:

a. IT Failure Within Site

*

4. Test Plan

Unless otherwise specified by Customer, Provider will conduct an annual exercise of the Business Continuity Plan (“BCP”) in order to validate its readiness to deal with a Business interruption or disaster. Customer shall be allowed to review and comment on the results of the exercise. BCP test will include the following attributes:

þ The Intelenet Business Continuity Management Group (“BCM”) will designate an individual who will serve as Provider’s Single Point of Contact (“SPOC”) with Customer. The BCM SPOC will provide e-mail notice with proposed dates of test to Customer BCM counterparts, a listing of the processes and locations to be tested, a description of the business continuity scenario and any proposed involvement by Customer or its third party service providers to validate test results.

þ The annual test for Customer may be aligned with the annual test of the Site’s Business Continuity Plan.

þ The tests may/may not actually involve the closing of facilities and/or interruption of system access to avoid disrupting ongoing operations.

þ To check the operating effectiveness of the BCP, tests can occasionally be conducted without any advance notice to the test participants however; notice will be given to the key contact names included in the respective BCP.

þ Test reports shall be documented and communicated to stakeholders for corrective actions/ information.

3

Schedule 12.1.1

Key Provider Positions

1. “Key Provider Positions” shall be, as of the Effective Date, the positions set forth in Section 5 of this Schedule, as may be supplemented in each SOW. Additionally, notwithstanding any failure to list such a position in Section 5 of this Schedule, Provider’s Account Manager, Provider’s Project Management Office Head, the relevant Project Managers for each SOW, the Operations Manager and all Provider Personnel who report directly to the Operations Manager in Provider’s organization shall be deemed to be Key Provider Personnel. Unless otherwise specified in the relevant SOW, Provider shall cause each of Key Provider Personnel to be 100% dedicated to Customer’s operations except for *, the designated primary Provider Account Manager, who will devote at least 90% of his time and effort to the provision of the Services. The Provider Personnel approved as of the Effective Date to fill the Key Provider Positions are listed in Section 5 of this Schedule.

(a) Customer and Provider may from time to time mutually agree to change the positions designated as Key Provider Positions under the Agreement, provided that without Provider’s consent, the number of Key Provider Positions shall not exceed the number initially specified in this Schedule as of the Effective Date. In response to such Customer change as set forth in the previous sentence, Provider shall use commercially reasonable efforts to implement such change as soon as possible, and in no event greater than ninety (90) days, provided that in such instances in which special skills are necessary to affect such change, Provider will diligently pursue satisfaction of such Customer change.

(b) Provider shall, in accordance with Section 2 of this Schedule, designate an individual to serve as “Provider Account Manager” for each SOW. Each Provider Account Manager shall be a Key Provider Personnel. Each Provider Account Manager shall (i) serve as the single point of accountability for Provider for the Services; and (ii) have day-to-day authority for undertaking to ensure customer satisfaction and (iii) be dedicated for at least 90% of his or her working hours to the Customer account. During the Term, the primary Provider Account Manager shall be located at Customer’s Lake Forest, California offices, or such other location reasonably designated by Customer from time to time.

2. Before assigning an individual to a Key Provider Position, whether as an initial assignment or a subsequent assignment, Provider shall (i) notify Customer of the proposed assignment, (ii) introduce the individual to appropriate Customer representatives, and (iii) provide Customer with a resume and other information about the individual reasonably requested by Customer. If Customer objects in good faith to the proposed assignment, the Parties shall attempt to resolve Customer’s concerns on a mutually agreeable basis. If the Parties have not been able to resolve Customer’s concerns within five (5) Business Days, Provider shall not assign the individual to that position and shall propose to Customer the assignment of another individual of suitable ability and qualifications. Except with Customer’s consent (which may be withheld in

1

Customer’s sole discretion), individuals filling Key Provider Positions may not be transferred or re-assigned to other positions with Provider or its Affiliates until a suitable replacement has been approved by Customer, and no such transfer shall occur at a time or in a manner that would have a material adverse impact on delivery of the Services. Provider shall establish and maintain an up-to-date succession plan for the replacement of individuals serving in Key Provider Positions that shall be reviewed with Customer on a regular basis.

3. For so long as an individual is assigned to a Key Provider Position, and for * thereafter, Provider shall not assign such individual to perform services for the benefit of any Competitor.

4. At any time, and in Customer’s sole and absolute discretion, Customer shall have the right to require that any individual assigned to a Key Provider Position be removed from such position and replaced with another individual approved by Customer in accordance with this Schedule provided that Customer sets forth its suitable and adequate reasons for such removal.

5. Set forth below is a list of the Key Provider Positions and the name of each individual who is designated to hold such Key Provider Position as of the Effective Date:

Key Provider Positions	Key Provider Personnel
Project Managers as set forth in each SOW
Project Management Office Head	*
Provider Account Manager	*
Provider’s Head of Operations, Operations Manager and Team Managers as set forth in each SOW.	*

2

Schedule 12.1.2

Provider Personnel Qualifications and Standards

1. Qualifications, Retention and Replacement of Key Provider Personnel

(a) Section 12.1.2 of the main text of the Agreement provides that Provider shall remove or transfer any Key Provider Personnel, or cause him or her to cease work on the Services, upon request by Customer in the reasonable exercise of its discretion. In the event that Customer determines in good faith that the continued assignment to Customer’s account of one of the Key Provider Personnel is not in the best interests of Customer, then Customer shall give Provider written notice to that effect. After receipt of such notice, Provider shall have a reasonable period of time, which shall not be less than thirty (30) days, in which to investigate the matters stated in such notice, discuss its findings with Customer and resolve the problems with such person. If, following such period (not to exceed ten (10) Business Days), Customer requests replacement of such person, Provider shall replace that person with another person of suitable ability and qualifications. However, where Customer notifies Provider that Customer has determined that the nature of the concern is of such a nature that such Key Provider Personnel should be removed immediately (albeit temporarily) from Customer’s account, Provider shall immediately remove such individual(s) from Customer’s account, provided that any such Customer request for immediate removal of Key Provider Personnel (i) may not be arbitrary, and/or (ii) may not be unlawful (e.g., removal because of employee’s age). In any event, any request by Customer to remove an individual from Customer’s account shall not be deemed to constitute a termination of such individual’s employment by Provider and in no event shall Customer be deemed an employer of any such person.

(b) In the event Customer requests Provider to provide new Services, as provided in Section 2.2.1 of the main text of the Agreement, Provider shall use commercially reasonable efforts to provide such new Services utilizing Key Provider Personnel who are familiar with the Customer account and Customer’s business.

2. Compliance with Customer Policies

(a) While at Customer’s premises (or the premises of others receiving the Services hereunder), Provider Personnel shall (i) comply with Customer’s requests, rules, and regulations regarding personal and professional conduct (including the wearing of an identification badge and adhering to regulations and general safety, dress, behavior, and security practices or procedures) generally applicable to such premises and communicated to the Provider Account Manager or a Provider-designated location senior Provider manager, and (ii) otherwise conduct themselves in a businesslike and professional manner. If requested by Customer, Provider shall have all Provider Personnel engaged in providing Services to Customer execute acknowledgement of Customer’s conduct and other policies

1

and Provider shall maintain records of compliance therewith which shall be made available to Customer upon request.

(b) Provider shall ensure that all Provider Personnel comply during the Term with: (a) the Administrative Manuals, as may be amended from time to time by the JSC, and/or policies otherwise made known by Customer to Provider from time to time, except to the extent the same are clearly not applicable or where Provider has substantially equivalent policies, (b) such aspects of the Customer Corporate Compliance Program as may be required by Customer and on which Customer has provided training, and (c) all rules of behavior, work schedules, security procedures and other standards, policies and procedures as established by or maintained by Customer from time to time and communicated to the Provider Account Manager. To the extent the foregoing policies and procedures change during the Term, Customer shall inform the Provider Account Manager in writing. If such changes cause Provider to incur a Significant Cost Increase, Provider shall be entitled to an equitable adjustment.

3. Training of Provider Personnel

(a) All Provider Personnel shall be required to be certified as having, at a minimum, the following training and certifications (or the portions thereof deemed by the JSC to be applicable to the SOW(s) with respect to which such Provider Personnel are providing services): HIPAA training; Red Flags training; fraud and abuse training, and applicable Revenue Management Certifications, provided that Customer has made such training and certification materials available to Provider. Provider shall be responsible for providing all such training and certifications in form and substance as prescribed by Customer. While Provider Personnel need not have substantive knowledge or experience in healthcare, billing or collections, all Provider Personnel shall possess the prerequisite skills and qualifications appropriate for the nature and complexity of the tasks and Services he or she will be required to perform and have undergone the training and certifications required by Customer.

(b) The Parties acknowledge that if Provider fails to meet Service Levels during the Term, and such failures are caused by the fact that Provider’s Personnel are inadequately trained, then Customer shall have the right to require Provider to implement solutions, as reasonably suggested by Customer, at Provider’s cost, in order to address such personnel issues leading to the failures. However, in the event that Provider Personnel have been trained in accordance with the training materials provided by Customer and Provider Personnel have completed certification/accreditation in accordance with Customer’s standards, Customer shall be responsible for the costs of any such Customer-required additional training.

4. In addition, Provider shall ensure that all Provider Personnel performing the Services shall meet the specific requirements, if any, defined in each SOW.

2

Schedule 12.2

Facilities

1. Facilities Generally.

(a) Provider shall perform all Services using dedicated, secure facilities. Provider shall perform the Services in two separate facilities. To the extent either facility is not entirely dedicated to the provision of the Services to Customer, Provider shall create and utilize a segregated portion of the facility to perform the Services so that the Services are not performed in areas within the facility in which Provider is performing services for any other customer unless on a temporary basis and Provider has received Customer’s prior written consent. Provider shall perform the Services for Customer at the location(s) provided under the SOWS (the “Provider Facilities”).

(b) Any Provider-proposed relocation of the facilities from which any of the Services are provided is subject to the following:

(i) no less than one hundred and eighty (180) days before the proposed relocation, Provider shall provide notice of the proposed relocation and an analysis of the proposed impact to Customer;

(ii) Provider shall develop a migration plan reasonably acceptable to Customer which is designed to minimize disruptions or degradation in Service to Customer during the migration period;

(iii) any relocation is subject to Customer’s prior written consent, which consent may not be unreasonably withheld. Provider acknowledges that Customer’s reasonable concerns with respect to the security, staffing, physical capabilities, and related factors of the new facility shall be a sufficient basis for Customer to withhold approval of such relocation;

(iv) Provider shall assume financial responsibility for any of its transition costs, unless otherwise agreed by the Parties;

2. Provider Facilities.

Provider shall be responsible for providing the Provider Facilities from which Provider shall provide all Services. In addition to being segregated, the space in the facilities from which Services will be provided for Customer shall be contiguous, unless otherwise agreed to in advance by the Parties or as otherwise approved by Customer. Each facility shall comply with all applicable laws, including but not limited to local health and safety standards, and be at least comparable to other facilities of similar services providers in the same country that house well-managed back-office transactions processing and customer contact operations performing services similar to the Services. Provider shall provide the facilities in time so that the Services may be transitioned to the Provider Facilities in accordance with the Pre-Services Migration Plan, as provided in Schedule

1

4.2. Provider shall provide space in each facility, at no charge to Customer, for Customer employees and consultants, as requested by Customer and the requirements shall be set forth in the applicable SOW or during the Controlled Migration Period as contemplated in Section 22.3 of the main text of the Agreement. This includes heat, light, power, air conditioning, uninterruptible power supply (if any), and other similar utilities, office space, furniture, secure storage space and equipment staging facilities, telephone service in support of the Services, office support services (including security and janitorial), and coordination of facility access security requirements to be used by Provider in support of the Services. Provider will provide Customer with the same or similar access to Provider’s workplace services, such as parking and cafeteria facilities, if any, as Provider provides to its employees.

3. Customer Obligations.

(a) All Customer Data shall be maintained on servers located in the United States (the “Customer Facilities”).

(b) To the extent relevant to Provider performing its obligations under the Agreement or any SOW, Customer will inform Provider of any plans or determination to relocate the Customer Facilities so that Provider will have a reasonable amount of time to prepare for and implement such change or relocation as it impacts Provider.

4. Provider Obligations.

(a) Provider shall use the Customer Facilities for the sole and exclusive purposes of providing the Services under the Agreement. The use of Customer Facilities by Provider does not constitute a leasehold or other property interest in favor of Provider.

(b) Provider shall use the Customer Facilities in a manner that is coordinated, and does not interfere, with Customer’s business operations. To the extent that Provider operates the space in a manner that materially and unnecessarily increases facility or other costs incurred by Customer, Customer shall notify Provider of such costs and Provider shall take such steps as may be necessary to reduce such facility costs to a level reasonably acceptable to Customer. Provider shall be responsible for any damage to the Customer Facilities resulting from the abuse, misuse, or negligence of Provider or other failure to comply with its obligations respecting the Customer Facilities, and Customer shall have the right to set off the reasonable and actual cost of repairing any such damage against charges payable to Provider under the Agreement.

2

Schedule 12.3

Equipment

1. Equipment Generally

a. Provider shall acquire and shall be responsible for all maintenance, modifications, repairs, upgrades and replacements of Equipment needed or used by Provider to provide the Services.

b. Provider shall keep such Equipment in good working condition at all times in accordance with the manufacturer’s recommended specifications.

c. Provider shall consult with Customer before introducing any new Equipment, the compatibility of which with Customer’s equipment and systems has not been tested and confirmed.

2. Special Terms

Provider Default. In the event Customer elects to exercise its option to terminate the Agreement and exercise operational control over the facilities, assets and operations used to provide the Services pursuant to Section 22.2.1.3 of the main text of the Agreement, Customer shall have the right to use the Equipment and, at Customer’s option, the right to require Provider to assign its right, title and interest in and to the Equipment to Customer in exchange for Customer’s payment of a amount equal to the reasonable depreciated value of such Equipment.

1

Schedule 13.3

Terms Applicable to New Intellectual Property

1. Newly Developed Intellectual Property. With respect to any new intellectual property developed by Provider, its Affiliates, its contractors or any of their respective employees in the course of providing the Services, including, without limitation, works of authorship (including software) generated under the Agreement such as manuals, training materials and other materials containing technical or operational procedures, including the Administrative Manuals but excluding Provider Property (“New Intellectual Property”), the following shall apply:

(a) New Intellectual Property shall be deemed “works made for hire.” To the extent any of the New Intellectual Property is not deemed “works made for hire” by operation of law, Provider hereby irrevocably assigns, transfers and conveys to Customer without further consideration all of its right, title and interest in such New Intellectual Property, including all rights of copyright, trade secret or other proprietary rights in such materials, and patent rights. Provider agrees to execute any documents or take any other actions as may reasonably be necessary, or as Customer may reasonably request, to perfect Customer’s ownership of any such New Intellectual Property; should the law award ownership of any intellectual property right mentioned or unmentioned above to Provider or any Provider Personnel, agent or contractor, Provider shall take whatever steps are necessary to accomplish the intent of this paragraph.

(b) Without limiting the generality of Section 1(a) of this Schedule 13.3, Provider hereby irrevocably acknowledges and agrees that, as between the Parties, all right, title and interest in the Developed Information and the Developed Software (as each such term is defined in Section 2 below) shall vest in Customer. In addition, any and all rights, title and interest which Provider may have in the Developed Information and Developed Software, including any patent, copyright, trademark, trade secret, know-how or other proprietary rights, under the laws of the United States or of any other jurisdiction, are hereby irrevocably assigned by Provider to Customer in perpetuity without any additional consideration therefor. Provider agrees to assist and cooperate with Customer, at no additional cost but at Customer’s expense, in obtaining, enforcing and/or defending such patents, copyrights, trademarks, trade secret, know-how other proprietary rights and other protection therefor as Customer may elect to pursue and shall execute such documents as counsel for Customer may request relating thereto.

(c) Provider agrees that it will and, where applicable, have all Provider Personnel, disclose and furnish promptly to Customer any and all technical information, computer or other apparatus programs, specifications, drawings, records, documentation, works of authorship or other creative works, ideas, knowledge or data, written, oral or otherwise expressed, originated or developed by Provider or by any Provider Personnel as a result of work performed hereunder. Customer shall have perpetual and exclusive use and ownership, including copyright, of the reports, information, and results developed under the Agreement. In the event that

1

any work developed hereunder includes material previously copyrighted by Provider, any Provider Personnel or any third party, Provider shall grant, or cause such Provider Personnel or third party to grant, Customer a royalty-free, nonexclusive, perpetual and unrestricted license to use, reproduce, modify, publish, translate and sublicense the same to third parties without in any way accounting to Provider, any Provider Personnel or any third party.

2. Defined Terms. For purposes of this Schedule 13.3, the following terms shall be defined as follows:

(a) “Developed Information” means any and all technical information, programs, specifications, drawings, records, documentation, works of authorship or other creative works, ideas, knowledge or written, written, oral or otherwise expressed, originated or developed by Provider or by any Provider Personnel as a result of the Services performed under this Agreement or any SOW.

(b) “Developed Software” means any and all source and object code, computer programs, electronic instructions, programming aids, translations, compilers, databases, functional specifications and documentation used to maintain, describe and use the software code and other related programs.

2

Schedule 14.5

Data Security and Privacy Requirements

1. Safeguarding Customer Data.

(a) Provider shall establish and maintain safeguards against the destruction, loss or alteration of Customer Data in the possession or control of Provider which are no less rigorous than those maintained by Customer as of the Effective Date, as specified to the Provider Account Manager, and are no less rigorous than those maintained by Provider for its own information of a similar nature, but in no event shall Provider use less than commercially reasonable efforts to safeguard such Customer Data. Customer shall have the right to establish backup security for Customer Data and to keep backup Customer Data and Customer Data files in its possession if it chooses.

(b) Without limiting the generality of Section 1(a) of this Schedule 14.5:

(i) Provider Personnel shall not attempt to access, or grant access to, any Customer Data which they are not permitted to access under the Agreement. If such access is attained (or is reasonably suspected), Provider shall immediately report such incident to Customer, describe in detail the accessed Customer Data, and if applicable return to Customer any copied or removed Customer Data.

(ii) Provider will use commercially reasonable efforts to use and follow the following access control services and procedures: (A) implement measures to restrict electronic access to Customer Data to only authorized personnel that are subject to nondisclosure agreements for the protection of Customer information (B) unless otherwise specified in a SOW, ensure that all Provider Personnel who access or submit material to Customer’s systems are uniquely identified to and authenticated by the Provider hosted systems and Customer’s systems (Provider shall not use any form of generic or shared user identifier); (C) enforce the principle of “least privilege,” as Directed by Customer, namely, that authorized personnel only have the level of access to Customer’s systems required to perform their job functions in providing the Services to Customer; (D) implement and maintain strong, industry standard encryption techniques for all Customer Data transmitted over any data network (for example, SSL for Web browser sessions, or PGP file encryption for bulk data transfers) (all encryption mechanisms employed by Provider must be approved in advance, in writing, by Customer); (E) restrict access to all Customer’s customers’ or providers’ data, personally identifiable information, and other data identified by Customer as “sensitive” or “confidential” stored on backup media, in hardcopy form or in any other format to only those employees who require such access to accomplish their job functions in performing the Services and store such data in a physically secure

1

location; (F) remove all Customer data and data identified as “sensitive” or “confidential” from any media, whether magnetic, optical or any other form, before disposing of such media (by way of example only, and without limitation, an acceptable form of data removal for magnetic media would be degaussing); and (G) unless receiving prior written permission, Provider will enforce a “paper destruction” rule. Sensitive and private customer information will be destroyed immediately after there is no longer need for that information, i.e. at the end of the customer interaction.

(iii) Provider shall utilize commercially reasonable efforts, including through systems security measures, to guard against the unauthorized access, alteration or destruction of all Licensed Software, Customer Software and Customer Data. Unless otherwise specified in the Administrative Manuals on a case-by-case basis or as Directed by Customer, such measures shall include the installation of software which: (A) requires all users to enter a user identification and password prior to gaining access to the information systems; and (B) controls and tracks the addition and deletion of users.

(iv) Provider will use commercially reasonable efforts to use and follow the following computer virus detection/scanning services and procedures: (A) employ, implement and maintain the then current commercially available computer virus detection/scanning program (including, without limitation, a feature to prevent the spread of computer viruses between parties which access or exchange data or files through network connectivity) prior to sending any data, files or other material to Customer and/or accessing or submitting the same to Customer’s call management systems and, upon detecting an actual, potential or suspected computer virus, notify Customer and cease sending data and shall not resume the same until the computer virus has been eliminated or contained to the satisfaction of Customer, and (B) install and use such computer virus detection/scanning on all data sending mechanisms as well as at any other points reasonably requested by Customer.

(c) At no time during the Term of the Agreement shall Provider or any Provider Personnel make or retain in its possession hard or electronic copies of any Customer Data, except as expressly may be required to provide the Services.

(d) Provider shall disclose to Customer Provider’s physical, personnel, communications, data and operational and security policies, procedures and methodologies and all hardware, software, telecommunications and other technology used to implement such policies, procedures and methodologies, including, without limitation, those related to network firewalls, access control, system administration and maintenance, intrusion detection, virus detection and eradication, data encryption, data backup, system restoration, redundant systems, backup power and disaster recovery used by Provider to meet Customer’s security requirements set forth in this Schedule (singularly or collectively, “Provider’s Security Practices”).

2

(e) Customer may conduct a review and audit of Provider’s Security Practices. At the conclusion of such audit (a “Security Audit Completion”), Customer may advise Provider of suggested modifications or additions to its Provider Security Practices in order to comply with Customer’s security requirements. Provider agrees that beginning upon the Security Audit Completion it will use commercially reasonable efforts to comply with the suggested modifications or additions to meet Customer’s security requirements. In addition, Provider agrees to work with Customer to implement acceptable recommendations that Customer makes with respect to Provider’s Security Practices.

2. In the event of any actual or suspected misuse, disclosure or loss of, or inability to account for, any Customer Data, Provider promptly shall (a) notify Customer upon becoming aware thereof; (b) promptly furnish to Customer full details of the unauthorized possession, use, or knowledge, or attempt thereof, and use reasonable efforts to assist Customer in investigating or preventing the reoccurrence of any unauthorized possession, use, or knowledge, or attempt thereof, of Customer Data; (c) take such actions as may be necessary or reasonably requested by Customer to minimize the violation; and (d) cooperate in all reasonable respects with Customer to minimize the violation and any damage resulting therefrom.

3. Provider’s obligations respecting Customer Data shall survive expiration or termination of the Agreement for a period of five (5) years, except: (A) for medical, provider, subscriber and customer information, which shall survive indefinitely, and (B) as otherwise provided by law.

4. HIPAA Privacy and Security Requirements.

(a) Definitions.

(i) The “Privacy Rule” shall mean the HIPAA regulations governing individually identifiable health information codified at 45 C.F.R. Parts 160 and 164.

(ii) “Protected Health Information” or “PHI” shall have the meaning given to such term under the Privacy Rule, including 45 C.F.R. § 160.103, created or received by Provider under the terms of the Agreement.

(iii) “Covered Entity” shall have the meaning given to such term under the Privacy Rule, including 45 C.F.R. § 160.103.

(iv) “Business Associate” shall have the meaning given to such term under the Privacy Rule, including 45 C.F.R. § 160.103.

(b) Obligations of Provider under the Privacy Rule. In order to receive the Services, Customer may be required to disclose certain PHI to Provider, and Provider may receive such PHI or create PHI on Customer’s behalf in connection with its obligations under the Agreement. Customer and Provider shall protect the privacy and provide for the security of PHI disclosed to Provider pursuant to the

3

Agreement in compliance with the Privacy Rule. Provider may use and disclose PHI created or received pursuant to the Agreement only as follows:

(i) To Carry Out the Purposes of the Agreement. Provider may use and disclose PHI received from Customer or created on behalf of Customer to perform its obligations under the Agreement solely in accordance with the specifications set forth in the Agreement or as required by law.

(ii) Nondisclosure. Provider shall not use or further disclose the PHI received from or created on behalf of Customer in a manner that would violate the requirements of the Privacy Rule (including the minimum necessary requirements), if done by Customer or any covered entity that Customer serves in the capacity of a business associate.

(iii) Safeguards. Provider shall use appropriate safeguards to prevent use or disclosure of the PHI other than as provided for under the Agreement, including adopting policies and procedures regarding the safeguarding of PHI; providing training to relevant employees, independent contractors and subcontractors on such policies and procedures to prevent the improper use or disclosure of PHI; and implementing appropriate technical safeguards to protect PHI.

(iv) Reporting Improper Disclosures. Provider shall report in writing to Customer any use or disclosure of the PHI not provided for under the Agreement, of which Provider becomes aware promptly but in no event later than five (5) Business Days of first learning of any such use or disclosure.

(v) Use of Agents and Subcontractors. Provider shall ensure that any approved subcontractors or agents to whom Provider provides PHI created or received pursuant to the Agreement agree to the same restrictions and conditions, as set forth in this Schedule, that apply to Provider with respect to such PHI.

(vi) Availability of Information to Customer. Within ten (10) Business Days of receipt of a request from Customer, Provider shall, in accordance with such Customer request, make PHI available to Customer, provide Customer access to PHI, and/or make a copy of PHI available to Customer, all in accordance with the Privacy Rule, including 45 C.F.R. § 164.524. If and to the extent that any Provider Personnel receives, directly or indirectly, a request from an individual requesting PHI, Provider shall use commercially reasonable efforts to notify Customer in writing promptly after and of such individual’s request for PHI, as set forth in the previous two sentences, but in no event later than ten (10) Business Days of receiving such request. If an individual requests PHI directly from Provider, Provider shall not give the individual access to the PHI unless

4

access is approved by Customer. Customer shall have full discretion to determine whether the individual shall be given access.

(vii) Amendment of PHI. Within ten (10) Business Days of a request from Customer, Provider shall make Customer’s PHI available to Customer as it may request to fulfill its obligations to amend such PHI pursuant to the Privacy Rule, including 45 C.F.R. § 164.526. Provider shall incorporate any amendments to Customer’s PHI into any and all PHI Provider maintains. If the individual requests an amendment to PHI directly from Provider, Provider shall not amend the PHI unless directed by Customer. Customer shall have full discretion to determine whether the amendment shall occur. If and to the extent that any Provider Personnel receives, directly or indirectly, a request from an individual requesting PHI, Provider shall use commercially reasonable efforts to notify Customer in writing promptly after and of such individual’s request for an amendment to PHI, as set forth in the previous two sentences, but in no event later than ten (10) Business Days of receiving such request.

(viii) Accounting of PHI. Within ten (10) Business Days of notice by Customer of a request for an accounting of disclosures of PHI by Provider or its subcontractors, Provider shall make available the account of such disclosures to Customer as requested for Customer to fulfill its obligations to provide an accounting pursuant to the Privacy Rule, including 45 C.F.R. § 164.528. Provider shall implement a process that allows for such an accounting. If the individual requests an accounting of disclosures of PHI directly from Provider, Provider shall not provide the individual the account of such disclosures unless directed by Customer. Customer shall have full discretion to determine whether the individual shall be given such accounting. If and to the extent that any Provider Personnel receives, directly or indirectly, a request from an individual requesting PHI, Provider shall use Commercially Reasonable Efforts to notify Customer in writing promptly after and of such individual’s request for an accounting of disclosures of PHI, as set forth in the previous two sentences, but in no event later than ten (10) Business Days of receiving such request.

(ix) Availability of Books and Records. As required by the Privacy Rule, Provider shall make its internal practices, books, and records relating to the use and disclosure of PHI received or created pursuant to the Agreement available to the Secretary of Health and Human Services for purposes of determining Customer’s (or any covered entities that Customer services) compliance with the Privacy Rule.

(x) Record Retention. Provider and Customer acknowledge and agree that Provider will not retain any PHI received from Customer, and that Customer shall be solely responsible for retaining all PHI created during the Term of the Agreement, unless otherwise agreed by the Parties.

5

(c) Audits and Inspection. If Customer, in good faith, believes that Provider has breached any provision of this Schedule, then upon providing written notice as soon as is reasonably possible, Customer may inspect Provider’s facilities, systems, books, records, agreements, policies and procedures relating to the use or disclosure of PHI pursuant to the Agreement, for the purpose of determining whether Provider has complied with the Agreement.

(d) Modifications to Privacy Rule. If the Privacy Rule is modified in any way impacting the Agreement, the Parties shall, at least sixty (60) days prior to the compliance date for such modifications, amend the Agreement to ensure compliance with such modifications. Actions to achieve such compliance may be new Services covered by a new SOW.

(e) Interpretation of the Agreement. Any ambiguity in the terms set forth in this Schedule shall be construed to permit Customer’s full compliance with the Privacy Rule.

5. At least sixty (60) days prior to the compliance date for any new HIPAA regulation, the Parties shall review the Agreement, and, as necessary, modify the Agreement to incorporate any relevant provisions. Actions to achieve such compliance may be new Services covered by a new SOW.

6

Schedule 15.1

Establishment of Provider Compensation Under SOWS

This Schedule 15.1 shall provide the methodology by which compensation will be calculated initially for each SOW unless the Parties otherwise agree. Unless otherwise specified, all billing and payment of the charges specified in this Schedule 15.1 shall be conducted in accordance with Section 15 of the main text of the Agreement.

I. Onshore Preparatory Activities

1.    Transition Workshops. Prior to the commencement of certain general categories of proposed Services (e.g. back-office billing transactions processing, customer services), the JSC, with approval from the Governance Board, may from time to time approve a transition workshop, as per Provider FACTS transition methodology, which will layout the roadmap for the entire program in relevant waves and assign tasks to each workstream and determine the program management, operations, resources, data transfer, infrastructure, technology, telecommunications, governance, contracting and other details necessary to provide the proposed Services. It is contemplated that each transition workshop will be conducted at Customer’s premises. Each Party shall bear its own costs of participating in any such workshop, including but not limited to any travel and lodging expenses.

2.    Information Gathering Activities. Prior to commencement of the Ramp Up Period for each SOW, the JSC, with approval from the Governance Board, will establish whether any compensable information gathering activities are required of Provider and the extent of any required training. To the extent any such activities are determined to require the presence of Provider Personnel in the United States, whether at Customer locations, or otherwise, the JSC will prepare and approve a proposed budget for the activities incorporating the following rates:

Rate Card for Onshore training Documentation and Onshore Site Immersion
Role	Per Diem Cost (US$)	Travel Cost (US$)
Team Leader	*	*
Offshore Trainer	*	*
Quality Assurance	*	*
Training Manager	*	*
HC (Agent)	*	*
Team Manager	*	*

1

3. Standard Terms and Assumptions

þ The per diem allowance is a per calendar day rate and is inclusive of all lodging, boarding and transportation expenses for the duration of the approved stay. Provider shall not be required to submit copies of receipts or other documentary evidence of its per diem or travel costs unless specifically requested by Customer.

þ If Provider Personnel are required by Customer to travel to and stay in a location with a higher cost of living than that of Lake Forest California, the location of Customer’s headquarters, the Parties shall adjust the per diem and travel allowances set forth in the table above as mutually agreed to reflect such higher costs.

þ The designated Provider Personnel will be dedicated to Customer for the duration of the assignment.

þ The cost of air-travel is for round-trip international travel (India to USA) and includes visa and travel insurance charges.

þ For the avoidance of doubt, Customer shall provide such reasonable access to operating sites, equipment and any other resources necessary to allow Provider Personnel to perform the required tasks.

þ For onshore resources, Customer will provide, at the minimum, the following:

• Desk space

• Laptops/ Desktops with Customer LAN access

• Internet access

• All software/ tools required to complete the assignment

þ Any additional out-of-pocket expenses like domestic travel by Provider Personnel within the United States shall be reimbursed at cost by Customer to Provider, subject to the prior written consent by Customer.

Once approved by the JSC, Governance Board and the Parties, the budget will be incorporated in the applicable SOW or otherwise agreed to by separate letter of engagement and will define the maximum amount Provider will receive as compensation from Customer in connection with such activities.

II. Train the Trainer Sessions.

1.    Onshore Sessions. Upon written request by Customer, Provider will dispatch Provider Personnel to the United States to be trained on the processes in scope of one or more SOWs. These sessions are referred to herein as “Onshore Train the Trainer” sessions. If so agreed, the Provider Personnel will also prepare the training documentation during this session. To the extent the Parties agree that such training is necessary for a particular SOW, the JSC in

2

consultation with the Parties will prepare a proposed budget for the Onshore Train the Trainer session for that SOW incorporating the following rates:

Train the Trainer Rate Card
Role	Typical FTE Numbers	Per Diem Cost (US$)	Travel Cost (US$)
Team Leader	1	*	*
Offshore Trainer	1	*	*
Quality Assurance	1	*	*
Training Manager	1	*	*
HC (Agent)	5	*	*
Team Manager	1	*	*

2. Standard Terms and Assumptions

þ The per diem allowance is a per calendar day rate and is inclusive of all lodging, boarding and transportation expenses for the duration of the approved stay. Provider shall not be required to submit copies of receipts or other documentary evidence of its per diem or travel costs unless specifically requested by Customer.

þ If Provider Personnel are required by Customer to travel to and stay in a location with a higher cost of living than that of Lake Forest California, the location of Customer’s headquarters, the Parties shall adjust the per diem and travel allowances set forth in the table above as mutually agreed to reflect such higher costs.

þ Provider Personnel will be dedicated to Customer for the duration of the assignment.

þ The cost of air-travel is for round-trip, international travel (India to USA) and includes visa and travel insurance charges.

þ In the case of Onshore Train the Trainer sessions, Customer shall provide such reasonable access to operating sites, equipment and any other resources necessary to allow Provider Personnel to perform the required tasks, including the following:

• Desk space

• Laptops/ Desktops with Customer LAN access

• Internet access

• All software/ tools required to complete the assignment

3

þ Any additional out-of-pocket expenses like domestic travel within USA should be payable by Customer, subject to prior written consent by Customer to Provider.

Once approved by the JSC, Governance Board and the Parties, the Onshore Train the Trainer budget will be incorporated in the applicable SOW or otherwise agreed to by separate letter of engagement and will define the maximum amount Provider will receive as compensation from Customer in connection with Onshore Train the Trainer activities for the SOW in question.

3.    Offshore Sessions. Alternatively, Customer may elect to dispatch its own personnel to India to conduct such training (“Offshore Train the Trainer” sessions). In the case of Offshore Train the Trainer sessions, Customer shall be responsible for all expenses of the dispatched Customer personnel but shall not be required to pay Provider any per diem fees or expenses for the Provider Personnel who participate in such sessions.

þ In the case of Offshore Train the Trainer sessions, Provider shall provide such reasonable access to operating sites, equipment and any other resources necessary to allow Customer personnel to perform the required tasks, including the following:

• Desk space

• Lap-tops/ Desktops with Customer LAN access

• Internet access

• All software/ tools required to complete the assignment

III. Ramp Up Period Rates

1.    Determination of Applicable RU Rates

During the Ramp Up Period, Provider shall be compensated for the Services it provides on the basis of the cost of its personnel based on monthly rates derived from the RU Rates. Such RU Rates shall remain fixed through *, but may be adjusted on an annual basis thereafter in accordance with Schedule 15.4. The RU Rates are described below as annual rates per FTE but will be charged on a per FTE per month basis with billing to be on a monthly basis. As a part of the planning process for each SOW, the JSC in consultation with the Parties will determine and agree upon initial staffing and complexity levels for the Ramp Up Period and hence the RU Rates applicable during such Period.

RU Rate Card (US$) per FTE Per Annum

*

Guidelines for Classification of Low, Medium and High Complexities

*

4

2.    RU Rate Inclusions and Exclusions

The RU Rates are “fully loaded” per FTE per annum rates and include the following:

þ Agent costs and supervisory staff, including:

• Operations Managers, Team Leaders

• Quality Assurance Associates, Dedicated Process Trainer

þ The following supervisory ratios will be adhered to:

Supervisory Position	Ratio
Team Leader to Agent	*
Team Manager to Agent	*
Quality Assurance Associate to Agent	*

þ Dedicated seats—The seats will only be used for Customer

þ Pricing is only for logged in hours (* hours per FTE per annum). All costs incurred on account of additional headcount required for holidays, leave, absenteeism, lunch and breaks are to be borne by Provider. If, however, a Provider Personnel work more than * hours (* hrs/* months) in a particular month, then Customer will pay a prorated portion of such Personnel’s RU Rate for the additional hours.

þ Customer will also pay the RU Rate for time spent by Provider Personnel to attend updated compliance training as may be required by Customer from time to time; provided, however, Customer shall not be required to pay for the training-related costs of new Provider Personnel who are replacing previously trained Provider Personnel or previously trained Provider Personnel who require remedial training.

þ Offshore training costs (for Generic and Process training) will be borne by Provider:

• Voice Processes - total * - * of Generic, Induction and Voice and Accent training; * of process specific classroom training.

• Data Processes - total * - * of Generic, Induction training; * of process specific classroom training.

• Costs of trainers, training rooms and all required training aids to deliver process specific training have been included.

• Any additional process training that exceeds the above-mentioned timelines due to complexity will be charged at the rate of $*, provide such additional training and fees need to be agreed to by the Parties in writing prior to the costs being incurred.

5

þ All connectivity and related equipment from Provider’s centers in India to Provider’s US POPs in Los Angeles and New York/

þ Bandwidth for the purpose of this pricing is assumed at * kbps per voice seat and * kbps per data seat with * % redundancy

þ The following hardware and software costs have been included:

*

The RU Rates do not include:

*

IV. Steady State Period Rates

1.    Determination of Applicable SS Rates

*

Once established, the SS Rate shall apply for the particular Service until it is adjusted in accordance with Schedule 15.4.

2.    SS Rate Inclusions and Exclusions

The SS Rates are fully loaded rates and include the following:

*

þ The following hardware and software costs have been included:

*

The SS Rates do not include:

*

V. Periodic Review Meetings

Customer may require that certain Key Provider Personnel travel to the United States no more frequently than twice each year during the term of the Agreement in order to participate in operations review and/or training. The Key Provider Personnel required by Customer to attend such meetings (other than the Provider Account Manager) will be reimbursed one-half of their actual travel costs, if they are above the Manager level, and at the rates set forth in the table contained in Part II of this Schedule 15.1, if they are Managers.

VI. Travel for Activities related to Processes that are Currently Offshore

6

Customer may require that various Provider Personnel travel to the United States in order to enable/ facilitate the processes that are anticipated to be offshore based on the Waves of Services specified in Schedule 4.2 of this Agreement. All Provider Personnel traveling for this purpose who are preapproved by Customer in writing will be reimbursed at the rates set forth in the table contained in Part II of this Schedule 15.1.

7

Schedule 15.4

Rate Adjustments and Benchmarking

1. Rate Adjustments

(a) RU Rates. The RU Rates set forth in Schedule 15.1 shall remain fixed through * and thereafter shall increase by * at the start of *.

(b) SS Rates. The SS Rates set forth in each SOW shall remain fixed up for the initial * following the relevant SS Commencement Date and thereafter shall increase by * on the * and each subsequent * thereof. The SS Rates shall be subject to further adjustments, however, from time to time upon the occurrence of any of the following events:

(i) Upon each of the * of the relevant SOW Commencement Date, each SS Rate shall decrease by * to reflect the contemplated efficiency and productivity gains by Provider Personnel as depicted in the example contained in the Table 1 below;

(ii) Upon any Customer technology enhancements or Customer-proposed process improvements that result in productivity gains, the SS Rate of each affected Service shall decrease to reflect the full amount of such productivity gains;

(iii) Upon any Provider technology enhancements after the second anniversary of the SS Commencement Date that result in productivity gains, the SS Rate of each affected Service shall decrease to reflect * of the amount of such productivity gains, provided Customer bears the costs of such enhancements (a) in their entirety, in the case of Customer-specific enhancements, or (b) on a pro rata basis, in the case of enhancements that Provider can use to benefit multiple customers;

(iv) Once the number of Provider Personnel engaged in the provision of Services in a Steady State Period across all SOWs under the Agreement has reached the equivalent of *, upon any sustained increase in the average monthly volume of Services requested by Customer under the Agreement over * that is more than * greater than the volume in the preceding *, the Parties shall apply the discounts set forth in Table 2 below to the relevant SS Rate to reflect such increase in volume; and/or

(v) Upon the completion of any benchmarking study conducted in accordance with the procedures specified below that indicates that the SS Rates and/or performance of Provider is not in the * (as such term is defined below), the Parties shall negotiate in good faith an equitable adjustment to the SS Rate that takes into account the results of the study and particular circumstances relating to Provider’s provision of the Service in question.

1

Table 1

	Rate On SS Commencement Date For Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7
Adjusted SS Rate For Prior Period ($)	*	*	*	*	*	*	*
YOY Increase @* ($)	*	*	*	*	*	*	*
* % Decrease in Years 1 and 2 Due to Productivity and Efficiency Improvements ($)	*	*	*	*	*	*	*
Final SS Rate Efficiency($)	*	*	*	*	*	*	*

The foregoing example uses $* as the initial SS Rate that applies during the * following the SS Commencement Date. On the * date thereof, the then-prevailing SS Rate of $* will be adjusted simultaneously by both the projected * in labor costs and the projected * in units of labor utilized per transaction (resulting from the presumed efficiency gains and productivity increases). On the * of the SS Commencement Date and each * thereafter, the then-prevailing SS Rate ($* in Year 2 of our example), will be adjusted, first, by the annual projected * in labor costs and the labor cost-adjusted rate then further adjusted by the second projected * in units of labor utilized per transaction. The then-prevailing SS Rate will thereafter be adjusted by the projected * in labor costs on each subsequent * date and such other adjustments as provided in this Schedule 15.4 from time to time.

Table 2

2

Increase in Volumes and Applicable Discounts
Overall MSA volumes	*	*	*	*	*	*	*
% Discount to each SS Rate	*	*	*	*	*	*	*

2. Benchmarks

(a) Customer shall have the right during the SOW Term, beginning upon the * of the SS Commencement Date, to benchmark the SS Rates for, and Provider’s performance of, all or a portion of the Services, provided that the benchmarking of any particular SS Rate cannot be undertaken more than * in any rolling * period.

(b) A benchmarking study may be conducted by Customer utilizing its own forces or such consultants as Customer may deem appropriate, and Customer may request an adjustment to the compensation Provider receives hereunder on the basis thereof. If Provider agrees to such rate adjustment, then the Agreement and any applicable SOWs shall be amended accordingly. If Provider does not agree to Customer’s request, Customer may cause the study to be conducted by an independent, third party, industry-recognized benchmarking service provider designated by Customer (the “Third Party Benchmarker”). The Parties shall cooperate with the Third Party Benchmarker, including, as appropriate, making available knowledgeable personnel and pertinent documents and records. The Third Party Benchmarker shall execute a confidentiality agreement that contains confidentiality terms and conditions substantially similar to those set forth in Section 14 of the main text of the Agreement, unless there already exists a confidentiality agreement with the Third Party Benchmarker. All internal and third party costs incurred by Customer in performing, or having a Third Party Benchmarker perform, the benchmarking study shall be borne by Customer.

(c) The Third Party Benchmarker shall perform the benchmarking in accordance with the Third Party Benchmarker’s documented procedures, which procedures shall be provided to the Parties prior to the start of the benchmarking process and to which the Parties may comment prior to the benchmarking. The Third Party Benchmarker shall compare the costs, charges and/or performance of the Services under the Agreement, as appropriate, for the Services being benchmarked to the costs, charges, and/or performance in a representative sample of well-managed back-office transactions processing and customer contact operations performing services similar in nature and volume to the Services. The Third Party Benchmarker shall select the representative sample from entities (i) identified by

3

the Third Party Benchmarker, and (ii) identified by a Party and approved by the Third Party Benchmarker. The following conditions apply to the representative sample: (A) it shall include at least four (4) entities and no more than twelve (12) entities, and (B) it may include entities that are outsourcing customers of Provider in related fields or similar types of transactions.

(d) The Third Party Benchmarker is to conduct a benchmarking as promptly as is prudent in the circumstances. In conducting the benchmarking, the Third Party Benchmarker shall normalize the data used to perform the benchmarking to accommodate, as appropriate, differences in volume of services, scope of services, service levels, financing or payment streams, and other pertinent factors. Each Party shall be provided a reasonable opportunity to review, comment on and request changes in the Third Party Benchmarker’s proposed findings. Following such review and comment, the Third Party Benchmarker shall issue a final report of its findings and conclusions.

(e) If in the final report of the Third Party Benchmarker, the SS Rates and/or performance to Customer under the Agreement for the benchmarked Services are not in the * of the representative sample (viewed from the perspective of Customer) (e.g., lower than * of the representative sample with respect to the SS Rates) (“*”), then the following shall apply:

(i) After collaboration with and discussion between the Parties with respect to the Third Party Benchmarker’s final report (which the Parties shall examine reasonably and in good faith), Provider shall give Customer written notification within * after issuance of the Third Party Benchmarker’s final report whether Provider accepts such final report. If Provider accepts such report, Provider promptly shall develop a plan and schedule, subject to the approval of Customer, to bring Provider within the * (or such other percentage as agreed by the Parties) in a reasonable period of time, but in any event no longer than within * (unless otherwise agreed by the Parties). Provider then shall implement the plan.

(ii) If (A) Provider does not provide notice that Provider accepts the Third Party Benchmarker’s final report within *, as provided above, or (B) the Parties are unable to agree on an appropriate plan and schedule to respond to the Third Party Benchmarker’s final report, as provided above, then the Parties will attempt in good faith to resolve the dispute in accordance with Section 24 of the main text of the Agreement, provided that, for the avoidance of doubt, the Parties agree that Provider’s failure to accept the Third Party Benchmarker’s final report shall not constitute a breach by Provider of the Agreement.

(iii) If in the final report of the Third Party Benchmarker, the SS Rates to Customer under the Agreement for the benchmarked Services are in the * of the representative sample (viewed from the perspective of most

4

beneficial to Customer), then no adjustment shall be made. In no event shall charges be increased as a result thereof.

5

Schedule 16.1

Audit Rights

1. Audit Rights.

(a) Provider shall maintain records and supporting documentation of all [financial and non-financial] transactions pertaining to the Services sufficient to permit a complete audit thereof in accordance with the provisions of this Schedule 16.1. Customer, and its auditors (including internal audit staff and external auditors), inspectors, regulators and other representatives as Customer may from time to time designate in writing (collectively “Customer Auditors”) shall have the right to perform up to * audits during any rolling * period at Customer’s cost and expense, subject to Section 1(c) below. An audit may consist, at Customer’s option, of financial audits, security audits and/or operations audits, as well as audits to confirm compliance with Sarbanes Oxley requirements; provided that Customer shall be entitled to additional audits (including as needed to meet Customer regulatory requirements or Customer contractual requirements) so long as Customer pays certain Provider costs relating to such audits, as described in Section 3 below. Provider shall provide to Customer Auditors access at all reasonable times and after reasonable notice (which shall not be less than 24 hours or more than one month), unless circumstances reasonably preclude such notice (and in the case of regulators at any time required by such regulators): (i) to any facility or part of a facility at which either Provider or any of its subcontractors is providing the Services, (ii) to Provider Personnel, and (iii) to data and records relating to the Services, for the purpose of performing audits and inspections of either Provider or any of its subcontractors during the Term and for the period Provider is required to maintain records hereunder to:

(i) verify the accuracy of charges and invoices;

(ii) verify the integrity of Customer Data and examine the systems that process, store, support and transmit that data; and

(iii) examine Provider’s performance of the Services and conformance to the terms of the Agreement including, to the extent applicable to the Services and to the charges therefor, performing audits: (1) of practices and procedures; (2) of systems, Equipment and Software; (3) of supporting information and calculations regarding compliance with Performance Standards; (4) of general controls and security practices and procedures; (5) of disaster recovery and back-up procedures; (6) of the efficiency of Provider in performing the Services; (7) of Provider’s charges for, or timing of, Services; (8) of the basis of Provider’s Services charges; and (9) as necessary to enable Customer to meet, or to confirm that Provider is meeting applicable regulatory and other legal requirements.

1

(b) Customer may require to be performed, no more than once annually, a SAS 70 audit of the facility or facilities from which Provider provides Services, by a certified public accounting firm or mutually agreeable alternative. In the event that Customer is the primary customer within such data center, then Customer shall be financially responsible for the costs for such SAS 70 audit; in any other event, Provider shall be financially responsible for the costs for such SAS 70 audit.]

(c) Notwithstanding the foregoing, if Customer has a reasonable belief to suspect any malfeasance or dishonest acts in relation to the Services, and to the extent that notice would undermine the efficacy of the audit, Customer Auditors shall be entitled to undertake such audit of Provider in relation to the Services as Customer reasonably deems appropriate without the foregoing notice. If any audit reveals that material operational problems or material financial issues exist, subject to Provider’s right to dispute such determination, Provider shall reimburse Customer for any reasonable and actual costs directly incurred in such audit, if the issues revealed (i) greater than $* of actual overpayments for a review period covering up to one year of charges, (ii) material data security lapses or breaches which were not cured by Provider as per provisions of the Agreement or (iii) material non-compliance with legal or regulatory requirements which was not cured by Provider as per provisions of the Agreement. In such event, Customer Auditors may conduct a follow-up audit, when reasonably deemed appropriate by Customer and at Provider’s cost and expense, to confirm that such issues have been conclusively and satisfactorily resolved. Provider shall, subject to Provider’s right to dispute such determination, respond promptly to any conclusions and recommendations reported as part of an audit, and the Parties will establish and monitor Provider’s schedule for implementation of such recommendations.

(d) Provider shall provide to Customer Auditors such assistance as they may reasonably require. Provider shall cooperate fully with Customer Auditors in connection with audit functions and with regard to examinations by regulatory authorities so that Customer Auditors may complete the audit as soon as possible. Provider shall promptly notify Customer once it determines that such cooperation may cause a problem or delay in providing the Services, and the Parties shall work together to avoid interference with Provider’s ability to provide the Services. Customer Auditors shall comply with Provider’s reasonable security and confidentiality requirements.

(e) Provider shall conduct audits of or pertaining to the Services in such manner and at such times as is consistent with the audit practices of well managed operations performing services similar to the Services. Provider shall perform a security audit at least annually.

2. Audit Follow-up.

(a) Following an audit or examination, Customer shall conduct, or request Customer Auditors to conduct, an exit conference with Provider to obtain factual

2

concurrence with issues identified in the review. Provider shall promptly brief Customer on the results of any review or audit conducted by Provider or its Affiliates (including by internal audit staff or external auditors), or by inspectors, regulators or other representatives (including internal and external auditors), relating to Provider’s operating practices and procedures to the extent relevant to the Services or Customer.

(b) Provider and Customer shall meet to review each audit report promptly after the issuance thereof and to mutually agree upon the appropriate manner, if any, in which to respond to the changes suggested by the audit report. Customer and Provider agree to meet and develop action plans to address (i) the audit, and (ii) regulatory findings and reports related to Provider’s operating practices and procedures related to the Services.

3. No Charge for Provider Assistance.

(a) There shall be no additional charge to Customer for any cooperation and assistance provided by Provider in connection with audits conducted pursuant to this Schedule 16.1.

3

Schedule 19.1

Insurance

1. Insurance Coverage. Provider shall during the Term have and maintain in force at least the following insurance coverages:

(a) Employer’s Liability Insurance or the local equivalent thereof, in all instances where employees are performing Services outside India, effective from the date Services are performed from such state, province or country and other similar social insurance with minimum limits per employee and per event of $5,000,000 and a minimum aggregate limit of $5,000,000 or the minimum limits required by law, whichever limits are greater.

(b) Statutory Workers Compensation Insurance or its equivalent where employees are performing services in India and, if outside India, then in accordance with the requirements of the country, state or province in which Provider’s employees are performing Services and other similar social insurance in accordance with the laws of the country, state or territory exercising jurisdiction over the employee.

(c) Comprehensive General Liability Insurance, including Products, Completed Operations, Contractual Liability for indemnified claims, Premises, Operations, Personal and Advertising Injury, Contractual and Broad Form Property Damage liability coverages, on an occurrence basis, with a minimum combined single limit per occurrence of $25,000,000 and a minimum combined single annual aggregate limit of $25,000,000. This coverage shall include standard independent contractors liability and shall provide for severability of interest in the event of a court adjudication or decree providing for it.

(d) Automotive Liability Insurance covering use of all non-owned and hired automobiles for bodily injury, property damage, uninsured motorist and underinsured motorist liability with a minimum combined single limit per accident of $1,000,000 or the minimum limit required by law, whichever limit is greater. For owned automobiles, Provider shall maintain insurance as per statutory requirements in the country where such vehicles are located with no less than the minimum limits required by the laws of that jurisdiction.

(e) Commercial Crime Insurance, including blanket coverage for Employee Dishonesty and Computer Fraud, for loss or damage arising out of or in connection with any fraudulent or dishonest acts committed by the employees of Provider, acting alone or in collusion with others, including the money, securities and funds of others in their possession, care, custody or control, with a minimum limit per event of $10,000,000.

(f) Errors and Omissions Liability Insurance covering liability for loss or damage due to an act, error, omission or negligence, or due to machine malfunction, including with respect to any billing errors, with a minimum limit per event of $25,000,000. This insurance shall also provide coverage for data privacy and network security

1

liability, Internet and electronic media liability, professional services liability, data recovery cost and business interruption coverage in the event of a network security breach, liability for identity theft, intellectual property coverage for advertising and technology products and expenses related to responding to any security/privacy breach. This insurance will provide coverage for all third party losses which includes but is not limited to losses sustained by Customer due to Provider’s errors and omissions in the performance of its obligations under the Agreement.

2. Insurance Terms.

(a) Provider shall provide standard additional insured endorsements naming Customer and each of its affiliates receiving Services under this Agreement of whom Provider is notified in writing for the policies described in Sections 1(c) through 1(d) and Section 1(f), and for Section 1(e) Provider shall provide an endorsement naming the Customer as a Loss Payee. The insurance coverages under Sections 1(a) through 1(h) of this Schedule shall be primary, except with respect to Section 1(c) of this Schedule for work performed at Customer Facilities, and all coverage shall be non-contributing with respect to any other insurance or self insurance which may be maintained by Provider. To the extent any coverage is written on a claims-made basis, it shall allow for reporting of claims until the later of one (1) year after the Term or the expiration of the period of the applicable limitations of actions. The Comprehensive General Liability Insurance shall contain appropriate waiver of subrogation and cross-liability endorsements or clauses.

(b) Provider shall cause its insurers to issue certificates of insurance evidencing that the coverages and policy endorsements required under the Agreement are maintained in force and that not less than thirty (30) days’ written notice shall be given to Customer prior to any modification, cancellation or non-renewal of the policies. The insurers selected by Provider shall be of good standing and authorized to conduct business in the jurisdictions in which Services are to be performed and amenable to suit and service of process within the United States. When the policy is issued each such insurer (or its reinsurer so long as the policies shall include appropriate “cut through” or direct access endorsements permitting direct access by the insured to the benefits of the reinsurance to the extent that the primary insurer shall fail) shall have at least an A.M. Best rating of A- VII and replacement coverage shall be sought if the insurer’s rating goes below B+ VII. Provider shall assure that its subcontractors, if any:

(i) are endorsed as additional insureds on Provider coverages specified by this Schedule; or

(ii) maintain:

(A) such insurance provided in Section 1(a) of this Schedule, with minimum limits of $5,000,000;

2

(B) such insurance provided in Section 1(b) of this Schedule;

(C) such insurance provided in Section 1(c) of this Schedule, with minimum limits of $25,000,000, which coverage shall be endorsed to name Provider as additional insured; and

(D) such insurance provided in Section 1(f) of this Schedule, which coverage shall be endorsed to name Provider as additional insured.

(c) In the case of loss or damage or other event that requires notice or other action under the terms of any insurance coverage specified in this Schedule, Provider shall be solely responsible to take such action. Provider shall provide Customer with contemporaneous notice and with such other information as Customer may request regarding the event. Moreover, Customer shall provide to Provider reasonable assistance and cooperation with respect to any insurance claim.

(d) Provider’s obligation to maintain insurance coverage shall be in addition to, and not in substitution for, Provider’s other obligations hereunder and Provider’s liability to Customer shall not be limited to the amount of coverage required hereunder.

3

Schedule 23.2.1

Termination / Expiration Assistance

1. Personnel.

(a) Prior to expiration or once notice of termination is given for any reason, Provider shall provide to Customer or Customer’s designee such information as Customer may reasonably request relating to all Provider Personnel who are employed or contracted by Provider to perform the Services or functions under the Agreement (including information and copies of any records relating to staffing levels, job titles, salary and benefit levels, length of service, etc.), provided that:

(i) Provider shall provide to Customer salary ranges for Provider positions (i.e., minimum salary, median salary, and maximum salary for those employees performing a specific job function); and

(ii) Provider shall not be required to disclose any Provider Confidential Information to a Customer designee unless and until such designee has agreed in writing to protect the confidentiality of such Confidential Information in a manner substantially equivalent to that required of Customer under the Agreement.

(b) Upon termination of this Agreement, for the applicable period set forth in Sections 23.2.2.1-23.2.2.4 of the main text of the Agreement (each, a “Termination Period”):

(i) Provider shall not make any material changes to the terms and conditions of employment or engagement of Provider Personnel; provided that this Section 1(b)(i) shall not apply with respect to changes that affect Provider Personnel generally (as opposed to the specific targeting of some or all of the personnel working on the Customer account);

(ii) Provider shall not terminate any such employment or engagement contract (other than for misconduct or performance-related issues), nor reassign such Provider Personnel away from performance of functions under the Agreement, without Customer’s prior written consent.

Upon the completion of the Termination Period, the provisions of Sections 1(b)(i) shall continue in effect but Section 1(b)(ii) shall no longer apply.

2. Software. If Customer is entitled pursuant to the Agreement to a license or other rights relating to any software owned or licensed by Provider, Provider shall provide such license or other rights to Customer. To the extent that (i) the Agreement requires Provider Software that is acquired during the Term to be in Customer’s name, and (ii) Provider fails to procure such Provider Software in Customer’s name, Provider shall obtain and provide to Customer a license for Customer to Use such Software upon termination/expiration of the Agreement.

1

3. Source Code. Except for Provider Software, Provider shall provide source code and artifacts (e.g., documentation, use cases, test scripts, design models, activity diagrams, systems configuration) which Provider has in its possession or its subcontractors have in their possession (i) for any modification or enhancement made hereunder by Provider to Customer Software or Licensed Software; (ii) for any software developed pursuant to the Agreement which Customer owns or with respect to which Customer is otherwise entitled to source code pursuant to Schedule 13.3 of the Agreement; and (iii) as otherwise provided in the Agreement. Provider shall provide such source code and artifacts as described in the previous sentence (A) upon any request from Customer during the Term, and (B) upon termination or expiration of the Agreement.

4. Third Party Services and Third Party Service Contracts. Provider shall make available to Customer or its designee, pursuant to reasonable terms and conditions, any third party services then being utilized by Provider to provide the Services to Customer, including services being provided through third party service or maintenance contracts on Equipment and Software, provided that:

(a) with respect to software that is not generally available for which Provider has previously obtained rights of assignment in favor of Customer and the right for Customer to receive maintenance for such software upon termination or expiration of the Agreement, Provider shall comply with the requirements of this Section 4; and

(b) with respect to (i) generally available software, and (ii) non-generally available software for which Provider attempted but was not previously able to obtain assignment and maintenance rights in favor of Customer, Provider’s responsibilities to obtain assignment and maintenance rights as set forth in this Section 4 shall be limited to using commercially reasonable efforts to obtain such, provided that such efforts do not include payment of additional fees to such third parties.

Provider will be entitled to retain the right to utilize any such third party services in connection with the performance of services for any other Provider customer to which Provider is providing such third party services prior to the effective date of termination/expiration.

5. Required Consents. Except as otherwise provided in the Agreement, Customer shall be financially responsible, and (at Customer’s option, except as provided below) Provider shall be administratively responsible, for obtaining any required consents necessary to grant or assign to Customer (and for Customer to have the rights with respect to): (a) the software licenses described in Section 3; and (b) the third party service and maintenance contracts described in Section 5, provided however, that in the event that a Customer third party vendor shall assume responsibility for provision of the Services upon termination or expiration of the Agreement, then Customer or its designee shall be administratively responsible for obtaining such required consents.

2

6. Cost of Termination/Expiration Assistance During the Term. Provider shall use commercially reasonable efforts to provide Termination/Expiration Assistance utilizing those resources then being regularly utilized to perform the Services. If and to the extent that the Termination/Expiration Assistance described in this Schedule 23.2.1 requires resources in addition to those resources then being regularly utilized in performing the Services, Customer will pay Provider for the resources utilized in providing such Termination/Expiration Assistance at the SS Rates set forth in the relevant SOW, unless otherwise agreed by the Parties.

3

Schedule 25.1

Competitors

The companies that are considered to be competitors of Customer are listed below and include their respective Affiliates and successors and any companies which become similarly situated in the home care and home infusion and medical equipment industries in the United States (provided that Customer must advise Provider of any companies becoming similarly situated and nothing herein contained shall invalidate any agreement entered into with a company becoming similarly situated with whom Provider enters into an agreement prior to receiving such notice). For the avoidance of doubt, the Parties agree that * is not currently considered to be a competitor of Customer and in the event * is acquired by or merges with another entity, including a Competitor listed below, or expands its business, Intelenet shall be permitted to continue providing services similar to the Services to * (or its successor entity) so long as such services do not support a home care business that competes directly or indirectly with Customer.

Competitor Name

*

1

EX-10.3

Exhibit 10.3

Amendment No. 1 to MSA

(Amends Schedule 15.1 and Other MSA Provisions in Order to

Provide for Partial Shift Rates, Discounted Rates

and Utilization Commitments)

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

This Amendment No. 1 is dated September 18, 2009; and is effective May 14, 2009 (“Amendment Effective Date”).

WHEREAS intelenet Global Services Private Limited and Apria Healthcare, Inc. have entered into a Master Services Agreement dated May 14, 2009 (“MSA”); and

WHEREAS the Parties intend to modify certain clauses in Schedule 15.1 to the MSA with respect to compensation for voice related Services.

IT IS NOW WITNESSETH HEREUNDER THAT:

From the Amendment Effective Date, the parties agree that Schedule 15.1 (Establishment of Provider Compensation Under SOWs) be modified as follows:

1. The Parties have agreed to create intermediate rates for partial shifts, to discount the rates for voice FTEs by * % from the amounts initially agreed to and documented in the MSA and to add rates for data employees who perform certain limited voice functions. These rates will be effective as on May 14, 2009 and the Parties will make appropriate adjustment of accounts with respect to both prior and ensuing billings and payments promptly after the execution hereof.

2. The RU Rate Card appearing at the top of Page 5 of Schedule 15.1 to the MSA (“Original RU Rate Card”) is hereby amended and restated in its entirety as follows (“New RU Rate Card”):

    New RU Rate Card (US$) Per FTE Per Annum

*

3. The guidelines for classification of low, medium and high complexity Services set forth in Schedule 15.1 shall also apply to DVS Provider Personnel. In addition, Provider agrees that DVS Provider Personnel will have access to telephonic and other telecommunications infrastructure and equipment with adequate bandwith and capacity and that such Provider Personnel shall have adequate knowledge of the English language to permit appropriate and efficient understanding and interaction with Payor interactive voice response systems. It is understood that DVS Provider Personnel will not be voice and accent trained and therefore will not be able to engage in voice conversation in the event that a live response is received when accessing an interactive voice response system.

4. The New RU Rate Card enacted through this Amendment shall take effect as of May 14, 2009, *

5. *

6. *

7. *

8. For purposes of this Amendment No. 1, FTEs (or FTE equivalents) over any period of time will be calculated on the basis of average monthly FTEs utilized or which should have been utilized by Provider for an average monthly basis for that period.

9. All capitalized terms used in this Amendment No. 1 will have the meanings given to them in the MSA (or a SOW thereunder) unless otherwise defined in this Amendment No. 1.

10. The modifications, amendments or alterations set forth in this Amendment No. 1 do not amend or waive any other provision of the Agreement or any SOW thereunder.

IN WITNESS WHEREOF the Parties have caused this Amendment No. 1 to be executed by their duly authorized representatives.

Intelenet Global Services Private Limited	Apria Healthcare, Inc.
By: /s/ Susir Kumar	By: /s/ James G. Gallas
Name: Susir Kumar	Name: James G. Gallas
Title: CEO and MD	Title: EVP and CAO
	Date: 9/22/09

Annex 1

Scenario 1A:

*

Scenario 1B:

*

Annex 2

*

EX-10.4

Exhibit 10.4

EMPLOYMENT AGREEMENT

(NORMAN C. PAYSON)

EMPLOYMENT AGREEMENT (this “Agreement”) dated November 21, 2008 by and between Apria Healthcare Group Inc., a Delaware corporation (the “Company”), BP Healthcare Holdings LLC, a Delaware limited liability company (“BP Healthcare”) and Norman C. Payson (“Executive”).

WHEREAS, the Company and its subsidiaries and the Company’s parent, Sky Acquisition LLC, a Delaware limited liability company (“Holdings”), desire to employ Executive, with the Company desiring to enter into an agreement embodying the terms of such employment;

WHEREAS, Executive desires to accept such employment and enter into such an agreement;

NOW THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1. Term of Employment. Subject to the provisions of Section 7 of this Agreement, Executive shall be employed by the Company and certain of its affiliates for a period commencing on October 28, 2008 (the “Effective Date”) and ending on the fourth anniversary of the Effective Date on the terms and subject to the conditions set forth in this Agreement; provided, however, that commencing on the fourth anniversary and on each anniversary thereafter (each an “Extension Date”), the term of this Agreement shall be automatically extended for an additional one-year period, unless the Company or Executive provides the other party hereto 60 days prior Notice before the next Extension Date that the Employment Term shall not be so extended (the period of such employment to be called the “Employment Term”).

2. Position.

(a) During the Employment Term, Executive shall serve as the Chief Executive Officer of the Company and Holdings. In such position, Executive shall report directly to the Board of Directors of the Company (the “Board”) and the board of directors of Holdings (the “Holdings Board”) and have such duties and authority as shall be determined from time to time by the Board consistent with such title, duties and responsibilities including reporting responsibilities. Executive shall also serve as Executive Chairman of the Board and as the Chairman of the Holdings Board without additional compensation.

(b) During the Employment Term, Executive will devote Executive’s full business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that nothing herein shall preclude Executive, (i) from engaging in charitable and civic activities, including accepting appointment to or continuing to serve on any board of directors or trustees of any charitable organization or (ii) subject to the prior approval of the Board, from accepting any new appointment to or continuing to serve within six months after the Effective Date on any board of directors or

1

trustees of any business corporation; provided in each case, and in the aggregate, that such activities do not conflict or interfere with the performance of Executive’s duties hereunder or conflict with Section 8. During the Employment Term, Executive will maintain principal offices in California and New Hampshire.

(c) Change in Position from Chief Executive Officer. In the event that Executive resigns, or is terminated or removed by the Company and/or Holdings, as applicable, from the position of Chief Executive Officer of the Company and/or Holdings, but the party initiating such action notifies the other party in writing that it desires Executive to continue to serve as the Executive Chairman of the Board and the Chairman of the Holdings Board, then the parties shall execute and deliver (i) an agreement terminating this Agreement (and ending the Employment Term) and (ii) the Services Agreement (the “Services Agreement”) attached as Exhibit A to govern their rights following such change. Notwithstanding anything to the contrary in this Agreement, any such resignation by Executive shall not constitute “Cause” and any such termination or removal by the Company shall not constitute “Constructive Termination” (each as defined below). For the avoidance of doubt, any action by the Company to reduce Executive’s Base Salary and/or Target Annual Bonus (each as defined below) in connection with any such resignation, termination or removal from the positions of Chief Executive Officer of the Company and/or Holdings pursuant to the terms of this Section 2(c) shall not constitute Constructive Termination for purposes of this Agreement or any other agreement, plan or arrangements among Executive, on the one hand, and the Company and/or its affiliates, on the other hand.

3. Compensation.

(a) Base Salary. During the Employment Term, the Company shall pay Executive a base salary at the annual rate of $750,000, payable in regular installments in accordance with the Company’s usual payment practices. Executive shall be entitled to such increases in Executive’s base salary, if any, as may be determined from time to time in the sole discretion of the Board; provided that Executive’s Base Salary (as defined below) may be modified in connection with any change in employment status or position pursuant to the terms of Section 2(c) herein. Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary.”

(b) Annual Bonus. During each full fiscal year during the Employment Term, Executive shall be eligible to earn an annual bonus award (an “Annual Bonus”) in such amount, if any, as may be determined in the sole discretion of the Board in accordance with the provisions of Appendix A attached hereto, based on the achievement of performance objectives and targets adopted by the Board, in consultation with Executive, within the first three months of each fiscal year during the Employment Term. With respect to each full fiscal year during the Employment Term, Executive shall be eligible to earn a target Annual Bonus of 100 percent (100%) of Executive’s Base Salary (the “Target Annual Bonus”) and a maximum Annual Bonus of 200 percent (200%) of Executive’s Base Salary; provided that Executive’s Target Annual Bonus may be modified in connection with any change in employment status or position pursuant to the terms of Section 2(c) herein. The Annual Bonus, if any, shall be paid to Executive within two and one-half (2.5) months after the end of the applicable fiscal year.

2

4. Equity Arrangements. Simultaneously with the execution of this Agreement, BP Healthcare and the Company are entering into arrangements with regard to Executive’s equity investment in BP Healthcare.

5. Employee Benefits. During the Employment Term, Executive shall be entitled to participate in the Company’s employee benefit plans (other than annual bonus and incentive plans) as in effect from time to time (collectively “Employee Benefits”), on the same basis as those benefits are generally made available to other senior executives of the Company; provided that Executive’s participation in such benefits may be modified in connection with any change in employment status or position pursuant to the terms of Section 2(c) herein.

6. Business Expenses. During the Employment Term and in accordance with Company policy, Executive shall be entitled to be reimbursed for reasonable and customary business expenses incurred in connection with the performance of services hereunder, including expenditures for his private airplane operating expenses, including travel between principal offices and other business travel, lodgings and meals. For the avoidance of doubt, the reimbursement for private airplane operating expenses shall not exceed $1.55 million annually.

7. Termination. The Employment Term and Executive’s employment hereunder may be terminated by the Company at any time and for any reason upon Notice to Executive and by Executive upon at least 60 days’ advance Notice of any such resignation of Executive’s employment. Notwithstanding any other provision of this Agreement, the provisions of this Section 7 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.

(a) By the Company with Cause or By Executive Other Than as a Result of a Constructive Termination.

(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company with Cause and shall terminate automatically upon the effective date of Executive’s resignation other than as result of a Constructive Termination (as defined in Section 7(c)(ii)).

(ii) For purposes of this Agreement, “Cause” shall mean (A) Executive’s willful and continued failure to substantially perform Executive’s duties to the Company or any of its subsidiaries or affiliates (other than as a result of total or partial incapacity due to physical or mental illness or as a result of Executive resigning as Chief Executive Officer of the Company) which failure has continued for a period of at least 20 days following delivery to Executive of written demand by the Company or any of its subsidiaries or affiliates specifying the manner in which Executive has willfully failed to so perform; (B) Executive’s engagement in fraud or willful dishonesty (other than dishonesty that has no material detrimental impact on the reputation or business of the Company and its affiliates); (C) any act on the part of Executive that constitutes a felony (other than traffic offenses), or its equivalent under applicable non-U.S. law (provided that if Executive’s employment is terminated for “Cause” as a result of any such act, but is not convicted in respect of, and does not plead guilty or nolo contendere to, the applicable conduct before a court of competent jurisdiction, then the Company shall have the burden of establishing by clear and convincing evidence that such conduct occurred and could

3

reasonably be expected to have a material detrimental impact on the reputation or business of the Company and its affiliates (and the failure to so satisfy such burden shall result in the termination of Executive’s employment being without Cause) or (D) Executive’s material breach of the provisions of Sections 8 or 9; provided, further, that “Cause” shall cease to exist for an event on the 90th day following the later of its occurrence or the knowledge thereof by a majority of the Board, unless the Company or any of its subsidiaries or affiliates has given Executive written notice thereof prior to such date. A termination of Executive shall not be deemed with Cause unless and until there shall have been delivered to Executive a copy of a finding duly approved by a majority of the entire membership of the Board (not including Executive), concluding that, in the good faith opinion of such majority, Executive has engaged in the conduct described in one or more of the clauses above, specifying the particulars thereof in reasonable detail and demonstrating that no cure by Executive was effected following giving Executive 20 days to cure the negative impact of such conduct after written notice by the Company or any of its subsidiaries or affiliates to Executive of such conduct, or, in the Board’s good faith reasonable judgment, no cure was possible.

(iii) If Executive’s employment is terminated by the Company with Cause, or if Executive resigns other than as a result of a Constructive Termination, Executive shall be entitled to receive:

(A) the Base Salary accrued through the date of termination, payable within fifteen days following the date of such termination;

(B) any Annual Bonus earned, but unpaid, as of the date of termination for the immediately preceding fiscal year, paid in accordance with Section 4 (except to the extent payment is otherwise deferred pursuant to any applicable deferred compensation arrangement with the Company, in which case such amount shall be paid in full at the earliest such time as is provided under such arrangement); and

(C) such fully vested and non-forfeitable Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company (the amounts described in clauses (A) through (C) hereof being referred to as the “Accrued Rights”).

Following such termination of Executive’s employment by the Company with Cause or resignation by Executive other than as a result of a Constructive Termination, except as set forth in this Section 7(a)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(b) Disability or Death.

(i) The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company if Executive becomes physically or mentally incapacitated, after providing Executive reasonable accommodation, and is therefore unable, for a period of six consecutive months or for an aggregate of twelve months in any twenty-four consecutive month period, to perform Executive’s duties. The period of six

4

months shall be deemed continuous unless Executive returns to work for a period of at least 30 consecutive days during such period and performs during such period at the level and competence that existed prior to the beginning of the six-month period. Such incapacity is hereinafter referred to as “Disability”. Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company. If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third qualified independent physician who shall make such determination in writing. The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement and any other agreement between the Company and Executive that incorporates the definition of “Disability”.

(ii) Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive the Accrued Rights.

Following Executive’s termination of employment due to death or Disability, except as set forth in this Section 7(b)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(c) By the Company without Cause or Resignation by Executive as a result of Constructive Termination.

(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company without Cause or by Executive as a result of a Constructive Termination.

(ii) For purposes of this Agreement, a “Constructive Termination” shall be deemed to have occurred upon (A) the failure of the Company or its subsidiaries to pay or cause to be paid Executive’s Base Salary, Annual Bonus (if any) or reimbursable expenses when due hereunder; (B) a reduction in Executive’s Base Salary or Target Annual Bonus, except as provided in Sections 2(c), 3(a) or 3(b); (C) any substantial and sustained diminution in Executive’s authority or responsibilities as of the Effective Date (other than a diminution pursuant to Section 2(c)) or (D) any material breach by the Company or its subsidiaries of any material agreement with Executive; provided that none of these events shall constitute Constructive Termination unless the Company fails to cure such event within 30 days after receipt from Executive of written notice specifying in reasonable detail the event which constitutes Constructive Termination; provided, further, that “Constructive Termination” shall cease to exist for an event on the 90th day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Company written notice thereof prior to such date.

(iii) If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns as a result of a Constructive Termination, Executive shall be entitled to receive:

(A) the Accrued Rights;

5

(B) a pro rata portion of an Annual Bonus (if otherwise payable in accordance with Section 3(b)), payable within 30 days after annual bonuses in respect of the year of termination are generally paid to senior executives of the Company, based upon the percentage of the fiscal year that shall have elapsed through the date of Executive’s termination of employment; and

(C) continued coverage under the Company’s group health plans until the earlier of (i) twelve months from Executive’s date of termination of employment with the Company and (ii) the date such Executive is or becomes eligible for comparable coverage under health plans of another employer.

Amounts payable to Executive under subparagraphs (B) and (C), above, are subject to Executive providing a release of all claims to the Company in the form attached hereto as Exhibit B (with any changes necessary to comply with applicable law and/or make the release legally enforceable in the judgment of the Company). Following Executive’s termination of employment by the Company without Cause (other than by reason of Executive’s death or Disability) or by Executive’s resignation as a result of a Constructive Termination, except as set forth in this Section 7(c)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(d) Expiration of Employment Term.

(i) Election Not to Extend the Employment Term. In the event either party elects not to extend the Employment Term pursuant to Section 1, unless Executive’s employment is terminated pursuant to paragraphs (a), (b) or (c) of this Section 7, Executive’s termination of employment hereunder (whether or not Executive continues as an employee of the Company thereafter) shall be deemed to occur on the close of business on the day immediately preceding the next scheduled Extension Date and Executive shall be entitled to receive the Accrued Rights and the payment described in Section 7(c)(iii)(B) of this Agreement. Following such termination of Executive’s employment hereunder as a result of either party’s election not to extend the Employment Term, except as set forth in this Section 7(d)(i) and subject to the provisions of paragraphs (a), (b) or (c) of this Section 7 as may apply, Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(ii) Continued Employment Beyond the Expiration of the Employment Term. Unless the parties otherwise agree in writing, continuation of Executive’s employment with the Company beyond the expiration of the Employment Term shall be deemed an employment at-will and shall not be deemed to extend any of the provisions of this Agreement and Executive’s employment may thereafter be terminated at will by either Executive or the Company; provided, that the provisions of Sections 8, 9 and 10 of this Agreement, and any accrued and vested rights of Executive as of the last day of the Employment Term, shall survive any termination of this Agreement or Executive’s termination of employment hereunder.

6

(e) Notice of Termination. Any purported termination of employment by the Company or by Executive (other than due to Executive’s death) shall be communicated by Notice of Termination to the other party hereto in accordance with Section 11(i) hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a Notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated.

(f) Board/Committee Resignation. Unless the parties hereto enter into the Services Agreement, upon termination of Executive’s employment for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the Board (and any committees thereof) and the Board of Directors (and any committees thereof) of any of the Company’s affiliates.

8. Non-Competition.

(a) Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees as follows:

(i) During the Employment Term and, for a period of twelve months following the date Executive ceases to be employed by the Company (the “Non-Compete Restricted Period”), (A) Executive shall not, directly or indirectly, enter the employ of, or render any services to, any person, firm or corporation engaged in any business that competes with a material line of business of the Company, Holdings or their subsidiaries (subject to the following proviso, the “Business”) at any time; provided that for periods after the date of Executive’s termination of employment, “material line of business” will be determined as of the date of Executive’s termination of employment; (B) Executive shall not engage in the Business on Executive’s own account; (C) Executive shall not invest in any such Business, directly or indirectly, as an individual, partner, shareholder, principal, member, trustee or similar capacity and (D) Executive shall not solicit or assist in soliciting in competition with Company in the Business, the business of any then current or prospective client or former customer with whom Executive (or his direct reports) had personal contact or dealings on behalf of the Company; provided, however, that nothing contained in this Section 8(a) shall be deemed to prohibit (i) Executive’s involvement in any capacity in any health plan, health insurance business or health care financing business, (ii) Executive from acquiring, solely as an investment, up to five percent (5%) of the outstanding shares of capital stock of any public corporation or (iii) Executive’s passive investments in existence as of the date hereof.

(b) During the Employment Term and, for a period of twenty-four months following the date Executive ceases to be employed by the Company (the “Non-Solicit Restricted Period”), Executive shall not, directly or indirectly:

(i) solicit or encourage any manager or executive of the Company to leave the employment or engagement of the Company; or

(ii) hire any manager or executive of the Company who was employed by the Company as of the date of Executive’s termination of employment with the Company or who left the employment of the Company coincident with, or within one year prior to, the termination of Executive’s employment with the Company.

7

provided, however, that the foregoing clause (i) shall not preclude Executive from (A) making good faith generalized solicitations for employees through advertisements or search firms and hiring any persons through such solicitations if Executive was not aware of such person’s prior employment with the Company; provided, that Executive does not encourage or advise such firm to approach any such employee and such searches are not targeted or focused on the Company’s employees, or (B) responding to or hiring any employee of the Company who contacts Executive at his or her own initiative without any prior direct or indirect encouragement or solicitation from Executive if Executive was not aware of such person’s prior employment with the Company.

(c) If Executive commits a breach, or threatens to commit a breach, of any of the provisions of this Section 8, the Company shall have the following rights and remedies:

(i) the right and remedy to have the provisions of this Section 8 specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company; and

(ii) the right and remedy to require Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits (collectively, “Benefits”) derived or received by Executive as the result of any transactions constituting a breach of any of the provisions of this Section 8, and Executive hereby agrees to account for and pay over such Benefits to the Company.

Each of the rights and remedies enumerated above shall be independent of the other, and shall be severally enforceable, and all of such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity.

(d) If any of the covenants contained in this Section 8 or any part thereof, hereafter are construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect, without regard to the invalid portions.

(e) If any of the covenants contained in this Section 8, or any part thereof, are held to be unenforceable because of the duration of such provision or the area covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision and, in its reduced form, said provision shall then be enforceable.

(f) The parties hereto intend to and hereby confer jurisdiction to enforce the covenants contained in this Section 8 upon the courts of any state within the geographical scope of such covenants. In the event that the courts of any one or more of such states shall hold such covenants wholly unenforceable by reason of the breadth of such covenants or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such covenants as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being for this purpose severable into diverse and independent covenants.

8

(g) It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 8 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction, that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

(h) The period of time during which the provisions of this Section 8 shall be in effect shall be extended by the length of time during which Executive is in breach of the terms hereof as determined by any court of competent jurisdiction on the Company’s application for injunctive relief.

9. Confidentiality.

(a) In view of the fact that Executive’s work for the Company brings Executive into close contact with many confidential affairs of the Company not readily available to the public, and plans for further developments, Executive agrees:

(i) to keep and retain in the strictest confidence all confidential matters of the Company, including, without limitation, “know how,” trade secrets, customer lists, pricing policies, operational methods, technical processes, formulae, inventions and research projects, and other business affairs of the Company, learned by Executive heretofore or hereafter, and not to disclose them to anyone outside of the Company or its representatives, agents or advisors, either during or after Executive’s employment with the Company, except as required by applicable law , in the course of performing Executive’s duties hereunder or with the Company’s express consent; and

(ii) to deliver promptly to the Company on termination of Executive’s employment by the Company, or at any time the Company may so request, all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the Company’s business and all property associated therewith, which Executive may then possess or have under Executive’s control;

provided that the foregoing shall not apply to information that was or becomes generally available to the public prior to, and other than as a result of, disclosure by Executive.

10. Specific Performance. Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Sections 8 or 9 would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company,

9

without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

11. Miscellaneous.

(a) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflicts of laws principles thereof that would direct the application of the laws of any other jurisdiction.

(b) Entire Agreement/Amendments. This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto. In the event of any inconsistency between this Agreement and any other plan, program, practice or agreement of which Executive is a participant or a party, this Agreement shall control unless such other plan, program, practice or agreement specifically refers to the provisions of this sentence.

(c) No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(d) Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

(e) Assignment. This Agreement, and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Company to a person or entity which is an affiliate or a successor in interest to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity.

(f) Set Off; No Mitigation. The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Company or its affiliates. Executive shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment, and such payments shall not be reduced by any compensation or benefits received from any subsequent employer or other endeavor except as provided at Section 7(c)(iii)(C)(ii).

10

(g) Compliance with Code Section 409A. To the extent applicable, it is intended that this Agreement comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). Notwithstanding anything contained herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company Executive is a “specified employee” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six months following Executive’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code); (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional tax; and (iii) Executive shall not be considered to have terminated employment for purposes of this Agreement and no payments shall be due to Executive under this Agreement which are payable upon termination of employment unless Executive would be considered to have incurred a “separation from service” within the meaning of Section 409A. The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 11(g); provided that neither the Company nor any of its employees or representatives shall have any liability to Executive with respect to thereto.

(h) Successors; Binding Agreement. No party may assign any of its or his rights or delegate any of its or his duties under this Agreement without the consent of the others and any attempted assignment in violation of this provision shall be void. Subject to the foregoing limitations, this Agreement shall be binding upon and inure to the benefit of the successors-in-interest and permitted assigns of the parties hereto.

(i) Notice. All notices and other communications required or permitted under this Agreement shall be made in writing and shall be deemed given if delivered personally, sent by registered or certified mail (e.g., the equivalent of U.S. registered mail), return receipt requested, postage prepaid, or sent by nationally recognized overnight courier service, addressed as follows:

If to the Company or Holdings:

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: General Counsel

11

with a copy which shall not constitute Notice to:

The Blackstone Group

345 Park Avenue

New York, New York 10154

Attention: Neil P. Simpkins

with a copy which shall not constitute Notice to:

Simpson Thacher & Bartlett LLP

425 Lexington Ave.

New York, NY 10017

Attention: Gregory Grogan

If to the Executive:

Norman C. Payson

NCP, Inc.,

with a copy which shall not constitute notice to:

Skadden Arps Slate Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attention:    Paul T. Schnell

                    Neil P. Stronski

(j) Executive Representation. Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

(k) Prior Agreements. This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive and the Company and/or its affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its affiliates.

(l) Cooperation. Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive’s employment with the Company and its affiliates. This provision shall survive any termination of this Agreement.

(m) Attorney’s Fees. The Company shall pay the reasonable documented legal fees and disbursements (not to exceed $50,000) incurred by Executive for one counsel in connection with the negotiation and preparation of the documentation of this Agreement, the subscription agreements, the limited liability company agreement, the securityholders agreement and other agreements entered into between Executive and the Company, Holding and their affiliates.

12

(n) Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

(o) Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

[Signature Page Follows this Page]

13

IN WITNESS WHEREOF, the parties hereto have duly executed this Employment Agreement as of the day and year first above written.

/s/ Norman C. Payson

Norman C. Payson

SKY ACQUISITION LLC
By:	/s/ Robert S. Holocombe
	Name:	Robert S. Holocombe
	Title:	Executive Vice President, General Counsel and Secretary
APRIA HEALTHCARE GROUP INC.
By:	/s/ Robert S. Holocombe
	Name:	Robert S. Holocombe
	Title:	Executive Vice President, General Counsel and Secretary
BP HEALTHCARE HOLDINGS LLC
By:	/s/ Neil P. Simpkins
	Name:	Neil P. Simpkins
	Title:	President

APPENDIX A

Performance as percentage of EBITDA target	Annual Bonus earned as percentage of Base Salary
90% or less	0	%
100%	100	%
120% or greater	200	%

* Increasing in linear progression (as calculated by the Board) from 0% to 100% of Target Annual Bonus for EBITDA target achieved between 90% and 100% and from 100% to 200% of Target Annual Bonus for EBITDA target between 100% and 120% or greater. The EBITDA target for 2009 shall be set at the “Bank Case” level.

- i -

EXHIBIT A

SERVICES AGREEMENT

THIS SERVICES AGREEMENT (this “Agreement”), is dated as of                      , 20    , by and between BP Healthcare Holdings LLC, a Delaware limited liability company (“BP Healthcare”), Sky Acquisition LLC, a Delaware limited liability company (“Holdings”), Apria Healthcare Group Inc., a Delaware corporation (the “Company”), and Norman C. Payson (“Payson”).

WHEREAS, BP Healthcare, Holdings and the Company desires to engage the services of Payson upon the terms and subject to the conditions hereinafter set forth, and Payson desires to accept such engagement;

NOW, THEREFORE, for and in consideration of the premises, the mutual promises, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Effective Date, Titles, Duties.

(a) Effective Date. This Agreement is effective as of                      , 20     (the “Effective Date”).

(b) Company Executive Chairman. Subject to the terms and conditions of this Agreement, Payson agrees to serve as the Executive Chairman of the board of directors (the “Company Board”) of the Company during the Term. As Executive Chairman of the Company Board, Payson shall provide reasonable and customary services commensurate with such title, although the Company Board and Payson will consider mutually acceptable reductions in his time commitments in the third and fourth years of the Term. Payson’s principal office will be located in New Hampshire.

(c) Holdings Chairman. Subject to the terms and conditions of this Agreement, Payson agrees to serve as the Chairman of the board of directors of Holdings (the “Holdings Board”) during the Term (it being understood that no compensation shall be payable to Payson for such services pursuant to this Agreement). As Chairman of the Holdings Board, Payson shall provide reasonable and customary services commensurate with such title.

(d) Senior Advisor. Subject to the terms and conditions of this Agreement, Payson agrees to serve as a Senior Advisor to BP Healthcare during the Term (it being understood that no compensation shall be payable to Payson for such services pursuant to this Agreement). As Senior Advisor, Payson shall provide reasonable and customary services commensurate with such title.

2. Compensation and Other Benefits.

(a) Fee. During the Term, Payson shall receive $500,000 per year from the Company, payable in regular installments consistent with the Company’s payroll procedures for senior executives (the “Fee”). The Fee shall be payable solely in respect of Payson’s services to the Company.

(b) Benefits. Except as otherwise expressly agreed in writing, Payson shall not be entitled to participate in any employee benefit plans of BP Healthcare, Holdings, the Company or their respective affiliates.

(c) Expenses. During the Term, Payson shall be entitled to be reimbursed for reasonable and customary business expenses incurred in connection with the performance of services hereunder, including expenditures for his private airplane operating expenses, business travel, lodgings and meals (“Business Expenses”). For the avoidance of doubt, the reimbursement for private airplane operating expenses shall not exceed $1.55 million annually. The Company shall reimburse Payson for all Business Expenses upon presentation by Payson, from time to time, of appropriately itemized accounts of such expenditures. Payson shall provide such itemized accounts within sixty (60) days after the expense is incurred and the Company shall reimburse Payson within thirty (30) days after receipt of such account.

3. Term.

(a) Length. The term of this Agreement shall begin on the Effective Date and shall continue until October 28, 2012 (the “Term”). The Term may be extended by mutual written agreement of the parties hereto entered into before the expiration of the Term.

(b) Termination. The Company, Holdings and BP Healthcare, acting together, may terminate the Term with respect to all (but not less than all) services being provided to it upon thirty (30) days’ prior written notice to Payson (provided that Payson may be relieved of his duties, authority and responsibility during the 30-day period, at the election of the Company, Holdings and BP Healthcare, acting together). Payson may terminate the Term with respect to all (but not less than all) services provided to the Company, Holdings and BP Healthcare upon thirty (30) days’ prior written notice to the Company.

(c) Further Rights. Except as otherwise expressly agreed in writing (including the subscription agreements entered into between Payson and BP Healthcare), upon the expiration or termination of the Term for any reason, Payson shall have no further rights to any compensation or any other benefits under this Agreement or under any employee benefit plan of the Company, Holdings or BP Healthcare (excluding any unpaid portion of the Fee, unreimbursed expenses or other amounts owed to Payson, in each case, attributable to periods prior to expiration or termination of the Term for any reason). Upon the expiration or termination of the Term for any reason, Payson agrees to resign, as of the date of such expiration or termination and to the extent applicable, from the board of directors (and any committees thereof) of any of the Company, Holdings or BP Healthcare or their respective affiliates.

2

4. Restrictive Covenants. Payson acknowledges and affirms the “Restrictive Covenants” contained in the subscription agreements entered into between Payson and BP Healthcare.

5. Severability. If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof which shall remain in full force and effect.

6. Entire Agreement. The provisions contained herein constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede any and all prior agreements, understandings and communications between the parties, oral or written, with respect to such subject matter.

7. Modifications. Any waiver, alteration, amendment or modification of any provisions of this Agreement shall not be valid unless in writing and signed by each party hereto.

8. Assignment; Binding Effect. No party may assign any of its or his rights or delegate any of its or his duties under this Agreement without the consent of the others and any attempted assignment in violation of this provision shall be void. Subject to the foregoing limitations, this Agreement shall be binding upon and inure to the benefit of the successors-in-interest and permitted assigns of the parties hereto.

9. Notice. All notices and other communications required or permitted under this Agreement shall be made in writing and shall be deemed given if delivered personally, sent by registered or certified mail (e.g., the equivalent of U.S. registered mail), return receipt requested, postage prepaid, or sent by nationally recognized overnight courier service, addressed as follows:

If to the Company, Holdings or BP Healthcare:

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: General Counsel

with a copy (which shall not constitute notice) to:

The Blackstone Group, L.P.

345 Park Avenue

New York, New York 10154

Attention: Neil P. Simpkins

and

Simpson Thacher & Bartlett LLP

3

425 Lexington Avenue

New York, New York 10017

Attention: Gregory Grogan

If to Payson:

Norman C. Payson

with a copy (which shall not constitute notice) to:

Skadden Arps Slate Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attention:     Paul T. Schnell

                      Neil P. Stronski

or to such other addresses as a party shall designate in the manner provided in this Section 9. Any notice or other communication shall be deemed given (a) on the date three (3) business days after it shall have been mailed, if sent by certified mail, (b) on the date one (1) business day after it shall have been given to a nationally-recognized overnight courier service or (c) upon the electronic confirmation of facsimile.

10. Choice of Law. This Agreement shall be governed by and construed in accordance with the law of the State of Delaware, without regard to conflicts of laws principles thereof.

11. Section Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

12. Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile), which shall, collectively and separately, constitute one agreement.

[Signature Page Follows.]

4

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

Norman C. Payson

SKY ACQUISITION LLC
By:
	Name:
	Title:
BP HEALTHCARE HOLDINGS LLC
By:
	Name:
	Title:
APRIA HEALTHCARE GROUP INC.
By:
	Name:
	Title:

EXHIBIT B

RELEASE OF CLAIMS

This Release of Claims is entered into by Norman C. Payson (“Executive”).

WHEREAS, Executive and Apria Healthcare Group Inc. with offices at                      (the “Company”) entered into an Employment Agreement (the “Employment Agreement”) dated November 21, 2008 that provides Executive certain payments and other benefits in the event of an involuntary termination of Executive’s employment without Cause or Executive’s resignation of employment due to a Constructive Termination (each term as defined under the Employment Agreement);

WHEREAS, Executive’s employment has so terminated; and

WHEREAS, pursuant to Section 7(c)(iii) of the Employment Agreement, a condition of Executive’s entitlement to certain payments and other benefits thereunder is his agreement to this Release of Claims.

NOW, THEREFORE, in consideration of the payments and other benefits provided under Section 7(c)(iii)(B) and (C)) of the Employment Agreement, Executive agrees as follows:

1. Executive, for himself and his heirs, executors and administrators, hereby fully and finally waives, discharges and releases the Company, including each of the Company’s past, current and future parents, subsidiaries, and affiliates, and its and their shareholders, members, directors, officers, and employees (“Released Parties”), from any and all claims relating to his employment with the Company or his termination therefrom, whether now known or later discovered, which he or anyone acting on his behalf might otherwise have had or asserted, including, but not limited to, any express or implied contract of employment claims, any tort claims, claims under Title VII of the Civil Rights Act of 1964, as amended, the Family and Medical Leave Act of 1993, Section 1981 of the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967, as amended, Americans with Disabilities Act of 1991, as amended, the Older Workers Benefit Protection Act of 1990, the Worker Adjustment and Retraining Notification Act, the laws, including the labor laws of any state, including the State of Florida, and all claims under related common law, statutes, and executive orders at the federal, state and local levels of government, and any claims to any benefits from employment with the Company, including, but not limited to, claims for salary, bonuses, unvested stock options, severance pay, vacation pay or any benefits under the Employee Retirement Income Security Act of 1974, as amended, other than: (i) those benefits set forth enumerated in Section 7(c)(iii) of the Employment Agreement, (ii) all rights and benefits as a member of the Company or as the holder of any equity security or any other equity interest in the Company, and (iii) any claims for accrued and vested benefits under any of the Company’s employee retirement and welfare benefit plans in which Executive participated immediately prior to the date of termination of his employment. In addition, Executive represents that no incident has occurred during his employment with the Company that could form the basis for any claim by him against the Company under the worker’s compensation laws of any jurisdiction. For the avoidance of

B-i

doubt, the foregoing does not constitute a release of any claims of Executive in respect of his direct and indirect holdings of equity in the Company and its affiliates or any other claims of Executive under any other written agreement that is not related to Executive’s employment and is between Executive or any of his affiliates and the Company and any of its affiliates.

2. Executive represents that he has not brought any charges, claims, demands, suits or actions, known or unknown, in any forum, against the Released Parties related to his employment or his termination (excluding any claims of Executive in respect of his direct and indirect holdings of equity in the Company and its affiliates or any other claims of Executive under any other written agreement that is not related to Executive’s employment and is between Executive or any of his affiliates and the Company and any of its affiliates); provided, however, that Executive shall not be prevented from enforcing any rights he may have under and the terms of this Release of Claims or in respect of any claims of Executive in respect of his direct and indirect holdings of equity in the Company and its affiliates or any other claims of Executive under any other written agreement that is not related to Executive’s employment and is between Executive or any of his affiliates and the Company and any of its affiliates.

3. Executive acknowledges that he is subject to a confidentiality covenant pursuant to Section 9 of the Employment Agreement and a noncompetition and non-solicitation covenant pursuant to Section 8 of the Employment Agreement and hereby reaffirms his obligations thereunder.

4. EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED, IN WRITING, TO CONSULT WITH AN ATTORNEY OF HIS CHOICE PRIOR TO SIGNING THIS AGREEMENT AND THAT HE HAS SIGNED THIS AGREEMENT KNOWINGLY, VOLUNTARILY, AND FREELY, AND WITH SUCH COUNSEL AS HE DEEMED APPROPRIATE. IN ADDITION, EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN PROVIDED WITH A PERIOD OF UP TO TWENTY-ONE (21) DAYS IN WHICH TO CONSIDER WHETHER OR NOT TO ENTER INTO THIS RELEASE. FURTHER, EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED OF HIS RIGHT TO REVOKE THIS AGREEMENT DURING THE SEVEN (7) DAY PERIOD FOLLOWING EXECUTION HEREOF, AND THAT THE AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED.

5. Nothing contained herein shall be construed as an admission by the Company of any liability of any kind to Executive, all such liability being expressly denied except for obligations of the Company imposed by the Employment Agreement which survive pursuant to this Release of Claims.

Norman C. Payson
Date:	, 20

B-ii

EX-10.5

Exhibit 10.5

[Execution Copy]

EMPLOYMENT AGREEMENT

(Chris A. Karkenny)

EMPLOYMENT AGREEMENT (this “Agreement”) dated December 19, 2008 by and between Apria Healthcare Group Inc., a Delaware corporation (the “Company”), and Chris A. Karkenny (“Executive”).

WHEREAS, the Company and Executive entered into an employment agreement, dated November 1, 2006 (the “Prior Agreement”), under which Executive is employed as the Executive Vice President and Chief Financial Officer of the Company;

WHEREAS, the Company and Executive now desire to enter into this Agreement, which will replace the Prior Agreement in its entirety as of the Effective Date (as defined below);

WHEREAS, commencing on the Effective Date, the Company and its subsidiaries and the Company’s parent, Sky Acquisition LLC, a Delaware limited liability company (“Holdings”), desire to continue to employ Executive with the Company and desire to enter into an agreement embodying the terms of such employment;

WHEREAS, Executive desires to remain employed by the Company and to accept such employment with Holdings, on the terms and subject to the conditions more fully set forth in this Agreement;

NOW THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1. Term of Employment. Subject to the provisions of Section 7 of this Agreement, Executive shall continue to be employed by the Company and certain of its affiliates for a period commencing on October 28, 2008 (the “Effective Date”) and ending on October 28, 2013 (the “Employment Term”), on the terms and subject to the conditions set forth in this Agreement; provided, however, that commencing on October 28, 2013 and on each anniversary thereafter (each an “Extension Date”), the Employment Term shall be automatically extended for an additional one-year period, unless the Company or Executive provides the other party hereto 60 days prior Notice before the next Extension Date that the Employment Term shall not be so extended.

2. Position.

(a) During the Employment Term, Executive shall serve as the Executive Vice President and Chief Financial Officer of the Company and Holdings. In such position, Executive shall report directly to the Chief Executive Officer of the Company and shall have such duties and authority as shall be determined from time to time by the Chief Executive Officer and the board of directors of the Company (the “Board”) consistent with such title, duties and responsibilities, including reporting responsibilities. If requested, Executive shall also serve as a member of the Board without additional compensation.

1

(b) During the Employment Term, Executive will devote Executive’s business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or materially interfere with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that nothing herein shall preclude Executive, (i) from engaging in charitable and civic activities, including accepting appointment to or continuing to serve on any board of directors or trustees of any charitable organization or (ii) from continuing to, or subject to the prior approval of the Board, from accepting appointment to serve on any board of directors or trustees of any business corporation; provided in each case, and in the aggregate, that such activities do not conflict or interfere with the performance of Executive’s duties hereunder or conflict with Section 8.

3. Compensation.

(a) Retention Payments. Subject to Executive’s continued employment with the Company on the applicable payment date, Executive shall be entitled to receive a retention bonus payment of $400,000, payable as of the date of this Agreement, and a retention bonus payment of $2,100,000, payable on January 5, 2009 (collectively, the “Retention Payments”). Notwithstanding the foregoing, in the event Executive terminates Executive’s employment with the Company, other than Executive’s resignation as a result of a Constructive Termination, or upon Executive’s death or Disability, in each case prior to March 31, 2010, Executive shall be required to repay to the Company the amount by which $2,100,000 exceeds the product of (x) $140,000 and (y) the number of full months following January 1, 2009 that Executive was continuously employed by the Company. Executive hereby agrees to pledge, on January 5, 2009, Executive’s equity holdings in Holdings as security for Executive’s repayment obligation hereunder.

(b) Base Salary. During the Employment Term, the Company shall pay Executive a base salary at the annual rate of (x) $411,000 until December 31, 2008 and (y) $475,000 thereafter, payable in each case in regular installments in accordance with the Company’s usual payment practices. Executive shall be entitled to such increases in Executive’s base salary, if any, as may be determined from time to time in the sole discretion of the Board. Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary.”

(c) Annual Bonus. During each full fiscal year during the Employment Term, Executive shall be eligible to earn an annual bonus award (an “Annual Bonus”) in such amount, if any, as may be determined in the sole discretion of the Board, calculated in accordance with the provisions of Appendix A attached hereto, based on the achievement of performance objectives and targets adopted by the Board, within the first three months of each fiscal year during the Employment Term. With respect to each full fiscal year during the Employment Term, Executive shall be eligible to earn a target Annual Bonus of 100 percent (100%) of Executive’s Base Salary (the “Target Annual Bonus”) and a maximum Annual Bonus of 200 percent (200%) of Executive’s Base Salary. The Annual Bonus, if any, shall be paid to Executive within two and one-half (2.5) months after the end of the applicable fiscal year.

2

4. Equity Arrangements. Simultaneously with the execution of this Agreement, Holdings is entering into arrangements with regard to Executive’s equity arrangements with Holdings.

5. Employee Benefits. During the Employment Term, Executive shall be entitled to participate in the Company’s employee benefit plans (other than annual bonus and incentive plans) as in effect from time to time (collectively “Employee Benefits”), on the same basis as those benefits are generally made available to other senior executives of the Company.

6. Business Expenses. During the Employment Term and in accordance with Company policy, Executive shall be entitled to be reimbursed for reasonable and customary business expenses incurred by Executive in connection with the performance of Executive’s duties hereunder.

7. Termination. The Employment Term and Executive’s employment hereunder may be terminated by the Company at any time and for any reason upon Notice to Executive and by Executive upon at least 30 days’ advance Notice of any such resignation of Executive’s employment, other than as a result of Executive’s death. Notwithstanding any other provision of this Agreement, the provisions of this Section 7 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.

(a) By the Company with Cause or By Executive Other Than as a Result of a Constructive Termination.

(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company with Cause and shall terminate automatically upon the effective date of Executive’s resignation other than as result of a Constructive Termination (as defined in Section 7(c)(ii)).

(ii) For purposes of this Agreement, “Cause” shall mean that the Board, acting in good faith based upon the information then known to the Company, determines that Executive has (i) engaged in or committed willful misconduct; (ii) engaged in or committed theft, fraud or other illegal conduct; (iii) refused or demonstrated an unwillingness to substantially perform his duties for a 30-day period after written demand for substantial performance that refers to this paragraph and is delivered by the Company that specifically identifies the manner in which the Company believes Executive has not substantially performed his duties; (iv) refused or demonstrated an unwillingness to reasonably cooperate in good faith with any Company or government investigation or provide testimony therein (other than such failure resulting from Executive’s disability); (v) engaged in or committed insubordination; (vi) engaged in or committed any willful act that is likely to and which does in fact have the effect of injuring the reputation or business of the Company; (vii) willfully violated his fiduciary duty or his duty of loyalty to the Company or the Company’s Code of Ethical Business Conduct in any material respect; (viii) used alcohol or drugs (other than drugs prescribed to Executive by a physician and used by Executive for their intended purpose for which they had been prescribed) in a manner which materially and repeatedly interferes with the performance of his duties hereunder or which has the effect of materially injuring the reputation or business of the Company; or (ix) engaged in or committed a material breach of this Agreement for a 30-day period after written notification is

3

delivered by the Company that specifically refers to this paragraph and identifies the manner in which the Company believes Executive has materially breached this Agreement. For purposes of the foregoing sentence of this paragraph, no act, or failure to act, on Executive’s part shall be considered willful unless done or omitted to be done, by him not in good faith or without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause without delivery to Executive of a notice of termination signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith opinion of the officer signing such notice, Executive has engaged in or committed conduct of the nature described in this paragraph, and specifying the particulars thereof in detail.

(iii) If Executive’s employment is terminated by the Company with Cause, or if Executive resigns other than as a result of a Constructive Termination, Executive shall be entitled to receive:

(A) the Base Salary accrued through the date of termination, payable within fifteen days following the date of such termination;

(B) any Annual Bonus earned, but unpaid, as of the date of termination for the immediately preceding fiscal year, paid in accordance with Section 3(c) (except to the extent payment is otherwise deferred pursuant to any applicable deferred compensation arrangement with the Company, in which case such amount shall be paid in full at the earliest such time as is provided under such arrangement); and

(C) such fully vested and non-forfeitable Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company (the amounts described in clauses (A) through (C) hereof being referred to as the “Accrued Rights”).

Following such termination of Executive’s employment by the Company with Cause or resignation by Executive other than as a result of a Constructive Termination, except as set forth in this Section 7(a)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(b) Disability or Death.

(i) The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company if Executive becomes physically or mentally incapacitated, after providing Executive reasonable accommodation, and is therefore unable, for a period of six consecutive months or for an aggregate of twelve months in any twenty-four consecutive month period, to perform Executive’s duties. The period of six months shall be deemed continuous unless Executive returns to work for a period of at least 30 consecutive days during such period and performs during such period at the level and competence that existed prior to the beginning of the six-month period. Such incapacity is hereinafter referred to as “Disability”. Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing

4

by a qualified independent physician mutually acceptable to Executive and the Company. If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third qualified independent physician which third such physician shall make such determination. The determination of Disability made by such physician in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement and any other agreement between the Company and Executive that incorporates the definition of “Disability”.

(ii) Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive the Accrued Rights.

Following Executive’s termination of employment due to death or Disability, except as set forth in this Section 7(b)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(c) By the Company without Cause or Resignation by Executive as a result of Constructive Termination.

(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company without Cause or by Executive as a result of a Constructive Termination.

(ii) For purposes of this Agreement, a “Constructive Termination” shall be deemed to have occurred upon (A) the failure of the Company to pay or provide or cause to be paid or provided Executive’s Base Salary, Annual Bonus (if any) or Retention Payments when due hereunder or any reduction in Base Salary or Target Annual Bonus (as a percentage of Base Salary); (B) a material reduction in, or the failure of the Company to provide in all material respects, the employee benefits to which Executive is entitled to or receiving as of the date hereof (excluding any reductions generally applicable to all senior executives); (C) a relocation of Executive’s principal place of business which will result in an increase by more than thirty (30) miles in Executive’s one-way commute; (C) a reduction in Executive’s title or a material reduction in the nature, status or scope of Executive’s authorities, duties and/or responsibilities; (D) the failure of a successor employer to the Company to assume this Agreement in writing; (E) the Company’s delivery of a Notice pursuant to Section 1 to not extend the Employment Term; or (F) Executive’s not being the Executive Vice President and Chief Financial Officer of the operating entity following the occurrence of a Change of Control (as defined in the Securityholders Agreement, among Holdings and the other parties thereto (including Executive)); provided that (i) the events described in this Section 7(c)(ii) shall constitute a Constructive Termination only if the Company fails to cure such event within 30 days after Notice is given by Executive specifying in reasonable detail the event which constitutes Constructive Termination and (ii) “Constructive Termination” shall cease to exist for an event on the 90^th day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Company Notice thereof prior to such date.

5

(iii) If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns as a result of a Constructive Termination, Executive shall be entitled to receive:

(A) the Accrued Rights;

(B) a pro rata portion of an Annual Bonus (if otherwise payable in accordance with Section 3(c)), payable within 30 days after annual bonuses in respect of the year of termination are generally paid to senior executives of the Company, based upon the percentage of the fiscal year that shall have elapsed through the date of Executive’s termination of employment;

(C) subject to Executive’s compliance with the provisions of Sections 8 and 9, the payment of an aggregate amount equal to the product of (x) two and (y) the sum of the annual Base Salary amount plus an amount equal to Executive’s Target Annual Bonus, which aggregate amount shall be payable to Executive in equal installments in accordance with the Company’s normal payroll practices, as in effect on the date of the termination of Executive’s employment, over twenty-four months after the date of such termination; provided that the aggregate amount described in this clause (C) shall be reduced by the present value of any other cash severance benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates; and

(D) continued coverage under the Company’s group health plans until the earlier of (i) twenty-four months from Executive’s date of termination of employment with the Company and (ii) the date such Executive is or becomes eligible for comparable coverage under health plans of another employer.

Amounts payable to Executive under subparagraphs (B), (C) and (D), above, are subject to Executive providing a release of all claims to the Company in the form attached hereto as Exhibit A (with any changes necessary to comply with applicable law and/or make the release legally enforceable in the reasonable judgment of the Company) no later than the 59^th day following termination of employment (and the Company may, at its sole election, defer the payment of any such amount until the 60^th day following termination of employment). Following Executive’s termination of employment by the Company without Cause (other than by reason of Executive’s death or Disability) or by Executive’s resignation as a result of a Constructive Termination, except as set forth in this Section 7(c)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(d) Expiration of Employment Term.

(i) Election Not to Extend the Employment Term. In the event either party elects not to extend the Employment Term pursuant to Section 1, unless Executive’s employment is terminated pursuant to paragraphs (a), (b) or (c) of this Section 7, Executive’s termination of employment hereunder (whether or not Executive continues as an employee of the Company

6

thereafter) shall be deemed to occur on the close of business on the day immediately preceding the next scheduled Extension Date and Executive shall be entitled to receive the Accrued Rights. Following such termination of Executive’s employment hereunder as a result of either party’s election not to extend the Employment Term, except as set forth in this Section 7(d)(i) and subject to the provisions of paragraphs (a), (b) or (c) of this Section 7 as may apply, Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(ii) Continued Employment Beyond the Expiration of the Employment Term. Unless the parties otherwise agree in writing, continuation of Executive’s employment with the Company beyond the expiration of the Employment Term shall be deemed an employment at-will and shall not be deemed to extend any of the provisions of this Agreement and Executive’s employment may thereafter be terminated at will by either Executive or the Company; provided, that the provisions of Sections 8, 9 and 10 of this Agreement, and any accrued and vested rights of Executive as of the last day of the Employment Term, shall survive any termination of this Agreement or Executive’s termination of employment hereunder.

(e) Notice of Termination. Any purported termination of employment by the Company or by Executive (other than due to Executive’s death) shall be communicated by Notice of Termination to the other party hereto in accordance with Section 12(i) hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a Notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated.

(f) Board/Committee Resignation. Upon termination of Executive’s employment for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the Board (and any committees thereof) and the board of directors (and any committees thereof) of any of the Company’s affiliates.

8. Non-Competition.

(a) Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees as follows:

(i) Executive will not, within eighteen months following the termination of Executive’s employment with the Company (the “Post-Termination Period”) or during the Employment Term (collectively with the Post-Termination Period, the “Restricted Period”), accept an employment or consulting relationship (or own or have any financial interest in), directly or indirectly, with any entity which derives at least 10% of its revenue from engaging in the business of home respiratory therapy, home infusion therapy, and home medical equipment that is competitive with the Company and its subsidiaries within the United States (a “Competitive Business”).

(ii) During the Restricted Period, Executive will not initiate or respond to communications with any of the employees of the Company or its subsidiaries who earned annually $50,000 or more as a Company or subsidiary employee during the twelve-month period prior to the termination of such employee’s employment with

7

the Company, for the purpose of soliciting such employee, or facilitating the hiring of any such employee, to work for any other business, individual, partnership, firm, corporation, or other entity.

(iii) During the Restricted Period, Executive will not influence or attempt to influence customers of the Company or its subsidiaries or any of its present or future subsidiaries or affiliates, either directly or indirectly, to divert their business to any individual, partnership, firm, corporation or other entity then in competition with the business of the Company or any subsidiary or affiliate of the Company.

(iv) During the Restricted Period, Executive will not, other than as required by law or by order of a court or other competent authority, make or publish, or cause any other person to make or publish, any statement that is disparaging or that reflects negatively upon the Company or its affiliates, or that is or reasonably would be expected to be damaging to the reputation of the Company or its affiliates.

Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly own, solely as an investment, securities of any person engaged in a Competitive Business which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Executive (i) is not a controlling person of, or a member of a group which controls, such person and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such person.

(b) It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 8 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction, that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

(c) The period of time during which the provisions of this Section 8 shall be in effect shall be extended by the length of time during which Executive is in breach of the terms hereof as determined by any court of competent jurisdiction on the Company’s application for injunctive relief.

8

9. Confidentiality.

(a) Executive will not at any time (whether during or after Executive’s employment with the Company) (x) retain or use for the benefit, purposes or account of Executive or any other person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information — including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals — concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“Confidential Information”) without the prior written authorization of the Board.

(b) “Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of Executive’s breach of this covenant or any breach of other confidentiality obligations by third parties; (b) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (c) required by law to be disclosed (including via subpoena); provided that Executive shall give prompt Notice to the Company of such requirement of law, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

(c) Except as required by law, Executive will not disclose to anyone, other than Executive’s immediate family and legal or financial advisors, the existence or contents of this Agreement; provided, that Executive may disclose to any prospective future employer the notice provisions of Sections 8 and 9 of this Agreement provided they agree to maintain the confidentiality of such terms.

(d) Upon termination of Executive’s employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates; (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information and Executive’s rolodex (or other physical or electronic address book); and (z) fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information not within Executive’s possession or control of which Executive is or becomes aware. Notwithstanding the

9

foregoing, Executive may retain Executive’s rolodex and similar address books. To the extent that Executive is provided with a cell phone number by the Company during employment, the Company shall cooperate with Executive in transferring such cell phone number to Executive’s individual name following termination.

(e) The provisions of Section 8, 9 and 10 shall survive the termination of Executive’s employment for any reason.

10. Specific Performance. Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Sections 8 or 9 would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to seek a temporary or permanent injunction or any other equitable remedy which may then be available.

11. Excise Tax.

(a) Change of Control Which Occurred Prior to the Effective Date.

(i) In the event that any amount or benefit that may be paid or otherwise provided to or in respect of Executive by or on behalf of the Company or any affiliate, whether pursuant to this Agreement or otherwise (collectively, “Covered Payments”), is or may, as a result of a Change of Control (as defined in the Prior Agreement) or other transaction that was consummated on or prior to the Effective Date, become subject to the tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any successor provision or any comparable provision of state, local or foreign law) (“Excise Tax”), the Company will pay to Executive a “Reimbursement Amount” equal to the total of: (A) any Excise Tax on the Covered Payments, plus (B) any Federal, state, and local income taxes, employment and excise taxes (including the Excise Tax) on the Reimbursement Amount, plus (C) the product of any deductions disallowed for Federal, state or local income tax purposes because of the inclusion of the Reimbursement Amount in Executive’s income multiplied by Executive’s combined Federal, state, and local income tax rate for the calendar year in which the Reimbursement Amount is includible in Executive’s taxable income, plus (D) any interest, penalties or additions to tax imposed under applicable law in connection with the Excise Tax or the Reimbursement Amount, plus (E) any reasonable out-of-pocket costs incurred by Executive in connection with any of the foregoing. For purposes of this Section 11(a)(i), Executive will be deemed to pay (1) Federal income taxes at the highest applicable marginal rate of Federal income taxation applicable to individuals for the calendar year in which the Reimbursement Amount is includible in Executive’s taxable income and (2) any applicable state and local income taxes at the highest applicable marginal rate of taxation applicable to individuals for the calendar year in which such Reimbursement Amount is includible in Executive’s taxable income, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year (determined without regard to limitations on deductions based upon the amount of Executive’s adjusted gross income). Except to the extent provided in Section 11(a)(iii) below, this provision is intended to put Employee in the same position as Employee would have been had no Excise Tax been imposed upon or incurred as a result of any Covered Payment that is paid or otherwise provided to or in respect of Executive in connection with a Change of Control or other transaction that was consummated on or prior to the Effective Date.

10

(ii) The payment of a Reimbursement Amount under this Section 11 shall not be conditioned upon Executive’s termination of employment.

(iii) Notwithstanding the foregoing provisions of this Section 11, if the Company determines that, absent this sentence, Executive is entitled to a Reimbursement Amount, but that the portion of the Covered Payments that would be treated as “parachute payments” under Code Section 280G (“Covered Parachute Payments”) does not exceed 103% of the greatest amount of Covered Parachute Payments that could be paid to Executive such that the receipt of such Covered Parachute Payments would not give rise to any Excise Tax (the “Safe Harbor Amount”), then no Reimbursement Amount shall be paid to Executive (unless for any reason Executive is determined to be subject to the Excise Tax after application of the balance of this sentence, in which case the full Reimbursement Amount shall be paid), and the Covered Parachute Payments payable under this Agreement shall be reduced so that the Covered Parachute Payments, in the aggregate, are reduced to the Safe Harbor Amount. For purposes of reducing the Covered Parachute Payments to the Safe Harbor Amount, only amounts payable under this Agreement shall be reduced. If the reduction of the amounts payable under this Agreement would not result in a reduction of the Covered Parachute Payments to the Safe Harbor Amount, no amounts payable under this Agreement or otherwise shall be reduced pursuant to this Section 11(a)(iii). The Company shall notify Executive of any intent to reduce the amount of any Covered Payments in accordance with this Section 11(a)(iii) (which notice, if practicable, shall be given prior to the occurrence of an event that would give rise to a Covered Parachute Payment), and Executive shall have the right to designate which of the Covered Payments shall be reduced and to what extent, provided that Executive may not so elect to the extent that, in the determination of counsel to the Company, such election would cause Executive to be subject to the Excise Tax.

(iv) The determination of whether an event described in Section 280G(b)(2)(A)(i) of the Code has occurred, the amount of any Reimbursement Amount and/or the amounts described in Section 11(a)(iii) above shall be made initially by an accounting firm selected by the Compensation Committee of the Board (the “Compensation Committee”) (as constituted prior to the occurrence of any Change of Control) (the “Compensation Committee”), or, if no such firm is selected, by the independent compensation consulting firm retained by the Compensation Committee prior to any Change of Control to provide consulting advice to the Compensation Committee; provided, however, that nothing herein shall limit Executive’s right to payment of the Reimbursement Amount in the event it is determined that any of such initial determinations was incorrect.

(v) Executive shall promptly notify the Company in writing of any claim by any taxing authority that, if successful, would require the payment by the Company of a Reimbursement Amount; provided, however, that failure by Executive to give such notice promptly shall not result in a waiver or forfeiture of any of Executive’s rights under this Section 11 except to the extent of actual damages suffered by the Company as a result of such failure. If the Company notifies Executive in writing within 15 days after receiving such notice that it desires to contest such claim (and demonstrates to the reasonable satisfaction of Executive its ability to pay any resulting Reimbursement Amount), Executive shall:

(A) give the Company any information reasonably requested by the Company relating to such claim;

11

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

(C) cooperate with the Company in good faith in order effectively to contest such claim; and

(D) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company’s actions do not unreasonably interfere with or prejudice Executive’s disputes with the taxing authority as to other issues; and provided, further, that the Company shall bear and pay on an after-tax and as-incurred basis, all attorneys fees, costs and expenses (including additional interest, penalties and additions to tax) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax and as-incurred basis, for all resulting taxes (including, without limitation, income and excise taxes), interest, penalties and additions to tax. Notwithstanding the foregoing, if Executive is entitled to a Reimbursement Amount pursuant to this Section 11, Executive shall forfeit 260,000 of Executive’s Class A-2 Units in Holdings.

(b) Change of Control Which Occurs After the Effective Date. Notwithstanding anything herein to the contrary, in the event that a Change of Control or other transaction that could reasonably be expected to result in the payment of a Reimbursement Amount pursuant to this Section 11 occurs on or after the Effective Date, if applicable at the time of such Change of Control, the Company shall use best efforts to obtain shareholder approval for any of the payments or benefits received or to be received by Executive, whether pursuant to this Agreement or otherwise, that are potentially subject to the Excise Tax, so that upon such shareholder approval, the payments and/or benefits shall not be subject to the Excise Tax; provided that failure to obtain such shareholder approval shall not constitute a breach of this Agreement or result in any additional payments to be made to Executive.

12. Miscellaneous.

(a) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of laws principles thereof that would direct the application of the laws of any other jurisdiction.

(b) Entire Agreement/Amendments. This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company. There are no restrictions, agreements, promises, warranties, covenants or undertakings between

12

the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto. In the event of any inconsistency between this Agreement and any other plan, program, practice or agreement of which Executive is a participant or a party, this Agreement shall control unless such other plan, program, practice or agreement specifically refers to the provisions of this sentence.

(c) No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(d) Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

(e) Assignment. This Agreement, and all of the respective parties rights and duties hereunder, shall be assignable or delegable only pursuant to a written agreement executed by both parties hereto. Upon such assignment, the rights and obligations of the respective parties hereunder shall become the rights and obligations of such affiliate or successor person or entity.

(f) Set Off; No Mitigation. The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Company or its affiliates. Executive shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment, and such payments shall not be reduced by any compensation or benefits received from any subsequent employer or other endeavor, except as provided in Section 7(c)(iii)(D)(ii).

(g) Compliance with IRC Section 409A. The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith. Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six months following Executive’s termination of employment with the Company (or the earliest date as is permitted under Section 409A) (the “Delay Period”), and (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a

13

manner, determined by the Board in consultation with Executive, that does not cause such an accelerated or additional tax. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to Executive) during any one year may not effect amounts reimbursable or provided in any subsequent year; provided, however, that with respect to any reimbursements for any taxes which Executive would become entitled to under the terms of this Agreement, the payment of such reimbursements shall be made by the Company no later than the end of the calendar year following the calendar year in which Executive remits the related taxes. The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 12(g); provided that neither the Company nor any of its employees or representatives shall have any liability to Executive with respect to thereto.

(h) Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. In the event of Executive’s death prior to receipt of all amounts payable to Executive (including any unpaid amounts due under Section 7), such amounts shall be paid to Executive’s beneficiary designated by him by Notice to the Company or, in the absence of such designation, to Executive’s estate.

(i) Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three postal delivery days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that Notice of change of address shall be effective only upon receipt (each such communication, “Notice”).

If to the Company, addressed to:

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: General Counsel

with a copy which shall not constitute Notice to:

The Blackstone Group

345 Park Avenue

New York, New York 10154

Attention: Neil P. Simpkins

14

with a copy which shall not constitute Notice to:

Simpson Thacher & Bartlett LLP

425 Lexington Ave.

New York, NY 10017

Attention: Gregory Grogan

To the most recent address of Executive set forth in the personnel records of the Company, with a copy which shall not constitute Notice to:

Skadden Arps Slate Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attention: Paul T. Schnell

                  Neil P. Stronski

(j) Executive Representation. Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

(k) Prior Agreements. This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive and the Company and/or its affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its affiliates (including without limitation, the Prior Agreement, except as otherwise specified herein). For the avoidance of doubt, Executive hereby confirms that he has no, and hereby waives as of the Effective Date, any right to terminate Executive’s employment with the Company for “good reason” (as defined in the Prior Agreement) and/or any compensation in respect of any such termination

(l) Cooperation. Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive’s employment with the Company and its affiliates. This provision shall survive any termination of this Agreement.

(m) Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

(n) Attorney’s Fees. The Company shall pay the reasonable documented legal fees and disbursements incurred by Executive in connection with the negotiation and preparation of the documentation of this Agreement and other agreements entered into between Executive and the Company, Holding and their affiliates on the date hereof.

(o) Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

[Signature Page Follows this Page]

15

IN WITNESS WHEREOF, the parties hereto have duly executed this Employment Agreement as of the day and year first above written.

APRIA HEALTHCARE GROUP INC.

/s/ Norman C. Payson

By:     Norman C. Payson

Title: Chief Executive Officer

EXECUTIVE

/s/ Chris A. Karkenny

CHRIS A. KARKENNY

16

APPENDIX A

Performance as percentage of EBITDA target	Annual Bonus earned as percentage of Base Salary
90% or less	0	%
100%	100	%
120% or greater	200	%

* Increasing in linear progression (as calculated by the Board) from 0% to 100% of Target Annual Bonus for EBITDA target achieved between 90% and 100% and from 100% to 200% of Target Annual Bonus for EBITDA target between 100% and 120% or greater. The EBITDA target for 2009 shall be set at the “Bank Case” level. “EBITDA” shall be calculated in a manner consistent with the definition of “EBITDA” in the draft Offering Memorandum dated December 12, 2008.

EXHIBIT A

RELEASE OF CLAIMS

This Release of Claims is entered into by Chris A. Karkenny (“Executive”).

WHEREAS, Executive and Apria Healthcare Group Inc. with offices at                      (the “Company”) entered into an Employment Agreement (the “Employment Agreement”) dated December         , 2008 that provides Executive certain severance and other benefits in the event of an involuntary termination of Executive’s employment without Cause or Executive’s resignation of employment due to a Constructive Termination (each term as defined under the Employment Agreement);

WHEREAS, Executive’s employment has so terminated; and

WHEREAS, pursuant to Section 7(c)(iii) of the Employment Agreement, a condition of Executive’s entitlement to certain severance and other benefits thereunder is his agreement to this Release of Claims.

NOW, THEREFORE, in consideration of the severance and other benefits provided under Section 7(c)(iii)(B), (C) and (D) of the Employment Agreement, Executive agrees as follows:

1. Executive, for himself and his heirs, executors and administrators, hereby fully and finally waives, discharges and releases the Company, including each of the Company’s past, current and future parents, subsidiaries, and affiliates, and its and their shareholders, members, directors, officers, and employees (“Released Parties”), from any and all claims arising on or prior to the date hereof relating to his employment with the Company or his termination therefrom, whether now known or later discovered, which he or anyone acting on his behalf might otherwise have had or asserted, including, but not limited to, any express or implied contract of employment claims, any tort claims, claims under Title VII of the Civil Rights Act of 1964, as amended, the Family and Medical Leave Act of 1993, Section 1981 of the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967, as amended, Americans with Disabilities Act of 1991, as amended, the Older Workers Benefit Protection Act of 1990, the Worker Adjustment and Retraining Notification Act, the laws, including the labor laws of any state, and all claims under related common law, statutes, and executive orders at the federal, state and local levels of government, and any claims to any benefits from employment with the Company, including, but not limited to, claims for salary, bonuses, unvested stock options, severance pay, vacation pay or any benefits under the Employee Retirement Income Security Act of 1974, as amended, other than: (i) those benefits set forth in Section 7(c)(iii) of the Employment Agreement, (ii) all rights and benefits as a member of the Company or as the holder of any equity security or any other equity interest in the Company, and (iii) any claims for accrued and vested benefits under any of the Company’s employee retirement and welfare benefit plans. In addition, Executive represents that no incident has occurred during his employment with the Company that could form the basis for any claim by him against the Company under the worker’s compensation laws of any jurisdiction. For the avoidance of

doubt, the foregoing does not constitute a release of any claims of Executive in respect of his direct and indirect holdings of equity in the Company and its affiliates or any other claims of Executive under any other written agreement that is not related to Executive’s employment and is between Executive or any of his affiliates and the Company and any of its affiliates.

2. Executive affirms that he has read the following quotation of the language of Section 1542 of the California Civil Code, which states in full:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

Executive expressly waives any rights that he may have under Section 1542 to the full extent that he may lawfully waive such rights pertaining to a general release of claims, and he affirms that he releases all known or unknown claims that he have or may have against the Company or any of the Released Parties as stated in this Release of Claims.

3. Executive represents that he has not brought any charges, claims, demands, suits or actions, known or unknown, in any forum, against the Released Parties related to his employment or his termination (excluding any claims of Executive in respect of his direct and indirect holdings of equity in the Company and its affiliates or any other claims of Executive under any other written agreement that is not related to Executive’s employment and is between Executive or any of his affiliates and the Company and any of its affiliates); provided, however, that Executive shall not be prevented from enforcing any rights he may have under the terms of this Release of Claims or in respect of any claims of Executive in respect of his direct and indirect holdings of equity in the Company and its affiliates or any other claims of Executive under any other written agreement that is not related to Executive’s employment and is between Executive or any of his affiliates and the Company and any of its affiliates.

4. Executive acknowledges that he is subject to a confidentiality covenant pursuant to Section 9 of the Employment Agreement and a noncompetition and non-solicitation covenant pursuant to Section 8 of the Employment Agreement and hereby reaffirms his obligations thereunder.

5. EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED, IN WRITING, TO CONSULT WITH AN ATTORNEY OF HIS CHOICE PRIOR TO SIGNING THIS AGREEMENT AND THAT HE HAS SIGNED THIS AGREEMENT KNOWINGLY, VOLUNTARILY, AND FREELY, AND WITH SUCH COUNSEL AS HE DEEMED APPROPRIATE. IN ADDITION, EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN PROVIDED WITH A PERIOD OF UP TO TWENTY-ONE (21) DAYS IN WHICH TO CONSIDER WHETHER OR NOT TO ENTER INTO THIS RELEASE. FURTHER, EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED OF HIS RIGHT TO REVOKE THIS AGREEMENT DURING THE SEVEN (7) DAY PERIOD FOLLOWING EXECUTION HEREOF, AND THAT THE AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED.

6. Nothing contained herein shall be construed as an admission by the Company of any liability of any kind to Executive, all such liability being expressly denied except for obligations of the Company imposed by the Employment Agreement which survive pursuant to this Release of Claims.

Chris A. Karkenny

Date:                             , 20        

EX-10.6

Exhibit 10.6

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (the “Agreement”) is entered into by and between Apria Healthcare Group Inc. (the “Company”) and Lawrence A. Mastrovich (the “Executive”), effective as of October 24, 2008. This Agreement amends and restates in its entirety that certain Employment Agreement by and between the Company and the Executive dated as of May 5, 2006 (the “Prior Employment Agreement”).

I. EMPLOYMENT.

The Company hereby employs the Executive and the Executive hereby accepts such employment, upon the terms and conditions hereinafter set forth. The term of the employment (the “Period of Employment”) will continue until the termination of the Executive’s employment by reason of his written resignation, termination by the Company for any reason by written notice of termination, or death, provided that for purposes of Section IV-D-3, the “Expiration Date” shall initially be April 7, 2004, and shall be extended one (1) day for each day of the Executive’s employment during the term of this Agreement until the Executive’s employment is terminated for any reason. For instance, if the Executive’s employment with the Company is terminated on January 1, 2003, the Expiration Date shall be December 31, 2004. The Executive’s employment may be terminated at any time by written notice from the Executive to the Company or from the Company to the Executive, in the manner provided in Section XVIII hereof.

II. DUTIES.

The Executive shall serve during the Period of Employment as the President and Chief Operating Officer of the Company, reporting to the Chief Executive Officer. The Executive shall undertake such duties and have such authority as the Company, through its Chief Executive Officer, shall assign to the Executive from time to time in the Company’s sole and absolute discretion, provided such duties and responsibilities are the types of duties that would ordinarily be assigned to a person with employment experience and a position comparable to that of the Executive. Initially, the Executive shall have responsibility for the following areas: field operations, corporate logistics, corporate revenue management, clinical services and regulatory affairs and compliance. The Executive agrees to devote substantially all of his working time and efforts to the business and affairs of the Company. The Executive further agrees that he shall not undertake any outside activities which create a conflict in interest with his duties to the Company, or which, in the judgment of the Board of Directors of the Company, interfere with the performance of the Executive’s duties to the Company.

III. COMPENSATION.

During the Period of Employment, the Executive shall be entitled to compensation and benefits set forth in this Section III.

1

A. Company will pay to the Executive a base salary at the rate of $580,000 per year. Such salary shall be payable in periodic installments in accordance with the Company’s customary practices. Amounts payable shall be reduced by standard withholdings and other authorized deductions. The Executive’s salary may be increased from time to time at the discretion of the Company.

B. Annual Bonus, Incentive, Savings and Retirement Plans. The Executive shall be entitled to participate in all annual bonus, incentive, savings and retirement plans, practices, policies and programs applicable generally to the Chief Executive Officer of the Company, including without limitation (i) the Company’s Executive Bonus Plan (a copy of which has been previously provided to the Executive) and (ii) the Company’s 401(k) Savings Plan. The parties to this Agreement recognize that such plans may be amended and/or terminated by the Company at any time without the consent of the Executive in accordance with the terms of such plans.

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

D. Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable employment expenses incurred by him in accordance with the policies, practices and procedures as in effect generally with respect to other executives of the Company. The parties to this Agreement recognize that such policies may be amended and/or terminated by the Company at any time without the consent of the Executive. In all events, any reimbursement made to the Executive pursuant to this Section III-D shall be made not later than the end of the calendar year following the year in which the related expense was incurred, and the amount of expenses eligible for reimbursement during any calendar year will not affect the amount of expenses eligible for reimbursement during any subsequent calendar year.

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

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

2

IV. TERMINATION.

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

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

3

theft, or other act constituting a felony (other than traffic related offenses or as a result of vicarious liability); or (B) the willful engaging by the Executive in misconduct that is significantly injurious to the Company. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause without delivery to the Executive of a notice of termination signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith opinion of the officer signing such notice, the Executive has engaged in or committed conduct of the nature described in this paragraph, and specifying the particulars thereof in detail.

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

D. Obligations of the Company Upon Termination.

1. Death or Disability. If the Executive’s employment is terminated by reason of the Executive’s death or Disability, this Agreement shall terminate without further obligations to the Executive or his legal representatives under this Agreement, other than for (a) payment of the sum of (i) the Executive’s base salary through the date of termination of employment to the extent not theretofore paid, plus (ii) any earned vacation pay, to the extent not theretofore paid (the sum of the amounts described in clauses (i) and (ii) shall be hereinafter referred to as the “Accrued Obligations”), which shall be paid to the Executive or his estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the date of termination of employment; and (b) payment to the Executive or his estate or beneficiary, as applicable, of (i) any amounts due pursuant to the terms of any applicable welfare benefit plans; (ii) obligations pursuant to the terms of any outstanding stock option agreements; and (iii) obligations under the Company’s 401(k) Savings Plan.

2. Cause. If the Executive’s employment is terminated by the Company for Cause, this Agreement shall terminate without further obligations to the Executive other than for the timely payment of the Accrued Obligations. If there is a bona fide dispute as to whether Cause existed under the circumstances and it is subsequently determined that the Company did not have Cause for termination under this Section IV-D-2, then the Company’s decision to terminate shall be deemed to have been made under Section IV-D-3 and the amounts payable thereunder in accordance with Treasury Regulation Section 1.409A-3(g) shall be the only amounts the Executive may receive for his termination.

3. Other than Cause or Death or Disability.

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

(x) an amount equal to the Contract Balance (as defined below) in one lump sum, such amount to be payable (subject to Section X-B) within ten (10) business days following the date the release referred to below in this Section IV-D-3(a) becomes irrevocable under applicable law and in all events not later than the end of the month following the month in which the Executive’s Separation from Service (as such term is defined in Section IV-D-3(g) below) occurs; and

4

(y) the Accrued Obligations as of the date of termination of employment.

Any payment made pursuant to this Section IV-D-3(a) shall be reduced by all amounts required to be withheld by applicable law, and with respect to the payment referred to in the foregoing clause (x), shall only be made in exchange for the execution and delivery to the Company within 21 days of the termination of the Executive’s employment (or such longer period as may be required under applicable law) of a valid release of all claims the Executive may have against the Company in the form attached hereto as Exhibit A (which may be modified only to the extent necessary to reflect developments in applicable law that would jeopardize enforceability of such release unless the modifications are not made) and not revoking such release within any revocation period provided under applicable law. Such payment shall constitute the sole and entire obligation of the Company to provide any compensation or benefits to the Executive upon termination, except for obligations under the Company’s 401(k) Savings Plan, obligations pursuant to the terms of any outstanding stock option agreements, and the Company’s obligations to make payments required to be made under any other incentive compensation plan.

(b) The term “Good Reason” means (except as set forth below):

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

(ii) if, the Company requires the Executive to be based at an office location which will result in an increase of more than thirty (30) miles in the Executive’s one-way commute, except in connection with a relocation of the Company’s principal executive offices; or

5

(iii) if the Company does not permit the Executive to continue to serve as the President and Chief Operating Officer or another mutually acceptable senior executive position.

provided, however, that “Good Reason” shall cease to exist for an event on the 60th day following the earlier of the Company’s written notice of the change to the Executive or the Executive’s becoming aware thereof, unless the Executive has given the Company written notice of his/her objection thereto prior to such date.

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

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

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

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

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

6

(v) the Company’s not permitting the Executive to continue to serve as the President and Chief Operating Officer or another mutually acceptable senior executive position.

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

(c) The term “Contract Balance” means an amount equal to the annual base salary that the Executive would have earned from the Company had the Executive continued his employment from the date the Executive’s employment terminated through the Expiration Date (i.e., base salary for two (2) years), using the rate of base salary in effect on the date on which the Executive received or gave written notice of his termination, plus an amount equal to two (2) times the sum of (i) an amount equal to the average of the annual bonuses with respect to the Company’s two (2) most recently completed fiscal years, if any, determined to be payable and/or paid to the Executive under the Company’s the Executive Bonus Plan (or comparable bonus plan) prior to such notice of termination, and (ii) an amount determined by the Company from time to time in its sole discretion to be equal to the annual cost for the Executive of obtaining medical, dental and vision insurance under COBRA, which annual amount is hereby initially estimated to be $20,000.

(d) A “Change of Control” shall be deemed to have occurred if:

(i) any “person,” as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “1934 Act”) is, becomes or enters a contract to become, the “beneficial owner,” as such term is used in Rule 13d-3 promulgated under the 1934 Act, directly or indirectly, of securities representing twenty-five percent (25%) or more of the voting common stock of the Company;

(ii) all or substantially all of the business or assets of the Company are disposed of, or a contract is entered to dispose of all of the business of the Company pursuant to a merger, consolidation other transaction in which (a) the Company is not the surviving parent company or (b) the stockholders of the Company prior to the transaction do not

7

(iii) the Company is materially or completely liquidated.

Notwithstanding clause (i) above, a “Change of Control” shall not be deemed to have occurred solely because a person shall be, become or enter into a contract to become the beneficial owner of 25% or more, but less than 40%, of the voting common stock of the Company, if and for so long as such person is bound by, and in compliance with, a contract with the Company providing that such person may not nominate, vote for, or select more than a minority of the directors of the Company. The exception provided by the preceding sentence shall cease to apply with respect to any person upon expiration, waiver, or non-compliance with any such contract, by which such person was bound.

(e) In the event the Executive initiates arbitration pursuant to Section V to enforce his rights to any payments under this Section IV-D-3, or the Company seeks to withhold or reduce any such payments for any reason, then:

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

(ii) the Company shall pay all expenses incurred by the Executive in prosecuting or defending any such proceeding as they are incurred by the Executive in advance of the final disposition of such dispute, together with any tax liability incurred by the Executive in connection with the receipt of such amounts (any such payment to be made as soon as reasonably practicable following the date such expense was incurred or tax was remitted, as the case may be, and in all events not later than the end of the Executive’s taxable year following the Executive’s taxable year in which the expense was incurred or tax was remitted, as the case may be, and with respect to any expenses, the amount of expenses eligible for reimbursement during the Executive’s taxable year may not affect the amount of expenses eligible for reimbursement in any other taxable year); provided, however, that the payment of such expenses incurred in advance of the final disposition of such proceeding shall be made only upon delivery to the Company of an undertaking, by or on behalf of the Executive, to repay all amounts so advanced to the extent the arbitrator in such proceeding so determines as provided in Section V; and

8

(iii) all such payments required under this Agreement shall continue to be made on the dates provided herein without any offsets, claims or charges of any kind whatsoever being asserted by the Company, except in the event a final determination pursuant to the arbitration provisions of Section V has been rendered and such determination provides that the Company is entitled to assert any such offset, claim or charge against the Executive, in which event any such offset, if applicable, shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

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

(g) Separation from Service. As used herein, a “Separation from Service” occurs when the Executive dies, retires, or otherwise has a termination of employment with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-l(h)(l), without regard to the optional alternative definitions available thereunder.

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

V. ARBITRATION.

Any dispute or controversy arising under or in connection with this Agreement or the Executive’s employment by the Company shall be settled exclusively by arbitration, conducted before a single neutral arbitrator in accordance with the American Arbitration Association’s National Rules for Resolution of Employment Disputes as then in effect. Such arbitration shall be conducted in Orange County, California, and the arbitrator shall be a resident of Orange County, California or of a county contiguous to Orange County, California. Judgment may be entered on the arbitrator’s award in any court having jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of Sections VI, VII, or IX of this Agreement and the Executive hereby consents that such restraining order or injunction

9

may be granted without the necessity of the Company’s posting any bond, and provided, further, that the Executive shall be entitled to seek specific performance of his right to be paid until the date of employment termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. The arbitrator’s order shall specify, based on the outcome of the arbitration, whether the Executive shall repay any of the Executive’s expenses theretofore paid by the Company pursuant to Section IV-D-3(e)(ii). The fees and expenses of the arbitrator shall be borne by the Company.

VI. NONCOMPETITION: ANTISOLICITATION.

The Executive promises and agrees that during the term of this Agreement and for a period of two years thereafter, he will not, directly or indirectly, either for himself or for any other person, entity or business, (i) be engaged in any way with a competing business of the Company or any of its present or future subsidiaries or affiliates, or (ii) induce or attempt to induce any patient, customer, supplier, licensee, or other party having a business relationship with Apria or any of its subsidiaries or affiliates to cease or reduce the scope of that relationship. For purposes of the above covenant in this Section VI, the Executive shall “be engaged in any way with a competing business of the Company” if he, directly or indirectly, engages or invests in, owns, manages, operates, finances, controls, or participates in the ownership, management, operation or control of, is employed by, lends his name or credit to, or renders consulting or other services or advice to, any person, firm, corporation or other business entity which performs or sells services or products which are competitive with those services and products performed or sold at any time after the date hereof by the Company or any of its subsidiaries or affiliates in any jurisdiction.

VII. SOLICITING EMPLOYEES.

The Executive promises and agrees that, for a period of two years following termination of his employment, he will not, directly or indirectly, solicit any of the Company employees who earned annually $50,000 or more as a Company employee during the last six months of his or her own employment, or facilitate the hiring of any such employee, to work for any other business, individual, partnership, firm, corporation, or other entity.

VIII.   CONFIDENTIAL INFORMATION.

A. The Executive, in the performance of his duties on behalf of the Company, shall have access to, receive and be entrusted with confidential information, including but not limited to systems technology, field operations, reimbursements, development, marketing, organizational, financial, management, administrative, clinical, customer, distribution and sales information, data, specifications and processes presently owned or at any time in the future developed, by the Company or its agents or consultants, or used presently or at any time in the future in the course of its business that is not otherwise part of the public domain (collectively, the “Confidential Material”). All such Confidential Material is considered secret and will be available to the Executive in confidence. Except in the performance of duties on behalf of the Company, the Executive shall not, directly or indirectly for any reason whatsoever, disclose or use any such Confidential Material, unless such Confidential Material ceases (through no fault of the Executive’s) to be confidential because it has become part of the public domain. All records,

10

files, drawings, documents, notes, disks, diskettes, tapes, magnetic media, photographs, equipment and other tangible items, wherever located, relating in any way to the Confidential Material or otherwise to the Company’s business, which the Executive prepares, uses or encounters during the course of his employment, shall be and remain the Company’s sole and exclusive property and shall be included in the Confidential Material. Upon termination of this Agreement by any means, or whenever requested by the Company, the Executive shall promptly deliver to the Company any and all of the Confidential Material, not previously delivered to the Company, that may be or at any time has been in the Executive’s possession or under the Executive’s control.

B. The Executive hereby acknowledges that the sale or unauthorized use or disclosure of any of the Company’s Confidential Material by any means whatsoever and at any time before, during or after the Executive’s employment with the Company shall constitute unfair competition. The Executive agrees that he shall not engage in unfair competition either during the time employed by the Company or any time thereafter.

C. The Executive promises and agrees that for a period of two years following termination of his employment, he will not, other than as required by law or by order of a court or other competent authority, make or publish, or cause any other person to make or publish, any statement that is disparaging or that reflects negatively upon the Company, or that is or reasonably would be expected to be damaging to the reputation of the Company.

IX. EXCISE TAX.

A. In the event that any amount or benefit that may be paid or otherwise provided to or in respect of the Executive by or on behalf of the Company or any affiliate, whether pursuant to this Agreement or otherwise (collectively, “Covered Payments”), is or may become subject to the tax imposed under Section 4999 of the Code (or any successor provision or any comparable provision of state, local or foreign law) (“Excise Tax”), the Company will pay to the Executive a “Reimbursement Amount” equal to the total of: (A) any Excise Tax on the Covered Payments, plus (B) any Federal, state, and local income taxes, employment and excise taxes (including the Excise Tax) on the Reimbursement Amount, plus (C) the product of any deductions disallowed for Federal, state or local income tax purposes because of the inclusion of the Reimbursement Amount in the Executive’s income multiplied by the Executive’s combined Federal, state, and local income tax rate for the calendar year in which the Reimbursement Amount is includible in the Executive’s taxable income, plus (D) any interest, penalties or additions to tax imposed under applicable law in connection with the Excise Tax or the Reimbursement Amount, plus (E) any reasonable out-of-pocket costs incurred by the Executive in connection with any of the foregoing. Any payment of the Reimbursement Amount pursuant to this Section IX-A shall be made promptly after the determination is made pursuant to Section IX-D that such amount is payable to the Executive, and in all cases not later than the end of the Executive’s taxable year next following the year in which the Executive remits the related taxes; provided that, in the case of any reimbursement of expenses incurred due to a tax audit or litigation addressing the existence or amount of the tax liability, the payment shall be made promptly after the Executive incurs the expenses and in all cases not later than the end of the Executive’s taxable year following the Executive’s taxable year in which the related taxes are remitted to the taxing authority, or where as a result of such audit or litigation, no taxes are remitted, the audit is

11

completed or there is a final and nonappealable settlement or other resolution of the litigation. In addition, with respect to the reimbursement of any expenses pursuant to this Section IX-A which are not incurred due to a tax audit or litigation addressing the existence or amount of tax liability, such expenses shall be paid to the Executive promptly after the Executive incurs the expenses and in all cases not later than the end of the Executive’s taxable year following the taxable year in which the Executive incurs such expenses, and the amount of expenses eligible for reimbursement during the Executive’s taxable year may not affect the amount of expenses eligible for reimbursement in any other taxable year. For purposes of this Section IX-A, the Executive will be deemed to pay (1) Federal income taxes at the highest applicable marginal rate of Federal income taxation applicable to individuals for the calendar year in which the Reimbursement Amount is includible in the Executive’s taxable income and (2) any applicable state and local income taxes at the highest applicable marginal rate of taxation applicable to individuals for the calendar year in which such Reimbursement Amount is includible in the Executive’s taxable income, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year (determined without regard to limitations on deductions based upon the amount of the Executive’s adjusted gross income). Except to the extent provided in Section IX-C below, this provision is intended to put the Executive in the same position as the Executive would have been had no Excise Tax been imposed upon or incurred as a result of any Payment.

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

C. Notwithstanding the foregoing provisions of this Section IX-A, if the Company determines that, absent this sentence, the Executive is entitled to a Reimbursement Amount, but that the portion of the Covered Payments that would be treated as “parachute payments” under Code Section 280G (“Covered Parachute Payments”) does not exceed 103% of the greatest amount of Covered Parachute Payments that could be paid to the Executive such that the receipt of such Covered Parachute Payments would not give rise to any Excise Tax (the “Safe Harbor Amount”), then no Reimbursement Amount shall be paid to the Executive (unless for any reason the Executive is determined to be subject to the Excise Tax after application of the balance of this sentence, in which case the full Reimbursement Amount shall be paid), and the Covered Parachute Payments payable under this Agreement shall be reduced so that the Covered Parachute Payments, in the aggregate, are reduced to the Safe Harbor Amount. For purposes of reducing the Covered Parachute Payments to the Safe Harbor Amount, only amounts payable under this Agreement shall be reduced. If the reduction of the amounts payable under this Agreement would not result in a reduction of the Covered Parachute Payments to the Safe Harbor Amount, no amounts payable under this Agreement or otherwise shall be reduced pursuant to this Section IX-C. The Company shall notify the Executive of any intent to reduce the amount of any Covered Payments in accordance with this Section IX-C (which notice, if practicable, shall be given prior to the occurrence of an event that would give rise to a Covered Parachute Payment). To the extent necessary to reduce the Covered Parachute Payments, the amounts payable or benefits to be provided to the Executive shall be reduced such that the economic loss to the Executive as a result of such reduction is minimized. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A of the Code, and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.

12

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

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

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

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

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

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

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

X. SECTION 409A.

A. It is intended that any amounts payable under this Agreement and the Company’s and the Executive’s exercise of authority or discretion hereunder shall comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) so as not to subject the Executive to payment of any interest or additional tax imposed under Section 409A. To the extent that any amount payable under this Agreement would trigger the additional tax imposed by Section 409A, the Agreement shall be construed and interpreted in a manner to avoid such additional tax yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Executive.

13

B. Notwithstanding any provision of this Agreement to the contrary, if the Executive is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-l(i) as of the date of the Executive’s Separation from Service, and if the deferral of the commencement of any payments or benefits otherwise payable hereunder for a period of six (6) months following the Executive’s Separation from Service is necessary pursuant to Section 409A of the Code, commencement of any such payments or benefits shall be delayed as required by Section 409A of the Code. Any amounts otherwise payable to the Executive upon or in the six (6) month period following the Executive’s Separation from Service that are not so paid by reason of this Section X-B shall be paid as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after the Executive’s Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of the Executive’s death), and any such payments shall be increased by an amount equal to interest on such payments for the period commencing with the date such payment would have otherwise been made but for this Section X-B (the “Original Payment Date”) and ending on the date such payment is actually made, at an interest rate equal to the prime rate in effect as of the Original Payment Date plus one point (for this purpose, the prime rate will be based on the rate published from time to time in The Wall Street Journal). The provisions of this Section X-B shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code.

C. Except as otherwise explicitly provided herein, any reimbursements or in-kind benefits provided hereunder shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the period of time specified in this Agreement (or, if no such period is specified, the Executive’s lifetime), (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit. In addition, any tax gross-up payments provided for herein shall be paid as soon as practicable, but in no event later than the end of the Executive’s taxable year following the Executive’s taxable year in which he remits the related taxes. Notwithstanding any other provision contained herein, any offset pursuant to the terms this Agreement of amounts payable to the Executive shall be in accordance with Section 409A of the Code.

XI. SUCCESSORS.

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

14

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

XII. WAIVER.

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

XIII. MODIFICATION.

This Agreement may not be amended or modified other than by a written agreement executed by the Executive and the Company’s Chief Executive Officer or Chairman.

XIV. SAVINGS CLAUSE.

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

XV. COMPLETE AGREEMENT.

This Agreement (including the attached exhibit) constitutes and contains the entire agreement and final understanding concerning the Executive’s employment with the Company and the other subject matters addressed herein between the parties. It is intended by the parties as a complete and exclusive statement of the terms of their agreement. It supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matter hereof (including, without limitation, the Prior Employment Agreement). Any representation, promise or agreement not specifically included in this Agreement shall not be binding upon or enforceable against either party. This is a fully integrated agreement. Except as provided herein, the Executive’s the Executive Severance Agreement with the Company, dated June 27, 2001, is no longer in effect. Notwithstanding the foregoing, the Noncompetition and Nonsolicitation Agreement dated as of the 7th day of March, 2007 between the Company and the Executive shall not be superseded by this Agreement and shall remain in full force and effect.

XVI. GOVERNING LAW.

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

15

XVII.   CONSTRUCTION.

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

XVIII.   COMMUNICATIONS.

All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or by courier, or if mailed by registered or certified mail, postage prepaid, addressed to the Executive at 5 Flax Court, Coto de Caza, CA 92679 or addressed to the Company at 26220 Enterprise Court, Lake Forest, California 92630, Attention: Chief Executive Officer, with a copy to the attention of the Senior Vice President, Human Resources. Either party may change the address at which notices shall be given by written notice given in the above manner.

XIX. EXECUTION.

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

XX. LEGAL COUNSEL.

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

16

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

APRIA HEALTHCARE GROUP INC.		THE EXECUTIVE
By	/s/ Norman C. Payson	By	/s/ Lawrence A. Mastrovich
	Norman C. Payson, M.D. Chief Executive Officer		Lawrence A. Mastrovich

17

EXHIBIT A

GENERAL RELEASE

THIS GENERAL RELEASE (this “Release”) is made as of the          day of                     , 20    , by and between Lawrence A. Mastrovich, an individual (“Executive”), and Apria Healthcare Group Inc., a Delaware corporation (“Apria”). In consideration of the payments and benefits to be provided to Executive pursuant to that certain Amended and Restated Employment Agreement, effective as of October 24, 2008, to which Executive and Apria are parties (the “Employment Agreement”), the sufficiency of which is acknowledged hereby, Executive and Apria agree as follows:

1. In consideration of Executive’s general release of claims, his agreements in paragraphs 7, 8 and 9 of the Severance Agreement, and his other promises set forth herein, Apria shall pay to Executive the following amounts:

a. a total of $                                     in severance compensation, subject to standard withholding for federal and state taxes, which shall be payable in accordance with Apria’s regular payroll procedures in a lump sum on                             ; and

b. all salary amounts earned but not yet paid, subject to standard withholding for federal and state taxes, payable on or as soon as practicable after                                                  .

2. On or before                                     , Executive shall return to Apria his company-provided laptop computer, cell phone, BlackBerry, credit cards, electronic fuel card, electronic building access cards, toll road FasTrak transmitter and all other property of Apria. He shall not take or copy in any form or manner any financial information, lists of customers, prices, or any other confidential and proprietary materials or information of Apria.

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

4. Except for (i) those obligations created by or arising out of this Release, (ii) any rights Executive may have under stock option agreements with Apria and any retirement, 401(k), or similar benefit plans of Apria, and (iii) the continuing right to indemnification as provided by applicable law or in Apria’s bylaws and articles of incorporation in connection with acts, suits or proceedings by reason of the fact that he was an officer or employee of Apria where the basis of the claims against him consists of acts or omissions taken or made in such capacity, or any indemnification rights of Executive otherwise provided pursuant to the Agreement and Plan of Merger among Apria, Sky Acquisition LLC, and Sky Merger Sub Corporation, dated as of June 18, 2008, Executive on behalf of himself, his descendants, dependents, heirs, executors, administrators, assigns, and successors, and each of them, hereby covenants not to sue and fully releases and discharges Apria, and its predecessors, subsidiaries and affiliates, past and present,

A-1

and each of them, as well as its and their trustees, directors, officers, agents, attorneys, insurers, employees, stockholders, representatives, assigns, and successors, past and present, and each of them, hereinafter together and collectively (including Apria) referred to as the “Apria Releasees,” with respect to and from any and all claims, wages, demands, rights, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, costs, expenses, attorneys’ fees, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which he now owns or holds or he has at any time heretofore owned or held as against the Apria Releasees, arising out of or in any way connected with his employment relationship with any Apria Releasee, or his voluntary resignation from employment with the Apria Releasees or any other transactions, occurrences, actions, omissions, claims, losses, damages or injuries whatsoever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of any Apria Releasee committed or omitted prior to the date of this Release, including, without limiting the generality of the foregoing, any claim under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the Fair Employment Practices Act, the Equal Pay Laws, the Workers’ Compensation Act, the Family and Medical Leave Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, the Employee Retirement Income Security Act of 1974, the California Fair Employment and Housing Act, the California Labor Code, the state and federal Worker Adjustment and Retraining Notification Act, the California Business and Professions Code, or any common law or statutory claim for fraud, wrongful termination, violation of public policy or defamation, or any claim for compensation, severance pay, bonus, sick leave, holiday pay, vacation pay, life insurance, health or medical insurance or any other fringe benefit, workers’ compensation or disability.

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

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

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

A-2

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

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

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

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

b. He was given a copy of this Release on                             , and informed that he had 21 days within which to consider this Release, although he is free to execute this Release anytime within that 21-day period as indicated in Section 16 below.

c. He was informed that he has seven days following the date of his execution of this Release in which to revoke the Release, which revocation may be effected by means of a written notice sent to the General Counsel of Apria at Apria’s corporate headquarters, provided that in all events any revocation must be received by Apria during the seven-day revocation period.

A-3

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

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

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

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

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

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

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

14. Any dispute or controversy between Executive on the one hand, and Apria (or any other Apria Releasee), on the other hand, in any way arising out of, related to, or connected with this Release or the subject matter hereof, or otherwise in any way arising out of, related to, or connected with Executive’s employment with any Apria Releasee or the termination of

A-4

Executive’s employment with any Apria Releasee, shall be submitted for resolution by arbitration in accordance with the provisions of the Employment Agreement. APRIA AND EXECUTIVE ACKNOWLEDGE, UNDERSTAND AND AGREE THAT IN THE EVENT OF A DISPUTE UNDER THIS RELEASE, EACH PARTY HAS WAIVED ANY RIGHT TO A JURY TRIAL AND A JUDICIAL RESOLUTION OF THE DISPUTE.

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

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

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

18. Executive hereby declares as follows:

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

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

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

[signature page follows]

A-5

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

Executive

APRIA HEALTHCARE GROUP INC.
By
	[Name]
	[Title]

A-6

EX-10.7

Exhibit 10.7

AMENDMENT TO THE EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”) is entered into as of April 3, 2009 (the “Effective Date”) by and between Apria Healthcare Group, Inc., a Delaware corporation (the “Company”), and Lawrence A. Mastrovich (the “Executive”).

WHEREAS, Executive is currently employed as President and Chief Operating Officer of the Company pursuant to an amended and restated employment agreement dated October 24, 2008, between Executive and the Company (the “Employment Agreement”); and

WHEREAS, the consummation on October 28, 2008 (the “Closing Date”) of the transactions contemplated in the Agreement and Plan of Merger (the “Merger Agreement”), dated as of June 18, 2008, by and among Apria, Sky Acquisition LLC, a Delaware limited liability company, and Sky Merger Sub Corporation, a Delaware corporation, constituted a “Specified Change in Control” as such term is defined in the Employment Agreement;

WHEREAS, in connection with the foregoing, the Company wishes to formally amend the terms of the Employment Agreement to reflect those changes to the Employment Agreement set forth herein, to be effective as of the Effective Date; and

WHEREAS, the Company and Executive agree to enter into such amendment on the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, and intending to be legally bound, the parties, subject to the terms and conditions set forth herein, agree, effective as of immediately prior to the Effective Time (as such term is defined in the Merger Agreement), as follows:

Capitalized terms not defined herein shall have the meaning set forth in the Employment Agreement.

AMENDMENTS

1. Section IX-A of the Employment Agreement shall be amended by adding “Change of Control Which Occurred Prior to April 3, 2009.” after heading “A”.

2. The first sentence of Section IX-A of the Employment Agreement shall be amended by adding “, as a result of a Change of Control that was consummated on or prior to April 3, 2009,” after the words “is or may”.

3. Section IX-A of the Employment Agreement shall be amended by deleting the last sentence of that section and replacing it with the following: “Except to the extent provided in Section IX-C below, this provision is intended to put Executive in the same position as Executive would have been had no Excise Tax been imposed upon or incurred as a result of any Covered Payment that is paid or otherwise provided to or in respect of the Executive in connection with a Change of Control that was consummated on or prior to April 3, 2009.”

4. Section IX of the Employment Agreement shall be amended to add the following new section:

“F. Change of Control Which Occurs After April 3, 2009.

1. Notwithstanding anything herein to the contrary, in the event that a Change of Control that could reasonably be expected to result in the payment of a Reimbursement Amount pursuant to this Section IX (but for the fact that such event occurs on or after April 3, 2009) (such Change of Control, a “Future Change of Control”), (i) the Company shall have no obligation to pay any Reimbursement Amount and (ii) if applicable at the time of such Future Change of Control, the Company shall use best efforts to obtain shareholder approval for any of the payments or benefits received or to be received by Executive, whether pursuant to this Agreement or otherwise, that are potentially subject to Excise Tax, so that upon such shareholder approval, the payments and/or benefits shall not be subject to Excise Tax; provided that failure to obtain such shareholder approval shall not constitute a breach of this Agreement or result in any additional payments to be made to Executive.

2. If such shareholder approval is not obtained or is not applicable in respect of a Future Change of Control, and in the event it shall be determined in connection with a Future Change of Control that any amount or benefit that may be paid or otherwise provided to or in respect of the Executive by or on behalf of the Company or any affiliate, whether pursuant to this Agreement or otherwise (collectively, the “Future Covered Payments”), is or may become subject to Excise Tax, then Executive shall forfeit and not be entitled to receive any such Future Covered Payments to the extent in excess of the maximum amount which could be provided to Executive without resulting in the imposition of any Excise Tax or the loss of any deduction under Section 280G of the Code (the “Capped Amount”); provided that the foregoing forfeiture and cutback shall not apply if the amount of the Future Covered Payments remaining after the imposition of any Excise Tax exceeds the Capped Amount.

3. All determinations required to be made under this Section IX-F, including whether an Excise Tax would be imposed and the amount of the Capped Amount, shall be made by a nationally recognized certified public accounting firm as may be designated by the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and Executive within ten business days after the receipt of notice from the Company or Executive that there has been a Payment, or such earlier time as is requested by the Company. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall so indicate to Executive in writing. Any determination by the Accounting Firm shall be binding upon the Company and Executive. Te Company and Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the written determination contemplated by Section IX-F hereof. The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Section IX-F hereof shall be borne solely by the Company.”

GENERAL

1. The Employment Agreement, as amended by this Amendment, shall continue in full force and effect in accordance with the terms thereof.

2. The other provisions and cross-references of the Employment Agreement shall be renumbered accordingly as a consequence of the additions and deletions described herein, to the extent applicable.

2

3. This Amendment may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute one and the same instrument.

4. This Amendment shall be governed and construed and the legal relationships of the parties determined in accordance with the laws of the State of California, without regard to conflicts of laws principles thereof that would direct the application of the laws of any other jurisdiction. Section XVI of the Employment Agreement is hereby incorporated by reference herein.

[Signatures on next page.]

3

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

APRIA HEALTHCARE GROUP, INC., a Delaware corporation
By:	/s/ Norman C. Payson
	Name: Norman C. Payson
	Title: Chief Executive Officer

EXECUTIVE

/s/ Lawrence A. Mastrovich

LAWRENCE A. MASTROVICH

EX-10.8

Exhibit 10.8

26220 Enterprise Court

Lake Forest, California 92630

Tel 949.639.2000

March 10, 2009

James Gallas

Dear James:

I am pleased to extend this offer of employment to you for the position of Executive Vice President and Chief Administrative Officer reporting to Norm Payson, Chief Executive Officer.

The terms of your offer are:

Base Salary: Your starting annual base salary will be $525,000, to be paid at the rate of $20,192.31 via the Company’s bi-weekly payroll process. You are eligible for consideration for future performance reviews and merit base wage adjustments consistent with other senior executives under Apria’s wage administration policy.

Executive Bonus: You will be eligible to participate in Apria’s Executive Bonus Plan. For 2009, your target aggregate bonus opportunity under the Plan will be equal to 100% of your annualized rate of base salary at date of hire. Additionally, the Executive Bonus Plan provides for the opportunity of overachievement up to 150% of your salary if the Apria Healthcare budgeted targets are exceeded. However, for plan year 2009, we will guarantee you a minimum $262,500 bonus.

Sign-On Bonus: In consideration of the significant difference in the cost of living and housing between Northeast Ohio and Southern California, Apria will pay you $150,000, subject to all applicable taxes and withholdings, payable with the first pay date following date of hire. Should you voluntarily terminate your employment with Apria, or are terminated for misconduct before completing 24 months of employment, you will be required to refund to Apria a portion of the total Sign-Bonus paid to you. The portion due to Apria will be equal to 1/24^th of the total for each month less than 24 completed.

James Gallas

Offer Letter

Page 2

Equity: You will receive an equity grant in form of a profit interest in Apria’s holding company, equal to 36.5 basis points of the fully diluted LLC ownership.

Benefits: You are eligible to participate in our group life, health and disability insurance plans, per the terms and conditions of those plans. Additionally, you will become eligible to enroll in the 401(k) Savings Plan on your first day of employment and will be eligible for a Company match after one year of employment. You will be eligible for time off benefits consistent with other Company senior executives.

Executive Severance Agreement: You will receive an Executive Severance Agreement, (copy enclosed) providing for severance payments equal in the aggregate to the sum of one year of your most recent base salary compensation, the average of the past two years bonus and one year of COBRA premium coverage, if your employment is terminated by the Company for any reason other than cause, as defined in the Agreement.

Relocation: It is a condition of your employment that you relocate to the Southern California area and your office will be in Apria’s Lake Forest corporate office. As a result, the Company will offer you senior-management relocation benefits that will ensure you are made whole for approved reasonable expenses associated with your relocation, including realtor and closing cost fees for your current residence and future California residence, movement of personal household items, shipment of three personal vehicles and, if necessary, temporary storage expenses.

Additionally, the Company will cover reasonable air, hotel, meal and transportation expenses associated with your temporary commute from Ohio to Southern California, up to the time you complete your relocation. Also, during this period of time, the Company will cover six months of temporary housing expenses in the Southern California area, up to $5,000 per month.

You will be required to sign and submit Apria’s Relocation Payback Agreement which is attached for your convenience.

Pursuant to the Immigration Reform & Control Act of 1986, you will be required to produce documents, specified by the federal government, establishing your identity and authorization for employment in the United States. These documents must be produced prior to commencement of employment. Please be sure you have these documents with you on your first day of work.

James Gallas

Offer Letter

Page 3

Apria Healthcare is not permitted to employ or contract with an individual who is debarred, suspended or otherwise ineligible to participate in federal programs. This offer of employment is contingent upon our verification that you are not currently debarred, suspended or otherwise ineligible to participate in federal programs. In addition, if you become debarred, suspended or otherwise ineligible to participate in federal programs, your employment may be terminated.

This offer of employment is also contingent upon the results of your substance abuse testing, background investigation and employment verification and reference process.

By accepting this offer, you are agreeing that your employment with Apria Healthcare is on an “at-will” basis and can be terminated by you or the Company at any time, subject to the provisions in the Executive Severance Agreement.

By signing this offer letter, you are acknowledging that you have reviewed the terms and conditions contained herein and there are no other terms, agreements or promises, verbal or written, outside this letter.

This offer is good up to seven (7) calendar days from the date above.

To indicate your acceptance of this offer letter, please sign below and return it to me (mail or fax 949 639-6966) within next the seven days. Please keep a copy for your records.

We are looking forward to having you join our team. Your first day of employment will be                     , 2009.
Sincerely,	Acceptance of Offer:
/s/  Howard Derman	/s/  James Gallas
Howard Derman Executive Vice President Human Resources	James Gallas

EX-10.9

Exhibit 10.9

AMENDED AND RESTATED

EXECUTIVE SEVERANCE AGREEMENT

This Executive Severance Agreement (this “Agreement”) is made as of this 10^th day of March, 2009, between Apria Healthcare Group Inc., a Delaware corporation (the “Company”), and James Gallas (the “Executive”).

RECITALS

A. It is the desire of the Company to retain the services of the Executive and to recognize the Executive’s contribution to the Company.

B. The Company and the Executive wish to set forth certain terms and conditions of the Executive’s employment.

C. The Company wishes to provide to the Executive certain benefits in the event that his employment is terminated by the Company without Cause (as defined below) or in the event that he terminates his employment for Good Reason (as defined below), in order to encourage the Executive’s performance and continued commitment to the Company.

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below, the parties hereto agree as follows:

1. Positions and Duties. During the period of his employment with the Company (the “Period of Employment”), the Executive shall serve as the Company’s Executive Vice President, Chief Administrative Officer, or in such other position and shall undertake such duties and have such authority as the Company, through its Chief Executive Officer, shall assign to the Executive from time to time in the Company’s sole and absolute discretion. The Company has the right to change the nature, amount or level of authority and responsibility assigned to the Executive at any time, for any reason or no reason, and with or without cause. The Company may also change the title or titles assigned to the Executive at any time, for any reason or no reason, and with or without cause. The Executive agrees to devote substantially all of his working time and efforts to the business and affairs of the Company. The Executive further agrees that he shall not undertake any outside activities which create a conflict of interest with his duties to the Company, or which, in the judgment of the Chief Executive Officer of the Company, interfere with the performance of the Executive’s duties to the Company.

2. Compensation and Benefits. During the Period of Employment, the Executive shall be entitled to the compensation and benefits set forth in this Section 2.

(a) Salary. The Executive’s salary shall be such salary as the Company assigns to him from time to time in accordance with its regular practices and policies. The parties to this Agreement recognize that the Company may, in its sole discretion, change such salary on a prospective basis at any time.

(b) Bonus. The Executive shall be entitled to participate in the Company’s Executive Bonus Plan or such other bonus plans applicable to his position as may be in effect from time to time. The parties to this Agreement recognize that such bonus plans may be amended and/or terminated by the Company at any time without the consent of the Executive in accordance with the terms of such bonus plans.

(c) Expenses. The Executive shall be entitled to receive reimbursement for all reasonable and customary expenses incurred by the Executive in performing services for the Company in accordance with the Company’s reimbursement policies as they may be in effect from time to time. The parties to this Agreement recognize that such policies may be amended and/or terminated by the Company at any time without the consent of the Executive. Any reimbursement made to the Executive pursuant to this Section 2(c) shall be made as soon as reasonably practicable but in all events not later than the end of the calendar year following the year in which the related expense was incurred.

(d) Other Benefits. The Executive shall be entitled to participate in all employee benefit plans, programs and arrangements of the Company (including, without limitation, equity grants and insurance, retirement and vacation plans, the deferred compensation plan and any other programs and arrangements), in accordance with the terms of such plans, programs or arrangements as they shall be in effect from time to time; provided, however, that nothing herein shall entitle the Executive to any specific awards under the Company’s equity compensation plans or other discretionary employee benefit plans. The parties to this Agreement recognize that the Company may terminate or modify such plans, programs or arrangements at any time without the consent of the Executive.

3. Grounds for Termination. The Executive’s employment may be terminated by the Company or the Executive at any time, for any reason or no reason, with or without Cause or Good Reason (as such terms are defined below), and except as expressly provided herein, with or without any advance notice. The Executive’s employment may end for any one of the following reasons:

(a) Without Cause or Good Reason. The Executive or the Company may terminate the Executive’s employment at any time, without Cause (in the case of the Company) or for Good Reason (in the case of the Executive), by giving the other party to this Agreement at least thirty (30) days advance written notice of such termination.

(b) Death. The Executive’s employment hereunder shall terminate upon his death.

(c) Disability. If, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been unable to perform the essential functions of his position, even with reasonable accommodation that does not impose an undue hardship on the Company, on a full-time basis for the entire period of six (6) consecutive months, and within thirty (30) days after written notice of termination is given (which may occur before or after the end of such six-month period), shall not have returned to the performance of his duties hereunder on a full-time basis (a “disability”), the Company may terminate the Executive’s employment on account of such disability.

2

(d) Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, “Cause” shall mean that the Company, acting in good faith based upon the information then known to the Company, determines that the Executive has (i) engaged in or committed willful misconduct; (ii) engaged in or committed theft, fraud or other illegal conduct; (iii) refused or demonstrated an unwillingness to substantially perform his duties after written demand for substantial performance is delivered by the Company that specifically identifies the manner in which the Company believes the Executive has not substantially performed his duties; (iv) refused or demonstrated an unwillingness to reasonably cooperate in good faith with any Company or government investigation or provide testimony therein (other than such failure resulting from the Executive’s disability); (v) engaged in or committed insubordination; (vi) engaged in or committed any willful act that is likely to and which does in fact have the effect of injuring the reputation or business of the Company; (vii) violated any fiduciary duty; (viii) violated Executive’s duty of loyalty to the Company; (ix) violated the Company’s Code of Ethical Business Conduct; (x) used alcohol or drugs (other than drugs prescribed to the Executive by a physician and used by the Executive for their intended purpose for which they had been prescribed) in a manner which materially and repeatedly interferes with the performance of his duties hereunder or which has the effect of materially injuring the reputation or business of the Company; or (xi) engaged in or committed a breach of any term of this Agreement. For purposes of the above clauses (i) and (vi) of this Section 3(d), no act, or failure to act, on the Executive’s part shall be considered willful unless done or omitted to be done, by his without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause without delivery to the Executive of a notice of termination signed by the Company’s Chief Executive Officer stating that, in the good faith opinion of the officer signing such notice, the Executive has engaged in or committed conduct of the nature described above in the second sentence of this Section 3(d), and specifying the particulars thereof.

4. Payments upon Termination.

(a) Without Cause or with Good Reason. In the event that the Executive’s employment is terminated by the Company for any reason other than death, disability or Cause as defined in Sections 3(b), (c) and (d) of this Agreement, or in the event that the Executive terminates his employment hereunder with Good Reason as defined in Section 4(c) of this Agreement, the Executive shall be entitled to receive severance pay in an aggregate amount equal to 100% of his Annual Compensation, which shall be paid, subject to Section 11(b), in periodic installments in accordance with the Company’s customary payroll practices over a period of one (1) year, less any amounts required to be withheld by applicable law, with the first such installment payable in the month following the month in which the Executive’s Separation from Service (as such term is defined in Section 4(g)) occurs; provided, however, that any such payment shall be contingent upon the Executive’s execution and delivery to the Company of a valid release of all claims the Executive may have against the Company in a form acceptable to the Company and continued compliance with the restrictive covenants described in Sections 7-9 below; and provided, further, that, if the Executive provides such release of claims, in no event shall the Executive be entitled to payment pursuant to this Section 4(a) of less than $5,000, which amount the parties agree is good and adequate consideration, in and of itself, for such release. The Company will also pay to the Executive any Accrued Obligations (as defined in Section 4(f) below).

3

(b) Annual Compensation. For purposes of this Section 4, the term “Annual Compensation” means an amount equal to the Executive’s annual base salary at the rate in effect on the date on which the Executive received or gave written notice of his termination, plus the sum of (i) an amount equal to the average of the Executive’s two most recent annual bonuses, if any, received prior to the notice of termination, and (ii) an amount determined by the Company from time to time in its sole discretion to be equal to the annual cost of providing the Executive with a continuation of his medical, dental and vision insurance under COBRA, including the cost of his participation in the Senior Executive Medical and Dental Programs. The following rules shall apply solely for purposes of calculating Annual Compensation under this Agreement in the event the Executive has been employed by the Company for a period which does not include two full annual bonus cycles.

(i) In the event the Executive’s annual bonus for either of the two years in question was a prorated bonus due to the Executive having worked a partial year, the Executive’s prorated bonus or bonuses shall be recalculated to reflect the target bonus the Executive would have received had the Executive worked for the entire year.

(ii) In the event the Executive has been employed by the Company for less than one year and for that reason has not yet received an annual bonus, then the Executive’s average annual bonus shall be deemed to be 100% of the Executive’s annual base salary rate as of the date of the Executive’s employment with the Company.

(iii) In the event the Executive has been employed for less than two full annual bonus cycles and only one annual bonus has been calculated for the Executive, then the amount of that annual bonus shall be deemed to be the average of the Executive’s annual bonuses.

(c) Good Reason. For purposes of this Section 4 the term “Good Reason” means the occurrence of any of the following, without the written consent of the Executive:

(i) any material reduction in the Executive’s annual base salary; provided that, for this purpose, in no event shall a general one-time “across-the-board” salary reduction not exceeding ten percent (10%) which is imposed simultaneously on all executive officers of the Company be considered a “material reduction”;

(ii) any requirement by the Company that the Executive relocate his residence to be based at an office location which will result in an increase of more than thirty (30) miles in the Executive’s one-way commute (which the parties agree constitutes a “material” relocation), except in connection with a relocation of the Company’s principal executive offices; or

4

(iii) failure of the Company to require a successor to expressly assume and perform this Agreement in accordance with Section 5(a) below.

provided, however, that any such condition or conditions, as applicable, shall not constitute grounds for “Good Reason” unless both (x) the Executive provides written notice to the Company of the condition claimed to constitute grounds for Good Reason within sixty (60) days of the initial existence of such condition(s), and (y) the Company fails to remedy such condition(s) within thirty (30) days of receiving such written notice thereof; and provided, further, that in all events the termination of the Executive’s employment with the Company shall not constitute a termination for “Good Reason” unless such termination occurs not more than one hundred and twenty (120) days following the initial existence of the condition claimed to constitute grounds for such a “Good Reason.”

(d) Release of all Claims. The Executive understands and agrees that the Company’s obligation to pay the Executive severance pay under this Agreement is subject to the Executive’s execution and delivery to the Company of a valid written waiver and release of all claims which the Executive may have against the Company and/or its successors in a form acceptable to the Company in its sole and absolute discretion.

(e) No Mitigation or Offset. Notwithstanding anything herein to the contrary, the amount of any payment or benefit provided for in this Section 4 shall not be reduced, offset or subject to recovery by the Company or any of its subsidiaries or affiliates by reason of any compensation earned by the Executive as the result of employment by another employer after the Executive’s employment with the Company terminates for any reason. In addition, the Executive shall be under no obligation to seek other employment or to take any other actions to mitigate the amounts payable under this Section 4.

(f) Termination Due To Death, Disability or Cause; Termination by Executive Other Than for Good Reason. In the event that the Executive’s employment is terminated due to his death or disability, by the Company for Cause or by the Executive other than for Good Reason, the Company shall not be obligated to pay the Executive any amount other than reimbursement for business expenses incurred prior to his termination and in compliance with the Company’s reimbursement policies, any unpaid salary for days worked prior to the termination, all other amounts accrued or earned by the Executive through the date of termination under the then existing plans and policies of the Company, and any amounts owing in respect of the Company’s indemnification obligations to the Executive (collectively, the “Accrued Obligations”).

(g) Separation from Service. As used herein, a “Separation from Service” occurs when the Executive dies, retires, or otherwise has a termination of employment with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.

5

5. Successors; Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the date of termination. As used in this Agreement, “Company” shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 5 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

(b) This Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrator, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate.

6. Notices. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, by facsimile, email or other form of written electronic transmission, by overnight courier or by registered or certified mail, postage prepaid, or mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

James Gallas

If to the Company:

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: Executive Vice President and General Counsel

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

6

7. Antisolicitation; Noncompetition.

(a) The Executive promises and agrees that, during the period of his employment by the Company and for a period of one year thereafter, he will not influence or attempt to influence customers or patients of the Company or any of its present or future subsidiaries or affiliates, either directly or indirectly, to divert their business to any individual, partnership, firm, corporation or other entity then in competition with the business of the Company, or any subsidiary or affiliate of the Company, where the identity of the customer or patient, or any information concerning the relationship between the customer or patient and the Company, is a trade secret or other Confidential Material (as defined below).

(b) In order avoid the disclosure by the Executive of the Company’s trade secrets or other Confidential Material, the Executive promises and agrees that, during the period of his employment by the Company and for a period of one year thereafter, he will not enter business or work with or for, whether as an employee, consultant or otherwise, any of the following corporations or their respective subsidiaries or affiliates: Lincare Holdings, Inc.; Rotech Healthcare, Inc.; American HomePatient, Inc.; Pacific Pulmonary Services Corporation; LifeCare Solutions, Inc.; or the home healthcare or infusion operations of Walgreen Co., Air Products & Chemicals, Inc. or Praxair, Inc.

(c) The Executive expressly acknowledges and agrees that if the Company has a reasonable good faith belief that he is in violation of any of the restrictive covenants set forth in this Section 7, then the Company, following written notice to the Executive explaining the basis for its belief, may suspend any future payments scheduled to be made pursuant to Section 4, unless and until the Executive establishes to the Company’s reasonable good faith satisfaction that no such violation has occurred.

8. Soliciting Employees. The Executive promises and agrees that, for a period of one year following termination of his employment, he will not, directly or indirectly, solicit any of the Company employees who earned annually $50,000 or more as a Company employee during the last six months of his own employment to work for any other business, individual, partnership, firm, corporation, or other entity.

9. Confidential Information.

(a) The Executive, in the performance of his duties on behalf of the Company, shall have access to, receive and be entrusted with confidential information, including but not limited to systems technology, field operations, reimbursement, development, marketing, organizational, financial, management, administrative, clinical, customer, distribution and sales information, data, specifications and processes presently owned or at any time in the future developed, by the Company or its agents or consultants, or used presently or at any time in the future in the course of its business that is not otherwise part of the public domain (collectively, the “Confidential Material”). All such Confidential Material is considered secret and will be available to the Executive in confidence. Except in the performance of duties on behalf of the Company, the Executive shall not, directly or indirectly for any reason whatsoever, disclose or use any such Confidential Material, unless such Confidential Material ceases (through no fault of the Executive’s) to be confidential because it has become part of the public domain. All records,

7

files, drawings, documents, notes, disks, diskettes, tapes, magnetic media, photographs, equipment and other tangible items, wherever located, relating in any way to the Confidential Material or otherwise to the Company’s business, which the Executive prepares, uses or encounters during the course of his employment, shall be and remain the Company’s sole and exclusive property and shall be included in the Confidential Material. Upon termination of this Agreement by any means, or whenever requested by the Company, the Executive shall promptly deliver to the Company any and all of the Confidential Material, not previously delivered to the Company, that may be or at any previous time has been in the Executive’s possession or under the Executive’s control.

(b) The Executive hereby acknowledges that the sale or unauthorized use or disclosure of any of the Company’s Confidential Material by any means whatsoever and at any time before, during or after the Executive’s employment with the Company shall constitute unfair competition. The Executive agrees he shall not engage in unfair competition either during the time employed by the Company or any time thereafter.

10. Parachute Limitation. Notwithstanding any other provision of this Agreement, the Executive shall not have any right to receive any payment or other benefit under this Agreement, any other agreement, or any benefit plan if such right, payment or benefit, taking into account all other rights, payments or benefits to or for the Executive under this Agreement, all other agreements, and all benefit plans, would cause any right, payment or benefit to the Executive under this Agreement to be considered a “parachute payment” within the meaning of Section 280G(b)(2) of the Internal Revenue Code as then in effect (a “Parachute Payment”). In the event that the receipt of any such right or any other payment or benefit under this Agreement, any other agreement, or any benefit plan would cause the Executive to be considered to have received a Parachute Payment under this Agreement, then the Executive shall have the right, in the Executive’s sole discretion, to designate those rights, payments or benefits under this Agreement, any other agreements, and/or any benefit plans, that should be reduced or eliminated so as to avoid having the right, payment or benefit to the Executive under this Agreement be deemed to be a Parachute Payment.

11. Section 409A.

(a) It is intended that any amounts payable under this Agreement and the Company’s and the Executive’s exercise of authority or discretion hereunder shall comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) (“Section 409A”) so as not to subject the Executive to payment of any interest or additional tax imposed under Section 409A. To the extent that any amount payable under this Agreement would trigger the additional tax imposed by Section 409A, the Agreement shall be construed and interpreted in a manner to avoid such additional tax yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Executive.

(b) Notwithstanding any provision of this Agreement to the contrary, if the Executive is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the Executive’s Separation from Service, the Executive shall not be entitled to any payment or benefit pursuant to Section 4(a) until the earlier of (i) the date which is six (6) months after the Executive’s Separation from Service for any reason other than death, or (ii) the

8

date of the Executive’s death. Any amounts otherwise payable to the Executive upon or in the six (6) month period following the Executive’s Separation from Service that are not so paid by reason of this Section 11(b) shall be paid as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after the Executive’s Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of the Executive’s death), and any such payments shall be increased by an amount equal to interest on such payments for the period commencing with the date such payment would have otherwise been made but for this Section 11(b) (the “Original Payment Date”) and ending on the date such payment is actually made, at an interest rate equal to the prime rate in effect as of the Original Payment Date plus one point (for this purpose, the prime rate will be based on the rate published from time to time in The Wall Street Journal). The provisions of this Section 11(b) shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code.

12. Modification and Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Chief Executive Officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California without regard to its conflicts of law principles.

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

14. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

15. Arbitration. Any dispute or controversy arising under or in connection with this Agreement or the Executive’s employment by the Company shall be settled exclusively by arbitration, conducted before a single neutral arbitrator in accordance with the American Arbitration Association’s National Rules for Resolution of Employment Disputes as then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of Sections 7, 8 or 9 of this Agreement and the Executive hereby consents that such restraining

9

order or injunction may be granted without the necessity of the Company’s posting any bond, and provided, further, that the Executive shall be entitled to seek specific performance of his right to be paid until the date of employment termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. Each party shall pay its own attorneys’ fees and costs. If any party prevails on a statutory claim which affords attorneys’ fees and costs, the arbitrator may award reasonable attorneys’ fees and/or costs to the prevailing party. The fees and expenses of the arbitrator and the arbitration shall be borne by the Company.

16. Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and canceled.

[signature page follows]

10

IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.

APRIA HEALTHCARE GROUP INC.
By:	/s/ Norman C. Payson
Name:	Norman C. Payson, MD
Title:	Chief Executive Officer
EXECUTIVE
By:	/s/ James Gallas
Name:	James Gallas

S-1

EX-10.10

Exhibit 10.10

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

This Amended and Restated Executive Employment Agreement (this “Agreement”) is entered into by and between Apria Healthcare Group Inc., a Delaware corporation (“Apria”) (the “Company”), and Daniel E. Greenleaf (the “Executive”) on October 24, 2008 and effective as of April 7, 2008 (the “Effective Date”).

RECITALS

A. It is the desire of the Company to retain the services of the Executive and to recognize the Executive’s contribution to the Company during the course of his employment.

B. The Company and the Executive wish to set forth certain terms and conditions of the Executive’s employment.

C. The Company wishes to provide to the Executive certain benefits in the event that his employment is terminated by the Company without Cause (as defined below) or in the event that he terminates employment for Good Reason (as defined below), in order to encourage the Executive’s performance and continued commitment to the Company.

D. This Agreement amends and restates in its entirety that certain Executive Employment Agreement by and between the Company and the Executive dated June 18, 2008 (the “Prior Employment Agreement”).

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below, the parties hereto agree as follows:

1. Term; Positions and Duties.

(a) Term. The Company hereby agrees to employ the Executive and the Executive hereby agrees to accept such employment, upon the terms and conditions hereinafter set forth. The term of the employment shall commence on the Effective Date and will continue until the termination of the Executive’s employment by reason of his written resignation, termination by the Company for any reason by written notice of termination, or death (the “Period of Employment”). The Executive’s employment may be terminated at any time by written notice from the Executive to the Company or from the Company to the Executive, in the manner provided in Section 6 hereof.

(b) Position and Duties. The Executive shall serve as President of Coram, Inc. (“Coram”), with direct reporting responsibility to the Chief Executive Officer of the Company. Subject to the terms and conditions set forth further herein, the Executive shall undertake such duties and have such authority for the Company and/or Coram as the Company, through its Chief Executive Officer, shall assign to the Executive from time to time in the Company’s sole and absolute discretion; provided such duties and responsibilities are the types of duties and responsibilities that would ordinarily be assigned to a person with employment experience and position comparable to that of the Executive and are consistent with the policies, procedures and guidelines of the Company, applicable laws and this Agreement. The Executive agrees to devote substantially all of his working time and efforts to the business and affairs of the Company and Coram. The Executive further agrees that he shall not undertake any outside

1

activities which create a conflict of interest with his duties to the Company and Coram, or which, in the judgment of the Chief Executive Officer or Board of Directors of the Company, interfere with the performance of the Executive’s duties to the Company and Coram. The Executive agrees that he shall not be entitled to any additional compensation (other than the compensation from the Company expressly provided for in this Agreement) for his services to Coram.

2. Compensation and Benefits.

(a) Salary. During the Period of Employment, the Company shall pay to the Executive a base salary at the rate of $475,000 per year, in accordance with its regular practices and policies. The Company may increase the Executive’s salary from time to time.

(b) Bonus. During the Period of Employment, the Executive shall be eligible to participate in the Company’s Executive Bonus Plan, or such other bonus plans applicable to the Executive’s position as in effect from time to time. For 2008, the Executive’s target aggregate bonus opportunity under the Executive Bonus Plan shall be 100% of the Executive’s annualized rate of base salary as set forth in Section 2(a) above, prorated from April 7, 2008. The actual amount of the bonus the Executive earns for 2008 shall be based on the level of achievement of the applicable performance criteria set forth in Schedule A to the Executive Bonus Plan, a copy of which is attached hereto as Exhibit A. As also specified in Schedule A attached to the Executive Bonus Plan, the Executive shall be eligible for a maximum bonus of 150% of the Executive’s salary if the budgeted targets for net revenue, operating income and free cash flow set for Apria are achieved at maximum levels. For 2008, the Executive shall receive a minimum guaranteed bonus payment of 25% of the Executive’s annualized rate of base salary as set forth in Section 2(a) above, prorated from April 1, 2008. Any bonus paid to the Executive shall be paid at the time and in the form and manner provided under the terms of the plan pursuant to which it was earned.

(c) Equity Awards. As of the Effective Date and subject to the Executive’s execution effective as of the Effective Date of that certain Non-competition and Non-solicitation Agreement attached hereto as Exhibit B (the “Non-competition Agreement”), the Company shall grant to the Executive (i) an award of 40,000 restricted stock units (“RSUs”) that represent shares of Apria common stock on a one-for-one basis that vests and is paid in three equal annual installments over the three year period beginning on the first anniversary of the Effective Date and each anniversary thereafter until the award is fully vested and paid, subject to the Executive’s continued employment with the Company through each vesting date, and (ii) stock appreciation right (“SARs”) with respect to 300,000 shares of Apria common stock that vest in equal annual installments over the four year period beginning on the first anniversary of the Effective Date and each anniversary of the Effective Date thereafter until the SAR is fully vested, subject to the Executive’s continued employment with the Company through each vesting date. The base price of the SARs shall be the closing price on the New York Stock Exchange on the Effective Date. The Executive acknowledges and agrees that he is subject to the Apria Stock Ownership Requirements for Senior Executive Officers, in the form attached hereto as Exhibit C. The Executive shall be eligible for future grants of RSUs, SARs and other equity-based awards under Apria’s 2003 Performance Incentive Plan, or such other equity compensation plan as may be in effect from time to time. The Company agrees that the agreements evidencing the equity awards described in this Section 2(c) shall provide that the term “Good Reason” shall have the meaning set forth in Section 3(e) hereof.

2

(d) Other Employee Benefits. During the Period of Employment, the Executive shall be entitled to participate in the Company’s group life, health and disability insurance plans, the Company’s 401(k) Savings Plan as well as the Senior Executive Medical and Dental Programs, subject in all respects to the terms and conditions of those plans and programs. In addition, the Executive shall be entitled to participate in all other employee benefit plans, programs and arrangements of the Company (including, without limitation, annual bonus, equity compensation, welfare, fringe, retirement, savings, vacation, deferred compensation and any other plans, programs and arrangements) applicable to senior executives or employees of the Company generally, in accordance with the terms of such plans, programs or arrangements as they shall be in effect from time to time during the term of the Executive’s employment; provided, however, that nothing herein shall entitle the Executive to any specific awards under the Company’s equity compensation plans or other discretionary employee benefit plans. Subject to the terms and conditions set forth further herein, the parties to this Agreement recognize that the Company may terminate or modify such plans, programs or arrangements at any time without the consent of the Executive.

(e) Relocation. The Executive’s principal work location shall be at Coram’s headquarters in Denver, Colorado. The Executive acknowledges and agrees that it is a condition of his employment with the Company that the Executive relocates to the Denver, Colorado area. In connection with the Executive’s relocation, the Company shall provide the Executive with executive-management relocation benefits such that the Executive will be reimbursed for approved reasonable expenses associated with the Executive’s relocation, including realtor and closing cost fees for the Executive’s New Jersey and Denver, Colorado area residences, movement of personal household items, shipment of two personal vehicles and temporary living and storage expenses. Additionally, the Company shall reimburse the Executive for reasonable expenses for up to five house hunting trips for the Executive and his spouse (with such travel arrangements to be made through the Company’s travel department).

If the Executive’s New Jersey residence becomes vacant and remains unsold, the Company will reimburse the Executive an amount equal to the greater of $7,000 gross or $4,500 net per month, for up to six months, to cover the residence’s carrying costs. In addition, during the period prior to the sale of the New Jersey residence, if the Executive incurs additional temporary indebtedness to fund the equity portion of the purchase price for the Executive’s Denver, Colorado area residence, the Company shall also reimburse the Executive for up to a total of $30,000 of the interest costs associated with that additional indebtedness. If the Executive’s New Jersey residence does not sell within six months, the Company and the Executive shall negotiate in good faith other possible assistance arrangements.

Any reimbursements to the Executive pursuant to this Section 2(e) shall be made in accordance with the Company’s reimbursement policies as they may be in effect from time to time and in all events shall be made not later than the end of the calendar year following the year in which the related expense was incurred.

(f) Vacation and Fringe Benefits. The Executive shall be entitled to a minimum of 20 days of vacation annually, to be available and prorated monthly during the terms of this Agreement and otherwise to be consistent with the vacation policy and practice applicable to other senior executives of the Company.

(g) Expenses. During the Period of Employment, the Executive shall be entitled to receive reimbursement for all reasonable and customary expenses incurred by the

3

Executive in performing services for the Company in accordance with the Company’s reimbursement policies as they may be in effect from time to time. The parties to this Agreement recognize that such policies may be amended and/or terminated by the Company at any time without the consent of the Executive. In all events, any reimbursement made to the Executive pursuant to this Section 2(g) shall be made not later than the end of the calendar year following the year in which the related expense was incurred, and the amount of expenses eligible for reimbursement during any calendar year will not affect the amount of expenses eligible for reimbursement during any subsequent calendar year.

3. Grounds for Termination. Subject to the terms and conditions set forth further herein, the Executive’s employment may be terminated by the Company or the Executive at any time, for any reason or no reason, with or without Cause or Good Reason (as such terms are defined below). The Executive’s employment may end for any one of the following reasons:

(a) Without Cause or Without Good Reason. The Executive or the Company may terminate the Executive’s employment at any time, without Cause (in the case of the Company) or without Good Reason (in the case of the Executive), by giving the other party to this Agreement at least thirty (30) days advance written notice of such termination.

(b) Death. The Executive’s employment hereunder shall terminate upon his death.

(c) Disability. If the Company determines in good faith that the Executive has incurred a Disability (as defined below), it may give the Executive written notice in accordance with Section 6 of this Agreement of its intention to terminate the Executive’s employment. In such event, the Executive’s employment shall terminate effective on the 30th day following receipt of such notice by the Executive; provided that, within the 30-day following receipt, the Executive shall not have returned to full-time performance of his duties. For purposes of this Agreement, “Disability” shall mean the Executive’s incapacity due to physical or mental impairment which substantially limits a major life activity and which renders the Executive unable to perform the essential functions of his position on a full-time basis for the entire period of six (6) consecutive months, even with reasonable accommodation that does not impose an undue hardship on the Company.

(d) Cause. The Company may terminate the Executive’s employment for Cause. For purposes of this Agreement (except as set forth below), “Cause” shall mean that the Board of Directors of the Company, acting in good faith based upon the information then known to the Company, determines that the Executive has (i) engaged in or committed willful misconduct; (ii) engaged in or committed theft, fraud or other conduct constituting a felony (other than traffic related offenses or as a result of vicarious liability); (iii) refused or demonstrated an unwillingness to substantially perform his duties for a 30-day period after written demand for substantial performance that refers to this Section 3(d) and is delivered by the Company that specifically identifies the manner in which the Company believes the Executive has not substantially performed his duties for the Company or Coram; (iv) refused or demonstrated an unwillingness to reasonably cooperate in good faith with any Company, Coram or government investigation or provide testimony therein (other than such failure resulting from the Executive’s disability); (v) engaged in or committed any willful act that is likely to and which does in fact have the effect of injuring the reputation or business of the Company or Coram; (vi) willfully violated his fiduciary duty or his duty of loyalty to the Company or Coram or the Company’s Code of Ethical Business Conduct in any material respect; (vii) used alcohol

4

or drugs (other than drugs prescribed to the Executive by a physician and used by the Executive for their intended purpose for which they had been prescribed) in a manner which materially and repeatedly interferes with the performance of his duties hereunder or which has the effect of materially injuring the reputation or business of the Company or Coram; or (viii) engaged in or committed a material breach of this Agreement for a 30-day period after written notification is delivered by the Company that specifically refers to this Section 3(d) and identifies the manner in which the Company believes the Executive has materially breached this Agreement. For purposes of the above clauses (i), (v) and (vi) of this Section 3(d), no act, or failure to act, on the Executive’s part shall be considered willful unless done or omitted to be done, by him not in good faith or without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding anything herein to the contrary, for purposes of any termination of employment that occurs within the period that (i) begins with the first to occur of (1) the initial public announcement of a Change of Control (as defined below), or (2) the 90th day preceding a Change of Control and (ii) ends two years following such Change of Control, “Cause” shall instead mean only the occurrence of either or both of the following: (A) the Executive’s conviction for committing an act of fraud, embezzlement, theft, or other act constituting a felony (other than traffic related offenses or as a result of vicarious liability); or (B) the willful engaging by the Executive in misconduct that is significantly injurious to the Company or Coram. For purposes of the above clause (B) of this Section 3(d), no act, or failure to act, on the Executive’s part shall be considered willful unless done or omitted to be done, by him not in good faith or without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause without delivery to the Executive of a notice of termination signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith opinion of such officer signing the notice, the Executive has engaged in or committed conduct of the nature described in this Section 3(d), specifying the particulars thereof in detail and, further, providing the Executive a reasonable opportunity to respond.

(e) Resignation for Good Reason. The Executive may resign on account of Good Reason (as defined below).

4. Payments upon Termination.

(a) Without Cause or With Good Reason. In the event that the Executive’s employment is terminated by the Company for any reason other than death, Disability or Cause as defined in Sections 3(b), (c) and (d) of this Agreement, or in the event that the Executive terminates his employment hereunder with Good Reason as defined in Section 4(c) of this Agreement, the Executive shall be entitled to receive severance pay in an aggregate amount equal to 200% of his Annual Compensation, which shall be paid, subject to Section 11(b), in periodic installments in accordance with the Company’s customary payroll practices over a period of twenty-four (24) months, less any amounts required to be withheld by applicable law, with the first such installment payable within ten (10) business days following the date the release referred to below in this Section 4(a) becomes irrevocable under applicable law and in all events not later than the end of the month following the month in which the Executive’s Separation from Service (as such term is defined in Section 4(g)) occurs; provided, however, that any such payment shall be contingent upon the Executive’s execution and delivery to the Company within 21 days of the termination of his employment (or such longer period as may be required under applicable law) of a valid release of all claims the Executive may have against the Company in the form attached hereto as Exhibit D (which may be modified only to the extent necessary to reflect developments in applicable law that would jeopardize enforceability of such

5

release unless the modifications are not made), and not revoking such release within any revocation period provided under applicable law, and continued compliance with the restrictive covenants described in Sections 7, 8 and 9 below; and provided, further, that, if the Executive provides such release of claims, in no event shall the Executive be entitled to payment pursuant to this Section 4(a) of less than $5,000, which amount the parties agree is good and adequate consideration, in and of itself, for such release. The Company will also pay to the Executive any Accrued Obligations (as defined in Section 4(f) below).

(b) Annual Compensation. For purposes of this Section 4, the term “Annual Compensation” means an amount equal to the Executive’s annual base salary at the rate in effect on the date on which the Executive received or gave written notice of his termination, plus the sum of (i) an amount equal to the average of the annual bonuses with respect to the Company’s two (2) most recently completed fiscal years, if any, determined to be payable and/or paid to the Executive under the Company’s the Executive Bonus Plan (or comparable bonus plan) prior to such notice of termination, and (ii) an amount determined by the Company from time to time in its sole discretion to be equal to the annual cost for the Executive of obtaining medical, dental and vision insurance under COBRA, which annual amount is hereby initially estimated to be $20,000. For purposes of calculating the Executive’s Annual Compensation under this Agreement in the event the Executive has been employed by the Company for a period which does not include two full annual bonus cycles or for which the Company did not maintain a bonus plan, the average of the annual bonuses described in clause (i) above shall be deemed to be equal to (A) if clause (B) below does not apply, 100% of the Executive’s base salary for the year of termination or (B) in the event that the Executive has been employed for a period which includes one (but not two) full annual bonus cycles prior to the termination of employment, the average of the earned annual bonus for the full bonus cycle during the Executive’s employment plus an amount equal to 100% of the Executive’s base salary for the year of termination.

(c) Good Reason. For purposes of this Agreement, the term “Good Reason” means the occurrence of any of the following, without the written consent of the Executive, unless such event is rescinded within ten (10) business days after the Executive notifies the Company that he objects thereto:

(i) any reduction in the Executive’s combined annual base salary and target level bonus percentage, except for a general one-time “across-the-board” salary reduction not exceeding ten percent (10%) which is imposed simultaneously on all executive officers of the Company; or

(ii) the Company requires the Executive to be based at an office location which will result in an increase of more than thirty (30) miles in the Executive’s one-way commute, except in connection with a relocation of the Company’s principal executive offices and except for the relocation contemplated by Section 2(e);

(iii) the Company does not permit the Executive to continue to serve as President of Coram or another mutually acceptable senior executive position;

provided, however, that “Good Reason” shall cease to exist for an event on the 60^th day following the earlier of the Company’s written notice of the change to the Executive or the Executive’s becoming aware thereof, unless the Executive has given the Company written notice of his objection thereto prior to such date.

6

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

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

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

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

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

7

(v) the Company’s not permitting the Executive to continue to serve as President of Coram or another mutually acceptable senior executive position.

(d) Release of all Claims. The Executive understands and agrees that the Company’s obligation to pay the Executive severance pay under this Agreement is subject to the Executive’s execution of a valid written waiver and release of all claims which the Executive may have against the Company and/or its successors in the form attached hereto as Exhibit D.

(e) No Mitigation or Offset. Notwithstanding anything herein to the contrary, the amount of any payment or benefit provided for in this Section 4 shall not be reduced, offset or subject to recovery by the Company or any of its subsidiaries or affiliates by reason of any compensation earned by the Executive as the result of employment by another employer after the Executive’s employment with the Company terminates for any reason. In addition, the Executive shall be under no obligation to seek other employment or to take any other actions to mitigate the amounts payable under this Section 4.

(f) Death, Disability, Cause or Without Good Reason. In the event that the Executive’s employment is terminated due to death, disability, Cause or by the Executive without Good Reason, the Company shall not be obligated to pay the Executive any amount other than accrued and unpaid vacation, reimbursement for business expenses incurred prior to his termination and in compliance with the Company’s reimbursement policies, any unpaid salary for days worked prior to the termination, all other amounts accrued and earned by the Executive through the date of termination under the then existing plans and policies of the Company, and any amounts owing in respect of the Company’s indemnification obligations to the Executive (collectively, the “Accrued Obligations”).

(g) Separation from Service. As used herein, a “Separation from Service” occurs when the Executive dies, retires, or otherwise has a termination of employment with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.

(h) Change of Control. For purposes of this Agreement, a “Change of Control” shall, unless otherwise determined by the Board of Directors of the Company or Compensation Committee thereof prior to the consummation of the Change of Control, be deemed to have occurred if:

(i) any “person,” as such term is used in Sections 13(d)and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “1934 Act”) is, becomes or enters a contract to become, the “beneficial owner,” as such term is used in Rule 13d-3 promulgated under the 1934 Act, directly or indirectly, of securities representing twenty-five percent (25%) or more of the voting common stock of the Company;

(ii) all or substantially all of the business or assets of the Company are disposed of, or a contract is entered to dispose of all of the business of the Company pursuant to a merger, consolidation other transaction in which (a) the Company is not the surviving parent company or (b) the stockholders of the Company prior to the

8

transaction do not continue to own at least sixty percent (60%) of the surviving parent company in substantially the same proportions as their ownership immediately prior to such transaction;

(iii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Effective Date, constitute the Board of Directors of Apria and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election to the Board of Directors of Apria or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended; or

(iv) the Company is materially or completely liquidated.

Notwithstanding clause (i) above, a “Change of Control” shall not be deemed to have occurred solely because a person shall be, become or enter into a contract to become the beneficial owner of 25% or more, but less than 40%, of the voting common stock of the Company, if and for so long as such person is bound by, and in compliance with, a contract with the Company providing that such person may not nominate, vote for, or select more than a minority of the directors of the Company. The exception provided by the preceding sentence shall cease to apply with respect to any person upon expiration, waiver, or non-compliance with any such contract, by which such person was bound.

(i) In the event that at any time following a Change of Control the Executive initiates arbitration pursuant to Section 15 to enforce his rights to any payments under Section 4, or the Company seeks to deny, dispute or reduce any such payments for any reason, then:

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

(ii) the Company shall pay all expenses incurred by the Executive in prosecuting or defending any such proceeding as they are incurred by the Executive in advance of the final disposition of such dispute, together with any tax liability incurred by the Executive in connection with the receipt of such amounts (any such payment to be made within 30 days following Executive’s submission of customary supporting documentation to the Company and in all events Executive shall submit such supporting documentation to the Company not later than six months after the year in which such expense was incurred, and with respect to any expenses, the amount of expenses eligible for reimbursement during the Executive’s taxable year may not affect the amount of expenses eligible for reimbursement in any other taxable year); provided, however, that the payment of such expenses incurred in advance of

9

the final disposition of such proceeding shall be made only upon delivery to the Company of an undertaking, by or on behalf of the Executive, to repay all amounts so advanced to the extent the arbitrator in such proceeding affirmatively determines that the Company is the prevailing party, taking into account all claims made by any such party to such proceeding; and

(iii) all such payments or benefits described in this Agreement shall continue to be made or provided on the dates provided herein as if all assertions or claims made by the Executive are accurate without any offsets, claims or charges of any kind whatsoever being asserted by the Company, except in the event a final determination pursuant to the arbitration provisions of Section 15 has been rendered and such determination provides that the Company is entitled to assert any such offset, claim or charge against the Executive, in which event any such offset, if applicable, shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

5. Successors; Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the date of termination. As used in this Agreement, “Company” shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 5 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

(b) This Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrator, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate.

10

6. Notices. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, by telecopy, email or other form of written electronic transmission, by overnight courier or by registered or certified mail, postage prepaid, or mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

Daniel E. Greenleaf

If to the Company:

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: Chief Executive Officer

With a copy to the attention of the Company’s Sr. Vice President, Human Resources or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

7. Antisolicitation. The Executive promises and agrees that, during the period of his employment by the Company and for a period of two years thereafter, he will not influence or attempt to influence customers or patients of the Company or any of its present or future subsidiaries or affiliates, either directly or indirectly, to divert their business to any individual, partnership, firm, corporation or other entity then in competition with the business of the Company, or any subsidiary or affiliate of the Company, where the identity of the customer or patient, or any information concerning the relationship between the customer or patient and the Company, is a trade secret or other Confidential Material (as defined below).

8. Soliciting Employees. The Executive promises and agrees that, for a period of two years following termination of his employment, he will not, directly or indirectly, solicit any of the Company employees who earned annually $50,000 or more as a Company employee during the last six months of his own employment, or facilitate the hiring of any such employee, to work for any other business, individual, partnership, firm, corporation, or other entity.

9. Confidential Information.

(a) The Executive, in the performance of his duties on behalf of the Company, shall have access to, receive and be entrusted with confidential information, including but not limited to systems technology, field operations, reimbursement, development, marketing, organizational, financial, management, administrative, clinical, customer, distribution and sales information, data, specifications and processes presently owned or at any time in the future developed, by the Company or its agents or consultants, or used presently or at any time in the future in the course of its business that is not otherwise part of the public domain (collectively, the “Confidential Material”). All such Confidential Material is considered secret and will be available to the Executive in confidence. Except in the performance of duties on behalf of the Company, the Executive shall not, directly or indirectly for any reason whatsoever, disclose or

11

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

(b) The Executive hereby acknowledges that the sale or unauthorized use or disclosure of any of the Company’s Confidential Material by any means whatsoever and at any time before, during or after the Executive’s employment with the Company shall constitute unfair competition. The Executive agrees he shall not engage in unfair competition either during the time employed by the Company or any time thereafter.

(c) The Executive promises and agrees that for a period of one year following termination of his employment, he will not, other than as required by law or by order of a court or other competent authority, make or publish, or cause any other person to make or publish, any statement that is disparaging or that reflects negatively upon the Company, or that is or reasonably would be expected to be damaging to the reputation of the Company. The Company promises and agrees that it will use its best efforts to not, other than as required by law or by order of a court or other competent authority, make or publish, or cause any other person to make or publish, any statement that is disparaging or that reflects negatively upon the Executive, or that is or reasonably would be expected to be damaging to the reputation of the Executive.

10. Parachute Limitation.

(i) Notwithstanding any other provision of this Agreement, in the event that any amount or benefit that may be paid or otherwise provided to or in respect of the Executive by or on behalf of the Company or any affiliate, whether pursuant to this Agreement or otherwise (collectively, “Covered Payments”), is or may become subject to the tax imposed under Section 4999 of the Code (or any successor provision or any comparable provision of state, local or foreign law) (“Excise Tax”), then the portion of the Covered Payments that would be treated as “parachute payments” under Code Section 280G (“Covered Parachute Payments”) shall be reduced so that the Covered Parachute Payments, in the aggregate, are reduced to the Safe Harbor Amount (as defined below); provided that such reduction to the Covered Payments shall be made only if the total after-tax benefit to the Executive is greater after giving effect to such reduction than if no such reduction had been made. For purposes of this Agreement, the term “Safe Harbor Amount” means the largest portion of the Covered Payments that would result in no portion of the Covered Payments being subject to the Excise Tax. In the event that it is determined that the amount of any Covered Payments will be reduced in

12

accordance with this Section 10, the Covered Payments shall be reduced on a nondiscretionary basis in such a way as to minimize the reduction in the economic value deliverable to the Executive. Where more than one payment has the same value for this purpose and they are payable at different times they will be reduced on a pro rata basis.

(ii) The determination of (i) whether an event described in Section 280G(b)(2)(A)(i) of the Code has occurred, (ii) the value of any Covered Parachute Payments and the Safe Harbor Amount, (iii) whether any reduction in the Covered Payments is required under Section 10(a), and (iv) the amount of any such reduction, shall be made initially by an accounting firm selected by the Compensation Committee of the Board of Directors (as constituted prior to the occurrence of any Change of Control), or, if no such firm is selected, by the independent compensation consulting firm retained by the Compensation Committee prior to any Change of Control to provide consulting advice to the Compensation Committee (the “Accountants”). For purposes of making the calculations required by this Section 10, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code, and other applicable legal authority. The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 10. The Company shall bear and be solely responsible for all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 10.

(iii) If it is determined that a reduction in payments is required pursuant to Section 10(a) and, notwithstanding any prior reduction described in this Section 10, the Internal Revenue Service (the “IRS”) determines that the Executive is liable for the Excise Tax as a result of the receipt of amounts payable under this Agreement or otherwise as described above, then the Executive shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or in the event that the Executive challenges the final IRS determination, a final judicial determination, a portion of such amounts equal to the “Repayment Amount”. The Repayment Amount with respect to the payment of benefits shall be, if a reduction in payments is required pursuant to Section 10(a), the smallest such amount as shall be required to be paid to the Company so that the Executive is not subject to the Excise Tax.

11. Section 409A.

(a) It is intended that any amounts payable under this Agreement and the Company’s and the Executive’s exercise of authority or discretion hereunder shall comply with Section 409A of the Code (including the Treasury regulations and other published guidance

13

relating thereto) (“Section 409A”) so as not to subject the Executive to payment of any interest or additional tax imposed under Section 409A. To the extent that any amount payable under this Agreement would trigger the additional tax imposed by Section 409A, the Agreement shall be construed and interpreted in a manner to avoid such additional tax yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Executive.

(b) Notwithstanding any provision of this Agreement to the contrary, if the Executive is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the Executive’s Separation from Service, and if the deferral of the commencement of any payments or benefits otherwise payable hereunder for a period of six (6) months following the Executive’s Separation from Service is necessary pursuant to Section 409A of the Code, commencement of any such payments or benefits shall be delayed as required by Section 409A of the Code. Any amounts otherwise payable to the Executive upon or in the six (6) month period following the Executive’s Separation from Service that are not so paid by reason of this Section 11(b) shall be paid as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after the Executive’s Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of the Executive’s death), and any such payments shall be increased by an amount equal to interest on such payments for the period commencing with the date such payment would have otherwise been made but for this Section 11(b) (the “Original Payment Date”) and ending on the date such payment is actually made, at an interest rate equal to the prime rate in effect as of the Original Payment Date plus one point (for this purpose, the prime rate will be based on the rate published from time to time in The Wall Street Journal). The provisions of this Section 11(b) shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code.

(c) Except as otherwise explicitly provided herein, any reimbursements or in-kind benefits provided hereunder shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the period of time specified in this Agreement (or, if no such period is specified, the Executive’s lifetime), (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit. In addition, any tax gross-up payments provided for herein shall be paid as soon as practicable, but in no event later than the end of the Executive’s taxable year following the Executive’s taxable year in which he remits the related taxes. Notwithstanding any other provision contained herein, any offset pursuant to the terms this Agreement of amounts payable to the Executive shall be in accordance with Section 409A of the Code.

12. Modification and Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Chief Executive Officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this

14

Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California without regard to its conflicts of law principles.

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

14. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

15. Arbitration. Any dispute or controversy arising under or in connection with this Agreement or the Executive’s employment by the Company shall be settled exclusively by arbitration, conducted before a single neutral arbitrator in accordance with the American Arbitration Association’s National Rules for Resolution of Employment Disputes as then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of Sections 7, 8 or 9 of this Agreement and the Executive hereby consents that such restraining order or injunction may be granted without the necessity of the Company’s posting any bond, and provided, further, that the Executive shall be entitled to seek specific performance of his right to be paid until the date of employment termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Executive expressly acknowledges and agrees that if the Company has a reasonable good faith belief that he is in violation of any of the restrictive covenants set forth in said Sections 7, 8 or 9, then the Company, following written notice to the Executive explaining the basis for its belief, may suspend any future payments scheduled to be made pursuant to Section 4, unless and until the Executive establishes to the Company’s reasonable good faith satisfaction that no such violation has occurred. Each party shall pay its own attorneys’ fees and costs. If any party prevails on a statutory claim which affords attorneys’ fees and costs, the arbitrator may award reasonable attorneys’ fees and/or costs to the prevailing party. The fees and expenses of the arbitrator and the arbitration shall be borne by the Company.

16. Entire Agreement. This Agreement together with all Exhibits hereto sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto in respect of the subject matter contained herein (including, without limitation, the Prior Employment Agreement) is hereby terminated and canceled.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.

15

APRIA HEALTHCARE GROUP INC.
By:	/s/ Norman C. Payson
	Name:	Norman C. Payson, M.D.
	Title:	Chief Executive Officer
EXECUTIVE
By:	/s/ Daniel E. Greenleaf
	Name:	Daniel E. Greenleaf

16

EXHIBIT A

APRIA HEALTHCARE GROUP INC. 2008 EXECUTIVE BONUS PLAN

EXHIBIT B

NONCOMPETITION AND NONSOLICITATION AGREEMENT

EXHIBIT C

APRIA HEALTHCARE GROUP INC. STOCK OWNERSHIP REQUIREMENTS FOR

SENIOR EXECUTIVE OFFICERS

EXHIBIT D

GENERAL RELEASE

THIS GENERAL RELEASE (this “Release”) is made as of the      day of                     , 20    , by and between Daniel E. Greenleaf, an individual (“Executive”), and Apria Healthcare Group Inc., a Delaware corporation (“Apria”). In consideration of the payments and benefits described in paragraph 1 below to be provided to Executive pursuant to that certain Amended and Restated Executive Employment Agreement, dated October 24, 2008 and effective as of April 7, 2008, to which Executive and Apria are parties (the “Employment Agreement”), the sufficiency of which is acknowledged hereby, Executive and Apria agree as follows:

1. In consideration of Executive’s general release of claims, his agreements in paragraphs 7, 8 and 9 of the Employment Agreement, and his other promises set forth herein, Apria shall pay to Executive the following amounts:

(a) a total of $             in severance compensation, subject to standard withholding for federal and state taxes, which shall be payable in accordance with Apria’s regular payroll procedures in 52 consecutive bi-weekly installments over the 24-month period beginning on                         , each in the gross amount of $            ; and

(b) all salary amounts earned but not yet paid, subject to standard withholding for federal and state taxes, payable on or as soon as practicable after                         .

2. On or before                         , Executive shall return to Apria his company-provided laptop computer, cell phone, BlackBerry, credit cards, electronic fuel card, electronic building access cards and all other property of Apria. He shall not take or copy in any form or manner any financial information, lists of customers, prices, or any other confidential and proprietary materials or information of Apria.

3. Neither this Release nor anything in this Release shall be construed to be or shall be admissible in any proceeding as evidence of an admission by Apria or Executive of any violation of Apria’s policies or procedures, or state or federal laws or regulations. This Release may be introduced, however, in any proceeding to enforce the Release. Such introduction shall be pursuant to an order protecting its confidentiality, except insofar as a court declines to enter any such Order.

4. Except for (i) those obligations created by or arising out of this Release, (ii) any rights Executive may have under stock option, stock appreciation right and restricted stock unit agreements with Apria and any retirement, 401(k), or similar benefit plans of Apria, and (iii) the continuing right to indemnification as provided by applicable law or in Apria’s bylaws and articles of incorporation in connection with acts, suits or proceedings by reason of the fact that he was an officer or employee of Apria where the basis of the claims against him consists of acts or omissions taken or made in such capacity, or any indemnification rights of Executive otherwise

1

provided pursuant to the Agreement and Plan of Merger among Apria, Sky Acquisition LLC, and Sky Merger Sub Corporation, dated as of June 18, 2008, Executive on behalf of himself, his descendants, dependents, heirs, executors, administrators, assigns, and successors, and each of them, hereby covenants not to sue and fully releases and discharges Apria, and its predecessors, subsidiaries and affiliates, past and present, and each of them, as well as its and their trustees, directors, officers, agents, attorneys, insurers, employees, stockholders, representatives, assigns, and successors, past and present, and each of them, hereinafter together and collectively (including Apria) referred to as the “Apria Releasees,” with respect to and from any and all claims, wages, demands, rights, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, costs, expenses, attorneys’ fees, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which he now owns or holds or he has at any time heretofore owned or held as against the Apria Releasees, arising out of or in any way connected with his employment relationship with any Apria Releasee, or his voluntary resignation from employment with the Apria Releasees or any other transactions, occurrences, actions, omissions, claims, losses, damages or injuries whatsoever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of any Apria Releasee committed or omitted prior to the date of this Release, including, without limiting the generality of the foregoing, any claim under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the Fair Employment Practices Act, the Equal Pay Laws, the Workers’ Compensation Act, the Family and Medical Leave Act, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code, the Employee Retirement Income Security Act of 1974, the California Fair Employment and Housing Act, the California Labor Code, the state and federal Worker Adjustment and Retraining Notification Act, the California Business and Professions Code, or any common law or statutory claim for fraud, wrongful termination, violation of public policy or defamation, or any claim for compensation, severance pay, bonus, sick leave, holiday pay, vacation pay, life insurance, health or medical insurance or any other fringe benefit, workers’ compensation or disability.

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

5. It is the intention of Apria and Executive in executing this Release that the same shall be effective as a bar to each and every claim, demand and cause of action hereinabove specified. In furtherance of this intention, Apria and Executive hereby expressly waive any and all rights and benefits conferred upon them by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly consent that this Release shall be given full force

2

and effect according to each and all of its express terms and provisions, including those related to unknown and unsuspected claims, demands and causes of action, if any, as well as those relating to any other claims, demands and causes of action hereinabove specified. SECTION 1542 provides:

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

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

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

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

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

b. He was given a copy of this Release on                         , and informed that he had 21 days within which to consider this Release, although he is free to execute this Release anytime within that 21-day period as indicated in Section 18 below; and

c. He was informed that he has seven days following the date of his execution of this Release in which to revoke this Release, which revocation may be effected by

3

means of a written notice sent to the General Counsel of Apria at Apria’s corporate headquarters, provided that in all events any revocation must be received by Apria during the seven-day revocation period.

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

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

9. Apria and Executive acknowledge that any employment relationship between them (including with any other Apria Releasee) will terminate on                         , that they have no further employment relationship except as may arise out of this Release and that Executive waives any right or claim to reinstatement as an employee of any Apria Releasee and will not seek employment in the future with Apria, unless by mutual consent. Nothing herein shall be construed as voiding Executive’s entitlement to post-termination payments pursuant to Section 1 above or the Company’s (or any of its affiliates as the case may be) rights pursuant to Sections 7, 8 and 9 of the Employment Agreement.

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

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

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

4

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

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

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

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

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

18. Executive hereby declares as follows:

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

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

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

[signature page follows]

5

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

Daniel E. Greenleaf
APRIA HEALTHCARE GROUP INC.
By:
	[Name]
	[Title]

6

EX-10.11

Exhibit 10.11

AMENDED AND RESTATED NONCOMPETITION AGREEMENT

This Amended and Restated Noncompetition Agreement (this “Agreement”) is dated as of the 7th day of March, 2007 (the “Effective Date”) by and between Chris A. Karkenny (the “Executive”) and Apria Healthcare Group Inc. (the “Company”).

INTRODUCTORY PROVISIONS

The following provisions are true and correct and constitute the basis for this Agreement:

A. Concurrently herewith, the Executive is entering into one or more agreements (herein referred to as “Incentive Compensation Agreements”) with the Company pursuant to which the Executive, subject to continued employment through the dates therein described and certain other restrictions, is receiving the option to purchase or otherwise receive shares of common stock issued by the Company as well as certain other benefits and the Executive is now being or may hereafter be offered the opportunity, at the Company’s discretion, to participate in one or incentive compensation or similar plans pursuant to which the Executive will be eligible to earn additional compensation beyond the Executive’s base salary (hereinafter referred to as “Incentive Compensation Plans”).

B. The Executive and the Company are executing this document to express their agreement concerning certain covenants pertaining to the protection of the Company’s confidential information and trade secrets and its business whereby the Executive agrees to satisfy certain obligations to perform and refrain from performing certain acts during the Executive’s employment with the Company and following the termination of the Executive’s employment with the Company.

C. The Executive and the Company acknowledge and agree that the rights granted to the Executive under the Incentive Compensation Plans and Incentive Compensation Agreements, as well as the Executive’s continued at-will employment with the Company and access to the Company’s confidential information and trade secrets, Executive’s continued receipt of salary and other remuneration and benefits associated with that at-will employment, and other good and valuable consideration, constitute adequate and sufficient consideration for the Executive’s entering into this Agreement.

D. The Executive and the Company have previously entered into a Noncompetition Agreement dated as of November 13, 2006 (the “Prior Noncompetition Agreement”) and an Amended and Restated Executive Severance Agreement of even date therewith (the “Severance Agreement”). This Agreement provides for certain payments to the Executive upon certain terminations of employment in connection with Change in Control (as defined below) from and after the Effective Date and supersedes and negates any and all previous agreements with respect to such payments, including, without limitation, the Prior Noncompetition Agreement; provided, however, that this sentence shall not apply to any severance benefits to which the Executive may become entitled under the Severance Agreement.

NOW, THEREFORE, for the purposes and considerations expressed above, the parties hereto, intending to be legally bound, agree as follows:

1. Confidential Information.

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

(b) The Executive hereby agrees that the Executive shall not at any time (whether during or after the Executive’s employment with the Company), directly or indirectly, other than in the course of the Executive’s duties to the Company, disclose or make available to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, any Confidential Material; provided, however, that this Section 1(b) shall not apply when (i) disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction to order the Executive to disclose or make available such information (provided, however, that the Executive shall promptly notify the Company in writing upon receiving a request for such information), or (ii) with respect to any other litigation, arbitration or mediation involving this Agreement, including but not limited to enforcement of this Agreement. The Executive agrees that, upon termination of the Executive’s employment with the Company, all Confidential Material in the Executive’s possession that is in written, digital or other tangible form (together with all copies or duplicates thereof, including computer files) shall be returned to the Company and shall not be retained by the Executive or furnished to any third party, in any form except as provided herein; provided, however, that the Executive shall not be obligated to treat as confidential, or return to the Company copies of any Confidential Material that (x) was publicly known at the time of disclosure to the Executive, (y) becomes publicly known or available thereafter other than by any means in violation of this Agreement or any other duty owed to the Company by any person or entity, or (z) is lawfully disclosed to the Executive by a third party.

2. Noncompetition Covenants.

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

2

(b) The risk of inevitable disclosure is particularly applicable to any such employment by the Executive with those competitors of the Company Group that are similar in operation, service, missions and markets to the Company Group (“Principal Competitors”). As of the date of this Agreement, the Principal Competitors are: Lincare Holdings, Inc.; Rotech Healthcare, Inc.; American HomePatient, Inc.; Coram Healthcare Corporation; Option Care, Inc.; Pacific Pulmonary Services Corporation; LifeCare Solutions, Inc.; and the home healthcare businesses of Air Products & Chemicals, Inc. and Praxair, Inc. and their respective parent, affiliated and subsidiary companies.

(c) In order avoid the disclosure by the Executive of the Company’s trade secrets or other Confidential Material to those businesses that could most adversely affect the performance of the Company Group and damage its goodwill, the Executive agrees that, during the period of the Executive’s employment by the Company and for a period of one year following the date on which the Executive’s employment with the Company Group terminates for any reason (the “Post-Termination Period”), the Executive will not engage, directly or indirectly, in business with or work with or for, whether as an owner, employee, consultant or otherwise, any Principal Competitor; provided, however, that this restriction shall not prevent the Executive from owning less than 1% of any class of publicly-traded securities (or other equity interests held through a publicly-traded mutual fund or similar investment) of a Principal Competitor following the termination of the Executive’s employment with the Company. The Executive expressly acknowledges and agrees that the foregoing restriction is reasonable and necessary in order to protect the Confidential Material of the Company Group. The phrase “engage, directly or indirectly” means engaging or having an interest in, directly or indirectly, as owner, partner, participant of a joint venture, trustee, proprietor, shareholder, member, manager, director, officer, employee, independent contractor, capital investor, lender, consultant, advisor or similar capacity.

3. Nonsolicitation Covenants.

(a) During the term of the Executive’s employment with the Company and during the Post-Termination Period, the Executive will not, directly or indirectly, individually or as a consultant to, or as an employee, officer, stockholder, director or other owner or participant in any business, influence or attempt to influence customers, patients, referral sources, vendors, suppliers, licensors, lessors, joint venturers, associates, consultants, agents, or partners of the Company Group, either directly or indirectly, to divert their business away from the Company Group, to any individual, partnership, firm, corporation or other entity then in competition with the business of any entity within the Company Group, and the Executive will not otherwise interfere with, disrupt or attempt to disrupt the business relationships, contractual or otherwise, between the Company, any of its respective affiliates or subsidiaries, and any customers, suppliers, vendors, lessors, licensors, joint venturers, associates, officers, employees, consultants, managers, partners, members of or investors in any entity within the Company Group.

(b) During the term of the Executive’s employment with the Company and during the Post-Termination Period, the Executive will not on behalf of any individual or entity (other than the Company Group) directly or indirectly (i) induce, encourage or otherwise solicit (or assist in soliciting) any person who is an employee, independent contractor, consultant or business partner of any entity within the Company Group to terminate his, her or its employment relationship, contract, consulting relationship or partnership arrangement with such entity to accept any other employment or position; or (ii) assist any other entity in hiring any such employee, independent contractor, consultant or business partner.

3

4. Cooperation; Nondisparagement. The Executive agrees that, following termination of employment with the Company, the Executive will cooperate, at no financial cost to the Executive, with any reasonable request the Company may make for information or assistance with respect to any matter involving the Executive. Furthermore, the Executive shall at no time make any libelous or slanderous remarks or writings about any entity within the Company Group, or any such entity’s officers or directors.

5. Company Remedies. In the event that the Company, acting in good faith and based on its reasonable belief at the time, determines that the Executive has engaged in Detrimental Activity, the Company shall have the right to take any or all of the actions set forth in this Section 5 to the fullest extent not prohibited by law; provided, however, that in the case of Detrimental Activity described in clause (i) of the definition of the term Detrimental Activity as set forth below, the Company shall have the right to take any or all of the actions set forth in Sections 5(a) and 5(b) (but, for purposes of clarity, shall not have the ability to take any of the actions set forth in Sections 5(c) and 5(d) with respect to such nature of Detrimental Activity). For purposes of this Agreement, “Detrimental Activity” shall mean (i) a breach of any of the covenants set forth in Sections 1 through 4 above that has resulted in material and demonstrable injury, monetarily or otherwise, to the Company, (ii) that, as a result of fraud or other misconduct by the Executive, the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under applicable securities laws, or (iii) Executive is found to have engaged in activities which are in violation of applicable law and such activities have resulted in material and demonstrable injury, monetarily or otherwise, to the Company. (The date of any determination by the Company that the Executive has engaged in Detrimental Activity is referred to herein as the “Determination Date.”) For these purposes, a determination by the Company that Detrimental Activity has occurred shall occur when either the Company’s Chairman of the Board of Directors or the Company’s Chief Executive Officer shall have notified the Company’s General Counsel in writing of its belief that the Executive engaged in Detrimental Activity within the meaning of this Agreement. For purposes of this Agreement, material damage to the Company may include damage to its reputation or standing before current or potential customers, current or potential sources of patient or customer referrals, industry suppliers, current or potential sources of financing or equity capital, or public or semi-public regulatory bodies such as the United States Department of Health and Human Services or the Joint Commission on Accreditation of Healthcare Organizations, and such damage need not be demonstrable as pecuniary damage. The parties stipulate that such damage may be shown in any judicial or arbitration by providing copies of media and analytical reports supported by written affidavit or oral testimony as having been published to the general public or a particular group in addition to any other form of evidence ordinarily allowed in judicial or arbitration proceedings.

4

(a) Termination of Cash Bonuses. The Company shall have the right to terminate immediately any and all rights the Executive may have with respect to any cash bonuses or other cash incentive opportunities (“Cash Bonuses”) awarded to the Executive under any Incentive Compensation Plan to the extent such Cash Bonuses have not been paid as of the Determination Date.

(b) Termination of Equity Awards. The Company shall have the right to terminate immediately any or all (i) stock options granted to the Executive that are outstanding and unexercised (whether or not vested) as of the Determination Date, and/or (ii) other equity-based or cash awards granted or issued under any Incentive Compensation Plan or Incentive Compensation Agreement to the Executive that are outstanding and unpaid (whether or not vested) as of the Determination Date.

(c) Company Repurchase Option.

(i) The Company shall have the right to repurchase any shares of the Company’s common stock (“Common Stock”) acquired by the Executive during the [one-year] period preceding the Determination Date pursuant to either (A) the exercise of any stock option granted by the Company to the Executive (whether granted on, before or after the date of this Agreement) or (B) the vesting or payment of any restricted stock, restricted stock unit or other equity-based award granted by the Company under any Incentive Compensation Agreement or Plan to the Executive whether granted on, before or after the date of this Agreement) (the “Repurchase Right”). The per-share price of any such repurchase of shares by the Company shall be equal to the lesser of (x) the Fair Market Value of the Common Stock at the time the Company gives notice of its intention to repurchase such shares, or (y) the per-share price paid by the Executive for such shares in connection with such exercise or vesting or payment event. For purposes of this Agreement, “Fair Market Value” shall be determined in accordance with the Company’s 2003 Performance Incentive Plan as in effect on the Effective Date. For purposes of clarity, the repurchase price for such shares shall be zero if the Executive did not pay any cash amount to acquire such shares.

(ii) The closing of any repurchase of shares following the Company’s exercise of its Repurchase Right shall be at a date specified by the Corporation in the Detrimental Activity Notice (as defined below), such date to be no later than 30 days after the date of the Detrimental Activity Notice. The purchase price (if any) shall be paid at the closing in the form of a check against surrender by the Executive of a stock certificate evidencing the repurchased shares with duly endorsed stock powers, free of adverse claims. No adjustments (other than as provided in the applicable stock incentive plan and/or award agreement) shall be made to the purchase price for fluctuations in the Fair Market Value of the shares after the date of the Detrimental Activity Notice. The Executive shall represent to the Company that the shares are not subject to any lien, encumbrance, pledge, or other interest of a third party. The Executive may not sell, encumber, pledge or otherwise transfer or alienate any of the shares after the date of the Detrimental Activity Notice. The Company shall have the right, to the maximum extent permitted by law, to offset against any payment otherwise due from the Executive any amount the Company is required to pay to the Executive in accordance with this Section 5.

5

(d) Company Cash Reimbursement Right.

(i) In the event that all or a portion of any of the shares of Common Stock referred to in the first sentence of Section 5(c) are not then owned by the Executive without restriction (for this purpose, the shares will be considered “restricted” if they are subject to, without limitation, any lien, encumbrance, pledge or other interest of a third party), the Company shall have the right to require the Executive to pay to the Company an amount equal to (x) the total number of shares acquired by the Executive on such option exercise, multiplied by (y) the difference between (A) the greater of the Fair Market Value of the Common Stock on [the date of the Detrimental Activity Notice] or the per-share consideration received by the Executive in any sale or other transfer or all or a portion of such shares, and (B) the per-share price (if any) paid by the Executive for such shares in connection with such exercise or vesting or payment event (the “Cash Reimbursement Right”).

(ii) Any payment required to be made by the Executive to the Company following the Company’s exercise of its Cash Reimbursement Right shall (a) be paid in the form of a certified or cashier’s check payable to the order of the Company, and (b) be delivered no later than 30 days after the date of the Detrimental Activity Notice to the Company at the address of its principal executive offices to the attention of the Company’s Chief Executive Officer, such delivery to be made by postage pre-paid registered or certified U.S. Mail. The Company shall have the right, to the maximum extent permitted by law, to offset against any payment otherwise due to the Executive any amounts the Executive is required to pay to the Company in accordance with this Section 5.

(e) Exercise of Company’s Rights. The Company’s exercise of any of its rights under the provisions of this Section 5 shall be exercisable by the Company by delivery of a written notice to the Executive (the “Detrimental Activity Notice”), which notice must set forth the general basis of the Company’s finding of Detrimental Activity, be mailed to the attention of or otherwise actually delivered to the Executive at the Executive’s most recent address reflected in the Company’s payroll records, and be so mailed or delivered during the Exercise Period set forth below. The “Exercise Period” shall commence on the Determination Date and shall terminate on the date that is sixty days after the Determination Date. The Company shall have the right to exercise any or all rights or remedies provided for in this Agreement at its sole discretion and the fact that the Company shall fail or defer its rights to exercise such rights or remedies in any given situation shall not preclude the Company from exercising such rights or remedies in any other situation even if such situation is identical or similar to the situation in which the Company declined to exercise such rights or remedies. All remedies provided herein are cumulative and are in addition to and not in limitation of any other remedies available at law, in equity or by contract. The pursuit of any one remedy shall not be deemed to limit the right to pursue any other remedy, except to the extent that such remedy has been fully realized in am manner that excludes the possibility of pursuing the other remedy.

6

6. Agreement to Compensate the Executive.

(a) Payment. The parties agree that, in the event that within the period that (i) begins with the first to occur of (1) the initial public announcement of a Change of Control (as defined in the Employment Agreement), or (2) the 90th day preceding a Change of Control and (ii) ends two years following such Change of Control, the Executive’s employment is terminated by the Company for any reason other than disability or Cause (as defined in the Employment Agreement), or in the event that the Executive terminates his employment with the Company with Good Reason (as defined in the Employment Agreement) during said period, the Executive shall be entitled to receive payments that equal $750,000 in the aggregate, it being understood that (A) such payments are intended to compensate the Executive fully for the performance of the Executive’s covenants set forth in Sections 1 through 4 above during the Post- Termination Period, and (B) the Executive is not entitled to receive any payments under this Section 6 in the event the Executive’s employment is terminated other than under one of the circumstances described in this Section 6(a).

(b) Timing of Payment. The payment payable to the Executive pursuant to Section 6(a) above shall be divided into thirteen (13) equal installments and paid biweekly over the twenty-six (26)-week period beginning on the first business day that is six months after the termination of the Executive’s employment with the Company; provided, however, that if any such payment date is not a business day, payment shall be delayed until the next following business day.

(c) Termination of Payments. The Executive expressly acknowledges and agrees that his right to continue to receive the payments hereunder is subject to his continued compliance with the restrictive covenants set forth in Sections 1 through 4 of this Agreement. If the Company determines that the Executive is in violation of any of the provisions of such restrictive covenants, then the Company, following written notice to the Executive explaining the basis for its decision, may, except as provided in Section 7(a) below, suspend any future payments scheduled to be made pursuant to this Section 6; provided, however, that:

(i) the burden of proving that the Executive is in violation of any of the restrictive covenants set forth in Sections 1 through 4 of this Agreement shall be on the Company;

(ii) the Company shall pay all expenses incurred by the Executive in prosecuting or defending any proceeding pursuant to Section 7(a) hereof with regard to such determination by the Company as they are incurred by the Executive in advance of the final disposition of such proceedings, together with any tax liability incurred by the Executive in connection with the receipt of such amounts; provided, however, that the payment of such expenses incurred in advance of the final disposition of such proceeding shall be made only upon delivery to the Company of an undertaking, by or on behalf of the Executive, to repay all amounts so advanced to the extent the arbitrator in such proceeding affirmatively determines that the Company is the prevailing party, taking into account all claims made by any such party to such proceeding; and

7

(iii) all payments described in Section 6 of this Agreement shall continue to be made or provided on the dates provided herein as if no such violation exists, except in the event a final determination pursuant to the arbitration provisions of Section 7(a) has been rendered and such determination provides that the Executive is, in fact, in violation of any of the restrictive covenants set forth in Sections 1 through 4 of this Agreement.

In order to implement the principle of this Section 6(c), in the event that an arbitrator determines that the Executive has violated any of the provisions of Sections 1 through 4 of this Agreement, the arbitrator may require that the Executive return to the Company any amounts paid to the Executive pursuant to Section 6(c)(iii) following the date of such violation.

(d) Term. This Section 6, and the Executive’s right to receive payments hereunder, shall have an initial term (the “Term”) of two years and shall terminate and be of no further force or effect on the second anniversary of the Effective Date; provided, however, that commencing on the second anniversary of the Effective Date and on each anniversary thereafter (each an “Extension Date”), the Term shall be automatically extended for an additional one-year period, unless the Company provides the Executive with written notice at least 30 days before the next Extension Date that the Term shall not be so extended. Notwithstanding anything in this Agreement to the contrary, upon the occurrence of a Change of Control, the Term shall automatically be extended until the latest of (i) the second anniversary of the consummation of the Change of Control or (ii) the expiration of the Post-Termination Period if a termination triggering the payment of the benefits described in this Section 6 occurs during the 24-month period following a Change in Control, or (iii) the expiration of all of the Company’s and/or any successor’s obligations under this Agreement.

7. Miscellaneous.

(a) Arbitration. Any dispute or controversy arising under or in connection with this Agreement or the Executive’s employment by the Company shall be settled exclusively by arbitration, conducted before a single neutral arbitrator in accordance with the National Rules for Resolution of Employment Disputes of the American Arbitration Association (“AAA”) as then in effect. Such arbitration shall be conducted in Orange County, California, and the arbitrator shall be a resident of Orange County, California or of a county contiguous to Orange County, California; provided, however, that provisional injunctive relief may, but need not, be sought in a court of law or equity in aid of arbitration while arbitration proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is finally determined by the arbitrator. The arbitration shall be administered by AAA pursuant to its Commercial Arbitration Rules. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

8

The parties acknowledge and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with any of the matters referenced in the first sentence of the first paragraph of this Section 7(a).

The parties agree that the Company shall be responsible for payment of the forum costs of any arbitration hereunder, including the arbitrator’s fee. The parties further agree that in any proceeding with respect to such matters, the prevailing party will be entitled to recover its reasonable attorney’s fees and costs from the non-prevailing party (other than forum costs associated with the arbitration which in any event shall be paid by the Company).

Without limiting the remedies available to the parties and notwithstanding the foregoing provisions of this Section 7(a), the Executive and the Company acknowledge that any breach of any of the covenants or provisions contained in Sections 1, 2, 3 or 4 of this Agreement could result in irreparable injury to either of the parties hereto for which there might be no adequate remedy at law, and that, in the event of such a breach or threat thereof, the non-breaching party shall be entitled to obtain a temporary restraining order and/or a preliminary injunction and a permanent injunction restraining the other party hereto from engaging in any activities prohibited by any covenant or provision in Sections 1, 2, 3 or 4 of this Agreement or such other equitable relief as may be required to enforce specifically any of such covenants or provisions.

(b) Successors.

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

(ii) This Agreement shall inure to the benefit of and be binding upon the Company, its subsidiaries and its successors and any successor to the Company shall be deemed substituted for the Company under the terms of this Agreement for all purposes. As used herein, “successor” shall include any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires either a controlling interest in the voting stock of the Company or substantial portion of or the business of the Company. This Agreement shall be considered to be assigned to any such successor, whether that happens by operation of law, operation of the terms of this Agreement, or otherwise.

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

9

(d) Modification. This Agreement may not be amended or modified other than by a written agreement executed by the Executive and the Company.

(e) Severability. It is the desire and intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under applicable law. If any provision of this Agreement or any part of any such provision is held under any circumstances to be invalid or unenforceable by any arbitrator or court of competent jurisdiction, then: (i) such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be modified by such arbitrator or court to conform to applicable laws so as to be valid and enforceable to the fullest possible extent; (ii) the invalidity or unenforceability of such provision or part thereof under such circumstances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other circumstances or in any other jurisdiction; (iii) the invalidity or unenforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this Agreement. Each provision of this Agreement is separable from every other provision of this Agreement, and each part of each provision of this Agreement is separable from every other part of such provision.

(f) Complete Agreement. This Agreement (together with such provisions of the Severance Agreement as are necessary to give effect to Section 6 hereof) constitutes and contains the entire agreement and final understanding concerning the subject matters addressed herein between the parties. This Agreement is intended by the parties as a complete and exclusive statement of the terms of their agreement. It supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matter hereof. Any representation, promise or agreement not specifically included in this Agreement shall not be binding upon or enforceable against either party. This Agreement constitutes a fully integrated agreement.

(g) Governing Law. This Agreement shall be deemed to have been executed and delivered in the State of California, which is the State in which the Executive is principally employed by the Company as of the date of this Agreement, and the rights and obligations of the parties hereunder shall be construed and enforced in accordance with, and governed by, by the laws of that particular State without regard to principles of conflict of laws.

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

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

10

(j) Execution. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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

APRIA HEALTHCARE GROUP INC.		EXECUTIVE
By	/s/ Lawrence M. Higby	/s/ Chris A. Karkenny
	Lawrence M. Higby	Chris A. Karkenny
	Chief Executive Officer

11

EX-10.12

Exhibit 10.12

AMENDED AND RESTATED NONCOMPETITION AND NONSOLICITATION

AGREEMENT

This Amended and Restated Noncompetition and Nonsolicitation Agreement (this “Agreement”) is entered into on the 24th day of October, 2008 (the “Effective Date”) by and between Daniel E. Greenleaf (the “Executive”) and Apria Healthcare Group Inc. (the “Company”).

INTRODUCTORY PROVISIONS

The following provisions are true and correct and constitute the basis for this Agreement:

A. The Executive has entered into one or more agreements (herein referred to as “Incentive Compensation Agreements”) with the Company pursuant to which the Executive, subject to continued employment through the dates therein described and certain other restrictions, received the option to purchase or otherwise receive shares of common stock issued by the Company as well as certain other benefits and the Executive is now being or may hereafter be offered the opportunity, at the Company’s discretion, to participate in one or incentive compensation or similar plans pursuant to which the Executive will be eligible to earn additional compensation beyond the Executive’s base salary (hereinafter referred to as “Incentive Compensation Plans”).

B. The Executive and the Company are executing this document to express their agreement concerning certain covenants pertaining to the protection of the Company’s confidential information and trade secrets and its business whereby the Executive agrees to satisfy certain obligations to perform and refrain from performing certain acts during the Executive’s employment with the Company and following the termination of the Executive’s employment with the Company.

C. The Executive and the Company acknowledge and agree that the rights granted to the Executive under the Incentive Compensation Plans and Incentive Compensation Agreements, as well as the Executive’s continued at-will employment with the Company and access to the Company’s confidential information and trade secrets, Executive’s continued receipt of salary and other remuneration and benefits associated with that at-will employment, and other good and valuable consideration, constitute adequate and sufficient consideration for the Executive’s entering into this Agreement.

D. The Executive and the Company have previously entered into a Noncompetition Agreement dated as of June 18, 2008 (the “Prior Noncompetition Agreement”) and are entering into an Amended and Restated Employment Agreement of even date herewith (the “Employment Agreement”). This Agreement provides for certain payments to the Executive upon certain terminations of employment in connection with Change in Control (as defined below) from and after the Effective Date and supersedes and negates any and all previous agreements with respect to such payments, including, without limitation, the Prior Noncompetition Agreement; provided, however, that this sentence shall not apply to any severance benefits to which the Executive may become entitled under the Employment Agreement.

NOW, THEREFORE, for the purposes and considerations expressed above, the parties hereto, intending to be legally bound, agree as follows:

1. Confidential Information.

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

(b) The Executive hereby agrees that the Executive shall not at any time (whether during or after the Executive’s employment with the Company), directly or indirectly, other than in the course of the Executive’s duties to the Company, disclose or make available to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, any Confidential Material; provided, however, that this Section 1(b) shall not apply when (i) disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction to order the Executive to disclose or make available such information (provided, however, that the Executive shall promptly notify the Company in writing upon receiving a request for such information), or (ii) with respect to any other litigation, arbitration or mediation involving this Agreement, including but not limited to enforcement of this Agreement. The Executive agrees that, upon termination of the Executive’s employment with the Company, all Confidential Material in the Executive’s possession that is in written, digital or other tangible form (together with all copies or duplicates thereof, including computer files) shall be returned to the Company and shall not be retained by the Executive or furnished to any third party, in any form except as provided herein; provided, however, that the Executive shall not be obligated to treat as confidential, or return to the Company copies of any Confidential Material that (x) was publicly known at the time of disclosure to the Executive, (y) becomes publicly known or available thereafter other than by any means in violation of this Agreement or any other duty owed to the Company by any person or entity, or (z) is lawfully disclosed to the Executive by a third party.

2. Noncompetition Covenants.

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

2

(b) The risk of inevitable disclosure is particularly applicable to any such employment by the Executive with those competitors of the Company Group that are similar in operation, service, missions and markets to the Company Group (“Principal Competitors”). As of the date of this Agreement, the Principal Competitors are: Advanced Home Care Inc.; Allied Healthcare International; Almost Family Inc.; Amedisys Inc.; American HomePatient, Inc.; Arcadia Resources Inc.; Chartwell Diversified Services Inc.; Chemed Corp.; Critical Homecare Solutions Holdings Inc; Gentiva Health Services, Inc.; Landauer Metropolitan, Inc.; LHC Group, Inc.; LifeCare Solutions, Inc.; Lincare Holdings, Inc.; Matria Healthcare Inc.; Medco Health Solutions, Inc.; Pacific Pulmonary Services Corporation; Rotech Healthcare, Inc.; The MED Group; Van G. Miller & Associates; Wright & Filippis; and the home healthcare and infusion businesses of Air Products & Chemicals, Inc., Praxair, Inc., Walgreen Co. and CVS Corp. and their respective parent, affiliated and subsidiary companies.

(c) In order avoid the disclosure by the Executive of the Company’s trade secrets or other Confidential Material to those businesses that could most adversely affect the performance of the Company Group and damage its goodwill, the Executive agrees that, during the period of the Executive’s employment by the Company and for a period of one year following the date on which the Executive’s employment with the Company Group terminates for any reason (the “Post-Termination Period”), the Executive will not engage, directly or indirectly, in business with or work with or for, whether as an owner, employee, consultant or otherwise, any Principal Competitor; provided, however, that this restriction shall not prevent the Executive from owning less than 1% of any class of publicly-traded securities (or other equity interests held through a publicly-traded mutual fund or similar investment) of a Principal Competitor following the termination of the Executive’s employment with the Company. The Executive expressly acknowledges and agrees that the foregoing restriction is reasonable and necessary in order to protect the Confidential Material of the Company Group. The phrase “engage, directly or indirectly” means engaging or having an interest in, directly or indirectly, as owner, partner, participant of a joint venture, trustee, proprietor, shareholder, member, manager, director, officer, employee, independent contractor, capital investor, lender, consultant, advisor or similar capacity.

3. Nonsolicitation Covenants.

(a) During the term of the Executive’s employment with the Company and during the Post-Termination Period, the Executive will not, directly or indirectly, individually or as a consultant to, or as an employee, officer, stockholder, director or other owner or participant in any business, influence or attempt to influence customers, patients, referral sources, vendors, suppliers, licensors, lessors, joint venturers, associates, consultants, agents, or partners of the Company Group, either directly or indirectly, to divert their business away from the Company Group, to any individual, partnership, firm, corporation or other entity then in competition with the business of any entity within the Company Group, and the Executive will not otherwise interfere with, disrupt or attempt to disrupt the business relationships, contractual or otherwise, between the Company, any of its respective affiliates or subsidiaries, and any customers, suppliers, vendors, lessors, licensors, joint venturers, associates, officers, employees, consultants, managers, partners, members of or investors in any entity within the Company Group.

3

(b) During the term of the Executive’s employment with the Company and during the Post-Termination Period, the Executive will not on behalf of any individual or entity (other than the Company Group) directly or indirectly (i) induce, encourage or otherwise solicit (or assist in soliciting) any person who is an employee, independent contractor, consultant or business partner of any entity within the Company Group to terminate his, her or its employment relationship, contract, consulting relationship or partnership arrangement with such entity to accept any other employment or position; or (ii) assist any other entity in hiring any such employee, independent contractor, consultant or business partner.

4. Cooperation; Nondisparagement. The Executive agrees that, following termination of employment with the Company, the Executive will cooperate, at no financial cost to the Executive, with any reasonable request the Company may make for information or assistance with respect to any matter involving the Executive. Furthermore, the Executive shall at no time make any libelous or slanderous remarks or writings about any entity within the Company Group, or any such entity’s officers or directors.

5. Company Remedies. In the event that the Company, acting in good faith and based on its reasonable belief at the time, determines that the Executive has engaged in Detrimental Activity, the Company shall have the right to take any or all of the actions set forth in this Section 5 to the fullest extent not prohibited by law; provided, however, that in the case of Detrimental Activity described in clause (i) of the definition of the term Detrimental Activity as set forth below, the Company shall have the right to take any or all of the actions set forth in Sections 5(a) and 5(b) (but, for purposes of clarity, shall not have the ability to take any of the actions set forth in Sections 5(c) and 5(d) with respect to such nature of Detrimental Activity). For purposes of this Agreement, “Detrimental Activity” shall mean (i) a breach of any of the covenants set forth in Sections 1 through 4 above that has resulted in material and demonstrable injury, monetarily or otherwise, to the Company, (ii) that, as a result of fraud or other misconduct by the Executive, the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under applicable securities laws, or (iii) Executive is found to have engaged in activities which are in violation of applicable law and such activities have resulted in material and demonstrable injury, monetarily or otherwise, to the Company. (The date of any determination by the Company that the Executive has engaged in Detrimental Activity is referred to herein as the “Determination Date.”) For these purposes, a determination by the Company that Detrimental Activity has occurred shall occur when either the Company’s Chairman of the Board of Directors or the Company’s Chief Executive Officer shall have notified the Company’s General Counsel in writing of its belief that the Executive engaged in Detrimental Activity within the meaning of this Agreement. For purposes of this Agreement, material damage to the Company may include damage to its reputation or standing before current or potential customers, current or potential sources of patient or customer referrals, industry suppliers, current or potential sources of financing or equity capital, or public or semi-public regulatory bodies such as the United States Department of Health and Human Services or the Joint Commission on Accreditation of Healthcare Organizations, and such damage need not be demonstrable as pecuniary damage. The parties stipulate that such damage may be shown in any judicial or arbitration by providing copies of media and analytical reports supported by written affidavit or oral testimony as having been published to the general public or a particular group in addition to any other form of evidence ordinarily allowed in judicial or arbitration proceedings.

4

(a) Termination of Cash Bonuses. The Company shall have the right to terminate immediately any and all rights the Executive may have with respect to any cash bonuses or other cash incentive opportunities (“Cash Bonuses”) awarded to the Executive under any Incentive Compensation Plan to the extent such Cash Bonuses have not been paid as of the Determination Date.

(b) Termination of Equity Awards. The Company shall have the right to terminate immediately any or all (i) stock options granted to the Executive that are outstanding and unexercised (whether or not vested) as of the Determination Date, and/or (ii) other equity-based or cash awards granted or issued under any Incentive Compensation Plan or Incentive Compensation Agreement to the Executive that are outstanding and unpaid (whether or not vested) as of the Determination Date.

(c) Company Repurchase Option.

(i) The Company shall have the right to repurchase any shares of the Company’s common stock (“Common Stock”) acquired by the Executive during the one-year period preceding the Determination Date pursuant to either (A) the exercise of any stock option granted by the Company to the Executive (whether granted on, before or after the date of this Agreement) or (B) the vesting or payment of any restricted stock, restricted stock unit or other equity-based award granted by the Company under any Incentive Compensation Agreement or Plan to the Executive whether granted on, before or after the date of this Agreement) (the “Repurchase Right”). The per-share price of any such repurchase of shares by the Company shall be equal to the lesser of (x) the Fair Market Value of the Common Stock at the time the Company gives notice of its intention to repurchase such shares, or (y) the per-share price paid by the Executive for such shares in connection with such exercise or vesting or payment event. For purposes of this Agreement, “Fair Market Value” shall be determined in accordance with the Company’s 2003 Performance Incentive Plan as in effect on the Effective Date. For purposes of clarity, the repurchase price for such shares shall be zero if the Executive did not pay any cash amount to acquire such shares.

(ii) The closing of any repurchase of shares following the Company’s exercise of its Repurchase Right shall be at a date specified by the Corporation in the Detrimental Activity Notice (as defined below), such date to be no later than 30 days after the date of the Detrimental Activity Notice. The purchase price (if any) shall be paid at the closing in the form of a check against surrender by the Executive of a stock certificate evidencing the repurchased shares with duly endorsed stock powers, free of adverse claims. No adjustments (other than as provided in the applicable stock incentive plan and/or award agreement) shall be made to the purchase price for fluctuations in the Fair Market Value of the shares after the date of the Detrimental Activity Notice. The Executive shall represent to the Company that the shares are not subject to any lien, encumbrance, pledge, or other interest of a third party. The Executive may not sell, encumber, pledge or otherwise transfer or alienate any of the shares after the date of the Detrimental Activity Notice. The Company shall have the right, to the maximum extent permitted by law, to offset against any payment otherwise due from the Executive any amount the Company is required to pay to the Executive in accordance with this Section 5.

5

(d) Company Cash Reimbursement Right.

(i) In the event that all or a portion of any of the shares of Common Stock referred to in the first sentence of Section 5(c) are not then owned by the Executive without restriction (for this purpose, the shares will be considered “restricted” if they are subject to, without limitation, any lien, encumbrance, pledge or other interest of a third party), the Company shall have the right to require the Executive to pay to the Company an amount equal to (x) the total number of shares acquired by the Executive on such option exercise, multiplied by (y) the difference between (A) the greater of the Fair Market Value of the Common Stock on the date of the Detrimental Activity Notice or the per-share consideration received by the Executive in any sale or other transfer or all or a portion of such shares, and (B) the per-share price (if any) paid by the Executive for such shares in connection with such exercise or vesting or payment event (the “Cash Reimbursement Right”).

(ii) Any payment required to be made by the Executive to the Company following the Company’s exercise of its Cash Reimbursement Right shall (a) be paid in the form of a certified or cashier’s check payable to the order of the Company, and (b) be delivered no later than 30 days after the date of the Detrimental Activity Notice to the Company at the address of its principal executive offices to the attention of the Company’s Chief Executive Officer, such delivery to be made by postage pre-paid registered or certified U.S. Mail. The Company shall have the right, to the maximum extent permitted by law, to offset against any payment otherwise due to the Executive any amounts the Executive is required to pay to the Company in accordance with this Section 5.

(e) Exercise of Company’s Rights. The Company’s exercise of any of its rights under the provisions of this Section 5 shall be exercisable by the Company by delivery of a written notice to the Executive (the “Detrimental Activity Notice”), which notice must set forth the general basis of the Company’s finding of Detrimental Activity, be mailed to the attention of or otherwise actually delivered to the Executive at the Executive’s most recent address reflected in the Company’s payroll records, and be so mailed or delivered during the Exercise Period set forth below. The “Exercise Period” shall commence on the Determination Date and shall terminate on the date that is sixty days after the Determination Date. The Company shall have the right to exercise any or all rights or remedies provided for in this Agreement at its sole discretion and the fact that the Company shall fail or defer its rights to exercise such rights or remedies in any given situation shall not preclude the Company from exercising such rights or remedies in any other situation even if such situation is identical or similar to the situation in which the Company declined to exercise such rights or remedies. All remedies provided herein are cumulative and are in addition to and not in limitation of any other remedies available at law, in equity or by contract. The pursuit of any one remedy shall not be deemed to limit the right to pursue any other remedy, except to the extent that such remedy has been fully realized in am manner that excludes the possibility of pursuing the other remedy.

6

6. Agreement to Compensate the Executive.

(a) Payment. The parties have previously entered into an Executive Employment Agreement on June 18, 2008 and effective as of April 7, 2008 (the “Employment Agreement”). In the event that within the period that (i) begins with the first to occur of (1) the initial public announcement of a Change of Control (as defined in the Employment Agreement), or (2) the 90th day preceding a Change of Control and (ii) ends two years following such Change of Control, the Executive’s employment is terminated by the Company for any reason other than death, disability or Cause (as defined in the Employment Agreement), or in the event that the Executive terminates his employment with the Company with Good Reason (as defined in the Employment Agreement) during said period, the Executive shall be entitled to receive payments that equal $750,000 in the aggregate, it being understood that (A) such payments are intended to compensate the Executive fully for the performance of the Executive’s covenants set forth in Sections 1 through 4 above during the Post-Termination Period, and (B) the Executive is not entitled to receive any payments under this Section 6 in the event the Executive’s employment is terminated other than under one of the circumstances described in this Section 6(a).

(b) Timing of Payment. The payment payable to the Executive pursuant to Section 6(a) above shall be divided into twenty-six (26) equal installments and paid bi-weekly over the fifty-two (52) week period beginning on the same payroll payment date on which the Executive’s severance payments commence under the Severance Agreement.

(c) Termination of Payments. The Executive expressly acknowledges and agrees that his right to continue to receive the payments hereunder is subject to his continued compliance with the restrictive covenants set forth in Sections 1 through 4 of this Agreement. If the Company determines that the Executive is in violation of any of the provisions of such restrictive covenants, then the Company, following written notice to the Executive explaining the basis for its decision, may, except as provided in Section 7(a) below, suspend any future payments scheduled to be made pursuant to this Section 6; provided, however, that:

(i) the burden of proving that the Executive is in violation of any of the restrictive covenants set forth in Sections 1 through 4 of this Agreement shall be on the Company;

(ii) the Company shall pay all expenses incurred by the Executive in prosecuting or defending any proceeding pursuant to Section 7(a) hereof with regard to such determination by the Company as they are incurred by the Executive in advance of the final disposition of such proceedings, together with any tax liability incurred by the Executive in connection with the receipt of such amounts (any such payment to be made as soon as reasonably practicable following the date such expense was incurred or tax was remitted, as the case may be, and in all events not later than the end of the Executive’s taxable year following the Executive’s taxable year in which the expense was incurred or tax was remitted, as the case may be); provided, however, that the payment of such expenses incurred in advance of the final disposition of such proceeding shall be made only upon delivery to the Company of an undertaking, by or on behalf of the Executive, to repay all amounts so advanced to the extent the arbitrator in such proceeding affirmatively determines that the Company is the prevailing party, taking into account all claims made by any such party to such proceeding; and

7

(iii) all payments described in Section 6 of this Agreement shall continue to be made or provided on the dates provided herein as if no such violation exists, except in the event a final determination pursuant to the arbitration provisions of Section 7(a) has been rendered and such determination provides that the Executive is, in fact, in violation of any of the restrictive covenants set forth in Sections 1 through 4 of this Agreement.

In order to implement the principle of this Section 6(c), in the event that an arbitrator determines that the Executive has violated any of the provisions of Sections 1 through 4 of this Agreement, the arbitrator may require that the Executive return to the Company any amounts paid to the Executive pursuant to Section 6(c)(iii) following the date of such violation.

(d) Term. This Section 6, and the Executive’s right to receive payments hereunder, shall have an initial term (the “Term”) of two years and shall terminate and be of no further force or effect on the second anniversary of the Effective Date; provided, however, that commencing on the second anniversary of the Effective Date and on each anniversary thereafter (each an “Extension Date”), the Term shall be automatically extended for an additional one-year period, unless the Company provides the Executive with written notice at least 30 days before the next Extension Date that the Term shall not be so extended. Notwithstanding anything in this Agreement to the contrary, upon the occurrence of a Change of Control, the Term shall automatically be extended until the latest of (i) the second anniversary of the consummation of the Change of Control or (ii) the expiration of the Post-Termination Period if a termination triggering the payment of the benefits described in this Section 6 occurs during the 24-month period following a Change in Control, or (iii) the expiration of all of the Company’s and/or any successor’s obligations under this Agreement.

7. Miscellaneous.

(a) Arbitration. Any dispute or controversy arising under or in connection with this Agreement or the Executive’s employment by the Company shall be settled exclusively by arbitration, conducted before a single neutral arbitrator in accordance with the National Rules for Resolution of Employment Disputes of the American Arbitration Association (“AAA”) as then in effect. Such arbitration shall be conducted in Orange County, California, and the arbitrator shall be a resident of Orange County, California or of a county contiguous to Orange County, California; provided, however, that provisional injunctive relief may, but need not, be sought in a court of law or equity in aid of arbitration while arbitration proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is finally determined by the arbitrator. The arbitration shall be administered by AAA pursuant to its Commercial Arbitration Rules. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

The parties acknowledge and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with any of the matters referenced in the first sentence of the first paragraph of this Section 7(a).

8

The parties agree that the Company shall be responsible for payment of the forum costs of any arbitration hereunder, including the arbitrator’s fee. The parties further agree that in any proceeding with respect to such matters, the prevailing party will be entitled to recover its reasonable attorney’s fees and costs from the non-prevailing party (other than forum costs associated with the arbitration which in any event shall be paid by the Company).

Without limiting the remedies available to the parties and notwithstanding the foregoing provisions of this Section 7(a), the Executive and the Company acknowledge that any breach of any of the covenants or provisions contained in Sections 1, 2, 3 or 4 of this Agreement could result in irreparable injury to either of the parties hereto for which there might be no adequate remedy at law, and that, in the event of such a breach or threat thereof, the non-breaching party shall be entitled to obtain a temporary restraining order and/or a preliminary injunction and a permanent injunction restraining the other party hereto from engaging in any activities prohibited by any covenant or provision in Sections 1, 2, 3 or 4 of this Agreement or such other equitable relief as may be required to enforce specifically any of such covenants or provisions.

(b) Successors.

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

(ii) This Agreement shall inure to the benefit of and be binding upon the Company, its subsidiaries and its successors and any successor to the Company shall be deemed substituted for the Company under the terms of this Agreement for all purposes. As used herein, “successor” shall include any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires either a controlling interest in the voting stock of the Company or substantial portion of or the business of the Company. This Agreement shall be considered to be assigned to any such successor, whether that happens by operation of law, operation of the terms of this Agreement, or otherwise.

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

(d) Modification. This Agreement may not be amended or modified other than by a written agreement executed by the Executive and the Company.

(e) Severability. It is the desire and intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under applicable law. If any provision of this Agreement or any part of any such provision is held under any circumstances to be invalid or unenforceable by any arbitrator or court of competent jurisdiction, then: (i) such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be modified by such arbitrator or court to conform to applicable laws so as to be valid and enforceable to the fullest possible extent; (ii) the invalidity or unenforceability of such provision or part thereof under such circumstances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other circumstances or in any other jurisdiction; (iii) the invalidity or unenforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this Agreement. Each provision of this Agreement is separable from every other provision of this Agreement, and each part of each provision of this Agreement is separable from every other part of such provision.

9

(f) Complete Agreement. This Agreement (together with such provisions of the Employment Agreement as are necessary to give effect to Section 6 hereof) constitutes and contains the entire agreement and final understanding concerning the subject matters addressed herein between the parties. This Agreement is intended by the parties as a complete and exclusive statement of the terms of their agreement. It supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matter hereof (including, without limitation, the Prior Noncompetition Agreement). Any representation, promise or agreement not specifically included in this Agreement shall not be binding upon or enforceable against either party. This Agreement constitutes a fully integrated agreement.

(g) Governing Law. This Agreement shall be deemed to have been executed and delivered in the State of Colorado, which is the State in which the Executive is principally employed by the Company as of the date of this Agreement, and the rights and obligations of the parties hereunder shall be construed and enforced in accordance with, and governed by, by the laws of that particular State without regard to principles of conflict of laws.

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

(i) Section 409A. It is intended that any amounts payable under this Agreement and the Company’s and the Executive’s exercise of authority or discretion hereunder shall comply with Section 409A of the U.S. Internal Revenue Code (including the Treasury regulations and other published guidance relating thereto) (“Section 409A”) so as not to subject the Executive to payment of any interest or additional tax imposed under Section 409A. To the extent that any amount payable under this Agreement would trigger the additional tax imposed by Section 409A, the Agreement shall be construed and interpreted in a manner to avoid such additional tax yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Executive.

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

10

(k) Execution. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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

APRIA HEALTHCARE GROUP INC.		EXECUTIVE
By	/s/ Norman C. Payson, M.D.	/s/ Daniel E. Greenleaf	12/30/08
	Norman C. Payson, M.D. Chief Executive Officer	Daniel E. Greenleaf

11

EX-10.13

Exhibit 10.13

MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

(Class B Units)

THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this “Agreement”) by and between BP Healthcare Holdings LLC, a Delaware limited liability company (the “Company”), and the individual named on the Executive Master Signature Page hereto (“Executive”) is made as of the date set forth on such Executive Master Signature Page.

WHEREAS, on the terms and subject to the conditions hereof, Executive desires to subscribe for and acquire from the Company, and the Company desires to issue and provide to Executive, the Company’s Class B Units (the “Units”), in each case in the amount set forth on Executive’s Master Signature Page, as hereinafter set forth; and

WHEREAS, this Agreement is one of several agreements being entered into by the Company or its Affiliates with certain persons who are or will be key employees or advisors of the Company or one or more Subsidiaries (collectively with Executive, the “Management Investors”) as part of a management equity purchase plan designed to comply with Regulation D or Rule 701, as applicable, promulgated under the Securities Act (as defined below);

NOW, THEREFORE, in order to implement the foregoing and in consideration of the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

1. Definitions.

1.1 Affiliate. An “Affiliate” of, or Person “Affiliated” with, a specified Person shall mean a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.

1.2 Agreement. The term “Agreement” shall have the meaning set forth in the preface.

1.3 Blackstone. The term “Blackstone” means Blackstone Capital Partners V L.P. and its Affiliates.

1.4 Board. The “Board” shall mean the Company’s Board of Directors.

1.5 Cause. The term “Cause” shall mean (A) Executive’s willful and continued failure to substantially perform Executive’s duties to the Company or any of its Subsidiaries or Affiliates (other than as a result of total or partial incapacity due to physical or mental illness or as a result of Executive resigning as Chief Executive Officer of Apria) which failure has continued for a period of at least 20 days following delivery to Executive of written demand by the Company or any of its Subsidiaries or Affiliates specifying the manner in which Executive has willfully failed to so perform; (B) Advisor’s engagement in fraud or willful dishonesty (other than dishonesty that has no material detrimental impact on the reputation or business of the Company and its Affiliates); (C) any act on the part of Executive that constitutes a felony (other than traffic offenses), or its equivalent under applicable non-U.S. law (provided that if

1

Executive’s employment is terminated for “Cause” as a result of any such act, but is not convicted in respect of, and does not plead guilty or nolo contendere to, the applicable conduct before a court of competent jurisdiction, then the Company shall have the burden of establishing by clear and convincing evidence that such conduct occurred and could reasonably be expected to have a material detrimental impact on the reputation or business of the Company and its Affiliates (and the failure to so satisfy such burden shall result in the termination of Executive’s employment being without Cause) or (D) Executive’s material breach of the provisions of Appendix A hereto; provided, further, that “Cause” shall cease to exist for an event on the 90th day following the later of its occurrence or the knowledge thereof by a majority of the Board, unless the Company or any of its Subsidiaries or Affiliates has given Executive written notice thereof prior to such date. A termination of Executive shall not be deemed with Cause unless and until there shall have been delivered to Executive a copy of a finding duly approved by a majority of the entire membership of the Board (not including Executive), concluding that, in the good faith opinion of such majority, Executive has engaged in the conduct described in one or more of the clauses above, specifying the particulars thereof in reasonable detail and demonstrating that no cure by Executive was effected following giving Executive 20 days to cure the negative impact of such conduct after written notice by the Company or any of its Subsidiaries or Affiliates to Executive of such conduct, or, in the Board’s good faith reasonable judgment, no cure was possible.

1.6 Change of Control. The term “Change of Control” shall have the meaning set forth in either the LLC Agreement or the Amended and Restated Limited Liability Company Agreement of Sky Acquisition LLC, dated as of the date hereof, as it may be amended or supplemented thereafter from time to time.

1.7 Closing. The term “Closing” shall have the meaning set forth in Section 2.2.

1.8 Closing Date. The term “Closing Date” shall have the meaning set forth in Section 2.2.

1.9 Company. The term “Company” shall have the meaning set forth in the preface.

1.10 Constructive Termination. The term “Constructive Termination” shall be deemed to have occurred upon (A) the failure of the Company or its Subsidiaries to pay or cause to be paid Executive’s base salary, annual bonus, director’s fees and reimbursable expenses (in each case, if any) when due under the Employment Agreement (or, if applicable, the Services Agreement attached thereto); (B) a reduction in such base salary, target annual bonus or director’s fees payable under the Employment Agreement (or, if applicable, the Services Agreement attached thereto), but excluding as a result of Executive ceasing to be Chief Executive Officer of Holdings or Apria as contemplated by Sections 2(c), 3(a) or 3(b) of the Employment Agreement; (C) any substantial and sustained diminution in Executive’s authority or responsibilities as of the Closing Date, but excluding as a result of Executive ceasing to be Chief Executive Officer of Holdings or Apria as contemplated by Sections 2(c), 3(a) or 3(b) of the Employment Agreement or (D) any material breach by the Company or its Subsidiaries of any material agreement with Executive; provided that none of these events shall constitute Constructive Termination unless the Company fails to cure such event within 30 days after receipt from Executive of written notice specifying in reasonable detail the event which

2

constitutes Constructive Termination; provided, further, that “Constructive Termination” shall cease to exist for an event on the 90th day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Company written notice thereof prior to such date.

1.11 Cost. The term “Cost” shall mean the price per Unit paid by Executive, if any, as proportionately adjusted for all subsequent distributions of Units and other recapitalizations and less the amount of any distributions (excluding tax distributions) made with respect to the Units pursuant to the Company’s organizational documents; provided that “Cost” may not be less than zero.

1.12 Disability. The term “Disability” shall mean Executive’s inability, for a period of six (6) consecutive months or for an aggregate of twelve (12) months in any twenty-four (24) consecutive month period, to perform Executive’s employment duties as a result of Executive becoming physically or mentally incapacitated. Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company. If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third physician who shall make such determination in writing. The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement.

1.13 Employee and Employment. The term “employee” shall mean, without any inference as to negate Executive’s status as a member of the Company for all purposes hereunder (subject to the terms hereof) and for federal and other tax purposes, any employee (as defined in accordance with the regulations and revenue rulings then applicable under Section 3401(c) of the Internal Revenue Code of 1986, as amended) of the Company or any of its Subsidiaries, and the term “employment” shall include service as a part- or full-time employee or advisor or board member to the Company or any of its Subsidiaries.

1.14 Executive. The term “Executive” shall have the meaning set forth in the preface.

1.15 Executive’s Group. The term “Executive’s Group” shall have the meaning set forth in Section 4.1(a).

1.16 Fair Market Value. The term “Fair Market Value” used in connection with the value of Units shall mean (a) if there is a public market for the equity of the Company, Holdings or Apria on the applicable date, the value for the Units shall be implied by the average of the high and low closing bid prices of such equity during the last 10 trading days on the stock exchange on which the equity is principally trading or (b) if there is no public market for the equity on such date, the value for the Units shall be determined in good faith by the Board after consultation with Executive and the Chief Executive Officer and Chief Financial Officer of Apria, in either case assuming, for purposes of determining Fair Market Value, application of the distribution and dissolution provisions contained in Sections 4.4 and 5.2(b) of the LLC Agreement; provided, however, if such Fair Market Value determination occurs more than three months removed from the most recent third-party valuation with respect to such equity, the

3

Board shall be required to obtain a current valuation from a nationally recognized third-party valuation firm selected by the Board and reasonably acceptable to Executive prior to making such determination of Fair Market Value (unless Executive and the Board can mutually agree on Fair Market Value prior to such determination).

1.17 Financing Default. The term “Financing Default” shall mean an event which would constitute (or with notice or lapse of time or both would constitute) an event of default under any of the financing documents of the Company or its Affiliates from time to time (collectively, the “Financing Agreements”).

1.18 LLC Agreement. The term “LLC Agreement” shall have the meaning set forth in the Securityholders Agreement.

1.19 Management Investors. The term “Management Investors” shall have the meaning set forth in the preface.

1.20 Merger Agreement. The term “Merger Agreement” shall mean the Agreement and Plan of Merger by and among Apria Healthcare Group Inc., a Delaware corporation (“Apria”), Sky Acquisition LLC, a Delaware limited liability company (“Holdings”), and Sky Merger Sub Corporation, a Delaware corporation, dated as of June 18, 2008.

1.21 Permitted Transferee. The term “Permitted Transferee” means any Person to whom Executive transfers Units in accordance with the Securityholders Agreement (other than the Sponsor and the Company and their respective Affiliates and except for transfers pursuant to a Public Offering).

1.22 Person. The term “Person” shall mean any individual, corporation, partnership, limited liability company, trust, joint stock company, business trust, unincorporated association, joint venture, governmental authority or other entity of any nature whatsoever.

1.23 Public Offering. The term “Public Offering” shall have the meaning set forth in the Securityholders Agreement.

1.24 Securities Act. The term “Securities Act” shall mean the Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder, as the same may be amended from time to time.

1.25 Securityholders Agreement. The term “Securityholders Agreement” shall mean the Securityholders Agreement dated as of the date hereof among the Sponsor, one or more Management Investors and the Company, as it may be amended or supplemented thereafter from time to time.

1.26 Sponsor. The term “Sponsor” means Blackstone.

1.27 Subsidiary. The term “Subsidiary” means any corporation, limited liability company, partnership or other entity with respect to which another specified entity has the power to vote or direct the voting of sufficient securities to elect directors (or comparable authorized persons of such entity) having a majority of the voting power of the board of directors (or comparable governing body) of such entity.

4

1.28 Termination Date. The term “Termination Date” means the date upon which Executive’s employment with the Company and its Subsidiaries is terminated.

1.29 Unvested Units. The term “Unvested Units” means, with respect to Executive’s Class B Units, the number of such Units that are not “Vested Units”.

1.30 Vested Units. The term “Vested Units” shall mean, with respect to an Executive’s Class B Units, the number of such Units that are vested, as determined in accordance with Schedule I attached hereto. The Board may elect at any time to treat Units as Vested Units by resolution.

1.31 Vesting Date. The term “Vesting Date” shall mean, October 28, 2008.

2. Subscription for and Grant of Units.

2.1 Grant of Units. Pursuant to the terms and subject to the conditions set forth in this Agreement, Executive hereby subscribes for and agrees to acquire, and the Company hereby agrees to issue and award to Executive on the Closing Date, the number of Units set forth on Executive’s Master Signature Page in exchange for services performed for the Company and its Subsidiaries by Executive.

2.2 The Closing. The closing (the “Closing”) of the grant of Units hereunder shall take place one business day following the date hereof. The date of the Closing shall be the “Closing Date”.

2.3 Section 83(b) Election. Within 10 days after the Closing, Executive shall provide the Company with a copy of a completed election under Section 83(b) of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder in the form of Exhibit A to Executive’s Master Signature Page. Executive shall timely (within 30 days of the Closing) file (via certified mail, return receipt requested) such election with the Internal Revenue Service and shall thereafter notify the Company it has made such timely filing. Executive should consult his tax advisor regarding the consequences of a Section 83(b) election, as well as the receipt, vesting, holding and sale of Units.

2.4 Closing Conditions. Notwithstanding anything in this Agreement to the contrary, the Company shall be under no obligation to issue, grant to Executive any Units unless (i) Executive is an employee of, or consultant to, the Company or one of its Subsidiaries on the Closing Date; (ii) the representations of Executive contained in Section 3 hereof are true and correct in all material respects as of the Closing Date and (iii) Executive is not in breach of any agreement, obligation or covenant herein required to be performed or observed by Executive on or prior to the Closing Date.

5

3. Investment Representations and Covenants of Executive and Representations of the Company.

3.1 Units Unregistered. Executive acknowledges and represents that Executive has been advised by the Company that:

(a) the offer and sale of the Units have not been registered under the Securities Act;

(b) the Units must be held indefinitely and Executive must continue to bear the economic risk of the investment in the Units unless the offer and sale of such Units are subsequently registered under the Securities Act and all applicable state securities laws or an exemption from such registration is available (or as otherwise provided in the Securityholders Agreement);

(c) there is no established market for the Units and it is not anticipated that there will be any public market for the Units in the foreseeable future;

(d) a restrictive legend in the form set forth below and the legends set forth in Section 7.3(a) and (b) of the Securityholders Agreement shall be placed on the certificates, if any, representing the Units:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A MANAGEMENT UNITS SUBSCRIPTION AGREEMENT WITH THE ISSUER, AS AMENDED AND MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE ISSUER’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE”; and

(e) a notation shall be made in the appropriate records of the Company indicating that the Units are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Units.

3.2 Additional Investment Representations. Executive represents and warrants that:

(a) Executive’s financial situation is such that Executive can afford to bear the economic risk of holding the Units for an indefinite period of time, has adequate means for providing for Executive’s current needs and personal contingencies, and can afford to suffer a complete loss of Executive’s investment in the Units;

(b) Executive’s knowledge and experience in financial and business matters are such that Executive is capable of evaluating the merits and risks of the investment in the Units;

(c) Executive understands that the Units are a speculative investment which involves a high degree of risk of loss of Executive’s investment therein, there are substantial

6

restrictions on the transferability of the Units and, on the Closing Date and for an indefinite period following the Closing, there will be no public market for the Units and, accordingly, it may not be possible for Executive to liquidate Executive’s investment in case of emergency, if at all;

(d) the terms of this Agreement provide that if under certain circumstances Executive ceases to be an employee of the Company or its Subsidiaries, the Company and its Affiliates may have the right to repurchase the Units at a price which may, under certain circumstances, be less than the Fair Market Value thereof;

(e) Executive understands and has taken cognizance of all the risk factors related to the purchase of the Units and, other than as set forth in this Agreement, no representations or warranties have been made to Executive or Executive’s representatives concerning the Units or the Company or their prospects or other matters;

(f) Executive has been given the opportunity to examine all documents and to ask questions of, and to receive answers from, the Company and its representatives concerning the Company and its Subsidiaries, the Securityholders Agreement, the Company’s organizational documents and the terms and conditions of the purchase of the Units and to obtain any additional information which Executive deems necessary;

(g) all information which Executive has provided to the Company and the Company’s representatives concerning Executive and Executive’s financial position is complete and correct in all material respects as of the date of this Agreement; and

(h) Executive is or is not an “accredited investor” within the meaning of Rule 501(a) under the Securities Act, as indicated on Executive’s Master Signature Page.

3.3 Other Representations. Executive acknowledges that Blackstone and its Affiliates may, from time to time, provide services to the Company and its Affiliates for which a fee will be paid by the Company or its Affiliates, including an annual monitoring/advisory fee.

3.4 Representations and Warranties of the Company.

(a) Organization. The Company (i) is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) has the requisite power and authority to own or lease and operate its assets and carry on its business.

(b) Authorization. The Company (or its Affiliate) has the requisite power and authority to enter into this Agreement, the LLC Agreement, the Employment Agreement dated as of the date hereof between Executive, the Company, Holdings and Apria (the “Employment Agreement”) and the Securityholders Agreement (together, the “Transaction Documents”). The execution, delivery and performance by the Company of this Agreement and each of the other Transaction Documents and the consummation by the Company of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company.

7

(c) Due Issuance and Authorization of Units. The Units being issued pursuant to this Agreement have been duly authorized and upon issuance in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and nonassessable (to the extent such concepts are legally applicable to membership interests in a Delaware limited liability company).

4. Certain Sales and Forfeitures Upon Termination of Employment; Variations to Securityholders Agreement.

4.1 Put Option.

(a) Prior to the occurrence of the initial Public Offering, if Executive’s employment with the Company and its Subsidiaries terminates due to the death of Executive or is terminated by the Company or any of its Subsidiaries or by Executive as a result of Executive’s Disability, Executive and Executive’s Permitted Transferees (hereinafter sometimes collectively referred to as “Executive’s Group”) shall have the right, subject to the provisions of Section 5 hereof, for 180 days following the Termination Date, to sell to the Company (the “Put Right”), and the Company shall be required to purchase (subject to the provisions of Section 5 hereof), on one occasion from each member of Executive’s Group, all (but not less than all) of the number of Vested Units then held by Executive’s Group that equals all Vested Units collectively held by Executive’s Group at a price per Unit equal to the Fair Market Value of such Units (measured as of the date that the relevant election to purchase such Units is delivered (the “Valuation Date”)). In order to exercise its rights with respect to the Vested Units pursuant to this Section 4.1(a), Executive’s Group shall also be required to simultaneously exercise any similar rights it may have with respect to any other units of the Company held by Executive’s Group in accordance with the terms of the agreements pursuant to which such other units were acquired from the Company.

(b) If Executive’s Group desires to exercise the Put Right, the members of Executive’s Group shall send one written notice to the Company setting forth such members’ intention to collectively sell all of their Vested Units pursuant to Section 4.1(a), which notice shall include the signature of each member of Executive’s Group. Subject to the provisions of Section 5.1, the closing of the purchase shall take place at the principal office of the Company on a date specified by the Company no later than the 30th day after the giving of such notice.

4.2 Call Options.

(a) If Executive’s employment with the Company and its Subsidiaries is terminated (1) by the Company or any of its Subsidiaries with Cause (or by Executive when grounds exist for a termination by the Company or any of its Subsidiaries with Cause; provided that the Company has delivered written notice to Executive, within 90 days of the date Executive’s employment with the Company or any of its Subsidiaries has terminated, that the Company or any of its Subsidiaries believe grounds for Cause exist) or as a result of the Disability of Executive, (2) due to the death of Executive or (3) prior to the fourth anniversary of the Vesting Date, by Executive (other than as a result of a Constructive Termination), then the Company shall have the right, for 90 days following the later of (x) the applicable Termination Date, or (y) if applicable, to avoid adverse accounting treatment, the date that is six months and

8

one day after the date on which Executive became vested in the applicable Units (the “Call Option”), and each member of Executive’s Group shall be required to sell to the Company, all Vested Units then held by such member of Executive’s Group at a price per Unit equal to the applicable purchase price determined as follows:

(i) Termination with Cause. If Executive’s employment with the Company and its Subsidiaries is terminated by the Company or any of its Subsidiaries with Cause (or by Executive when grounds exist for a termination by the Company or any of its Subsidiaries with Cause), the purchase price per Unit will be the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost; and

(ii) Death or Disability; Voluntary Resignation. If Executive’s employment with the Company and its Subsidiaries is terminated (x) by the Company or any of its Subsidiaries as a result of the Disability of Executive, (y) due to the death of Executive or (z) by Executive prior to the fourth anniversary of the Vesting Date (other than as a result of a Constructive Termination), the purchase price per Unit will be the Fair Market Value thereof (measured as of the Valuation Date).

The Call Option in respect of Vested Units shall expire upon the occurrence of a Public Offering. For purposes of clarification, the number of Vested Units shall be determined after giving effect to the provisions of Schedule I attached hereto.

(b) If Executive’s employment with the Company and its Subsidiaries is terminated for any reason, all Unvested Time-Vesting Units (as defined in Schedule I hereto) will be forfeited (or, to the extent a forfeiture is not permissible under applicable law for any reason, the Unvested Time-Vesting Units shall be subject to the Call Option in Section 4.2(a) with the purchase price per Unvested Time-Vesting Units equal to the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost). All Unvested Performance-Vesting Units (as defined in Schedule I hereto) shall remain outstanding and shall become Vested Units or be terminated in accordance with Schedule I hereto.

(c) If the Company desires to exercise its Call Option pursuant to this Section 4.2, the Company shall send written notice to each member of Executive’s Group of its intention to purchase Units, specifying the number of Units to be purchased (the “Call Notice”). Subject to the provisions of Section 5, the closing of the purchase shall take place at the principal office of the Company on a date specified by the Company no later than the 30th day after the giving of the Call Notice.

(d) Notwithstanding the foregoing, if the Company elects not to exercise its Call Option pursuant to this Section 4.2, the Sponsor may elect to purchase such Units on the same terms and conditions set forth in this Section 4.2 by providing written notice to each member of Executive’s Group of its intention to purchase Units.

4.3 Obligation to Sell Several. If there is more than one member of Executive’s Group, the failure of any one member thereof to perform its obligations hereunder shall not excuse or affect the obligations of any other member thereof, and the closing of the purchases from such other members by the Company shall not excuse, or constitute a waiver of its rights against, the defaulting member.

9

5. Certain Limitations on the Company’s Obligations to Purchase Units.

5.1 Prohibition of Purchases. Notwithstanding anything to the contrary contained herein, the Company shall not be obligated to purchase any Units at any time pursuant to Section 4, regardless of whether it has delivered a notice of its election to purchase any such Units, to the extent that the purchase of such Units or the payment to the Company or one of its Subsidiaries of a cash dividend or distribution by a Subsidiary of the Company that is necessary to fund such purchase (together with any other purchases of Units pursuant to Section 4 or pursuant to similar provisions in agreements with other employees of the Company and its Subsidiaries of which the Company has at such time been given or has given notice and together with cash dividends and distributions necessary to fund such other purchases) would result in a violation of any law, statute, rule, regulation, policy, order, writ, injunction, decree or judgment promulgated or entered by any federal, state, local or foreign court or governmental authority applicable to the Company or any of its Subsidiaries or any of its or their property. The Company shall, within fifteen days of learning of any such fact, so notify the members of Executive’s Group that it is not obligated to purchase Units hereunder.

5.2 Payment for Units. If at any time the Company elects or is required to purchase any Units pursuant to Section 4, the Company shall pay the purchase price for the Units it purchases (i) first, by the cancellation of any indebtedness, if any, owing from Executive to the Company or any of its Subsidiaries (which indebtedness shall be applied pro rata against the proceeds receivable by each member of Executive’s Group receiving consideration in such repurchase) and (ii) then, by the Company’s delivery of a check or wire transfer of immediately available funds for the remainder of the purchase price, if any, against delivery of the certificates or other instruments, if any, representing the Units so purchased, duly endorsed; provided that if (x) any of the conditions set forth in Section 5.1 exists or (y) such purchase of Units would result in a Financing Default, in each case which prohibits such cash payment (either directly or indirectly as a result of the prohibition of a related cash dividend or distribution) (each a “Cash Payment Restriction”), the portion of the cash payment so prohibited may be made with respect to the exercise of any Put Right, to the extent such payment is not prohibited, by the Company’s delivery of a junior subordinated promissory note (which shall be subordinated and subject in right of payment to the prior payment of any debt outstanding under the senior Financing Agreements and any modifications, renewals, extensions, replacements and refunding of all such indebtedness provided that no dividends, distributions or payments shall be made with respect to the Company’s Class A units prior to payment in full of the Junior Subordinated Note (as defined) of the Company (a “Junior Subordinated Note”) in a principal amount equal to the balance of the purchase price, payable within ten days after the Cash Payment Restriction no longer exists, and bearing interest payable (and compounded to the extent not so paid) as of the last day of each year at the interest rate payable under the senior financing credit facilities of the Company or its Subsidiaries (as applicable) from time to time, and all such accrued and unpaid interest payable on the date of the payment of principal (or, if applicable, the last installment of principal), with payments to be applied in the order of: (A) first to any enforcement costs incurred by Executive or Executive’s Group, (B) second to interest and (C) third to principal (provided that the applicable member of Executive’s Group may reject (by delivery of a written

10

notice at the closing of the purchase and sale) the delivery of a Junior Subordinated Note as the purchase price in the case of Section 4.1(a), in which case the Put Right shall be extended until the 90^th day following delivery of written notice from the Company to Executive’s Group that the Cash Payment Restriction has lapsed, unless the Company agrees to arrange for alternative payment of the applicable purchase price in cash). In the event that a Cash Payment Restriction exists as a result of a Financing Default and the Company or its Subsidiaries is refinancing, modifying, reviewing, extending, replacing or refunding the indebtedness that resulted in the Financing Default then the Company shall use commercially reasonable efforts to cause such refinanced, modified, reviewed, extended, replaced or refunded indebtedness not to include any terms that would result in a Financing Default with respect to the payment for the Units as contemplated herein. The Company shall have the right set forth in clause (i) of the first sentence of this Section 5.2 whether or not the member of Executive’s Group selling such Units is an obligor of the Company. The principal of, and accrued interest on, any such Junior Subordinated Note may be prepaid in whole or in part at any time at the option of the Company. To the extent that the Company is prohibited from paying accrued interest, that is required to be paid on any Junior Subordinated Note prior to maturity, due to the existence of any Cash Payment Restriction, such interest shall be cumulated, compounded calendar quarterly, and accrued until and to the extent that such Cash Payment Restriction no longer exists, at which time such accrued interest shall be immediately paid. Notwithstanding any other provision in this Agreement, the Company may elect to pay the purchase price hereunder in shares or other equity securities of one of its direct or indirect Subsidiaries with a fair market value equal to the applicable purchase price, provided that such Subsidiary promptly repurchases such shares or other equity securities for cash equal to the applicable purchase price or a Junior Subordinated Note (if otherwise permissible hereunder) with a principal amount equal to the applicable purchase price.

6. Competitive Activity. Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its Affiliates and accordingly agrees, in his capacity as an investor and equityholder in the Company and its Affiliates, to the provisions of Appendix A to this Agreement.

7. Miscellaneous.

7.1 Transfers. Prior to the transfer of Units to a Permitted Transferee, Executive shall deliver to the Company a written agreement of the proposed transferee (a) evidencing such Person’s undertaking to be bound by the terms of this Agreement and (b) acknowledging that the Units transferred to such Person will continue to be Units for purposes of this Agreement in the hands of such Person. Any transfer or attempted transfer of Units in violation of any provision of this Agreement or the Securityholders Agreement shall be void, and the Company shall not record such transfer on its books or treat any purported transferee of such Units as the owner of such Units for any purpose.

7.2 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Units, to any and all securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution of

the Units, by reason of any dividend payable in Units, issuance of Units, combination, recapitalization, reclassification, merger, consolidation or otherwise.

11

7.3 Executive’s Employment by the Company. Nothing contained in this Agreement shall be deemed to obligate the Company or any Subsidiary of the Company to employ Executive in any capacity whatsoever or to prohibit or restrict the Company (or any such Subsidiary) from terminating the employment of Executive at any time or for any reason whatsoever, with or without Cause.

7.4 Cooperation. Executive agrees to cooperate with the Company in taking action reasonably necessary to consummate the transactions contemplated by this Agreement.

7.5 Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns; provided, however, that no Transferee shall derive any rights under this Agreement unless and until such Transferee has executed and delivered to the Company a valid undertaking and becomes bound by the terms of this Agreement; and provided further that the Sponsor is a third party beneficiary of this Agreement and shall have the right to enforce the provisions hereof.

7.6 Amendment; Waiver. This Agreement may be amended only by a written instrument signed by the parties hereto. No waiver by any party hereto of any of the provisions hereof shall be effective unless set forth in a writing executed by the party so waiving.

7.7 Governing Law; Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed therein. Any suit, action or proceeding with respect to this Agreement, or any judgment entered by any court in respect of any thereof, shall be brought in any court of competent jurisdiction in the State of New York or the State of Delaware, and each of the Company and the members of Executive’s Group hereby submits to the exclusive jurisdiction of such courts for the purpose of any such suit, action, proceeding or judgment. Each of the members of Executive’s Group and the Company hereby irrevocably waives (i) any objections which it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any court of competent jurisdiction in the State of Delaware or the State of New York, (ii) any claim that any such suit, action or proceeding brought in any such court has been brought in any inconvenient forum and (iii) any right to a jury trial.

7.8 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three postal delivery days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

12

(a) If to the Company:

BP Healthcare Holdings LLC

345 Park Avenue

New York, NY 10154

Attention: Neil P. Simpkins

with a copy (which shall not constitute notice) to:

The Blackstone Group

345 Park Avenue

New York, NY 10154

Attention: Neil P. Simpkins

and

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017-3954

Attention: Gregory T. Grogan

If to Executive:

Norman C. Payson

NCP, Inc.

with a copy to:

Skadden Arps Slate Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attention:     Paul T. Schnell

                      Neil P. Stronski

7.9 Integration. This Agreement and the documents referred to herein (including referred to in the Executive Master Signature Page) or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to the subject matter hereof and thereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein and therein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

7.10 Counterparts. This Agreement may be executed in separate counterparts, and by different parties on separate counterparts each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

7.11 Injunctive Relief. The Company, Executive and Executive’s Permitted Transferees each acknowledges and agrees that a violation of any of the terms of this Agreement will cause the Company, Executive or Executive’s Permitted Transferees, as the case may be, irreparable injury for which adequate remedy at law is not available. Accordingly, it is agreed that the Company, Executive or Executive’s Permitted Transferees may seek an injunction, restraining order or other equitable relief to prevent breaches of the provisions of this Agreement

13

and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction in the United States or any state thereof, in addition to any other remedy to which it may be entitled at law or equity.

7.12 Rights Cumulative; Waiver. The rights and remedies of Executive and the Company under this Agreement shall be cumulative and not exclusive of any rights or remedies which either would otherwise have hereunder or at law or in equity or by statute, and no failure or delay by either party in exercising any right or remedy shall impair any such right or remedy or operate as a waiver of such right or remedy, nor shall any single or partial exercise of any power or right preclude such party’s other or further exercise or the exercise of any other power or right. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or times hereunder.

*    *    *    *    *

14

*    *    *    *    *

This Subscription Agreement between the Company and the Executive named on the Executive Master Signature Page hereto is dated and executed as of the date set forth on such Executive Master Signature Page.

*    *    *    *    *

1

EXECUTIVE MASTER SIGNATURE PAGE

Norman C. Payson

(Executive’s Name)

Dated as of: November 21, 2008 (the “Commitment Date”)

A. The individual named above and signatory hereto (the “Executive”) agrees to be bound by:

(1) the Second Amended and Restated Limited Liability Company Agreement of BP Healthcare Holdings LLC, a Delaware limited liability company (the “Company”), in the form attached hereto (the “BP LLC Agreement”);

(2) the Management Unit Subscription Agreement (Class A-2 Units), between the Company and the Executive, dated as of the Commitment Date, in the form attached hereto (the “Co-Investment Subscription Agreement”);

(3) the Management Unit Subscription Agreement (Class B Units), between the Company and the Executive, dated as of the Commitment Date, in the form attached hereto (the “Promote Subscription Agreement” and, together with the Co-Investment Subscription Agreement, the “Subscription Agreements”); and

(4) the Securityholders Agreement, among the Company and the other parties thereto (including the Executive), in the form attached hereto (the “Securityholders Agreement”).

B. The Executive and the Company agree that the following information is hereby incorporated by reference into the Subscriptions Agreements:

Class of Units	Number of Units	Cash Paid (if any)
Class A-2 Units	10,000,000	$	10,000,000
Class B Units	38,697,318		N/A

C. The Executive agrees that, upon the request of the Company, Executive shall promptly and duly execute and deliver such further instruments and documents and take such further actions as the Company may reasonably request for the purpose of giving effect to the foregoing.

[Remainder of Page Intentionally Blank]

1

Executive:

/s/ Norman C. Payson

Name: Norman C. Payson

Address:

Executive is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act of 1933, as amended.

1

Agreed and accepted:
BP HEALTHCARE HOLDINGS LLC
By:	/s/ Neil P. Simpkins
	Name: Neil P. Simpkins
	Title: President

2

SCHEDULE I

Time-Vesting Units

With regard to 80% of the Class B Units granted hereunder (the “Time-Vesting Units”), the percentage of such Time-Vesting Units that will be Vested Units in respect of a Termination Date occurring:

• prior to 3 months after the Vesting Date, will be 0%

• on or after 3 months after the Vesting Date, but prior to 6 months after the Vesting Date, will be 6.25%

• on or after 6 months after the Vesting Date, but prior to 9 months after the Vesting Date, will be 12.5%

• on or after 9 months after the Vesting Date, but prior to 12 months after the Vesting Date, will be 18.75%

• on or after 12 months after the Vesting Date, but prior to 15 months after the Vesting Date, will be 25%

• on or after 15 months after the Vesting Date, but prior to 18 months after the Vesting Date, will be 31.25%

• on or after 18 months after the Vesting Date, but prior to 21 months after the Vesting Date, will be 37.5%

• on or after 21 months after the Vesting Date, but prior to 24 months after the Vesting Date, will be 43.75%

• on or after 24 months after the Vesting Date, but prior to 27 months after the Vesting Date, will be 50%

• on or after 27 months after the Vesting Date, but prior to 30 months after the Vesting Date, will be 56.25%

• on or after 30 months after the Vesting Date, but prior to 33 months after the Vesting Date, will be 62.50%

• on or after 33 months after the Vesting Date, but prior to 36 months after the Vesting Date, will be 68.75%

• on or after 36 months after the Vesting Date, but prior to 39 months after the Vesting Date, will be 75%

• on or after 39 months after the Vesting Date, but prior to 42 months after the Vesting Date, will be 81.25%

• on or after 42 months after the Vesting Date, but prior to 45 months after the Vesting Date, will be 87.5%

• on or after 45 months after the Vesting Date, but prior to 48 months after the Vesting Date, will be 93.75%

• on or after 48 months after the Vesting Date, will be 100%;

Notwithstanding the foregoing:

• immediately prior to, and following, the occurrence of a Change of Control that occurs prior to the Termination Date, 100% of the Time-Vesting Units that are Unvested Units shall become Vested Units;

• if the Sponsor receives cash proceeds in respect of 50% of its units in Holdings (measured as of the Vesting Date) equal to at least 200% of the Sponsor’s aggregate capital contributions in respect of such units prior to the Termination Date, 100% of the Time-Vesting Units that are Unvested Units shall become Vested Units; and

• if Executive’s employment with the Company and its Subsidiaries is terminated (x) by the Company or any of its Subsidiaries without Cause or (y) by Executive as a result of a Constructive Termination, then an additional number of Time-Vesting Units equal to the number that would have vested over the 24 month period following the Termination Date shall become Vested Units immediately prior to such termination.

Except as provided in the immediately preceding sentence, any Time-Vesting Units that are Unvested Units on a Termination Date shall be immediately forfeited by Executive (or, to the extent a forfeiture is not permissible, such Time-Vesting Units that are Unvested Units shall be subject to the Call Option in Section 4.2(a) with the purchase price per Unvested Unit equal to the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost).

I-2

Performance-Vesting Units

1. Any Class B Units that are not Time-Vesting Units will be “Performance-Vesting Units.” Initially, all Performance-Vesting Units will be Unvested Units.

2. If the Sponsor receives cash proceeds in respect of its units in Holdings equal to at least 200% of its aggregate capital contributions for all such units, 50% of the Performance-Vesting Units shall become Vested Units.

3. If the Sponsor receives cash proceeds in respect of its units in Holdings equal to at least 300% of its aggregate capital contributions for all such units, 100% of the Performance-Vesting Units shall become Vested Units.

Any Performance-Vesting Units that are Unvested Units on termination of Executive’s employment (i) by the Company without Cause, (ii) by Executive as a result of Constructive Termination or (iii) by Executive for any reason on or following the fourth anniversary of the Vesting Date, will remain outstanding until the second anniversary of the Termination Date (unless such Performance-Vesting Units become Vested Units prior to such second anniversary). Except as provided in the immediately preceding sentence, any Performance-Vesting Units that are Unvested Units on termination of Executive’s employment (or upon the second anniversary referred to in the immediately preceding sentence) shall be immediately forfeited by Executive (or, to the extent a forfeiture is not permissible, such Performance-Vesting Units that are Unvested Units shall be subject to the Call Option in Section 4.2(a) with the purchase price per Unvested Unit equal to the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost).

I-3

Appendix A

Restrictive Covenants

1. Non-Compete; Non-Solicit.

(a) For the purposes of this Appendix A, any reference to the “Company” shall mean the Company and its Subsidiaries, collectively. In view of the fact that Executive’s work for the Company brings Executive into close contact with many confidential affairs of the Company not readily available to the public, and plans for further developments, Executive agrees:

(i) to keep and retain in the strictest confidence all confidential matters of the Company, including, without limitation, “know how,” trade secrets, customer lists, pricing policies, operational methods, technical processes, formulae, inventions and research projects, and other business affairs of the Company, learned by Executive heretofore or hereafter, and not to disclose them to anyone outside of the Company or its representatives, agents or advisors, either during or after Executive’s employment with the Company, except as required by applicable law , in the course of performing Executive’s duties hereunder or with the Company’s express consent; and

(ii) to deliver promptly to the Company on termination of Executive’s employment by the Company, or at any time the Company may so request, all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) relating to the Company’s business and all property associated therewith, which Executive may then possess or have under Executive’s control;

provided that the foregoing shall not apply to information that was or becomes generally available to the public prior to, and other than as a result of, disclosure by Executive.

(b) During the period of Executive’s employment and, following termination of such employment for any reason, for 12 months following the date of such termination, (i) Executive shall not, directly or indirectly, enter the employ of, or render any services to, any person, firm or corporation engaged in any business that competes with a material line of business of Holdings or its Subsidiaries (subject to the following proviso, the “Business”) at any time; provided that for periods after the Termination Date, “material line of business” will be determined as of the Termination Date; (ii) Executive shall not engage in the Business on Executive’s own account; (iii) Executive shall not invest in any such Business, directly or indirectly, as an individual, partner, shareholder, principal, member, trustee or similar capacity and (iv) Executive shall not solicit or assist in soliciting in competition with Company in the Business, the business of any then current or prospective client or former customer with whom Executive (or his direct reports) had personal contact or dealings on behalf of the Company; provided, however, that nothing contained in this Section 1(b) shall be deemed to prohibit (i) Executive’s involvement in any capacity in any health plan, health insurance business or health care financing business, (ii) Executive from acquiring, solely as an investment, up to five percent (5%) of the outstanding shares of capital stock of any public corporation or (iii) Executive’s passive investments in existence as of the date hereof.

(c) During the period of Executive’s employment other than in connection with Executive’s performance of services under the Employment Agreement (or, if applicable, the Services Agreement attached thereto) and, following termination of such employment for any reason, for 24 months following the date of such termination, Executive shall not, directly or indirectly:

(i) solicit or encourage any manager or executive of the Company to leave the employment or engagement of the Company; or

(ii) hire any manager or executive of the Company who was employed by the Company as of the date of Executive’s termination of employment with the Company or who left the employment of the Company coincident with, or within one year prior to, the termination of Executive’s employment with the Company.

provided, however, that the foregoing clause (i) shall not preclude Executive from (A) making good faith generalized solicitations for employees through advertisements or search firms and hiring any persons through such solicitations if Executive was not aware of such person’s prior employment with the Company; provided, that Executive does not encourage or advise such firm to approach any such employee and such searches are not targeted or focused on the Company’s employees, or (B) responding to or hiring any employee of the Company who contacts Executive at his or her own initiative without any prior direct or indirect encouragement or solicitation from Executive if Executive was not aware of such person’s prior employment with the Company.

(d) If Executive commits a breach, or threatens to commit a breach, of any of the provisions of Section 1 hereof, the Company shall have the following rights and remedies:

(i) the right and remedy to have the provisions of this Appendix specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company; and

(ii) the right and remedy to require Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits (collectively, “Benefits”) derived or received by Executive as the result of any transactions constituting a breach of any of the provisions of this Section 1, and Executive hereby agrees to account for and pay over such Benefits to the Company.

Each of the rights and remedies enumerated above shall be independent of the other, and shall be severally enforceable, and all of such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity.

(e) If any of the covenants contained in Section 1 or any part thereof, hereafter are construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect, without regard to the invalid portions.

(f) If any of the covenants contained in Section 1, or any part thereof, are held to be unenforceable because of the duration of such provision or the area covered thereby, the

A-2

parties agree that the court making such determination shall have the power to reduce the duration and/or area of such provision and, in its reduced form, said provision shall then be enforceable.

(g) The parties hereto intend to and hereby confer jurisdiction to enforce the covenants contained in Section 1 upon the courts of any state within the geographical scope of such covenants. In the event that the courts of any one or more of such states shall hold such covenants wholly unenforceable by reason of the breadth of such covenants or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company’s right to the relief provided above in the courts of any other states within the geographical scope of such covenants as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being for this purpose severable into diverse and independent covenants.

(h) It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 1 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Appendix A is an unenforceable restriction against Executive, the provisions of this Appendix A shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Appendix A is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

(i) The period of time during which the provisions of this Appendix shall be in effect shall be extended by the length of time during which Executive is in breach of the terms hereof as determined by any court of competent jurisdiction on the Company’s application for injunctive relief.

A-3

EX-10.14

Exhibit 10.14

MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

(Class A-2 Units, Class B Units and Class C Units)

THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this “Agreement”) by and between Sky Acquisition LLC, a Delaware limited liability company (the “Company”), and the individual named on the Executive Master Signature Page hereto (“Executive”) is made as of the date set forth on such Executive Master Signature Page.

WHEREAS, on the terms and subject to the conditions hereof, Executive desires to subscribe for and acquire from the Company, and the Company desires to issue and provide to Executive, the Company’s Class A-2 Units, Class B Units and Class C Units (the “Units”), in each case in the amount set forth on Executive’s Master Signature Page, as hereinafter set forth; and

WHEREAS, this Agreement is one of several agreements being entered into by the Company or its Subsidiaries with certain persons who are or will be key employees or advisors of the Company or one or more Affiliates (collectively with Executive, the “Management Investors”) as part of a management equity purchase plan designed to comply with Regulation D or Rule 701, as applicable, promulgated under the Securities Act (as defined below);

NOW, THEREFORE, in order to implement the foregoing and in consideration of the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

1. Definitions.

1.1 Affiliate. An “Affiliate” of, or Person “Affiliated” with, a specified Person shall mean a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.

1.2 Agreement. The term “Agreement” shall have the meaning set forth in the preface.

1.3 Blackstone. The term “Blackstone” means Blackstone Capital Partners V L.P. and its Affiliates.

1.4 Board. The “Board” shall mean the Company’s Board of Directors.

1.5 Cause. The term “Cause” shall have the meaning assigned such term in Executive’s employment agreement (the “Employment Agreement”) with Apria Healthcare Group Inc. (“Apria”) dated as of the date hereof.

1.6 Change of Control. The term “Change of Control” shall have the meaning set forth in the LLC Agreement.

1.7 Closing. The term “Closing” shall have the meaning set forth in Section 2.2.

1

1.8 Closing Date. The term “Closing Date” shall have the meaning set forth in Section 2.2.

1.9 Company. The term “Company” shall have the meaning set forth in the preface.

1.10 Constructive Termination. The term “Constructive Termination” shall have the meaning assigned such term in the Employment Agreement.

1.11 Cost. The term “Cost” shall mean the price per Unit paid by Executive, if any, as proportionately adjusted for all subsequent distributions of Units and other recapitalizations and less the amount of any distributions (excluding tax distributions) made with respect to the Units pursuant to the Company’s organizational documents; provided that “Cost” may not be less than zero.

1.12 Disability. The term “Disability” shall have the meaning assigned such term in the Employment Agreement.

1.13 Employee and Employment. The term “employee” shall mean, without any inference as to negate Executive’s status as a member of the Company for all purposes hereunder (subject to the terms hereof) and for federal and other tax purposes, any employee (as defined in accordance with the regulations and revenue rulings then applicable under Section 3401(c) of the Internal Revenue Code of 1986, as amended) of the Company or any of its Subsidiaries, and the term “employment” shall include service as a part- or full-time employee or board member to the Company or any of its Subsidiaries.

1.14 Executive. The term “Executive” shall have the meaning set forth in the preface.

1.15 Executive’s Group. The term “Executive’s Group” shall have the meaning set forth in Section 4.1(a).

1.16 Fair Market Value. The term “Fair Market Value” used in connection with the value of Units shall mean (a) if there is a public market for the equity of the Company or Apria on the applicable date, the value for the Units shall be implied by the average of the high and low closing bid prices of such equity during the last 10 trading days on the stock exchange on which the equity is principally trading or (b) if there is no public market for the equity on such date, the value for the Units shall be determined in good faith by the Board after consultation with Executive and the Chief Executive Officer and Chief Financial Officer of Apria, in either case assuming, for purposes of determining Fair Market Value, application of the distribution and dissolution provisions contained in Sections 4.4 and 5.2(b) of the LLC Agreement; provided, however, if such Fair Market Value determination occurs more than three months removed from the most recent third-party valuation with respect to such equity, the Board shall be required to obtain a current valuation from a nationally recognized third-party valuation firm selected by the Board prior to making such determination of Fair Market Value (unless Executive and the Board can mutually agree on Fair Market Value prior to such determination).

1.17 Financing Default. The term “Financing Default” shall mean an event which would constitute (or with notice or lapse of time or both would constitute) an event of default under any of the financing documents of the Company or its Affiliates from time to time (collectively, the “Financing Agreements”) and any restrictive financial covenants contained in the organizational documents of the Company or its Affiliates.

2

1.18 LLC Agreement. The term “LLC Agreement” shall have the meaning set forth in the Securityholders Agreement.

1.19 Management Investors. The term “Management Investors” shall have the meaning set forth in the preface.

1.20 Permitted Transferee. The term “Permitted Transferee” means any Person to whom Executive transfers Units in accordance with the Securityholders Agreement (other than the Sponsor and the Company and their respective Affiliates and except for transfers pursuant to a Public Offering).

1.21 Person. The term “Person” shall mean any individual, corporation, partnership, limited liability company, trust, joint stock company, business trust, unincorporated association, joint venture, governmental authority or other entity of any nature whatsoever.

1.22 Public Offering. The term “Public Offering” shall have the meaning set forth in the Securityholders Agreement.

1.23 Restrictive Covenant Violation. The term “Restrictive Covenant Violation” shall mean Executive’s breach of any section in Appendix A hereto.

1.24 Securities Act. The term “Securities Act” shall mean the Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder, as the same may be amended from time to time.

1.25 Securityholders Agreement. The term “Securityholders Agreement” shall mean the Securityholders Agreement dated as of November 24, 2008 among the Sponsor, one or more Management Investors and the Company, as it may be amended or supplemented thereafter from time to time.

1.26 Sponsor. The term “Sponsor” means Blackstone.

1.27 Subsidiary. The term “Subsidiary” means any corporation, limited liability company, partnership or other entity with respect to which another specified entity has the power to vote or direct the voting of sufficient securities to elect directors (or comparable authorized persons of such entity) having a majority of the voting power of the board of directors (or comparable governing body) of such entity.

1.28 Termination Date. The term “Termination Date” means the date upon which Executive’s employment with the Company and its Subsidiaries is terminated.

1.29 Unvested Units. The term “Unvested Units” means, with respect to Executive’s Class A-2 Units, Class B Units and Class C Units, the number of such Units that are not “Vested Units”.

3

1.30 Vested Units. The term “Vested Units” shall mean, with respect to an Executive’s Class A-2 Units, Class B Units and Class C Units, the number of such Units that are vested and nonforfeitable, as determined in accordance with Schedule I attached hereto.

2. Subscription for and Grant of Units.

2.1 Grant of Units. Pursuant to the terms and subject to the conditions set forth in this Agreement, Executive hereby subscribes for and agrees to acquire, and the Company hereby agrees to issue and award to Executive on the Closing Date, the number and classes of Units set forth on Executive’s Master Signature Page in exchange for services performed for the Company and its Subsidiaries by Executive. For all purposes under the LLC Agreement, the Class A-2 Units shall be deemed to have made a capital contribution of $1 per such Unit (although no such contribution shall be required).

2.2 The Closing. The closing (the “Closing”) of the grant of Units hereunder shall take place one business day following the date hereof. The date of the Closing shall be the “Closing Date”.

2.3 Section 83(b) Election. Within 10 days after the Closing, Executive shall provide the Company with a copy of a completed election under Section 83(b) of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder in the form of Exhibit A to Executive’s Master Signature Page. Executive shall timely (within 30 days of the Closing) file (via certified mail, return receipt requested) such election with the Internal Revenue Service and shall thereafter notify the Company it has made such timely filing. Executive should consult his tax advisor regarding the consequences of a Section 83(b) election, as well as the receipt, vesting, holding and sale of Units.

2.4 Closing Conditions. Notwithstanding anything in this Agreement to the contrary, the Company shall be under no obligation to issue, grant to Executive any Units unless (i) Executive is an employee of, or consultant to, the Company or one of its Subsidiaries on the Closing Date; (ii) the representations of Executive contained in Section 3 hereof are true and correct in all material respects as of the Closing Date and (iii) Executive is not in breach of any agreement, obligation or covenant herein required to be performed or observed by Executive on or prior to the Closing Date.

3. Investment Representations and Covenants of Executive and Representations of the Company.

3.1 Units Unregistered. Executive acknowledges and represents that Executive has been advised by the Company that:

(a) the offer and sale of the Units have not been registered under the Securities Act;

(b) the Units must be held indefinitely and Executive must continue to bear the economic risk of the investment in the Units unless the offer and sale of such Units are subsequently registered under the Securities Act and all applicable state securities laws or an exemption from such registration is available (or as otherwise provided in the Securityholders Agreement);

4

(c) there is no established market for the Units and it is not anticipated that there will be any public market for the Units in the foreseeable future;

(d) a restrictive legend in the form set forth below and the legends set forth in Section 7.3(a) and (b) of the Securityholders Agreement shall be placed on the certificates, if any, representing the Units:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A MANAGEMENT UNITS SUBSCRIPTION AGREEMENT WITH THE ISSUER, AS AMENDED AND MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE ISSUER’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE”; and

(e) a notation shall be made in the appropriate records of the Company indicating that the Units are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Units.

3.2 Additional Investment Representations. Executive represents and warrants that:

(a) Executive’s financial situation is such that Executive can afford to bear the economic risk of holding the Units for an indefinite period of time, has adequate means for providing for Executive’s current needs and personal contingencies, and can afford to suffer a complete loss of Executive’s investment in the Units;

(b) Executive’s knowledge and experience in financial and business matters are such that Executive is capable of evaluating the merits and risks of the investment in the Units;

(c) Executive understands that the Units are a speculative investment which involves a high degree of risk of loss of Executive’s investment therein, there are substantial restrictions on the transferability of the Units and, on the Closing Date and for an indefinite period following the Closing, there will be no public market for the Units and, accordingly, it may not be possible for Executive to liquidate Executive’s investment in case of emergency, if at all;

(d) the terms of this Agreement provide that if under certain circumstances Executive ceases to be an employee of the Company or its Subsidiaries, the Company and its Affiliates have the right to repurchase the Units at a price which may, under certain circumstances, be less than the Fair Market Value thereof;

(e) Executive understands and has taken cognizance of all the risk factors related to the purchase of the Units and, other than as set forth in this Agreement, no representations or warranties have been made to Executive or Executive’s representatives concerning the Units or the Company or their prospects or other matters;

5

(f) Executive has been given the opportunity to examine all documents and to ask questions of, and to receive answers from, the Company and its representatives concerning the Company and its Subsidiaries, the Securityholders Agreement, the Company’s organizational documents and the terms and conditions of the purchase of the Units and to obtain any additional information which Executive deems necessary;

(g) all information which Executive has provided to the Company and the Company’s representatives concerning Executive and Executive’s financial position is complete and correct in all material respects as of the date of this Agreement; and

(h) Executive is or is not an “accredited investor” within the meaning of Rule 501(a) under the Securities Act, as indicated on Executive’s Master Signature Page.

3.3 Other Representations. Executive acknowledges that Blackstone and its Affiliates may, from time to time, provide services to the Company and its Affiliates for which a fee will be paid by the Company or its Affiliates, including an annual monitoring/advisory fee.

3.4 Representations and Warranties of the Company.

(a) Organization. The Company (i) is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) has the requisite power and authority to own or lease and operate its assets and carry on its business.

(b) Authorization. The Company has the requisite power and authority to enter into this Agreement, the LLC Agreement, the Employment Agreement and the Securityholders Agreement (together, the “Transaction Documents”). The execution, delivery and performance by the Company of this Agreement and each of the other Transaction Documents and the consummation by the Company of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company.

(c) Due Issuance and Authorization of Units. The Units being issued pursuant to this Agreement have been duly authorized and upon issuance in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and nonassessable (to the extent such concepts are legally applicable to membership interests in a Delaware limited liability company).

4. Certain Sales and Forfeitures Upon Termination of Employment; Variations to Securityholders Agreement.

4.1 Put Option.

(a) Prior to the occurrence of the initial Public Offering, if Executive’s employment with the Company and its Subsidiaries terminates due to the death of Executive or is terminated by the Company or any of its Subsidiaries as a result of the Disability of Executive, Executive and Executive’s Permitted Transferees (hereinafter sometimes collectively referred to

6

as the “Executive’s Group”) shall have the right, subject to the provisions of Section 5 hereof, for 180 days following the date that is 210 days after the Termination Date, to sell to the Company (the “Put Right”), and the Company shall be required to purchase (subject to the provisions of Section 5 hereof), on one occasion from each member of Executive’s Group, all (but not less than all) of the number of Vested Units then held by Executive’s Group that equals all Vested Units collectively held by Executive’s Group at a price per Unit equal to the Fair Market Value of such Units (measured as of the date that the relevant election to purchase such Units is delivered (the “Valuation Date”)). In order to exercise its rights with respect to the Vested Units pursuant to this Section 4.1(a), Executive’s Group shall also be required to simultaneously exercise any similar rights it may have with respect to any other units of the Company held by Executive’s Group in accordance with the terms of the agreements pursuant to which such other units were acquired from the Company.

(b) If Executive’s Group desires to exercise the Put Right, the members of Executive’s Group shall send one written notice to the Company setting forth such members’ intention to collectively sell all of their Vested Units pursuant to Section 4.1(a), which notice shall include the signature of each member of Executive’s Group. Subject to the provisions of Section 5.1, the closing of the purchase shall take place at the principal office of the Company on a date specified by the Company no later than the 45th day after the giving of such notice.

4.2 Call Options.

(a) If (1) Executive’s employment with the Company and its Subsidiaries is terminated for any reason (whether by the Company or Executive, or as a result of death or Disability), (2) a Restrictive Covenant Violation occurs or (3) Executive engages in a Competitive Activity (as defined in Section 6 of this Agreement) not constituting a Restrictive Covenant Violation without the consent of the Board, then the Company shall have the right, (x) for 210 days following the relevant event described in clause (1), (2) or (3) (or, in the case of clause (2) or (3) only, the date on which the Board has actual knowledge (or reasonably should have knowledge) thereof) or (y) if applicable, to avoid adverse accounting treatment, the date that is six months and one day after the date on which Executive became vested in the applicable Units, to purchase (the “Call Option”), and each member of Executive’s Group shall be required to sell to the Company, all Units (excluding Class A-2 Units, except as expressly provided in Schedule I) then held by such member of Executive’s Group (it being understood that if Units of any class subject to repurchase hereunder may be repurchased at different prices, the Company may elect to repurchase only the portion of the Units of such class subject to repurchase hereunder at the lower price) at a price per Unit equal to the applicable purchase price determined as follows:

(i) Termination with Cause or Restrictive Covenant Violation. If Executive’s employment with the Company and its Subsidiaries is terminated by the Company or any of its Subsidiaries with Cause (or by Executive at a time when grounds exist for Cause, regardless of any notice, cure or waiting period thereunder) or in the event of a Restrictive Covenant Violation, the purchase price per Unit will be the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost;

7

(ii) Death or Disability; Termination without Cause; Resignation for Constructive Termination. If Executive’s employment with the Company and its Subsidiaries is terminated (w) by the Company or any of its Subsidiaries as a result of the Disability of Executive, (x) due to the death of Executive, (y) by the Company without Cause or (z) by Executive as a result of a Constructive Termination, the purchase price per Unit will be the Fair Market Value thereof (measured as of the Valuation Date);

(iii) Voluntary Resignation. If Executive’s employment with the Company and its Subsidiaries is terminated by Executive (other than as a result of Constructive Termination), the purchase price per Unit will be:

(A) if such termination occurs on or before January 28, 2010, the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost; or

(B) if such termination occurs after January 28, 2010, the Fair Market Value thereof; and

(iv) Competitive Activity. In the event Executive engages in a Competitive Activity not constituting a Restrictive Covenant Violation without the consent of the Board, the purchase price per Unit will be the Fair Market Value thereof (measured as of the Valuation Date).

The Call Option in respect of Vested Units (except in respect of any event described in Section 4.2(a)(i) or 4.2(a)(iii)(A)) shall expire upon the occurrence of a Public Offering.

(b) Following the occurrence of any of the events described in Section 4.2(a)(1), (2) or (3), the Company shall have the right, (x) for 210 days following the relevant event described in clause (1), (2) or (3) (or, in the case of clause (2) or (3) only, the date on which the Board has actual knowledge (or reasonably should have knowledge) thereof) or (y) if applicable, to avoid adverse accounting treatment, the date that is six months and one day after the date on which Executive became vested in the Class A-2 Units (including any date that the Board declares such Class A-2 Units to be Vested Units), to exercise the Call Option with respect to Executive’s Class A-2 Units that are Vested Units, and each member of Executive’s Group shall be required to sell to the Company, all Class A-2 Units that are Vested Units then held by such member of Executive’s Group (it being understood that if Units of any class subject to repurchase hereunder may be repurchased at different prices, the Company may elect to repurchase only the portion of the Units of such class subject to repurchase hereunder at the lower price) at a price per Unit equal to the applicable purchase price defined as set forth in Section 4.2(a)(i), (ii) or (iii), provided that the “cost” per Unit for such Class A-2 Units shall be equal to $1.

(c) If Executive’s employment with the Company and its Subsidiaries is terminated for any reason, all Unvested Units (excluding the Class A 2 Units) will be forfeited (or, to the extent a forfeiture is not permissible under applicable law for any reason, the Unvested Units (excluding the Class A 2 Units) shall be subject to the Call Option in Section 4.2(a) with the purchase price per Unvested Unit equal to the lesser of (A) Fair Market Value thereof

8

(measured as of the Valuation Date) and (B) Cost). All Class A 2 Units issued hereunder shall remain outstanding and shall become Vested Units or be terminated in accordance with Schedule I hereto.

(d) If the Company desires to exercise its Call Option pursuant to this Section 4.2, the Company shall send written notice to each member of Executive’s Group of its intention to purchase Units, specifying the number of Units to be purchased (the “Call Notice”). Subject to the provisions of Section 5, the closing of the purchase shall take place at the principal office of the Company on a date specified by the Company no later than the 30th day after the giving of the Call Notice.

(e) Notwithstanding the foregoing, if the Company elects not to exercise its Call Option pursuant to this Section 4.2, the Sponsor may elect to purchase such Units at any time on the same terms and conditions set forth in this Section 4.2 by providing written notice to each member of Executive’s Group of its intention to purchase Units.

4.3 Obligation to Sell Several. If there is more than one member of Executive’s Group, the failure of any one member thereof to perform its obligations hereunder shall not excuse or affect the obligations of any other member thereof, and the closing of the purchases from such other members by the Company shall not excuse, or constitute a waiver of its rights against, the defaulting member.

5. Certain Limitations on the Company’s Obligations to Purchase Units.

5.1 Prohibition of Purchases. Notwithstanding anything to the contrary contained herein, the Company shall not be obligated to purchase any Units at any time pursuant to Section 4, regardless of whether it has delivered a notice of its election to purchase any such Units, to the extent that the purchase of such Units or the payment to the Company or one of its Subsidiaries of a cash dividend or distribution by a Subsidiary of the Company that is necessary to fund such purchase (together with any other purchases of Units pursuant to Section 4 or pursuant to similar provisions in agreements with other employees of the Company and its Subsidiaries of which the Company has at such time been given or has given notice and together with cash dividends and distributions necessary to fund such other purchases) would result in a violation of any law, statute, rule, regulation, policy, order, writ, injunction, decree or judgment promulgated or entered by any federal, state, local or foreign court or governmental authority applicable to the Company or any of its Subsidiaries or any of its or their property. The Company shall, within fifteen days of learning of any such fact, so notify the members of Executive’s Group that it is not obligated to purchase Units hereunder.

5.2 Payment for Units. If at any time the Company elects or is required to purchase any Units pursuant to Section 4, the Company shall pay the purchase price for the Units it purchases (i) first, by the cancellation of any indebtedness, if any, owing from Executive to the Company or any of its Subsidiaries (which indebtedness shall be applied pro rata against the proceeds receivable by each member of Executive’s Group receiving consideration in such repurchase) and (ii) then, by the Company’s delivery of a check or wire transfer of immediately available funds for the remainder of the purchase price, if any, against delivery of the certificates or other instruments, if any, representing the Units so purchased, duly endorsed; provided that if (x) any

9

of the conditions set forth in Section 5.1 exists or (y) such purchase of Units would result in a Financing Default, in each case which prohibits such cash payment (either directly or indirectly as a result of the prohibition of a related cash dividend or distribution) (each a “Cash Payment Restriction”), the portion of the cash payment so prohibited may be made, to the extent such payment is not prohibited, by the Company’s delivery of a junior subordinated promissory note (which shall be subordinated and subject in right of payment to the prior payment of any debt outstanding under the senior Financing Agreements and any modifications, renewals, extensions, replacements and refunding of all such indebtedness); provided that no dividends, distributions or payments shall be made with respect to the Company’s Class A units prior to payment in full of the Junior Subordinated Note (as defined) of the Company of the Company (a “Junior Subordinated Note”) in a principal amount equal to the balance of the purchase price, payable within ten days after the Cash Payment Restriction no longer exists, and bearing interest payable (and compounded to the extent not so paid) as of the last day of each year at the interest rate payable under the senior financing credit facilities of the Company or its Subsidiaries (as applicable) from time to time, and all such accrued and unpaid interest payable on the date of the payment of principal (or, if applicable, the last installment of principal), with payments to be applied in the order of: (A) first to any enforcement costs incurred by Executive or Executive’s Group, (B) second to interest and (C) third to principal. In the event that a Cash Payment Restriction exists as a result of a Financing Default and the Company or its Subsidiaries is refinancing, modifying, reviewing, extending, replacing or refunding the indebtedness that resulted in the Financing Default then the Company shall use commercially reasonable efforts to cause such refinanced, modified, reviewed, extended, replaced or refunded indebtedness not to include any terms that would result in a Financing Default with respect to the payment for the Units as contemplated herein. The Company shall have the right set forth in clause (i) of the first sentence of this Section 5.2 whether or not the member of Executive’s Group selling such Units is an obligor of the Company. The principal of, and accrued interest on, any such Junior Subordinated Note may be prepaid in whole or in part at any time at the option of the Company. To the extent that the Company is prohibited from paying accrued interest, that is required to be paid on any Junior Subordinated Note prior to maturity, due to the existence of any Cash Payment Restriction, such interest shall be cumulated, compounded calendar quarterly, and accrued until and to the extent that such Cash Payment Restriction no longer exists, at which time such accrued interest shall be immediately paid. Notwithstanding any other provision in this Agreement, the Company may elect to pay the purchase price hereunder in shares or other equity securities of one of its direct or indirect Subsidiaries with a fair market value equal to the applicable purchase price, provided that such Subsidiary promptly repurchases such shares or other equity securities for cash equal to the applicable purchase price or a Junior Subordinated Note (if otherwise permissible hereunder) with a principal amount equal to the applicable purchase price.

5.3 Repayment of Proceeds. If a Restrictive Covenant Violation occurs or the Company discovers after a termination of employment that grounds existed for Cause at the time thereof, then Executive shall be required to pay to the Company, within 10 business days’ of the Company’s request to Executive therefor, an amount equal to the excess, if any, of (A) the aggregate after-tax proceeds (taking into account all amounts of tax that would be recoverable upon a claim of loss for payment of such proceeds in the year of repayment) Executive received upon the sale or other disposition of, or distributions in respect of, Executive’s Units over (B) the aggregate Cost of such Units.

10

6. Restrictive Covenant Violation; Competitive Activity.

(a) Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its Affiliates and accordingly agrees, in his capacity as an investor and equityholder in the Company and its Affiliates, to the provisions of Appendix A to this Agreement. Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Appendix A would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

(b) Executive shall be deemed to have engaged in “Competitive Activity” if Executive engages in any conduct that would be a Restrictive Covenant Violation if it occurred during the relevant periods specified in Appendix A (even if such conduct occurs after the relevant periods). For the avoidance of doubt, any conduct that constitutes Competitive Activity but not a Restrictive Covenant Violation shall not be prohibited hereby.

7. Miscellaneous.

7.1 Transfers. Prior to the transfer of Units to a Permitted Transferee, Executive shall deliver to the Company a written agreement of the proposed transferee (a) evidencing such Person’s undertaking to be bound by the terms of this Agreement and (b) acknowledging that the Units transferred to such Person will continue to be Units for purposes of this Agreement in the hands of such Person. Any transfer or attempted transfer of Units in violation of any provision of this Agreement or the Securityholders Agreement shall be void, and the Company shall not record such transfer on its books or treat any purported transferee of such Units as the owner of such Units for any purpose.

7.2 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to Units, to any and all securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution of the Units, by reason of any dividend payable in units, issuance of units, combination, recapitalization, reclassification, merger, consolidation or otherwise.

7.3 Executive’s Employment by the Company. Nothing contained in this Agreement shall be deemed to obligate the Company or any Subsidiary of the Company to employ Executive in any capacity whatsoever or to prohibit or restrict the Company (or any such Subsidiary) from terminating the employment of Executive at any time or for any reason whatsoever, with or without Cause.

7.4 Cooperation. Executive agrees to cooperate with the Company in taking action reasonably necessary to consummate the transactions contemplated by this Agreement.

11

7.5 Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns; provided, however, that no Transferee shall derive any rights under this Agreement unless and until such Transferee has executed and delivered to the Company a valid undertaking and becomes bound by the terms of this Agreement; and provided further that the Sponsor is a third party beneficiary of this Agreement and shall have the right to enforce the provisions hereof.

7.6 Amendment; Waiver. This Agreement may be amended only by a written instrument signed by the parties hereto. No waiver by any party hereto of any of the provisions hereof shall be effective unless set forth in a writing executed by the party so waiving.

7.7 Governing Law; Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed therein. Any suit, action or proceeding with respect to this Agreement, or any judgment entered by any court in respect of any thereof, shall be brought in any court of competent jurisdiction in the State of New York or the State of Delaware, and each of the Company and the members of Executive’s Group hereby submits to the exclusive jurisdiction of such courts for the purpose of any such suit, action, proceeding or judgment. Each of the members of Executive’s Group and the Company hereby irrevocably waives (i) any objections which it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any court of competent jurisdiction in the State of Delaware, (ii) any claim that any such suit, action or proceeding brought in any such court has been brought in any inconvenient forum and (iii) any right to a jury trial.

7.8 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three postal delivery days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

(a) If to the Company:

Sky Acquisition LLC

c/o Apria Healthcare Group Inc.

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: General Counsel

with a copy (which shall not constitute notice) to:

The Blackstone Group

345 Park Avenue

New York, NY 10154

Attention: Neil P. Simpkins

12

and

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017-3954

Attention: Gregory T. Grogan

If to Executive:

To the most recent address of Executive set forth in the personnel records of the Company.

7.9 Integration. This Agreement and the documents referred to herein (including referred to on the Executive Master Signature Page) or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to the subject matter hereof and thereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein and therein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

7.10 Counterparts. This Agreement may be executed in separate counterparts, and by different parties on separate counterparts each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

7.11 Injunctive Relief. The Company, Executive and Executive’s Permitted Transferees each acknowledges and agrees that a violation of any of the terms of this Agreement will cause the Company, Executive or Executive’s Permitted Transferees, as the case may be, irreparable injury for which adequate remedy at law is not available. Accordingly, it is agreed that the Company, Executive or Executive’s Permitted Transferees may seek an injunction, restraining order or other equitable relief to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction in the United States or any state thereof, in addition to any other remedy to which it may be entitled at law or equity.

7.12 Rights Cumulative; Waiver. The rights and remedies of Executive and the Company under this Agreement shall be cumulative and not exclusive of any rights or remedies which either would otherwise have hereunder or at law or in equity or by statute, and no failure or delay by either party in exercising any right or remedy shall impair any such right or remedy or operate as a waiver of such right or remedy, nor shall any single or partial exercise of any power or right preclude such party’s other or further exercise or the exercise of any other power or right. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or times hereunder.

*    *    *    *    *

13

*    *    *    *    *

This Subscription Agreement between the Company and the Executive named on the Executive Master Signature Page hereto is dated and executed as of the date set forth on such Executive Master Signature Page.

*    *    *    *    *

EXECUTIVE MASTER SIGNATURE PAGE

Chris A. Karkenny

(Executive’s Name)

Dated as of: December 19, 2008 (the “Commitment Date”)

A. The individual named above and signatory hereto (the “Executive”) agrees to be bound by:

(1) the Amended and Restated Limited Liability Company Agreement of Sky Acquisition LLC, a Delaware limited liability company (the “Company”), in the form attached hereto (the “LLC Agreement”);

(2) the Management Unit Subscription Agreement (Class A-2 Units and Class B Units), between the Company and the Executive, dated as of the Commitment Date, in the form attached hereto (the “Subscription Agreement”); and

(3) the Securityholders Agreement, among the Company and the other parties thereto (including the Executive), in the form attached hereto (the “Securityholders Agreement”).

B. The Executive and the Company agree that the following information is hereby incorporated by reference into the Subscriptions Agreements:

Class of Units	Number of Units		Cash Paid (if any)
Class A-2 Units	500,000		N/A
Class B Units	6,675,287	1	N/A
Class C Units	2,225,096	2	N/A

C. The Executive agrees that, upon the request of the Company, Executive shall promptly and duly execute and deliver such further instruments and documents and take such further actions as the Company may reasonably request for the purpose of giving effect to the foregoing.

[Remainder of Page Intentionally Blank]

¹ This number is intended to reflect 0.8625% of the pro-forma capitalization and, as such, may be revised upon the completion of the remaining management equity program.

² This number is intended to reflect 0.2875% of the pro-forma capitalization and, as such, may be revised upon the completion of the remaining management equity program.

Executive:

/s/ Chris A. Karkenny

Name: Chris A. Karkenny

Address:

Executive is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act of 1933, as amended.

Agreed and accepted:
SKY ACQUISITION LLC
By:	/s/ Norman C. Payson
	Name: Norman C. Payson
	Title: Chief Executive Office

SCHEDULE I

Time-Vesting Units

With regard to 66^2/3% of the Class B Units granted hereunder (the “Time-Vesting Units”), the percentage of such Time-Vesting Units that will be Vested Units in respect of a Termination Date occurring:

• prior to 12 months after October 28, 2008 (the “Vesting Reference Date”), will be 0%

• on or after 12 months after the Vesting Reference Date, but prior to 15 months after the Vesting Reference Date, will be 25%

• on or after 15 months after the Vesting Reference Date, but prior to 18 months after the Vesting Reference Date, will be 30%

• on or after 18 months after the Vesting Reference Date, but prior to 21 months after the Vesting Reference Date, will be 35%

• on or after 21 months after the Vesting Reference Date, but prior to 24 months after the Vesting Reference Date, will be 40%

• on or after 24 months after the Vesting Reference Date, but prior to 27 months after the Vesting Reference Date, will be 45%

• on or after 27 months after the Vesting Reference Date, but prior to 30 months after the Vesting Reference Date, will be 50%

• on or after 30 months after the Vesting Reference Date, but prior to 33 months after the Vesting Reference Date, will be 55%

• on or after 33 months after the Vesting Reference Date, but prior to 36 months after the Vesting Reference Date, will be 60%

• on or after 36 months after the Vesting Reference Date, but prior to 39 months after the Vesting Reference Date, will be 65%

• on or after 39 months after the Vesting Reference Date, but prior to 42 months after the Vesting Reference Date, will be 70%

• on or after 42 months after the Vesting Reference Date, but prior to 45 months after the Vesting Reference Date, will be 75%

• on or after 45 months after the Vesting Reference Date, but prior to 48 months after the Vesting Reference Date, will be 80%

• on or after 48 months after the Vesting Reference Date, but prior to 51 months after the Vesting Reference Date, will be 85%

• on or after 51 months after the Vesting Reference Date, but prior to 54 months after the Vesting Reference Date, will be 90%

• on or after 54 months after the Vesting Reference Date, but prior to 57 months after the Vesting Reference Date, will be 95%

• on or after 57 months after the Vesting Reference Date, will be 100%

Notwithstanding the foregoing, immediately prior to, and following, the occurrence of a Change of Control that occurs prior to the Termination Date, 100% of the Time-Vesting Units that are Unvested Units shall become Vested Units.

Any Time-Vesting Units that are Unvested Units on a Termination Date shall be immediately forfeited by Executive (or, to the extent a forfeiture is not permissible, such Time-Vesting Units that are Unvested Units shall be subject to the Call Option in Section 4.2(a) with the purchase price per Unvested Unit equal to the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost).

I-2

Performance-Vesting Units

1. Any Class B Units granted hereunder that are not Time-Vesting Units and all Class C Units granted hereunder will be “Performance-Vesting Units.” Initially, all Performance-Vesting Units will be Unvested Units.

2. If the Sponsor receives cash proceeds (not subject to any clawback, indemnity or similar contractual obligation) in respect of 25% of its units in the Company equal to at least 200% of its aggregate capital contributions for such units prior to the Termination Date, then all of the Performance-Vesting Units shall become Vested Units.

Any Performance-Vesting Units that are Unvested Units on a Termination Date shall be immediately forfeited by Executive (or, to the extent a forfeiture is not permissible, such Performance-Vesting Units that are Unvested Units shall be subject to the Call Option in Section 4.2(a) with the purchase price per Unvested Unit equal to the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost).

I-3

Class A-2 Units

1. Any Class A-2 Units granted hereunder will be Unvested Units.

2. If a Public Offering or Change of Control occurs and the valuation of the Class A-1 Units implied by the relevant transaction exceeds 110% of the Sponsor’s aggregate capital contributions for such units, then all of the Class A-2 Units shall become Vested Units.

Any Class A-2 Units that are Unvested Units on termination of Executive’s employment for any reason will remain outstanding until the occurrence of a Public Offering or Change of Control (unless such Class A-2 Units become Vested Units in such Public Offering or Change of Control). Except as provided in the immediately preceding sentence, any Class A-2 Units that are Unvested Units following a Public Offering or Change of Control shall be immediately (prior to such event) forfeited by Executive (or, to the extent a forfeiture is not permissible, such Class A-2 Units that are Unvested Units shall be subject to the Call Option in Section 4.2(a) with the purchase price per Unvested Unit equal to the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost).

Appendix A

Restrictive Covenants

1. Non-Competition.

(a) Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees as follows:

(i) Executive will not, within eighteen months following the termination of Executive’s employment with Company or its subsidiaries (the “Post-Termination Period”) or during the period of Executive’s employment with the Company or its subsidiaries (collectively with the Post-Termination Period, the “Restricted Period”), accept an employment or consulting relationship (or own or have any financial interest in), directly or indirectly, with any entity which derives at least 10% of its revenue from engaging in the business of home respiratory therapy, home infusion therapy, and home medical equipment that is competitive with the Company and its Subsidiaries within the United States (a “Competitive Business”).

(ii) During the Restricted Period, Executive will not initiate or respond to communications with any of the employees of the Company or its subsidiaries who earned annually $50,000 or more as a Company or subsidiary employee during the twelve-month period prior to the termination of such employee’s employment with the Company or subsidiary, for the purpose of soliciting such employee, or facilitating the hiring of any such employee, to work for any other business, individual, partnership, firm, corporation, or other entity.

(iii) During the Restricted Period, Executive will not influence or attempt to influence customers of the Company or its subsidiaries or any of its present or future subsidiaries or affiliates, either directly or indirectly, to divert their business to any individual, partnership, firm, corporation or other entity then in competition with the business of the Company or any subsidiary or affiliate of the Company.

(iv) During the Restricted Period, Executive will not, other than as required by law or by order of a court or other competent authority, make or publish, or cause any other person to make or publish, any statement that is disparaging or that reflects negatively upon the Company or its affiliates, or that is or reasonably would be expected to be damaging to the reputation of the Company or any subsidiary or affiliate of the Company.

Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly own, solely as an investment, securities of any person engaged in a Competitive Business which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Executive (i) is not a controlling person of, or a member of a group which controls, such person and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such person.

(b) It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Appendix A to be reasonable, if a final judicial determination is made by a court of competent jurisdiction, that the time or territory or any other restriction contained in this Appendix A is an unenforceable restriction against Executive, the provisions of this Appendix A shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

(c) The period of time during which the provisions of this Appendix A shall be in effect shall be extended by the length of time during which Executive is in breach of the terms hereof as determined by any court of competent jurisdiction on the Company’s application for injunctive relief.

2. Confidentiality.

(a) Executive will not at any time (whether during or after Executive’s employment with the Company) (x) retain or use for the benefit, purposes or account of Executive or any other person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information —including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals — concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“Confidential Information”) without the prior written authorization of the Board.

(b) “Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of Executive’s breach of this covenant or any breach of other confidentiality obligations by third parties; (b) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (c) required by law to be disclosed (including via subpoena); provided that Executive shall give prompt Notice to the Company of such requirement of law, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

(c) Except as required by law, Executive will not disclose to anyone, other than Executive’s immediate family and legal or financial advisors, the existence or contents of this Agreement; provided, that Executive may disclose to any prospective future employer the notice provisions of this Appendix A provided they agree to maintain the confidentiality of such terms.

A-2

(d) Upon termination of Executive’s employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates; (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information and Executive’s rolodex (or other physical or electronic address book); and (z) fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information not within Executive’s possession or control of which Executive is or becomes aware. Notwithstanding the foregoing, Executive may retain Executive’s rolodex and similar address books. To the extent that Executive is provided with a cell phone number by the Company during employment, the Company shall cooperate with Executive in transferring such cell phone number to Executive’s individual name following termination.

(e) The provisions of Appendix A shall survive the termination of Executive’s employment for any reason.

A-3

EX-10.15

Exhibit 10.15

MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

(Profits Interest Grant)

THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this “Agreement”) by and between Apria Holdings LLC, a Delaware limited liability company (the “Company”), and the individual named on the Executive Master Signature Page hereto (“Executive”) is made as of the date set forth on such Executive Master Signature Page.

WHEREAS, on the terms and subject to the conditions hereof, Executive desires to subscribe for and acquire from the Company, and the Company desires to issue and provide to Executive, the Company’s Class B Units and Class C Units (the “Units”), in each case in the amount set forth on Executive’s Master Signature Page, as hereinafter set forth; and

WHEREAS, this Agreement is one of several agreements being entered into by the Company or its Subsidiaries from time to time with certain persons who are or will be key employees or advisors of the Company or one or more Affiliates (collectively with Executive, the “Management Investors”) as part of a management equity purchase plan designed to comply with Regulation D or Rule 701, as applicable, promulgated under the Securities Act (as defined below);

NOW, THEREFORE, in order to implement the foregoing and in consideration of the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

1. Definitions.

1.1 Affiliate. An “Affiliate” of, or Person “Affiliated” with, a specified Person shall mean a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.

1.2 Agreement. The term “Agreement” shall have the meaning set forth in the preface.

1.3 Apria. The term “Apria” means Apria Healthcare Group Inc., a Delaware corporation.

1.4 Blackstone. The term “Blackstone” means Blackstone Capital Partners V L.P. and its Affiliates.

1.5 Board. The “Board” shall mean the Company’s Board of Directors.

1.6 Cause. The term “Cause” shall mean shall mean that the Board, acting in good faith based upon the information then known to the Company, determines that Executive has (A) engaged in or committed willful misconduct; (B) engaged in or committed theft, fraud or other illegal conduct; (C) refused or demonstrated an unwillingness to substantially perform the Executive’s duties for a 30-day period after written demand for substantial performance that refers to this definition and is delivered by the Company or Apria that specifically identifies the manner in which the Company believes Executive has not substantially performed the Executive’s duties; (D)

1

refused or demonstrated an unwillingness to reasonably cooperate in good faith with any Company or government investigation or investigation by the Company or its Subsidiaries or provide testimony therein (other than such failure resulting from Executive’s disability); (E) engaged in or committed insubordination; (F) engaged in or committed any willful act that is likely to and which does in fact have the effect of injuring the reputation or business of the Company or its Subsidiaries; (G) willfully violated the Executive’s fiduciary duty or the Executive’s duty of loyalty to the Company or its Subsidiaries or the Code of Ethical Business Conduct of the Company or its Subsidiaries in any material respect; (H) used alcohol or drugs (other than drugs prescribed to Executive by a physician and used by Executive for their intended purpose for which they had been prescribed) in a manner which materially and repeatedly interferes with the performance of the Executive’s duties hereunder or which has the effect of materially injuring the reputation or business of the Company or its Subsidiaries; or (I) engaged in or committed a material breach of this Agreement (including any beach of the provisions of Appendix A) for a 30-day period after written notification is delivered by the Company that specifically refers to this definition and identifies the manner in which the Company believes Executive has materially breached this Agreement or any other employment agreement. For purposes of the foregoing sentence of this paragraph, no act, or failure to act, on Executive’s part shall be considered willful unless done or omitted to be done, by him not in good faith or without reasonable belief that his action or omission was in the best interest of the Company.

1.7 Change of Control. The term “Change of Control” shall have the meaning set forth in the LLC Agreement.

1.8 Closing. The term “Closing” shall have the meaning set forth in Section 2.2.

1.9 Closing Date. The term “Closing Date” shall have the meaning set forth in Section 2.2.

1.10 Company. The term “Company” shall have the meaning set forth in the preface.

1.11 Constructive Termination. The term “Constructive Termination” shall mean (A) a diminution in Executive’s base salary or annual bonus opportunity; (B) any material diminution in Executive’s authority, duties or responsibilities; or (C) failure of the Company or its Subsidiaries to pay or cause to be paid Executive’s base salary or annual bonus, when due; provided that none of these events shall constitute Constructive Termination unless the Company fails to cure such event within 30 days after receipt from Executive of written notice of the event which constitutes Constructive Termination; provided, further, that “Constructive Termination” shall cease to exist for an event on the 90^th day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Board written notice thereof prior to such date. Notwithstanding anything herein to the contrary, for purposes of the last proviso of the immediately foregoing sentence, a series of related events shall be deemed to have occurred on the date upon which the last event in such series of related events has occurred.

1.12 Cost. The term “Cost” shall mean the price per Unit paid by Executive, if any, as proportionately adjusted for all subsequent distributions of Units and other recapitalizations and less the amount of any distributions (excluding tax distributions) made with respect to the Units pursuant to the Company’s organizational documents; provided that “Cost” may not be less than zero.

2

1.13 Disability. The term “Disability” shall mean Executive’s inability, for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period, to perform Executive’s employment duties as a result of Executive becoming physically or mentally incapacitated as determined in good faith by the Board.

1.14 Employee and Employment. The term “employee” shall mean, without any inference as to negate Executive’s status as a member of the Company for all purposes hereunder (subject to the terms hereof) and for federal and other tax purposes, any employee (as defined in accordance with the regulations and revenue rulings then applicable under Section 3401(c) of the Internal Revenue Code of 1986, as amended) of the Company or any of its Subsidiaries, and the term “employment” shall include service as a part- or full-time employee or board member to the Company or any of its Subsidiaries.

1.15 Executive. The term “Executive” shall have the meaning set forth in the preface.

1.16 Executive’s Group. The term “Executive’s Group” shall have the meaning set forth in Section 4.1(a).

1.17 Fair Market Value. The term “Fair Market Value” used in connection with the value of Units shall mean (a) if there is a public market for the equity of the Company or Apria on the applicable date, the value for the Units shall be implied by the average of the high and low closing bid prices of such equity during the last 10 trading days on the stock exchange on which the equity is principally trading or (b) if there is no public market for the equity on such date, the value for the Units shall be determined in good faith by the Board after consultation with the Chief Executive Officer and Chief Financial Officer of Apria, in either case assuming, for purposes of determining Fair Market Value, application of the distribution and dissolution provisions contained in Sections 4.4 and 5.2(b) of the LLC Agreement.

1.18 Financing Default. The term “Financing Default” shall mean an event which would constitute (or with notice or lapse of time or both would constitute) an event of default under any of the financing documents of the Company or its Affiliates from time to time (collectively, the “Financing Agreements”) and any restrictive financial covenants contained in the organizational documents of the Company or its Affiliates.

1.19 LLC Agreement. The term “LLC Agreement” shall have the meaning set forth in the Securityholders Agreement.

1.20 Management Investors. The term “Management Investors” shall have the meaning set forth in the preface.

1.21 Permitted Transferee. The term “Permitted Transferee” means any Person to whom Executive transfers Units in accordance with the Securityholders Agreement (other than the Sponsor and the Company and their respective Affiliates and except for transfers pursuant to a Public Offering).

3

1.22 Person. The term “Person” shall mean any individual, corporation, partnership, limited liability company, trust, joint stock company, business trust, unincorporated association, joint venture, governmental authority or other entity of any nature whatsoever.

1.23 Public Offering. The term “Public Offering” shall have the meaning set forth in the Securityholders Agreement.

1.24 Restrictive Covenant Violation. The term “Restrictive Covenant Violation” shall mean Executive’s breach of any section in Appendix A hereto.

1.25 Securities Act. The term “Securities Act” shall mean the Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder, as the same may be amended from time to time.

1.26 Securityholders Agreement. The term “Securityholders Agreement” shall mean the Amended and Restated Securityholders Agreement dated as of April     , 2010 among the Sponsor, one or more Management Investors and the Company, as it may be amended or supplemented thereafter from time to time.

1.27 Sponsor. The term “Sponsor” means Blackstone.

1.28 Subsidiary. The term “Subsidiary” means any corporation, limited liability company, partnership or other entity with respect to which another specified entity has the power to vote or direct the voting of sufficient securities to elect directors (or comparable authorized persons of such entity) having a majority of the voting power of the board of directors (or comparable governing body) of such entity.

1.29 Termination Date. The term “Termination Date” means the date upon which Executive’s employment with the Company and its Subsidiaries is terminated.

1.30 Unvested Units. The term “Unvested Units” means, with respect to Executive’s Class B Units and Class C Units, the number of such Units that are not “Vested Units”.

1.31 Vested Units. The term “Vested Units” shall mean, with respect to an Executive’s Class B Units and Class C Units, the number of such Units that are vested and nonforfeitable, as determined in accordance with Schedule I attached hereto.

2. Subscription for and Grant of Units.

2.1 Grant of Units. Pursuant to the terms and subject to the conditions set forth in this Agreement, Executive hereby subscribes for and agrees to acquire, and the Company hereby agrees to issue and award to Executive on the Closing Date, the number and classes of Units set forth on Executive’s Master Signature Page in exchange for services performed for the Company and its Subsidiaries by Executive.

2.2 The Closing. The closing (the “Closing”) of the grant of Units hereunder shall take place on the closing date specified in Executive’s Master Signature Page. The date of the Closing shall be the “Closing Date”.

4

2.3 Section 83(b) Election. Within 10 days after the Closing, Executive shall provide the Company with a copy of a completed election under Section 83(b) of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder in the form of Exhibit A to Executive’s Master Signature Page. Executive shall timely (within 30 days of the Closing) file (via certified mail, return receipt requested) such election with the Internal Revenue Service and shall thereafter notify the Company it has made such timely filing. Executive should consult his or her tax advisor regarding the consequences of a Section 83(b) election, as well as the receipt, vesting, holding and sale of Units.

2.4 Closing Conditions. Notwithstanding anything in this Agreement to the contrary, the Company shall be under no obligation to issue, grant to Executive any Units unless (i) Executive is an employee of, or consultant to, the Company or one of its Subsidiaries on the Closing Date; (ii) the representations of Executive contained in Section 3 hereof are true and correct in all material respects as of the Closing Date and (iii) Executive is not in breach of any agreement, obligation or covenant herein required to be performed or observed by Executive on or prior to the Closing Date.

3. Investment Representations and Covenants of Executive.

3.1 Units Unregistered. Executive acknowledges and represents that Executive has been advised by the Company that:

(a) the offer and sale of the Units have not been registered under the Securities Act;

(b) the Units must be held indefinitely and Executive must continue to bear the economic risk of the investment in the Units unless the offer and sale of such Units are subsequently registered under the Securities Act and all applicable state securities laws or an exemption from such registration is available (or as otherwise provided in the Securityholders Agreement);

(c) there is no established market for the Units and it is not anticipated that there will be any public market for the Units in the foreseeable future;

(d) a restrictive legend in the form set forth below and the legends set forth in Section 7.3(a) and (b) of the Securityholders Agreement shall be placed on the certificates, if any, representing the Units:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A MANAGEMENT UNITS SUBSCRIPTION AGREEMENT WITH THE ISSUER, AS AMENDED AND MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE ISSUER’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE”; and

(e) a notation shall be made in the appropriate records of the Company indicating that the Units are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Units.

5

3.2 Additional Investment Representations. Executive represents and warrants that:

(a) Executive’s financial situation is such that Executive can afford to bear the economic risk of holding the Units for an indefinite period of time, has adequate means for providing for Executive’s current needs and personal contingencies, and can afford to suffer a complete loss of Executive’s investment in the Units;

(b) Executive’s knowledge and experience in financial and business matters are such that Executive is capable of evaluating the merits and risks of the investment in the Units;

(c) Executive understands that the Units are a speculative investment which involves a high degree of risk of loss of Executive’s investment therein, there are substantial restrictions on the transferability of the Units and, on the Closing Date and for an indefinite period following the Closing, there will be no public market for the Units and, accordingly, it may not be possible for Executive to liquidate Executive’s investment in case of emergency, if at all;

(d) the terms of this Agreement provide that if under certain circumstances Executive ceases to be an employee of the Company or its Subsidiaries, the Company and its Affiliates have the right to repurchase the Units at a price which may, under certain circumstances, be less than the Fair Market Value thereof;

(e) Executive understands and has taken cognizance of all the risk factors related to the purchase of the Units and, other than as set forth in this Agreement, no representations or warranties have been made to Executive or Executive’s representatives concerning the Units or the Company or their prospects or other matters;

(f) Executive has been given the opportunity to examine all documents and to ask questions of, and to receive answers from, the Company and its representatives concerning the Company and its Subsidiaries, the Securityholders Agreement, the Company’s organizational documents and the terms and conditions of the purchase of the Units and to obtain any additional information which Executive deems necessary;

(g) all information which Executive has provided to the Company and the Company’s representatives concerning Executive and Executive’s financial position is complete and correct as of the date of this Agreement; and

(h) Executive is or is not an “accredited investor” within the meaning of Rule 501(a) under the Securities Act, as indicated on Executive’s Master Signature Page.

3.3 Other Representations. Executive acknowledges that Blackstone and its Affiliates may, from time to time, provide services to the Company and its Affiliates for which a fee will be paid by the Company or its Affiliates, including an annual monitoring/advisory fee.

6

4. Certain Sales and Forfeitures Upon Termination of Employment; Variations to Securityholders Agreement.

4.1 Put Option.

(a) Prior to the occurrence of the initial Public Offering, if Executive’s employment with the Company and its Subsidiaries terminates due to the death of Executive or is terminated by the Company or any of its Subsidiaries as a result of the Disability of Executive, Executive and Executive’s Permitted Transferees (hereinafter sometimes collectively referred to as the “Executive’s Group”) shall have the right, subject to the provisions of Section 5 hereof, for 180 days following the date that is 210 days after the Termination Date, to sell to the Company (the “Put Right”), and the Company shall be required to purchase (subject to the provisions of Section 5 hereof), on one occasion from each member of Executive’s Group, all (but not less than all) of the number of Vested Units then held by Executive’s Group that equals all Vested Units collectively held by Executive’s Group at a price per Unit equal to the Fair Market Value of such Units (measured as of the date that the relevant election to purchase such Units is delivered (the “Valuation Date”)). In order to exercise its rights with respect to the Vested Units pursuant to this Section 4.1(a), Executive’s Group shall also be required to simultaneously exercise any similar rights it may have with respect to any other units of the Company held by Executive’s Group in accordance with the terms of the agreements pursuant to which such other units were acquired from the Company.

(b) If Executive’s Group desires to exercise the Put Right, the members of Executive’s Group shall send one written notice to the Company setting forth such members’ intention to collectively sell all of their Vested Units pursuant to Section 4.1(a), which notice shall include the signature of each member of Executive’s Group. Subject to the provisions of Section 5.1, the closing of the purchase shall take place at the principal office of the Company on a date specified by the Company no later than the 60th day after the giving of such notice.

4.2 Call Options.

(a) If (1) Executive’s employment with the Company and its Subsidiaries is terminated for any reason (whether by the Company or Executive, or as a result of death or Disability), (2) a Restrictive Covenant Violation occurs or (3) Executive engages in a Competitive Activity (as defined in Section 6 of this Agreement) not constituting a Restrictive Covenant Violation without the consent of the Board, then the Company shall have the right, for 210 days following the relevant event described in clause (1), (2) or (3) (or, in the case of clause (2) or (3) only, the date on which the Board has actual knowledge (or reasonably should have knowledge) thereof) or (z) the date that is six months and one day after the date on which Executive became vested in the applicable Units, to purchase (the “Call Option”), and each member of Executive’s Group shall be required to sell to the Company, all Vested Units then held by such member of Executive’s Group (it being understood that if Units of any class subject to repurchase hereunder may be repurchased at different prices, the Company may elect to repurchase only the portion of the Units of such class subject to repurchase hereunder at the lower price) at a price per Unit equal to the applicable purchase price determined as follows:

(i) Termination with Cause or Restrictive Covenant Violation. If Executive’s employment with the Company and its Subsidiaries is terminated by the Company or any of its Subsidiaries with Cause (or by Executive at a time when grounds exist for Cause, regardless of any notice, cure or waiting period thereunder) or in the event of a Restrictive Covenant Violation, the purchase price per Unit will be the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost;

7

(ii) Death or Disability; Termination without Cause; Resignation for Constructive Termination. If Executive’s employment with the Company and its Subsidiaries is terminated (w) by the Company or any of its Subsidiaries as a result of the Disability of Executive, (x) due to the death of Executive, (y) by the Company without Cause or (z) by Executive as a result of a Constructive Termination, the purchase price per Unit will be the Fair Market Value thereof (measured as of the Valuation Date);

(iii) Voluntary Resignation. If Executive’s employment with the Company and its Subsidiaries is terminated by Executive (other than as a result of Constructive Termination), the purchase price per Unit will be:

(A) if such termination occurs on or before the second anniversary of the Closing Date, the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost; or

(B) if such termination occurs after the Closing Date, the Fair Market Value thereof; and

(iv) Competitive Activity. In the event Executive engages in a Competitive Activity not constituting a Restrictive Covenant Violation without the consent of the Board, the purchase price per Unit will be the Fair Market Value thereof (measured as of the Valuation Date).

The Call Option in respect of Vested Units (except in respect of any event described in Sections 4.2(a)(i) or 4.2(a)(iii)(A)) shall expire upon the occurrence of a Public Offering.

(b) If Executive’s employment with the Company and its Subsidiaries is terminated for any reason, all Unvested Units will be forfeited (or, to the extent a forfeiture is not permissible under applicable law for any reason, the Unvested Units shall be subject to the Call Option in Section 4.2(a) with the purchase price per Unvested Unit equal to the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost).

(c) If the Company desires to exercise its Call Option pursuant to this Section 4.2, the Company shall send written notice to each member of Executive’s Group of its intention to purchase Units, specifying the number of Units to be purchased (the “Call Notice”). Subject to the provisions of Section 5, the closing of the purchase shall take place at the principal office of the Company on a date specified by the Company no later than the 30th day after the giving of the Call Notice.

(d) Notwithstanding the foregoing, if the Company elects not to exercise its Call Option pursuant to this Section 4.2, the Sponsor may elect to purchase such Units at any time on the same terms and conditions set forth in this Section 4.2 by providing written notice to each member of Executive’s Group of its intention to purchase Units.

8

4.3 Obligation to Sell Several. If there is more than one member of Executive’s Group, the failure of any one member thereof to perform its obligations hereunder shall not excuse or affect the obligations of any other member thereof, and the closing of the purchases from such other members by the Company shall not excuse, or constitute a waiver of its rights against, the defaulting member.

5. Certain Limitations on the Company’s Obligations to Purchase Units.

5.1 Prohibition of Purchases. Notwithstanding anything to the contrary contained herein, the Company shall not be obligated to purchase any Units at any time pursuant to Section 4, regardless of whether it has delivered a notice of its election to purchase any such Units, to the extent that the purchase of such Units or the payment to the Company or one of its Subsidiaries of a cash dividend or distribution by a Subsidiary of the Company that is necessary to fund such purchase (together with any other purchases of Units pursuant to Section 4 or pursuant to similar provisions in agreements with other employees of the Company and its Subsidiaries of which the Company has at such time been given or has given notice and together with cash dividends and distributions necessary to fund such other purchases) would result in a violation of any law, statute, rule, regulation, policy, order, writ, injunction, decree or judgment promulgated or entered by any federal, state, local or foreign court or governmental authority applicable to the Company or any of its Subsidiaries or any of its or their property. The Company shall, within fifteen days of learning of any such fact, so notify the members of Executive’s Group that it is not obligated to purchase Units hereunder.

5.2 Payment for Units. If at any time the Company elects or is required to purchase any Units pursuant to Section 4, the Company shall pay the purchase price for the Units it purchases (i) first, by the cancellation of any indebtedness, if any, owing from Executive to the Company or any of its Subsidiaries (which indebtedness shall be applied pro rata against the proceeds receivable by each member of Executive’s Group receiving consideration in such repurchase) and (ii) then, by the Company’s delivery of a check or wire transfer of immediately available funds for the remainder of the purchase price, if any, against delivery of the certificates or other instruments, if any, representing the Units so purchased, duly endorsed; provided that if (x) any of the conditions set forth in Section 5.1 exists or (y) such purchase of Units would result in a Financing Default, in each case which prohibits such cash payment (either directly or indirectly as a result of the prohibition of a related cash dividend or distribution) (each a “Cash Payment Restriction”), the portion of the cash payment so prohibited may be made, to the extent such payment is not prohibited, by the Company’s delivery of a junior subordinated promissory note (which shall be subordinated and subject in right of payment to the prior payment of any debt outstanding under the senior Financing Agreements and any modifications, renewals, extensions, replacements and refunding of all such indebtedness) of the Company (a “Junior Subordinated Note”) in a principal amount equal to the balance of the purchase price, payable within ten days after the Cash Payment Restriction no longer exists, and bearing interest payable (and compounded to the extent not so paid) as of the last day of each year at the interest rate payable under the senior financing credit facilities of the Company or its Subsidiaries (as applicable) from time to time, and all such accrued and unpaid interest payable on the date of the payment of principal (or, if applicable, the last installment of principal), with

9

payments to be applied in the order of: first to any enforcement costs incurred by Executive or Executive’s Group, second to interest and third to principal. The Company shall have the right set forth in clause (i) of the first sentence of this Section 5.2 whether or not the member of Executive’s Group selling such Units is an obligor of the Company. The principal of, and accrued interest on, any such Junior Subordinated Note may be prepaid in whole or in part at any time at the option of the Company. To the extent that the Company is prohibited from paying accrued interest, that is required to be paid on any Junior Subordinated Note prior to maturity, due to the existence of any Cash Payment Restriction, such interest shall be cumulated, compounded calendar quarterly, and accrued until and to the extent that such Cash Payment Restriction no longer exists, at which time such accrued interest shall be immediately paid. Notwithstanding any other provision in this Agreement, the Company may elect to pay the purchase price hereunder in shares or other equity securities of one of its direct or indirect Subsidiaries with a fair market value equal to the applicable purchase price, provided that such Subsidiary promptly repurchases such shares or other equity securities for cash equal to the applicable purchase price or a Junior Subordinated Note (if otherwise permissible hereunder) with a principal amount equal to the applicable purchase price.

5.3 Repayment of Proceeds. If a Restrictive Covenant Violation occurs or the Company discovers after a termination of employment that grounds existed for Cause at the time thereof, then Executive shall be required to pay to the Company, within 10 business days’ of the Company’s request to Executive therefor, an amount equal to the excess, if any, of (A) the aggregate after-tax proceeds (taking into account all amounts of tax that would be recoverable upon a claim of loss for payment of such proceeds in the year of repayment) Executive received upon the sale or other disposition of, or distributions in respect of, Executive’s Units over (B) the aggregate Cost of such Units.

6. Restrictive Covenant Violation; Competitive Activity.

(a) Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its Affiliates and accordingly agrees, in his capacity as an investor and equityholder in the Company and its Affiliates, to the provisions of Appendix A to this Agreement. Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Appendix A would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

(b) Executive shall be deemed to have engaged in “Competitive Activity” if Executive engages, in any conduct that would be a Restrictive Covenant Violation if it occurred during the relevant periods specified in Appendix A (even if such conduct occurs after the relevant periods). For the avoidance of doubt, any conduct that constitutes Competitive Activity but not a Restrictive Covenant Violation shall not be prohibited hereby, but instead shall serve to provide that the Call Option may be exercised pursuant to Section 4.2 hereof.

10

7. Miscellaneous.

7.1 Transfers. Prior to the transfer of Units to a Permitted Transferee, Executive shall deliver to the Company a written agreement of the proposed transferee (a) evidencing such Person’s undertaking to be bound by the terms of this Agreement and (b) acknowledging that the Units transferred to such Person will continue to be Units for purposes of this Agreement in the hands of such Person. Any transfer or attempted transfer of Units in violation of any provision of this Agreement or the Securityholders Agreement shall be void, and the Company shall not record such transfer on its books or treat any purported transferee of such Units as the owner of such Units for any purpose.

7.2 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Units, to any and all securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution of the Units, by reason of any dividend payable in Units, issuance of Units, combination, recapitalization, reclassification, merger, consolidation or otherwise.

7.3 Executive’s Employment by the Company. Nothing contained in this Agreement shall be deemed to obligate the Company or any Subsidiary of the Company to employ Executive in any capacity whatsoever or to prohibit or restrict the Company (or any such Subsidiary) from terminating the employment of Executive at any time or for any reason whatsoever, with or without Cause.

7.4 Cooperation. Executive agrees to cooperate with the Company in taking action reasonably necessary to consummate the transactions contemplated by this Agreement.

7.5 Binding Effect. The provisions of this Agreement shall be binding upon and accrue to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns; provided, however, that no Transferee shall derive any rights under this Agreement unless and until such Transferee has executed and delivered to the Company a valid undertaking and becomes bound by the terms of this Agreement; and provided further that the Sponsor is a third party beneficiary of this Agreement and shall have the right to enforce the provisions hereof.

7.6 Amendment; Waiver. This Agreement may be amended only by a written instrument signed by the parties hereto. No waiver by any party hereto of any of the provisions hereof shall be effective unless set forth in a writing executed by the party so waiving.

7.7 Governing Law; Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed therein. Any suit, action or proceeding with respect to this Agreement, or any judgment entered by any court in respect of any thereof, shall be brought in any court of competent jurisdiction in the State of New York or the State of Delaware, and each of the Company and the members of Executive’s Group hereby submits to the exclusive jurisdiction of such courts for the purpose of any such suit, action, proceeding or judgment. Each of the members of Executive’s Group and the Company hereby irrevocably waives (i) any objections which it may now or hereafter have to the laying of the venue of any suit, action or proceeding

11

arising out of or relating to this Agreement brought in any court of competent jurisdiction in the State of Delaware or the State of New York, (ii) any claim that any such suit, action or proceeding brought in any such court has been brought in any inconvenient forum and (iii) any right to a jury trial.

7.8 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three postal delivery days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

(a) If to the Company:

Apria Holdings LLC

c/o Apria Healthcare Group Inc.

Apria Healthcare Group Inc.

26220 Enterprise Court

Lake Forest, California 92630

Attention: General Counsel

with a copy (which shall not constitute notice) to:

The Blackstone Group

345 Park Avenue

New York, NY 10154

Attention: Neil P. Simpkins

and

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017-3954

Attention: Gregory T. Grogan

If to Executive:

To the most recent address of Executive set forth in the personnel records of the Company.

7.9 Integration. This Agreement and the documents referred to herein (including referred to in the Executive Master Signature Page) or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to the subject matter hereof and thereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein and therein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

12

7.10 Counterparts. This Agreement may be executed in separate counterparts, and by different parties on separate counterparts each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

7.11 Injunctive Relief. Executive and Executive’s Permitted Transferees each acknowledges and agrees that a violation of any of the terms of this Agreement will cause the Company irreparable injury for which adequate remedy at law is not available. Accordingly, it is agreed that the Company shall be entitled to an injunction, restraining order or other equitable relief to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction in the United States or any state thereof, in addition to any other remedy to which it may be entitled at law or equity.

7.12 Rights Cumulative; Waiver. The rights and remedies of Executive and the Company under this Agreement shall be cumulative and not exclusive of any rights or remedies which either would otherwise have hereunder or at law or in equity or by statute, and no failure or delay by either party in exercising any right or remedy shall impair any such right or remedy or operate as a waiver of such right or remedy, nor shall any single or partial exercise of any power or right preclude such party’s other or further exercise or the exercise of any other power or right. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or times hereunder.

*    *    *    *    *

13

*    *    *    *    *

This Subscription Agreement between the Company and the Executive named on the Executive Master Signature Page hereto is dated and executed as of the date set forth on such Executive Master Signature Page.

*    *    *    *    *

EXECUTIVE MASTER SIGNATURE PAGE

(Executive’s Name)

Dated as of:                          , 2010 (the “Commitment Date”)

A. The individual named above and signatory hereto (the “Executive”) agrees to be bound by:

(1) the Amended and Restated Limited Liability Company Agreement of Apria Holdings LLC, a Delaware limited liability company (the “Company”), in the form attached hereto (the “LLC Agreement”), as a Member and an Employee Member (each, as defined in the LLC Agreement);

(2) the Management Unit Subscription Agreement (Class B Units and Class C Units), between the Company and the Executive, dated as of the Commitment Date, in the form attached hereto (the “Promote Agreement”); and

(3) the Amended and Restated Securityholders Agreement, among the Company and the other parties thereto (including the Executive), in the form attached hereto (the “Securityholders Agreement”), as an Employee (as defined in the Securityholders Agreement).

B. The Executive and the Company agree that the following information is hereby incorporated by reference into the Promote Agreement:

Class of Units	Number of Units	Cash Paid (if any)
Class B Units		$	0
Class C Units		$	0

C. Notwithstanding anything to the contrary in the LLC Agreement, Executive’s initial distributions in respect of each Class B Unit (whether or not then vested) shall be foregone and shall instead be distributed in respect of other Units until such time as the cumulative foregone distributions in respect of each of such Class B Units equals $0.33 (the “Excluded Amount Per Unit”). Once the Excluded Amount Per Unit has been foregone, Executive shall be entitled to a share of all subsequent distributions in connection with each Class B Unit calculated in the same manner as other Class B Units; provided that the Excluded Amount Per Unit shall remain foregone. The intent of the foregoing exclusion is to ensure that the Class B Units do not participate in a distribution of any profits or increase in the value of the Company created prior to the Closing Date, such that the Class B Units qualify as “profits interests” under applicable tax laws.

D. The Executive agrees that, upon the request of the Company, Executive shall promptly and duly execute and deliver such further instruments and documents and take such further actions as the Company may reasonably request for the purpose of giving effect to the foregoing.

E. The “Closing Date” for the transactions contemplated by the Promote Agreement shall be                          , 2010.

[Remainder of Page Intentionally Blank]

Executive:
Name: Address: Please check the appropriate box:
q	Executive is an “accredited investor”1 within the meaning of Rule 501(a) under the Securities Act of 1933, as amended.
q	Executive is not an “accredited investor” within the meaning of Rule 501(a) under the Securities Act of 1933, as amended.

Agreed and accepted: APRIA HOLDINGS LLC
By:
	Name: Title:

¹ You are an “accredited investor” if you meet any of the following tests:

1. You are a director or executive officer of the Company;

2. You have an individual net worth, or joint net worth with your spouse, at the time of your purchase exceeding $1,000,000;

3. You had individual income (excluding your spouse) in excess of $200,000 in both 2008 and 2009 and have a reasonable expectation of reaching the same income level in 2010; or

4. You and your spouse had joint income in excess of $300,000 in both 2008 and 2009 and have a reasonable expectation of reaching the same income level in 2010.

[Executive Master Signature Page]

SCHEDULE I

Time-Vesting Units

With regard to  ²/3 of the Class B Units granted hereunder (the “Time-Vesting Units”), the percentage of such Time-Vesting Units that will be Vested Units in respect of a Termination Date occurring:

• prior to 12 months after the Closing Date, will be 0%

• on or after 12 months after the Closing Date, but prior to 15 months after the Closing Date, will be 20%

• on or after 15 months after the Closing Date, but prior to 18 months after the Closing Date, will be 25%

• on or after 18 months after the Closing Date, but prior to 21 months after the Closing Date, will be 30%

• on or after 21 months after the Closing Date, but prior to 24 months after the Closing Date, will be 35%

• on or after 24 months after the Closing Date, but prior to 27 months after the Closing Date, will be 40%

• on or after 27 months after the Closing Date, but prior to 30 months after the Closing Date, will be 45%

• on or after 30 months after the Closing Date, but prior to 33 months after the Closing Date, will be 50%

• on or after 33 months after the Closing Date, but prior to 36 months after the Closing Date, will be 55%

• on or after 36 months after the Closing Date, but prior to 39 months after the Closing Date, will be 60%

• on or after 39 months after the Closing Date, but prior to 42 months after the Closing Date, will be 65%

• on or after 42 months after the Closing Date, but prior to 45 months after the Closing Date, will be 70%

• on or after 45 months after the Closing Date, but prior to 48 months after the Closing Date, will be 75%

• on or after 48 months after the Closing Date, but prior to 51 months after the Closing Date, will be 80%

• on or after 51 months after the Closing Date, but prior to 54 months after the Closing Date, will be 85%

• on or after 54 months after the Closing Date, but prior to 57 months after the Closing Date, will be 90%

• on or after 57 months after the Closing Date, but prior to 60 months after the Closing Date, will be 95%

• on or after 60 months after the Closing Date, will be 100%

Notwithstanding the foregoing, immediately prior to, and following, the occurrence of a Change of Control that occurs prior to the Termination Date, 100% of the Time-Vesting Units that are Unvested Units shall become Vested Units.

Any Time-Vesting Units that are Unvested Units on a Termination Date shall be immediately forfeited by Executive (or, to the extent a forfeiture is not permissible, such Time-Vesting Units that are Unvested Units shall be subject to the Call Option in Section 4.2(a) with the purchase price per Unvested Unit equal to the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost).

I-2

Performance-Vesting Units

1. Any Class B Units granted hereunder that are not Time-Vesting Units and all Class C Units granted hereunder will be “Performance-Vesting Units.” Initially, all Performance-Vesting Units will be Unvested Units.

2. If the Sponsor receives cash proceeds (not subject to any clawback, indemnity or similar contractual obligation) in respect of 25% of its units in the Company equal to at least 200% of its aggregate capital contributions for such units prior to the Termination Date, then all of the Performance-Vesting Units shall become Vested Units.

Any Performance-Vesting Units that are Unvested Units on a Termination Date shall be immediately forfeited by Executive (or, to the extent a forfeiture is not permissible, such Performance-Vesting Units that are Unvested Units shall be subject to the Call Option in Section 4.2(a) with the purchase price per Unvested Unit equal to the lesser of (A) Fair Market Value thereof (measured as of the Valuation Date) and (B) Cost).

I-3

Appendix A

Restrictive Covenants

1. Confidentiality; Non-Compete; Non-Solicit; Non-Disparagement.

(a) For the purposes of this Appendix A, any reference to the “Company” shall mean the Company and its Subsidiaries, collectively. In view of the fact that Executive’s work for the Company brings Executive into close contact with many confidential affairs of the Company not readily available to the public, and plans for further developments, Executive agrees:

(i) Executive will not at any time (whether during or after Executive’s employment with the Company) (x) retain or use for the benefit, purposes or account of Executive or any other person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information —including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals — concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“Confidential Information”) without the prior written authorization of the Board.

(ii) “Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of Executive’s breach of this covenant or any breach of other confidentiality obligations by third parties; (b) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (c) required by law to be disclosed (including via subpoena); provided that Executive shall give prompt Notice to the Company of such requirement of law, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

(iii) Except as required by law, Executive will not disclose to anyone, other than Executive’s immediate family and legal or financial advisors, the existence or contents of this Agreement; provided, that Executive may disclose to any prospective future employer the notice provisions of this Appendix A provided they agree to maintain the confidentiality of such terms.

(iv) Upon termination of Executive’s employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates; (y)

immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information and his rolodex (or other physical or electronic address book); and (z) fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information not within Executive’s possession or control of which Executive is or becomes aware.

(b) Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees as follows:

(i) Executive will not, within one year following the termination of his employment with the Company (the “Post-Termination Period”) or during Executive’s employment (collectively with the Post-Termination Period, the “Restricted Period”), accept an employment or consulting relationship (or own or have any financial interest in), directly or indirectly, with any entity engaged in the business of home respiratory therapy, home infusion therapy, and home medical equipment, within the United States.

(ii) During the Restricted Period, Executive will not influence or attempt to influence customers of the Company or its subsidiaries or any of its present or future subsidiaries or affiliates, either directly or indirectly, to divert their business to any individual, partnership, firm, corporation or other entity then in competition with the business of the Company or any subsidiary or affiliate of the Company.

(iii) Executive will not, within two years following the termination of his employment with the Company, initiate or respond to communications with any of the employees of the Company or its subsidiaries who earned annually $50,000 or more as a Company or subsidiary employee during the twelve-month period prior to the termination of such employee’s employment with the Company, for the purpose of soliciting such employee, or facilitating the hiring of any such employee, to work for any other business, individual, partnership, firm, corporation, or other entity; and

Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly own, solely as an investment, securities of any Person which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Executive (i) is not a controlling person of, or a member of a group which controls, such person and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such Person.

(c) Executive will not, other than as required by law or by order of a court or other competent authority, make or publish, or cause any other person to make or publish, any statement that is disparaging or that reflects negatively upon the Company or its affiliates, or that is or reasonably would be expected to be damaging to the reputation of the Company or its affiliates.

A-2

(d) It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Appendix A to be reasonable, if a final judicial determination is made by a court of competent jurisdiction, that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

(e) The period of time during which the provisions of this Appendix A shall be in effect shall be extended by the length of time during which Executive is in breach of the terms hereof as determined by any court of competent jurisdiction on the Company’s application for injunctive relief.

2. Specific Performance; Survival.

(a) Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of this Appendix A would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to suspend making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

(b) The provisions of this Appendix A shall survive the termination of Executive’s employment for any reason.

A-3

EX-10.16

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 Agreements

EX-10.17

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.

EX-10.18

Exhibit 10.18

EXECUTION VERSION

Published CUSIP Number: 037933108

U.S. $150,000,000

CREDIT AGREEMENT

dated as of October 28, 2008

among

SKY ACQUISITION LLC,

SKY MERGER SUB CORPORATION,

(to be merged with and into APRIA HEALTHCARE GROUP INC.),

THE LENDERS FROM TIME TO TIME PARTY HERETO,

BANK OF AMERICA, N.A.,

as Administrative Agent and Collateral Agent,

WACHOVIA BANK, NATIONAL ASSOCIATION

and

BARCLAYS CAPITAL, THE INVESTMENT BANKING DIVISION OF BARCLAYS BANK PLC,

as Syndication Agents

and

THE BANK OF NOVA SCOTIA,

as Documentation Agent

BANC OF AMERICA SECURITIES LLC

and

WACHOVIA CAPITAL MARKETS, LLC,

as Joint Lead Arrangers

and

BANC OF AMERICA SECURITIES LLC,

WACHOVIA CAPITAL MARKETS, LLC

and

BARCLAYS CAPITAL, THE INVESTMENT BANKING DIVISION OF BARCLAYS BANK PLC,

as Joint Bookrunners

TABLE OF CONTENTS

		Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01	Defined Terms	1
Section 1.02	Other Interpretive Provisions	55
Section 1.03	Accounting Terms and Determinations	55
Section 1.04	Rounding	56
Section 1.05	Times of Day	56
Section 1.06	Letter of Credit Amounts	56
Section 1.07	Currency Equivalents Generally	56
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
Section 2.01	The Loans	56
Section 2.02	Borrowings, Conversions and Continuations of Loans	58
Section 2.03	Letters of Credit	59
Section 2.04	Swing Line Loans	68
Section 2.05	Prepayments	70
Section 2.06	Termination or Reduction of Commitments	72
Section 2.07	Repayment of Loans	72
Section 2.08	Interest	72
Section 2.09	Fees	73
Section 2.10	Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate and Applicable Fee Rate	74
Section 2.11	Evidence of Debt	74
Section 2.12	Payments Generally; Administrative Agent’s Clawback	75
Section 2.13	Sharing of Payments by Lenders	78
Section 2.14	Increase in Revolving Credit Facility	79
Section 2.15	Designation of Lead Borrower as Borrowers’ Agent	80
ARTICLE III
TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY
Section 3.01	Taxes	81
Section 3.02	Illegality	85
Section 3.03	Inability to Determine Rates	85
Section 3.04	Increased Costs; Reserves on Eurodollar Rate Loans	85
Section 3.05	Compensation for Losses	87
Section 3.06	Mitigation Obligations; Replacement of Lenders	87
Section 3.07	Survival	87
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
Section 4.01	Conditions of Initial Credit Extension	87
Section 4.02	Conditions to All Credit Extensions	90

Table of Contents (cont.)

		Page
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01	Existence, Qualification and Power; Compliance with Laws	91
Section 5.02	Authorization; No Contravention	91
Section 5.03	Governmental Authorization; Other Consents	91
Section 5.04	Binding Effect	92
Section 5.05	Financial Statements; No Material Adverse Effect	92
Section 5.06	Litigation	93
Section 5.07	No Default	93
Section 5.08	Ownership of Property; Liens; Intellectual Property; Insurance	93
Section 5.09	Environmental Compliance	93
Section 5.10	Taxes	95
Section 5.11	ERISA Compliance	95
Section 5.12	Subsidiaries; Equity Interests	95
Section 5.13	Margin Regulations; Investment Company Act	96
Section 5.14	Disclosure	96
Section 5.15	Solvency	96
Section 5.16	Subordination of Junior Financing	96
Section 5.17	Collateral Documents	96
Section 5.18	Labor Matters	97
Section 5.19	Fraud and Abuse	97
Section 5.20	Licensing and Accreditation	97
Section 5.21	Anti-Terrorism Law	98
Section 5.22	Borrowing Base Certificates	98
ARTICLE VI
AFFIRMATIVE COVENANTS
Section 6.01	Financial Statements	99
Section 6.02	Certificates; Other Information	101
Section 6.03	Notices	103
Section 6.04	Payment of Obligations	103
Section 6.05	Preservation of Existence, Etc	104
Section 6.06	Maintenance of Properties	104
Section 6.07	Maintenance of Insurance	104
Section 6.08	Compliance with Laws	105
Section 6.09	Books and Records	105
Section 6.10	Inspection Rights	105
Section 6.11	Covenant to Guarantee Obligations and Give Security	106
Section 6.12	Compliance with Environmental Laws	108
Section 6.13	Further Assurances and Post Closing Covenants	108
Section 6.14	Information Regarding Collateral	110
Section 6.15	Collateral Administration	110
Section 6.16	Corporate Separateness	112
Section 6.17	Consolidated Fixed Charge Coverage Ratio	112
Section 6.18	Maintenance of Cash Management System	113

- ii -

Table of Contents (cont.)

		Page
ARTICLE VII
NEGATIVE COVENANTS
Section 7.01	Liens	115
Section 7.02	Investments	118
Section 7.03	Indebtedness	121
Section 7.04	Fundamental Changes	124
Section 7.05	Dispositions	126
Section 7.06	Restricted Payments	128
Section 7.07	Change in Nature of Business	131
Section 7.08	Transactions with Affiliates	131
Section 7.09	Burdensome Agreements	132
Section 7.10	Use of Proceeds	133
Section 7.11	Accounting Changes	133
Section 7.12	Prepayments, Etc	133
Section 7.13	Permitted Activities of Holdings	134
Section 7.14	Concentration Account	134
Section 7.15	Designation of Subsidiaries	134
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01	Events of Default	134
Section 8.02	Remedies Upon Event of Default	137
Section 8.03	Exclusion of Immaterial Subsidiaries	137
Section 8.04	Application of Funds	138
ARTICLE IX
AGENTS
Section 9.01	Appointment and Authority	139
Section 9.02	Rights as a Lender	139
Section 9.03	Exculpatory Provisions	139
Section 9.04	Reliance by Administrative Agent	140
Section 9.05	Delegation of Duties	140
Section 9.06	Resignation of Administrative Agent	141
Section 9.07	Non-Reliance on Administrative Agent and Other Lenders	141
Section 9.08	No Other Duties, Etc	142
Section 9.09	Administrative Agent May File Proofs of Claim	142
Section 9.10	Collateral and Guaranty Matters	142
Section 9.11	Secured Cash Management Agreements and Secured Hedge Agreements	143
ARTICLE X
MISCELLANEOUS
Section 10.01	Amendments, Etc	143
Section 10.02	Notices; Effectiveness; Electronic Communication	146
Section 10.03	No Waiver; Cumulative Remedies; Enforcement	147
Section 10.04	Expenses; Indemnity; Damage Waiver	148
Section 10.05	Payments Set Aside	150

- iii -

Table of Contents (cont.)

			Page
	Section 10.06	Successors and Assigns	150
	Section 10.07	Treatment of Certain Information; Confidentiality	154
	Section 10.08	Right of Setoff	155
	Section 10.09	Interest Rate Limitation	155
	Section 10.10	Counterparts; Integration; Effectiveness	156
	Section 10.11	Survival of Representations and Warranties	156
	Section 10.12	Severability	156
	Section 10.13	Replacement of Lenders	156
	Section 10.14	Governing Law; Jurisdiction Etc	157
	Section 10.15	California Judicial Reference	158
	Section 10.16	Waiver of Jury Trial	158
	Section 10.17	No Advisory or Fiduciary Responsibility	159
	Section 10.18	Electronic Execution of Assignments and Certain Other Documents	159
	Section 10.19	USA PATRIOT Act Notice	159
	Section 10.20	Intercreditor Agreement	160
Schedules:
	Schedule 1.01A	—     Guarantors
	Schedule 1.01B	—     Certain Security Interests and Guarantees
	Schedule 1.01C	—     Unrestricted Subsidiaries
	Schedule 1.01D	—     Excluded Subsidiaries
	Schedule 1.01E	—     Existing Letters of Credit
	Schedule 2.01	—     Lenders; Revolving Credit Commitments; Applicable Percentage
	Schedule 5.01	—     Compliance with Laws
	Schedule 5.05(a)	—     Material Dispositions Not Reflected in Financial Statements
	Schedule 5.06	—     Litigation
	Schedule 5.11(a)	—     ERISA Compliance
	Schedule 5.12	—     Subsidiaries and Other Equity Investments
	Schedule 5.19	—     Fraud and Abuse
	Schedule 6.02(vi)	—     Financial and Collateral Reports
	Schedule 6.13(c)	—     Post-Closing Matters
	Schedule 7.01(c)	—     Existing Liens
	Schedule 7.02(g)	—     Existing Investments
	Schedule 7.03(c)	—     Existing Indebtedness
	Schedule 7.08	—     Transactions with Affiliates
	Schedule 7.09	—     Existing Restrictions
	Schedule 10.02	—     Administrative Agent’s Office
Exhibits:
	Exhibit A-1	—     Form of Committed Loan Notice
	Exhibit A-2	—     Form of Swing Line Loan Notice
	Exhibit B-1	—     Form of Revolving Credit Note
	Exhibit B-2	—     Form of Swing Line Note
	Exhibit C-1	—     Form of Assignment and Assumption
	Exhibit C-2	—     Form of Administrative Questionnaire
	Exhibit D	—     Form of Compliance Certificate
	Exhibit E	—     Form of Opinion of Counsel to Loan Parties
	Exhibit F	—     Form of Guaranty

- iv -

Table of Contents (cont.)

Exhibit G-1	—     Form of Security Agreement
Exhibit G-2	—     Form of Perfection Certificate
Exhibit H	—     Form of Solvency Certificate
Exhibit I	—     Form of Borrowing Base Certificate

- v -

CREDIT AGREEMENT

This CREDIT AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”) is entered into as of October 28, 2008 among SKY ACQUISITION LLC, a Delaware limited liability company (“Holdings”), SKY MERGER SUB CORPORATION (“Merger Sub” and, prior to the Merger (as defined below), the “Lead Borrower”), a Delaware corporation to be merged with and into APRIA HEALTHCARE GROUP INC., a Delaware corporation (the “Company” and, after the Merger, the “Lead Borrower”), the other Borrowers from time to time party hereto, BANK OF AMERICA, N.A. (with its successors, “Bank of America”), as Administrative Agent and Collateral Agent, the other agents listed herein and each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”).

PRELIMINARY STATEMENTS

Pursuant to the Agreement and Plan of Merger among the Company, Holdings and Merger Sub (the “Merger Agreement”), (i) Merger Sub, a direct wholly owned subsidiary of Holdings, will merge with and into the Company (the “Merger”) with (A) the outstanding capital stock of the Company being converted into (and outstanding options, warrants or other rights to purchase shares of capital stock of the Company being canceled in exchange for) the right to receive the Per Common Share Amount (as defined in the Merger Agreement) in cash, subject to dissenters’ rights, (B) the Company surviving as a wholly owned Subsidiary of Holdings and (C) the Company assuming by operation of law all of the obligations of Merger Sub under this Agreement and the other Loan Documents, (ii) the refinancing of outstanding indebtedness of the Company (the “Refinancing”) will be effected and (iii) Transaction Expenses will be paid.

In furtherance of the foregoing, the Borrowers have requested that the Lenders provide a revolving credit facility, and the Lenders have indicated their willingness to lend and each L/C Issuer has indicated its willingness to issue Letters of Credit, in each case on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

“Account(s)” means collectively (i) any right to payment of a monetary obligation arising from the provision of merchandise, goods or services by any Loan Party or any of its Subsidiaries in the course of their respective operations, (ii) without duplication, any “account” (as that term is defined in the UCC), any accounts receivable, any “health-care-insurance receivables” (as that term is defined in the UCC), any “payment intangibles” (as that term is defined in the UCC) and all other rights to payment and/or reimbursement of every kind and description, whether or not earned by performance, of any Loan Party or any of its Subsidiaries in each case arising in the course of their respective operations, (iii) all accounts, contract rights, general intangibles, rights, remedies, guarantees, supporting obligations, letter of credit rights and security interests in respect of the foregoing, all rights of enforcement and collection, all books and records evidencing or related to the foregoing, and all rights under any of the Loan

Documents in respect of the foregoing, (iv) all information and data compiled or derived by any Secured Party or to which any Secured Party is entitled in respect of or related to the foregoing (other than any such information and data subject to legal restrictions of patient confidentiality), (v) all collateral security of any kind, given by any Account Debtor or any other Person to any Secured Party, with respect to any of the foregoing and (vi) all proceeds of the foregoing.

“Account Debtor” means a Person who is obligated under an Account, Chattel Paper or General Intangible.

“ACH” means automated clearing house transfers.

“Acquired EBITDA” means, with respect to any Acquired Entity or Business, the entities acquired as the result of the Coram Acquisition or any Converted Restricted Subsidiary for any Test Period, the amount for such Test Period of Consolidated EBITDA of such Acquired Entity or Business, acquired entity or Converted Restricted Subsidiary, all as determined on a consolidated basis for such Acquired Entity or Business, acquired entity or Converted Restricted Subsidiary.

“Acquired Entity or Business” has the meaning specified in the definition of the term “Consolidated EBITDA”.

“Additional Issuing Banks” means up to two Lenders, in addition to the Bank of America, which have been approved by the Administrative Agent (such approval not to be unreasonably withheld) and the Lead Borrower and that have agreed (each in its sole discretion) to act as an “L/C Issuer” hereunder.

“Additional Loans” has the meaning specified in Section 2.14(a).

“Additional Senior Secured Term Debt” means, collectively, the Additional Senior Secured Notes and the Additional Senior Secured Term Loans.

“Additional Senior Secured Notes” means the senior secured notes (other than the Initial Senior Secured Notes) of the Lead Borrower issued and sold pursuant to the Senior Secured Notes Documents and any exchange notes issued in exchange therefor, in each case pursuant to the Senior Secured Notes Indenture and to the extent permitted to be incurred by Section 7.03(b)(ii) or 7.03(b)(iii), and permitted to be secured by Section 7.01(b)(A)(ii).

“Additional Senior Secured Term Loans” means the term loans (other than the Initial Senior Secured Term Loans) of the Lead Borrower made pursuant to the Senior Secured Term Loan Documents and any refinancings thereof, in each case pursuant to the Senior Secured Term Loan Agreement and to the extent permitted to be incurred by Section 7.03(b)(ii) or 7.03(b)(iii), and permitted to be secured by Section 7.01(b)(A)(ii).

“Adjusted Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan, the quotient obtained (expressed as a decimal, carried out five decimal places) by dividing (i) the applicable Eurodollar Rate for such Interest Period by (ii) 1.00 minus the Eurodollar Reserve Percentage.

“Administrative Agent” means Bank of America, in its capacity as administrative agent under the Loan Documents, or any successor administrative agent.

- 2 -

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 or such other address or account as the Administrative Agent may from time to time notify the Lead Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire substantially in the form of Exhibit C-2 or in any other form approved by the Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Agents” means, collectively, the Administrative Agent and the Collateral Agent.

“Agent Parties” has the meaning specified in Section 10.02(c).

“Aggregate Commitments” means the Revolving Credit Commitments of all the Lenders.

“Agreement” has the meaning specified in the introductory paragraph hereto.

“Anti-Terrorism Laws” has the meaning specified in Section 5.21(a).

“Applicable Adjusted Percentage” has the meaning specified in Section 2.12(a).

“Applicable Fee Rate” means, for each fiscal quarter ending after the Closing Date, (i) 0.50% per annum, if the Average Revolving Credit Facility Balance during the immediately preceding fiscal quarter (or, in the case of the fiscal quarter ending immediately after the Closing Date, the Average Revolving Credit Facility Balance during the period from the Closing Date to the end of such fiscal quarter) is greater than 66.00% of the Aggregate Commitments outstanding during such period, (ii) 0.625% per annum, if the Average Revolving Credit Facility Balance during the immediately preceding fiscal quarter (or, in the case of the fiscal quarter ending immediately after the Closing Date, the Average Revolving Credit Facility Balance during the period from the Closing Date to the end of such fiscal quarter) is less than or equal to 66.00% and greater than 33.00% of the Aggregate Commitments outstanding during such period, or (iii) 1.00%, if the Average Revolving Credit Facility Balance during the immediately preceding fiscal quarter (or, in the case of the fiscal quarter ending immediately after the Closing Date, the Average Revolving Credit Facility Balance during the period from the Closing Date to the end of such fiscal quarter) is less than or equal to 33.00% of the Aggregate Commitments outstanding during such period.

“Applicable Percentage” means, with respect to any Revolving Credit Lender at any time, the percentage (carried out to the ninth decimal place) of the Revolving Credit Facility represented by such Revolving Credit Lender’s Revolving Credit Commitment at such time. If the commitment of each Revolving Credit Lender to make Revolving Credit Loans, the commitment of the Swing Line Lender to make Swing Line Loans and the obligation of each L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02, or if the Revolving Credit Commitments have expired, then the Applicable Percentage of each Revolving Credit Lender in respect of the Revolving Credit Facility shall be determined based on the Applicable Percentage of such Revolving Credit Lender in respect of the Revolving Credit Facility most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Revolving Credit Lender in respect of the Revolving Credit Facility is set forth opposite the name of such Revolving Credit Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Revolving Credit Lender becomes a party hereto, as applicable.

- 3 -

“Applicable Rate” means:

(a) from the Closing Date through the end of the first full fiscal quarter following the Closing Date, 2.00% per annum for Base Rate Loans and 3.00% per annum for Eurodollar Rate Loans and Letter of Credit Fees and

(b) for each fiscal quarter thereafter, the applicable percentage per annum set forth below determined by reference to Average Excess Availability for the immediately preceding fiscal quarter:

Applicable Rate
Pricing Level	Average Excess Availability	Eurodollar Rate and Letter of Credit Fees		Base Rate
1	> $125,000,000	2.75	%	1.75	%
2	> $50,000,000 but £ $125,000,000	3.00	%	2.00	%
3	£ $50,000,000	3.25	%	2.25	%

Any increase or decrease in the Applicable Rate resulting from a change in the Average Excess Availability shall become effective as of the first calendar day of each fiscal quarter. Average Excess Availability shall be calculated by the Administrative Agent based on the Administrative Agent’s records. If the Borrowing Base Certificates (including any required financial information in support thereof) of the Borrowers are not received by the Administrative Agent by the date required pursuant to Section 6.01(v) of this Agreement, then, upon the request of the Required Lenders, the Applicable Rate shall be determined as if the Average Excess Availability for the immediately preceding fiscal quarter is at Level 3 until such time as such Borrowing Base Certificates and supporting information are received.

Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.10(b).

“Approved Fund” means, with respect to any Lender, any Fund that is administered, advised or managed by (i) such Lender, (ii) an Affiliate of such Lender or (iii) an entity or an Affiliate of an entity that administers, advises or manages such Lender.

“Arrangers” means Banc of America Securities LLC and Wachovia Capital Markets, LLC in their respective capacities as joint lead arrangers.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an Assignment and Assumption substantially in the form of Exhibit C-1.

- 4 -

“Attributable Indebtedness” means, on any date in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.

“Audited Financial Statements” has the meaning specified in Section 4.01(e).

“Auto-Extension Letter of Credit” has the meaning specified in Section 2.03(b)(iii).

“Availability Period” means the period from and including the Closing Date to the earliest of (i) the Maturity Date, (ii) the date of termination of the Revolving Credit Commitments of each Revolving Credit Lender pursuant to Section 2.06 and (iii) the date of termination of the Revolving Credit Commitments of each Revolving Credit Lender to make Revolving Credit Loans, the termination of the commitment of the Swing Line Lender to make Swing Line Loans and of the obligations of each L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

“Availability Reserve” means, on any date of determination and with respect to the Borrowing Base, the sum (without duplication) of: (i) reserves for deterioration in the salability of inventory; (ii) the Rent and Charges Reserve; (iii) the Bank Product Reserve; (iv) all accrued Royalties, whether or not then due and payable by a Loan Party; (v) the aggregate amount of liabilities secured by Liens upon Eligible Collateral that are senior to the Administrative Agent’s Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); (vi) Contractual Allowance Reserves; (vii) reserves representing purchase price variance, physical inventories variance, slow-moving inventory and shrinkage accrual inventory; and (viii) such additional reserves, in such amounts and with respect to such matters, as the Administrative Agent in its Credit Judgment may elect to impose from time to time; provided that, after the Closing Date, such Availability Reserve shall not be established or changed except upon not less than five Business Days’ notice to the Lead Borrower (unless an Event of Default exists, in which event no notice shall be required). The Administrative Agent will be available during such period to discuss any such proposed Availability Reserve or change with the Borrowers and, without limiting the right of the Administrative Agent to establish or change such Availability Reserves in the Administrative Agent’s Credit Judgment, the Borrowers may take such action as may be required so that the event, condition or matter that is the basis for such Availability Reserve no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent. The amount of any Availability Reserve established by the Administrative Agent shall have a reasonable relationship as determined by the Administrative Agent in its Credit Judgment to the event, condition or other matter that is the basis for the Availability Reserve. Notwithstanding anything herein to the contrary, (i) an Availability Reserve shall not be established to the extent that it would be duplicative of any specific item excluded as ineligible in the definitions of Eligible Collateral, but the Administrative Agent shall retain the right, subject to the requirements of this paragraph, to establish an Availability Reserve with respect to prospective changes in Eligible Collateral that may reasonably be anticipated and (ii) circumstances, conditions, events or contingencies arising prior to the Closing Date of which the Administrative Agent had actual knowledge prior to the Closing Date shall not be the basis for the establishment of the Availability Reserves unless the Administrative Agent establishes such Availability Reserve on the Closing Date or such circumstances, conditions, events or contingencies shall have changed since the Closing Date.

“Available Amount” means, at any time (the “Reference Date”), an amount equal to the sum of (i) 50.00% of Consolidated Net Income for the Available Amount Reference Period (or in the case such Consolidated Net Income for such period is a deficit, minus 100.00% of such deficit); plus (ii) to the extent not utilized in connection with other transactions permitted pursuant to Section 7.12, the aggregate amount of Net Cash Proceeds of the type set forth in clause (i) thereof retained by the Lead Borrower during the period from and including the Business Day immediately following the Closing Date through and including the Reference Date; minus (iii) the aggregate amount of any Investments made pursuant to

- 5 -

Section 7.02(o) (net of any return of capital in respect of such Investment or deemed reduction in the amount of such Investment including, without limitation, upon the re-designation of any Unrestricted Subsidiary as a Restricted Subsidiary or the Disposition of any such Investment), any Restricted Payment made pursuant to Section 7.06(k), or any payment of Indebtedness made pursuant to Section 7.12(a)(iii) or (a)(v) during the period commencing on the Closing Date and ending on or prior to the Reference Date (and, for purposes of this clause (iii), without taking account of the intended usage of the Available Amount on such Reference Date).

“Available Amount Reference Period” means, with respect to any Reference Date, the period commencing at the beginning of the fiscal quarter in which the Closing Date occurs and ending on the last day of the most recent fiscal quarter or fiscal year, as applicable, for which financial statements required to be delivered pursuant to Section 6.01(i) or Section 6.01(ii), and the related Compliance Certificate required to be delivered pursuant to Section 6.02(i), have been received by the Administrative Agent.

“Average Excess Availability” means, on any date of determination, the amount of Excess Availability during a stipulated consecutive Business Day period, calendar day period or fiscal quarter period divided by the number of Business Days or calendar days, as the case may be, in such period.

“Average Revolving Credit Facility Balance” means, for any period, the amount obtained by adding the Outstanding Amount of Revolving Credit Loans and L/C Obligations at the end of each day for the period in question and by dividing such sum by the number of days in such period.

“Bank of America” has the meaning specified in the introductory paragraph hereto.

“Bank Product” means any of the following products, services or facilities extended to any Loan Party: (i) cash management services provided by Cash Management Banks under Cash Management Agreements and (ii) products provided by Hedge Banks under Secured Hedge Agreements; provided, however, that for any of the foregoing to be included as a “Finance Obligation” for purposes of a distribution under Section 8.04, the applicable Secured Party must have previously provided written notice to the Administrative Agent of (i) the existence of such Bank Product, (ii) the maximum dollar amount of obligations arising thereunder to be included as a Bank Product Reserve (the “Bank Product Amount”) and (iii) the methodology to be used by such parties in determining the Bank Product Debt owing from time to time (other than, in the case of Secured Hedge Agreements, on a mark-to-market basis). The Bank Product Amount may be changed from time to time upon written notice to the Administrative Agent by the applicable Secured Party and Loan Party. No Bank Product Amount may be established or increased (other than as the result of mark-to-market fluctuations) at any time that a Default or Event of Default exists and is continuing, or if a reserve in such amount would cause an Overadvance.

“Bank Product Amount” has the meaning specified in the definition of “Bank Product”.

“Bank Product Debt” means Indebtedness and other obligations of a Loan Party relating to Bank Products.

“Bank Product Reserve” means, with respect to the Borrowing Base, the aggregate amount of reserves established by the Administrative Agent from time to time in its Credit Judgment in respect of Bank Product Debt of Loan Parties, which shall be at least equal to the Bank Product Amount.

“Base Rate” means for any day a fluctuating rate per annum equal to the higher of (i) the Federal Funds Rate in effect on such date plus 1/2 of 1.00% and (ii) the rate of interest in effect for such

- 6 -

day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Loan” means a Loan that bears interest at a rate based on the Base Rate.

“Base Rate Loan Floor Rate” means a rate per annum equal to the sum of the Adjusted Eurodollar Rate with an Interest Period of three months plus the Applicable Rate for a Eurodollar Loan.

“BBA LIBOR” has the meaning specified in the definition of “Eurodollar Rate”.

“Bookrunners” means, collectively, Banc of America Securities LLC and Wachovia Capital Markets, LLC, in their respective capacities as joint lead arrangers, and Banc of America Securities LLC, Wachovia Capital Markets, LLC and Barclays Capital, the investment banking division of Barclays Bank Plc, in their respective capacities as joint bookrunners.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowers” means, collectively, the Lead Borrower, the Borrowers identified on the signature pages hereto and each other Person that owns assets of the type subject to the Borrowing Base and becomes a Borrower hereunder in accordance with the terms of this Agreement.

“Borrowing” means (i) a borrowing consisting of Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period, made by each of the Lenders pursuant to Section 2.01 or (ii) a Swing Line Loan.

“Borrowing Base” means, on any date of determination, an amount (calculated based on the most recent Borrowing Base Certificate delivered to the Administrative Agent in accordance with this Agreement) equal to:

(a) the sum of

(i) 85.00% of the value of the Eligible Accounts of the Loan Parties, and

(ii) the lesser of (A) 85.00% of the NOLV Percentage of the value of the Eligible Inventory of the Loan Parties and (B) $20,000,000,

minus

(b) the Availability Reserve in the Administrative Agent’s Credit Judgment on such date.

“Borrowing Base Certificate” has the meaning specified in Section 6.01(v).

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located, except that (i) when used in Section 2.03 with respect to any action taken by or with respect to any L/C Issuer, the term “Business Day” shall not include any day on

- 7 -

which commercial banks are authorized to close under the Laws of, or are in fact closed in, the jurisdiction where such L/C Issuer’s Lending Office is located, and (ii) if such day relates to any interest rate settings as to a Eurodollar Rate Loan, any fundings, disbursements, settlements and payments in respect of any such Eurodollar Rate Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such Eurodollar Rate Loan, “Business Day” shall mean any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“Capital Asset” means, with respect to any Person, any asset that should, in accordance with GAAP, be classified and accounted for as a capital asset on a consolidated balance sheet of such Person, including, without limitation, all assets represented by Capitalized Software Expenditures.

“Capital Expenditures” means, with respect to any Person for any period, the aggregate cost of all Capital Assets acquired by such Person and its Subsidiaries during such period, as determined in accordance with GAAP, including, without limitation, all Capitalized Software Expenditures.

“Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a Capitalized Lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) prepared in accordance with GAAP.

“Capitalized Leases” means all leases that are required to be, in accordance with GAAP, recorded as capitalized leases; provided that for all purposes hereunder the amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a liability in accordance with GAAP.

“Capitalized Software Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by Holdings, the Lead Borrower and the Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of Holdings, the Borrowers and the Restricted Subsidiaries.

“Cash Collateralize” has the meaning specified in Section 2.03(g).

“Cash Dominion Event” means any of the following: (i) the occurrence and continuance of an Event of Default under clause (a), (f) or (g) of Section 8.01; (ii) the occurrence and continuance of an Event of Default under clause (b) or (e) of Section 8.01; or (iii) the failure of the Loan Parties to maintain for five consecutive Business Days Excess Availability of at least 12.50% of the lesser of (x) the Aggregate Commitments and (y) the Borrowing Base. For purposes of this Agreement, the occurrence of any particular Cash Dominion Event shall be deemed continuing (a) if such Cash Dominion Event arises under clause (i) above, from the date of the occurrence of such Event of Default and for so long as such Event of Default is continuing and has not been cured or waived, (b) if such Cash Dominion Event arises under clause (ii) above, from the date of the delivery by the Administrative Agent of a notice to the Lead Borrower of its intent to initiate a Cash Dominion Event based on such Event of Default and for so long as such Event of Default is continuing and has not been cured or waived and/or (c) if such Cash Dominion Event arises under clause (iii) above, until Excess Availability is equal to or greater than 12.50% of the lesser of (x) the Aggregate Commitments and (y) the Borrowing Base for 30 consecutive days, in which case such Cash Dominion Event shall no longer be deemed to be continuing for purposes of this Agreement.

- 8 -

“Cash Equivalents” means any of the following types of Investments, to the extent owned by the Lead Borrower or any Restricted Subsidiary:

(i) Dollars;

(ii) securities issued or directly and fully and unconditionally guaranteed or insured by the United States government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 24 months or less from the date of acquisition;

(iii) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any domestic or foreign commercial bank having capital and surplus of not less than $500,000,000 (or the Dollar equivalent as of the date of determination);

(iv) repurchase obligations for underlying securities of the types described in clauses (ii), (iii) and (vii) entered into with any financial institution meeting the qualifications specified in clause (iii) above;

(v) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P and in each case maturing within 24 months after the date of creation thereof and Indebtedness or Preferred Stock issued by Persons with a rating of “A” or higher from S&P or “A2” or higher from Moody’s with maturities of 24 months or less from the date of acquisition;

(vi) marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Lead Borrower) and in each case maturing within 24 months after the date of creation or acquisition thereof;

(vii) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having an Investment Grade Rating from either Moody’s or S&P with maturities of 24 months or less from the date of acquisition;

(viii) Investments with average maturities of twelve months or less from the date of acquisition in money market funds rated within the top three ratings category by S&P or Moody’s; and

(ix) investment funds investing 90.00% of their assets in securities of the types described in clauses (i) through (viii) above.

In the case of Investments by any Foreign Subsidiary that is a Restricted Subsidiary or Investments made in a country outside the United States of America, Cash Equivalents shall also include (i) investments of the type and maturity described in clauses (i) through (ix) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (ii) other short-term investments utilized by Foreign Subsidiaries that are Restricted Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (viii) and (ix) and in this paragraph.

- 9 -

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than Dollars, provided that such amounts are converted into Dollars as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.

“Cash Management Agreement” means any agreement to provide Cash Management Services.

“Cash Management Bank” means any Person that, at the time it enters into a Cash Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Cash Management Agreement, in each case in respect of services provided under such Cash Management Agreement to a Loan Party.

“Cash Management Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person under or in respect of a Cash Management Agreement.

“Cash Management Services” means any one or more of the following types of services or facilities provided to any Loan Party by any Lender or any Affiliate of a Lender: (i) ACH transactions, (ii) treasury and/or cash management services, including, without limitation, controlled disbursement services, (iii) foreign exchange facilities, (iv) credit or debit cards, (v) deposit and other accounts and (vi) merchant services (other than those constituting a line of credit).

“Casualty Event” means any event that gives rise to the receipt by the Lead Borrower or any Restricted Subsidiary of any insurance proceeds or condemnation awards in respect of any equipment, fixed assets or Real Property (including any improvements thereon) to replace or repair such equipment, fixed assets or Real Property.

“CHAMPVA” means, collectively, the Civilian Health and Medical Program of the Department of Veteran Affairs, a program of medical benefits covering retirees and dependents of former members of the armed services administered by the United States Department of Veteran Affairs, and all laws, rules, regulations, manuals, orders, guidelines or requirements pertaining to such program including, without limitation, (i) all federal statutes (whether set forth in 38 U.S.C. 1713 or elsewhere) affecting such program to the extent applicable to CHAMPVA and (ii) all rules, regulations (including 38 C.F.R. 17.54), manuals, orders and administrative, reimbursement and other guidelines of all Governmental Authorities promulgated in connection with such program (whether or not having the force of law), in each case as the same may be amended, supplemented or otherwise modified from time to time.

“CHAMPVA Account” means an Account payable pursuant to CHAMPVA.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule, regulation or treaty; (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority; or (iii) the compliance by any Lender or L/C Issuer with any written request, guideline or directive (whether or not having the force of law, but if not having force of law, then being one with which the relevant party would customarily comply) by any Governmental Authority.

“Change of Control” means the earliest to occur of:

(i) the Permitted Holders ceasing to have the power, directly or indirectly, to vote or direct the voting of securities having a majority of the ordinary voting power for the election of directors of Holdings or, if an Intermediate Holding Company is formed, the Intermediate Holding Company; provided that the occurrence of the foregoing event shall not be deemed a Change of Control if:

(A) any time prior to the consummation of a Qualifying IPO, and for any reason whatsoever, (1) the Permitted Holders otherwise have the right, directly or indirectly, to designate (and do so designate) a majority of the board of directors of Holdings or, if an Intermediate Holding Company is formed, the Intermediate Holding Company at such time and (2) the Permitted Holders own a majority of the outstanding voting Equity Interests of Holdings or, if an Intermediate Holding Company is formed, the Intermediate Holding Company, at such time; or

- 10 -

(B) at any time upon or after the consummation of a Qualifying IPO, and for any reason whatsoever, (1) no “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person and its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), excluding the Permitted Holders, shall become the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of more than the greater of (x) 35.00% of the then outstanding voting stock of Holdings or, if an Intermediate Holding Company is formed, the Intermediate Holding Company, and (y) the percentage of the then outstanding voting stock of Holdings or, if an Intermediate Holding Company is formed, the Intermediate Holding Company, owned, directly or indirectly, beneficially by the Permitted Holders, and (2) during each period of twelve consecutive months, the board of directors of Holdings or, if an Intermediate Holding Company is formed, the Intermediate Holding Company, shall consist of a majority of the Continuing Directors; or

(ii) the Lead Borrower ceases to be a direct wholly owned (without regard to the parenthetical in the definition thereof) Subsidiary of (A) Holdings or (B) if any Intermediate Holding Company is formed, the Intermediate Holding Company that is a direct parent of the Lead Borrower; or

(iii) any “Change of Control” (or any comparable term) in any document pertaining to the Term Debt Obligations or to any Junior Financing with an aggregate outstanding principal amount in excess of the Threshold Amount.

“Chattel Paper” has the meaning assigned to such term in the Security Agreement.

“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 4.01.

“Closing Date Material Adverse Effect” means any effect, change, occurrence, development, condition or event that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (a) the ability of the Company to consummate the transactions contemplated in the Merger Agreement or (b) the condition (financial or otherwise), assets, business, or results of operations of the Company and its Subsidiaries, taken as a whole, other than, in the case of any of the foregoing, (i) the effects of changes that are generally applicable to the industries and markets in which the Company and its Subsidiaries operate, (ii) any change in general economic or political conditions, or in the financial, banking or securities markets (including general changes to interest rates or stock, bond and/or debt prices) in the United States or other countries in which the Company or its Subsidiaries conduct operations, (iii) the effect of any change arising in connection with natural disasters, acts of war, sabotage or terrorism, military actions or the escalation thereof, (iv) the

- 11 -

effect of any changes in applicable Laws (as defined in the Merger Agreement) or accounting rules, including, but not limited to changes in laws, regulations or interpretations thereof by Governmental Entities (as defined in the Merger Agreement) affecting the healthcare industry (including the introduction or enactment of any legislation or the proposal or adoption of any rule or regulation affecting Medicare reimbursement, competitive bidding, or other aspects of the healthcare industry), (v) the effect of any failure to obtain the approvals or consents set forth in Section 3.5 of the Merger Agreement (other than for purposes of the representation set forth in Section 3.5 thereof) and Section 5.7 of the Merger Agreement, (vi) changes in the trading volume or market price of the Shares (as defined in the Merger Agreement) of the Company in and of itself, (vii) any actions required under the Merger Agreement to obtain any approval or authorization under applicable antitrust or competition Laws for the consummation of the Merger, (viii) any effect of the public announcement of the Merger Agreement, the transactions contemplated thereby or the consummation of such transactions (other than the Closing (as defined in the Merger Agreement) of the Merger Agreement itself), (ix) any failure by the Company and its Subsidiaries to meet internal or published projections, forecasts or revenue or earnings predictions, in and of itself, (x) any action expressly required to be taken pursuant to the terms of the Merger Agreement or (xi) any actions taken at the request of Holdings or Merger Sub; provided, however, that any effect, change, occurrence, development, condition or event referred to in clauses (i) and (ii) shall be taken into account for purposes of such clause only so long as such effect, change, occurrence, development, condition or event does not adversely affect the Company and its Subsidiaries, taken as a whole, in a disproportionate manner relative to other participants in the industries and markets in which the Company and its Subsidiaries operate.

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, and rules and regulations related thereto.

“Collateral” means all of the “Collateral” and “Mortgaged Property” referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties.

“Collateral Access Agreement” means an agreement reasonably satisfactory in form and substance to the Collateral Agent executed by (i) a bailee or other Person in possession of Collateral, including, without limitation, any warehouseman, and (ii) a landlord of Real Property leased by any Loan Party (including, without limitation, any warehouse or distribution center), pursuant to which such Person (A) acknowledges the Collateral Agent’s Lien on the Collateral, (B) releases or subordinates such Person’s Liens in the Collateral held by such Person or located on such Real Property, (C) agrees to furnish the Collateral Agent with access to the Collateral in such Person’s possession or on Real Property for the purposes of conducting a Liquidation and (D) makes such other agreements with the Collateral Agent as the Collateral Agent may reasonably require.

“Collateral Agent” means Bank of America in its capacity as collateral agent under any of the Loan Documents, or any successor collateral agent.

“Collateral and Guarantee Requirement” means, at any time, the requirement that:

(i) the Administrative Agent shall have received each Collateral Document required to be delivered on the Closing Date pursuant to Section 4.01(a)(iii) or pursuant to Section 6.11, 6.13 or 6.18 at such time, duly executed by each Loan Party thereto;

(ii) all Finance Obligations shall have been unconditionally guaranteed by Holdings, any Intermediate Holding Company and each Restricted Subsidiary of Holdings (other

- 12 -

than each Borrower (solely to the extent of its own Borrowings) and any Excluded Subsidiary) that is a wholly owned Material Domestic Subsidiary, including those that are listed on Schedule 1.01A hereto (together with Holdings and any Intermediate Holding Company, each, a “Guarantor”);

(iii) except to the extent otherwise provided hereunder or under any Collateral Document or the Intercreditor Agreement, the Finance Obligations shall have been secured by a perfected security interest (to the extent such security interest may be perfected by delivering certificated securities or filing UCC financing statements) in (A) all the Equity Interests of the Borrowers and (B) all Equity Interests (other than Equity Interests of Unrestricted Subsidiaries and any Equity Interest of any Restricted Subsidiary pledged to secure Indebtedness permitted under Section 7.03(h) or (i)) of each Material Domestic Subsidiary of Holdings, the Borrowers or any Guarantor (other than Holdings); provided that Equity Interests of non-wholly owned Subsidiaries shall be pledged only to the extent such pledge is permitted by applicable law, the Organization Documents thereof and any equityholders’ agreement relating thereto and (C) 65.00% of the issued and outstanding voting Equity Interests (and 100.00% of the issued and outstanding non-voting Equity Interests, if any) of each wholly owned Material Foreign Subsidiary that is directly owned by Holdings or any Domestic Subsidiary of Holdings that is a Guarantor;

(iv) except to the extent otherwise provided hereunder or under any Collateral Document or the Intercreditor Agreement, the Finance Obligations shall have been secured by a perfected security interest (other than in the case of Mortgages, to the extent such security interest may be perfected by delivering certificated securities, filing UCC financing statements or making any necessary filings with the United States Patent and Trademark Office or United States Copyright Office) in, and Mortgages on, substantially all tangible and intangible assets of Holdings, the Borrowers and each Guarantor (including accounts receivable, inventory, cash, deposit accounts, equipment, investment property, intercompany notes, Intellectual Property, other general intangibles, owned (but not leased) Real Property and proceeds of the foregoing); provided that security interests in Real Property shall be limited to the Mortgaged Properties;

(v) none of the Collateral shall be subject to any Liens other than Permitted Liens; and

(vi) except to the extent otherwise provided hereunder or under any Collateral Document or the Intercreditor Agreement, the Collateral Agent shall have received (A) counterparts of a Mortgage with respect to each Material Real Property required to be delivered pursuant to Sections 4.01(a), 6.11 and 6.13 (the “Mortgaged Properties”) duly executed and delivered by the record owner of such property, (B) fully paid American Land Title Association Lender’s Extended Coverage title policies or the equivalent or other form available in each applicable jurisdiction (the “Mortgage Policies”) insuring the Lien of each such Mortgage as a valid Lien on the property described therein, free of any other Liens except Permitted Liens, together with such endorsements, coinsurance and reinsurance as the Collateral Agent may reasonably request and (C) such new or existing surveys, new or existing abstracts, new or existing appraisals, legal opinions and other documents as the Collateral Agent may reasonably request with respect to any such Mortgaged Property.

The foregoing definition shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance or surveys with respect to, particular assets if and for so long as, in the reasonable judgment of the Administrative Agent and the Lead Borrower, the cost of

- 13 -

creating or perfecting such pledges or security interests in such assets or obtaining title insurance or surveys in respect of such assets shall be excessive in view of the benefits to be obtained by the Lenders therefrom.

The Administrative Agent may grant extensions of time for the perfection of security interests in or the obtaining of title insurance and surveys with respect to particular assets (including extensions beyond the Closing Date for the perfection of security interests in the assets of the Loan Parties on such date) where it reasonably determines, in consultation with the Lead Borrower, that perfection cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required by this Agreement or the Collateral Documents.

Notwithstanding the foregoing provisions of this definition or anything in this Agreement or any other Loan Document to the contrary, (a) with respect to leases of Real Property entered into by any Loan Party, such Loan Party shall not be required to take any action with respect to creation or perfection of security interests with respect to such leases, (b) Liens required to be granted from time to time pursuant to the Collateral and Guarantee Requirement shall be subject to exceptions and limitations set forth in the Collateral Documents and, to the extent appropriate in the applicable jurisdiction, as agreed between the Administrative Agent and the Lead Borrower, (c) the Collateral and Guarantee Requirement shall not apply to any of the following assets: (i) any fee-owned Real Property that is not a Material Real Property and any leasehold interests in Real Property, (ii) motor vehicles and other assets subject to certificates of title, letter of credit rights and commercial tort claims in amounts less than $20,000,000, (iii) assets of which a pledge thereof or a security interest therein is prohibited by law or by agreements containing anti-assignment clauses not overridden by the UCC or other applicable law, (iv) any assets as to which the Administrative Agent and the Lead Borrower agree that the cost of obtaining such a security interest or perfection thereof are excessive in relation to the value to the Lenders of the security to be afforded thereby, (v) assets specifically requiring perfection through control agreements (including, without limitation, deposit accounts and securities accounts) other than as required pursuant to the cash management requirements herein, (vi) stock and assets of Unrestricted Subsidiaries and (vii) assets to the extent a security interest in such assets would result in material adverse tax consequences as reasonably determined by the Lead Borrower (it being understood that the Lenders shall not require the Lead Borrower or any of its Subsidiaries to enter into any security agreements or pledge agreements governed under foreign law) and (d) the Lead Borrower and its Subsidiaries shall not be required to obtain any landlord waivers, estoppels or collateral access letters.

“Collateral Documents” means, collectively, the Security Agreement, the Intellectual Property Security Agreements, any Collateral Access Agreement, any Deposit Account Control Agreement, the Mortgages, each of the mortgages, collateral assignments, Security Agreement Supplements, security agreements, pledge agreements or other similar agreements delivered to the Collateral Agent and the Lenders pursuant to Section 4.01(a)(iii), 6.11, 6.13 or 6.18, the Guaranty and each of the other agreements, instruments or documents that creates or purports to create a Lien or Guarantee in favor of any Agent for the benefit of the Secured Parties.

“Committed Loan Notice” means a notice of (i) a Borrowing, (ii) a conversion of Revolving Credit Loans from one Type to the other or (iii) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A-1.

“Company” has the meaning specified in the introductory paragraph hereto.

“Compliance Certificate” means a certificate substantially in the form of Exhibit D.

- 14 -

“Concentration Account” means Account No. 12579-55100, ABA No. 026009593, at Bank of America.

“Consolidated Depreciation and Amortization Expense” means with respect to any Person for any period the total amount of depreciation and amortization expense, including the amortization of deferred financing fees, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

“Consolidated EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period:

(i) increased (without duplication) by:

(A) provision for taxes based on income or profits or capital gains, including, without limitation, state, franchise and similar taxes and foreign withholding taxes of such Person paid or accrued during such period to the extent the same was deducted (and not added back) in computing Consolidated Net Income; plus

(B) the sum of (x) Consolidated Interest Expense of such Person for such period (including (1) net losses on Swap Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk and (2) costs of surety bonds in connection with financing activities, in each case, to the extent included in Consolidated Interest Expense), (y) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock of any Restricted Subsidiary during such period and (z) all dividends or other distributions accrued (excluding items eliminated in consolidation) on any series of Disqualified Equity Interests during such period, in each case, to the extent the same was deducted (and not added back) in calculating such Consolidated Net Income; plus

(C) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent the same were deducted (and not added back) in computing Consolidated Net Income; plus

(D) the amount of any integration costs or other business optimization expenses or reserves deducted (and not added back) in such period in computing Consolidated Net Income, including any one-time costs incurred in connection with acquisitions after the Closing Date and costs related to the closure and/or consolidation of facilities; plus

(E) any other non-cash charges, including any write-offs or write-downs, reducing Consolidated Net Income for such period (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period); plus

(F) the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-wholly-owned Subsidiary deducted (and not added back) in such period in calculating Consolidated Net Income; plus

- 15 -

(G) the amount of management, monitoring, consulting and advisory fees and related expenses paid in such period to the Sponsor to the extent otherwise permitted under Section 7.08; plus

(H) the amount of net cost savings and synergies projected by the Lead Borrower in good faith to be realized as a result of specified actions taken or with respect to which substantial steps have been taken (in the good faith determination of the Lead Borrower) in connection with the Merger, Permitted Acquisitions and cost saving, restructuring and other similar initiatives (which cost savings shall be added to Consolidated EBITDA until fully realized and calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that such cost savings are reasonably identifiable and factually supportable (which adjustments may be incremental to pro forma adjustments made pursuant to the definition of “Pro Forma Adjustments”); plus

(I) any costs or expense incurred by the Lead Borrower or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of the Lead Borrower or net cash proceeds of an issuance of Equity Interests of the Lead Borrower (other than Disqualified Equity Interests) solely to the extent that such net cash proceeds are excluded from the calculation of the “Available Amount”; and

(ii) decreased by (without duplication) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced Consolidated EBITDA in any prior period; and

(iii) increased or decreased by (without duplication):

(A) any net gain or loss resulting in such period from Swap Obligations and the application of Statement of Financial Accounting Standards No. 133; plus or minus, as applicable, and

(B) any net gain or loss resulting in such period from currency translation gains or losses related to currency remeasurements of Indebtedness (including any net loss or gain resulting from hedge agreements for currency exchange risk).

There shall be included in determining Consolidated EBITDA for any period, without duplication, (A) the Acquired EBITDA of any Person, property, business or asset acquired by Holdings, any Borrower or any Restricted Subsidiary during such period (but not the Acquired EBITDA of any related Person, property, business or assets to the extent not so acquired), to the extent not subsequently sold, transferred or otherwise disposed by Holdings, such Borrower or such Restricted Subsidiary during such period (each such Person, property, business or asset acquired and not subsequently so disposed of, an “Acquired Entity or Business”), including the commencement of activities constituting such business, and the Acquired EBITDA of any Unrestricted Subsidiary that is converted into a Restricted Subsidiary during such period (each a “Converted Restricted Subsidiary”), based on the actual Acquired EBITDA of such Acquired Entity or Business or Converted Restricted Subsidiary for such period (including the portion thereof occurring prior to such acquisition) and (B) for the purposes of the definition of the term

- 16 -

“Permitted Acquisition,” an adjustment in respect of each Acquired Entity or Business equal to the amount of the Pro Forma Adjustment with respect to such Acquired Entity or Business for such period (including the portion thereof occurring prior to such acquisition) as specified in a certificate executed by a Responsible Officer and delivered to the Lenders and the Administrative Agent. For purposes of determining the Consolidated Fixed Charge Coverage Ratio, there shall be excluded in determining Consolidated EBITDA for any period the Disposed EBITDA of any Person, property, business or asset (other than an Unrestricted Subsidiary) sold, transferred or otherwise disposed of, closed or classified as discontinued operations by any Borrower or any Restricted Subsidiary during such period (each such Person, property, business or asset so sold or disposed of, a “Sold Entity or Business”) and the Disposed EBITDA of any Restricted Subsidiary that is converted into an Unrestricted Subsidiary during such period (each a “Converted Unrestricted Subsidiary”), based on the actual Disposed EBITDA of such Sold Entity or Business or Converted Unrestricted Subsidiary for such period (including the portion thereof occurring prior to such sale, transfer or disposition).

“Consolidated Fixed Charge Coverage Ratio” means, with respect to Holdings, the Borrowers and their respective Restricted Subsidiaries for the most recently ended twelve-month period for which financial information is available prior to the date of calculation, the ratio of:

(i) (A) Consolidated EBITDA of Holdings, the Borrowers and their respective Restricted Subsidiaries for such period plus (B) only for purposes of the calculation of the Consolidated Fixed Charge Coverage Ratio under, and as provided in, Section 6.17 hereof, Specified Equity Contributions minus (C) taxes based on income or profits or capital, including, without limitation, state, franchise and similar taxes (such as the Delaware franchise tax, the Pennsylvania capital tax, the Texas margin tax and provincial income taxes paid in Canada) and foreign withholding taxes and penalties and interest relating to taxes, net of cash refunds received, of Holdings, the Borrowers and their respective Restricted Subsidiaries paid in cash during such period minus (D) Unfinanced Capital Expenditures made by Holdings, the Borrowers and their respective Restricted Subsidiaries during such period minus (E) Restricted Payments made pursuant to Section 7.06(h), (i) and (k), to

(ii) Debt Service Charges payable by Holdings, the Borrowers and their respective Restricted Subsidiaries in cash during such period.

In calculating the Consolidated Fixed Charge Coverage Ratio for purposes of Sections 6.17 and 6.02(i), no Restricted Subsidiaries that are Foreign Subsidiaries shall be included in such calculations; provided that the amount of any dividends or other distributions from any Restricted Subsidiary that is a Foreign Subsidiary actually received by a Loan Party in cash during such period shall be included in the computation of Consolidated EBITDA for such purposes. In calculating the Consolidated Fixed Charge Coverage Ratio for the purposes of Section 7.02(j), 7.02(o), 7.03(o), 7.06(k), or 7.12(a)(v), the Lead Borrower may elect to include in or exclude from the calculation thereof any Restricted Subsidiary that is a Foreign Subsidiary; provided that, notwithstanding the exclusion of any Restricted Subsidiary that is a Foreign Subsidiary from such calculation, the amount of any dividends or other distributions from any Restricted Subsidiary that is a Foreign Subsidiary actually received by a Loan Party in cash during such period shall be included in the computation of Consolidated EBITDA for such purposes. Any such inclusion or exclusion, as the case may be, shall be for the entire twelve-month calculation period (or the entire period during which any such Person was a Restricted Subsidiary if such Person was a Restricted Subsidiary for less than twelve months).

- 17 -

“Consolidated Interest Expense” means, with respect to any Person for any period, without duplication, the sum of:

(i) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (A) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (B) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (C) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of Swap Obligations or other derivative instruments pursuant to GAAP), (D) the interest component of Capitalized Lease Obligations and (E) net payments, if any, pursuant to interest rate Swap Obligations with respect to Indebtedness and excluding (1) accretion or accrual of discounted liabilities not constituting Indebtedness, (2) any expense resulting from the discounting of any outstanding Indebtedness in connection with the application of purchase accounting in connection with any acquisition, (3) any “Additional Interest” provided for, and as defined in, a registration rights agreement with respect to the Term Debt Obligations, (4) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and (5) any expensing of bridge, commitment and other financing fees); plus

(ii) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

(iii) interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income, of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided, however, that, without duplication,

(i) any after-tax effect of extraordinary, non-recurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses (including relating to the Transaction), severance, relocation costs and curtailments or modifications to pension and post-retirement employee benefit plans and other restructuring costs shall be excluded,

(ii) the cumulative effect of a change in accounting principles during such period shall be excluded,

(iii) any after-tax effect of income (loss) from disposed, abandoned, transferred, closed or discontinued operations and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations shall be excluded,

(iv) any after-tax effect of gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business, as determined in good faith by the Lead Borrower, shall be excluded,

(v) the Net Income for such period of any Person that is not a Subsidiary or is an Unrestricted Subsidiary or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of the Lead Borrower shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period,

- 18 -

(vi) solely for the purpose of calculating the Available Amount, the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived, provided that Consolidated Net Income of the Lead Borrower will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) or Cash Equivalents to the Lead Borrower or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein,

(vii) effects of adjustments (including the effects of such adjustments pushed down to the Lead Borrower and its Restricted Subsidiaries) in the property and equipment, inventory and other intangible assets, deferred revenue and debt line items in such Person’s consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to the Transactions or any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded,

(viii) any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Swap Obligations or other derivative instruments shall be excluded,

(ix) any impairment charge or asset write-off, in each case pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded,

(x) any non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights shall be excluded,

(xi) any fees and expenses incurred during such period, or any amortization thereof for such period, in connection with any acquisition, Disposition, recapitalization, Investment, issuance or repayment of Indebtedness, issuance of Equity Interests, refinancing transaction or amendment or modification of any debt instrument (in each case, including any such transaction consummated prior to the Closing Date and any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction shall be excluded, and

(xii) accruals and reserves that are established or adjusted within twelve months after the Closing Date that are so required to be established or adjusted as a result of the Transactions in accordance with GAAP or changes as a result of a modification of accounting policies shall be excluded.

Notwithstanding the foregoing, for the purpose of calculating the Available Amount, there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Investments made by the Lead Borrower with the proceeds of the Available Amount and its Restricted Subsidiaries, any repurchases and redemptions of such Investments from the Lead Borrower and its Restricted Subsidiaries, any repayments of loans and advances which constitute such Investments

- 19 -

by the Lead Borrower or any of its Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the Available Amount.

“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent,

(i) to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(ii) to advance or supply funds

(A) for the purchase or payment of any such primary obligation, or

(B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or

(iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation.

“Continuing Directors” means the directors of Holdings or, if an Intermediate Holding Company is formed, the Intermediate Holding Company, or the Lead Borrower, as the case may be, on the Closing Date, as elected or appointed after giving effect to the Merger and the other transactions contemplated hereby, and each other director, if, in each case, such other director’s nomination for election to the board of directors of Holdings or, if an Intermediate Holding Company is formed, the Intermediate Holding Company, or the Lead Borrower, as the case may be (or the direct or indirect parent of the Lead Borrower after a Qualifying IPO of such direct or indirect parent) is recommended by a majority of the then Continuing Directors or such other director receives the vote of the Permitted Holders in his or her election by the stockholders of Holdings or, if an Intermediate Holding Company is formed, the Intermediate Holding Company, or the Lead Borrower, as the case may be (or the direct or indirect parent of the Lead Borrower after a Qualifying IPO of such direct or indirect parent).

“Contract Provider” means any Person or any employee, agent or subcontractor of such Person who provides professional health care services under or pursuant to any contract with any Loan Party or its Restricted Subsidiaries.

“Contractual Allowance” means, with respect to an Account of a Third Party Payor owed to a Loan Party, an amount equal to the difference between the amount invoiced by such Loan Party for a service that gave rise to the creation of such Account and the amount allowed to be paid for such service by such Third Party Payor.

“Contractual Allowance Reserves” means, with respect to the Borrowing Base, the aggregate amount of reserves established by the Administrative Agent from time to time in its Credit Judgment in respect of the Accounts owed to the Loan Parties by Third Party Payors, which shall be at least equal to the aggregate amount of all Contractual Allowances.

- 20 -

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” has the meaning specified in the definition of “Affiliate”.

“Converted Restricted Subsidiary” has the meaning specified in the definition of “Consolidated EBITDA”.

“Converted Unrestricted Subsidiary” has the meaning specified in the definition of “Consolidated EBITDA”.

“Coram Account” has the meaning specified in Section 6.13(c).

“Coram Acquisition” means the acquisition by the Company of Coram, Inc. completed on December 3, 2007.

“Coram Concentration Account” has the meaning specified in Section 6.13(c).

“Credit Extension” means each of the following: (i) a Borrowing, and (ii) an L/C Credit Extension.

“Credit Judgment” means the Administrative Agent’s commercially reasonable judgment exercised in good faith, based upon its consideration of any factor that it reasonably believes (i) could materially adversely affect the quantity, quality, mix or value of Collateral (including any applicable Laws that may inhibit collection of an Account), the enforceability or priority of the Administrative Agent’s Liens, or the amount that the Administrative Agent and the Lenders could receive in liquidation of any Collateral; (ii) that any collateral report or financial information delivered by any Loan Party is incomplete, inaccurate or misleading in any material respect; (iii) materially increases the likelihood of any Insolvency Proceeding involving a Loan Party; or (iv) creates or could result in an Event of Default. In exercising such judgment, the Administrative Agent may consider any factors that could materially increase the credit risk of lending to the Borrowers on the security of the Collateral.

“DDAs” means any checking or other demand deposit account maintained by the Loan Parties. All funds in such DDAs shall be conclusively presumed to be Collateral and proceeds of Collateral, and the Agents or the Lenders shall have no duty to inquire as to the source of the amounts on deposit in the DDAs.

“Debt Service Charges” means, for any period, the sum of (i) Consolidated Interest Expense paid in cash for such period, plus (ii) scheduled principal payments of Indebtedness for borrowed money, including the full amount of any non-recourse Indebtedness (excluding the Senior Credit Obligations, but including, without limitation, Capitalized Lease Obligations) for such period, plus (iii) scheduled mandatory payments on account of Disqualified Equity Interests (whether in the nature of dividends, redemption, repurchase or otherwise) required to be made during such period, in each case determined in accordance with GAAP.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

- 21 -

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means an interest rate equal to (i) the greater of (A) the Base Rate plus the Applicable Rate for such Base Rate Loans and (B) the Base Rate Loan Floor Rate plus (ii) the Applicable Rate applicable to Base Rate Loans plus (iii) 2.00% per annum; provided that with respect to a Eurodollar Rate Loan, the Default Rate with respect to payments of principal thereon shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2.00% per annum, in each case, to the fullest extent permitted by applicable Laws.

“Defaulting Lender” means a Lender during the period and only for so long as a Lender Default is in effect with respect to such Lender.

“Deposit Account Control Agreements” has the meaning specified in the Security Agreement.

“Designated Non-Cash Consideration” means the fair market value of non-cash consideration received by Holdings, a Borrower or a Restricted Subsidiary in connection with a Disposition pursuant to Section 7.05(i) that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer, setting forth the basis of such valuation (which amount will be reduced by the fair market value of the portion of the non-cash consideration converted to cash within 180 days following the consummation of the applicable Disposition).

“Disposed EBITDA” means, with respect to any Sold Entity or Business or any Converted Unrestricted Subsidiary for any period, the amount for such period of Consolidated EBITDA of such Sold Entity or Business or such Converted Unrestricted Subsidiary, all as determined on a consolidated basis for such Sold Entity or Business or such Converted Unrestricted Subsidiary.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and any sale of Equity Interests) of any property by any Person, including any sale, assignment, transfer, abandonment or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that “Disposition” and “Dispose” shall not be deemed to include any issuance by Holdings of any of its Equity Interests to another Person.

“Disqualified Equity Interests” means any Equity Interest which, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (i) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Senior Credit Obligations that are accrued and payable and the termination of the Revolving Credit Commitments and all outstanding Letters of Credit), (ii) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (iii) provides for the scheduled payments of dividends in cash, or (iv) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Maturity Date.

“Dollar” and “$” mean lawful money of the United States.

- 22 -

“Domestic Subsidiary” means any Subsidiary that is organized under the Laws of the United States, any state thereof or the District of Columbia.

“Dominion Account” means any DDA (other than an Excluded Account or a Specified Government Receivables Deposit Account) of a Loan Party at Bank of America or its Affiliates or branches or another bank reasonably acceptable to the Administrative Agent, in each case which is subject to a Deposit Account Control Agreement.

“Eligible Accounts” means Accounts of the Loan Parties subject to the Lien of the Collateral Documents, the value of which shall be determined by taking into consideration, among other factors, their book value determined in accordance with GAAP, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the Account Debtor or any other Person; provided, however, that, subject to the ability of the Administrative Agent to establish other criteria of ineligibility in its Credit Judgment or modify the criteria established below, unless otherwise approved by the Administrative Agent in its Credit Judgment, (a) no Government Account shall constitute an Eligible Account unless such Government Account complies with Section 6.18(c) and (b) none of the following classes of Accounts shall be deemed to be Eligible Accounts:

(i) Accounts that do not arise out of sales of goods or rendering of services in the ordinary course of the Borrowers’ or the relevant Subsidiaries’ business;

(ii) Accounts payable other than in Dollars or that are otherwise on terms other than those normal or customary in the Borrowers’ or the relevant Subsidiaries’ business;

(iii) Accounts arising out of a sale made or services rendered by any Borrower to a Subsidiary of any Borrower or an Affiliate of any Borrower or to a Person controlled by an Affiliate of any Borrower (including any employees of such Borrower) other than, in each case, solely by reason of being an Affiliate of The Blackstone Group L.P.;

(iv) Accounts (A) that are invoiced but unpaid for more than 120 days past the original invoice date or (B) that are not invoiced more for than 60 days past the original service date;

(v) Accounts owing from any Person from which an aggregate amount of more than 50.00% of the Accounts owing therefrom are not, solely based on the most recent field audit report, Eligible Accounts pursuant to the foregoing clause (iv);

(vi) except for Government Accounts that are otherwise Eligible Accounts, Accounts owing from any Person and its Affiliates that, solely based on the most recent field audit report, exceed 20.00% of the net amount of all Eligible Accounts, but only to the extent of such excess;

(vii) Self-Pay Accounts;

(viii) Accounts owing from any Person that (A) has disputed liability for any Account owing from such Person or has been placed on credit hold due to past due balances or (B) has otherwise asserted any claim, demand or liability against a Borrower or any of its Subsidiaries, whether by action, suit, counterclaim or otherwise;

- 23 -

(ix) Accounts owing from any Person that shall take or be the subject of any action or proceeding of a type described in Section 8.01(f);

(x) Accounts (A) owing from any Person that is also a supplier to or creditor of a Borrower or any of its Subsidiaries unless such Person has waived any right of setoff in a manner reasonably acceptable to the Administrative Agent, (B) representing any manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling a Borrower or any of its Subsidiaries to discounts on future purchase therefrom, (C) in respect of which the related invoice(s) has been reversed; provided that subclauses (A) and (B) shall not affect the eligibility of Accounts owing from a Third Party Payor and arising out of the provision of health care services insured and/or administered by such Third Party Payor;

(xi) Accounts arising out of sales to Account Debtors outside the United States and Canada unless such Accounts are fully backed by an irrevocable letter of credit on terms, and issued by a financial institution, reasonably acceptable to the Administrative Agent and such irrevocable letter of credit is in the possession of the Administrative Agent;

(xii) Accounts arising out of sales on a bill-and-hold, cash in advance or cash on delivery payment terms, guaranteed sale, sale-or-return, sale on approval or consignment basis or subject to any right of return, setoff or charge back or Accounts representing any unapplied cash;

(xiii) except for Government Accounts that are otherwise Eligible Accounts, Accounts owing from an Account Debtor that is an agency, department or instrumentality of the United States or any state thereof or Canada or any province or territory thereof unless such Accounts are not subject to the Assignment of Claims Act of 1940 or the Financial Administration Act (Canada) and any similar state, provincial or territorial legislation or the applicable Borrower or its relevant Subsidiary shall have satisfied the requirements of the Assignment of Claims Act of 1940 or the Financial Administration Act (Canada) and any similar state, provincial or territorial legislation and, in each case, the Administrative Agent is reasonably satisfied as to the absence of setoffs, counterclaims and other defenses on the part of such account debtor;

(xiv) Accounts of a Loan Party owed by a Third Party Payor to the extent that such Loan Party is or has been audited by such Third Party Payor and either (A) any of such audits provides for adjustments in reimbursable costs or asserts claims for reimbursement or repayment by such Loan Party of costs and/or payments theretofore made by such Third Party Payor that, if adversely determined, in the aggregate could reasonably be expected to have a Material Adverse Effect or (B) such Loan Party has had requests or assertions of claims for reimbursement or repayment by it of costs and/or payments theretofore made by such Third Party Payor that, if adversely determined, in the aggregate could reasonably be expected to have a Material Adverse Effect;

(xv) Accounts with respect to which the representations and warranties set forth in the Security Agreement applicable to Accounts are not correct in any material respect;

(xvi) Accounts in respect of which the Security Agreement, after giving effect to the related filings of financing statements that have then been made, if any, does not or has ceased to create a valid and perfected first priority lien or security interest in favor of the Collateral Agent, on behalf of the Secured Parties, securing the Finance Obligations; or

- 24 -

(xvii) Accounts representing deferred revenue on rental equipment for rentals that extend over a month-end period.

If the Administrative Agent deems Accounts ineligible in its Credit Judgment (and not based upon the criteria set forth above), then the Administrative Agent shall give the Lead Borrower five Business Days’ prior notice thereof (unless an Event of Default exists, in which event no notice shall be required); provided that (i) any modification of the eligibility criteria set forth above shall have a reasonable relationship to circumstances, conditions, events or contingencies which are the basis for such eligibility criteria, as determined by the Administrative Agent in its Credit Judgment and (ii) circumstances, conditions, events or contingencies arising prior to the Closing Date of which the Administrative Agent had actual knowledge prior to the Closing Date shall not be the basis for any such modification unless the Administrative Agent establishes such eligibility criteria on the Closing Date or such circumstances, conditions, events or contingencies shall have changed since the Closing Date.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 10.06(b)(iii)).

“Eligible Collateral” means, collectively, Eligible Inventory and Eligible Accounts.

“Eligible Inventory” means Inventory (other than the Rental Inventory) of the Loan Parties subject to the Lien of the Collateral Documents, the value of which shall be determined by taking into consideration, among other factors, the lower of its cost and its book value determined in accordance with GAAP and excluding any portion of cost attributable to intercompany profit among the Loan Parties and their Affiliates; provided, however, that, subject to the ability of the Administrative Agent to establish other criteria of ineligibility in its Credit Judgment or modify the criteria established below, unless otherwise approved by the Administrative Agent in its Credit Judgment, none of the following classes of Inventory shall be deemed to be Eligible Inventory:

(i) Inventory that is obsolete, unusable or otherwise unavailable for sale;

(ii) Inventory consisting of promotional, marketing, packaging or shipping materials and supplies;

(iii) Inventory that fails to meet all applicable material standards imposed by any Governmental Authority having regulatory authority over such Inventory or its use or sale;

(iv) Inventory that is subject to any licensing, patent, royalty, trademark, trade name or copyright agreement with any third party from which the Borrowers or any of their Subsidiaries have received notice of a dispute in respect of any such agreement;

(v) Inventory located outside the United States;

(vi) Inventory that is located on premises owned, leased or rented by a customer of any Borrower, or is placed on consignment;

(vii) Inventory that is not reflected in the details of a current inventory report;

(viii) Inventory with respect to which the representations and warranties set forth in Section 3.02 of the Security Agreement applicable to Inventory are not correct in any material respect;

- 25 -

(ix) Inventory in respect of which the Security Agreement, after giving effect to the related filings of financing statements that have then been made, if any, does not or has ceased to create a valid and perfected first priority Lien or security interest in favor of the Collateral Agent, on behalf of the applicable Secured Parties, securing the applicable Finance Obligations;

(x) Inventory at locations with less than $50,000 of Inventory on-hand; or

(xi) Inventory in transit between the Loan Parties’ warehouse locations.

If the Administrative Agent deems Inventory ineligible in its Credit Judgment (and not based upon the criteria set forth above), then the Administrative Agent shall give the Lead Borrower five Business Days’ prior notice thereof (unless an Event of Default exists, in which event no notice shall be required); provided that (i) any modification of the eligibility criteria set forth above shall have a reasonable relationship to circumstances, conditions, events or contingencies which are the basis for such eligibility criteria, as determined by the Administrative Agent in its Credit Judgment and (ii) circumstances, conditions, events or contingencies arising prior to the Closing Date of which the Administrative Agent had actual knowledge prior to the Closing Date shall not be the basis for any such modification unless the Administrative Agent establishes such eligibility criteria on the Closing Date or such circumstances, conditions, events or contingencies shall have changed since the Closing Date.

“Environmental Laws” means any and all Laws relating to pollution, the protection of the environment, natural resources or to the release of any Hazardous Materials into the environment, or, to the extent relating to exposure to Hazardous Materials, human health.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (i) violation of any Environmental Law, (ii) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (iii) exposure to any Hazardous Materials, (iv) the release or threatened release of any Hazardous Materials into the environment or (v) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any applicable Environmental Law.

“Equity Contribution” means the contribution by the Sponsor, its co-investors and its Affiliates of an amount of cash to the common equity of Holdings which, in the aggregate (taking into account rollover equity), is not less than 40.00% of the pro forma total consolidated capitalization of Holdings after giving effect to the Transactions, it being understood that the amount of any rollover equity shall not exceed 25.00% of the aggregate amount of the Equity Contribution.

“Equity Interests” means, with respect to any Person, all of the shares, interests, rights, participations or other equivalents (however designated) of capital stock of (or other ownership or profit interests or units in) such Person and all of the warrants, options or other rights for the purchase, acquisition or exchange from such Person of any of the foregoing (including through convertible securities).

“Equity Offering” means any public or private sale of common stock or Preferred Stock of the Lead Borrower (excluding Disqualified Equity Interests) or any of its direct or indirect parent

- 26 -

companies to the extent contributed to the Lead Borrower as equity (other than Disqualified Equity Interests), other than (i) public offerings with respect to the Lead Borrower’s or any direct or indirect parent company’s common stock registered on Form S-8 and (ii) issuances to any Subsidiary of the Lead Borrower.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is under common control with any Loan Party and is treated as a single employer within the meaning of Section 414 of the Code or Section 4001 of ERISA.

“ERISA Event” means (i) a Reportable Event with respect to a Pension Plan; (ii) a withdrawal by any Loan Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as a termination under Section 4062(e) of ERISA; (iii) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer Plan, notification of any Loan Party or ERISA Affiliate concerning the imposition of Withdrawal Liability or notification that a Multiemployer Plan is insolvent or is in reorganization within the meaning of Title IV of ERISA (or, after the effectiveness of the Pension Act, is in endangered or critical status, within the meaning of Section 305 of ERISA); (iv) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (v) an event or condition which could reasonably be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (vi) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; (vii) on and after the effectiveness of the Pension Act, a determination that any Pension Plan is, or is expected to be, in “at-risk” status (within the meaning of Section 303(i)(4)(A) of ERISA or Section 430(i)(4)(A) of the Code); (viii) with respect to a Pension Plan, the failure to satisfy the minimum funding standard of Section 412 of the Code and Section 302 of ERISA; or (xi) the failure to make by its due date a required contribution under Section 412(m) of the Code (or Section 430(j) of the Code, as amended by the Pension Act).

“Eurodollar Rate” means, for any Interest Period with respect to any Eurodollar Rate Loan, the rate per annum equal to British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time), at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

“Eurodollar Rate Loan” means a Revolving Credit Loan that bears interest at a rate based on the Eurodollar Rate.

- 27 -

“Eurodollar Reserve Percentage” means for any day during any Interest Period the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any other entity succeeding to the functions currently performed thereby) for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Adjusted Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically on and as of the effective date of any change in the Eurodollar Reserve Percentage.

“Event of Default” has the meaning specified in Section 8.01.

“Excess Availability” means, at any time, the difference between (i) the lesser of (A) the Revolving Credit Facility and (B) the Borrowing Base at such time, as determined from the most recent Borrowing Base Certificate delivered by the Lead Borrower to the Administrative Agent pursuant to Section 6.01(v) hereof minus (ii) the Total Revolving Credit Outstandings.

“Exchange Act” means the Securities Exchange Act of 1934.

“Excluded Accounts” has the meaning specified in the Security Agreement.

“Excluded Subsidiary” means (i) any Subsidiary that is not a wholly owned Subsidiary (other than a Subsidiary that is a Subsidiary Guarantor and is not permitted to become an Unrestricted Subsidiary pursuant to Section 7.15), (ii) each Subsidiary listed on Schedule 1.01D hereto, (iii) any Subsidiary that is prohibited by applicable Law from guaranteeing the Finance Obligations, (iv) any Foreign Subsidiary and any Domestic Subsidiary that is a Subsidiary of a Foreign Subsidiary, (v) any Restricted Subsidiary acquired pursuant to a Permitted Acquisition financed with secured Indebtedness incurred pursuant to Section 7.03(h) and each Restricted Subsidiary thereof that guarantees such Indebtedness (provided that each such Restricted Subsidiary shall cease to be an Excluded Subsidiary under this clause (v) if such secured Indebtedness is repaid or becomes unsecured or if such Restricted Subsidiary ceases to guarantee such secured Indebtedness, as applicable), (vi) any other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent the cost or other consequences (including any adverse tax consequences in the reasonable judgment of the Lead Borrower confirmed in writing by notice to the Administrative Agent) of providing a Guarantee shall be excessive, (vii) each Unrestricted Subsidiary, (viii) any “not-for-profit” Subsidiary and (ix) any special purpose entity.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of a Borrower hereunder or under any Loan Document, (i) taxes imposed on or measured by its overall net income (however denominated), and franchise (and similar) taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which such recipient is organized, in which its principal office is located or with which it has a present or former connection (other than any such connection arising from the recipient’s having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document) or, in the case of any Lender, in which its Lending Office is located, (ii) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which a Borrower is located, (iii) any backup withholding tax that is required by the Code to be withheld from amounts payable to a Lender that has failed to comply with clause (A) of Section 3.01(e)(ii), and (iv) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Lead Borrower under Section 10.13), any United States withholding tax that (A) is required to be imposed on amounts payable to such Foreign Lender pursuant to Laws in force at the time such Foreign Lender becomes a party hereto (or designates a new Lending

- 28 -

Office) or (B) is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with clause (B) of Section 3.01(e)(ii), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to Section 3.01(a).

“Executive Order” has the meaning specified in Section 5.21(a).

“Existing Letters of Credit” means the letters of credit listed on Schedule 1.01E and outstanding on the Closing Date.

“Facility Increase” has the meaning specified in Section 2.14(a).

“Federal Funds Rate” means, for any day, the rate per annum (expressed, as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1.00%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Bank of America, on such day on such transactions as determined by the Administrative Agent.

“Fee Letter” means the Fee Letter dated June 18, 2008, as amended, among the Lead Borrower, the Administrative Agent, Banc of America Securities LLC, Banc of America Bridge LLC, Wachovia Bank, National Association, Wachovia Investment Holdings, LLC, Wachovia Capital Markets, LLC and Barclays Bank PLC.

“Finance Document” means (i) each Loan Document, (ii) each Secured Hedge Agreement and (iii) each Secured Cash Management Agreement, and “Finance Documents” means all of them, collectively.

“Finance Obligations” means, at any date, (i) all Senior Credit Obligations, (ii) all Swap Obligations of a Loan Party permitted hereunder owed or owing under any Secured Hedge Agreement to any Hedge Bank and (iii) all Cash Management Obligations owing under any Secured Cash Management Agreement to a Cash Management Bank.

“Financial Covenant Trigger Event” has the meaning specified in Section 6.17.

“Foreign Lender” means any Lender that is organized under the Laws of a jurisdiction other than that in which a Borrower is resident for tax purposes (including such a Lender when acting in the capacity of an L/C Issuer). For purposes of this definition, the United States, each state thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Plan” means any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by, or entered into with, any Loan Party or any Subsidiary with respect to employees employed outside the United States.

“Foreign Subsidiary” means any direct or indirect Subsidiary of Holdings which is not a Domestic Subsidiary.

- 29 -

“Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States, as in effect from time to time.

“General Intangibles” has the meaning assigned to such term in the Security Agreement.

“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Government Accounts” means, collectively, any and all Accounts which are (i) Medicare Accounts, (ii) Medicaid Accounts, (iii) TRICARE Accounts, (iv) CHAMPVA Accounts or (v) any other Account payable by a Governmental Authority acceptable to the Administrative Agent in its Credit Judgment.

“Government Healthcare Programs” means the CHAMPVA, Medicare, Medicaid and TRICARE programs and any other healthcare program operated by or financed in whole or in part by any federal, state or local government.

“Granting Lender” has the meaning specified in Section 10.06(g).

“Group Company” means any of Holdings, the Borrowers or their respective Subsidiaries (regardless of whether or not consolidated with Holdings or the Borrowers for purposes of GAAP), and “Group Companies” means all of them, collectively.

“Guarantee” means, as to any Person, without duplication, (i) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (A) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (B) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (C) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, or (D) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (ii) any Lien on any assets of such Person securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or other monetary obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit, in either case in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

- 30 -

“Guarantor” has the meaning specified in the definition of “Collateral and Guarantee Requirement”.

“Guaranty” means (i) the guaranty made by Holdings and the Subsidiary Guarantors in favor of the Administrative Agent on behalf of the Secured Parties, substantially in the form of Exhibit F, and (ii) each other guaranty and guaranty supplement delivered pursuant to Section 6.11 and “Guaranties” means any two or more of them, collectively.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any applicable Environmental Law.

“Hedge Bank” means any Person that is a Lender, a Bookrunner or an Affiliate of the foregoing at the time it enters into a Secured Hedge Agreement, or is a party to such an agreement as of the Closing Date, in its capacity as a party thereto.

“HHS” has the meaning specified in the definition of “Medicare Regulations”.

“Holdings” has the meaning set forth in the introductory paragraph of this Agreement.

“Honor Date” has the meaning specified in Section 2.03(c)(i).

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(i) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(ii) the maximum amount (after giving effect to any prior drawings or reductions which may have been reimbursed) of all letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

(iii) net obligations of such Person under any Swap Contract;

(iv) all obligations of such Person to pay the deferred purchase price of property or services (other than (A) trade accounts payable in the ordinary course of business and (B) any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and if not paid after becoming due and payable);

(v) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements and mortgage, industrial revenue bond, industrial development bond and similar financings), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(vi) all Attributable Indebtedness;

- 31 -

(vii) all obligations of such Person in respect of Disqualified Equity Interests; and

(viii) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall, in the case of Holdings and its Subsidiaries, exclude all intercompany Indebtedness having a term not exceeding 364 days (inclusive of any roll-over or extensions of terms) and made in the ordinary course of business consistent with past practice. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of Indebtedness of any Person for purposes of clause (v) shall be deemed to be equal to the lesser of (A) the aggregate unpaid amount of such Indebtedness and (B) the fair market value of the property encumbered thereby as determined by such Person in good faith.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitee” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Initial Senior Secured Notes” means the senior secured notes of the Lead Borrower issued and sold pursuant to the Senior Secured Notes Documents for the purpose of refinancing or repaying the Senior Secured Bridge Loans and any exchange notes issued in exchange therefor, in each case, pursuant to the Senior Secured Notes Indenture.

“Initial Senior Secured Term Loans” means the term loans of the Lead incurred pursuant to the Senior Secured Term Loan Documents for the purpose of refinancing or repaying the Senior Secured Bridge Loans and any refinancings thereof, in each case, pursuant to the Senior Secured Term Loan Agreement.

“Insolvency Proceeding” means any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (i) the entry of an order for relief under Debtor Relief Laws, or the initiation by any Person of any proceeding or filing under any other insolvency, debtor relief or debt adjustment law; (ii) the appointment of a receiver, interim receiver, trustee, liquidator, administrator, monitor, conservator or other custodian for such Person or any part of its property; or (iii) an assignment or trust mortgage for the benefit of creditors.

“Intellectual Property” has the meaning assigned to such term in the Security Agreement.

“Intellectual Property Security Agreements” means the Grant of Security Interest in Trademarks, the Grant of Security Interest in Patents and the Grant of Security Interest in Copyrights, substantially in the form attached as Exhibits C, D and E to the Security Agreement respectively.

“Intercreditor Agreement” means the Lien Subordination and Intercreditor Agreement dated as of the date hereof among the Administrative Agent, on behalf of the Secured Parties, and the Term Debt Collateral Agent (as defined therein) on behalf of the Term Debt Secured Parties (as defined therein), and the Loan Parties.

“Interest Payment Date” means (i) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (ii) as to any Base Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date.

- 32 -

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months or, to the extent available (as determined by each Lender of such Eurodollar Rate Loan) to all Lenders making such Eurodollar Rate Loan, one week or nine or twelve months thereafter, as selected by the Borrower in its Committed Loan Notice or such other period that is twelve months or less requested by the Borrower and consented to by all Lenders making such Eurodollar Rate Loan; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business Day shall, subject to clause (iii) below, be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date.

“Intermediate Holding Company” means any Subsidiary of Holdings (of which Holdings, directly or indirectly, owns 100.00% of the issued and outstanding Equity Interests) that, directly or indirectly, owns 100.00% of the issued and outstanding Equity Interests of the Lead Borrower.

“Inventory” has the meaning specified in the UCC and shall include all goods intended for sale or lease by a Loan Party, or for display or demonstration, all work in process, all raw materials, and other materials and supplies of every nature and description used or which might be used in connection with the manufacture, printing, packing, shipping, advertising, selling, leasing or furnishing such goods or otherwise used or consumed in such Loan Party’s business.

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (i) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (ii) a loan, advance or capital contribution to, Guarantee or assumption of Indebtedness of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person (excluding, in the case of the Lead Borrower and its Subsidiaries, intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-over or extensions of terms) and made in the ordinary course of business consistent with past practice) or (iii) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other nationally recognized statistical rating agency selected by the Lead Borrower.

- 33 -

“IP Rights” means the right to use all trademarks, service marks, trade names, domain names and other source indicators and all goodwill associated with the foregoing, copyrights, patents, patent rights, technology, software, know-how, database rights, design rights, trade secrets and other intellectual property rights, including any applications or registrations relating thereto, and the right to register and obtain renewals of any of the foregoing and the right to sue for past, present and future infringement, misappropriation or other violation thereof, including the right to all damages and proceeds therefrom.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by an L/C Issuer and a Borrower (or any Subsidiary) or in favor of such L/C Issuer and relating to such Letter of Credit.

“Junior Financing” means any Indebtedness that is or is required to be subordinated to the Senior Credit Obligations pursuant to the terms of the Loan Documents.

“Junior Financing Documentation” means any documentation governing any Junior Financing.

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directives, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.

“L/C Advance” means, with respect to each Revolving Credit Lender, such Revolving Credit Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Adjusted Percentage.

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“L/C Issuer” means, collectively, (i) Bank of America, in its capacity as issuer of Letters of Credit under Section 2.03(b) and its successor or successors in such capacity, (ii) each Additional Issuing Bank and (iii) each Lender listed in Schedule 1.01E hereto as the issuer of an Existing Letter of Credit.

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

- 34 -

“Lead Borrower” has the meaning set forth in the introductory paragraph to this Agreement.

“Lease” means any agreement pursuant to which a Loan Party is entitled to the use or occupancy of any space in a structure, land, improvements or premises for any period of time.

“Lender” means each bank or other lending institution listed on Schedule 2.01, each Eligible Assignee that becomes a Lender pursuant to Section 10.06(b), and their respective permitted successors and shall include, as the context may require, each L/C Issuer and/or the Swing Line Lender in such capacity.

“Lender Default” means, with respect to any Lender, that (i) such Lender has failed (or notified the Administrative Agent of its intent to fail) to fund any portion of the Revolving Credit Loans, participations in L/C Advances or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, unless the subject of a good faith dispute (or a good faith dispute that is subsequently cured), (ii) such Lender has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute (or a good faith dispute that is subsequently cured), (iii) such Lender has been deemed insolvent or become the subject of a bankruptcy or insolvency or other conservatorship or receivership proceeding or is Controlled by a Person who has been deemed insolvent or become the subject of a bankruptcy or insolvency or other conservatorship or receivership proceeding, or (iv) the Administrative Agent, any L/C Issuer or the Swing Line Lender, as applicable, in good faith believes that such Lender has defaulted in fulfilling its obligations under one or more other syndicated credit facilities.

“Lending Office” means (i) with respect to any Lender and for each Type of Loan, the “Lending Office” of such Lender (or of an Affiliate of such Lender) designated for such Type of Loan in such Lender’s Administrative Questionnaire or in any applicable Assignment and Assumption pursuant to which such Lender became a Lender hereunder or such other office of such Lender (or of an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Lead Borrower as the office by which its Loans of such Type are to be made and maintained and (ii) with respect to any L/C Issuer and for each Letter of Credit, the “Lending Office” of such L/C Issuer (or of an Affiliate of such L/C Issuer) designated on the signature pages hereto or such other office of such L/C Issuer (or of an Affiliate of such L/C Issuer) as such L/C Issuer may from time to time specify to the Administrative Agent and the Lead Borrower as the office by which its Letters of Credit are to be issued and maintained.

“Letter of Credit” means any letter of credit issued hereunder and shall include the Existing Letters of Credit. A Letter of Credit may be a commercial letter of credit or a standby letter of credit.

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by an L/C Issuer.

“Letter of Credit Expiration Date” means the day that is three days prior to the Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day).

- 35 -

“Letter of Credit Fee” has the meaning specified in Section 2.03(i).

“Letter of Credit Sublimit” means an amount equal to $75,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Facility.

“License” means any license or agreement under which a Loan Party is authorized to use IP Rights in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of property or any other conduct of its business.

“Licensor” means any Person from whom a Loan Party obtains the right to use any Intellectual Property.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to Real Property, and any Capitalized Lease having substantially the same economic effect as any of the foregoing).

“Lien Waiver” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, by which: (i) for any Collateral located on leased premises, the lessor waives or subordinates any Lien it may have on the Collateral, and agrees to permit the Administrative Agent to enter upon the premises and remove the Collateral or to use the premises for an agreed upon period of time to store or dispose of the Collateral; (ii) for any Collateral held by a warehouseman, processor, shipper, customs broker or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral, agrees to hold any documents in its possession relating to the Collateral as agent for the Administrative Agent, and agrees to deliver the Collateral to the Administrative Agent upon request; (iii) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges the Administrative Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and agrees to deliver the Collateral to the Administrative Agent upon request; and (iv) for any Collateral subject to a Licensor’s IP Rights, the Licensor grants to the Administrative Agent the right, vis-à-vis such Licensor, to enforce the Administrative Agent’s Liens with respect to the Collateral, including the right to dispose of it with the benefit of the IP Rights, whether or not a default exists under any applicable License.

“Liquidation” means the exercise by the Administrative Agent of those rights and remedies accorded to the Administrative Agent under the Loan Documents and applicable Law as a creditor of the Loan Parties, including (after the occurrence and during the continuation of an Event of Default) the conduct by any or all of the Loan Parties, acting with the consent of the Administrative Agent, of any public, private or “Going-Out-Of-Business Sale” or other Disposition of Collateral for the purpose of liquidating the Collateral. Derivations of the word “Liquidation” (such as “Liquidate”) are used with like meaning in this Agreement.

“Loan” means an extension of credit by a Lender to a Borrower under Article II in the form of a Revolving Credit Loan or a Swing Line Loan (including any extensions of credit under any Facility Increases).

“Loan Documents” means, collectively, (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Intercreditor Agreement, (v) the Collateral Documents and (vi) each Issuer Document.

“Loan Parties” means, collectively, (i) the Borrowers, (ii) Holdings and (iii) each other Guarantor that satisfies the Collateral and Guarantee Requirement.

- 36 -

“Management Stockholders” means the members of management of Holdings or any direct or indirect parent thereof or any of its Subsidiaries as of the Closing Date (after giving effect to the Transactions), including the Lead Borrower, who are investors in Holdings or any direct or indirect parent thereof as of the Closing Date (after giving effect to the Transactions).

“Master Agreement” has the meaning specified in the definition of “Swap Contract”.

“Material Adverse Effect” means (i) a material adverse effect on the business, operations, assets, liabilities (actual or contingent) or financial condition of Holdings and its Subsidiaries, taken as a whole, (ii) a material adverse effect on the ability of the Loan Parties (taken as a whole) to perform their respective payment obligations under any Loan Document to which any of the Loan Parties is a party or (iii) a material adverse effect on the rights and remedies of the Lenders or the Agents under any Loan Document.

“Material Domestic Subsidiary” means, at any date of determination, each of Holdings’ Domestic Subsidiaries (other than the Borrowers) (i) whose total assets at the last day of the most recent Test Period were equal to or greater than 5.00% of Total Assets at such date or (ii) whose Consolidated EBITDA for such Test Period were equal to or greater than 5.00% of the Consolidated EBITDA of Holdings, the Borrowers and the Restricted Subsidiaries for such period; provided that “Material Domestic Subsidiary” shall also include any of Holding’s Subsidiaries selected by the Lead Borrower which is required to ensure that all Material Domestic Subsidiaries have in the aggregate (A) total assets at the last day of the most recent Test Period that were equal to or greater than 95.00% of the total assets of Holdings, the Borrowers and the Restricted Subsidiaries that are Domestic Subsidiaries at such date and (B) Consolidated EBITDA for such Test Period that were equal to or greater than 95.00% of the Consolidated EBITDA of Holdings, the Borrowers and the Restricted Subsidiaries that are Domestic Subsidiaries for such period.

“Material Foreign Subsidiary” means, at any date of determination, each of Holdings’ Foreign Subsidiaries (i) whose total assets at the last day of the most recent Test Period were equal to or greater than 5.00% of Total Assets at such date or (ii) whose Consolidated EBITDA for such Test Period were equal to or greater than 5.00% of the Consolidated EBITDA of Holdings, the Borrowers and the Restricted Subsidiaries for such period; provided that “Material Foreign Subsidiary” shall also include any of Holding’s Subsidiaries selected by the Lead Borrower which is required to ensure that all Material Foreign Subsidiaries have in the aggregate (A) total assets at the last day of the most recent Test Period that were equal to or greater than 95.00% of the total assets of Holdings, the Borrowers and the Restricted Subsidiaries that are Foreign Subsidiaries at such date and (B) Consolidated EBITDA for such Test Period that were equal to or greater than 95.00% of the Consolidated EBITDA of Holdings, the Borrowers and the Restricted Subsidiaries that are Foreign Subsidiaries for such period.

“Material Real Property” means any Real Property owned by any Loan Party where the greater of its cost and book value exceeds $5,000,000.

“Material Subsidiary” means any Material Domestic Subsidiary or any Material Foreign Subsidiary.

“Maturity Date” means the fifth anniversary of the Closing Date; provided that if such day is not a Business Day, the Maturity Date shall be the Business Day immediately preceding such day.

“Maximum Rate” has the meaning specified in Section 10.09.

- 37 -

“Medicaid” means that means-tested entitlement program under Title XIX of the Social Security Act that provides federal grants to states for medical assistance based on specific eligibility criteria. (Social Security Act of 1965, Title XIX, P.L. 89-87, as amended; 42 U.S.C. 1396 et seq.)

“Medicaid Account” means an Account payable pursuant to Medicaid.

“Medicaid Regulations” means, collectively: (i) all federal statutes (whether set forth in Title XIX of the Social Security Act or elsewhere) affecting the medical assistance program established by Title XIX of the Social Security Act and any statutes succeeding thereto; (ii) all applicable provisions of all federal rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with the statutes described in clause (i) above and all federal administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to or in connection with the statutes described in clause (i) above; (iii) all state statutes and plans for medical assistance enacted in connection with the statutes and provisions described in clauses (i) and (ii) above; and (iv) all applicable provisions of all rules, regulations, manuals and orders of all Governmental Authorities promulgated pursuant to or in connection with the statutes described in clause (iii) above and all state administrative, reimbursement and other guidelines of all Governmental Authorities having the force of law promulgated pursuant to or in connection with the statutes described in clause (ii) above, in each case as may be amended, supplemented or otherwise modified from time to time.

“Medicare” means that government-sponsored entitlement program under Title XVIII of the Social Security Act that provides for a health insurance system for eligible elderly and disabled individuals. (Social Security Act of 1965, Title XVIII, P.L. 89-87 as amended; 42 U.S.C. 1395 et seq.)

“Medicare Account” means an Account payable pursuant to Medicare.

“Medicare Part C” means the government-sponsored entitlement program under Title XVIII, Part C of the Social Security Act.

“Medicare Part C Account” means an Account payable pursuant to Medicare Part C (Title XVIII, Part C of the Social Security Act).

“Medicare Part D” means the government-sponsored entitlement program under Title XVIII, Part D of the Social Security Act.

“Medicare Part D Account” means an Account payable pursuant to Medicare Part D (Title XVIII, Part D of the Social Security Act).

“Medicare Regulations” means, collectively, all federal statutes (whether set forth in Title XVIII of the Social Security Act or elsewhere) affecting the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act and any statutes succeeding thereto; together with all applicable provisions of all rules, regulations, manuals and orders and administrative, reimbursement and other guidelines having the force of law of all Governmental Authorities (including, without limitation, the Department of Health and Human Services (“HHS”), the Centers for Medicare and Medicaid Services, the Office of the Inspector General for HHS, or any person succeeding to the functions of any of the foregoing) promulgated pursuant to or in connection with any of the foregoing having the force of law, as each may be amended, supplemented or otherwise modified from time to time.

“Merger” has the meaning specified in the preliminary statements hereto.

- 38 -

“Merger Agreement” has the meaning specified in the preliminary statements hereto.

“Merger Sub” has the meaning specified in the introductory paragraph hereto.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Mortgage” means, collectively, the deeds of trust, trust deeds, hypothecs and mortgages creating and evidencing a Lien on a Mortgaged Property made by the Loan Parties in favor or for the benefit of the Collateral Agent on behalf of the Secured Parties in form and substance reasonably satisfactory to the Collateral Agent, and any other mortgages executed and delivered pursuant to Sections 4.01(a)(iii), 6.11 and 6.13.

“Mortgage Policies” has the meaning specified in clause (vi) of the definition of “Collateral and Guarantee Requirement”.

“Mortgaged Properties” has the meaning specified in clause (vi) of the definition of “Collateral and Guarantee Requirement”.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate makes or is obligated to make contributions, or in the past six years has made or been obligated to make contributions.

“Net Cash Proceeds” means:

(i) with respect to the Disposition of any asset by Holdings, the Lead Borrower or any Restricted Subsidiary or any Casualty Event, the excess, if any, of (A) the sum of cash and Cash Equivalents received in connection with such Disposition or Casualty Event (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received and, with respect to any Casualty Event, any insurance proceeds or condemnation awards in respect of such Casualty Event actually received by or paid to or for the account of Holdings, the Lead Borrower or any Restricted Subsidiary) over (B) the sum of (1) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness that is secured by the asset subject to such Disposition or Casualty Event and that is required to be repaid (and is timely repaid) in connection with such Disposition or Casualty Event (other than Indebtedness under the Loan Documents), (2) the out-of-pocket fees and expenses (including attorneys’ fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other customary fees) actually incurred by Holdings, the Lead Borrower or such Restricted Subsidiary in connection with such Disposition or Casualty Event, (3) taxes paid or reasonably estimated to be actually payable in connection therewith, and (4) any reserve for adjustment in respect of (x) the sale price of such asset or assets established in accordance with GAAP and (y) any liabilities associated with such asset or assets and retained by Holdings, the Lead Borrower or any Restricted Subsidiary after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction and it being understood that “Net Cash Proceeds” shall include (i) any cash or Cash Equivalents received upon the Disposition of any non-cash consideration by Holdings, the Lead Borrower or any Restricted Subsidiary in any such Disposition and (ii) upon the reversal (without the satisfaction of any applicable liabilities in cash in a corresponding amount) of any reserve described in clause (4) above or if such liabilities have not been satisfied in cash and such reserve is not reversed within 365 days after such Disposition or Casualty Event, the amount of such reserve; and

- 39 -

(ii) (A) with respect to the incurrence or issuance of any Equity Interest or Indebtedness by Holdings, the Lead Borrower or any Restricted Subsidiary, the excess, if any, of (x) the sum of the cash received in connection with such incurrence or issuance over (y) the investment banking fees, underwriting discounts, commissions, costs and other out-of-pocket expenses and other customary expenses, incurred by Holdings, the Borrowers or such Restricted Subsidiary in connection with such incurrence or issuance and (B) with respect to any Permitted Equity Issuance by any direct or indirect parent of Holdings or the Lead Borrower, the amount of cash from such Permitted Equity Issuance contributed to the capital of (without duplication) Holdings or the Lead Borrower.

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

“NOLV Percentage” means the net orderly liquidation value of Inventory, expressed as a percentage, expected to be realized at an orderly, negotiated sale held within a reasonable period of time, net of all liquidation expenses, as determined from the most recent appraisal of the Loan Parties’ Inventory performed by an appraiser and on terms reasonably satisfactory to the Administrative Agent.

“Non-Defaulting Lender” means, at any date, a Lender which is not a Defaulting Lender at such date.

“Non-Loan Party” means any Subsidiary of the Lead Borrower that is not a Loan Party.

“Not Otherwise Applied” means, with reference to any amount of Net Cash Proceeds of any transaction or event or of the Available Amount that is proposed to be applied to a particular use or transaction, that such amount has not previously been (and is not simultaneously being) applied to anything other than that particular use or transaction.

“Notes” means, collectively, (i) Revolving Credit Notes and (ii) the Swing Line Note.

“OFAC” has the meaning specified in Section 5.21(b)(v).

“Organization Documents” means: (i) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (ii) with respect to any limited liability company, the certificate or articles of formation or organization and operating or limited liability company agreement; and (iii) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“Other Liabilities” means outstanding liabilities with respect to or arising from (i) any Cash Management Services furnished to any of the Loan Parties or any of their Subsidiaries and/or (ii) any transaction which arises out of any Bank Product entered into with any Loan Party, as each may be amended from time to time.

- 40 -

“Other Taxes” means all present or future stamp or documentary taxes or any other excise, property intangible, mortgage recording or similar taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document; provided that such term shall not include any of the foregoing taxes that result from an Assignment and Assumption, grant of a participation pursuant to Section 10.06(d) or transfer or assignment to or designation of a new Lending Office or other office for receiving payments under any Loan Document, except to the extent that any such action described in this proviso is requested or required by the Lead Borrower.

“Outstanding Amount” means (i) with respect to Revolving Credit Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans and Swing Line Loans, as the case may be, occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by a Borrower of Unreimbursed Amounts.

“Overadvance” has the meaning specified in Section 2.01(b).

“Overadvance Loan” means a Revolving Credit Loan made when an Overadvance exists or is caused by the funding thereof.

“Participant” has the meaning specified in Section 10.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Act” means the Pension Protection Act of 2006, as amended.

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Loan Party or any ERISA Affiliate or to which any Loan Party or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time in the past six years.

“Perfection Certificate” means the certificate in the form of Exhibit G-2 or any other form approved by the Administrative Agent, as the same shall be supplemented from time to time by a Perfection Certificate Supplement or otherwise.

“Perfection Certificate Supplement” means a perfection certificate supplement in form and substance reasonably satisfactory to the Administrative Agent.

“Permitted Acquisition” has the meaning specified in Section 7.02(j).

“Permitted Equity Issuance” means any sale or issuance of any Qualified Equity Interests of Holdings or any direct or indirect parent of Holdings (and, after a Qualifying IPO, of any Intermediate Holding Company), in each case to the extent permitted hereunder.

“Permitted Holders” means each of (i) the Sponsor and (ii) the Management Stockholders.

- 41 -

“Permitted Investment” has the meaning specified in Section 7.02.

“Permitted Lien” has the meaning specified in Section 7.01.

“Permitted Refinancing” means, with respect to any Person, any modification, refinancing, refunding, renewal or extension of any Indebtedness of such Person; provided that (i) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, renewed or extended except by an amount equal to unpaid accrued interest and premium thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred, in connection with such modification, refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder, (ii) other than with respect to a Permitted Refinancing in respect of Indebtedness permitted pursuant to Section 7.03(f), such modification, refinancing, refunding, renewal or extension has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being modified, refinanced, refunded, renewed or extended, (iii) other than with respect to a Permitted Refinancing in respect of Indebtedness permitted pursuant to Section 7.03(f), at the time thereof, no Event of Default shall have occurred and be continuing, (iv) any Permitted Refinancing of the Term Debt Obligations shall be subject to the Intercreditor Agreement to the extent such Indebtedness is secured, and (v) if such Indebtedness being modified, refinanced, refunded, renewed or extended is Indebtedness permitted pursuant to Section 7.03(c), 7.03(h) or 7.03(l) or is Junior Financing, (A) to the extent such Indebtedness being modified, refinanced, refunded, renewed or extended is subordinated in right of payment to the Senior Credit Obligations, such modification, refinancing, refunding, renewal or extension is subordinated in right of payment to the Senior Credit Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed or extended, (B) the terms and conditions (including, if applicable, as to collateral but excluding as to subordination, interest rate and redemption premium) of any such modified, refinanced, refunded, renewed or extended Indebtedness, taken as a whole, are not materially less favorable to the Loan Parties or the Lenders than the terms and conditions of the Indebtedness being modified, refinanced, refunded, renewed or extended; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Lead Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Lead Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees) and (C) such modification, refinancing, refunding, renewal or extension is incurred by the Person who is the obligor of the Indebtedness being modified, refinanced, refunded, renewed or extended.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA), other than a Foreign Plan, established, maintained or contributed to by any Loan Party or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

“Platform” has the meaning specified in Section 6.02.

- 42 -

“Post-Acquisition Period” means, with respect to any Permitted Acquisition or the Coram Acquisition, as the case may be, the period beginning on the date such Permitted Acquisition is consummated or, in the case of the Coram Acquisition, beginning on the Closing Date, and ending on the last day of the sixth full consecutive fiscal quarter immediately following the date on which such Permitted Acquisition is consummated or, in the case of the Coram Acquisition, following the Closing Date.

“Preferred Stock” means any Equity Interest with preferential rights (in relation to common equity of the same issuer) of payment of dividends or upon liquidation, dissolution or winding up.

“primary obligation” has the meaning specified in the definition of “Contingent Obligations”.

“primary obligor” has the meaning specified in the definition of “Contingent Obligations” or “Guarantee”, as applicable.

“Prime Rate” means the rate of interest per annum publicly announced from time to time by Bank of America as its prime rate in effect for dollars at its principal office in Charlotte, North Carolina; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. The Administrative Agent or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

“Pro Forma Adjustment” means, for any Test Period that includes all or any part of a fiscal quarter included in any Post-Acquisition Period, with respect to the Acquired EBITDA of the applicable Acquired Entity or Business, the entities acquired as the result of the Coram Acquisition or Converted Restricted Subsidiary, or the Consolidated EBITDA of Holdings, the Borrowers and the Restricted Subsidiaries, the pro forma increase or decrease in such Acquired EBITDA or such Consolidated EBITDA, set forth in a certificate by a Responsible Officer in form and substance reasonably satisfactory to the Administrative Agent, as the case may be, projected by Holdings or the Lead Borrower in good faith as a result of (i) actions taken during such Post-Acquisition Period for the purposes of realizing reasonably identifiable and factually supportable synergies and cost savings or (ii) any additional costs incurred during such Post-Acquisition Period, in each case in connection with the combination of the operations of such Acquired Entity or Business, the entities acquired as the result of the Coram Acquisition or Converted Restricted Subsidiary with the operations of Holdings, the Borrowers and the Restricted Subsidiaries; provided that (A) at the election of Holdings or the Lead Borrower, such Pro Forma Adjustment shall not be required to be determined for any Acquired Entity or Business, the entities acquired as the result of the Coram Acquisition or Converted Restricted Subsidiary to the extent the aggregate consideration paid in connection with such acquisition was less than $20,000,000, and (B) so long as such actions are taken during such Post-Acquisition Period or such costs are incurred during such Post-Acquisition Period, as applicable, for purposes of projecting such pro forma increase or decrease to such Acquired EBITDA or such Consolidated EBITDA, as the case may be, it may be assumed that such cost savings will be realizable during the entirety of such Test Period, or such additional costs, as applicable, will be incurred during the entirety of such Test Period; provided, further, that any such pro forma increase or decrease to such Acquired EBITDA or such Consolidated EBITDA, as the case may be, shall be without duplication for cost savings or additional costs already included in such Acquired EBITDA or such Consolidated EBITDA, as the case may be, for such Test Period.

“Pro Forma Balance Sheet” has the meaning specified in Section 5.05(b).

- 43 -

“Pro Forma Basis” and “Pro Forma Effect” mean, with respect to compliance with any test hereunder, that (i) to the extent applicable, the Pro Forma Adjustment shall have been made and (ii) all Specified Transactions and the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period of measurement in such test: (A) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (1) in the case of a Disposition of all or substantially all Equity Interests in any Subsidiary of Holdings or any division, product line, or facility used for operations of Holdings or any of its Subsidiaries, shall be excluded, and (2) in the case of a Permitted Acquisition or Investment described in the definition of “Specified Transaction”, shall be included, (B) any retirement of Indebtedness, and (C) any Indebtedness incurred or assumed by Holdings, any Borrower or any of the Restricted Subsidiaries in connection therewith and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination; provided that, without limiting the application of the Pro Forma Adjustment pursuant to (i) above, the foregoing pro forma adjustments may be applied to any such test solely to the extent that such adjustments are consistent with the definition of Consolidated EBITDA and give effect to events (including, for the avoidance of doubt and without duplication, cost savings, synergies and operating expense reductions resulting from such Specified Transaction) that are (as determined by Holdings in good faith) (i) (x) directly attributable to such transaction, (y) expected to have a continuing impact on Holdings, the Borrowers and the Restricted Subsidiaries and (z) factually supportable or (ii) otherwise consistent with the definition of “Pro Forma Adjustment”.

“Pro Forma Excess Availability” means, for any date of calculation, the Average Excess Availability for 90 days prior to, and including, such date, after giving effect to the transactions occurring on such date, based on assumptions and calculations reasonably acceptable to the Administrative Agent; it being agreed that, for purposes of calculating Pro Forma Excess Availability, unless the Administrative Agent shall otherwise agree in its reasonable discretion, no Inventory or Accounts to be acquired in an Investment otherwise permitted hereunder shall be included in the Borrowing Base until the Administrative Agent shall have completed a preliminary field audit and inventory appraisal in scope and with results reasonably satisfactory to it and until the Administrative Agent shall have received duly executed Deposit Account Control Agreements with respect to the DDAs to be acquired in such Investment.

“Pro Forma Excess Availability Condition” means, for any date of calculation with respect to any Specified Payment, the condition that (i) the Pro Forma Excess Availability following, and after giving Pro Forma Effect to, such Specified Payment, will equal or exceed 20.00% of the lesser of the Aggregate Commitments and the Borrowing Base; provided that such threshold amount shall be 25.00% of the lesser of the Aggregate Commitments and the Borrowing Base with respect to any Specified Payment permitted under Section 7.06(f) or 7.06(k) and (ii) only with respect to Specified Payments permitted under Section 7.03(f), 7.06(f) or 7.06(k) or with respect to the designation of a Restricted Subsidiary as an Unrestricted Subsidiary, the Consolidated Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) will for the most recently completed Test Period ending on or prior to such date of calculation be at least 1.05 to 1.0.

“Pro Forma Financial Statements” has the meaning specified in Section 5.05(b).

“Projections” has the meaning specified in Section 6.01(iii).

“Protective Advances” has the meaning specified in Section 2.01(c).

“Public Lender” has the meaning specified in Section 6.02.

- 44 -

“Qualified Equity Interests” means any Equity Interests that are not Disqualified Equity Interests.

“Qualifying IPO” means the issuance by Holdings, any direct or indirect parent of Holdings or the Lead Borrower of its common Equity Interests in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act (whether alone or in connection with a secondary public offering).

“Real Property” means all Leases and all land, tenements, hereditaments and any estate or interest therein, together with the buildings, structures, parking areas and other improvements thereon (including all fixtures), now or hereafter owned by any Loan Party, including all easements, rights-of-way, and similar rights relating thereto and all leases, tenancies and occupancies thereof.

“Reference Date” has the meaning specified in the definition of “Available Amount”.

“Refinancing” has the meaning set forth in the preliminary statements hereto.

“Register” has the meaning specified in Section 10.06(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

“Release” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Hazardous Material in, into, onto or through the environment.

“Rent and Charges Reserve” means, with respect to the Borrowing Base, the aggregate of (i) all past due rent and other amounts owing by a Loan Party to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Eligible Inventory or could assert a Lien on any Eligible Inventory and (ii) a reserve equal to two months rent that could be payable to any such Person unless it has executed a Lien Waiver.

“Rental Inventory” means Inventory that is reflected on the ledger of the applicable Loan Party as being on rent to a patient.

“Reportable Event” means, with respect to any Plan, any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than events for which the 30-day notice period has been waived.

“Request for Credit Extension” means (i) with respect to a Borrowing, conversion or continuation of Revolving Credit Loans, a Committed Loan Notice, (ii) with respect to an L/C Credit Extension, a Letter of Credit Application and (iii) with respect to a Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders holding more than 50.00% of the sum of the (i) Total Revolving Credit Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Revolving Credit Lender for purposes of this definition) and (ii) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit

- 45 -

Commitment of, and the portion of the Total Revolving Credit Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders. A Revolving Credit Lender that is an Affiliate of Lead Borrower or any of its Subsidiaries and any Revolving Credit Loans or Revolving Credit Commitments held by any such Lender shall not be included in the calculation of “Required Lenders” for any purpose (including without limitation in any proceeding under any Debtor Relief Law).

“Requirement of Law” means, as to any Person, the Organization Documents of such Person, and any law, treaty, rule or regulation or final, non-appealable determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or to which any of its material property is subject.

“Responsible Officer” means the chief executive officer, president, vice president, chief financial officer, treasurer or assistant treasurer or other similar officer of a Loan Party and, as to any document delivered on the Closing Date, any secretary or assistant secretary of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“Restricted Cash” means when referring to cash or Cash Equivalents of the Lead Borrower or any of its Restricted Subsidiaries, that such cash or Cash Equivalents (i) appear (or would be required to appear) as “restricted” on a consolidated balance sheet of the Lead Borrower or of any such Restricted Subsidiary prepared in accordance with GAAP (unless such appearance is related to the Loan Documents or Liens created thereunder), (ii) are subject to any Lien in favor of any Person other than the Collateral Agent for the benefit of the Secured Parties or (iii) are not otherwise generally available for use by the Lead Borrower or such Restricted Subsidiary.

“Restricted Debt” has the meaning specified in Section 7.12(a).

“Restricted Debt Payments” in respect of any Restricted Debt, means any prepayments, redemptions, purchases and defeasances prior to the maturity thereof in respect of such Restricted Debt, including pursuant to any sinking fund or similar deposit.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of Holdings, the Lead Borrower or any Restricted Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Equity Interest, or on account of any return of capital to Holdings or the Borrowers’ stockholders, partners or members (or the equivalent Persons thereof).

“Restricted Subsidiary” means any Subsidiary of Holdings, or the Borrowers other than an Unrestricted Subsidiary.

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Revolving Credit Lenders pursuant to Section 2.01(a) and shall be deemed to include any Overadvance Loan and Protective Advance made hereunder.

“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its obligation to (i) make Revolving Credit Loans to the Borrowers pursuant to Section 2.01(a), (ii) purchase

- 46 -

participations in L/C Obligations and (iii) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Revolving Credit Facility” means, at any time, the aggregate amount of all Revolving Credit Lenders’ Revolving Credit Commitments at such time.

“Revolving Credit Increase Effective Date” has the meaning specified in Section 2.14(d).

“Revolving Credit Lender” means, at any time, any Lender that has a Revolving Credit Commitment or that holds Revolving Credit Loans at such time.

“Revolving Credit Loan” has the meaning specified in Section 2.01(a) and shall be deemed to include any Overadvance Loan and Protective Advance made hereunder.

“Revolving Credit Notes” means the promissory notes of the Borrowers payable to any Lender or its registered assigns, substantially in the form of Exhibit B-1 hereto, evidencing the aggregate Indebtedness of the Borrowers to such Lender resulting from Revolving Credit Loans made by such Lender to the Borrowers.

“Royalties” means all royalties, fees, expense reimbursement and other amounts payable by a Loan Party under a License.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Secured Cash Management Agreement” means any Cash Management Agreement that is entered into by and between a Loan Party and any Cash Management Bank.

“Secured Hedge Agreement” means any Swap Contract permitted under Section 7.03(g) that is entered into by and between any Loan Party or any Restricted Subsidiary and any Hedge Bank.

“Secured Parties” means (i) each Senior Credit Party, (ii) each Cash Management Bank, (iii) each Hedge Bank, (iv) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document, and (v) the successors and, subject to any limitations contained in this Agreement, assigns of each of the foregoing.

“Securities Act” means the Securities Act of 1933.

“Security Agreement” means, collectively, the Security Agreement executed by the Loan Parties substantially in the form of Exhibit G-1, together with each other security agreement supplement executed and delivered pursuant to Section 6.11.

“Security Agreement Supplement” has the meaning specified in the Security Agreement.

- 47 -

“Senior Credit Obligations” means, with respect to each Loan Party, without duplication:

(i) in the case of the Borrowers, all principal of and interest (including, without limitation, any interest which accrues after the commencement of any proceeding under any Debtor Relief Law with respect to any Borrower, whether or not allowed or allowable as a claim in any such proceeding) on any Loan or L/C Obligation under, or any Note issued pursuant to, this Agreement or any other Loan Document;

(ii) all fees, expenses, indemnification obligations and other amounts of whatever nature now or hereafter payable by such Loan Party (including, without limitation, any amounts which accrue after the commencement of any proceeding under any Debtor Relief Law with respect to such Loan Party, whether or not allowed or allowable as a claim in any such proceeding) pursuant to this Agreement or any other Loan Document;

(iii) all expenses of the Agents as to which one or more of the Agents have a right to reimbursement by such Loan Party under Section 10.04(a) of this Agreement or under any other similar provision of any other Loan Document, including, without limitation, any and all sums advanced by the Collateral Agent to preserve the Collateral or preserve its security interests in the Collateral to the extent permitted under any Loan Document or applicable Law;

(iv) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement by such Loan Party under Section 10.04(b) of this Agreement or under any other similar provision of any other Loan Document; and

(v) in the case of Holdings, any Intermediate Holding Company, the Lead Borrower and each Subsidiary Guarantor, all amounts now or hereafter payable by Holdings, any Intermediate Holding Company, the Lead Borrower or such Subsidiary Guarantor and all other obligations or liabilities now existing or hereafter arising or incurred (including, without limitation, any amounts which accrue after the commencement of any proceeding under any Debtor Relief Law with respect to Holdings, any Intermediate Holding Company, the Lead Borrower or such Subsidiary Guarantor, whether or not allowed or allowable as a claim in any such proceeding) on the part of Holdings, any Intermediate Holding Company, the Lead Borrower or such Subsidiary Guarantor pursuant to this Agreement, the Guaranty or any other Loan Document;

together in each case with all renewals, modifications, consolidations or extensions thereof.

“Senior Credit Party” means each Lender, each L/C Issuer, the Administrative Agent, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05, the Collateral Agent and each Indemnitee and their respective successors and assigns, and “Senior Credit Parties” means any two or more of them, collectively.

“Self-Pay Account” means any Account, or a portion thereof, for which a Third Party Payor is not the Account Debtor other than Accounts, or portions thereof, for which the Account Debtor is a credit card or debit card processor.

“Senior Secured Bridge Loan Agreement” means the Senior Secured Bridge Credit Agreement, dated as of the date hereof, among the Lead Borrower, as borrower thereunder, Holdings, the guarantors party thereto, Bank of America, as administrative agent and collateral agent thereunder and the other agents and lenders from time to time party thereto.

- 48 -

“Senior Secured Bridge Loan Documents” means the Senior Secured Bridge Loan Agreement and all other agreements, instruments and other documents (including collateral documents with respect thereto) pursuant to which the Senior Secured Bridge Loans have been or will be made or otherwise setting forth the terms of the Senior Secured Bridge Loans.

“Senior Secured Bridge Loans” means the senior secured bridge loans in the aggregate principal amount of up to $1,010,000,000 consisting of either or a combination of senior secured fixed rate loans and senior secured floating rate loans, in each case made pursuant to the Senior Secured Bridge Loan Agreement.

“Senior Secured Notes” means the Initial Senior Secured Notes and the Additional Senior Secured Notes.

“Senior Secured Notes Documents” means the Senior Secured Notes Indenture, the purchase agreement among the Lead Borrower, the guarantors party thereto, and the initial purchasers thereunder with respect to the Initial Senior Secured Notes, all purchase agreements with respect to the Additional Senior Secured Notes, if any, and all other agreements, instruments and other documents (including collateral documents with respect thereto) pursuant to which the Senior Secured Notes have been or will be issued or otherwise setting forth the terms of the Senior Secured Notes.

“Senior Secured Notes Indenture” means the Indenture with respect to the Senior Secured Notes among the Lead Borrower, as issuer thereunder, the guarantors party thereto and the trustee thereunder.

“Senior Secured Term Loan Agreement” means the Term Credit Agreement with respect to the Senior Secured Term Loans among the Lead Borrower, as borrower thereunder, Holdings, the guarantors party thereto, Bank of America, as administrative agent and collateral agent thereunder and the other agents and lenders from time to time party thereto.

“Senior Secured Term Loan Documents” means the Senior Secured Term Loan Agreement and all other agreements, instruments and other documents (including collateral documents with respect thereto) pursuant to which the Senior Secured Term Loans have been or will be made or otherwise setting forth the terms of the Senior Secured Term Loans.

“Senior Secured Term Loans” means the Initial Senior Secured Term Loans and the Additional Senior Secured Term Loans.

“Senior Unsecured Notes” means the senior unsecured notes of the Lead Borrower issued and sold pursuant to the Senior Unsecured Notes Documents and any exchange notes issued in exchange therefor, in each case, pursuant to the Senior Unsecured Notes Indenture.

“Senior Unsecured Notes Documents” means the Senior Unsecured Notes Indenture, all purchase agreements with respect thereto, and all other agreements, instruments and other documents pursuant to which the Senior Unsecured Notes have been or will be issued or otherwise setting forth the terms of the Senior Unsecured Notes.

“Senior Unsecured Notes Indenture” means the Indenture with respect to the Senior Unsecured Notes among the Lead Borrower, as issuer thereunder, the guarantors party thereto and the trustee thereunder.

- 49 -

“Social Security Act” means the Social Security Act as set forth in Title 42 of the United States Code, as amended, and any successor statute thereto, as interpreted by the rules and regulations issued thereunder, in each case as in effect from time to time. References to sections of the Social Security Act shall be construed also to refer to any successor sections.

“Sold Entity or Business” has the meaning specified in the definition of the term “Consolidated EBITDA”.

“Solvency Certificate” means the certificate substantially in the form of Exhibit H or any other form approved by the Administrative Agent and the Lead Borrower.

“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (i) the fair value of the property (for the avoidance of doubt, calculated to include goodwill and other intangibles) of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (ii) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (iv) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“SPC” has the meaning specified in Section 10.06(g).

“Specified Conditions” means, with respect to any Investment contemplated in the proviso at the end of Section 7.02 or any Disposition contemplated in clause (B) of the second proviso to Section 7.05(d), that (i) no Event of Default then exists or would arise as a result of the entering into such Investment or Disposition and (ii) the Pro Forma Excess Availability Condition shall have been satisfied after giving Pro Forma Effect to such Investment or Disposition. Prior to undertaking any Investment or Disposition which is subject to the Specified Conditions, the Loan Parties shall deliver to the Administrative Agent evidence reasonably satisfactory to the Administrative Agent that the conditions contained in clause (ii) of this definition have been satisfied.

“Specified Equity Contribution” means cash equity contributions (which if in the form of preferred equity shall be on terms and conditions reasonably acceptable to the Administrative Agent) made directly or indirectly to the Lead Borrower as cash equity after the Closing Date and on or prior to the day on which any Borrowing hereunder is requested when Excess Availability is less than 12.50% of the lesser of the Aggregate Commitments and the Borrowing Base, which equity contribution is added to Consolidated EBITDA for the purposes of calculating compliance with Section 6.17.

“Specified Government Accounts” means, collectively, any and all Government Accounts other than (i) Medicare Part C Accounts, (ii) Medicare Part D Accounts and (iii) any Account payable pursuant to a managed care plan, program or product funded by a Governmental Authority.

“Specified Government Receivables Deposit Account” has the meaning specified in Section 6.18.

“Specified Payments” means, with respect to any period, any Investment permitted under Section 7.02(d), (j) or (o), any Indebtedness permitted under Section 7.03(f), (h), (i) or (o), the making of

- 50 -

any Restricted Payment under Section 7.06(f) or 7.06(k) or payments under Section 7.12(a)(v) or the designation of a Restricted Subsidiary as an Unrestricted Subsidiary which Subsidiary has assets included in the calculation of the Borrowing Base immediately prior to such Subsidiaries being designated as an Unrestricted Subsidiary.

“Specified Transaction” means any Investment, Disposition, incurrence or repayment of Indebtedness, Restricted Payment, Subsidiary designation or Facility Increase that by the terms of this Agreement requires such test to be calculated on a Pro Forma Basis or after giving Pro Forma Effect.

“Sponsor” means Blackstone Capital Partners V L.P. and its Affiliates and funds or partnerships managed by them or any of their Affiliates, but not including any of their portfolio companies.

“Sponsor Management Agreements” means the management, transaction or advisory agreements between certain of the management companies associated with the Sponsor or its advisors and the Lead Borrower or any of its Subsidiaries.

“Sponsor Termination Fees” means the one time payment under any of the Sponsor Management Agreements of a termination fee to the Sponsor and its Affiliates in the event of either a Change of Control or the completion of a Qualifying IPO.

“Spot Rate” has the meaning specified in Section 1.07.

“Stark Law” means Section 1877 of the Social Security Act as set forth at Section 1395nn of Title 42 of the United States Code, as amended, and any successor statute thereto, as interpreted by the rules and regulations issued thereunder, in each case as in effect from time to time.

“Stated Amount” means at any time the maximum amount for which a Letter of Credit may be honored.

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrowers.

“Subsidiary Guarantor” means, collectively, the Borrowers (other than the Lead Borrower) and the Subsidiaries of the Borrowers that are Guarantors.

“Successor Loan Party” has the meaning specified in Section 7.04(d).

“Supermajority Lenders” means, as of any date of determination, Lenders holding more than 66- ²/3% of the sum of the (i) Total Revolving Credit Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Revolving Credit Lender for purposes of this definition) and (ii) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Revolving Credit Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Supermajority Lenders.

- 51 -

“Swap Contract” means (i) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (ii) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Obligations” of any Person means all obligations (including, without limitation, any amounts which accrue after the commencement of any bankruptcy or insolvency proceeding with respect to such Person, whether or not allowed or allowable as a claim under any proceeding under any Debtor Relief Law) of such Person in respect of any Swap Contract, excluding any amounts which such Person is entitled to set-off against its obligations under applicable Law.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (i) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (ii) for any date prior to the date referenced in clause (i), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined by the Hedge Bank in accordance with the terms thereof and in accordance with customary methods for calculating mark-to-market values under similar arrangements by the Hedge Bank.

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

“Swing Line Lender” means Bank of America, in its capacity as lender of Swing Line Loans hereunder to the Borrowers hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04.

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b) which, if in writing, shall be substantially in the form of Exhibit A-2.

“Swing Line Loan Sublimit” means an amount equal to the lesser of (i) $15,000,000 and (ii) the Revolving Credit Facility. The Swing Line Loan Sublimit is part of, and not in addition to, the Revolving Credit Facility.

“Swing Line Note” means the promissory notes of the Borrowers payable to any Lender or its registered assigns, substantially in the form of Exhibit B-2 hereto, evidencing the aggregate Indebtedness of the Borrowers to such Swing Line Lender resulting from Swing Line Loans made by such Swing Line Lender to the Borrowers.

- 52 -

“Syndication Agents” means, collectively, Wachovia Bank, National Association and Barclays Capital, the investment banking division of Barclays Bank PLC, each as a Syndication Agent under this Agreement.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, remittances, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term Debt Documents” means the Senior Secured Bridge Loan Documents, the Senior Secured Term Loan Documents, the Senior Secured Notes Documents and the Senior Unsecured Notes Documents.

“Term Debt Obligations” means, collectively, the Senior Secured Bridge Loans, the Senior Secured Term Loans, the Senior Secured Notes and the Senior Unsecured Notes.

“Term Debt Secured Documents” means the Term Debt Documents exclusive of the Senior Unsecured Notes Documents.

“Term Debt Secured Obligations” means the Term Debt Obligations exclusive of the Senior Unsecured Notes.

“Test Period” in effect at any time means the most recent period of four consecutive fiscal quarters or twelve consecutive fiscal months of Holdings, as applicable, ended on or prior to such time (taken as one accounting period) in respect of which financial statements for each fiscal year, quarter or month in such period have been or are required to be delivered pursuant to Section 6.01(i), (ii) or (vi), respectively. A Test Period may be designated by reference to the last day thereof (i.e., “the March 31, 2009 Test Period” refers to the period of four consecutive fiscal quarters of Holdings ended March 31, 2009), and a Test Period shall be deemed to end on the last day thereof.

“Third Party Payor” means any governmental entity, insurance company, health maintenance organization, professional provider organization or similar entity that is obligated to make payments on any Account.

“Threshold Amount” means $30,000,000.

“Total Assets” means the total assets of Holdings, the Lead Borrower and the Restricted Subsidiaries on a consolidated basis, as shown on the most recent balance sheet of Holdings delivered pursuant to Section 6.01(i) or (ii) or, for the period prior to the time any such statements are so delivered pursuant to Section 6.01(i) or (ii), the Pro Forma Balance Sheet.

“Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of all Revolving Credit Loans, Swing Line Loans and L/C Obligations.

“Transaction Expenses” means any fees or expenses incurred or paid by the Sponsor, Holdings, the Lead Borrower or any Restricted Subsidiary in connection with the Transactions and the transactions contemplated thereby.

“Transactions” means, collectively, (i) the Equity Contribution, (ii) the Merger, (iii) the Refinancing, (iv) the funding, if any, of the Revolving Credit Loans, (v) the funding of the Senior Secured Bridge Loans and (vi) the payment of the fees and expenses incurred in connection with any of the foregoing.

- 53 -

“TRICARE” means the United States Department of Defense health care program for service families, including but not limited to, TRICARE PRIME, TRICARE EXTRA, and TRICARE STANDARD and any successor and predecessor thereof.

“TRICARE Account” means an Account payable pursuant to TRICARE.

“Type” means, with respect to any Loan or Borrowing, its character as a Base Rate Loan or a Eurodollar Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“Unaudited Financial Statements” has the meaning specified in Section 4.01(e).

“Uncontrolled Cash” means an amount equal to the lesser of (a) the sum of $5,000,000 plus all Restricted Cash then held by the Loan Parties which was received in the ordinary course of business, and (b) $15,000,000.

“Unfinanced Capital Expenditures” means, with respect to any Person and for any period, Capital Expenditures made by such Person during such period and not financed from the proceeds of Indebtedness (other than with the proceeds of Credit Extensions), Permitted Equity Issuances, Casualty Events or Dispositions.

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“Unrestricted Subsidiaries” means (i) each Subsidiary of Holdings listed on Schedule 1.01C and (ii) any Subsidiary of Holdings (other than the Borrowers) designated by the board of directors of Holdings as an Unrestricted Subsidiary pursuant to Section 7.15 subsequent to the Closing Date and any Subsidiary of an Unrestricted Subsidiary.

“USA PATRIOT Act” has the meaning specified in Section 10.19.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (i) the sum of the products obtained by multiplying (A) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (B) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (ii) the then outstanding principal amount of such Indebtedness.

“wholly owned” means, with respect to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (x) director’s qualifying shares and (y) shares issued to foreign nationals to the extent required by applicable Law) are owned by such Person and/or by one or more wholly owned Subsidiaries of such Person.

- 54 -

“Withdrawal Liability” means the liability of a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

Section 1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such Law and any reference to any law or regulation shall, unless otherwise specified, refer to such Law or regulation as amended, modified or supplemented from time to time and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through means “to and including.”

(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

Section 1.03 Accounting Terms and Determinations.

(a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP or in the application thereof would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Lead Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Lead Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall

- 55 -

continue to be computed in accordance with GAAP prior to such change therein and (ii) the Lead Borrower shall provide to the Administrative Agent and the Lenders financial statements and any other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

(c) Computation of Certain Financial Covenants. Unless otherwise specified herein, all defined financial terms (and all other definitions used to determine such terms) shall be to those determined and computed in respect of Holdings and its Subsidiaries.

Section 1.04 Rounding. Any financial ratios required to be maintained or satisfied by Holdings or any of its respective Subsidiaries pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

Section 1.05 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

Section 1.06 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

Section 1.07 Currency Equivalents Generally. Any amount specified in this Agreement (other than in Articles II, IX and X) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this Section 1.07, the “Spot Rate” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date of such determination; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

Section 2.01 The Loans.

(a) The Revolving Credit Borrowings. Subject to the terms and conditions set forth herein, each Revolving Credit Lender severally agrees to make loans (each such loan, a “Revolving Credit Loan”) to the Borrowers from time to time, on any Business Day during the Availability Period, in an aggregate principal amount not to exceed at any time outstanding the amount of such Revolving Credit Lender’s Revolving Credit Commitment; provided, however: (i) that the amount of Revolving Credit Loans made on the Closing Date shall not exceed $30,000,000; (ii) that in no event shall Excess

- 56 -

Availability on the Closing Date (and after giving effect to all Credit Extensions to be made on the Closing Date) be less than $75,000,000; and (iii) that after giving effect to any Revolving Credit Borrowing, (A) the Total Revolving Credit Outstandings shall not exceed the lesser of (x) the Revolving Credit Facility, and (y) the Borrowing Base at such time and (B) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Credit Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment. Within the limits of each Revolving Credit Lender’s Revolving Credit Commitment, and subject to the other terms and conditions hereof, the Lead Borrower may borrow under this Section 2.01(a), prepay under Section 2.05, and reborrow under this Section 2.01(a). Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

(b) Overadvances. If the aggregate Outstanding Amount of the Revolving Credit Loans exceeds the Borrowing Base (“Overadvance”) at any time, the excess amount shall be payable by the Borrowers on demand by the Administrative Agent, but all such excess Revolving Credit Loans shall nevertheless constitute Senior Credit Obligations secured by the Collateral and entitled to all benefits of the Loan Documents. Unless its authority has been revoked in writing by Required Lenders, the Administrative Agent may require the Revolving Credit Lenders to honor (pro rata in accordance with their Applicable Adjusted Percentages) requests for Overadvance Loans and forbear from requiring the Borrowers to cure an Overadvance, when no other Event of Default is known to the Administrative Agent, as long as (i) the Overadvance does not continue for more than 45 consecutive days (and no Overadvance may exist for at least five consecutive days thereafter before further Overadvance Loans are required), and (ii) the Overadvance is not known by the Administrative Agent to exceed, when taken together with all Protective Advances, the lesser of (x) $15,000,000 and (y) an amount equal to 10.00% of the Borrowing Base. In no event shall Overadvance Loans be required that would cause the (A) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Applicable Adjusted Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Credit Lender’s Applicable Adjusted Percentage of the Outstanding Amount of all Swing Line Loans to exceed such Revolving Credit Lender’s Revolving Credit Commitment or (B) the Total Revolving Credit Outstandings to exceed (x) the Revolving Credit Facility minus (y) the Availability Reserve in the Administrative Agent’s Credit Judgment at such time. Any funding of an Overadvance Loan or sufferance of an Overadvance shall not constitute a waiver by the Administrative Agent or the Revolving Credit Lenders of the Event of Default caused thereby. In no event shall any Borrower or other Loan Party be deemed a beneficiary of this Section 2.01(b) or authorized to enforce any of its terms. At the Administrative Agent’s discretion, Overadvance Loans made under this Section 2.01(b) may be made in the form of Swing Line Loans in accordance with Section 2.04.

(c) Protective Advances. The Administrative Agent shall be authorized, in its discretion, at any time that any conditions in Section 4.02 are not satisfied, to make Revolving Credit Loans (any such Revolving Credit Loans made pursuant to this Section 2.01(c), “Protective Advances”) (a) up to an aggregate amount not to exceed, when taken together with all Overadvances, the lesser of (x) $15,000,000 and (y) 10.00% of the Borrowing Base outstanding at any time, if the Administrative Agent reasonably deems such Loans necessary or desirable to preserve or protect Collateral, or to enhance the collectibility or repayment of Senior Credit Obligations; or (b) to pay any other amounts chargeable to Loan Parties under any Loan Documents, including costs, fees and expenses. Protective Advances shall constitute Senior Credit Obligations secured by the Collateral and shall be entitled to all of the benefits of the Loan Documents. Immediately upon the making of a Protective Advance, each applicable Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Administrative Agent a risk participation in such Protective Advance in an amount equal to the

- 57 -

product of such applicable Revolving Credit Lender’s Applicable Adjusted Percentage times the amount of such Protective Advance. The Supermajority Lenders may at any time revoke the Administrative Agent’s authority to make further Protective Advances by written notice to the Administrative Agent. Absent such revocation, the Administrative Agent’s determination that funding of a Protective Advance is appropriate shall be conclusive. In no event shall Protective Advances cause the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Applicable Adjusted Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Credit Lender’s Applicable Adjusted Percentage of the Outstanding Amount of all Swing Line Loans to exceed such Revolving Credit Lender’s Revolving Credit Commitment.

Section 2.02 Borrowings, Conversions and Continuations of Loans.

(a) Each Revolving Credit Borrowing, each conversion of Revolving Credit Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Lead Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 2:00 p.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans (but with respect to the initial Credit Extension, one business day prior to the requested date of any Borrowing of Base Rate Loans); provided, however, that if the Lead Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period”, the applicable notice must be received by the Administrative Agent not later than 2:00 p.m. four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Revolving Credit Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Lead Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Revolving Credit Lenders. Each telephonic notice by the Lead Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Lead Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $2,500,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Lead Borrower is requesting a Revolving Credit Borrowing, a conversion of Revolving Credit Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Revolving Credit Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Lead Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Lead Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Revolving Credit Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Lead Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a Eurodollar Rate Loan.

- 58 -

(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Revolving Credit Lender of the amount of its Applicable Percentage under the Revolving Credit Facility of the applicable Revolving Credit Loans, and if no timely notice of a conversion or continuation is provided by the Lead Borrower, the Administrative Agent shall notify each Revolving Credit Lender of the details of any automatic conversion to Base Rate Loans described in Section 2.02(a). In the case of a Revolving Credit Borrowing, each Revolving Credit Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Lead Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Lead Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Lead Borrower; provided, however, that if, on the date a Committed Loan Notice with respect to a Revolving Credit Borrowing is given by the Lead Borrower, there are L/C Borrowings outstanding, then the proceeds of such Revolving Credit Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to the Lead Borrower as provided above.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.

(d) The Administrative Agent shall promptly notify the Lead Borrower and the Revolving Credit Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Lead Borrower and the Revolving Credit Lenders of any change in Bank of America’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

(e) After giving effect to all Revolving Credit Borrowings, all conversions of Revolving Credit Loans from one Type to the other, and all continuations of Revolving Credit Loans as the same Type, there shall not be more than seven Interest Periods in effect in respect of the Revolving Credit Facility.

(f) Anything in this Section 2.02 to the contrary notwithstanding, the Lead Borrower may not select (i) Eurodollar Rate Loans for the initial Credit Extension or (ii) Interest Periods for Eurodollar Rate Loans that have a duration of more than one month prior to the 91^st day after the Closing Date (or such earlier date as may be specified by the Administrative Agent in a notice to the Lead Borrower and the Lenders).

Section 2.03 Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Lead Borrower or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance

- 59 -

with Section 2.03(b), and (2) to honor drawings under the Letters of Credit; and (B) the Revolving Credit Lenders severally agree to participate in Letters of Credit issued for the account of the Lead Borrower or its Subsidiaries and any drawings thereunder (pro rata in accordance with the Applicable Adjusted Percentage); provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Revolving Credit Outstandings shall not exceed the lesser of (I) the Revolving Credit Facility, and (II) the Borrowing Base at such time, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Applicable Adjusted Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Credit Lender’s Applicable Adjusted Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Lead Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Lead Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Lead Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Lead Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.

(ii) No L/C Issuer shall issue any Letter of Credit if:

(A) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or

(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Revolving Credit Lenders (excluding Defaulting Lenders) and such L/C Issuer have approved such expiry date.

(iii) No L/C Issuer shall be under any obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law, but if not having the force of law, then being one with which the L/C Issuer would customarily comply) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer applicable to letters of credit generally;

- 60 -

(C) except as otherwise agreed by the Administrative Agent and the applicable L/C Issuer, such Letter of Credit is in an initial stated amount less than $25,000, in the case of a commercial Letter of Credit, or $250,000, in the case of a standby Letter of Credit;

(D) such Letter of Credit is to be denominated in a currency other than Dollars; or

(E) a default of any Revolving Credit Lender’s obligations to fund under Section 2.03(c) exists or any Revolving Credit Lender is at such time a Defaulting Lender hereunder, unless the applicable L/C Issuer has entered into satisfactory arrangements with the Lead Borrower or such Revolving Credit Lender to eliminate such L/C Issuer’s risk with respect to such Revolving Credit Lender.

(iv) The applicable L/C Issuer shall not amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

(v) The applicable L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(vi) Each L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and such L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included such L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to such L/C Issuer.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Lead Borrower delivered to the applicable L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Lead Borrower. Such Letter of Credit Application must be received by such L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and such L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the applicable L/C Issuer may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application

- 61 -

shall specify in form and detail satisfactory to the applicable L/C Issuer: (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the applicable L/C Issuer may reasonably require. Additionally, the Lead Borrower shall furnish to the applicable L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the applicable L/C Issuer or the Administrative Agent may reasonably require.

(ii) Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Lead Borrower and, if not, the applicable L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the applicable L/C Issuer has received written notice from any Revolving Credit Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Lead Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the applicable L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Credit Lender’s Applicable Adjusted Percentage times the amount of such Letter of Credit.

(iii) If the Lead Borrower so requests in any applicable Letter of Credit Application, the applicable L/C Issuer may, in its sole and absolute discretion, agree that a Letter of Credit shall automatically be extended for one or more additional successive periods not to exceed twelve months each, unless the applicable L/C Issuer, in its sole and absolute discretion, elects not to extend for any such additional periods (each, an “Auto-Extension Letter of Credit”). Unless otherwise directed by the applicable L/C Issuer, the Lead Borrower shall not be required to make a specific request to the applicable L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Revolving Credit Lenders shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that no L/C Issuer shall permit any such extension if (A) such L/C Issuer has determined that it would not be permitted, or would have no obligation at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Revolving Credit Lender or the Lead Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the applicable L/C Issuer not to permit such extension.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the Lead Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

- 62 -

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable L/C Issuer shall notify the Lead Borrower and the Administrative Agent thereof. Not later than the later of (A) 11:00 a.m. on the date of any payment by the applicable L/C Issuer under a Letter of Credit (each such date, an “Honor Date”) or (B) 11:00 a.m. on the Business Day immediately following the date that notice is given pursuant to the immediately preceding sentence, the Lead Borrower shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Lead Borrower fails to so reimburse the applicable L/C Issuer by such time, such L/C Issuer shall notify the Administrative Agent who shall promptly notify each Revolving Credit Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Revolving Credit Lender’s Applicable Adjusted Percentage thereof. In such event, the Lead Borrower shall be deemed to have requested a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Revolving Credit Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given by an L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii) Each Revolving Credit Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the applicable L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Adjusted Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Lead Borrower in such amount. The Administrative Agent shall remit the funds so received to the applicable L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Lead Borrower shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Revolving Credit Lender’s payment to the Administrative Agent for the account of the applicable L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Revolving Credit Lender in satisfaction of its participation obligation under this Section 2.03.

(iv) Until each Revolving Credit Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Revolving Credit Lender’s Applicable Adjusted Percentage of such amount shall be solely for the account of such L/C Issuer.

(v) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse the applicable L/C Issuer for amounts drawn under Letters

- 63 -

of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Revolving Credit Lender may have against the applicable L/C Issuer, the Lead Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Lead Borrower of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Lead Borrower to reimburse the applicable L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.

(vi) If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of any L/C Issuer any amount required to be paid by such Revolving Credit Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), the applicable L/C Issuer shall be entitled to recover from such Revolving Credit Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by such L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by such L/C Issuer in connection with the foregoing. If such Revolving Credit Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Revolving Credit Lender’s Revolving Credit Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the applicable L/C Issuer submitted to any Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.

(d) Repayment of Participations.

(i) At any time after an L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit Lender such Revolving Credit Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of such L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Lead Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Revolving Credit Lender its Applicable Percentage thereof in the same funds as those received by the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of the applicable L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by such L/C Issuer in its discretion), each Revolving Credit Lender shall pay to the Administrative Agent for the account of such L/C Issuer its Applicable Adjusted Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Revolving Credit Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Revolving Credit Lenders under this clause (ii) shall survive the payment in full of the Senior Credit Obligations and the termination of this Agreement.

- 64 -

(e) Obligations Absolute. The obligation of the Lead Borrower to reimburse each L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right that the Lead Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the applicable L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv) any payment by the applicable L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Lead Borrower or any of its Subsidiaries; provided that the Lead Borrower shall not be obligated to reimburse the applicable L/C Issuer for any wrongful payment made by such L/C Issuer as a result of acts or omissions constituting willful misconduct or gross negligence on the part of such L/C Issuer.

The Lead Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Lead Borrower’s instructions or other irregularity, the Lead Borrower will immediately notify the applicable L/C Issuer.

(f) Role of L/C Issuers. Each Revolving Credit Lender and the Lead Borrower agree that, in paying any drawing under a Letter of Credit, no L/C Issuer shall have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of any L/C Issuer shall be liable to any Revolving Credit Lender for: (i) any action taken or omitted in connection herewith at the request or with the approval of the Revolving Credit Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to

- 65 -

any Letter of Credit or Issuer Document. The Borrowers hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrowers’ pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of any L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Lead Borrower may have a claim against an L/C Issuer, and such L/C Issuer may be liable to the Lead Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrowers which the Lead Borrower proves were caused by such L/C Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, any L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and such L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

(g) Cash Collateral. Upon the request of the Administrative Agent, if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Lead Borrower shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations. Sections 2.05 and 8.02(iii) set forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this Section 2.03, Section 2.05 and Section 8.02(iii), “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the applicable L/C Issuer and the Revolving Credit Lenders, as collateral for the applicable L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and such L/C Issuer (which documents are hereby consented to by the Revolving Credit Lenders). Derivatives of such term have corresponding meanings. The Borrowers hereby grant to the Administrative Agent, for the benefit of each L/C Issuer and the Revolving Credit Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. If at any time the Administrative Agent reasonably determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the Lead Borrower will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such aggregate Outstanding Amount over (y) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Laws, to reimburse the applicable L/C Issuer.

(h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the applicable L/C Issuer and the Lead Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance, shall apply to each commercial Letter of Credit.

- 66 -

(i) Letter of Credit Fees. The Lead Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Applicable Adjusted Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Rate times the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. Letter of Credit Fees shall be (i) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each standby Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

(j) Fronting Fee and Documentary and Processing Charges to L/C Issuers. The Lead Borrower shall pay directly to each L/C Issuer for its own account a fronting fee with respect to each Letter of Credit, at the rate per annum equal to 0.125%, computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. In addition, the Lead Borrower shall pay directly to each L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(k) Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Lead Borrower shall be obligated to reimburse each L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Lead Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Lead Borrower, and that the Lead Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

(m) Reporting. Each L/C Issuer will report in writing to the Administrative Agent (i) on the first Business Day of each week, the aggregate face amount of Letters of Credit issued by it and outstanding as of the last Business Day of the preceding week, (ii) on or prior to each Business Day on which such L/C Issuer expects to issue, amend, renew or extend any Letter of Credit, the date of such issuance or amendment, and the aggregate face amount of Letters of Credit to be issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension (and such L/C Issuer shall advise the Administrative Agent on such Business Day whether such issuance, amendment, renewal or extension occurred and whether the amount thereof changed), (iii) on each Business Day on which such L/C Issuer makes any L/C Advance, the date and amount of such L/C Advance and (iv) on any Business Day on which the Borrower fails to reimburse an L/C Advance required to be reimbursed to such L/C Issuer on such day, the date and amount of such failure.

- 67 -

Section 2.04 Swing Line Loans.

(a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line Lender may, in its sole and absolute discretion and in reliance upon the agreements of the other Lenders set forth in this Section 2.04, make loans (each such loan, a “Swing Line Loan”) to the Lead Borrower from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Loan Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Adjusted Percentage of the Outstanding Amount of Revolving Credit Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Revolving Credit Commitment; provided, however, that after giving effect to any Swing Line Loan (other than Overadvance Loans and Protective Advances), (i) the Total Revolving Credit Outstandings shall not exceed the lesser of (x) the Revolving Credit Facility and (y) the Borrowing Base at such time and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender at such time, plus such Revolving Credit Lender’s Applicable Adjusted Percentage of the Outstanding Amount of all L/C Obligations at such time, plus such Revolving Credit Lender’s Applicable Adjusted Percentage of the Outstanding Amount of all Swing Line Loans at such time shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment; provided that the Lead Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Lead Borrower may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall bear interest only at a rate based on the Base Rate. Immediately upon the making of a Swing Line Loan, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Credit Lender’s Applicable Adjusted Percentage times the amount of such Swing Line Loan.

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Lead Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 2:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Lead Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. If the Swing Line Lender determines, acting in its sole and absolute discretion, that it shall make such requested Swing Line Loan to the Lead Borrower in accordance with the Swing Line Loan Notice, and unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Credit Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Lead Borrower at its office by crediting the account of the Lead Borrower on the books of the Swing Line Lender in immediately available funds; provided that failure by the Swing Line Lender to make the amount of the Swing Line Loan available to the Lead Borrower in accordance with this Section 2.04 shall be deemed to be confirmation that the Swing Line Lender determined, acting in its sole and absolute discretion, not to make such Swing Line Loan.

- 68 -

(c) Refinancing of Swing Line Loans.

(i) The Swing Line Lender at any time (but no less frequently than once a week) in its sole and absolute discretion may request, on behalf of the Lead Borrower (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Revolving Credit Lender make a Base Rate Loan in an amount equal to such Revolving Credit Lender’s Applicable Adjusted Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Revolving Credit Facility and the conditions set forth in Section 4.02. The Swing Line Lender shall furnish the Lead Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Credit Lender shall make an amount equal to its Applicable Adjusted Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Lead Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Credit Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Credit Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii) If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Revolving Credit Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Revolving Credit Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. If such Revolving Credit Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Revolving Credit Lender’s Revolving Credit Loan included in the relevant Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Revolving

- 69 -

Credit Lender may have against the Swing Line Lender, the Lead Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02.

(d) Repayment of Participations.

(i) At any time after any Revolving Credit Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Credit Lender its Applicable Percentage thereof in the same funds as those received by the Swing Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Credit Lender shall pay to the Swing Line Lender its Applicable Adjusted Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Revolving Credit Lenders under this clause shall survive the payment in full of the Senior Credit Obligations and the termination of this Agreement.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Lead Borrower for interest on the Swing Line Loans. Until each Revolving Credit Lender funds its Base Rate Loan or risk participation pursuant to this Section 2.04 to refinance such Revolving Credit Lender’s Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Lead Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender. At any time a Swing Line Loan is outstanding and the Lead Borrower requests a Revolving Credit Borrowing, the Administrative Agent may require the Lead Borrower to (i) utilize a portion of the requested Revolving Credit Borrowing in an amount of such outstanding Swing Line Loan to repay such Swing Line Loan or (ii) at the Lead Borrower’s option, but subject to compliance with Section 2.01, to increase the amount of the requested Revolving Credit Borrowing by up to an amount of such outstanding Swing Line Loan and utilize such increase to repay such Swing Line Loan. The Administrative Agent shall apply the relevant portion of the requested Revolving Credit Borrowing to repayment of such Swing Line Loan as specified above.

Section 2.05 Prepayments.

(a) Optional.

(i) Subject to the last sentence of this Section 2.05(a)(i), the Borrowers may, upon notice by the Lead Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Credit Loans in whole or in part without premium or penalty; provided that: (A) such notice must be received by the Administrative Agent not later than 2:00 p.m. (1) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and

- 70 -

(2) on the date of prepayment of Base Rate Loans; (B) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (C) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Revolving Credit Lender of its receipt of each such notice and of the amount of such Revolving Credit Lender’s ratable portion of such prepayment (based on such Revolving Credit Lender’s Applicable Percentage in respect of the Revolving Credit Facility). Each such notice shall be revocable subject to Section 3.05. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05.

(ii) The Borrowers may, upon notice by the Lead Borrower to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (B) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. Each such notice shall be revocable subject to Section 3.05.

(b) Mandatory.

(i) Excess Outstandings. If for any reason the Total Revolving Credit Outstandings at any time exceed the lesser of (x) the Borrowing Base at such time (except as a result of Overadvance Loans or Protective Advances permitted under Sections 2.01(b) and (c)) and (y) the Revolving Credit Facility at such time, the Borrowers shall promptly prepay their respective Revolving Credit Loans, Swing Line Loans and L/C Borrowings and/or Cash Collateralize their respective L/C Obligations (other than the L/C Borrowings) in an aggregate amount equal to such excess.

(ii) Application to Revolving Credit Facility. Subject to Section 2.12(b), prepayments of the Revolving Credit Facility made pursuant to this Section 2.05(b), first, shall be applied ratably to pay accrued and unpaid interest in respect of the outstanding L/C Borrowings and the outstanding Swing Line Loans, Overadvance Loans and Protective Advances then being prepaid, second, shall be applied ratably to prepay the principal of any outstanding L/C Borrowing and any outstanding Swing Line Loans, Overadvance Loans and Protective Advances, if any, third, shall be applied ratably to the outstanding Revolving Credit Loans (other than Overadvance Loans and Protective Advances), and, fourth, shall be used to Cash Collateralize the remaining L/C Obligations; and the amount remaining, if any, after the prepayment in full of all L/C Borrowings, Swing Line Loans and Revolving Credit Loans outstanding at such time and the Cash Collateralization of the remaining L/C Obligations in full may be retained by the Lead Borrower for use in the ordinary course of its business; provided that, upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from any Borrower or any other Loan Party) to reimburse the applicable L/C Issuer or the applicable Revolving Credit Lenders, as applicable.

- 71 -

Section 2.06 Termination or Reduction of Commitments.

(a) Optional. The Lead Borrower may, upon notice to the Administrative Agent, terminate the Revolving Credit Facility, the Letter of Credit Sublimit or the Swing Line Loan Sublimit, or from time to time permanently reduce the Revolving Credit Facility, the Letter of Credit Sublimit or the Swing Line Loan Sublimit; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof and (iii) the Lead Borrower shall not terminate or reduce (A) the Revolving Credit Facility if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Credit Outstandings would exceed the Revolving Credit Facility, (B) the Letter of Credit Sublimit if, after giving effect thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder would exceed the Letter of Credit Sublimit, or (C) the Swing Line Loan Sublimit if, after giving effect thereto and to any concurrent prepayments hereunder, the Outstanding Amount of Swing Line Loans would exceed the Swing Line Loan Sublimit.

(b) Mandatory. If, after giving effect to any reduction or termination of Revolving Credit Commitments under this Section 2.06, the Letter of Credit Sublimit or the Swing Line Loan Sublimit exceeds the Revolving Credit Facility at such time, the Letter of Credit Sublimit or the Swing Line Loan Sublimit, as the case may be, shall be automatically reduced by the amount of such excess.

(c) Application of Commitment Reductions; Payment of Fees. The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Letter of Credit Sublimit, Swing Line Loan Sublimit or the Revolving Credit Commitment under this Section 2.06. Upon any reduction of the Revolving Credit Commitments, the Revolving Credit Commitment of each Revolving Credit Lender shall be reduced by such Revolving Credit Lender’s Applicable Percentage of such reduction amount. All fees in respect of the Revolving Credit Facility accrued until the effective date of any termination of the Revolving Credit Facility shall be paid on the effective date of such termination.

Section 2.07 Repayment of Loans.

(a) Revolving Credit Loans. The Borrowers shall repay to the Revolving Credit Lenders on the Maturity Date the aggregate principal amount of all Revolving Credit Loans outstanding on such date.

(b) Swing Line Loans. The Borrowers shall repay each Swing Line Loan on the earlier to occur of (i) the date ten Business Days after such Loan is made and (ii) the Maturity Date.

Section 2.08 Interest.

(a) Stated Interest. Subject to the provisions of Section 2.08(b): (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to Adjusted Eurodollar Rate for such Interest Period plus the Applicable Rate for such Eurodollar Rate Loans; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing or conversion date at a rate per annum equal to the greater of (A) the Base Rate plus the Applicable Rate for such Base Rate Loans and (B) the Base Rate Loan Floor Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the greater of (A) the Base Rate plus the Applicable Rate for Base Rate Loans and (B) the Base Rate Loan Floor Rate.

- 72 -

(b) Default Interest.

(i) If any amount of principal of any Loan (other than Loans of a Defaulting Lender) is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii) If any amount (other than principal of any Loan) payable by the Borrowers under any Loan Document is not paid when due (without regard to any applicable grace periods) (other than to Defaulting Lenders), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iii) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

(c) Payments of Interest. Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

Section 2.09 Fees. In addition to certain fees described in Sections 2.03(i) and (j):

(a) Commitment Fee. The Lead Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender (other than to any Defaulting Lender for any period during which it is a Defaulting Lender) in accordance with its Applicable Percentage, a commitment fee equal to the Applicable Fee Rate times the actual daily amount by which the Revolving Credit Facility exceeds the sum of (i) the Outstanding Amount of Revolving Credit Loans and (ii) the Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Fee Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Fee Rate separately for each period during such quarter that such Applicable Fee Rate was in effect.

(b) Other Fees.

(i) The Lead Borrower shall pay to the Bookrunners and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(ii) The Lead Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

- 73 -

Section 2.10 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate and Applicable Fee Rate.

(a) All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(b) If, as a result of any restatement of or other adjustment to the financial statements of any Loan Party or for any other reason, the Lead Borrower, Holdings, the Administrative Agent or the Required Lenders determine that (i) the Average Excess Availability as calculated by the Lead Borrower or Holdings as of any applicable date was inaccurate and (ii) a proper calculation of the Average Excess Availability would have resulted in higher pricing for such period, the Lead Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders or the L/C Issuers, as the case may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Lead Borrower under the Debtor Relief Laws, automatically and without further action by the Administrative Agent, any Lender or any L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or any L/C Issuer, as the case may be, under Section 2.03(c)(iii), 2.03(i) or 2.08(b) or under Article VIII. The Lead Borrower’s obligations under this paragraph shall survive the termination of the Aggregate Commitments and the repayment of all other Senior Credit Obligations hereunder.

Section 2.11 Evidence of Debt.

(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained in good faith by the Administrative Agent and each Lender shall be prima facie evidence absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Senior Credit Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Lead Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

(b) In addition to the accounts and records referred to in Section 2.11(a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

- 74 -

Section 2.12 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided for herein, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender, subject to clause (b) below, its Applicable Percentage in respect of the Revolving Credit Facility (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrowers shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be. For purposes of this Agreement, “Applicable Adjusted Percentage” means, with respect to any Revolving Credit Lender at any time, its percentage of the Revolving Credit Facility computed as set forth in the definition of “Applicable Percentage” but with reference only to the Revolving Credit Commitments of all Non-Defaulting Lenders at such time. Absent the existence of one or more Defaulting Lenders at any time of determination, the Applicable Adjusted Percentage of each Revolving Credit Lender shall equal its Applicable Percentage. The Applicable Adjusted Percentage of each Revolving Credit Lender shall adjust automatically whenever a Lender Default occurs or ceases to exist.

(b) Funding and Payments; Presumptions.

(i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrowers, the interest rate applicable to Base Rate Loans. If the Borrowers and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Lead Borrower the amount of such interest paid by the Borrowers for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s

- 75 -

Loan included in such Borrowing. Any payment by the Borrowers shall be without prejudice to any claim the Borrowers may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(ii) Failed Loans. If any Revolving Credit Lender shall fail to make any Loan (a “Failed Loan”) which such Revolving Credit Lender is otherwise obligated hereunder to make to the Borrowers on the date of Borrowing thereof, and the Administrative Agent shall not have received notice from the Lead Borrower or such Lender that any condition precedent to the making of the Failed Loan has not been satisfied, then, until such Revolving Credit Lender shall have made or be deemed to have made (pursuant to the last sentence of this subsection (b)(ii)) the Failed Loan in full or the Administrative Agent shall have received notice from the Lead Borrower or such Revolving Credit Lender that any condition precedent to the making of the Failed Loan was not satisfied at the time the Failed Loan was to have been made, whenever the Administrative Agent shall receive any amount from or for the account of the Borrowers on account of any Borrowing of the Revolving Credit Loans, (i) the amount so received will, upon receipt by the Administrative Agent, be distributed in the following order of priority: First, to the Revolving Credit Lenders on account of the Revolving Credit Loans made by them as part of the Borrowing that would have included the Failed Loan had the relevant Revolving Credit Lender not failed to fund its Failed Loan, ratably among such Revolving Credit Lenders in accordance with the respective Revolving Credit Loans made by them as part of such Borrowing, Second, to all other Revolving Credit Loans made by the Revolving Credit Lenders other than the Defaulting Lenders, ratably among such Revolving Credit Lenders in accordance with the respective Revolving Credit Loans made by them, and Third, to the Revolving Credit Loans made by the Defaulting Lenders; provided, however, that with respect to any voluntary prepayment of the Revolving Credit Loans, unless the application of such voluntary prepayment according to the order of payments specified above would not result in any Borrower becoming subject to compensation requirements pursuant to Section 3.05, the Lead Borrower may specifically designate in its prepayment notice delivered in accordance with the terms hereof that the amount received by the Administrative Agent as the result of such voluntary prepayment shall be applied to an outstanding Borrowing that does not include a Failed Loan, in which case such amount shall be applied to such prior Borrowing.

(iii) Defaulted Amounts. If any Revolving Credit Lender shall fail to make any payment (the “Defaulted Amount”) to any Agent, any L/C Issuer, the Swing Line Lender or any other Lender, whether an account of a risk participation in Overadvance Loans, Protective Advances, Swing Line Loans, Letters of Credit or otherwise, whenever the Administrative Agent shall receive any amount from or for the account of the Borrowers for the account of such Revolving Credit Lender (other than as described in clause (ii) of this Section 2.12(b)), the amount so received will, upon receipt by the Administrative Agent, be distributed in the following order of priority: First, the Agents for any Defaulted Amounts then owing to them (other than on account of any Overadvance Loans and Protective Advances), in their capacities as such, ratably in accordance with such respective Defaulted Amounts then owing to the Agents, Second, to the Administrative Agent (on account of any outstanding Overadvance Loans and Protective Advances), the L/C Issuers and the Swing Line Lender for any Defaulted Amounts then owing to them, in their capacities as such, ratably in accordance with such respective Defaulted Amounts then owing to such Lenders, and Third, to any other Lenders for any Defaulted Amounts then owing to such other Lenders, ratably in accordance with such respective Defaulted Amounts then owing to such other Lenders. Any portion of such amount paid by the Borrowers for the account of such Defaulting Lender remaining, after giving effect to the amount applied by the Administrative Agent pursuant to this clause (iii), shall be applied or held by the Administrative Agent as specified in clause (iv) of this Section 2.12(b).

- 76 -

(iv) Distribution of Certain Amounts. If any Revolving Credit Lender shall be a Defaulting Lender that (x) does not, at any time owe a Failed Loan or a Defaulted Amount or (y) does owe a Failed Loan but the amount received from or for the account of the Borrowers referred to below is designated by the Lead Borrower (in accordance with clause (ii) above) for application to a Borrowing that does not include a Failed Loan, in each case whenever the Administrative Agent shall receive any amount from or for the account of the Borrowers for the account of such Defaulting Lender, the amount so received will, upon receipt by the Administrative Agent, be held without interest by the Administrative Agent and applied from time to time to the extent necessary to make any Revolving Credit Loans required to be made by such Defaulting Lender and to pay any amount payable by such Defaulting Lender hereunder and under the other Loan Documents to any Agent, any L/C Issuer, the Swing Line Lender or any other Lender, as and when such Revolving Credit Loans or amounts are required to be made or paid. If the amount so held shall at any time be insufficient to make and pay all such Revolving Credit Loans and amounts required to be made or paid at such time, the Administrative Agent shall apply such held funds in the following order of priority: First, to the Agents for any amounts then due and payable by such Defaulting Lender to them hereunder (other than on account of any Overadvance Loans and Protective Advances), in their capacities as such, ratably in accordance with such respective amounts then due and payable to the Agents, Second, to the Administrative Agent (on account of any outstanding Overadvance Loans and Protective Advances), the L/C Issuers and the Swing Line Lender for any amounts then due and payable to them hereunder, in their capacities as such, by such Defaulting Lender, ratably in accordance with such respective amounts then due and payable to such Lenders, and Third, to any other Lenders for any amount then due and payable by such Defaulting Lender to such other Lenders hereunder, ratably in accordance with such respective amounts then due and payable to such other Lenders. In the event that any Defaulting Lender ceases to be a Defaulting Lender, any funds held by the Administrative Agent in escrow at such time with respect to such Lender shall be distributed by the Administrative Agent to such Lender and applied by such Lender Party to the Senior Credit Obligations owing to such Lender at such time under this Agreement and the other Loan Documents ratably in accordance with the respective amounts of such Senior Credit Obligations outstanding at such time.

(v) Payments by Borrowers; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Lead Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuers hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the applicable L/C Issuer, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the applicable L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or the Lead Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing

- 77 -

provisions of this Article II, and such funds are not made available to the Borrowers by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Revolving Credit Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 10.04(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

(f) Insufficient Funds. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder (other than in respect of Bank Product Debt), ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, (ii) second, toward payment of principal amount of any L/C Borrowings, Swing Line Loans, Overadvance Loans and any Protective Advances ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties and (iii) third, toward payment of principal and Bank Product Debt then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due to such parties.

Section 2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (i) Senior Credit Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (x) the amount of such Senior Credit Obligations due and payable to such Lender at such time to (y) the aggregate amount of the Senior Credit Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Senior Credit Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (ii) Senior Credit Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (x) the amount of such Senior Credit Obligations owing (but not due and payable) to such Lender at such time to (y) the aggregate amount of the Senior Credit Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payment on account of the Senior Credit Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (A) notify the Administrative Agent of such fact, and (B) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Senior Credit Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

(i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

- 78 -

(ii) the provisions of this Section 2.13 shall not be construed to apply to (A) any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement, (B) any payment obtained pursuant to Section 2.12(b) or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than to the Lead Borrower or any Subsidiary thereof (as to which the provisions of this Section 2.13 shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

Section 2.14 Increase in Revolving Credit Facility.

(a) Request for Increase. Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Lead Borrower may from time to time, request an increase (each a “Facility Increase”) in the Revolving Credit Facility by an amount (for all such requests) not exceeding $25,000,000; provided that (i) any such request for a Facility Increase shall be in a minimum amount of $5,000,000 and (ii) the Lead Borrower may make a maximum of three such requests. At the time of sending such notice, the Lead Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders). All Revolving Credit Loans made pursuant to any such Facility Increase (i) are herein referred to herein as “Additional Loans” and (ii) shall be priced on a basis identical to the existing Loans.

(b) Lender Elections to Increase. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Revolving Credit Commitment and, if so, whether by an amount equal to, greater than, or less than its Applicable Adjusted Percentage of the requested Facility Increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Revolving Credit Commitment.

(c) Notification by Administrative Agent; Additional Lenders. The Administrative Agent shall notify the Lead Borrower and each Lender of the Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase, and subject to any necessary approval of the Administrative Agent, each L/C Issuer and the Swing Line Lender (which approvals shall not be unreasonably withheld or delayed), the Lead Borrower may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(d) Effective Date and Allocations. If the Revolving Credit Facility is increased in accordance with this Section, the Administrative Agent and the Lead Borrower shall determine the effective date (the “Revolving Credit Increase Effective Date”) and the final allocation of such increase. The Administrative Agent shall promptly notify the Lead Borrower and the Lenders of the final allocation of such increase and the Revolving Credit Increase Effective Date.

- 79 -

(e) Conditions to Effectiveness of Increase. As a condition precedent to any Facility Increase: (i) the conditions precedent set forth in Section 4.02 shall have been satisfied both before and after giving effect to such Facility Increase and the Additional Loans provided thereby (it being understood that all references to “the obligation of any Lender to make a Loan on the occasion of any Borrowing” shall be deemed to refer to the effectiveness of the Facility Increase on the date of the initial funding of the Facility Increase); (ii) the Maturity Date of any Facility Increase shall be coincident with the existing Maturity Date; and (iii) all fees and expenses owing in respect of such increase to the Administrative Agent or the Lenders shall have been paid. The Additional Loans shall be made by the Lenders participating therein pursuant to the procedures set forth in Section 2.02.

(f) Conflicting Provisions. This Section shall supersede any provisions in Section 2.13 or 10.01 to the contrary.

Section 2.15 Designation of Lead Borrower as Borrowers’ Agent.

(a) Each Borrower hereby irrevocably designates and appoints the Lead Borrower as such Borrower’s agent to obtain Loans and Letters of Credit, the proceeds of which shall be available to each Borrower for such uses as are permitted under this Agreement. As the disclosed principal for its agent, each Borrower shall be obligated to the Administrative Agent and each Lender on account of Loans so made and Letters of Credit so issued as if made directly by the Lenders to such Borrower, notwithstanding the manner by which such Loans and Letters of Credit are recorded on the books and records of the Lead Borrower and of any other Borrower.

(b) Each Borrower represents to the Senior Credit Parties that it is an integral part of a consolidated enterprise, and that each Loan Party will receive direct and indirect benefits from the availability of the joint credit facility provided for herein, and from the ability to access the collective credit resources of the consolidated enterprise which the Loan Parties comprise. Each Borrower recognizes that credit available to it hereunder is in excess of and on better terms than it otherwise could obtain on and for its own account and that one of the reasons therefor is its joining in the credit facility contemplated herein with all other Borrowers. Consequently, each Borrower hereby assumes and agrees to discharge all Senior Credit Obligations of each of the other Borrowers as if the Borrower which is so assuming and agreeing were each of the other Borrowers.

(c) The Lead Borrower shall act as a conduit for each Borrower (including itself, as a Borrower) on whose behalf the Lead Borrower has requested a Loan. None of the Agents nor any other Senior Credit Party shall have any obligation to see to the application of such proceeds.

(d) The authority of the Lead Borrower to request Loans and Letters of Credit on behalf of, and to bind, the Borrowers, shall continue unless and until the Administrative Agent actually receives written notice of: (i) the termination of such authority, (ii) the subsequent appointment of a successor Lead Borrower, which notice is signed by the respective Responsible Officers of each Borrower and (iii) written notice from such successive Lead Borrower accepting such appointment and acknowledging that from and after the date of such appointment, the newly appointed Lead Borrower shall be bound by the terms hereof, and that as used herein, the term “Lead Borrower” shall mean and include the newly appointed Lead Borrower.

- 80 -

ARTICLE III

TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY

Section 3.01 Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

(i) Any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan Document shall to the extent permitted by applicable Laws be made free and clear of and without reduction or withholding for any Taxes. If, however, applicable Laws require any Borrower or the Administrative Agent to withhold or deduct any Tax, such Tax shall be withheld or deducted in accordance with such Laws as determined by the Lead Borrower or the Administrative Agent, as the case may be, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

(ii) If any Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or make such deductions as are reasonably determined by the Administrative Agent to be required by applicable Law and based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum payable by the applicable Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or applicable L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(b) Payment of Other Taxes by the Borrowers. Without limiting the provisions of subsection (a) above, the Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law.

(c) Tax Indemnifications.

(i) Without limiting the provisions of subsection (a) or (b) above, the Borrowers shall, and do hereby, jointly and severally, indemnify the Administrative Agent, each Lender and each L/C Issuer, and shall make payment in respect thereof within 15 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) withheld or deducted by any Borrower or the Administrative Agent or paid by the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that the Administrative Agent, such Lender or such L/C Issuer, as the case may be, provides the Lead Borrower with a written statement thereof setting forth in reasonable detail the basis and calculation of such amounts. A certificate as to the amount of any such payment or liability delivered to the Lead Borrower by a Lender or an L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an L/C Issuer, shall be conclusive absent manifest error. If the Lead Borrower reasonably believes that such Indemnified Taxes or Other Taxes were not

- 81 -

correctly or legally asserted, the Administrative Agent and each Lender and L/C Issuer will use reasonable efforts to cooperate with the Lead Borrower for the Lead Borrower to file for and obtain a refund of such Indemnified Taxes or Other Taxes so long as such efforts would not, in the sole determination of the Administrative Agent, such Lender or such L/C Issuer, result in any additional costs, expenses or risks or be otherwise disadvantageous to it.

(ii) Without limiting the provisions of subsection (a) or (b) above, each Lender and each L/C Issuer shall, and does hereby, indemnify the Borrowers and the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Lead Borrower or the Administrative Agent) incurred by or asserted against any Borrower or the Administrative Agent by any Governmental Authority as a result of the failure by such Lender or such L/C Issuer, as the case may be, to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender or such L/C Issuer, as the case may be, to the Lead Borrower or the Administrative Agent pursuant to subsection (e). Each Lender and each L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or such L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii). The agreements in this clause (ii) shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender or an L/C Issuer, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all other Finance Obligations.

(iii) The Borrowers shall not be required pursuant to this Section 3.01 to pay any additional amount to, or to indemnify, any Lender or the Administrative Agent, as the case may be, to the extent that such Lender or Administrative Agent becomes subject to Taxes subsequent to the Closing Date (or, if later, the date such Lender or Administrative Agent becomes a party to this Agreement) as a result of a change in the place of organization or place of doing business of such Lender or Administrative Agent or a change in the Lending Office of such Lender, except to the extent that any such change is requested or required by the Borrowers (and provided that nothing in this clause (iii) shall be construed as relieving the Borrowers from any obligation to make such payments or indemnification in the event of a change in Lending Office or place of organization or place of doing business that precedes a change in Law to the extent such Taxes result from a change in Law).

(d) Evidence of Payments. Upon request by the Lead Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by any Borrower or the Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Lead Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Lead Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Lead Borrower or the Administrative Agent, as the case may be.

(e) Status of Lenders; Tax Documentation.

(i) Each Lender shall deliver to the Lead Borrower and to the Administrative Agent, at the time or times prescribed by applicable Laws or when reasonably requested by the Lead Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Laws or by the taxing authorities of any

- 82 -

jurisdiction and such other reasonably requested information as will permit the Lead Borrower or the Administrative Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Loan Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be made to such Lender by the Borrowers pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in the applicable jurisdiction.

(ii) Without limiting the generality of the foregoing, if any Borrower is resident for tax purposes in the United States:

(A) any Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Lead Borrower and the Administrative Agent executed originals of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable Laws or reasonably requested by the Lead Borrower or the Administrative Agent as will enable the Lead Borrower or the Administrative Agent, as the case may be, to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Such documentation and information shall be delivered by any such Lender (i) on or prior to the Closing Date (or on or prior to the date it becomes a party to this Agreement), (ii) on or before the date that such form expires or becomes obsolete, (iii) after the occurrence of a change in the Lender’s circumstances requiring a change in the most recent form previously delivered by it to the Lead Borrower and the Administrative Agent and (iv) from time to time thereafter if reasonably requested by the Lead Borrower or the Administrative Agent. For the avoidance of doubt, if such Lender fails to deliver such forms, then the Administrative Agent may withhold from any payment to such Lender an amount equivalent to the applicable backup withholding tax imposed by the Code unless and until such forms are provided; and

(B) each Foreign Lender that is entitled under the Code or any applicable treaty to an exemption from or reduction of withholding tax with respect to payments hereunder or under any other Loan Document shall deliver to the Lead Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Lead Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

(1) executed originals of Internal Revenue Service Form W-8BEN (or any successor form thereto) claiming eligibility for benefits of an income tax treaty to which the United States is a party;

(2) executed originals of Internal Revenue Service Form W-8ECI (or any successor form thereto);

(3) executed originals of Internal Revenue Service Form W-8IMY (or any successor form thereto) and all required supporting documentation;

(4) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a

- 83 -

certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) executed originals of Internal Revenue Service Form W-8BEN; or

(5) executed originals of any other form prescribed by applicable Laws as a basis for claiming exemption from or a reduction in United States Federal withholding tax together with such supplementary documentation as may be prescribed by applicable Laws to permit the Lead Borrower or the Administrative Agent to determine the withholding or deduction required to be made.

(iii) Each Lender shall promptly (A) notify the Lead Borrower and the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws of any jurisdiction that any Borrower or the Administrative Agent make any withholding or deduction for taxes from amounts payable to such Lender and (C) submit to the Lead Borrower and the Administrative Agent such additional executed copies of one or more such forms or certificates as may then be available under the current United States Laws and regulations to avoid, or reduce, United States federal withholding taxes in respect of all payments to be made to such Foreign Lender by the Borrowers or other Loan Party pursuant to this Agreement.

(f) Treatment of Certain Refunds. Subject to the last sentence in Section 3.01(c)(i) and unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or any L/C Issuer, or have any obligation to pay to any Lender or any L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or any L/C Issuer, as the case may be. If the Administrative Agent, any Lender or any L/C Issuer determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this Section, it shall pay to the Lead Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Lead Borrower, upon the request of the Administrative Agent, such Lender or such L/C Issuer, agrees to repay the amount paid over to the Lead Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or such L/C Issuer in the event the Administrative Agent, such Lender or such L/C Issuer is required to repay such refund to such Governmental Authority. In such event, the Administrative Agent, such Lender or such L/C Issuer, as the case may be, shall, at the Lead Borrower’s request, provide the Lead Borrower with a copy of any notice of assessment or other evidence of the requirement to repay such refund received from the relevant taxing authority (provided that the Administrative Agent, such Lender or such L/C Issuer may delete any information therein that they deem confidential). This subsection shall not be construed to require the Administrative Agent, any Lender or any L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Borrower or any other Person.

- 84 -

Section 3.02 Illegality. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon Eurodollar Rate, then, on notice thereof by such Lender to the Lead Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Lead Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrowers shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or promptly, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Lead Borrower shall also pay accrued interest on the amount so prepaid or converted. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.

Section 3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (i) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (ii) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (iii) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Lead Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Lead Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

Section 3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets held by, deposits with or for the account of, or credit extended or participated in by, any Lender (or its Lending Office) (except any reserve requirement which is contemplated by Section 3.04(e) hereof) or any L/C Issuer;

(ii) subject any Lender (or its Lending Office) or L/C Issuer to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any Participation Interest in a Letter of Credit or any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Lender or L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or L/C Issuer);

- 85 -

(iii) impose on any Lender (or its Lending Office) or L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender (or its Lending Office) of making or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or any L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or L/C Issuer by delivery of a certificate pursuant to subsection (c) of this Section 3.04, the Borrowers will pay to such Lender or L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender or L/C Issuer determines that any Change in Law affecting such Lender or L/C Issuer or any Lending Office of such Lender or such Lender’s or L/C Issuer’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or such L/C Issuer’s capital or on the capital of such Lender’s or such L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Revolving Credit Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such L/C Issuer, to a level below that which such Lender or L/C Issuer or such Lender’s or L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or L/C Issuer’s policies and the policies of such Lender’s or L/C Issuer’s holding company with respect to capital adequacy), then from time to time, upon request by delivery of a certificate pursuant to subsection (c) of this Section 3.04, the Borrowers will pay to such Lender or L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or L/C Issuer or such Lender’s or L/C Issuer’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender or L/C Issuer prepared in good faith setting forth the amount or amounts necessary to compensate such Lender or L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section 3.04 and delivered to the Lead Borrower shall be conclusive absent manifest error. The Borrowers shall pay such Lender or L/C Issuer, as the case may be, the amount shown as due on any such certificate within 15 days after receipt thereof by the Lead Borrower.

(d) Delays in Requests. Failure or delay on the part of any Lender or L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or L/C Issuer’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than six months prior to the date that such Lender or an L/C Issuer, as the case may be, notifies the Lead Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or an L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof); provided, further, that the Borrowers shall not be required to compensate a Lender or an L/C Issuer for increased costs or reductions suffered more than nine months after such Change in Law, except that in the case of any such change having retroactive effect such period shall be extended until nine months after the Lender becomes aware of such change.

- 86 -

Section 3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrowers shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(i) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or

(ii) any failure by a Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Lead Borrower.

For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

Section 3.06 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrowers are required to pay any additional amount to any Lender, any L/C Issuer or any Governmental Authority for the account of any Lender or L/C Issuer pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender or L/C Issuer shall, as applicable, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender or L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender or L/C Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be materially disadvantageous to such Lender or L/C Issuer, as the case may be. The Lead Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender or L/C Issuer in connection with any such designation or assignment.

(b) Replacement of Lenders. If a Lender requests compensation under Section 3.04, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Lead Borrower may replace such Lender in accordance with Section 10.13.

Section 3.07 Survival. All of the Borrowers’ obligations under this Article III shall survive termination of the Aggregate Commitments, repayment of all other Senior Credit Obligations hereunder and resignation of the Administrative Agent.

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

Section 4.01 Conditions of Initial Credit Extension. The obligation of each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent except as otherwise agreed between the Borrowers and the Administrative Agent:

(a) The Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party and each in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel:

(i) executed counterparts of this Agreement and each Guaranty;

- 87 -

(ii) a Note executed by the Borrowers in favor of each Lender that has requested a Note at least two Business Days in advance of the Closing Date;

(iii) evidence that the elements of the Collateral and Guarantee Requirement required to be satisfied on the Closing Date have been satisfied, the Intercreditor Agreement and each Collateral Document set forth on Schedule 1.01B required to be executed on the Closing Date as indicated on such schedule, duly executed by each Loan Party, as applicable thereto, together with:

(A) to the extent required under the Collateral and Guarantee Requirement, opinions of local counsel for the Loan Parties in states in which the Mortgaged Properties are located, with respect to the enforceability and perfection of the Mortgages and any related fixture filings in form and substance reasonably satisfactory to the Administrative Agent and Collateral Agent; and

(B) evidence that all other actions, searches, recordings and filings that the Administrative Agent or Collateral Agent may deem reasonably necessary to satisfy the Collateral and Guarantee Requirement shall have been taken, completed or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent;

provided that to the extent any lien search, Guarantee, Collateral or insurance referred to in clause (vii) below (other than pledge and perfection of security interests in Equity Interests of Domestic Subsidiaries of the Borrowers and the Guarantors (to the extent required hereunder) and other assets with respect to which a Lien may be perfected by the filing of a financing statement under the UCC) is not provided on the Closing Date after the Borrowers’ use of commercially reasonable efforts to do so, the delivery of such lien search, Guarantee, Collateral or insurance referred to in clause (vii) below shall not constitute a condition precedent to the availability of the Revolving Credit Loans on the Closing Date but shall be required to be delivered after the Closing Date pursuant to Section 6.13(c) or 6.18 (it being understood and acknowledged by the Borrowers that, due to the eligibility requirements set forth in the definitions of “Eligible Accounts” and “Eligible Inventory”, Excess Availability may be adversely affected if the above-mentioned conditions are not satisfied);

(iv) (A) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party on the Closing Date, and (B) a good standing certificate from the applicable governmental authority of each Loan Party’s jurisdiction of incorporation, organization or formation, each dated a recent date prior to the Closing Date;

- 88 -

(v) (A) an opinion from Simpson Thacher & Bartlett LLP, New York counsel to the Loan Parties, substantially in the form of Exhibit E and (B) opinions of local counsel to the Loan Parties reasonably acceptable to the Administrative Agent with regard to such matters of law as the Administrative Agent shall reasonably request;

(vi) a Solvency Certificate attesting to the Solvency of the Lead Borrower and its Restricted Subsidiaries (taken as a whole) on the Closing Date after giving effect to the Transactions, from the chief financial officer of the Lead Borrower;

(vii) evidence that all insurance (including title insurance) required to be maintained pursuant to the Loan Documents has been obtained and is in effect and that the Administrative Agent has been named as loss payee and additional insured under each insurance policy with respect to such insurance as to which the Administrative Agent shall have requested to be so named;

(viii) certified copies of the Merger Agreement and the Senior Secured Bridge Loan Documents, duly executed by the parties thereto, together with all material agreements, instruments and other documents delivered in connection therewith as the Administrative Agent shall reasonably request, each including certification by a Responsible Officer of the Lead Borrower that such documents are in full force and effect as of the Closing Date;

(ix) a Committed Loan Notice relating to the initial Credit Extension; and

(x) copies of a recent Lien and judgment, tax, patent and trademark searches in each jurisdiction reasonably requested by the Collateral Agent with respect to the Loan Parties.

(b) All fees and expenses required to be paid hereunder, under the Fee Letter and invoiced at least three business days prior to the Closing Date shall have been paid in full in cash or will be paid on the Closing Date out of the initial Credit Extension.

(c) Prior to or simultaneously with the initial Credit Extension, (i) the Equity Contribution shall have been funded in full to Holdings and Holdings shall have contributed such amount to the Lead Borrower in the form of cash equity, (ii) the Lead Borrower shall have received no less than $1,010,000,000 of gross proceeds from (i) the funding of the Senior Secured Bridge Loans in accordance with the Senior Secured Bridge Loan Documents and (iii) the Merger shall be consummated in accordance with the terms of the Merger Agreement (and no provision of the Merger Agreement shall have been waived, amended, supplemented, consented to or otherwise modified in a manner material and adverse to the Lenders without the consent of the Administrative Agent and the Bookrunners (which consent shall not be unreasonably withheld or delayed)).

(d) Concurrently with the consummation of the Merger, all of the Indebtedness of the Company required to be repaid or refinanced in accordance with Section 5.1 of the Merger Agreement shall have been repaid or refinanced, all commitments to extend credit pursuant to the agreements governing such Indebtedness shall have been terminated and all Liens or other security interests securing such Indebtedness shall have been terminated and released by the lenders thereunder, and the Administrative Agent shall have received evidence thereof.

(e) The Administrative Agent shall have received (i) the audited consolidated balance sheets of the Company and its Subsidiaries for the three fiscal years ended respectively December 31, 2005, December 31, 2006 and December 31, 2007, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal years of the Company and its

- 89 -

Subsidiaries, including the notes thereto (the “Audited Financial Statements”), (ii) unaudited consolidated balance sheets and related statements of income and cash flows of the Company and its Subsidiaries for each subsequent fiscal quarter ending more than 45 days prior to the Closing Date (the “Unaudited Financial Statements”) and (iii) the Pro Forma Financial Statements.

(f) The Administrative Agent shall have received all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act that has been reasonably requested at least 10 days in advance of the Closing Date.

(g) The Administrative Agent shall have received a Borrowing Base Certificate dated as of the Closing Date, relating to the month ended on September 30, 2008, and executed by the Treasurer of the Lead Borrower, and such Borrowing Base Certificate shall reflect an Excess Availability (after giving effect to (without duplication) the Transactions and the Credit Extensions made on the Closing Date) of at least $75,000,000.

(h) Since December 31, 2007, there shall have been no Closing Date Material Adverse Effect.

Section 4.02 Conditions to All Credit Extensions. The obligation of each Lender to honor any Request for Credit Extension (excluding a Committed Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurodollar Rate Loans) and of each L/C Issuer to issue each Letter of Credit is subject to the following conditions precedent:

(a) The representations and warranties of the Borrowers and each other Loan Party contained in Article V or any other Loan Document (except, in the case of the initial Credit Extensions, the representations and warranties contained in Sections 5.01(i) (solely with respect to the Subsidiaries of the Lead Borrower), 5.01(ii)(A), 5.01(iii), 5.01(iv), 5.01(v), 5.02 (other than due authorization and clauses (i) and (iii)), 5.03, 5.05, 5.06, 5.07, 5.08, 5.09, 5.10, 5.11, 5.12, 5.14, 5.18, 5.19, 5.20, 5.21 and 5.22 and in any other Loan Document) shall be true and correct in all material respects on and as of the date of such Credit Extension (except, in the case of the initial Credit Extensions, Sections 5.02(i) and (iii) shall be true and correct except to the extent any conflict with or breach thereof would not reasonably be expected to result in a Closing Date Material Adverse Effect); provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided, further, that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates.

(b) Except in the case of the initial Credit Extensions, no Default or Event of Default shall exist or would result from such proposed Credit Extension or from the application of the proceeds therefrom.

(c) The Administrative Agent and, if applicable, the relevant L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension (or with respect to Letters of Credit, such other notice required hereunder) in accordance with the requirements hereof.

Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Lead Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension and that after giving effect to such Credit Extension, the lesser of (i) the Borrowing Base and (ii) the Revolving Credit Facility shall be equal to or exceed the Outstanding Amount of the Revolving Credit Loans, Swing Line Loans and L/C Obligations.

- 90 -

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Holdings and the Borrowers represent and warrant to the Agents and the Lenders that:

Section 5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan Party and each of its Restricted Subsidiaries (i) is a Person duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (ii) has all requisite power and authority to (A) own or lease its assets and carry on its business and (B) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (iii) is duly qualified and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, (iv) except as set forth on Schedule 5.01 is in compliance with all Laws (including Medicare Regulations and Medicaid Regulations), orders, writs, injunctions and orders applicable to it or to its properties, and (v) has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted, except in each case referred to in clauses (iii), (iv), or (v) to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, each Loan Party and each of its Restricted Subsidiaries represents that (x) its current billing policies, arrangements, protocols and instructions comply with requirements of each Government Healthcare Program and are administered by properly trained personnel except where any such failure to comply could not reasonably be expected to result in either (1) exclusion from a Government Healthcare Program, or (2) loss of 5.00% or more of annual consolidated revenues of each Loan Party and each of its Restricted Subsidiaries and (y) its current compensation arrangements with physicians substantially comply with state and federal anti-kickback, fraud and abuse, Stark Law, and state self-referral law requirements except where any such failure to comply could not reasonably be expected to result in either (1) an exclusion from a Government Healthcare Program, or (2) loss of 5.00% or more of annual consolidated revenues of each Loan Party and each of its Restricted Subsidiaries.

Section 5.02 Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is a party, and the consummation of the Transactions (to the extent of such Person’s involvement therein), are within such Loan Party’s corporate or other powers, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (i) contravene the terms of any of such Person’s Organization Documents, (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under (other than as permitted by Section 7.01), or require any payment to be made under (A) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (B) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (iii) violate any material Law; except with respect to any conflict, breach or contravention or payment (but not creation of Liens) referred to in clause (ii)(A), to the extent that such conflict, breach, contravention or payment could not reasonably be expected to have a Material Adverse Effect.

Section 5.03 Governmental Authorization; Other Consents. No material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (i) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, or for the consummation of the Transactions, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the perfection or maintenance of the Liens created under the

- 91 -

Collateral Documents (including the priority thereof) or (iv) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for (A) filings necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties, (B) the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect and (C) those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make could not reasonably be expected to have a Material Adverse Effect.

Section 5.04 Binding Effect. This Agreement and each other Loan Document has been duly executed and delivered by each Loan Party that is party thereto. This Agreement and each other Loan Document constitutes a legal, valid and binding obligation of such Loan Party enforceable against each Loan Party that is party thereto in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws, by general principles of equity and by a covenant of good faith and fair dealing.

Section 5.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements and the Unaudited Financial Statements fairly present in all material respects the financial condition of the Company and its Subsidiaries as of the dates thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except for (in the case of interim statements) customary year-end adjustments and the absence of complete footnotes and as otherwise expressly noted therein. During the period from December 31, 2007 to and including the Closing Date, except as set forth on Schedule 5.05(a), there has been (i) no sale, transfer or other disposition by the Company or any of its Subsidiaries of any material part of the business or property of the Company or any of its Subsidiaries, taken as a whole and (ii) no purchase or other acquisition by the Company or any of its Subsidiaries of any business or property (including any Equity Interests of any other Person) material in relation to the consolidated financial condition of the Company and its Subsidiaries taken as a whole, in each case, which is not reflected in the foregoing financial statements or in the notes thereto or has not otherwise been disclosed in writing to the Administrative Agent prior to the Closing Date.

(b) The unaudited pro forma consolidated balance sheet of the Lead Borrower and its Restricted Subsidiaries as of the date of Unaudited Financial Statements (the “Pro Forma Balance Sheet”) and the unaudited pro forma statement of income of the Lead Borrower and its Restricted Subsidiaries for the four quarter period ending as of such date (together with the Pro Forma Balance Sheet, the “Pro Forma Financial Statements”), copies of which have heretofore been furnished to the Administrative Agent, have been prepared giving effect (as if such events had occurred on such date or at the beginning of such periods, as the case may be) to the Transactions, each material acquisition by the Lead Borrower and its Restricted Subsidiaries and the Company and its Subsidiaries, respectively, consummated after the date of such financial statements and prior to the Closing Date and all other transactions that would be required to be given pro forma effect (including other adjustments consistent with the definition of “Pro Forma Adjustment” or as otherwise agreed between the Lead Borrower and the Administrative Agent). The Pro Forma Financial Statements have been prepared in good faith, based on assumptions believed by Holdings to be reasonable as of the time of preparation thereof, and, subject to the foregoing, present fairly in all material respects on a pro forma basis the estimated financial position of Holdings and its Restricted Subsidiaries as at the last day for which the financial statements were delivered pursuant to Section 5.05(a) and their estimated results of operations for the periods covered thereby, assuming that the events specified in the preceding sentence had actually occurred at such date or at the beginning of the periods covered thereby.

- 92 -

(c) Since the Closing Date, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

(d) The forecasts of consolidated balance sheets, income statements and cash flow statements of Holdings and its Restricted Subsidiaries, copies of which have been furnished to the Administrative Agent prior to the Closing Date in a form reasonably satisfactory to it, have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time of preparation of such forecasts, it being understood that actual results may vary from such forecasts and that such variations may be material.

Section 5.06 Litigation. Except as set forth in Schedule 5.06, there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of Holdings or the Borrowers, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against Holdings, the Borrowers or any of their respective Restricted Subsidiaries or against any of their properties or revenues that either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

Section 5.07 No Default. Neither Holdings, any Borrower nor any Subsidiary is in default under or with respect to, or a party to, any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.08 Ownership of Property; Liens; Intellectual Property; Insurance.

(a) General. Each Loan Party and each of its Restricted Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, or easements or other limited property interests in, all Real Property necessary in the ordinary conduct of its business, free and clear of all Liens except for minor defects in title that do not materially interfere with its ability to conduct its business or to utilize such assets for their intended purposes and Liens permitted by Section 7.01 and except where the failure to have such title or other interest could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(b) Intellectual Property. Each Loan Party and each of its Restricted Subsidiaries owns, or has the legal right to use, all of the IP Rights reasonably necessary for each of them to conduct its business as currently conducted except for those the failure to own or have such legal right to use could not reasonably be expected to have a Material Adverse Effect.

(c) Insurance. The properties of each Loan Party and each of its Restricted Subsidiaries are insured with financially sound and reputable insurance companies, in such amounts (after giving effect to any self-insurance reasonable and customary for similarly situated persons engaged in the same or similar business), with such deductibles and covering such risks as are in accordance with normal industry practice or customarily carried by companies engaged in similar businesses and owning similar properties in localities where the applicable Group Company operates.

Section 5.09 Environmental Compliance.

(a) There are no pending or, to the knowledge of Holdings or the Borrowers, threatened claims, actions, suits, or proceedings alleging potential liability under or violation of any applicable Environmental Law that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

- 93 -

(b) Except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (i) there are no and never have been any underground or aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned, leased or operated by any Loan Party or any of its Restricted Subsidiaries or, to its knowledge, on any property formerly owned or operated by any Loan Party or any of its Restricted Subsidiaries; (ii) there is no asbestos or asbestos-containing material on or at any property or facility currently owned or operated by any Loan Party or any of its Restricted Subsidiaries; and (iii) there has been no Release of Hazardous Materials by any of the Loan Parties and their Restricted Subsidiaries at, on, under or from any location in a manner which could reasonably be expected to give rise to liability under applicable Environmental Laws.

(c) There are no Hazardous Materials at, on, under or migrating from any of the properties currently or formerly owned, leased or operated by Holdings, the Borrowers and the Restricted Subsidiaries in amounts or concentrations which (i) constitute a violation of, (ii) require investigation or remediation under, or (iii) could reasonably be expected to give rise to liability under, applicable Environmental Laws, which violations, investigations or remediations and liabilities, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

(d) None of Holdings, the Borrowers nor any of their respective Restricted Subsidiaries are conducting, either individually or together with other potentially responsible parties, any investigation or remediation relating to any actual or threatened Release, discharge or disposal of Hazardous Materials at, on, under or from any site or location, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any applicable Environmental Law except for such investigation or remediation that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(e) All Hazardous Materials generated, used, treated, handled or stored at or transported by or on behalf of Holdings or any of its Restricted Subsidiaries from any property currently or formerly owned or operated by any Loan Party or any of its Restricted Subsidiaries for off-site treatment or disposal have been treated or disposed of in a manner which would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect.

(f) Except as could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect, none of the Loan Parties and their Restricted Subsidiaries has contractually assumed any liability or obligation under or relating to any applicable Environmental Law.

(g) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not require any notification, registration, filing, reporting, disclosure, investigation, remediation or cleanup pursuant to any applicable Environmental Law, except for any requirement the noncompliance with which could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(h) As of the Closing Date, the Lead Borrower has made available to the Agents and the Lenders all material documents, studies, and reports in the possession, custody or control of the Loan Parties concerning compliance with or liability under Environmental Law, including those concerning the actual or suspected existence of Hazardous Material at Real Property or facilities currently or formerly owned, operated, leased or used by the Loan Parties which could reasonably be expected to have a Material Adverse Effect.

- 94 -

(i) Except as could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect, the Loan Parties and each of their Restricted Subsidiaries and their respective businesses, operations and properties are and have been in compliance with all applicable Environmental Laws and have all Environmental Permits which are in full force and effect.

Section 5.10 Taxes. Except as could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, the Loan Parties and each of their Restricted Subsidiaries have timely filed or caused to be timely filed (taking into account applicable extensions) all federal, state, foreign and other tax returns and reports required to be filed, and have timely paid or caused to be timely paid (taking into account applicable extensions) all federal, state, foreign and other taxes (including in its capacity as a withholding agent), assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP.

Section 5.11 ERISA Compliance.

(a) Except as set forth in Schedule 5.11(a) or as could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Plan is in compliance in with the applicable provisions of ERISA, the Code and other federal or state Laws.

(b) (i) No ERISA Event has occurred during the period beginning six years from the date on which this representation is made through the date on which this representation is made or deemed made; (ii) neither any Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iii) neither any Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 et seq. or 4243 of ERISA with respect to a Multiemployer Plan; and (iv) neither any Loan Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA, except, with respect to each of the foregoing clauses of this Section 5.11(b), as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

(c) Except where noncompliance could not reasonably be expected individually or in the aggregate to result in a Material Adverse Effect, (i) each Foreign Plan has been maintained in substantial compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders, and (ii) neither a Loan Party nor any Restricted Subsidiary have incurred any material obligation in connection with the termination of or withdrawal from any Foreign Plan. Except as could not reasonably be expected to result in a Material Adverse Effect, the present value of the accrued benefit liabilities (whether or not vested) under each Foreign Plan which is funded, determined as of the end of the most recently ended fiscal year of a Loan Party or Restricted Subsidiary (based on the actuarial assumptions used for purposes of the applicable jurisdiction’s financial reporting requirements), did not exceed the current value of the assets of such Foreign Plan, and for each Foreign Plan which is not funded, the obligations of such Foreign Plan are properly accrued.

Section 5.12 Subsidiaries; Equity Interests. As of the Closing Date, no Loan Party has any Subsidiaries other than those specifically disclosed in Schedule 5.12, and all of the outstanding Equity Interests in the Borrowers and the Material Subsidiaries have been validly issued, are fully paid and nonassessable and all such Equity Interests owned by any Loan Party are owned free and clear of all Liens except (i) those created under the Collateral Documents, (ii) Liens permitted under Section 7.01(b) and (iii) any nonconsensual Lien that is permitted under Section 7.01. As of the Closing Date, Schedule

- 95 -

5.12 (a) sets forth the name and jurisdiction of each Subsidiary, (b) sets forth the ownership interest of Holdings, the Borrowers and any of their Subsidiaries in each of their Subsidiaries, including the percentage of such ownership and (c) identifies each Person the Equity Interests of which are required to be pledged on the Closing Date pursuant to the Collateral and Guarantee Requirement.

Section 5.13 Margin Regulations; Investment Company Act.

(a) No Loan Party is engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), or extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of any Borrowings or drawings under any Letters of Credit will be used for any purpose that violates Regulation U.

(b) None of Holdings, the Borrowers or any Person Controlling Holdings, the Borrowers or any Restricted Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

Section 5.14 Disclosure. No report, financial statement, certificate or other written information furnished by or on behalf of any Loan Party to any Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or any other Loan Document (as modified or supplemented by other information so furnished) when taken as a whole contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information and pro forma financial information, the Borrowers represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time of preparation, it being understood that such projections may vary from actual results and that such variances may be material.

Section 5.15 Solvency. On the Closing Date after giving effect to the Transactions, the Lead Borrower and its Restricted Subsidiaries, on a consolidated basis, are Solvent.

Section 5.16 Subordination of Junior Financing. The Senior Credit Obligations are “Senior Debt”, “Senior Indebtedness”, “Guarantor Senior Debt” or “Senior Secured Financing” (or any comparable term) and “Designated Senior Debt”, “Designated Senior Indenture”, “Designated Guaranteed Secured Debt”, or “Designated Senior Financing” (or any comparable term) under, and as defined in, any Junior Financing Documentation.

Section 5.17 Collateral Documents. The Collateral Documents create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein as security for the Senior Credit Obligations to the extent that a legal, valid, binding and enforceable security interest in such Collateral may be created under any applicable Law of the United States of America and any states thereof, including, without limitation, the applicable UCC, which security interest, upon the filing of financing statements or the obtaining of “control”, in each case, as applicable, with respect to the relevant Collateral as required under the applicable UCC, will constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Borrowers and each Guarantor thereunder in such Collateral, in each case prior and superior (except as otherwise provided for in the relevant Collateral Document or the Intercreditor Agreement) in right to any other Person (other than Permitted Liens), in each case to the extent that a security interest may be perfected by the filing of a financing statement under the applicable UCC or by obtaining “control”.

- 96 -

Section 5.18 Labor Matters. There are no strikes against Holdings or any of its Subsidiaries, other than any strikes that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. All material payments due from Holdings or any of its Subsidiaries, or for which any claim may be made against Holdings or any of its Subsidiaries, on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of Holdings and its Subsidiaries, as applicable, to the extent required by GAAP, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the consummation of the Transactions will not give rise to a right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which Holdings or any of its Subsidiaries is a party or by which Holdings or any of its Subsidiaries (or any predecessor) is bound.

Section 5.19 Fraud and Abuse. Except as set forth on Schedule 5.19, to the knowledge of the officers of the Loan Parties and each of their Restricted Subsidiaries, neither the Loan Parties nor their Restricted Subsidiaries nor any of their officers, directors or Contract Providers have engaged in any material respect in any activities which are prohibited under Medicare Regulations or Medicaid Regulations or which are prohibited by binding rules of professional conduct, including but not limited to the following: (i) knowingly and willfully making or causing to be made a false statement or representation of a material fact in any applications for any benefit or payment; (ii) knowingly and willfully making or causing to be made any false statement or representation of a material fact for use in determining rights to any benefit or payment; (iii) failing to disclose knowledge by a claimant of the occurrence of any event affecting the initial or continued right to any benefit or payment on its own behalf or on behalf of another, with intent to secure such benefit or payment fraudulently; (iv) knowingly and willfully soliciting or receiving any unlawful remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind or offering to pay such remuneration (A) in return for referring an individual to a Person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part by Medicare, Medicaid or other applicable third party payors, or (B) in return for purchasing, leasing or ordering or arranging for or recommending the purchasing, leasing or ordering of any good, facility, service, or item for which payment may be made in whole or in part by Medicare, Medicaid or other applicable third party payors.

Section 5.20 Licensing and Accreditation. Each of the Loan Parties and each of their Restricted Subsidiaries and, to the knowledge of the officers of each of the Loan Parties and each of their Restricted Subsidiaries, each Contract Provider, has, to the extent applicable: (i) obtained (or been duly assigned) all required certificates of need or determinations of need as required by the relevant state Governmental Authority for the acquisition, construction, expansion of, investment in or operation of its businesses as currently operated; (ii) obtained and maintains in good standing all required licenses; (iii) to the extent prudent and customary in the industry in which it is engaged, obtained and maintains accreditation from all generally recognized accrediting agencies; and (iv) entered into and maintains in good standing its status as a Medicare supplier and as a Medicaid provider. To the knowledge of the officers of each of the Loan Parties and each of their Restricted Subsidiaries, each Contract Provider is duly licensed (where license is required) by each state or state agency or commission, or any other Governmental Authority having jurisdiction over the provisions of such services by such Person in the locations in which each of the Loan Parties and each of their Restricted Subsidiaries conduct business, required to enable such Person to provide the professional services provided by such Person and otherwise as is necessary to enable each of the Loan Parties and each of their Restricted Subsidiaries to operate as currently operated and as presently contemplated to be operated. To the knowledge of the officers of each of the Loan Parties and each of their Restricted Subsidiaries, all such required licenses are in full force and effect on the date hereof and have not been revoked or suspended or otherwise limited.

- 97 -

Section 5.21 Anti-Terrorism Law.

(a) No Loan Party and, to the knowledge of the Borrowers, none of their Affiliates is in violation of any Requirement of Law relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”) or the USA PATRIOT Act (as defined below).

(b) No Loan Party and to the knowledge of the Loan Parties, no Affiliate or broker or other agent of any Loan Party acting or benefiting in any capacity in connection with the Loans is any of the following:

(i) a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(ii) a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(iii) a person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

(iv) a person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or

(v) a person that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”) at its official website or any replacement website or other replacement official publication of such list or similarly named by any similar foreign Governmental Authority.

(c) No Loan Party and, to the knowledge of the Borrowers, no broker or other agent of any Loan Party acting in any capacity in connection with the Loans (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in paragraph (b) above, (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

Section 5.22 Borrowing Base Certificates. Without limiting the provisions of Section 5.14 or the statements contained in any Borrowing Base Certificate, each Borrower hereby represents and warrants that the statements in each Borrowing Base Certificate are or will be when such Borrowing Base Certificate is delivered true and correct in all material respects. The Administrative Agent may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by the Borrowers with respect thereto.

ARTICLE VI

AFFIRMATIVE COVENANTS

Until (i) the Revolving Credit Commitments have expired or been terminated, (ii) the principal of and interest on each Loan and all fees and other Senior Credit Obligations (other than contingent indemnity obligations with respect to then unasserted claims and the Other Liabilities) shall have been paid in full, (iii) all Letters of Credit shall have expired or terminated (or been cash

- 98 -

collateralized or backstopped in a manner reasonably satisfactory to the applicable L/C Issuer) and (iv) all L/C Obligations have been reduced to zero (or cash collateralized or backstopped in a manner reasonably satisfactory to the L/C Issuers), Holdings and the Borrowers (except in the case of the covenant set forth in Section 6.17, which shall apply only to the Borrowers) shall, and Holdings and the Borrowers (except in the case of the covenant set forth in Section 6.17, which shall apply only to the Borrowers) shall cause (except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03) each Restricted Subsidiary to:

Section 6.01 Financial Statements. Deliver to the Administrative Agent for prompt further distribution to each Lender:

(i) as soon as available, but in any event within 120 days after the end of the fiscal year ending December 31, 2008 and within 90 days after the end of each subsequent fiscal year of Holdings, a consolidated balance sheet of Holdings and its Subsidiaries and, if different, Holdings and its Restricted Subsidiaries, in each case as at the end of such fiscal year, and the related consolidated statements of income or operations, stockholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year (or, in lieu of such audited financial statements for Holdings and its Restricted Subsidiaries, a reconciliation reflecting such financial information for Holdings and its Restricted Subsidiaries, on the one hand, and Holdings and its Subsidiaries, on the other hand), all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of Deloitte & Touche, LLP or any other independent registered public accounting firm of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;

(ii) as soon as available, but in any event within 45 days (or, solely in the case of the fiscal quarter ending September 30, 2008, within 75 days) after the end of each of the first three fiscal quarters of each fiscal year of Holdings (commencing with the fiscal quarter ending September 30, 2008), a consolidated balance sheet of Holdings and its Subsidiaries and, if different, Holdings and its Restricted Subsidiaries, in each case as at the end of such fiscal quarter, and the related (A) consolidated statements of income or operations for such fiscal quarter and for the portion of the fiscal year then ended and (B) a consolidated statement of cash flows for the portion of the fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year (or, in lieu of such unaudited financial statements for Holdings and its Restricted Subsidiaries, a reconciliation reflecting such financial information for Holdings and its Restricted Subsidiaries, on the one hand, and Holdings and its Subsidiaries, on the other hand), all in reasonable detail and certified by a Responsible Officer of Holdings as fairly presenting in all material respects the financial condition, results of operations, stockholders’ equity and cash flows of Holdings and its Subsidiaries and Holdings and its Restricted Subsidiaries, as applicable, in accordance with GAAP, subject only to normal year end adjustments and the absence of footnotes;

(iii) as soon as available, and in any event no later than 90 days after the end of each fiscal year of Holdings, a detailed consolidated budget for the following fiscal year (including a projected consolidated balance sheet of Holdings and its Restricted Subsidiaries as of the end of the following fiscal year, the related consolidated statements of projected cash flow and projected income and a summary of the material underlying assumptions applicable thereto) (collectively, the “Projections”), which Projections shall in each case be accompanied by a certificate of a Responsible Officer stating that such Projections have been prepared in good faith

- 99 -

on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time of preparation of such Projections, it being understood that actual results may vary from such Projections and that such variations may be material;

(iv) simultaneously with the delivery of each set of consolidated financial statements referred to in Sections 6.01(i) and 6.01(ii) above, statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements;

(v) on the 15th Business Day of each fiscal month (or more frequently as the Lead Borrower may elect), a certificate in the form of Exhibit I (a “Borrowing Base Certificate”) showing the Borrowing Base as of the close of business for the immediately preceding fiscal month (or in the case of a voluntary delivery of a Borrowing Base Certificate at the election of the Lead Borrower, a subsequent date), each Borrowing Base Certificate to be certified as complete and correct in all material respects on behalf of the Lead Borrower by a Responsible Officer of the Lead Borrower; provided that if a Cash Dominion Event shall have occurred and be continuing, such Borrowing Base Certificate shall be furnished on Wednesday of each week (or, if Wednesday is not a Business Day, on the next succeeding Business Day), as of the close of business on the immediately preceding Friday; and provided, further that after any Disposition or Casualty Event with respect to Collateral having a fair market value in excess of $5,000,000 and subject to the Borrowing Base (other than sales of inventory in the ordinary course of business), the Lead Borrower shall promptly (and in any event prior to the next Borrowing) deliver a revised Borrowing Base Certificate reflecting such Disposition or Casualty Event; and

(vi) as soon as available, and in any event no later than 25 days after the end of each fiscal month of Holdings for which the Consolidated Fixed Charge Coverage Ratio is required to be tested pursuant to Section 6.17, an unaudited consolidated balance sheet of Holdings and its Subsidiaries and, if different, Holdings and its Restricted Subsidiaries, in each case as at the end of such fiscal month, and the related (A) consolidated statements of income or operations for such fiscal month and for the portion of the fiscal year then ended and (B) a consolidated statement of cash flows for the portion of the fiscal year then ended (or, in lieu of such unaudited financial statements for Holdings and its Restricted Subsidiaries, a reconciliation, reflecting such financial information for Holdings and its Restricted Subsidiaries, on the one hand, and Holdings and its Subsidiaries, on the other hand), all in reasonable detail and certified by a Responsible Officer of Holdings as fairly presenting in all material respects the financial condition, results of operations, stockholders’ equity and cash flows of Holdings and its Subsidiaries and Holdings and its Restricted Subsidiaries, as applicable, in accordance with GAAP, subject only to normal year-end adjustments and the absence of footnotes.

Notwithstanding the foregoing, the obligations in clauses (i) and (ii) of this Section 6.01 may be satisfied with respect to financial information of Holdings and its Subsidiaries by furnishing (A) the applicable financial statements of any direct or indirect parent of Holdings that holds all of the Equity Interests of Holdings or (B) Holdings’ (or any direct or indirect parent thereof), as applicable, Form 10-K or 10-Q, as applicable, filed with the SEC; provided that, with respect to each of clauses (A) and (B), (1) to the extent such information relates to a parent of the Lead Borrower, such information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to Holdings, on the one hand, and the information relating to Holdings and the Restricted Subsidiaries on a standalone basis, on the other hand and (2) to the extent such information is in lieu of information required to be provided under Section 6.01(i), such financial statements are audited and accompanied by a report and opinion of Deloitte & Touche, LLP or any other independent registered public accounting firm of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit.

- 100 -

Section 6.02 Certificates; Other Information. Deliver to the Administrative Agent for prompt further distribution to each Lender:

(i) no later than five days after the delivery of the financial statements referred to in Sections 6.01(i), (ii) and (vi), a duly completed Compliance Certificate signed by a Responsible Officer of Holdings (substantially in form of Exhibit D and including, without limitation, reasonably detailed calculations with respect to the Average Excess Availability (based on the most recent monthly and/or weekly Borrowing Base Certificates furnished to the Administrative Agent) and the Consolidated Fixed Charge Coverage Ratio), including a reconciliation reflecting any impact from the application of Section 1.03(b);

(ii) promptly after the same are publicly available, copies of all annual, regular, periodic and special reports and registration statements which any Loan Party files with the SEC or with any Governmental Authority that may be substituted therefor (other than amendments to any registration statement (to the extent such registration statement, in the form it became effective, is delivered), exhibits to any registration statement and, if applicable, any registration statement on Form S-8) and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(iii) promptly after the furnishing thereof, copies of any material requests or material notices received by any Loan Party (other than in the ordinary course of business) from or material statements or material reports furnished to any holder of debt securities of any Loan Party or of any of its Subsidiaries having an aggregate outstanding principal amount greater than the Threshold Amount or pursuant to the terms of any Junior Financing Documentation, in each case, so long as the aggregate outstanding principal amount thereunder is greater than the Threshold Amount and not otherwise required to be furnished to the Lenders pursuant to any other clause of this Section 6.02;

(iv) together with the delivery of the financial statements pursuant to Section 6.01(i) and each Compliance Certificate pursuant to Section 6.02(i), (A) a report setting forth the information required by Section 3.03(c) of the Security Agreement or confirming that there has been no change in such information since the Closing Date or the date of the last such report), (B) a description of each Disposition or Casualty Event during the last fiscal quarter covered by such Compliance Certificate and (C) a list of Subsidiaries that identifies each Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary as of the date of delivery of such Compliance Certificate or a confirmation that there is no change in such information since the later of the Closing Date or the date of the last such list;

(v) promptly following any request by a Lender or the Administrative Agent therefor, on and after the effectiveness of the Pension Act, copies of (A) any documents described in Section 101(k)(1) of ERISA that Holdings and any of its ERISA Affiliates may request with respect to any Multiemployer Plan and (B) any notices described in Section 101(l)(1) of ERISA that Holdings or any of its ERISA Affiliates may request with respect to any Plan or Multiemployer Plan; provided that if Holdings or any of its ERISA Affiliates have not requested such documents or notices from the administrator or sponsor of the applicable Plan or Multiemployer Plan, Holdings or its ERISA Affiliates shall promptly make a request for such documents or notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof;

- 101 -

(vi) the financial and collateral reports described on Schedule 6.02(vi) hereto, at the times set forth in such Schedule 6.02(vi);

(vii) at least five Business Days prior to the making of any Specified Payment, a detailed calculation of the Excess Availability and all components thereof, and, to the extent applicable, a detailed calculation of the Consolidated Fixed Charge Coverage Ratio calculated on a Pro Forma Basis and all components thereof, in each case, with such supporting documentation as the Administrative Agent may reasonably request;

(viii) promptly, such additional information regarding the business, legal, financial or corporate affairs of any Loan Party or any Restricted Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender through the Administrative Agent may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(i) or (ii) or Section 6.02(i), (ii) or (iii) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which the Lead Borrower posts such documents, or provides a link thereto on the Lead Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Lead Borrower’s behalf on IntraLinks or another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) upon written request by the Administrative Agent, the Lead Borrower shall deliver paper copies of such documents to the Administrative Agent for further distribution to each Lender until a written request to cease delivering paper copies is given by the Administrative Agent and (ii) the Lead Borrower shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Lead Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(i) to the Administrative Agent. Each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents and the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by Holdings or the Borrowers with any such request for delivery.

Each of Holdings and the Lead Borrower hereby acknowledges that (i) the Administrative Agent and the Bookrunners will make available to the Lenders and the L/C Issuers materials and/or information provided by or on behalf of Holdings and the Lead Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (ii) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Lead Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. Each of Holdings and the Lead Borrower hereby agrees that so long as Holdings or the Lead Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that: (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Lead Borrower shall be deemed to have authorized the Administrative Agent, the Bookrunners, the L/C Issuers and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with

- 102 -

respect to Holdings or the Lead Borrower or their respective securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agent and the Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.” Notwithstanding the foregoing, neither Holdings nor the Lead Borrower shall be under any obligation to mark any Borrower Materials “PUBLIC”.

Section 6.03 Notices. Promptly after obtaining actual knowledge thereof, notify the Administrative Agent:

(i) of the occurrence of any Default;

(ii) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including such matters arising out of or resulting from (A) breach or non-performance of, or any default or event of default under, a Contractual Obligation of any Loan Party or any Subsidiary, (B) to the extent permitted by Law, any dispute, litigation, investigation or proceeding between any Loan Party or any Subsidiary and any Governmental Authority, (C) the commencement of, or any material development in, any litigation or proceeding affecting any Loan Party or any Subsidiary, including pursuant to any applicable Environmental Laws or in respect of IP Rights or the assertion or occurrence of any noncompliance by any Loan Party or any of its Subsidiaries with, or liability under, any applicable Environmental Law or Environmental Permit, (D) the occurrence of any ERISA Event or similar event with respect to Foreign Plans, (E) to the extent permitted by Law, any notice of loss or threatened loss of accreditation, loss of participation under any Government Healthcare Program or loss of applicable health care license, in each case that could reasonably be expected to have a Material Adverse Effect or (F) to the extent permitted by Law, the institution of any investigation or proceedings against such Person (or, to the knowledge of the Borrowers’ officers, any Contract Provider) to suspend, revoke or terminate or which may result in the termination of its status as a Medicare supplier or its status as a Medicaid provider or exclusion from any Government Healthcare Program;

(iii) any casualty or other insured damage to any portion of the Collateral subject to the Borrowing Base in excess of $5,000,000, or the commencement of any action or proceeding for the taking of any interest in a portion of the Collateral subject to the Borrowing Base in excess of $5,000,000 or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceedings; and

(iv) the receipt of any notice of default by a Loan Party under, or notice of termination of, any Lease for any of the Loan Parties’ distribution centers or warehouses.

Each notice pursuant to this Section shall be accompanied by a written statement of a Responsible Officer of the Lead Borrower (x) that such notice is being delivered pursuant to Section 6.03(i), (ii), (iii) or (iv) (as applicable) and (y) setting forth details of the occurrence referred to therein and stating what action the Lead Borrower has taken and proposes to take with respect thereto.

Section 6.04 Payment of Obligations. Pay, discharge or otherwise satisfy as the same shall become due and payable, all its obligations and liabilities in respect of taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, except, in each case, to the extent the failure to pay or discharge the same could not reasonably be

- 103 -

expected to have a Material Adverse Effect, it being understood that neither Holdings, the Borrowers nor any of their respective Restricted Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with GAAP.

Section 6.05 Preservation of Existence, Etc. (i) Preserve, renew and maintain in full force and effect its legal existence under the Laws of the jurisdiction of its organization and (ii) take all reasonable action to maintain all rights, privileges (including its good standing), permits, licenses and franchises necessary or desirable in the normal conduct of its business, except in the case of clauses (i) and (ii), (A) to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect or (B) pursuant to a transaction permitted by Section 7.04 or 7.05.

Section 6.06 Maintenance of Properties. Except if the failure to do so could not reasonably be expected to have a Material Adverse Effect, (i) maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order, repair and condition, ordinary wear and tear excepted and casualty or condemnation excepted, and (ii) make all necessary renewals, replacements, modifications, improvements, upgrades, extensions and additions thereof or thereto in accordance with prudent industry practice.

Section 6.07 Maintenance of Insurance. (a) Maintain (i) with financially sound and reputable insurance companies, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against in accordance with normal industry practice or by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance reasonable and customary for similarly situated Persons engaged in the same or similar businesses as Holdings, the Borrowers and the Restricted Subsidiaries) as are customarily carried under similar circumstances in accordance with normal industry practice or by such other Persons and (ii) without limitation to the foregoing, the insurance arrangements in respect of the Collateral required by the Security Agreement.

(b) Property coverage policies maintained with respect to any Collateral shall be endorsed or otherwise amended to include (i) a mortgage clause (regarding improvements to Real Property) and a lenders’ loss payable clause (regarding personal property), in form and substance reasonably satisfactory to the Agents, which endorsements or amendments shall provide that the insurer shall pay all proceeds otherwise payable to the Loan Parties under the policies directly to the Administrative Agent, (ii) a provision to the effect that none of the Loan Parties, Senior Credit Parties (in their capacity as such) or any other Affiliate of a Loan Party shall be a co-insurer (the foregoing not being deemed to limit the amount of self-insured retention or deductibles under such policies, which self-insured retention or deductibles shall be consistent with business practices in effect on the Closing Date or as otherwise determined by the Responsible Officers of the Loan Parties acting reasonably in their business judgment), and (iii) such other provisions as the Administrative Agent may reasonably require from time to time to protect the interests of the Senior Credit Parties. Commercial general liability policies shall be endorsed to name the Administrative Agent as an additional insured. Each endorsement to such casualty or liability policy referred to in this Section 6.07(b) shall also provide that it shall not be canceled, modified in any manner that would cause this Section 6.07 to be violated, or not renewed (i) by reason of nonpayment of premium except upon not less than ten days’ prior written notice thereof by the insurer to the Administrative Agent (giving the Administrative Agent the right to cure defaults in the payment of premiums) or (ii) for any other reason except upon not less than 30 days’ prior written notice thereof by the insurer to the Administrative Agent. The Lead Borrower shall deliver to the Administrative Agent, prior to the cancellation, modification or non-renewal of any such policy of insurance, a copy of a renewal or replacement policy (or other evidence of renewal of a policy previously delivered to the Administrative Agent, including an insurance binder) together with evidence satisfactory to the Administrative Agent of payment of the premium therefor.

- 104 -

(c) With respect to each Mortgaged Property, obtain flood insurance in such total amounts as the Administrative Agent may from time to time reasonably require, if at any time the area in which any improvements located on any Mortgaged Property is designated as a “flood hazard area” in any Flood Insurance Rate Map established by the Federal Emergency Management Agency (or any successor agency), and otherwise comply with the National Flood Insurance Program set forth in the Flood Disaster Protection Act of 1973, as amended from time to time.

(d) For the avoidance of doubt, the requirements of this Section 6.07 are subject in all respects to the terms of the Intercreditor Agreement.

Section 6.08 Compliance with Laws. (i) Comply in all respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, other than such orders, writs, injunctions and decrees as to which an appeal has been timely and properly taken in good faith, except if the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect; and (ii) shall have in place a compliance program which is reasonably designed to provide internal controls that promote adherence to, and prevent and detect material violations of, any Requirement of Law applicable to it and which includes the implementation of internal audits and monitoring on a regular basis to monitor compliance with the compliance program with the Requirements of Law.

Section 6.09 Books and Records. Maintain proper books of record and account, in which entries that are full, true and correct in all material respects and are in conformity with GAAP consistently applied shall be made of all material financial transactions and matters involving the assets and business of Holdings, the Lead Borrower or any Restricted Subsidiary, as the case may be.

Section 6.10 Inspection Rights.

(a) Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom (other than the records of the Board of Directors of such Loan Party or such Subsidiary) and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the reasonable expense of the Borrowers and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Lead Borrower; provided that, excluding any such visits and inspections during the continuation of an Event of Default, only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this Section 6.10 and the Administrative Agent shall not exercise such rights more often than two times during any calendar year absent the existence of an Event of Default and only one such time shall be at the Borrowers’ expense; provided, further that when an Event of Default exists, the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrowers at any time during normal business hours and upon reasonable advance notice. The Administrative Agent and the Lenders shall give the Lead Borrower the opportunity to participate in any discussions with the Borrowers’ independent public accountants. Notwithstanding anything to the contrary in this Section 6.10, none of the Loan Parties or any Restricted Subsidiary will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (i) constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by Law (including but not limited to patient privacy laws and regulations) or any binding agreement or (iii) is subject to attorney-client or similar privilege or constitutes attorney work product.

- 105 -

(b) In addition to the foregoing, from time to time upon the request of the Administrative Agent, permit the Administrative Agent or professionals (including consultants, accountants, lawyers and appraisers) retained by the Administrative Agent, on reasonable prior notice and during normal business hours, to conduct appraisals and commercial finance examinations, including, without limitation, of (i) the Borrowers’ practices in the computation of the Borrowing Base, and (ii) the assets subject to the Borrowing Base and related financial information such as, but not limited to, sales, gross margins, payables, accruals and reserves. The Loan Parties shall pay the reasonable out-of-pocket fees and expenses of the Administrative Agent or such professionals with respect to such evaluations and appraisals, provided that (x) the Administrative Agent may conduct no more than two commercial finance examinations in any calendar year (provided that the Administrative Agent, in its reasonable discretion, if any Event of Default exists, may cause such additional commercial finance examinations to be taken as the Administrative Agent reasonably determines (each, at the expense of the Loan Parties)) and provided, further, that at any time that Excess Availability is or has been less than 20.00% of the Borrowing Base, the Administrative Agent may conduct up to three commercial finance examinations in such calendar year at the Loan Parties’ expense (provided, further, that the Administrative Agent may undertake at its sole expense whether or not an Event of Default exists, one additional commercial finance examination), (y) the Administrative Agent may undertake no more than two appraisals of the Loan Parties’ Inventory in any calendar year (provided that the Administrative Agent, in its reasonable discretion, if any Event of Default exists, may cause such additional appraisals to be taken as the Administrative Agent reasonably determines (each, at the expense of the Loan Parties) and provided, further, that at any time that Excess Availability is or has been less than 20.00% of the Borrowing Base, the Administrative Agent may conduct up to three appraisals for each category of Inventory of the Loan Parties in such calendar year at the Loan Parties’ expense (provided, further, that the Administrative Agent may undertake at its sole expense whether or not an Event of Default exists, one additional appraisal of Inventory) and (z) the Administrative Agent may undertake no more than two appraisals of the Loan Parties’ Real Property in any calendar year (provided that the Administrative Agent, in its reasonable discretion, if any Event of Default exists, may cause such additional appraisals to be taken as the Administrative Agent reasonably determines (each, at the expense of the Loan Parties) and provided, further, that at any time that Excess Availability is or has been less than 20.00% of the Borrowing Base, the Administrative Agent may conduct up to three appraisals of the Loan Parties’ Real Property in such calendar year at the Loan Parties’ expense (provided, further, that the Administrative Agent may undertake at its sole expense whether or not an Event of Default exists, one additional appraisal for Real Property).

Section 6.11 Covenant to Guarantee Obligations and Give Security. At the Borrowers’ expense, take all action necessary or reasonably requested by the Administrative Agent to ensure that the Collateral and Guarantee Requirement continues to be satisfied, including (except to the extent otherwise provided hereunder or under any Collateral Document or the Intercreditor Agreement):

(a) upon the formation or acquisition of any new direct or indirect Subsidiary (in each case, other than an Unrestricted Subsidiary or an Excluded Subsidiary) by any Loan Party, the designation in accordance with Section 7.15 of any existing direct or indirect Subsidiary as a Restricted Subsidiary or any Subsidiary becoming a Material Subsidiary:

(i) within 45 days after such formation, acquisition or designation or such longer period as the Collateral Agent or Administrative Agent may agree in its discretion:

(A) cause each such Domestic Subsidiary that is required to become a Guarantor under the Collateral and Guarantee Requirement to furnish to the

- 106 -

Administrative Agent or the Collateral Agent (as appropriate) a description of the Material Real Properties owned by such Restricted Subsidiary in detail reasonably satisfactory to the Administrative Agent;

(B) cause each such Domestic Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement, to the extent such Domestic Subsidiary owns assets of the type subject to Borrowing Base, duly execute and deliver to the Administrative Agent a counterpart signature page to this Agreement, whereby such Domestic Subsidiary shall agree to become a Borrower hereunder in accordance with the terms of this Agreement;

(C) cause each such Domestic Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement to duly execute and deliver to the Administrative Agent or the Collateral Agent (as appropriate) Mortgages, Security Agreement Supplements, Intellectual Property Security Agreements, Guaranties and other security agreements and documents (including, with respect to the Mortgages, the documents listed in Section 6.13(b)) as reasonably requested by and in form and substance reasonably satisfactory to the Administrative Agent or the Collateral Agent (as appropriate) (consistent with the Mortgages, Security Agreement, Intellectual Property Security Agreements and other Collateral Documents in effect on the Closing Date), in each case granting Liens required by the Collateral and Guarantee Requirement;

(D) cause each such Domestic Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement to deliver any and all certificates representing Equity Interests (to the extent certificated) that are required to be pledged pursuant to the Collateral and Guarantee Requirement, accompanied by undated stock powers or other appropriate instruments of transfer executed in blank (or any other documents customary under local law) and instruments evidencing the intercompany Indebtedness held by such Restricted Subsidiary and required to be pledged pursuant to the Collateral Documents, indorsed in blank to the Collateral Agent;

(E) take and cause such Domestic Subsidiary and each direct or indirect parent of such Domestic Subsidiary that is required to become a Guarantor pursuant to the Collateral and Guarantee Requirement to take whatever action (including the recording of Mortgages, the filing of UCC financing statements and delivery of stock and membership interest certificates) may be necessary in the reasonable opinion of the Administrative Agent or the Collateral Agent (as appropriate) to vest in the Administrative Agent or the Collateral Agent (as appropriate) (or in any representative of the Administrative Agent or the Collateral Agent (as appropriate) designated by it) valid Liens required by the Collateral and Guarantee Requirement, enforceable against all third parties in accordance with their terms, except as such enforceability may be limited by Debtor Relief Laws, and by general principles of equity (regardless of whether enforcement is sought in equity or at law) and by an implied covenant of good faith and fair dealing;

(ii) within 30 days (or 45 days with respect to any Foreign Subsidiary) after the request therefor by the Administrative Agent or the Collateral Agent (as appropriate) (or such longer period as the Administrative Agent or the Collateral Agent (as appropriate) may agree in its sole discretion), deliver to the Administrative Agent or the Collateral Agent (as appropriate) a signed copy of an opinion, addressed to the Administrative Agent or the Collateral Agent (as appropriate) and the other Secured Parties, of counsel for the Loan Parties reasonably acceptable to the Administrative Agent as to such matters set forth in this Section 6.11(a) as the Administrative Agent may reasonably request; and

- 107 -

(iii) as promptly as practicable after the request therefor by the Collateral Agent, deliver to the Collateral Agent with respect to each Material Real Property, any existing title reports, surveys or environmental assessment reports;

(b) (i) the Borrowers shall obtain the security interests and Guaranties set forth on Schedule 1.01B on or prior to the dates corresponding to such security interests and Guaranties set forth on Schedule 1.01B; and

(ii) after the Closing Date, promptly after the acquisition of any Material Real Property by any Loan Party, if such Material Real Property shall not already be subject to a perfected Lien pursuant to the Collateral and Guarantee Requirement, the Lead Borrower shall give notice thereof to the Administrative Agent and promptly thereafter shall cause such Real Property to be subjected to a Lien to the extent required by the Collateral and Guarantee Requirement and will take, or cause the relevant Loan Party to take, such actions as shall be necessary or reasonably requested by the Administrative Agent or the Collateral Agent to grant and perfect or record such Lien including, as applicable, the actions referred to in Section 6.13(b).

Section 6.12 Compliance with Environmental Laws. Except, in each case, to the extent that the failure to do so could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (i) comply, and take all commercially reasonable actions to cause any lessees and other Persons operating or occupying its properties to comply with all applicable Environmental Laws and Environmental Permits; (ii) obtain and renew all Environmental Permits necessary for its operations and properties; and (iii) in each case to the extent required by applicable Environmental Laws, conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to address all Hazardous Materials at, on, under or emanating from any currently or formerly owned or operated property or facility, in accordance with the requirements of all applicable Environmental Laws.

Section 6.13 Further Assurances and Post Closing Covenants.

(a) Promptly upon reasonable request by the Administrative Agent (i) correct any material defect or error that may be discovered in the execution, acknowledgment, filing or recordation of any Collateral Document or other document or instrument relating to any Collateral, and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments including any amendments or assignments thereto as the Administrative Agent or Collateral Agent may reasonably request from time to time in order to carry out more effectively the purposes of the Collateral Documents as set forth therein. Without limiting the foregoing, the Loan Parties shall use commercially reasonable efforts to obtain a Collateral Access Agreement from any Person from whom a Loan Party enters into a Lease after the Closing Date for a regional distribution center prior to entering into such Lease.

(b) In the case of any Material Real Property, except to the extent otherwise provided hereunder or under any Collateral Document or the Intercreditor Agreement, provide the Administrative Agent with Mortgages and otherwise satisfy the applicable Collateral and Guarantee Requirements with respect to such owned Real Property within 60 days (or such longer period as the Administrative Agent may agree in its sole discretion) of the acquisition of, or, if requested by the Administrative Agent, entry into, or renewal of, a ground lease in respect of, such Real Property in each case together with:

(i) evidence that counterparts of the Mortgages have been duly executed, acknowledged and delivered and are in form suitable for filing or recording in all filing or recording offices that the Collateral Agent may deem reasonably necessary or desirable in order to create a valid and subsisting perfected Lien on the Mortgaged Property described therein in favor of the Collateral Agent for the benefit of the Secured Parties and that all filing and recording taxes and fees have been paid or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent;

- 108 -

(ii) Mortgage Policies in form and substance, with endorsements and in amount, reasonably acceptable to the Collateral Agent (not to exceed the value of the real properties covered thereby), issued, coinsured and reinsured by title insurers reasonably acceptable to the Collateral Agent, insuring the Mortgages to be valid subsisting Liens on the Mortgaged Property described therein, free and clear of all defects and encumbrances, subject to Liens permitted by Section 7.01, and providing for such other affirmative insurance (including endorsements for future advances under the Loan Documents) and such coinsurance and direct access reinsurance as the Collateral Agent may reasonably request;

(iii) opinions of local counsel for the Loan Parties in states in which the Mortgaged Properties are located, with respect to the enforceability and perfection of the Mortgages and any related fixture filings in form and substance reasonably satisfactory to the Collateral Agent; and

(iv) such other evidence that all other actions that the Collateral Agent may reasonably deem necessary or desirable in order to create valid and subsisting Liens on the property described in the Mortgages has been taken;

provided that, with respect to any obligation set forth in clauses (b)(i) through (iv) above for any ground lease requiring the consent of a third party not controlled by Holdings or its Restricted Subsidiaries, such Loan Party shall only be required to use its commercially reasonable efforts to perform such obligation.

(c) (i) Within five Business Days from the Closing Date (or, with respect to such DDAs in the name of Coram, Inc. or any of its Subsidiaries (the “Coram Accounts”), 180 days from the Closing Date) (or, unless a Cash Dominion Event or an Event of Default has occurred, such later date as may be agreed to by the Administrative Agent), deliver to the Collateral Agent, for each DDA established or maintained by any of Holdings, the Borrowers and the Restricted Subsidiaries, into which the proceeds of Accounts owed by Third Party Payors are being deposited, an irrevocable instruction to a depositary institution maintaining such DDA in form and substance reasonably satisfactory to the Collateral Agent (it being understood that the Lead Borrower shall not, except as required by Law, permit such instruction to be amended or waived in a manner adverse to the Lenders without the prior written consent of the Collateral Agent), duly executed by such Person, which will provide that by 10:00 a.m. (New York time) on each Business Day, each of Holdings, the Borrowers and the Restricted Subsidiaries will cause the entire available balance in each such DDA to be transferred by ACH or book entry transfer to the Concentration Account; (ii) within 30 days from the Closing Date (or, unless a Cash Dominion Event or an Event of Default has occurred, such later date as may be agreed to by the Administrative Agent), deliver to the Collateral Agent, for each Coram Account into which the proceeds of Accounts owed by Third Party Payors are being deposited, an irrevocable instruction to a depositary institution maintaining such Coram Account in form and substance reasonably satisfactory to the Collateral Agent (it being understood that the Lead Borrower shall not, except as required by Law, permit such instruction to be amended or waived in a manner adverse to the Lenders without the prior written consent of the Collateral Agent), duly executed by such Person, which will provide that by 10:00 a.m. (New York time) on each Business Day, each of Holdings, the Borrowers and the Restricted Subsidiaries will cause the entire

- 109 -

available balance in each such Coram Account to be transferred by ACH or book entry transfer to a designated Coram Account which shall be a Dominion Account (the “Coram Concentration Account”); and (iii) perform the obligations set forth on Schedule 6.13(c) in each case within the time limits set forth on Schedule 6.13(c) or such longer period as determined by the Administrative Agent in its sole discretion; provided that, with respect to any obligation set forth on Schedule 6.13(c) requiring the consent, waiver, approval or other participation of a third party not controlled by Holdings or its Restricted Subsidiaries, such Loan Party shall only be required to use its commercially reasonable efforts to perform such obligation, and the Administrative Agent may, in its sole discretion, extend or waive such obligations to the extent such Loan Party’s use of commercially reasonable efforts has not resulted, and in the judgment of the Administrative Agent will not result, in the performance of such obligation.

Section 6.14 Information Regarding Collateral. Furnish to the Agents prompt written notice of any change in: (i) any Loan Party’s name; (ii) the location of any Loan Party’s chief executive office or its principal place of business; (iii) any Loan Party’s organizational structure or jurisdiction of incorporation or formation; or (iv) any Loan Party’s Federal Taxpayer Identification Number and organizational identification number assigned to it by its state of organization. The Loan Parties agree not to effect or permit any change referred to in the preceding sentence unless all filings, publications and registrations, have been made (or will be made in a timely fashion) under the UCC or other applicable Law that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority security interest to the extent required under the Collateral Documents (subject only to Permitted Liens having priority under applicable Law) in all the Collateral for its own benefit and the benefit of the other Secured Parties.

Section 6.15 Collateral Administration.

(a) Administration of Accounts.

(i) Records and Schedules of Accounts. Keep accurate and complete records of its Accounts, including all payments and collections thereon, and shall submit to the Administrative Agent sales, collection, reconciliation and other reports in form reasonably satisfactory to the Administrative Agent, on such periodic basis as the Administrative Agent may request. The Lead Borrower shall also provide to the Administrative Agent, on or before the 15th Business Day of each month, a detailed aged trial balance of all Loan Party Accounts as of the end of the preceding month, specifying each Account’s Account Debtor name and address, amount, invoice date and due date, showing any discount, allowance, credit, authorized return or dispute, and including such proof of delivery, copies of invoices and invoice registers, copies of related documents, repayment histories, status reports and other information as the Administrative Agent may reasonably request. If Accounts in an aggregate face amount of $5,000,000 or more cease to be Eligible Accounts, the Lead Borrower shall notify the Administrative Agent of such occurrence promptly (and in any event within three Business Days) after any Loan Party has knowledge thereof.

(ii) Taxes. If an Account of any Loan Party includes a charge for any Taxes, the Administrative Agent is authorized, in its discretion, to pay the amount thereof to the proper taxing authority for the account of such Loan Party and to charge the Borrowers therefor; provided, however, that neither the Administrative Agent nor the Lenders shall be liable for any Taxes that may be due from the Loan Parties or with respect to any Collateral.

(iii) Account Verification. Whether or not a Default or Event of Default or a Cash Dominion Event exists, the Administrative Agent shall have the right at any time, in the name of the Administrative Agent, any designee of the Administrative Agent or any Loan Party,

- 110 -

to verify the validity, amount or any other matter relating to any Accounts of the Loan Party by mail, telephone or otherwise. The Loan Parties shall cooperate fully with the Administrative Agent in an effort to facilitate and promptly conclude any such verification process.

(iv) Maintenance of Accounts. The Loan Parties shall maintain one or more Dominion Accounts, each pursuant to a lockbox or other arrangement acceptable to Administrative Agent, with such banks as may be selected by applicable Loan Parties and be acceptable to Administrative Agent. No later than the date specified in Section 6.18 hereof, the Loan Parties shall enter into Deposit Account Control Agreements with each bank at which a DDA (other than an Excluded Account or a Specified Government Receivables Deposit Account) is maintained by which such bank shall, upon the occurrence and during the continuation of a Cash Dominion Event or an Event of Default, immediately transfer to the Concentration Account all monies deposited to a Dominion Account constituting proceeds of Collateral. All funds deposited in each Dominion Account shall be subject to the Administrative Agent’s Lien. The Loan Parties shall obtain the agreement (in favor of and in form and content reasonably satisfactory to the Administrative Agent) by each bank at which a Dominion Account is maintained to waive any offset rights against the funds deposited into such Dominion Account, except offset rights in respect of charges incurred in the administration of such Dominion Account. The Administrative Agent and the Lenders shall not assume any responsibility to any Loan Party for such lockbox arrangement or, upon the occurrence and during the continuation of a Cash Dominion Event or Event of Default, any Dominion Account, including any claim of accord and satisfaction or release with respect to deposits accepted by any bank thereunder.

(v) Collection of Accounts; Proceeds of Collateral. All payment items received by any Loan Party in respect of its Accounts, together with the proceeds of any other Collateral, shall be held by such Loan Party as trustee of an express trust for the Administrative Agent’s benefit; such Loan Party shall immediately deposit same in kind in a Dominion Account or other DDA, as applicable, for application, as the case may be, to the applicable Finance Obligations in accordance with the terms of this Agreement and the Security Agreement. The Administrative Agent retains the right at all times that a Default or an Event of Default exists to notify Account Debtors of any Loan Party (other than Account Debtors with respect to Specified Government Accounts) that Accounts (other than Specified Government Accounts) have been assigned to the Administrative Agent and to collect Accounts (other than Specified Government Accounts) directly in its own name and to charge to the Borrowers the collection costs and expenses incurred by the Administrative Agent or Lenders, including reasonable attorneys’ fees. Upon the occurrence and during the continuation of a Cash Dominion Event or an Event of Default, all monies properly deposited in the Concentration Account shall be deemed to be voluntary prepayments of Senior Credit Obligations and applied in accordance with Section 2.05(b)(ii) and Section 2.12(b) to reduce outstanding Senior Credit Obligations.

(vi) Asset Sales Proceeds Accounts. Neither the Lead Borrower nor any of its Subsidiaries shall deposit any funds or credit any amounts into any “Asset Sales Proceeds Account” (as defined in the Intercreditor Agreement), other than proceeds of “Noteholder Collateral” (as defined in the Intercreditor Agreement).

(b) Administration of Inventory.

(i) Records and Reports of Inventory. Each Loan Party shall keep accurate and complete records of its Inventory, including costs and daily withdrawals and additions, and shall submit to the Administrative Agent inventory and reconciliation reports in form reasonably satisfactory to the Administrative Agent, on such periodic basis as the Administrative Agent may

- 111 -

request. Each Loan Party shall conduct a physical inventory consistent with historical practices (and on a more frequent basis if requested by the Administrative Agent when an Event of Default exists) and periodic cycle counts consistent with historical practices, and shall provide to the Administrative Agent a report based on each such inventory and count promptly upon completion thereof, together with such supporting information as the Administrative Agent may request. The Administrative Agent may participate in and observe each physical count.

(ii) Returns of Inventory. No Loan Party shall return any Inventory to a supplier, vendor or other Person, whether for cash, credit or otherwise, unless: (A) such return is in the ordinary course of business; (B) no Default, Event of Default or Overadvance exists or would result therefrom; and (C) the Administrative Agent is promptly notified if the aggregate value of all Inventory returned in any month exceeds $5,000,000.

(iii) Acquisition, Sale and Maintenance. The Loan Parties shall use, store and maintain all Inventory with reasonable care and caution, in accordance with applicable standards of any insurance and in conformity with all applicable Law, and shall make current rent payments (within applicable grace periods provided for in leases) at all locations where any Collateral is located.

Section 6.16 Corporate Separateness.

(a) Satisfy, and cause each of its Restricted Subsidiaries and Unrestricted Subsidiaries to satisfy, customary corporate and other formalities, including, as applicable, the holding of regular board of directors’ and shareholders’ meetings or action by directors or shareholders without a meeting, in each case, to the extent required by law and the maintenance of corporate offices and records.

(b) Ensure that (i) no payment is made by it or any of its Restricted Subsidiaries to a creditor of any Unrestricted Subsidiary in respect of any liability of any Unrestricted Subsidiary, (ii) no bank account of any Unrestricted Subsidiary shall be commingled with any bank account of the Borrowers, Holdings or any direct or indirect parent of the Borrowers or any of their Restricted Subsidiaries, and (iii) any financial statements distributed to any creditors of any Unrestricted Subsidiary shall clearly establish or indicate the corporate separateness of such Unrestricted Subsidiary from the Borrowers, Holdings or any direct or indirect parent of the Borrowers or any of their Restricted Subsidiaries.

Section 6.17 Consolidated Fixed Charge Coverage Ratio. If Excess Availability shall be less than 12.50% of the lesser of the Aggregate Commitments and the Borrowing Base (a “Financial Covenant Trigger Event”), maintain a Consolidated Fixed Charge Coverage Ratio of at least 1.05 to 1.0 as of the immediately preceding fiscal month end for which financial statements are available (but in any event as of the most recent fiscal month ending at least fifteen days prior to such Financial Covenant Trigger Event) and as of each subsequent fiscal month end thereafter; provided that (i) a breach of such covenant when so tested shall not be cured by a subsequent increase of Excess Availability above the applicable limit set forth above and (ii) such requirement to maintain a Consolidated Fixed Charge Coverage Ratio of at least 1.05 to 1.0 shall no longer apply if Excess Availability on each day during any period of 45 consecutive calendar days commencing after the date of such Financial Covenant Trigger Event shall be at least 12.50% of the lesser of the Aggregate Commitments and the Borrowing Base, after which time the requirement to comply with the Consolidated Fixed Charge Coverage Ratio shall not apply unless a subsequent Financial Covenant Trigger Event occurs; provided, further, that after any Financial Covenant Trigger Event, unless and until the Lead Borrower has demonstrated its compliance with the Consolidated Fixed Charge Coverage Ratio requirement set forth above by delivery to the Administrative Agent of the monthly financial statements for the fiscal month specified above and the

- 112 -

related Compliance Certificate, (i) the Borrowers shall not be permitted to request any Loans or the issuance of any Letters of Credit and (ii) Holdings, the Borrowers and their respective Restricted Subsidiaries shall not be permitted to consummate (A) any transaction described under Section 7.02(d)(iv), 7.02(j), 7.02(o), 7.06(k) or 7.12(a)(v) or (B) without the consent of the Administrative Agent, any transaction described under Section 7.05(i). For purposes of determining satisfaction with the foregoing Consolidated Fixed Charge Coverage Ratio under this Section 6.17, any Specified Equity Contribution made during the period from the last day of the relevant period until the expiration of the 10th day after the date on which financial statements are required to be delivered hereunder with respect to the relevant period will, at the request of the Lead Borrower, be included in the calculation of Consolidated EBITDA for any period of calculation which includes the month in which such Specified Equity Contribution was received by the Loan Parties, provided that (A) in each four fiscal quarter period, there shall be a period of at least two consecutive fiscal quarters in respect of which no Specified Equity Contribution is made, (B) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause Holdings and the Borrowers to be in compliance with the Consolidated Fixed Charge Coverage Ratio specified above on a Pro Forma Basis, and in any event no greater than $40,000,000 for any one Specified Equity Contribution and (C) all Specified Equity Contributions shall be disregarded for purposes of determining the amount or availability of any baskets with respect to the covenants contained herein.

Section 6.18 Maintenance of Cash Management System.

The Loan Parties will establish and maintain the cash management system described below:

(a) The applicable schedule to the Perfection Certificate sets forth all DDAs maintained by the Loan Parties, including all Dominion Accounts. On or prior to the date that is 180 days after the Closing Date (or, with respect to the Coram Concentration Account, 30 days after the Closing Date) (or, unless a Cash Dominion Event or Event of Default has occurred, such later date as may be agreed to by the Administrative Agent), each Loan Party shall take all actions necessary to establish the Administrative Agent’s control of and Lien on each such DDA (other than an Excluded Account or a Specified Government Receivables Deposit Account). Each Loan Party shall be the sole account holder of each DDA (other than an Excluded Account) and shall not allow any other Person (other than the Administrative Agent) to have control over or a Lien on a DDA (other than an Excluded Account) or any property deposited therein (it being understood that the Administrative Agent shall not have a control over or a Lien on any Specified Government Receivables Deposit Account). The Lead Borrower shall not, and shall not cause or permit any of its Restricted Subsidiaries to, accumulate or maintain cash (other than (i) cash that is not proceeds of any Collateral and (ii) Uncontrolled Cash) in the Excluded Accounts as of any date of determination in excess of checks outstanding against such Accounts as of the date and amounts necessary to meet minimum balance, near-term funding requirements or near-term operating requirements.

(b) Within 180 days after the Closing Date (or, with respect to the Coram Concentration Account, 30 days after the Closing Date) (or, unless a Cash Dominion Event or an Event of Default has occurred, such later date as may be agreed to by the Administrative Agent), the Loan Parties shall have delivered to the Administrative Agent Deposit Account Control Agreements for all of the DDAs of the Loan Parties (other than Excluded Accounts and Specified Government Receivables Deposit Accounts), duly executed by each applicable Loan Party and the applicable depositary bank and opinion of counsel (which may contain customary qualifications and exclusions) with respect thereto in form and substance reasonably satisfactory to the Collateral Agent.

- 113 -

(c) Within 90 days after the Closing Date (or, unless a Cash Dominion Event or an Event of Default has occurred, such later date as may be agreed to by the Administrative Agent), the Lead Borrower will, or will cause each of the applicable Loan Parties to, request in writing and otherwise take reasonable steps to provide that, within 180 days after the Closing Date (or, unless a Cash Dominion Event or an Event of Default has occurred, such later date as may be agreed to by the Administrative Agent), all Account Debtors in respect of Specified Government Accounts that constitute Collateral forward payment directly to an account of the applicable Loan Party designated as a Specified Government Receivables Deposit Account on the applicable schedule to the Perfection Certificate (each a “Specified Government Receivables Deposit Account”). Without limiting the requirements of Sections 6.13(c)(i), 6.13(c)(ii) and 6.18(b), (i) each Loan Party that owns or originates Specified Government Accounts, shall establish and maintain appropriate Specified Government Receivables Deposit Accounts within the timeframe provided in the preceding sentence, (ii) within 180 days after the Closing Date (or, unless a Cash Dominion Event or an Event of Default has occurred, such later date as may be agreed to by the Administrative Agent), each Loan Party that owns or originates Eligible Accounts generated by Third Party Payors shall deliver to the Collateral Agent for each DDA into which such Eligible Accounts are being deposited (including each Specified Government Receivables Deposit Account) established or maintained by such Loan Party, an agreement in form and substance satisfactory to the Collateral Agent, duly executed by such Loan Party and the applicable depositary bank providing for sweeps described in the following clause (iii) and will not, except as required by Law, allow for such provisions to be amended or waived in a manner adverse to the Lenders without the prior written consent of the Collateral Agent, (iii) by 10:00 a.m. (New York time) on each Business Day (commencing with the sixth Business Day following the Closing Date (or, with respect to Coram Accounts, the 181^st day following the Closing Date)) (or, unless a Cash Dominion Event or an Event of Default has occurred, such later date as may be agreed to by the Administrative Agent), each Loan Party will cause the entire available balance in each DDA referred to in the foregoing clause (ii) (including each Specified Government Receivables Deposit Account) to be transferred by ACH or book entry transfer to the Concentration Account and (iv) after the fifth Business Day following the Closing Date (or, with respect to Coram Accounts, the 180 ^th day following the Closing Date) (or, unless a Cash Dominion Event or an Event of Default has occurred, such later date as may be agreed to by the Administrative Agent), the Loan Parties will not transfer any funds out of any DDA referred to in the foregoing clause (ii) (including each Specified Government Receivables Deposit Account) except to the Concentration Account.

(d) Upon the occurrence and during the continuation of a Cash Dominion Event, the Loan Parties shall cause any and all funds and financial assets constituting Collateral (other than Uncontrolled Cash) held in or credited to each DDA to be swept into the Concentration Account on a daily basis (or less frequently as agreed by the Administrative Agent). Uncontrolled Cash may be deposited into a segregated DDA which the Lead Borrower designates in writing to the Administrative Agent as being the “Uncontrolled Cash Account”.

ARTICLE VII

NEGATIVE COVENANTS

Until (i) the Revolving Credit Commitments have expired or been terminated, (ii) the principal of and interest on each Loan (including Swing Line Loans) and all fees and other Senior Credit Obligations (other than contingent indemnity obligations with respect to then unasserted claims and the Other Liabilities) shall have been paid in full, (iii) all Letters of Credit shall have expired or terminated (or been cash collateralized or backstopped in a manner reasonably satisfactory to the L/C Issuers) and (iv) all L/C Obligations have been reduced to zero (or cash collateralized or backstopped in a manner reasonably satisfactory to the L/C Issuers), neither Holdings nor any Borrower shall, nor shall any of them permit any of its Restricted Subsidiaries to, directly or indirectly:

- 114 -

Section 7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of their property, assets or revenues, whether now owned or hereafter acquired, other than the following (each of the following, a “Permitted Lien”):

(a) Liens pursuant to any Loan Document;

(b) Liens securing (i) (A) the Term Debt Secured Obligations (other than the Additional Senior Secured Term Debt) and (B) subject to the terms of the Intercreditor Agreement, Additional Senior Secured Term Debt permitted to be incurred under Sections 7.03(b)(ii) and 7.03(b)(iii) and (ii) without duplication, any Permitted Refinancing of any of the Term Debt Secured Obligations referred to in the foregoing clauses (i)(A) and (i)(B);

(c) Liens existing on the Closing Date (other than consensual Liens on Inventory and Accounts that, in each case is subject to the Borrowing Base); provided that any Lien securing Indebtedness in excess of $1,000,000 individually or in the aggregate (when taken together with all other Liens securing obligations outstanding in reliance on this clause (c) that are not listed on Schedule 7.01(c)) shall only be permitted to the extent such Lien is listed on Schedule 7.01(c);

(d) Liens for taxes, assessments or governmental charges which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person to the extent required in accordance with GAAP;

(e) statutory or common law Liens of landlords, carriers, warehousemen, mechanics, materialmen, repairmen, construction contractors or other like Liens arising in the ordinary course of business which secure amounts not overdue for a period of more than 30 days or if more than 30 days overdue, are unfiled and no other action has been taken to enforce such Lien or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the Loan Parties, as applicable, to the extent required in accordance with GAAP;

(f) (i) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation and (ii) pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to Holdings, the Borrowers or any Restricted Subsidiary thereof;

(g) deposits to secure the performance of bids, trade contracts, governmental contracts and leases (other than Indebtedness for borrowed money), statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature (including those to secure health, safety and environmental obligations) incurred in the ordinary course of business;

(h) easements, rights-of-way, restrictions, encroachments, protrusions and other similar encumbrances and minor title defects affecting Real Property which, in the aggregate, do not in any case materially interfere with the ordinary conduct of the business of Holdings, the Borrowers or any Material Subsidiary, and any exceptions on the title policies issued in connection with the Mortgaged Property;

(i) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h);

- 115 -

(j) Liens securing Indebtedness permitted under Section 7.03(f); provided that (i) such Liens attach concurrently with or within 270 days after the acquisition, construction, repair, replacement or improvement (as applicable) of the property subject to such Liens, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness, replacements thereof and additions and accessions to such property and the proceeds and the products thereof and customary security deposits and (iii) with respect to Capitalized Lease Obligations, such Liens do not at any time extend to or cover any assets (except for additions and accessions to such assets, replacements and products thereof and customary security deposits) other than the assets subject to such Capitalized Lease Obligations; provided that individual financings of equipment provided by one lender may be cross collateralized to other financings of equipment provided by such lender;

(k) leases, licenses, subleases or sublicenses (in each case, including without limitation, with respect to Intellectual Property) granted to others in the ordinary course of business which do not (i) interfere in any material respect with the business of the Borrowers or any Material Subsidiary, taken as a whole, or (ii) secure any Indebtedness;

(l) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

(m) Liens (i) of a collecting bank arising under Section 4-210 of the UCC on the items in the course of collection, (ii) attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business and (iii) in favor of a banking or other financial institution arising as a matter of law encumbering deposits or other funds maintained with a financial institution (including the right of set-off) and which are within the general parameters customary in the banking industry;

(n) Liens (i) on cash advances in favor of the seller of any property to be acquired in an Investment permitted pursuant to Section 7.02(j) or (o) to be applied against the purchase price for such Investment and (ii) consisting of an agreement to Dispose of any property in a Disposition permitted under Section 7.05, in each case, solely to the extent such Investment or Disposition, as the case may be, would have been permitted on the date of the creation of such Lien;

(o) Liens in favor of Holdings, the Borrowers or a Restricted Subsidiary securing Indebtedness permitted under Section 7.03(e);

(p) Liens existing on property (other than consensual Liens on Inventory and Accounts that, in each case, is subject to the Borrowing Base) at the time of its acquisition or existing on the property of any Person at the time such Person becomes a Restricted Subsidiary (other than by designation as a Restricted Subsidiary pursuant to Section 7.15), in each case after the Closing Date (other than Liens on the Equity Interests of any Person that becomes a Restricted Subsidiary); provided that (i) such Lien was not created in contemplation of such acquisition or such Person becoming a Restricted Subsidiary, (ii) such Lien does not extend to or cover any other assets or property (other than the proceeds or products thereof and other than after-acquired property subjected to a Lien securing Indebtedness and other obligations incurred prior to such time and which Indebtedness and other obligations are permitted hereunder that require, pursuant to their terms at such time, a pledge of after-acquired property, it being understood that such requirement shall not be permitted to apply to any property to which such requirement would not have applied but for such acquisition), and (iii) the Indebtedness secured thereby is permitted under Section 7.03(f) or (h);

- 116 -

(q) any interest or title of a lessor under leases entered into by Holdings, the Borrowers or any of the Restricted Subsidiaries in the ordinary course of business;

(r) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by Holdings, the Borrowers or any of the Restricted Subsidiaries in the ordinary course of business;

(s) Liens deemed to exist in connection with Investments in repurchase agreements under Section 7.02 and reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts maintained in the ordinary course of business and not for speculative purposes;

(t) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks or other financial institutions not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of Holdings, the Borrowers or any of their respective Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of Holdings, the Borrowers and any of their respective Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of Holdings, the Borrowers or any Restricted Subsidiary thereof in the ordinary course of business;

(u) Liens solely on any cash earnest money deposits made by Holdings, the Borrowers or any of their respective Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder;

(v) (i) Liens placed upon the Equity Interests of any Restricted Subsidiary acquired pursuant to a Permitted Acquisition to secure Indebtedness incurred pursuant to Section 7.03(h) in connection with such Permitted Acquisition and (ii) Liens placed upon the assets of such Restricted Subsidiary and any of its Subsidiaries to secure Indebtedness (or to secure a Guarantee of such Indebtedness) incurred pursuant to Section 7.03(h) in connection with such Permitted Acquisition;

(w) ground leases in respect of Real Property on which facilities owned or leased by Holdings, the Borrowers or any of their Subsidiaries are located;

(x) Liens arising from precautionary UCC financing statement filings;

(y) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

(z) any zoning or similar law or right reserved to or vested in any Governmental Authority to control or regulate the use of any Real Property that does not materially interfere with the ordinary conduct of the business of Holdings, the Borrowers or any Material Subsidiary;

(aa) Liens on specific items of inventory or other goods and the proceeds thereof securing such Person’s obligations in respect of documentary letters of credit or banker’s acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods;

(bb) Liens on assets and Equity Interests of Foreign Subsidiaries securing Indebtedness permitted pursuant to Section 7.03(i);

- 117 -

(cc) the modification, replacement, renewal or extension of any Lien permitted by clause (b), (c), (j), (p) or (v) of this Section 7.01; provided that (i) the Lien does not extend to any additional property other than (x) after-acquired property that is affixed or incorporated into the property covered by such Lien or financed by Indebtedness permitted under Section 7.03, and (y) proceeds and products thereof, and (ii) the renewal, extension or refinancing of the obligations secured or benefited by such Liens is permitted by Section 7.03;

(dd) any encumbrance or restriction (including put and call arrangements) with respect to capital stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement; and

(ee) other Liens (other than consensual Liens on Inventory and Accounts that, in each case, are subject to the Borrowing Base) securing Indebtedness and other obligations outstanding in an aggregate principal amount not to exceed $50,000,000 (none of which shall be secured by Liens on the Revolving Facility Collateral (as defined in the Intercreditor Agreement)).

Section 7.02 Investments. Make or hold any Investments, except the following permitted investments (each, a “Permitted Investment”):

(a) Investments by Holdings, the Borrowers or a Restricted Subsidiary in assets that were Cash Equivalents when such Investment was made;

(b) loans or advances to officers, directors and employees of Holdings (or any direct or indirect parent thereof), any Intermediate Holding Company, the Borrowers or the Restricted Subsidiaries (i) for reasonable and customary business-related travel, entertainment, relocation and analogous ordinary business purposes, (ii) to the extent permitted by Law, in connection with such Person’s purchase of Equity Interests of Holdings (or any direct or indirect parent thereof or after a Qualifying IPO, any Intermediate Holding Company or the Borrowers) (provided that the amount of such loans and advances shall be contributed to a Loan Party in cash as common equity) and (iii) for purposes not described in the foregoing clauses (i) and (ii), in an aggregate principal amount outstanding not to exceed $15,000,000 at any time outstanding (net of any realized return representing a return of capital in respect of any such Investment);

(c) asset purchases (including purchases of inventory, supplies and materials), the licensing of Intellectual Property and the contribution of Intellectual Property pursuant to joint marketing arrangements with other Persons, in each case in the ordinary course of business;

(d) Investments (i) by any Loan Party in any other Loan Party, (ii) by any Non-Loan Party in any other Non-Loan Party that is a Restricted Subsidiary, (iii) by any Non-Loan Party in any Loan Party, and (iv) by any Loan Party in any Non-Loan Party that is a Restricted Subsidiary in an aggregate amount not to exceed (x) $15,000,000 at any time outstanding (net of any realized return representing a return of capital in respect of any such Investment) or (y) if the Pro Forma Excess Availability Condition has been satisfied both immediately before and immediately after giving Pro Forma Effect thereto and no Default or Event of Default exists or would result therefrom, $40,000,000 at any time outstanding (net of any realized return representing a return of capital in respect of any such Investment) (satisfaction of such condition shall be evidenced by a certificate from the Chief Financial Officer or other financial officer of the Lead Borrower demonstrating such satisfaction calculated in reasonable detail);

(e) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors and other credits to suppliers in the ordinary course of business;

- 118 -

(f) Investments consisting of Liens, Indebtedness, fundamental changes, Dispositions and Restricted Payments permitted under Sections 7.01, 7.03, 7.04, 7.05 and 7.06, respectively;

(g) Investments (i) existing or contemplated on the Closing Date and set forth on Schedule 7.02(g) and any modification, replacement, renewal, reinvestment or extension thereof and (ii) existing on the Closing Date by Holdings, the Borrowers or any Restricted Subsidiary in the Borrowers or any other Restricted Subsidiary and any modification, renewal, reinvestment or extension thereof; provided that the amount of any Investment permitted pursuant to this Section 7.02(g) is not increased from the amount of such Investment on the Closing Date except pursuant to the terms of such Investment as of the Closing Date or as otherwise permitted by this Section 7.02;

(h) Investments in Swap Contracts permitted under Section 7.03;

(i) promissory notes and other noncash consideration received in connection with Dispositions permitted by Section 7.05;

(j) the purchase or other acquisition of property and assets or businesses of any Person or of assets constituting a business unit, a line of business or division of such Person, or Equity Interests in a Person that, upon the consummation thereof, will be a Subsidiary of Holdings or the Borrowers (including as a result of a merger or consolidation); provided that, with respect to each purchase or other acquisition made pursuant to this Section 7.02(j) (each, a “Permitted Acquisition”):

(i) subject to clause (ii) below, a majority of all property, assets and businesses acquired in such purchase or other acquisition shall constitute Collateral and each applicable Loan Party and any such newly created or acquired Subsidiary (and, to the extent required under the Collateral and Guarantee Requirement, the Subsidiaries of such created or acquired Subsidiary) shall be Guarantors and shall have complied with the requirements of Section 6.11, within the times specified therein (for the avoidance of doubt, this clause (i) shall not override any provisions of the Collateral and Guarantee Requirement);

(ii) the aggregate amount of consideration paid in respect of acquisitions of Equity Interests in Persons that do not become Loan Parties (giving effect to any Investments permitted under Section 7.02(r)) shall not exceed (A) in the case of Persons that are or become Domestic Subsidiaries, $30,000,000 (net of any return representing a return of capital in respect of any such Investment), and (B) in the case of Persons that are or become Foreign Subsidiaries, $150,000,000 (net of any return representing a return of capital in respect of any such Investment), reduced by the principal amount of any Indebtedness incurred by any of such Persons used to fund the related acquisition;

(iii) the acquired property, assets, business or Person is in the same or substantially the same line of business as Holdings and its Subsidiaries, taken as a whole (or a business that is reasonably related or ancillary thereto);

(iv) the board of directors (or similar governing body) of the Person to be so purchased or acquired shall not have indicated publicly its opposition to the consummation of such purchase or acquisition (which opposition has not been publicly withdrawn);

- 119 -

(v) (A) immediately before and immediately after giving Pro Forma Effect to any such purchase or other acquisition, no Default or Event of Default shall have occurred and be continuing; (B) with respect to each such acquisition or series of acquisitions, after giving effect to such purchase or other acquisition immediately prior to and after giving Pro Forma Effect thereto the Pro Forma Excess Availability Condition shall have been satisfied; and (C) in the case of any acquisition the consideration for which is in excess of $50,000,000 satisfaction of such test shall be evidenced by a certificate from the Chief Financial Officer or other financial officer of the Lead Borrower demonstrating such satisfaction calculated in reasonable detail; and

(vi) the Lead Borrower shall have delivered to the Administrative Agent, on behalf of the Lenders, no later than five Business Days after the date on which any such purchase or other acquisition is consummated, a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the requirements set forth in this clause (j) have been satisfied or will be satisfied on or prior to the consummation of such purchase or other acquisition;

(k) the Transactions;

(l) Investments in the ordinary course of business consisting of UCC Article III endorsements for collection or deposit and UCC Article IV customary trade arrangements with customers consistent with past practices;

(m) Investments (including debt obligations and Equity Interests) received in connection with the bankruptcy or reorganization of suppliers and customers or in settlement of delinquent obligations of, or other disputes with, customers and suppliers arising in the ordinary course of business or upon the foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment;

(n) loans and advances to Holdings or the Borrowers (or any direct or indirect parent thereof) in lieu of, and not in excess of the amount of (after giving effect to any other loans, advances or Restricted Payments in respect thereof), Restricted Payments to the extent permitted to be made to Holdings or the Borrowers (or such direct or indirect parent) in accordance with Section 7.06(f) or (g);

(o) so long as immediately after giving effect to any such Investment no Default has occurred and is continuing, other Investments that do not exceed at any time (x) $30,000,000, (y) if the Pro Forma Excess Availability Condition has been satisfied both immediately before and immediately after giving Pro Forma Effect thereto, $60,000,000 (satisfaction of such condition shall be evidenced by a certificate from the Chief Financial Officer or other financial officer of the Lead Borrower demonstrating such satisfaction calculated in reasonable detail) or (z) if (i) the Pro Forma Excess Availability Condition has been satisfied both immediately before and immediately after giving Pro Forma Effect thereto and (ii) the Consolidated Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the most recently completed Test Period prior to the making of such Investment is at least 1.05 to 1.0, $100,000,000 (satisfaction of such condition shall be evidenced by a certificate from the Chief Financial Officer or other financial officer of the Lead Borrower demonstrating such satisfaction calculated in reasonable detail), in each case in the aggregate and net of any return representing return of capital in respect of any such investment and valued at the time of the making thereof; provided that, if the Pro Forma Excess Availability Condition has been satisfied both immediately before and immediately after giving Pro Forma Effect thereto (satisfaction of such condition shall be evidenced by a certificate from the Chief Financial Officer or other financial officer of the Lead Borrower demonstrating such satisfaction calculated in reasonable detail), such amount shall be increased by (i) the Net Cash Proceeds of Permitted Equity Issuances (other than Specified Equity Contributions) that are Not Otherwise Applied and (ii) the

- 120 -

Available Amount that is Not Otherwise Applied; provided, further that if any Investment made under this clause (o) is for the purchase or other acquisition of property and assets or businesses of any Person or of assets constituting a business unit, a line of business or division of such Person, or Equity Interests in a Person, then the conditions of clause (j) above (other than clauses (v) and (vi) of the proviso thereto) shall be satisfied prior to any such Investment;

(p) advances of payroll payments to employees in the ordinary course of business;

(q) Investments to the extent that payment for such Investments is made solely with Qualified Equity Interests of Holdings (or by the Borrowers or any Intermediate Holding Company or any direct or indirect parent of Holdings);

(r) Investments held by a Restricted Subsidiary acquired after the Closing Date or of a corporation merged into Holdings or the Borrowers or merged or consolidated with a Restricted Subsidiary in accordance with Section 7.04 after the Closing Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;

(s) Guarantees by Holdings, the Borrowers or any Restricted Subsidiary of leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into in the ordinary course of business;

(t) Investments constituting the non-cash portion of consideration received in a Disposition permitted by Section 7.05;

provided that no Investment in an Unrestricted Subsidiary that would otherwise be permitted under this Section 7.02 shall be permitted hereunder (x) to the extent that any portion of such Investment is used to make any prepayments, redemptions, purchases, defeasances and other payments in respect of any Restricted Debt to the extent prohibited under Section 7.12, (y) if such Investment consists of a transfer of any Property (other than Real Property) of the type subject to the Borrowing Base, or (z) if after giving effect to such Investment, the Specified Conditions shall not have been satisfied.

Section 7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness of Holdings, the Borrowers or any of their respective Subsidiaries under the Loan Documents;

(b) (i) the Term Debt Obligations (other than Additional Senior Secured Term Debt) in an aggregate principal amount not to exceed $1,010,000,000 and, without duplication, any Permitted Refinancings thereof, (ii) Additional Senior Secured Term Debt in an aggregate principal amount not to exceed $150,000,000 and any Permitted Refinancings thereof and (iii) Additional Senior Secured Term Debt in an aggregate principal amount not to exceed $150,000,000, the proceeds of which shall be used solely to finance Permitted Acquisitions, and any Permitted Refinancings thereof; provided that for purposes of clauses (i) and (ii) of this Section 7.03(b), both immediately prior and after giving effect to the incurrence of such Additional Senior Secured Term Debt, no Event of Default shall exist or result therefrom;

(c) (i) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(c) and any Permitted Refinancing thereof and (ii) intercompany Indebtedness outstanding on the Closing Date;

- 121 -

(d) Guarantees by Holdings, the Borrowers and the Restricted Subsidiaries in respect of Indebtedness of Holdings, the Borrowers or any Restricted Subsidiary otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise incur under this Section 7.03); provided that (i) no Guarantee by any Restricted Subsidiary of the Term Debt Obligations or any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Senior Credit Obligations substantially on the terms set forth in the Guaranty and (ii) if the Indebtedness being Guaranteed is subordinated to the Senior Credit Obligations, such Guarantee shall be subordinated to the Guarantee of the Senior Credit Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;

(e) Indebtedness of Holdings, the Borrowers or any Restricted Subsidiary owing to Holdings, the Borrowers or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to subordination terms reasonably satisfactory to the Administrative Agent;

(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within 270 days after the applicable acquisition, construction, repair, replacement or improvement and (ii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clause (i); provided that the aggregate amount of such Indebtedness incurred pursuant to clause (i) of this paragraph (f) (and any Permitted Refinancing thereof) and outstanding at any one time shall not exceed (x) $30,000,000 or (y) if the Pro Forma Excess Availability Condition has been satisfied both immediately before and immediately after giving Pro Forma Effect to such Indebtedness and no Default or Event of Default shall have occurred or would result therefrom, $100,000,000 (satisfaction of such condition shall be evidenced by a certificate from the Chief Financial Officer or other financial officer of the Lead Borrower demonstrating such satisfaction calculated in reasonable detail);

(g) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;

(h) Indebtedness of Holdings, the Borrowers or of any Restricted Subsidiary assumed in connection with any Permitted Acquisition, provided that (x) such Indebtedness (i) was not incurred in contemplation of such Permitted Acquisition, (ii) is secured only by the assets acquired in the applicable Permitted Acquisition (including any acquired Equity Interests), (iii) the only obligors with respect to any Indebtedness incurred pursuant to this clause (h) shall be those Persons who were obligors of such Indebtedness prior to such Permitted Acquisition, and (y) both immediately prior and after giving effect thereto (A) no Default shall exist or result therefrom and (B) the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this clause (h) does not exceed (x) $50,000,000 or (y) if the Pro Forma Excess Availability Condition has been satisfied both immediately before and immediately after giving Pro Forma Effect thereto (satisfaction of such condition shall be evidenced by a certificate from the Chief Financial Officer or other financial officer of the Lead Borrower demonstrating such satisfaction calculated in reasonable detail), $100,000,000, at any one time; provided that the aggregate amount of Indebtedness outstanding at Persons that are not Loan Parties pursuant to this clause (h) and clause (i) below shall not exceed at any one time (x) $20,000,000 or (y) if the Pro Forma Excess Availability Condition has been satisfied both immediately before and immediately after giving Pro Forma Effect thereto and no Default or Event of Default exists or would result therefrom, $40,000,000 (satisfaction of such condition shall be evidenced by a certificate from the Chief Financial Officer or other financial officer of the Lead Borrower demonstrating such satisfaction calculated in reasonable detail);

- 122 -

(i) Indebtedness of Subsidiaries that are not Guarantors in an aggregate principal amount outstanding not to exceed at any time (x) $20,000,000 or (y) if no Default shall exist or result therefrom and the Pro Forma Excess Availability Condition has been satisfied both immediately before and immediately after giving Pro Forma Effect thereto (satisfaction of such condition shall be evidenced by a certificate from the Chief Financial Officer or other financial officer of the Lead Borrower demonstrating such satisfaction calculated in reasonable detail), $40,000,000; provided that up to an additional $50,000,000 of Indebtedness may be incurred in connection with an Investment permitted by Section 7.02(j)(ii)(B);

(j) Indebtedness representing deferred compensation to employees of Holdings or the Borrowers (or any direct or indirect parent of the Borrowers) and the Restricted Subsidiaries incurred in the ordinary course of business;

(k) Indebtedness to current or former officers, directors, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06;

(l) Indebtedness incurred by Holdings, the Borrowers or any of the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition permitted hereunder, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;

(m) Indebtedness consisting of obligations of Holdings, the Borrowers or any of the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions and Permitted Acquisitions or any other Investment expressly permitted hereunder;

(n) obligations with respect to Cash Management Services and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts;

(o) unsecured Indebtedness of Holdings, the Borrowers or any of the Restricted Subsidiaries that are Guarantors not otherwise permitted under this Section 7.03; provided that the aggregate outstanding principal amount of such Indebtedness shall not exceed $40,000,000 at any time unless both immediately prior and after giving Pro Forma Effect to such incurrence (A) the Consolidated Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) shall for the most recently completed Test Period for which financial statements have been delivered pursuant to Section 6.01(i) or Section 6.01(ii) prior to the time of such incurrence be at least 1.25 to 1.0, (B) the Pro Forma Excess Availability Condition shall have been satisfied and (C) no Default or Event of Default shall exist or result therefrom; and, provided, further, that Indebtedness incurred pursuant to this Section 7.03(o) shall not mature or provide for any Restricted Debt Payments in respect thereof at any time prior to the 91^st day following the Maturity Date;

(p) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

(q) Indebtedness incurred by Holdings, the Borrowers or any of the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or

- 123 -

similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;

(r) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by Holdings, the Borrowers or any of the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;

(s) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business;

(t) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances;

(u) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (t) above; and

(v) Contingent Obligations incurred in the ordinary course of business.

For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased.

For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (c) through (v) above, the Lead Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses.

The accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness or Disqualified Equity Interests shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.

Section 7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that:

(a) any Restricted Subsidiary may merge with (i) any Borrower (including a merger, the purpose of which is to reorganize such Borrower into a new jurisdiction); provided that (x) such Borrower shall be the continuing or surviving Person, and (y) such merger does not result in such Borrower ceasing to be incorporated under the Laws of the United States, any state thereof or the District of Columbia or (ii) any one or more other Restricted Subsidiaries (other than any Borrower); provided that when any Restricted Subsidiary that is a Loan Party is merging with another Restricted Subsidiary, a Loan Party shall be the continuing or surviving Person;

- 124 -

(b) (i) any Subsidiary that is not a Loan Party may merge or consolidate with or into any other Subsidiary that is not a Loan Party and (ii) (A) any Subsidiary may liquidate or dissolve or (B) any Borrower or any Subsidiary may change its legal form if such Borrower or Subsidiary determines in good faith that such action is in the best interests of such Borrower and its Subsidiaries and is not materially disadvantageous to the interests of the Lenders;

(c) any Restricted Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to a Borrower or another Restricted Subsidiary; provided that if the transferor in such a transaction is a Loan Party, then (i) the transferee must be a Loan Party or (ii) to the extent constituting an Investment, such Investment must be a permitted Investment in or Indebtedness of a Restricted Subsidiary which is not a Loan Party in accordance with Sections 7.02 and 7.03, respectively;

(d) so long as no Default exists or would result therefrom, Holdings and each Borrower may merge with any other Person; provided that (i) Holdings or such Borrower, as the case may be, shall be the continuing or surviving entity or (ii) if the Person formed by or surviving any such merger or consolidation is not Holdings or such Borrower, as the case may be (any such Person, the “Successor Loan Party”), (A) the Successor Loan Party shall be an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, (B) the Successor Loan Party shall expressly assume all the obligations of Holdings or such Borrower, as the case may be, under this Agreement and the other Loan Documents to which Holdings or such Borrower, as the case may be, is party pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (C) each Guarantor, unless it is the other party to such merger or consolidation, shall have by a supplement to the Guaranty confirmed that its Guarantee shall apply to the Successor Loan Party’s obligations under this Agreement, (D) each Loan Party, unless it is the other party to such merger or consolidation, shall have by a supplement to the Security Agreement confirmed that its obligations thereunder shall apply to the Successor Loan Party’s obligations under this Agreement, (E) each mortgagor of a Mortgaged Property, unless it is the other party to such merger or consolidation, shall have by an amendment to or restatement of the applicable Mortgage (or other instrument reasonably satisfactory to the Administrative Agent) confirmed that its obligations thereunder shall apply to the Successor Loan Party’s obligations under this Agreement, and (F) the Lead Borrower shall have delivered to the Administrative Agent an officer’s certificate and an opinion of counsel, each stating that such merger or consolidation and such supplement to this Agreement or any other Loan Document comply with this Agreement; provided, further, that if the foregoing are satisfied, the Successor Loan Party will succeed to, and be substituted for, the applicable Loan Party under this Agreement;

(e) so long as no Default exists or would result therefrom, any Restricted Subsidiary may merge with any other Person in order to effect an Investment permitted pursuant to Section 7.02; provided that the continuing or surviving Person shall be a Restricted Subsidiary, which together with each of its Restricted Subsidiaries, shall have complied with the requirements of Section 6.11 to the extent applicable;

- 125 -

(f) the Merger may be consummated; and

(g) so long as no Default exists or would result therefrom, a merger, dissolution, liquidation, consolidation or Disposition, the purpose of which is to effect a Disposition permitted pursuant to Section 7.05.

Section 7.05 Dispositions. Make any Disposition, except:

(a) Dispositions or abandonment of obsolete, worn out or surplus property, (including, without limitation, Intellectual Property), whether now owned or hereafter acquired, in the ordinary course of business and Dispositions of property no longer used or useful in the conduct of the business of Holdings, the Borrowers and the Restricted Subsidiaries;

(b) Dispositions or discounts of inventory and Dispositions of immaterial assets in the ordinary course of business (including allowing any registrations or any applications for registration of any immaterial IP Rights to lapse or become abandoned in the ordinary course of business);

(c) Dispositions of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property that is promptly purchased or (ii) the proceeds of such Disposition are promptly applied to the purchase price of such replacement property (which replacement property is actually promptly purchased);

(d) Dispositions of property to Holdings, the Borrowers or a Restricted Subsidiary; provided that if the transferor of such property is a Loan Party (i) the transferee thereof must be a Loan Party or (ii) to the extent such transaction constitutes an Investment, such transaction is permitted under Section 7.02; provided, further, that (A) if the property being disposed of is transferred to a Subsidiary that is not a Loan Party, the Administrative Agent may require, in the exercise of its reasonable business judgment, that the transferee execute an agreement granting the Administrative Agent access to such property for purposes of conducting a Liquidation, and (B) if the property being disposed of constitutes Eligible Accounts or Eligible Inventory and is being transferred to a Subsidiary which is not a Loan Party, such disposition shall be made only if the Specified Conditions are satisfied after giving effect thereto;

(e) Dispositions permitted by Sections 7.02, 7.04 and 7.06 and Liens permitted by Section 7.01;

(f) Dispositions in the ordinary course of business of Cash Equivalents;

(g) leases, subleases, licenses or sublicenses (including the provision of software under an open source license), in each case in the ordinary course of business and which do not materially interfere with the business of Holdings, the Borrowers and the Restricted Subsidiaries, taken as a whole;

(h) transfers of property subject to Casualty Events upon receipt of the Net Cash Proceeds of such Casualty Event;

(i) Dispositions of property (other than Inventory and Accounts that are subject to the Borrowing Base) not otherwise permitted under this Section 7.05; provided that (i) at the time of such Disposition (other than any such Disposition made pursuant to a legally binding commitment entered into at a time when no Default exists), no Default shall exist or would result from such Disposition, (ii) the

- 126 -

aggregate book value of all property Disposed of in reliance on this clause (i) shall not exceed $80,000,000 per calendar year (with unused amounts in any calendar year being carried over to the succeeding calendar years); provided that such amount may, at the option of the Lead Borrower, be increased by an amount up to $40,000,000 (which such amount shall reduce the annual amount for the subsequent calendar year), and (iii) with respect to any Disposition pursuant to this clause (i) for a purchase price in excess of $5,000,000, Holdings, the Borrowers or a Restricted Subsidiary shall receive not less than 75.00% of such consideration in the form of cash or Cash Equivalents (in each case, free and clear of all Liens at the time received, other than nonconsensual Liens permitted by Section 7.01 and Liens permitted by Section 7.01(a), Section 7.01(b), Section 7.01(m) and clauses (i) and (ii) of Section 7.01(v)); provided, however, that for the purposes of this clause (iii), (A) Holdings, the Lead Borrower and all of the Restricted Subsidiaries shall have been validly released by all applicable creditors in writing from any liabilities (as shown on Holdings, such Borrower’s or such Restricted Subsidiary’s most recent balance sheet provided hereunder or in the footnotes thereto) of Holdings, such Borrower or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the payment in cash of the Senior Credit Obligations, that are assumed by the transferee with respect to the applicable Disposition, (B) any securities received by such Borrower or such Restricted Subsidiary from such transferee that are converted by such Borrower or such Restricted Subsidiary into cash (to the extent of the cash received) within 180 days following the closing of the applicable Disposition and (C) any Designated Non-Cash Consideration received in respect of such Disposition having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (C) that is at that time outstanding, not in excess of 1.00% of Total Assets at the time of the receipt of such Designated Non-Cash Consideration, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value, shall be deemed to be cash;

(j) Dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

(k) Dispositions of accounts receivable or notes receivable in the ordinary course of business in connection with the collection or compromise thereof or the conversion of accounts receivable to notes receivable;

(l) any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary; and

(m) the unwinding of any Swap Contract pursuant to its terms;

provided that any Disposition of any property pursuant to this Section 7.05 (except pursuant to Section 7.05(e) and (m) and except for Dispositions from a Loan Party to another Loan Party or from a Non-Loan Party to another Non-Loan Party or from a Non-Loan Party to a Loan Party), shall be for no less than the fair market value of such property at the time of such Disposition and, in the case of Accounts and Inventory, solely for cash consideration. To the extent any Collateral is Disposed of as expressly permitted by this Section 7.05 to any Person other than the Borrowers or any Restricted Subsidiary, such Collateral (but not the proceeds thereof) shall be sold free and clear of the Liens created by the Loan Documents, and, if requested of the Administrative Agent, upon the certification by the Lead Borrower that such Disposition is permitted by this Agreement, the Administrative Agent or the Collateral Agent, as applicable, shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

- 127 -

Section 7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, except:

(a) each Restricted Subsidiary may make Restricted Payments to the Borrowers and to other Restricted Subsidiaries (and, in the case of a Restricted Payment by a non-wholly owned Restricted Subsidiary, to the Borrowers and any other Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests);

(b) Holdings and the Lead Borrower may purchase or redeem in whole or in part any of its Equity Interests for another class of Equity Interests or rights to acquire its Equity Interests or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests, provided that (i) any terms and provisions material to the interests of the Lenders, when taken as a whole, contained in such other class of Equity Interests are at least as advantageous to the Lenders as those contained in the Equity Interests redeemed thereby and (ii) Holdings, the Borrowers and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests not otherwise permitted by Section 7.03) of such Person;

(c) Restricted Payments made on the Closing Date to consummate the Transactions;

(d) to the extent constituting Restricted Payments, Holdings, the Borrowers and the Restricted Subsidiaries may enter into and consummate transactions expressly permitted by any provision of Section 7.02, 7.04 or 7.08 other than Section 7.08(vi);

(e) repurchases of Equity Interests in Holdings, the Borrowers or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or withholding of shares of restricted stock upon vesting;

(f) Holdings, any Borrower or any Restricted Subsidiary may pay (or make Restricted Payments to allow any direct or indirect parent thereof to pay) for the repurchase, retirement or other acquisition or retirement for value of Equity Interests of Holdings (or of any such direct or indirect parent thereof) held by any future, present or former employee, director or consultant (or any spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees of any of the foregoing) of Holdings, any Intermediate Holding Company, any Borrower (or any direct or indirect parent of the Borrowers) or any of their respective Subsidiaries pursuant to any employee or director equity plan, employee or director stock option plan or any other employee or director benefit plan or any agreement (including any stock subscription or shareholder agreement) with any employee, director or consultant of Holdings (or any direct or indirect parent thereof), any Intermediate Holding Company, the Borrowers or any of their Subsidiaries; provided that the aggregate amount of Restricted Payments made pursuant to this clause (f) shall not exceed (x) $10,000,000 in any calendar year (which shall increase to $20,000,000 subsequent to the consummation of a Qualifying IPO) (with unused amounts in any calendar year being carried over to the immediately two succeeding calendar years); provided, further, that such amount in any calendar year may be increased by an amount not to exceed:

(i) to the extent contributed to the Lead Borrower, the Net Cash Proceeds from the sale of Equity Interests (other than Disqualified Equity Interests or Specified Equity Contributions) of Holdings or the Lead Borrower and, to the extent contributed to Holdings or the Lead Borrower, Equity Interests of any of the Borrowers’ direct or indirect parent companies, in each case to members of management, directors or consultants of Holdings, the Borrowers, any of their Subsidiaries or any of its direct or indirect parent companies that occurs after the Closing Date to the extent such Net Cash Proceeds are not utilized in connection with other transactions pursuant to Sections 7.02, 7.06 or 7.12; plus

- 128 -

(ii) the Net Cash Proceeds of key man life insurance policies received by Holdings, the Borrowers or their Restricted Subsidiaries; less

(iii) the amount of any Restricted Payments previously made with the cash proceeds described in clauses (i) and (ii) of this Section 7.06(f);

provided, further, that cancellation of Indebtedness owing to Holdings or any Borrower from members of management of Holdings or such Borrower, any of the Borrowers’ direct or indirect parent companies or any of the Borrowers’ Restricted Subsidiaries in connection with a repurchase of Equity Interests of any of the Borrowers’ direct or indirect parent companies will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Agreement; provided, further, that the value of any Equity Interests repurchased, retired or acquired pursuant to this clause (f) shall be determined based on the imputed per share (or interest) price of any such Equity Interest as of the Closing Date; provided, further, that the aggregate amount of Restricted Payments made pursuant to this clause (f) shall not exceed (x) $60,000,000 in any calendar year (including any amounts carried over) unless both immediately prior to and after giving Pro Forma Effect to such Restricted Payment, the Pro Forma Excess Availability Condition shall have been satisfied.

(g) Holdings and the Borrowers may make Restricted Payments to any direct or indirect parent of Holdings and the Borrowers:

(i) the proceeds of which shall be used to pay its operating costs and expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, legal, accounting and similar expenses provided by third parties), which are reasonable and customary and incurred in the ordinary course of business, attributable to the ownership or operations of Holdings, the Borrowers and their respective Subsidiaries (including any reasonable and customary indemnification claims made by directors or officers of any direct or indirect parent of Holdings and the Borrowers attributable to the ownership or operations of Holdings, the Borrowers and their respective Subsidiaries);

(ii) the proceeds of which will be used to pay consolidated or combined federal, state or local income taxes attributable to the income of Holdings, the Borrowers and their respective Subsidiaries in an amount not to exceed the income tax liabilities that would have been payable by Holdings, the Borrowers and their respective Subsidiaries on a stand-alone basis, reduced by any such income taxes paid or to be paid directly by Holdings, the Borrowers or their respective Subsidiaries; provided that, in determining the stand-alone income tax liability of Holdings, the Borrowers and their respective Subsidiaries, any interest expense of a direct or indirect parent of Holdings and the Borrowers substantially all of whose assets consist (directly or indirectly) of equity and debt of Holdings or the Borrowers, shall be treated as an interest expense of Holdings or the Borrowers, as the case may be;

(iii) the proceeds of which shall be used to pay franchise and excise taxes and other fees, taxes and expenses required to maintain its (or so long as its direct or indirect parents directly or indirectly own no other assets than the Equity Interest in Holdings, the Borrowers or any of their direct or indirect parents’) corporate existence;

(iv) to finance any Investment permitted to be made pursuant to Section 7.02; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings or the Borrowers, as the case may be, shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be held by it or contributed to a Restricted Subsidiary or (2) the merger (to the

- 129 -

extent permitted in Section 7.04) of the Person formed or acquired into a Restricted Subsidiary in order to consummate such Permitted Acquisition, in each case, in accordance with the requirements of Section 6.11;

(v) the proceeds of which shall be used to pay customary costs, fees and expenses related to any unsuccessful equity or debt offering permitted by this Agreement; and

(vi) the proceeds of which shall be used to pay customary salary, bonus and other benefits payable to officers and employees of any direct or indirect parent company of Holdings and the Borrowers to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Holdings, the Borrowers and their respective Restricted Subsidiaries;

(h) Holdings, any Borrower or any Restricted Subsidiary may (i) pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition and (ii) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;

(i) the declaration and payment of dividends following the first public offering of any Borrower’s common stock or the common stock of any of such Borrower’s direct or indirect parents after the Closing Date of up to 6.00% per annum of the net proceeds received by or contributed to Holdings, any Intermediate Holding Company, the Lead Borrower or such Borrower from any such public offering to the extent such net proceeds are not utilized in connection with other transactions permitted pursuant to Section 7.02, 7.06 or 7.12;

(j) payments made or expected to be made by Holdings, the Borrowers or any of the Restricted Subsidiaries in respect of withholding or similar Taxes payable by any future, present or former employee, director, manager or consultant (or any spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees of any of the foregoing) and any repurchases of Equity Interests in consideration of such payments including deemed repurchases in connection with the exercise of stock options; and

(k) in addition to the foregoing Restricted Payments and so long as no Default shall have occurred and be continuing or would result therefrom, Holdings and the Borrowers may make additional Restricted Payments (i) in an aggregate amount, together with the aggregate amount of loans and advances to any direct or indirect parent of the Borrowers made pursuant to Section 7.02(n) in lieu of Restricted Payments permitted by this clause (k), not to exceed (x) $10,000,000 or (y) if both immediately prior and after giving Pro Forma Effect to such Restricted Payment the Pro Forma Excess Availability Condition shall have been satisfied, $45,000,000 (satisfaction of such condition shall be evidenced by a certificate from the Chief Financial Officer or other financial officer of the Lead Borrower demonstrating such satisfaction calculated in reasonable detail); provided that, such amount shall be increased by (A) the Net Cash Proceeds of Permitted Equity Issuances (other than Specified Equity Contributions) that are Not Otherwise Applied and (B) the Available Amount that is Not Otherwise Applied, and (ii) (A) to the extent that on a pro forma basis after giving effect to any such Restricted Payment the Consolidated Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) as of the last day of the immediately preceding Test Period for which financial statements have been delivered pursuant to Section 6.01(i) or Section 6.01(ii), is at least 1.25 to 1.0 and (B) if the Pro Forma Excess Availability Condition has been satisfied both immediately before and immediately after giving Pro Forma Effect thereto and no Default or Event of Default exists or would result therefrom.

- 130 -

Section 7.07 Change in Nature of Business. Engage in any material line of business substantially different from those lines of business conducted by Holdings, the Borrowers and the Restricted Subsidiaries on the Closing Date or any business reasonably related or ancillary thereto.

Section 7.08 Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of Holdings or the Borrowers, whether or not in the ordinary course of business, other than (i) transactions between or among the Loan Parties or any entity that becomes a Loan Party as a result of such transaction or between or among Non-Loan Parties, including entities that become Restricted Subsidiaries as a result of such transaction, (ii) transactions on terms not materially less favorable to Holdings, such Borrower or such Restricted Subsidiary as would be obtainable by Holdings, such Borrower or such Restricted Subsidiary at the time in a comparable arm’s-length transaction with a Person other than an Affiliate, (iii) the Transactions and the payment of fees and expenses related to the Transactions, (iv) the issuance of Equity Interests to any officer, director, employee or consultant of Holdings, the Borrowers or any of their respective Subsidiaries or any direct or indirect parent of Holdings or the Borrowers in connection with any transaction, (v) the payment of management, consulting, monitoring and advisory fees and customary transaction fees to the Sponsor and any Sponsor Termination Fees pursuant to the Sponsor Management Agreement as in effect on the Closing Date, or any amendment thereto so long as any such amendment is not more disadvantageous to the Lenders when taken as a whole, as compared to the Sponsor Management Agreement as in effect on the Closing Date (provided that any increase of the advisory fee pursuant to Section 4(d) of the Sponsor Management Agreement which is not disproportionate to the amount of the percentage increase in Consolidated EBITDA (resulting from the transaction giving rise to such increase of the advisory fee) shall not be deemed to be disadvantageous to the Lenders), and related indemnities and reasonable expenses, (vi) equity issuances, repurchases, retirements or other acquisitions or retirements of Equity Interests by Holdings, the Borrowers or any of their respective Restricted Subsidiaries to any Permitted Holder or to any director, officer, employee or consultant of Holdings, any of its direct or indirect parent companies or any of its Restricted Subsidiaries, or as otherwise permitted under Section 7.06, (vii) loans and other transactions by Holdings, the Borrowers and the Subsidiaries to the extent permitted under this Article VII, (viii) employment and severance arrangements between Holdings, the Borrowers and the Restricted Subsidiaries and their respective officers and employees in the ordinary course of business and transactions pursuant to stock option plans and employee benefit plans and arrangements, (ix) payments by Holdings, the Borrowers (and any direct or indirect parent thereof) and the Restricted Subsidiaries pursuant to the tax sharing agreements among Holdings, the Borrowers (and any such direct or indirect parent thereof) and the Restricted Subsidiaries on customary terms to the extent attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries, (x) the payment of customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, current and former directors, officers, employees and consultants of Holdings, the Borrowers and the Restricted Subsidiaries or any direct or indirect parent of Holdings and the Borrowers in the ordinary course of business to the extent attributable to the ownership or operation of Holdings, the Borrowers and the Restricted Subsidiaries, (xi) transactions pursuant to permitted agreements in existence on the Closing Date and set forth on Schedule 7.08 or any amendment thereto to the extent such an amendment is not adverse to the interests of the Lenders in any material respect, (xii) dividends, redemptions, repurchases and other Restricted Payments permitted under Section 7.06, (xiii) customary payments by Holdings, the Borrowers and any Restricted Subsidiaries to the Sponsor made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities (including in connection with acquisitions or divestitures), which payments are approved by the majority of the members of the board of directors or a majority of the disinterested members of the board of directors of Holdings, the Lead Borrower or the entity making such payment in good faith and (xiv) the existence of, or the performance by any of Holdings, the Borrowers or any of their respective Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Closing Date and any

- 131 -

similar agreements which it may enter into thereafter; provided that the existence of, or the performance by Holdings, the Borrowers or any of their respective Restricted Subsidiaries of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Closing Date shall only be permitted by this clause (xiv) to the extent that the terms of any such amendment or new agreement are not otherwise disadvantageous to the Lenders when taken as a whole.

Section 7.09 Burdensome Agreements. Enter into or permit to exist any Contractual Obligation (other than this Agreement, any other Loan Document or any Term Debt Document) that limits the ability of (i) any Restricted Subsidiary that is not a Loan Party to make Restricted Payments to any Loan Party or (ii) any Loan Party to create, incur, assume or suffer to exist Liens on property of such Person for the benefit of the Lenders with respect to this Agreement and the Senior Credit Obligations or under the other Loan Documents; provided that the foregoing clauses (i) and (ii) shall not apply to Contractual Obligations which

(a) (x) exist on the Closing Date and (to the extent not otherwise permitted by this Section 7.09) are listed on Schedule 7.09 hereto and (y) to the extent Contractual Obligations permitted by clause (x) are set forth in an agreement evidencing Indebtedness, are set forth in any agreement evidencing any permitted renewal, extension or refinancing of such Indebtedness so long as such renewal, extension or refinancing does not expand the scope of such Contractual Obligation,

(b) are binding on a Restricted Subsidiary at the time such Restricted Subsidiary first becomes a Restricted Subsidiary or at the time such Restricted Subsidiary merges with or into the Lead Borrower or any of its Restricted Subsidiaries or is assumed in connection with the acquisition of assets from such Person, so long as such Contractual Obligations were not entered into in contemplation of such Person becoming a Restricted Subsidiary; provided, further, that this clause (b) shall not apply to Contractual Obligations that are binding on a Person that becomes a Restricted Subsidiary pursuant to Section 7.15,

(c) represent Indebtedness of a Restricted Subsidiary which is not a Loan Party which is permitted by Section 7.03,

(d) arise in connection with any Lien permitted by Section 7.01(u) or any Disposition permitted by Section 7.05,

(e) are customary provisions in joint venture agreements and other similar agreements or written arrangements applicable to joint ventures permitted under Section 7.02 and applicable solely to such joint venture entered into in the ordinary course of business,

(f) are negative pledges and restrictions on Liens in favor of any holder of Indebtedness permitted under Section 7.03 but solely to the extent any negative pledge relates to the property financed by or the subject of such Indebtedness (and excluding in any event any Indebtedness constituting any Junior Financing) and the proceeds and products thereof,

(g) are customary restrictions on leases, subleases, licenses, sublicenses, asset sale or similar agreements, including with respect to intellectual property and other similar agreements, otherwise permitted hereby so long as such restrictions relate to the assets subject thereto,

(h) comprise restrictions imposed by any agreement relating to secured Indebtedness permitted pursuant to Section 7.03(f), 7.03(h), 7.03(o) or 7.03(u) to the extent that such restrictions apply only to the property or assets securing such Indebtedness or, in the case of Indebtedness incurred pursuant to Section 7.03(h) only, to the Restricted Subsidiaries incurring or guaranteeing such Indebtedness,

- 132 -

(i) are customary provisions restricting subletting or assignment of any lease governing a leasehold interest of any Restricted Subsidiary,

(j) are customary provisions restricting assignment of any agreement entered into in the ordinary course of business,

(k) are restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business,

(l) arise in connection with cash or other deposits permitted under Section 7.01 and

(m) are obligations under (i) any Swap Contracts or (ii) other derivative instruments entered into for the purpose of hedging interest rate or currency risks in effect on the Closing Date.

Section 7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or indirectly, (i) in violation of Section 5.13(a) or (ii) for purposes other than (A) to finance the Merger, the Refinancing and Transaction Expenses, (B) provide working capital for the Borrowers and their Subsidiaries or (C) for other general corporate purposes (including, without limitation, Permitted Acquisitions, permitted Restricted Payments, permitted Investments and permitted payments with respect to Indebtedness).

Section 7.11 Accounting Changes. Make any change in fiscal year; provided, however, that Holdings and any Borrower may, upon written notice to the Administrative Agent, change their fiscal year to any other fiscal year reasonably acceptable to the Administrative Agent, in which case, Holdings and the Borrowers and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are necessary to reflect such change in fiscal year.

Section 7.12 Prepayments, Etc. of Indebtedness. (a) Make any Restricted Debt Payments (whether in cash, securities or other property) of or in respect of the Term Debt Obligations, any Junior Financing, any Indebtedness incurred pursuant to Section 7.03(o) or any Permitted Refinancing of any thereof (collectively, the “Restricted Debt”), except:

(i) Restricted Debt Payments in the form of Equity Interests other than Disqualified Equity Interests (so long as no Change of Control would result therefrom) of Holdings or any Intermediate Holding Company, the conversion of such Restricted Debt to Equity Interests (other than Disqualified Equity Interests) of Holdings or any Intermediate Holding Company (as long as no Change in Control would result therefrom);

(ii) payments of principal as and when due in respect of any Restricted Debt (subject to applicable subordination provisions relating thereto);

(iii) Restricted Debt Payments with the net proceeds of any Permitted Equity Issuances (other than Specified Equity Contributions) for the purpose of making such payment or prepayment;

(iv) Restricted Debt Payments from any Permitted Refinancing thereof (which, for the avoidance of doubt, shall include prepayment of the Senior Secured Bridge Loans out of the proceeds of the issuance or incurrence, as applicable, of other Term Debt Obligations); and

- 133 -

(v) other Restricted Debt Payments, so long as (i) no Event of Default then exists or would arise as a result of the making of such payment and (ii) both immediately prior to and after giving effect to the making of such payment, the Pro Forma Excess Availability Condition has been satisfied.

(b) Amend, modify or change in any manner materially adverse to the interests of the Lenders any term or condition of any Junior Financing Documentation without the consent of the Administrative Agent.

Section 7.13 Permitted Activities of Holdings. Holdings shall not (i) incur, directly or indirectly, any Indebtedness or any other obligation or liability whatsoever other than Indebtedness and obligations under this Agreement and the other Loan Documents (other than such Indebtedness represented by Holdings’ guarantee of obligations under the Term Debt Documents and any Permitted Refinancing of the Term Debt Obligations, (ii) create or suffer to exist any Lien upon any property or assets now owned or hereafter acquired by it other than the Liens created under the Collateral Documents and Permitted Liens, or (iii) engage in any business or activity or own any assets other than those incidental to its ownership of the Equity Interests of the Lead Borrower.

Section 7.14 Concentration Account. After the occurrence and during the continuance of a Cash Dominion Event, use the funds on deposit in the Concentration Account for any purposes other than (i) the payment of operating expenses incurred by the Loan Parties in the ordinary course of business (including payments of interest when due on account of the Senior Secured Bridge Loans (or other Term Debt Obligations incurred in lieu of, or partially in lieu of, the Senior Secured Bridge Loans)), and (ii) for such other ordinary course purposes as the Loan Parties deem appropriate.

Section 7.15 Designation of Subsidiaries. Designate any Restricted Subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary, unless such designation is made by the board of directors of Holdings; provided that no Subsidiary shall be designated an Unrestricted Subsidiary if (i) immediately before such designation a Default shall have occurred and be continuing or would occur after giving effect thereto, (ii) such Subsidiary is a Borrower or such Subsidiary owns any property subject to the Borrowing Base, (iii) immediately before or immediately after such designation the Pro Forma Excess Availability Condition has not been satisfied or (iv) such Subsidiary continues to be a guarantor in respect of the Term Debt Obligations, any Permitted Refinancing thereof or any Junior Financing. The designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by the Borrowers therein at the date of designation in an amount equal to the net book value of the Lead Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Subsidiary existing at such time.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

Section 8.01 Events of Default. Any of the following events referred to in any of clauses (a) through (m) inclusive of this Section 8.01 shall constitute an “Event of Default”:

(a) Non-Payment. Any Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any reimbursement obligation in respect of any L/C Advance, (ii) within five Business Days after the same becomes due, any interest on any Loan or (iii) within 20 calendar days after the same become due, any other amount, including fees, payable hereunder or with respect to any other Loan Document.

- 134 -

(b) Specific Covenants. (i) Any Loan Party fails to perform or observe any term, covenant or agreement on its part to be performed or observed contained in any of Sections 6.03(i), 6.05(i) (with respect to the Lead Borrower only), 6.13(c), 6.17, 6.18(a), (b) or (c) (solely with respect to post-closing collateral perfection obligations of the Loan Parties), 6.18(d) or Article VII, (ii) any Loan Party fails to perform or observe any term, covenant or agreement on its part to be performed or observed contained in Section 6.01(vi) and such failure continues for two days, or (iii) any Loan Party fails to perform or observe any term, covenant or agreement on its part to be performed or observed contained in Section 6.10 and such failure continues for fifteen days.

(c) Other Defaults. Any Loan Party fails to perform or observe any covenant or agreement on its part to be performed or observed contained in (i) Article VI hereof not specified in Section 8.01(b)(i) above (other than Section 6.01(v)) and such failure continues for 30 days following the earlier of (x) written notice from the Administrative Agent or (y) the Loan Party’s obtaining actual knowledge thereof; or (ii) Section 6.01(v) hereof and such failure continues for fifteen days following the earlier of (x) written notice from the Administrative Agent or (y) the Loan Party’s obtaining actual knowledge thereof, provided that if the covenants or agreements on such Loan Party’s part to be performed or observed contained in Section 6.01(v) must be performed or observed weekly or more often, a failure to so perform or observe for five days following the earlier of (x) written notice from the Administrative Agent or (y) the Loan Party’s obtaining actual knowledge thereof, shall constitute an Event of Default; or (iii) any Loan Document (not specified in Section 8.01(a) or (b) above or in Section 8.01(c)(i) above) and such failure continues for 30 days after receipt by the Lead Borrower of written notice thereof by the Administrative Agent.

(d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Loan Party herein, in any other Loan Document, or in any document required to be delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made.

(e) Cross-Default. Any Loan Party or any Restricted Subsidiary (i) fails to make any payment beyond the applicable grace period with respect thereto, if any (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder) having an aggregate principal amount of not less than the Threshold Amount, or (ii) fails to observe or perform any other agreement or condition relating to any such Indebtedness, or any other event occurs (other than, with respect to Indebtedness consisting of Swap Agreements, termination events or equivalent events pursuant to the terms of such Swap Agreements), the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity; provided that this clause (e)(ii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness; provided, further, that such failure is unremedied and is not waived by the holders of such Indebtedness.

(f) Insolvency Proceedings, Etc. Any Loan Party or any of the Restricted Subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, administrator, administrative receiver or similar officer is appointed

- 135 -

without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days; or an order for relief is entered in any such proceeding.

(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Restricted Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts in excess of the Threshold Amount as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of the Loan Parties, taken as a whole, and is not released, vacated or fully bonded within 60 days after its issue or levy.

(h) Judgments. There is entered against any Loan Party or any Restricted Subsidiary a final judgment or order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgment or order and has not denied or failed to acknowledge coverage thereof) and such judgment or order shall not have been satisfied, vacated, discharged or stayed or bonded pending an appeal for a period of 60 consecutive days.

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which, when taken together with all other ERISA Events, has resulted or could reasonably be expected to result in liability of any Loan Party under Title IV of ERISA in an aggregate amount which could reasonably be expected to result in a Material Adverse Effect, (ii) any Loan Party or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its Withdrawal Liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount which could reasonably be expected to result in a Material Adverse Effect, or (iii) a termination, withdrawal or noncompliance with applicable law or plan terms or termination, withdrawal or other event similar to an ERISA Event occurs with respect to a Foreign Plan that, when taken together with other such events, could reasonably be expected to result in a Material Adverse Effect.

(j) Invalidity of Loan Documents. Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder (including as a result of a transaction permitted under Section 7.04 or 7.05) or as a result of acts or omissions by the Administrative Agent or any Lender or the satisfaction in full of all the Senior Credit Obligations, ceases to be in full force and effect; or any Loan Party contests in writing the validity or enforceability of any provision of any Loan Document; or any Loan Party denies in writing that it has any or further liability or obligation under any Loan Document (other than as a result of repayment in full of the Senior Credit Obligations and termination of the Aggregate Commitments), or purports in writing to revoke or rescind any Loan Document.

(k) Change of Control. There occurs any Change of Control.

(l) Collateral Documents. (i) Any Collateral Document after delivery thereof pursuant to Section 4.01 or 6.11 shall for any reason (other than pursuant to the terms hereof or thereof including as a result of a transaction permitted under Section 7.04 or 7.05) cease to create a valid and perfected lien, with the priority required by the Collateral Documents (or other security purported to be created on the applicable Collateral) on and security interest in any material portion of the Collateral purported to be covered thereby, subject to Liens permitted under Section 7.01, except to the extent that any such loss of perfection or priority results from the failure of the Administrative Agent or the Collateral Agent to maintain possession of certificates actually delivered to it representing securities

- 136 -

pledged under the Collateral Documents or to file UCC continuation statements and except as to Collateral consisting of Real Property to the extent that such losses are covered by a Lender’s title insurance policy and such insurer has not denied or failed to acknowledge coverage, or (ii) any of the Equity Interests of the Borrowers ceasing to be pledged pursuant to the Security Agreement free of Liens other than Liens created by the Security Agreement, Liens permitted under Section 7.01(b) or any nonconsensual Liens arising solely by operation of Law.

(m) Junior Financing Documentation. (i) Any of the Senior Credit Obligations of the Loan Parties under the Loan Documents for any reason shall cease to be “Senior Indebtedness” (or any comparable term) or “Senior Secured Financing” (or any comparable term) under, and as defined in any Junior Financing Documentation or (ii) the subordination provisions set forth in any Junior Financing Documentation shall, in whole or in part, cease to be effective or cease to be legally valid, binding and enforceable against the holders of any Junior Financing, if applicable.

Section 8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent may and, at the request of the Required Lenders, shall take any or all of the following actions:

(i) declare the Revolving Credit Commitment of each Lender to make Loans (including Swing Line Loans) and any obligation of the L/C Issuers to issue Letters of Credit to be terminated, whereupon such commitments and obligation shall be terminated;

(ii) declare the unpaid principal amount of all outstanding Loans (including Swing Line Loans), all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers;

(iii) require that the Borrowers cash collateralize the amount of the L/C Obligations (in an amount equal to 101.50% of the then Stated Amount of outstanding Letters of Credit plus 100.00% of the then unreimbursed amounts due to the L/C Issuers); and

(iv) exercise on behalf of itself and the Secured Parties all rights and remedies available to it and the Secured Parties under the Loan Documents or applicable Law;

provided that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrowers under Debtor Relief Laws, the obligation of each Lender to make Loans (including Swing Line Loans) and any obligation of the L/C Issuers to issue Letters of Credit shall automatically terminate, the unpaid principal amount of all outstanding Loans (including Swing Line Loans) and all interest and other amounts as aforesaid shall automatically become due and payable and the obligations of the Borrowers to cash collateralize the amount of the L/C Obligations as aforesaid shall automatically become effective, in each case, without further act of the Administrative Agent or any Lender.

Section 8.03 Exclusion of Immaterial Subsidiaries. Solely for the purpose of determining whether a Default has occurred under clause (f) or (g) of Section 8.01, any reference in any such clause to any Restricted Subsidiary or Loan Party shall be deemed not to include any Restricted Subsidiary affected by any event or circumstances referred to in any such clause that is not a Material Subsidiary (it being agreed that all Restricted Subsidiaries affected by any event or circumstance referred to in any such clause shall be considered together, as a single consolidated Restricted Subsidiary, for purposes of determining whether the condition specified above is satisfied).

- 137 -

Section 8.04 Application of Funds. After the occurrence and during the continuance of an Event of Default, at the election of the Administrative Agent or the Required Lenders (or after the Loans have become immediately due and payable and the L/C Obligations have been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Finance Obligations shall be applied by the Administrative Agent in the following order:

FIRST, to payment of that portion of the Senior Credit Obligations consisting of fees, indemnities, expenses and other amounts (other than principal and interest, but including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent and the Collateral Agent in their respective capacities as such;

SECOND, to payment of that portion of the Senior Credit Obligations consisting of fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders (other than Defaulting Lenders) and the L/C Issuers (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III), ratably among them in proportion to the amounts described in this clause Second payable to them;

THIRD, to payment of that portion of the Senior Credit Obligations consisting of accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Senior Credit Obligations, ratably among the Lenders (other than Defaulting Lenders) in proportion to the respective amounts described in this clause Third payable to them;

FOURTH, to payment of that portion of the Senior Credit Obligations consisting of unpaid principal of the Swing Line Loans, Overadvances, Protective Advances and Unreimbursed Amounts ratably among the Secured Parties in proportion to the respective amounts described in this clause Fourth held by them;

FIFTH, to payment of that portion of the Senior Credit Obligations consisting of unpaid principal of the Loans, ratably among the Secured Parties (other than Defaulting Lenders) in proportion to the respective amounts described in this clause Fifth held by them;

SIXTH, to the Administrative Agent, to be held by the Administrative Agent, for the ratable benefit of the L/C Issuers and the Lenders as cash collateral in an amount up to 101.50% of the then Stated Amount of Letters of Credit until paid in full;

SEVENTH, to pay outstanding Finance Obligations with respect to Cash Management Services furnished to any Loan Party by the Secured Parties and any amounts due and owing under Secured Hedge Agreements, including the Swap Termination Value under Secured Hedge Agreements, ratably among the Secured Parties in proportion to the respective amounts described in this clause Seventh held by them;

EIGHTH, to the payment of all other Finance Obligations (including any other outstanding Other Liabilities) that are due and payable to the Administrative Agent and the other Secured Parties (including Defaulting Lenders) on such date, ratably based upon the respective aggregate amounts of all such Senior Credit Obligations owing to the Administrative Agent and the other Secured Parties on such date; and

LAST, the balance, if any, after all of the Finance Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by Law.

- 138 -

ARTICLE IX

AGENTS

Section 9.01 Appointment and Authority.

(a) Administrative Agent. Each of the Lenders and each L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuers, and neither any Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

(b) Collateral Agent. The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank and a potential Cash Management Bank) and the L/C Issuers hereby irrevocably appoint and authorize the Administrative Agent to act as the agent of such Lender and such L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Finance Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent, shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

Section 9.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

Section 9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law; and

- 139 -

(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of their Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default as such is given to the Administrative Agent by the Lead Borrower, a Lender or an L/C Issuer.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the value or the sufficiency of any Collateral or (vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

Section 9.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or a L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Lead Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

Section 9.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

- 140 -

Section 9.06 Resignation of Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuers and the Lead Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Lead Borrower, to appoint a successor, which shall be (i) a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States and (ii) either a Lender or any other Person reasonably acceptable to the Lead Borrower. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Lead Borrower, the Lenders and the L/C Issuers that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuers under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section 9.06. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section 9.06). The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Lead Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article IX and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as an L/C Issuer and as the Swing Line Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of Bank of America as a retiring L/C Issuer and as the Swing Line Lender, (ii) Bank of America, as a retiring L/C Issuer and as the Swing Line Lender, shall be discharged from all of its duties and obligations in such capacities hereunder or under the other Loan Documents and (iii) a successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, issued by Bank of America outstanding at the time of such succession or make other arrangements satisfactory to Bank of America as a retiring L/C Issuer to effectively assume the obligations of Bank of America as issuer of such Letters of Credit.

Section 9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

- 141 -

Section 9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangers or other agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an L/C Issuer hereunder.

Section 9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Lead Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Senior Credit Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Senior Credit Parties (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuers and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial proceeding; and

(ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Finance Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

Section 9.10 Collateral and Guaranty Matters. Each of the Lenders (including in its capacities as a potential Cash Management Bank and a potential Hedge Bank) and the L/C Issuers irrevocably agree to (and authorize the Administrative Agent to act in accordance with) the following:

(i) any Lien on any property granted to or held by the Administrative Agent under any Loan Document shall be automatically released (A) upon termination of the Aggregate Commitments and payment in full of all Finance Obligations (other than (x) contingent indemnification obligations and (y) unmatured obligations and liabilities under Secured Cash Management Agreements and Secured Hedge Agreements) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements reasonably satisfactory to the Administrative Agent and the L/C Issuers shall have been made), (B) at the time the property subject to such Lien is transferred or to be transferred as part of or in connection with any transfer permitted hereunder or under any other Loan Document to any Person other than the Borrowers or any of their Domestic Subsidiaries that are Restricted Subsidiaries (and

- 142 -

upon written request from the Lead Borrower identifying the property to be transferred pursuant to this clause (B), the Administrative Agent shall provide to the Lead Borrower within ten Business Days a written acknowledgment that such property shall be automatically released pursuant to this clause (B)), (C) if approved, authorized or ratified in writing in accordance with Section 10.01 or (D) if the property subject to such Lien is owned by a Guarantor, upon release of such Guarantor from its obligations under its Guaranty pursuant to clause (ii) below;

(ii) any Guarantor shall be automatically released from its obligations under the Guaranty if such Person ceases to be a Restricted Subsidiary as a result of a transaction permitted hereunder or a Material Domestic Subsidiary; and

(iii) the Administrative Agent shall release or subordinate any Lien on any property granted to or held by the Administrative Agent under any Finance Document to the holder of any Lien on such property that is permitted by Section 7.01(c), (j), (k) or (w).

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty, pursuant to this Section 9.10. In each case as specified in this Section 9.10, the Administrative Agent will promptly, at the Borrowers’ expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.10.

Section 9.11 Secured Cash Management Agreements and Secured Hedge Agreements. No Cash Management Bank or Hedge Bank that obtains the benefits of Section 8.04, any Guaranty or any Collateral by virtue of the provisions hereof or of any Guaranty or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Finance Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements unless the Administrative Agent has received written notice of such Finance Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.

ARTICLE X

MISCELLANEOUS

Section 10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by any Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders (or by the Administrative Agent with the consent or ratification of the Required Lenders or such other number or percentage of Lenders as may be specified herein) and the Lead Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent (it being understood that such acknowledgement is ministerial in nature and must be made to the extent such amendment, waiver or consent otherwise complies with the requirements of this Section 10.01), and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that

- 143 -

(x) the Administrative Agent and the Lead Borrower may, with the consent of the other, amend, modify or supplement this Agreement and any other Loan Document to cure any ambiguity, typographical error, defect or inconsistency if such amendment, modification or supplement does not adversely affect the rights of any Agent, any Lender or any L/C Issuer and (y) no such amendment, waiver or consent shall:

(i) [reserved];

(ii) extend or increase the Revolving Credit Commitment of any Lender (or reinstate any Revolving Credit Commitment terminated pursuant to Section 8.02) without the written consent of such Lender (it being understood that a waiver of any condition precedent set forth in Section 4.02 or the waiver of any Default, mandatory prepayment or mandatory reduction of the Revolving Credit Commitments shall not constitute an extension or increase of any Revolving Credit Commitment of any Lender);

(iii) postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to such payment, it being understood that the waiver of (or amendment to the terms of) any mandatory prepayment of the Loans shall not constitute a postponement of any date scheduled for the payment of principal or interest;

(iv) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to such amount (it being understood that any change effected pursuant to clause (ix) or (x) below shall not constitute such reduction); provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Borrowers to pay interest or Letter of Credit Fees at the Default Rate;

(v) change (A) Section 8.04 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender affected thereby or (B) the order of application of any reduction in the Revolving Credit Commitments or any prepayment of Loans from the application thereof set forth in the applicable provisions of Section 2.05(b) or 2.06(b), respectively, in any manner that adversely affects the Lenders without the written consent of each Lender adversely affected thereby;

(vi) change any provision of this Section 10.01 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender affected thereby;

(vii) other than in a transaction permitted under Section 7.04 or Section 7.05, release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender; provided that the Collateral Agent may, without consent from any other Lender, release any Collateral that is sold or transferred by a Loan Party in compliance with Sections 7.04 or 7.05 or released in compliance with Section 9.10(i), (ii) or (iii) (in which case such release shall be made by the Administrative Agent acting alone);

(viii) other than in a transaction permitted under Section 7.04 or Section 7.05, release all or substantially all of the value of the Guaranty, without the written consent of each Lender, except to the extent the release of any Subsidiary from the Guaranty is permitted pursuant to Section 9.10 (in which case such release shall be made by the Administrative Agent acting alone);

- 144 -

(ix) increase the advance rates set forth in the definition of “Borrowing Base” without the written consent of each Lender; or

(x) change or otherwise modify the eligibility criteria, eligible asset classes, reserves, sublimits in respect of the Borrowing Base, or add new asset categories to the Borrowing Base, if such increase, change or modification causes availability under the Revolving Credit Facility provided for herein to be increased, in each case without the written consent of the Supermajority Lenders; provided that this clause (x) shall not limit the discretion of the Administrative Agent to change, establish or eliminate any reserves, to add assets acquired in a Permitted Acquisition to the Borrowing Base or to otherwise exercise its discretion or Credit Judgment in respect of any determination expressly provided hereunder to be made by the Administrative Agent in its discretion or Credit Judgment, all to the extent otherwise set forth herein;

and provided, further, that: (i) no amendment, waiver or consent shall, unless in writing and signed by each applicable L/C Issuer in addition to the Lenders required above, affect the rights or duties of such L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) Section 10.06(g) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; and (v) no amendment, waiver or consent which would require the consent of a Lender but for the fact that it is a Defaulting Lender shall be enforced against it without its consent if such amendment, waiver or consent affects such Defaulting Lender in a disproportionate manner. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Revolving Credit Commitment of such Lender may not be increased or extended without the consent of such Lender (it being understood that any Commitments or Loans held or deemed held by any Defaulting Lender shall be excluded from a vote of the Lenders hereunder requiring any consent of the Lenders).

Notwithstanding anything to the contrary contained in this Section 10.01, guarantees, collateral security documents and related documents executed by Subsidiaries in connection with this Agreement may be in a form reasonably determined by the Administrative Agent and may be, together with this Agreement, amended, supplemented and waived with the consent of the Administrative Agent at the request of the Lead Borrower without the need to obtain the consent of any other Lender if such amendment, supplement or waiver is delivered in order (i) to comply with local Law or advice of local counsel, (ii) to cure ambiguities, omissions, mistakes or defects or (iii) to cause such guarantee, collateral security document or other document to be consistent with this Agreement and the other Loan Documents.

If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required Lenders, the Lead Borrower may replace such non-consenting Lender in accordance with Section 10.13.

- 145 -

Section 10.02 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i) if to any Loan Party, the Administrative Agent, an L/C Issuer or the Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders and the L/C Issuers hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or L/C Issuer pursuant to Article II if such Lender or L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Lead Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received when sent; provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN

- 146 -

CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, “Agent Parties”) have any liability to any Borrower, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Loan Party’s or the Administrative Agent’s transmission of Borrower Materials through electronic telecommunications or other information transmission systems, except for direct or “economic” (as such term is used in Title 18, United States Code, Section 1030(g)) (as opposed to special, indirect, consequential or punitive) losses, claims, damages, liabilities or expenses to the extent that such losses, claims, damages, liabilities or expenses (x) are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party or (y) result from a claim brought by any Borrower or any other Loan Party against an Indemnitee for material breach of such Indemnitee’s obligations hereunder or under any other Loan Document in respect of Borrower Materials made available through electronic telecommunications or other information transmission systems, if such Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction; provided, however, that in no event shall any Agent Party have any liability to any Borrower, any Lender, any L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to such direct or “economic” damages).

(d) Change of Address, Etc. Each of the Loan Parties, the Administrative Agent, each L/C Issuer and the Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Lead Borrower, the Administrative Agent, the L/C Issuers and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrowers or their securities for purposes of United States Federal or state securities laws.

(e) Reliance by Administrative Agent, L/C Issuers and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices) purportedly given by or on behalf of the Borrowers or any other Loan Party even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Lead Borrower shall indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrowers in the absence of gross negligence or willful misconduct. All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

Section 10.03 No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender or L/C Issuer or by the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall

- 147 -

any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuer; provided, however, that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (ii) any L/C Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (iii) any Lender from exercising setoff rights in accordance with Section 10.08 (subject to the terms of Section 2.13) or (iv) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (x) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (y) in addition to the matters set forth in clauses (ii), (iii) and (iv) of the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

Section 10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. Holdings and the Lead Borrower jointly and severally agree to pay (i) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by any L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Lender or any L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or any L/C Issuer) in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit; provided that Holdings and the Lead Borrower shall not be required to reimburse the legal fees and expenses of more than one outside counsel (in addition to any special counsel and up to one local counsel in each applicable local jurisdiction) for all Persons indemnified under this subsection (a) unless, in the written opinion of outside counsel reasonably satisfactory to the Lead Borrower and the Administrative Agent, representation of all such indemnified persons would be inappropriate due to the existence of an actual or potential conflict of interest.

(b) Indemnification. Holdings and the Lead Borrower, jointly and severally, shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender each L/C Issuer, and each

- 148 -

Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and reasonably related expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Lead Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Lead Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing brought by a third party or by any Borrower or any other Loan Party or any of such Borrower’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or (y) result from a claim brought by any Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

(c) Reimbursement by Lenders. To the extent that Holdings and the Lead Borrower for any reason fail indefeasibly to pay any amount required under subsection (a) or (b) of this Section 10.04 to be paid by it or them to the Administrative Agent (or any sub-agent thereof), any L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), each L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Adjusted Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or an L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or an L/C Issuer in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).

(d) Waiver of Consequential Damages. To the fullest extent permitted by applicable Law, no Borrower or Indemnitee shall assert, and each Borrower and Indemnitee hereby waives, any claim, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

- 149 -

(e) Payments. All amounts due under this Section 10.04 shall be payable not later than ten Business Days after demand therefor; provided, however, that such Indemnitee shall promptly refund such amount to the extent that there is a final judicial or arbitral determination that such Indemnitee was not entitled to indemnification or contribution rights with respect to such payment pursuant to the express terms of this Section 10.04.

(f) Survival. The agreements in this Section shall survive the resignation of the Administrative Agent, any L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Senior Credit Obligations.

Section 10.05 Payments Set Aside. To the extent that any payment by or on behalf of any Borrower or any other Loan Party is made to the Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, any L/C Issuer or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, such L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (i) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (ii) each Lender and L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders and the L/C Issuers under clause (ii) of the preceding sentence shall survive the payment in full of the Senior Credit Obligations and the termination of this Agreement.

Section 10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Lead Borrower nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 10.06(b), (ii) by way of participation in accordance with the provisions of Section 10.06(d), (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.06(f), or (iv) to an SPC in accordance with the provisions of Section 10.06(g) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, is intended to confer, shall be construed to confer, or shall confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section 10.06 and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Credit Commitment(s) and the Loans (including for purposes of this Section 10.06(b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Revolving Credit Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

- 150 -

(B) in any case not described in subsection (b)(i)(A) of this Section 10.06, the aggregate amount of the Revolving Credit Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Revolving Credit Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $2,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Lead Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met.

(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Revolving Credit Commitment assigned, except that this clause (ii) shall not apply to the Swing Line Lender’s rights and obligations in respect of Swing Line Loans.

(iii) Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section 10.06 and, in addition:

(A) the consent of the Lead Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default under clause (a), (f) or (g) of Section 8.01 has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender (other than a Defaulting Lender), an Affiliate of a Lender (other than a Defaulting Lender) or an Approved Fund with respect to such Lender;

(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of any Revolving Credit Commitment if such assignment is to a Defaulting Lender or to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund with respect to such Lender;

(C) the consent of each L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment to a Defaulting Lender or that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and

- 151 -

(D) the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment to a Defaulting Lender or in respect of the Revolving Credit Facility.

(iv) Assignment and Assumption. The parties to each assignment shall execute (except as otherwise contemplated in the penultimate sentence of Section 10.13) and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v) No Assignment to Borrower. No such assignment shall be made to the Lead Borrower or any of the Lead Borrower’s Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, and the surrender by the assigning Lender of its Notes, the Lead Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.06(d).

(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Lead Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Revolving Credit Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and each Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Lead Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. In addition, at any time that a request for a consent for a material or other substantive change to the Loan Documents is pending, any Lender may request and receive from the Administrative Agent a copy of the Register.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, any Borrower or the Administrative Agent, sell participations to any Person (other than a natural person) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Revolving Credit Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s

- 152 -

obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent, the Lenders and the L/C Issuers shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any amendment, modification or waiver of any provision of this Agreement or the other Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in clause (y) of the first proviso to Section 10.01 that directly affects such Participant. Subject to subsection (e) of this Section 10.06, the Borrowers agree that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.06(b). To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender.

(e) Limitation Upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Lead Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Lead Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Lead Borrower, to comply with Section 3.01(e) as though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(g) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Lead Borrower (an “SPC”) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.12(b)(i). Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrowers under this Agreement (including its obligations under Section 3.04), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder. The making of a Loan by an SPC hereunder shall utilize the Revolving Credit Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the

- 153 -

laws of the United States or any State thereof. Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the Lead Borrower and the Administrative Agent, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or guaranty or credit or liquidity enhancement to such SPC.

(h) Resignation as an L/C Issuer or Swing Line Lender after Assignment. Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Revolving Credit Commitment and Revolving Credit Loans pursuant to Section 10.06(b), Bank of America may, (i) upon 30 days’ notice to the Lead Borrower and the Lenders, resign as an L/C Issuer and/or (ii) upon 30 days’ notice to the Lead Borrower, resign as Swing Line Lender. In the event of any such resignation as an L/C Issuer or the Swing Line Lender, the Lead Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by the Lead Borrower to appoint any such successor shall affect the resignation of Bank of America as an L/C Issuer or the Swing Line Lender, as the case may be. If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit issued by it which remain outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America resigns as the Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (ii) such successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, issued by the retiring L/C Issuer and remaining outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

Section 10.07 Treatment of Certain Information; Confidentiality. Each of the Administrative Agent, the Lenders and the L/C Issuers agrees to maintain the confidentiality of the Information (as defined below) and not to disclose such information, except that Information may be disclosed: (i) to its Affiliates and to it and its Affiliates’ respective partners, directors, officers, employees, agents, trustees, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners) in which case the Administrative Agent or such Lender or L/C Issuer, as applicable, shall notify the Lead Borrower prior to such disclosure, in any case, to the extent legally permissible; (iii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process; (iv) to any other party hereto; (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions at least as restrictive as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to Section 2.14(c) or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to any Borrower and its obligations, (vii) with the consent of the Lead Borrower or (viii) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section or (B) becomes available to the Administrative Agent, any Lender, any L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Lead Borrower.

- 154 -

For purposes of this Section, “Information” means all information received from Holdings, the Lead Borrower or any of its Subsidiaries or Related Parties relating to Holdings or the Lead Borrower or any Subsidiary or Related Party or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender or L/C Issuer on a nonconfidential basis prior to disclosure by Holdings or the Lead Borrower or any Subsidiary other than by breach of this Section 10.07; provided that, in the case of information received from Holdings or the Lead Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential or is delivered pursuant to Section 6.01, 6.02 or 6.03 hereof. Any Person required to maintain the confidentiality of Information as provided in this Section 10.07 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Notwithstanding the foregoing, any Agent and any Lender may place advertisements in financial and other newspapers and periodicals or on a home page or similar place for dissemination of information on the Internet or worldwide web as it may choose, and circulate similar promotional materials, after the closing of the transactions contemplated by this Agreement in the form of a “tombstone” or otherwise describing the names of the Loan Parties, or any of them, and the amount, type and closing date of such transactions, all at their sole expense.

Each of the Administrative Agent, the Lenders and the L/C Issuers acknowledge that (i) the Information may include material non-public information concerning Holdings, the Lead Borrower or one or more Subsidiaries, as the case may be, (ii) it has developed compliance procedures regarding the use of material non-public information and (iii) it will handle such material non-public information in accordance with applicable Laws, including Federal and state securities Laws.

Section 10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, L/C Issuer or any such Affiliate to or for the credit or the account of any Borrower or any other Loan Party against any and all of the obligations of such Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or an L/C Issuer, irrespective of whether or not such Lender or L/C Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of such Borrower or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender, the L/C Issuers and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuers or their respective Affiliates may have. Each Lender and each L/C Issuer agrees to notify the Lead Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application. Notwithstanding the provisions of this Section 10.08, if at any time any Lender, the L/C Issuers or any of their respective Affiliates maintains one or more deposit accounts for any Borrower or any other Loan Party into which Specified Government Accounts are deposited, such Person shall waive the right of setoff set forth herein.

Section 10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall

- 155 -

not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Lead Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (i) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (ii) exclude voluntary prepayments and the effects thereof and (iii) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Senior Credit Obligations hereunder.

Section 10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 10.11 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by any Agent or any Lender or on their behalf and notwithstanding that the Agent or any Lender may have had notice or knowledge of any Default or Event of Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Senior Credit Obligation shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

Section 10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 10.13 Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, if any Lender’s obligations to make, continue or convert to Eurodollar Rate Loans has been suspended pursuant to Section 3.02, if any Lender is a Defaulting Lender or if any other circumstance exists hereunder that gives the Lead Borrower the right to replace a Lender as a party hereto (including but not limited to the last paragraph of Section 10.01), then the Lead Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(i) the Lead Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b);

- 156 -

(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the applicable Borrower (in the case of all other amounts);

(iii) in the case of any assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and

(iv) such assignment does not conflict with applicable Laws; and

(v) in the case of any replacement of Lenders under the circumstances described in last paragraph of Section 10.01, the applicable amendment, waiver, discharge or termination that the Lead Borrower has requested shall become effective upon giving effect to such replacement (and any related Assignment and Assumptions required to be effected in connection therewith in accordance with this Section 10.13).

In connection with the replacement of a Defaulting Lender pursuant to this Section 10.13, no signature of such Defaulting Lender to the Assignment and Assumption shall be required to properly effect the assignment of Loans held by such Defaulting Lender. A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Lead Borrower to require such assignment and delegation cease to apply.

Section 10.14 Governing Law; Jurisdiction Etc.

(a) Governing Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND OTHER THAN AS EXPRESSLY SET FORTH IN SUCH OTHER LOAN DOCUMENTS) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500, IN THE CASE OF DOCUMENTARY LETTERS OF CREDIT OR TRADE LETTERS OF CREDIT, AND THE INTERNATIONAL STANDBY PRACTICES 1998 PUBLISHED BY THE INSTITUTE OF INTERNATIONAL BANKING LAW & PRACTICE, INC. (OR SUCH LATER VERSION THEREOF AS MAY BE IN EFFECT AT THE TIME OF ISSUANCE), IN THE CASE OF STANDBY LETTERS OF CREDIT AND, AS TO MATTERS NOT GOVERNED BY SUCH UNIFORM CUSTOMS AND/OR INTERNATIONAL STANDBY PRACTICES, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

- 157 -

(b) Submission to Jurisdiction. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c) Waiver of Venue. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) Service of Process. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

Section 10.15 California Judicial Reference. If any action or proceeding is filed in a court of the State of California by or against any party hereto in connection with any of the transactions contemplated by this Agreement or any other Loan Document, (i) the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee (who shall be a single active or retired judge) to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision, provided that at the option of any party to such proceeding, any such issues pertaining to a “provisional remedy” as defined in California Code of Civil Procedure Section 1281.8 shall be heard and determined by the court, and (ii) without limiting the generality of Section 10.04, the Lead Borrower shall be solely responsible to pay all fees and expenses of any referee appointed in such action or proceeding.

Section 10.16 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY

- 158 -

(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 10.17 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each of the Lead Borrower and Holdings acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Bookrunners are arm’s-length commercial transactions between the Lead Borrower, Holdings and their respective Affiliates, on the one hand, and the Administrative Agent and the Bookrunners, on the other hand, (B) each of the Lead Borrower and Holdings has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each of the Lead Borrower and Holdings is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent each Bookrunner each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Lead Borrower, Holdings or any of their respective Affiliates, or any other Person and (B) neither the Administrative Agent nor any Bookrunner in their capacities as Administrative Agent or Bookrunner has any obligation to the Borrowers, Holdings or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, each Bookrunner and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers, Holdings and their respective Affiliates, and neither the Administrative Agent nor any Bookrunner has any obligation to disclose any of such interests to the Borrowers, Holdings or any of their respective Affiliates. To the fullest extent permitted by law, each of the Lead Borrower and Holdings hereby waives and releases any claims that it may have against the Administrative Agent and any Bookrunner with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

Section 10.18 Electronic Execution of Assignments and Certain Other Documents. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

Section 10.19 USA PATRIOT Act Notice. Each Lender that is subject to the USA PATRIOT Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into Law October 26, 2001) (the “USA PATRIOT Act”), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name

- 159 -

and address of each Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Borrower in accordance with the USA PATRIOT Act. Each Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” an anti-money laundering rules and regulations, including the USA PATRIOT Act.

Section 10.20 Intercreditor Agreement. Each Lender hereunder: (a) consents to the subordination of Liens provided for in the Intercreditor Agreement, (b) agrees that it will be bound by and will take no actions contrary to the provisions of the Intercreditor Agreement and (c) authorizes and instructs the Revolving Facility Collateral Agent (as defined in the Intercreditor Agreement) to enter into the Intercreditor Agreement as Revolving Facility Collateral Agent and on behalf of such Lender. The foregoing provisions are intended as an inducement to the Term Debt Parties (as defined in the Intercreditor Agreement) to enter into the arrangements contemplated by the Term Debt Documents (as defined in the Intercreditor Agreement) and the Term Debt Parties are intended third party beneficiaries of such provisions and the provisions of the Intercreditor Agreement.

[Signature Pages Follow]

- 160 -

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

SKY ACQUISITION LLC,
By:	/s/ Michael Dal Bello
	Name: Michael Dal Bello
	Title:
SKY MERGER SUB CORPORATION,
	as Lead Borrower
By:	/s/ Michael Dal Bello
	Name: Michael Dal Bello
	Title:

The undersigned hereby acknowledges and agrees that, upon the effectiveness of the merger of Sky Merger Sub Corporation with and into Apria Healthcare Group Inc. with Apria Healthcare Group Inc. continuing as the surviving corporation under the name “Apria Healthcare Group Inc.” it will succeed by operation of law to all of the rights and obligations of Sky Merger Sub Corporation set forth herein and in all other Loan Documents and that all references herein and therein to the “Lead Borrower” shall thereupon be deemed to be references to the undersigned.
APRIA HEALTHCARE GROUP INC.,
	as Lead Borrower
By:	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	General Counsel and Secretary

S-1

[Signature Page to the ABL Credit Agreement]

APRIA HEALTHCARE, INC.

APRIACARE MANAGEMENT SYSTEMS, INC.

APRIADIRECT.COM, INC.

APRIA HEALTHCARE OF NEW YORK STATE, INC.

CORAM, INC.
	as Borrowers
By:	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	Executive Vice President
		General Counsel and Secretary

S-2

[Signature Page to the ABL Credit Agreement]

CORAM CLINICAL TRIALS, INC.

T2 MEDICAL, INC.

CORAM SPECIALTY INFUSION SERVICES, INC.

CORAM HEALTHCARE CORPORATION OF ALABAMA

CORAM HEALTHCARE CORPORATION OF FLORIDA

CORAM HEALTHCARE CORPORATION OF GREATER D.C.

CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK

CORAM HEALTHCARE CORPORATION OF INDIANA

CORAM HEALTHCARE CORPORATION OF MICHIGAN

CORAM HEALTHCARE CORPORATION OF MISSISSIPPI

CORAM HEALTHCARE CORPORATION OF NEVADA

CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA

CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA

CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA

CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA

CORAM HOMECARE OF MINNESOTA, INC.

CORAM ALTERNATE SITE SERVICES, INC.

CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS

CORAM HEALTHCARE CORPORATION OF NEW YORK

CORAM HEALTHCARE CORPORATION OF NORTH TEXAS

CORAM HEALTHCARE CORPORATION OF UTAH

CORAMRX, LLC

CORAM HEALTHCARE OF WYOMING, L.L.C.

HEALTHINFUSION, INC.

H.M.S.S., INC.

CORAM SERVICE CORPORATION

	as Borrowers
By:	/s/ Michael E. Dell
	Name:	Michael E. Dell
	Title:	V.P., General Counsel & Secretary

S-3

[Signature Page to the ABL Credit Agreement]

BANK OF AMERICA, N.A.,
	as L/C Issuer
By:	/s/ Michael Lemiszko
	Name:	Michael Lemiszko
	Title:	Senior Vice President
BANK OF AMERICA, N.A.,
	as Swing Line Lender
By:	/s/ Michael Lemiszko
	Name:	Michael Lemiszko
	Title:	Senior Vice President
BANK OF AMERICA, N.A.,
	as Administrative Agent
By:	/s/ Michael Lemiszko
	Name:	Michael Lemiszko
	Title:	Senior Vice President
BANK OF AMERICA, N.A.,
	as Collateral Agent
By:	/s/ Michael Lemiszko
	Name:	Michael Lemiszko
	Title:	Senior Vice President
BANK OF AMERICA, N.A.,
	as an initial Lender
By:	/s/ Michael Lemiszko
	Name:	Michael Lemiszko
	Title:	Senior Vice President

S-4

[Signature Page to the ABL Credit Agreement]

WACHOVIA BANK, NATIONAL ASSOCIATION,
	as an initial Lender
By:	/s/ Charles C. Edwards, III
	Name:	Charles C. Edwards, III
	Title:	Director

S-5

[Signature Page to the ABL Credit Agreement]

BARCLAYS BANK PLC,
	as an initial Lender
By:	/s/ Diane Rolfe
	Name:	Diane Rolfe
	Title:	Director

S-6

[Signature Page to the ABL Credit Agreement]

THE BANK OF NOVA SCOTIA,
	as an initial Lender
By:	/s/ Paula J. Czach
	Name:	Paula J. Czach
	Title:	Director

S-7

[Signature Page to the ABL Credit Agreement]

Lender Signature Page

Credit Agreement

Sky Merger Sub Corporation (to be merged into Apria Healthcare Group Inc.)

SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF OCTOBER 28, 2008 AMONG SKY ACQUISITION LLC, SKY MERGER SUB CORPORATION (TO BE MERGED INTO APRIA HEALTHCARE GR01.1P INC.), EACH LENDER FROM TIME TO TIME PARTY HERETO, BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, COLLATERAL AGENT, SWING LINE LENDER AND L/C ISSUER, WACHOVIA RANK, NATIONAL ASSOCIATION AND BARCLAYS CAPITAL, THE INVESTMENT BANKING DIVISION OF BARCLAYS BANK PLC, AS SYNDICATION AGENTS AND THE BANK OF NOVA SCOTIA, AS DOCUMENTATION AGENT.
NAME OF INSTITUTION:
PNC Bank, National Association
By:	/s/ Thomas A. Sinclair
	Name:	Thomas A. Sinclair
	Title:	Senior Vice President

Schedule 1.01A

Guarantors

Schedule 1.01B

Certain Security Interests and Guarantees

Schedule 1.01C

Unrestricted Subsidiaries

Schedule 1.01D

Excluded Subsidiaries

Schedule 1.01E

Existing Letters of Credit

Schedule 2.01

Lenders; Revolving Credit Commitments; Applicable Percentage

Schedule 5.01

Compliance with Laws

Schedule 5.05(a)

Material Dispositions Not Reflected in Financial Statements

Schedule 5.06

Litigation

Schedule 5.11(a)

ERISA Compliance

Schedule 5.12

Subsidiaries and Other Equity Investments

Schedule 5.19

Fraud and Abuse

Schedule 6.02(vi)

Financial and Collateral Reports

Schedule 6.13(c)

Post-Closing Matters

Schedule 7.01(c)

Existing Liens

Schedule 7.02(g)

Existing Investments

Schedule 7.03(c)

Existing Indebtedness

Schedule 7.08

Transactions with Affiliates

Schedule 7.09

Existing Restrictions

Schedule 10.02

Administrative Agent’s Office

Exhibit A-1

Form of Committed Loan Notice

Exhibit A-2

Form of Swing Line Loan Notice

Exhibit B-1

Form of Revolving Credit Note

Exhibit B-2

Form of Swing Line Note

Exhibit C-1

Form of Assignment and Assumption

Exhibit C-2

Form of Administrative Questionnaire

Exhibit D

Form of Compliance Certificate

Exhibit E

Form of Opinion of Counsel to Loan Parties

Exhibit F

Form of Guaranty

Exhibit G-1

Form of Security Agreement

Exhibit G-2

Form of Perfection Certificate

Exhibit H

Form of Solvency Certificate

Exhibit I

Form of Borrowing Base Certificate

EX-10.19

Exhibit 10.19

EXECUTION VERSION

AMENDMENT NO. 1 TO CREDIT AGREEMENT

Amendment No. 1 dated as of May 27, 2009 (this “First Amendment”) among SKY ACQUISITION LLC, a Delaware limited liability company (“Holdings”), APRIA HEALTHCARE GROUP INC., a Delaware corporation (the “Borrower”), the other Loan Parties (as defined below) party hereto, the Lenders (as defined below) party hereto and BANK OF AMERICA, N.A., as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”).

Holdings, the Borrower, the other Loan Parties, the Lenders from time to time party thereto (the “Lenders”), the Administrative Agent, Bank of America, N.A., as Collateral Agent, Wachovia Bank, National Association and Barclays Capital, the investment banking division of Barclays Bank Plc, as Syndication Agents and The Bank of Nova Scotia, as Documentation Agent, are parties to that certain Credit Agreement dated as of October 28, 2008 (the “Credit Agreement”). Unless otherwise defined herein, capitalized terms defined in the Credit Agreement have the same meanings when used in this First Amendment.

Holdings and the Borrower have requested that the Lenders agree to certain amendments to the Credit Agreement, and each of the Lenders signatory hereto (which Lenders collectively constitute the Required Lenders referred to in the Credit Agreement), have agreed, subject to the terms and conditions set forth herein, to amend the Credit Agreement as herein provided. Accordingly, the parties agree as follows:

ARTICLE I

AMENDMENTS TO THE CREDIT AGREEMENT

(a) The text “$1,010,000,000” in (i) the definition of “Senior Secured Bridge Loans” in Section 1.01 of the Credit Agreement and (ii) Section 7.03(b)(i) of the Credit Agreement is hereby replaced, in each instance, by the text “$1,025,000,000”.

(b) The text “primary” is hereby added before the text “purpose” in the definition of “Initial Senior Secured Notes” in Section 1.01 of the Credit Agreement.

(c) The text “and” is hereby deleted at the end of Section 7.12(a)(iv) of the Credit Agreement; the text “.” is hereby replaced by the text “; and” at the end of Section 7.12(a)(v) of the Credit Agreement; and the following text is hereby inserted as the new Section 7.12(a)(vi) of the Credit Agreement: “(vi) other Restricted Debt Payments used to prepay or repay the Senior Secured Bridge Loans and/or pay any fees in connection with such prepayment or repayment, so long as the aggregate amount of all such Restricted Debt Payments since the Closing Date does not exceed $15,000,000”.

ARTICLE II

MISCELLANEOUS

(a) This First Amendment, and each of the amendments contained herein, shall become effective on the date (the “First Amendment Effective Date”) when the Administrative Agent shall have received counterparts of this First Amendment duly executed by Holdings, the Borrower, the other Loan Parties and the Administrative Agent and duly consented to by the Required Lenders.

(b) On the First Amendment Effective Date, the Credit Agreement will be automatically amended to reflect the amendments thereto provided for in this First Amendment. The rights and obligations of the parties hereto shall be governed (i) prior to the First Amendment Effective Date, by the Credit Agreement and (ii) on and after the First Amendment Effective Date, by the Credit Agreement as amended by this First Amendment. Once the First Amendment Effective Date has occurred, all references to the Credit

Agreement in any document, instrument, agreement, or writing shall be deemed to refer to the Credit Agreement as amended by this First Amendment. Except as specifically amended by this First Amendment, the Credit Agreement shall remain in full force and effect and the Credit Agreement and all obligations of the Loan Parties thereunder, as amended by this First Amendment, are hereby ratified and affirmed in all respects.

(c) Other than as specifically provided herein, this First Amendment shall not operate as a waiver or amendment of any right, power or privilege of the Administrative Agent or any Lender under the Credit Agreement or any other Finance Document or of any other term or condition of the Credit Agreement or any other Finance Document, nor shall the entering into of this First Amendment preclude the Administrative Agent and/or any Lender from refusing to enter into any further waivers or amendments with respect thereto. This First Amendment is not intended by any of the parties hereto to be interpreted as a course of dealing which would in any way impair the rights or remedies of the Administrative Agent or any Lender except as expressly stated herein, and no Lender shall have any obligation to extend credit to the Borrower other than pursuant to the strict terms of the Credit Agreement and the other Finance Documents, as amended or supplemented to date (including by means of this First Amendment).

(d) The Loan Parties have all requisite corporate (or similar organizational) power and authority to enter into this First Amendment and to carry out the transactions contemplated by, and perform their obligations under, this First Amendment (and the Credit Agreement as amended by this First Amendment). The execution, delivery and performance of this First Amendment (and the Credit Agreement as amended by this First Amendment) by each Loan Party have been duly authorized by all necessary corporate (or similar organizational) action. This First Amendment has been duly executed and delivered by each Loan Party. This First Amendment constitutes legal, valid and binding obligations of the Loan Parties enforceable in accordance with their terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

(e) This First Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. A counterpart hereof executed and delivered by facsimile or pdf or other similar electronic transmission shall be effective as an original.

(f) This First Amendment and the rights and obligations of the parties hereunder shall be governed by and construed and interpreted in accordance with the internal laws of the State of New York (including, without limitation, Section 5-1401 of the General Obligations Law of the State of New York).

[Signature Pages Follow]

- 2 -

IN WITNESS WHEREOF, the signatories hereto have caused this First Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

HOLDINGS:	SKY ACQUISITION LLC
	By:	/s/ Chris A. Karkenny
		Name:	Chris A. Karkenny
		Title:	Executive Vice President and Chief Financial Officer
BORROWER:	APRIA HEALTHCARE GROUP INC.
	By:	/s/ Chris A. Karkenny
		Name:	Chris A. Karkenny
		Title:	Executive Vice President and Chief Financial Officer
LOAN PARTIES:	APRIA HEALTHCARE, INC.
	APRIACARE MANAGEMENT SYSTEMS, INC.
	APRIADIRECT.COM, INC.
	APRIA HEALTHCARE OF NEW YORK STATE, INC.
	CORAM, INC.
	By:	/s/ Robert S. Holcombe
		Name:	Robert S. Holcombe
		Title:	Executive Vice President General Counsel and Secretary

[First Amendment to Credit Agreement]

LOAN PARTIES:	CORAM CLINICAL TRIALS, INC.
	T2 MEDICAL, INC.
	CORAM SPECIALTY INFUSION SERVICES, INC.
	CORAM HEALTHCARE CORPORATION OF ALABAMA
	CORAM HEALTHCARE CORPORATION OF FLORIDA
	CORAM HEALTHCARE CORPORATION OF GREATER D.C.
	CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK
	CORAM HEALTHCARE CORPORATION OF INDIANA
	CORAM HEALTHCARE CORPORATION OF MICHIGAN
	CORAM HEALTHCARE CORPORATION OF MISSISSIPPI
	CORAM HEALTHCARE CORPORATION OF NEVADA
	CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA
	CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA
	CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA
	CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA
	CORAM HOMECARE OF MINNESOTA, INC.
	CORAM ALTERNATE SITE SERVICES, INC.
	CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS
	CORAM HEALTHCARE CORPORATION OF NEW YORK
	CORAM HEALTHCARE CORPORATION OF NORTH TEXAS
	CORAM HEALTHCARE CORPORATION OF UTAH
	CORAMRX, LLC
	CORAM HEALTHCARE OF WYOMING, L.L.C.
	HEALTHINFUSION, INC.
	H.M.S.S., INC.
	CORAM SERVICE CORPORATION
	By:	/s/ Michael E. Dell
		Name:	Michael E. Dell
		Title:	Vice President, General Counsel and Secretary

[First Amendment to Credit Agreement]

BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent
By:	/s/ Adam Seiden
	Name:	Adam Seiden
	Title:	Vice President
BANK OF AMERICA, N.A., as Lender, Swing Line Lender and L/C Issuer
By:	/s/ Adam Seiden
	Name:	Adam Seiden
	Title:	Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION, as Lender
By:	/s/ Charles C. Edwards, III
	Name:	Charles C. Edwards, III
	Title:	Director
BARCLAYS BANK PLC, as Lender
By:	/s/ Diane Rolfe
	Name:	Diane Rolfe
	Title:	Director
PNC BANK, NATIONAL ASSOCIATION, as Lender
By:	/s/ Mark A. Tito
	Name:	Mark A. Tito
	Title:	Vice President
WELLS FARGO FOOTHILL, LLC, as Lender
By:	/s/ Ilene Silberman
	Name:	Ilene Silberman
	Title:	Vice President

[First Amendment to Credit Agreement]

THE BANK OF NOVA SCOTIA, as Lender
By:	/s/ Paula J. Czach
	Name:	Paula J. Czach
	Title:	Director

[First Amendment to Credit Agreement]

EX-10.20

Exhibit 10.20

CREDIT AGREEMENT SUPPLEMENT NO. 1

SUPPLEMENT NO. 1 dated as of July 13, 2010, (as amended, modified or supplemented from time to time, this “Supplement”) among AHNY-DME LLC, a New York limited liability company (“AHNY-DME”), AHNY-IV LLC, a New York limited liability company (“AHNY-IV” and, together with AHNY-DME, the “New Loan Parties”), and BANK OF AMERICA, N.A., as Administrative Agent and as Collateral Agent for and on behalf of the Lenders referred to below, to the Credit Agreement (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”), dated as of October 28, 2008, by and among Apria Healthcare Group Inc., a Delaware corporation and successor in interest to Sky Merger Sub Corporation (the “Lead Borrower”), the other Borrowers party thereto, Holdings, the other Guarantors party thereto and Bank of America, N.A., as Administrative Agent and Collateral Agent, the other agents listed therein and each lender (the “Lenders”) from time to time party thereto.

A. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement referred to therein.

B. AHNY-DME is a wholly owned Subsidiary of Apria Healthcare of New York State, Inc.

C. AHNY-IV is a wholly owned Subsidiary of Apria Healthcare, Inc.

D. Each New Loan Party has agreed to execute and deliver this Supplement in order to evidence its agreement to become a “Borrower” under the Credit Agreement. Accordingly, the parties hereto agree as follows:

Section 1. Each New Loan Party by its signature below becomes a Borrower under the Credit Agreement in accordance with the terms of the Credit Agreement (including Section 6.11(a)(i)(B) thereof) with the same force and effect as if originally named therein as a Borrower and each New Loan Party hereby (a) agrees to all the terms and provisions of the Credit Agreement applicable to it as a Borrower thereunder and (b) represents and warrants that the representations and warranties made by it as a Borrower thereunder and under each of the other Finance Documents are true and correct on and as of the date hereof after giving effect to the accession of the New Loan Parties as additional “Borrowers” and additional “Loan Parties” thereunder; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all respects as of such earlier date. Each reference to a “Borrower” or “Loan Party” in the Credit Agreement shall be deemed to include each New Loan Party. The Credit Agreement is hereby incorporated herein by reference.

Section 2. Each New Loan Party represents and warrants to each of the Administrative Agent, the Collateral Agent and the Lenders that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

Section 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when (i) the Administrative Agent shall have received counterparts of

1

this Supplement that bear the signature of each New Loan Party and (ii) the Administrative Agent and Collateral Agent have executed counterparts hereof. Delivery of an executed signature page to this Supplement by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Supplement.

Section 4. Except as expressly supplemented hereby, the Credit Agreement shall remain in full force and effect.

Section 5. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

Section 6. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Credit Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto 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.

Section 7. All communications and notices hereunder shall be in writing and given as provided in Section 10.02 of the Credit Agreement.

Section 8. Each New Loan Party agrees to reimburse the Administrative Agent and the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Administrative Agent and the Collateral Agent.

2

IN WITNESS WHEREOF, each New Loan Party, the Administrative Agent and the Collateral Agent have duly executed this Supplement as of the date first above written.

AHNY-DME LLC
By:	/s/ Robert S. Holcombe
	Name: Robert S. Holcombe
	Title: Executive Vice President, General Counsel and Secretary
AHNY-IV LLC
By:	/s/ Robert S. Holcombe
	Name: Robert S. Holcombe
	Title: Executive Vice President, General Counsel and Secretary
BANK OF AMERICA, N.A., as Administrative Agent
By:	/s/ Adam Seiden
	Name: Adam Seiden
	Title: Vice-President
BANK OF AMERICA, N.A., as Collateral Agent
By:	/s/ Adam Seiden
	Name: Adam Seiden
	Title: Vice-President

[Signature page to Credit Agreement Supplement]

EX-10.21

Exhibit 10.21

EXECUTION COPY

GUARANTY

dated as of

October 28, 2008

among

SKY ACQUISITION LLC,

as Holdings,

CERTAIN SUBSIDIARIES OF SKY ACQUISTION LLC IDENTIFIED HEREIN

and

BANK OF AMERICA, N.A.,

as Administrative Agent and Collateral Agent

Table of Contents	Page
Article I.
Definitions	1
Section 1.1. Credit Agreement	1
Section 1.2. Other Defined Terms	1
Article II.
Guaranty	2
Section 2.1. Guaranty	2
Section 2.2. Guaranty of Payment	2
Section 2.3. No Limitations	2
Section 2.4. Reinstatement	4
Section 2.5. Agreement To Pay; Subrogation	4
Section 2.6. Information	4
Article III.
Indemnity, Subrogation and Subordination	4
Section 3.1. Waiver of Contribution and Subrogation	4
Section 3.2. Subordination	4
Article IV.
Miscellaneous	5
Section 4.1. Notices	5
Section 4.2. Waivers; Amendment	5
Section 4.3. Administrative Agent’s Fees and Expenses; Indemnification	6
Section 4.4. Successors and Assigns	6
Section 4.5. Survival of Agreement	7

Section 4.6. Counterparts; Effectiveness; Several Agreement	7
Section 4.7. Severability	7
Section 4.8. Right of Setoff	7
Section 4.9. Governing Law; Jurisdiction; Consent to Service of Process	8
Section 4.10. WAIVER OF JURY TRIAL	8
Section 4.11. Headings	9
Section 4.12. Security Interest Absolute	9
Section 4.13. Termination or Release	9
Section 4.14. Additional Guarantors	10
Exhibits
Exhibit A        Form of Guaranty Supplement

ii

GUARANTY, dated as of October 28, 2008, among SKY ACQUISITION LLC, a Delaware limited liability company (“Holdings”), certain subsidiaries of Holdings from time to time party hereto and BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent.

Reference is made to the Credit Agreement dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Holdings, SKY MERGER SUB CORPORATION (“Merger Sub” and, prior to the Merger (as defined below), the “Lead Borrower”), a Delaware corporation to be merged with and into APRIA HEALTHCARE GROUP INC., a Delaware corporation (the “Company” and, after the Merger, the “Lead Borrower”), the other Borrowers from time to time party thereto (together with the Lead Borrower, the “Borrowers”), BANK OF AMERICA, N.A., as Administrative Agent, Swingline Lender, L/C Issuer and Collateral Agent, the other agents party thereto and each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”). The Lenders have agreed to extend credit to the Borrowers subject to the terms and conditions set forth in the Credit Agreement. The obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement. Each Guarantor (as defined below) is an affiliate of the Borrowers, will derive substantial benefits from the extension of credit to the Borrowers pursuant to the Credit Agreement and is willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit. Accordingly, the parties hereto agree as follows:

Article I.

Definitions

Section 1.1. Credit Agreement.

(a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.

(b) The rules of construction specified in Article I of the Credit Agreement also apply to this Agreement.

Section 1.2. Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“Agreement” means this Guaranty.

“Credit Agreement” has the meaning assigned to such term in the preliminary statement of this Agreement.

“Guarantor” means Holdings, any Intermediate Holding Company, each Restricted Subsidiary of Holdings (other than each Borrower solely to the extent of its own Borrowings and any Excluded Subsidiary) that is a wholly-owned Material Domestic Subsidiary and each party that becomes a party to this Agreement after the Closing Date.

“Guaranty Parties” means, collectively, the Borrowers and each Guarantor.

“Guaranty Supplement” means an instrument in the form of Exhibit A hereto.

“Holdings” has the meaning assigned to such term in the preliminary statement of this Agreement.

Article II.

Guaranty

Section 2.1. Guaranty. Each Guarantor absolutely, irrevocably and unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Finance Obligations. Each of the Guarantors further agrees that the Finance Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Finance Obligation. Each of the Guarantors waives presentment to, demand of payment from and protest to the Borrowers or any other Guaranty Party of any of the Finance Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.

Section 2.2. Guaranty of Payment. Each of the Guarantors further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any other Secured Party to any security held for the payment of the Finance Obligations, or to any balance of any deposit account or credit on the books of the Administrative Agent or any other Secured Party in favor of the Borrowers or any other Person.

Section 2.3. No Limitations.

(a) Except for termination of a Guarantor’s obligations hereunder as expressly provided in Section 4.13, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Finance Obligations, or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Administrative Agent or any other Secured Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Finance Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Finance Document or any other agreement, including with respect to any other Guarantor under this Agreement; (iii) the release of any security held by the Collateral Agent or any other Secured Party for the Finance Obligations; (iv) any default, failure or delay, willful or otherwise, in the performance of the Finance Obligations; or (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of law or equity

2

(other than the indefeasible payment in full in cash of all the Finance Obligations). Each Guarantor expressly authorizes the Secured Parties to take and hold security for the payment and performance of the Finance Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in their sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Finance Obligations, all without affecting the obligations of any Guarantor hereunder.

(b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of the Borrowers or any other Guaranty Party or the unenforceability of the Finance Obligations, or any part thereof from any cause, or the cessation from any cause of the liability of the Borrowers or any other Guaranty Party, other than the indefeasible payment in full in cash of all the Finance Obligations. The Administrative Agent and the other Secured Parties may in accordance with the terms of the Collateral Documents, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Finance Obligations, make any other accommodation with the Borrowers or any other Guaranty Party or exercise any other right or remedy available to them against the Borrowers or any other Guaranty Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Finance Obligations have been fully and indefeasibly paid in full in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrowers or any other Guaranty Party, as the case may be, or any security.

(c) Each Subsidiary Guarantor, and by its acceptance of this Agreement, the Administrative Agent and each other Secured Party, hereby confirms that it is the intention of all such Persons that this Agreement and the Finance Obligations of each Subsidiary Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code of the United States, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Guaranty and the Finance Obligations of each Subsidiary Guarantor hereunder. To effectuate the foregoing intention, the Administrative Agent, the other Secured Parties and the Guarantors hereby irrevocably agree that the Finance Obligations of each Subsidiary Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the Finance Obligations of such Subsidiary Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.

(d) Each Guarantor acknowledges that it will receive indirect benefits from the financing arrangements contemplated by the Finance Documents and that the waivers set forth in this Agreement are knowingly made in contemplation of such benefits.

3

Section 2.4. Reinstatement. Each of the Guarantors agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Finance Obligation, is rescinded or must otherwise be restored by the Administrative Agent or any other Secured Party upon the bankruptcy, insolvency or reorganization of any of the Borrowers, any other Guaranty Party or otherwise.

Section 2.5. Agreement To Pay; Subrogation. In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of any of the Borrowers or any other Guaranty Party to pay any Finance Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent for distribution to the Secured Parties in cash the amount of such unpaid Finance Obligation. Upon payment by any Guarantor of any sums to the Administrative Agent as provided above, all rights of such Guarantor against any of the Borrowers or any other Guaranty Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subject to Article III.

Section 2.6. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrowers’ and each other Guaranty Party’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Finance Obligations, and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the other Secured Parties will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.

Article III.

Indemnity, Subrogation and Subordination

Section 3.1. Waiver of Contribution and Subrogation. Each Guarantor Party hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against any other Guaranty Party that arise from the existence, payment, performance or enforcement of such Guarantor’s Finance Obligations under or in respect of this Guaranty or any other Finance Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Secured Party against the Borrowers, any other Guaranty Party or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Borrowers or any other Guaranty Party, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Finance Obligations (other than contingent indemnity obligations for then unasserted claims) and all other amounts payable under this Agreement shall have been paid in full, all Letters of Credit, all Secured Hedge Agreements and all Secured Cash Management Agreements shall have expired or been terminated and the Commitments shall have expired or been terminated.

4

Section 3.2. Subordination. Each Guarantor Party hereby agrees that upon the occurrence and during the continuance of an Event of Default and after notice from the Collateral Agent all Indebtedness owed by it to any Subsidiary shall be fully subordinated to the indefeasible payment in full in cash of the Finance Obligations.

Article IV.

Miscellaneous

Section 4.1. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit Agreement. All communications and notices hereunder to any Guarantor shall be given to it in care of the Borrowers as provided in Section 10.02 of the Credit Agreement.

Section 4.2. Waivers; Amendment.

(a) No failure or delay by the Administrative Agent, any other Agent, or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, any other Agent, and the Lenders hereunder and under the other Loan Documents and the rights and remedies of the other Secured Parties under the other Finance Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Guaranty Party therefrom shall in any event be effective unless the same shall be permitted by clause (b) of this Section 4.2, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any other Agent, or any Lender may have had notice or knowledge of such Default at the time. No notice or demand on any Guaranty Party in any case shall entitle any Guaranty Party to any other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Guaranty Party or Guaranty Parties with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 10.01 of the Credit Agreement.

5

Section 4.3. Administrative Agent’s Fees and Expenses; Indemnification.

(a) The parties hereto agree that the Administrative Agent shall be entitled to reimbursement of its expenses incurred hereunder as provided in Section 10.04 of the Credit Agreement.

(b) Without limitation of its indemnification obligations under the other Loan Documents, the Guarantors agree to indemnify the Administrative Agent and the other Indemnitees (as defined in Section 10.04(b) of the Credit Agreement) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and reasonably related expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of, the execution, delivery or performance of this Agreement or any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing agreements or instruments contemplated hereby, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from (x) the gross negligence, bad faith or willful misconduct of such Indemnitee, or (y) a claim brought by any Borrower or Guaranty Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder, if such Borrower or Guaranty Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

(c) Any such amounts payable as provided hereunder shall be additional Finance Obligations secured hereby and by the other Collateral Documents. The provisions of this Section 4.03 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Finance Document, the consummation of the transactions contemplated hereby, the repayment of any of the Finance Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Finance Document, or any investigation made by or on behalf of the Administrative Agent or any other Secured Party. All amounts due under this Section 4.03 shall be payable within 10 days of written demand therefor.

Section 4.4. Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Guarantor or the Administrative Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns, except that neither the Lead Borrower nor any other Guaranty Party may assign or otherwise transfer any of its rights or obligations hereunder except as otherwise permitted by this Agreement or the Credit Agreement without the prior written consent of the Administrative Agent.

6

Section 4.5. Survival of Agreement. All covenants, agreements, representations and warranties made by the Guaranty Parties in the Loan Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any Lender or on its behalf and notwithstanding that any Senior Credit Party may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended under the Credit Agreement, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under any Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.

Section 4.6. Counterparts; Effectiveness; Several Agreement. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile transmission or other electronic communication shall be as effective as delivery of a manually signed counterpart of this Agreement. This Agreement shall become effective as to any Guaranty Party when a counterpart hereof executed on behalf of such Guaranty Party shall have been delivered to the Administrative Agent and a counterpart hereof shall have been executed on behalf of the Administrative Agent, and thereafter shall be binding upon such Guaranty Party and the Administrative Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Guaranty Party, the Administrative Agent and the other Secured Parties and their respective successors and assigns, except that no Guaranty Party shall have the right to assign or transfer its rights or obligations hereunder or any interest herein (and any such assignment or transfer shall be void) except as otherwise permitted by this Agreement or the Credit Agreement. This Agreement shall be construed as a separate agreement with respect to each Guaranty Party and may be amended, modified, supplemented, waived or released with respect to any Guaranty Party without the approval of any other Guaranty Party and without affecting the obligations of any other Guaranty Party hereunder.

Section 4.7. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 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.

Section 4.8. Right of Setoff. In addition to any rights and remedies of the Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default, each Lender and its Affiliates is authorized at any time and from time to time, without prior notice to the Borrowers or any other Guaranty Party, any such notice being waived by the Borrowers and each Guaranty Party to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other Indebtedness at any time owing by, such Lender and its Affiliates to or for the credit or the

7

account of the respective Guaranty Parties against any and all obligations owing to such Lender and its Affiliates hereunder, now or hereafter existing, irrespective of whether or not such Lender or Affiliate shall have made demand under this Agreement and although such obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit or Indebtedness. Each Lender agrees promptly to notify the Borrowers and the Administrative Agent after any such setoff and application made by such Lender; provided, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Lender under this Section 4.08 are in addition to other rights and remedies (including other rights of setoff) that the Administrative Agent and such Lender may have.

Section 4.9. Governing Law; Jurisdiction; Consent to Service of Process.

(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

(b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GUARANTOR AND THE ADMINISTRATIVE AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GUARANTOR AND THE ADMINISTRATIVE AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR OTHER DOCUMENT RELATED THERETO.

Section 4.10. WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

8

Section 4.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

Section 4.12. Security Interest Absolute. All rights of the Administrative Agent hereunder and all obligations of each Guarantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Finance Document, any agreement with respect to any of the Finance Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Finance Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Finance Document, any other agreement or instrument, (c) any release or amendment or waiver of or consent under or departure from any guarantee guaranteeing all or any of the Finance Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Guarantor in respect of the Finance Obligations or this Agreement.

Section 4.13. Termination or Release.

(a) This Agreement and the Guaranties made herein shall terminate with respect to all Finance Obligations (other than contingent indemnification obligations not yet accrued and payable) when (i) the Revolving Credit Commitments have expired or been terminated, (ii) the principal of and interest on each Loan (including Swing Line Loans) and all fees and other Finance Obligations (other than contingent indemnity obligations and the Other Liabilities) shall have been paid in full, (iii) all Letters of Credit shall have expired or terminated (or been cash collateralized or backstopped in an amount equal to 101.5% of the outstanding Letters of Credit or in respect of which other arrangements reasonably satisfactory to the Administrative Agent and L/C Issuers have been made) and (iv) all outstanding Letters of Credit have been reduced to zero (or cash collateralized or backstopped in an amount equal to 101.5% of the outstanding Letters of Credit or in respect of which other arrangements reasonably satisfactory to the Administrative Agent and L/C Issuers have been made).

(b) A Guarantor shall automatically be released from its obligations hereunder upon the consummation of any transaction or designation permitted by the Credit Agreement as a result of which such Guarantor ceases to be a Restricted Subsidiary of the Lead Borrower or is designated as an Unrestricted Subsidiary of Holdings; provided that the Required Lenders shall have consented to such transaction (to the extent required by the Credit Agreement) and the terms of such consent did not provide otherwise.

(c) In connection with any termination or release pursuant to paragraphs (a) or (b), the Administrative Agent shall execute and deliver to any Guarantor, at such Guarantor’s expense, all documents that such Guarantor shall reasonably request

9

to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 4.13 shall be without recourse to or warranty by the Administrative Agent.

(d) A Guarantor (other than Holdings and any Intermediate Holding Company) shall automatically be released from its obligations hereunder if such Guarantor ceases to be a Material Domestic Subsidiary pursuant to the terms of the Credit Agreement.

Section 4.14. Additional Guarantors. Pursuant to Section 6.11 of the Credit Agreement, any Intermediate Holding Company and certain Restricted Subsidiaries of Holdings that were not in existence or not Restricted Subsidiaries on the date of the Credit Agreement are required to enter in this Agreement as Guarantors upon becoming an Intermediate Holding Company or Restricted Subsidiary, as the case may be. Upon execution and delivery by the Administrative Agent and an Intermediate Holding Company or a Restricted Subsidiary, as the case may be, of a Guaranty Supplement, such Intermediate Holding Company or Restricted Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein. The execution and delivery of any such instrument shall not require the consent of any other Guaranty Party hereunder. The rights and obligations of each Guaranty Party hereunder shall remain in full force and effect notwithstanding the addition of any new Guaranty Party as a party to this Agreement.

Section 4.15. Intercreditor Agreement. Reference is made to the Intercreditor Agreement. Notwithstanding any other provision contained herein, this Agreement, the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions of the Intercreditor Agreement and, to the extent provided therein, the applicable Term Debt Security Documents (as defined therein). In the event of any conflict or inconsistency between the provisions of this Agreement and the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall control.

[Signature Pages to Follow]

10

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

SKY ACQUISITION LLC
By:	/s/ Michael Dal Bello
	Name:	Michael dal Bello
	Title:
SKY MERGER SUB CORPORATION
By:	/s/ Michael Dal Bello
	Name:	Michael dal Bello
	Title:

S-1

[Signature Page to the ABL Guaranty]

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

APRIA HEALTHCARE GROUP INC. APRIA HEALTHCARE, INC. APRIACARE MANAGEMENT SYSTEMS, INC. APRIADIRECT.COM, INC. APRIA HEALTHCARE OF NEW YORK STATE, INC. CORAM, INC.
By:	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	Executive Vice President
		General Counsel and Secretary

S-2

[Signature Page to the ABL Guaranty]

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

CORAM CLINICAL TRIALS, INC. T2 MEDICAL, INC. CORAM SPECIALTY INFUSION SERVICES, INC. CORAM HEALTHCARE CORPORATION OF ALABAMA CORAM HEALTHCARE CORPORATION OF FLORIDA CORAM HEALTHCARE CORPORATION OF GREATER D.C. CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK CORAM HEALTHCARE CORPORATION OF INDIANA CORAM HEALTHCARE CORPORATION OF MICHIGAN CORAM HEALTHCARE CORPORATION OF MISSISSIPPI CORAM HEALTHCARE CORPORATION OF NEVADA CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA CORAM HOMECARE OF MINNESOTA, INC. CORAM ALTERNATE SITE SERVICES, INC. CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS CORAM HEALTHCARE CORPORATION OF NEW YORK CORAM HEALTHCARE CORPORATION OF NORTH TEXAS CORAM HEALTHCARE CORPORATION OF UTAH CORAMRX, LLC CORAM HEALTHCARE OF WYOMING, L.L.C. HEALTHINFUSION, INC. H.M.S.S., INC. CORAM SERVICE CORPORATION
By:	/s/ Michael E. Dell
	Name:	Michael E. Dell
	Title:	V.P., General Counsel & Secretary

S-3

[Signature Page to the ABL Guaranty]

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

BANK OF AMERICA, N.A.
By:	/s/ Michael Lemiszko
	Name:	Michael Lemiszko
	Title:	Senior Vice President

S-4

[Signature Page to the ABL Guaranty]

Exhibit A to the

Guaranty Agreement

SUPPLEMENT NO.      (the “Guaranty Supplement”) dated as of [                    ], to the Guaranty dated as of October 28, 2008, among SKY ACQUISITION LLC, a Delaware limited liability company (“Holdings”), certain subsidiaries of Holdings from time to time party hereto and BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent.

A. Reference is made to the Credit Agreement dated as of October 28, 2008 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among SKY MERGER SUB CORPORATION (“Merger Sub” and, prior to the Merger (as defined below), the “Lead Borrower”), a Delaware corporation to be merged with and into APRIA HEALTHCARE GROUP INC., a Delaware corporation (the “Company” and, after the Merger, the “Lead Borrower”), the other Borrowers from time to time party thereto, Holdings, BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent, the other agents party thereto and each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”).

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Guaranty referred to therein.

C. The Guarantors have entered into the Guaranty in order to induce the Lenders to make Loans. Section 4.14 of the Guaranty provides that any Intermediate Holding Company and certain Restricted Subsidiaries of Holdings that were not in existence or not Restricted Subsidiaries on the date of the Credit Agreement are required (pursuant to the terms of the Credit Agreement), to become Guarantors under the Guaranty by execution and delivery of an instrument in the form of this Guaranty Supplement. The undersigned Intermediate Holding Company or Subsidiary of Holdings (the “New Guarantor”) is executing this Guaranty Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Guaranty in order to induce the Lenders to make additional Loans and as consideration for Loans previously made.

Accordingly, the Administrative Agent and the New Guarantor agree as follows:

SECTION 1. Obligations under the Guaranty. In accordance with Section 4.14 of the Guaranty, the New Guarantor by its signature below becomes a Guarantor under the Guaranty with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby (a) agrees to all the terms and provisions of the Guaranty applicable to it as a Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof. Each reference to a “Guarantor” in the Guaranty shall be deemed to include the New Guarantor and each reference in the Credit Agreement and any other Finance Document to a “Guarantor”, “Subsidiary Guarantor” or a “Loan Party” shall also be deemed to include the New Guarantor. The Guaranty is hereby incorporated herein by reference.

SECTION 2. Representations and Warranties. The New Guarantor represents and warrants to the Administrative Agent and the other Secured Parties that this Guaranty Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

SECTION 3. Execution and Delivery. This Guaranty Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Guaranty Supplement shall become effective when the Administrative Agent shall have received a counterpart of this Guaranty Supplement that bears the signature of the New Guarantor and the Administrative Agent has executed a counterpart hereof. Delivery of an executed signature page to this Guaranty Supplement by facsimile transmission or other electronic communication shall be as effective as delivery of a manually signed counterpart of this Guaranty Supplement.

SECTION 4. Affirmation. Except as expressly supplemented hereby, the Guaranty shall remain in full force and effect.

SECTION 5. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc..

(a) THIS GUARANTY SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

(b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS GUARANTY SUPPLEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS GUARANTY SUPPLEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY SUPPLEMENT, EACH GUARANTOR AND THE ADMINISTRATIVE AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GUARANTOR AND THE ADMINISTRATIVE AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS GUARANTY SUPPLEMENT OR OTHER DOCUMENT RELATED THERETO.

(c) EACH PARTY TO THIS GUARANTY SUPPLEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY SUPPLEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS GUARANTY SUPPLEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND

CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS GUARANTY SUPPLEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 5(C) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

SECTION 6. Severability. In case any one or more of the provisions contained in this Guaranty Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Guaranty shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto 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.

SECTION 7. Notice. All communications and notices hereunder shall be in writing and given as provided in Section 4.01 of the Guaranty.

SECTION 8. Reimbursement. The New Guarantor agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Guaranty Supplement, including the reasonable fees, other charges and disbursements of counsel for the Administrative Agent.

IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have duly executed this Guaranty Supplement as of the date first above written.

[New Guarantor]
By:
	Name:
	Title:

BANK OF AMERICA, N.A.
By:
	Name:
	Title:

EX-10.22

Exhibit 10.22

GUARANTY AGREEMENT SUPPLEMENT

SUPPLEMENT NO.1 (the “Guaranty Supplement”) dated as of July 13, 2010, to the Guaranty dated as of October 28, 2008, among SKY ACQUISITION LLC, a Delaware limited liability company (“Holdings”), certain subsidiaries of Holdings from time to time party hereto and BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent.

A. Reference is made to the Credit Agreement dated as of October 28, 2008 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among APRIA HEALTHCARE GROUP INC., a Delaware corporation and successor in interest to SKY MERGER SUB CORPORATION (the “Company” and, after the Merger, the “Lead Borrower”), the other Borrowers from time to time party thereto, Holdings, BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent, the other agents party thereto and each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”).

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Guaranty referred to therein.

C. The Guarantors have entered into the Guaranty in order to induce the Lenders to make Loans. Section 4.14 of the Guaranty provides that any Intermediate Holding Company and certain Restricted Subsidiaries of Holdings that were not in existence or not Restricted Subsidiaries on the date of the Credit Agreement are required (pursuant to the terms of the Credit Agreement), to become Guarantors under the Guaranty by execution and delivery of an instrument in the form of this Guaranty Supplement. Each undersigned Subsidiary of Holdings (each, a “New Guarantor”) is executing this Guaranty Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Guaranty in order to induce the Lenders to make additional Loans and as consideration for Loans previously made.

Accordingly, the Administrative Agent and each New Guarantor agree as follows:

SECTION 1. Obligations under the Guaranty. In accordance with Section 4.14 of the Guaranty, each New Guarantor by its signature below becomes a Guarantor under the Guaranty with the same force and effect as if originally named therein as a Guarantor and each New Guarantor hereby (a) agrees to all the terms and provisions of the Guaranty applicable to it as a Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof. Each reference to a “Guarantor” in the Guaranty shall be deemed to include each New Guarantor and each reference in the Credit Agreement and any other Finance Document to a “Guarantor”, “Subsidiary Guarantor” or a “Loan Party” shall also be deemed to include each New Guarantor. The Guaranty is hereby incorporated herein by reference.

SECTION 2. Representations and Warranties. Each New Guarantor represents and warrants to the Administrative Agent and the other Secured Parties that this Guaranty Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

SECTION 3. Execution and Delivery. This Guaranty Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Guaranty Supplement shall become effective when the Administrative Agent shall have received a counterpart of this Guaranty Supplement that bears the signature of each New Guarantor and the Administrative Agent has executed a counterpart hereof. Delivery of an executed signature page to this Guaranty Supplement by facsimile transmission or other electronic communication shall be as effective as delivery of a manually signed counterpart of this Guaranty Supplement.

SECTION 4. Affirmation. Except as expressly supplemented hereby, the Guaranty shall remain in full force and effect.

SECTION 5. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc..

(a) THIS GUARANTY SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

(b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS GUARANTY SUPPLEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS GUARANTY SUPPLEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY SUPPLEMENT, EACH GUARANTOR AND THE ADMINISTRATIVE AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GUARANTOR AND THE ADMINISTRATIVE AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS GUARANTY SUPPLEMENT OR OTHER DOCUMENT RELATED THERETO.

(c) EACH PARTY TO THIS GUARANTY SUPPLEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS GUARANTY SUPPLEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS GUARANTY SUPPLEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY

TO THIS GUARANTY SUPPLEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 5(C) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

SECTION 6. Severability. In case any one or more of the provisions contained in this Guaranty Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Guaranty shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto 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.

SECTION 7. Notice. All communications and notices hereunder shall be in writing and given as provided in Section 4.01 of the Guaranty.

SECTION 8. Reimbursement. Each New Guarantor agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Guaranty Supplement, including the reasonable fees, other charges and disbursements of counsel for the Administrative Agent.

IN WITNESS WHEREOF, each New Guarantor and the Administrative Agent have duly executed this Guaranty Supplement as of the date first above written.

AHNY-DME LLC
By:	/s/ Robert S. Holcombe
	Name: Robert S. Holcombe
	Title: Executive Vice President, General Counsel and Secretary
AHNY-IV LLC
By:	/s/ Robert S. Holcombe
	Name: Robert S. Holcombe
	Title: Executive Vice President, General Counsel and Secretary

[Guaranty Agreement Supplement]

BANK OF AMERICA, N.A.
By:	/s/ Adam Seiden
	Name: Adam Seiden
	Title: Vice-President

[Guaranty Agreement Supplement]

EX-10.23

Exhibit 10.23

EXECUTION COPY

SECURITY AGREEMENT

Dated as of October 28, 2008

among

SKY MERGER SUB CORPORATION

(to be merged with and into APRIA HEALTHCARE GROUP INC.)

SKY ACQUISITION LLC,

CERTAIN OTHER SUBSIDIARIES OF SKY ACQUISITION LLC

IDENTIFIED HEREIN

and

BANK OF AMERICA, N.A.,

as COLLATERAL AGENT

Table of Contents	Page
ARTICLE I
Definitions	1
Section 1.01 Definitions	1
Section 1.02 Other Defined Terms	2
ARTICLE II
Pledge of Securities	6
Section 2.01 Pledge	6
Section 2.02 Delivery of the Pledged Collateral	7
Section 2.03 Representations, Warranties and Covenants	8
Section 2.04 Certification of Limited Liability Company and Limited Partnership Interests	9
Section 2.05 Registration in Nominee Name; Denominations	9
Section 2.06 Voting Rights; Dividends and Interest	10
Section 2.07 Collateral Agent Not a Partner or Limited Liability Company Member	12
ARTICLE III
Security Interests in Personal Property	12
Section 3.01 Security Interest	12
Section 3.02 Representations and Warranties	15
Section 3.03 Covenants	17
Section 3.04 Other Actions	18
ARTICLE IV
Special Provisions Concerning Intellectual Property Collateral	20
Section 4.01 Grant of License to Use Intellectual Property	20
Section 4.02 Protection of Collateral Agent’s Security	21

i

ARTICLE V
Collections	22
ARTICLE VI
Remedies	22
Section 6.01 Remedies Upon Default	22
Section 6.02 Application of Proceeds	25
ARTICLE VII
Indemnity, Subrogation and Subordination	25
ARTICLE VIII
Miscellaneous	26
Section 8.01 Notices	26
Section 8.02 Waivers; Amendment	26
Section 8.03 Collateral Agent’s Fees and Expenses; Indemnification	27
Section 8.04 Successors and Assigns	27
Section 8.05 Survival of Agreement	28
Section 8.06 Counterparts; Effectiveness; Several Agreement	28
Section 8.07 Severability	28
Section 8.08 Right of Set-Off	28
Section 8.09 GOVERNING LAW	29
Section 8.10 WAIVER OF RIGHT TO TRIAL BY JURY	30
Section 8.11 Headings	30
Section 8.12 Security Interest Absolute	30
Section 8.13 Termination or Release	30
Section 8.14 Additional Restricted Subsidiaries	31
Section 8.15 Collateral Agent Appointed Attorney-in-Fact	32

ii

Section 8.16 Recourse; Limited Obligations	32
Section 8.17 Mortgages	33

SCHEDULES
Schedule I	-	Borrowers
Schedule II	-	Guarantors
Schedule III	-	Pledged Equity; Pledged Debt
Schedule IV	-	Commercial Tort Claims
Schedule V	-	Intellectual Property
EXHIBITS
Exhibit A	-	Form of Security Agreement Supplement
Exhibit B	-	Form of Perfection Certificate
Exhibit C	-	Form of Grant of Security Interest in Trademarks
Exhibit D	-	Form of Grant of Security Interest in Patents
Exhibit E	-	Form of Grant of Security Interest in Copyrights

iii

SECURITY AGREEMENT (as amended, supplemented, restated or otherwise modified from time to time pursuant to the terms hereof, this “Agreement”) is entered into as of October 28, 2008 by and among SKY MERGER SUB CORPORATION (prior to the Merger (as defined below), the “Lead Borrower”), a Delaware corporation to be merged (the “Merger”) with and into APRIA HEALTHCARE GROUP INC., a Delaware corporation (after the Merger, the “Lead Borrower”), the other Borrowers set forth on Schedule I hereto (together with the Lead Borrower, collectively, the “Borrowers”), SKY ACQUISITION LLC, a Delaware limited liability company (“Holdings”), the Guarantors set forth on Schedule II hereto (together with the Borrowers and Holdings, collectively, the “Grantors”), and BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent (in such capacity, the “Collateral Agent”) for the Secured Parties. Capitalized terms used herein and defined in Article I are used herein as therein defined.

Reference is made to the Credit Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, Holdings, the Collateral Agent and the other agents and Lenders from time to time party thereto.

The Lenders have agreed to extend credit to the Borrowers, subject to the terms and conditions set forth in the Credit Agreement, and each L/C Issuer has agreed to issue Letters of Credit for the account of the Borrowers on the terms and conditions set forth therein. The obligations of the Lenders to extend such credit, and the obligation of each L/C Issuer to issue Letters of Credit, are, in each case, conditioned upon, among other things, the execution and delivery of this Agreement by each of the Grantors. The Grantors are affiliates of one another, are an integral part of a consolidated enterprise and will derive substantial direct and indirect benefits from (a) the extensions of credit to the Borrowers pursuant to the Credit Agreement and (b) the issuance of Letters of Credit by each L/C Issuer for the account of the Borrowers, and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit and each L/C Issuer to issue such Letters of Credit. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

Section 1.01 Definitions. (a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement. Unless otherwise defined in the Credit Agreement, all terms defined in the Uniform Commercial Code and used but not defined in this Agreement have the meanings specified in the Uniform Commercial Code; the term “instrument” shall have the meaning specified in Article 9 of the Uniform Commercial Code.

(b) The rules of construction specified in Article I of the Credit Agreement also apply to this Agreement.

Section 1.02 Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“Account Debtor” means any Person who is or who may become obligated to any Grantor under, with respect to or on account of an Account.

“Agreement” has the meaning assigned to such term in the preamble.

“Article 9 Collateral” has the meaning assigned to such term in Section 3.01(a).

“Bankruptcy Event of Default” shall mean any Event of Default under Sections 8.01(f) or (g) of the Credit Agreement; provided that for the purposes of this Agreement only and notwithstanding Section 8.03 of the Credit Agreement, in determining whether such an Event of Default has occurred, any reference in any such clause to any Restricted Subsidiary or Loan Party shall be deemed not to include (i) any Subsidiary that is not a Material Subsidiary affected by any event or circumstances referred to in any such clause (it being agreed that all such Restricted Subsidiaries affected by any event or circumstance referred to in any such clause shall be considered together, as a single consolidated Restricted Subsidiary, for purposes of determining whether they constitute Material Subsidiaries) nor (ii) any Restricted Subsidiary that is not a Loan Party affected by any event or circumstances referred to in any such clause.

“Collateral” means, collectively, the Article 9 Collateral and the Pledged Collateral.

“Collateral Account” means any cash collateral account established pursuant to, or in connection with, any Loan Document, which cash collateral account shall be maintained with, and under the sole dominion and control of, the Collateral Agent for the benefit of the relevant Secured Parties.

“Collateral Agent” has the meaning assigned to such term in the preamble.

“Copyright License” means any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now or hereafter owned by any Grantor or that such Grantor otherwise has the right to license, or granting any right to any Grantor under any Copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement.

“Copyrights” means all of the following now owned or hereafter acquired by or assigned to any Grantor: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, whether registered or unregistered and whether published or unpublished, (b) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, supplemental registrations and pending applications for registration in the United States Copyright Office, including those copyright registrations and applications listed on Schedule V and all (i) rights and privileges arising under applicable Law with respect to such Grantor’s use of such copyrights, (ii) renewals and extensions thereof and amendments thereto, (iii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable with respect thereto, including damages and payments for past, present or future Infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present or future Infringements thereof.

2

“Credit Agreement” has the meaning assigned to such term in the preamble.

“Deposit Account Control Agreement” means, with respect to a Dominion Account, a deposit account control agreement acceptable in form and substance to the Collateral Agent, among one or more Loan Parties, the Collateral Agent and the bank which maintains the Dominion Account.

“Domain Names” means all Internet domain names and associated URL addresses in or to which any Grantor now or hereafter has any right, title or interest.

“Equipment” shall mean (x) any “equipment” as such term is defined in Article 9 of the Uniform Commercial Code and in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, appliances, furniture, fixtures, tools, and vehicles now or hereafter owned by any Grantor in each case, regardless of whether characterized as equipment under the Uniform Commercial Code (but excluding any such items which constitute Inventory) and (y) and any and all additions, substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefore, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.

“Excluded Accounts” means (i) Deposit Accounts the balance of which consists exclusively of (A) withheld income taxes and federal, state or local employment taxes in such amounts as are required in the reasonable judgment of the Borrower to be paid to the Internal Revenue Service or state or local government agencies within the following two months with respect to employees of any of the Loan Parties and (B) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of employees of one or more Loan Parties, (ii) all segregated Deposit Accounts constituting (and the balance of which consists solely of funds set aside in connection with) taxes accounts, payroll accounts and trust accounts and (iii) Deposit Accounts the balance of which consists solely of Uncontrolled Cash.

“General Intangibles” has the meaning provided in Article 9 of the Uniform Commercial Code and shall in any event include all chooses in action and causes of action and all other intangible personal property of every kind and nature (other than Accounts) now owned or hereafter acquired by any Grantor, as the case may be, including corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Swap Contracts and other agreements), goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor.

“Grant of Security Interest” means a Grant of Security Interest in certain Intellectual Property in the form of Exhibit C, D or E attached hereto.

“Grantors” has the meaning assigned to such term in the preamble.

“Holdings” has the meaning assigned to such term in the preamble.

“Infringement” means infringement, misappropriation, dilution, tarnishment, impairment or other violation.

“Intellectual Property” means all intellectual and similar property of every kind and nature now owned or hereafter acquired by any Grantor, including (a) inventions, designs,

3

Domain Names, Patents, Copyrights, Licenses, Trademarks, Trade Secrets, and (b) confidential or proprietary technical and business information, know how, show how, or other proprietary data or information relating to its business, software, databases, and all other proprietary information relating to its business.

“Intellectual Property Collateral” means Collateral consisting of Intellectual Property.

“License” means any Patent License, Trademark License, Copyright License or other intellectual property license or sublicense agreement relating solely to Intellectual Property to which any Grantor is a party, including those listed on Schedule V.

“Margin Stock” means any “margin stock” (as defined in Regulation U issued by the Board of Governors of the Federal Reserve System).

“Patent License” means any written agreement, now or hereafter in effect, granting to any third party any right to make, have made, use, sell, offer to sell or import any invention covered in whole or in part by a Patent, now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to make, have made, use, sell, offer to sell or import any invention covered in whole or in part by a patent, now or hereafter owned by any third party, and all rights of any Grantor under any such agreement.

“Patents” means all of the following now owned or hereafter acquired by any Grantor: (a) all letters patent of the United States or the equivalent thereof in any other country, all registrations thereof, and all applications for letters patent of the United States or the equivalent thereof in any other country, including registrations and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, including those listed on Schedule V, and (b) all (i) rights and privileges arising under applicable Law with respect to such Grantor’s use of any patents, (ii) inventions and improvements described and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof and amendments thereto, (iv) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto including damages and payments for past, present or future Infringements thereof, (v) rights corresponding thereto throughout the world and (vi) rights to sue for past, present or future Infringements thereof.

“Perfection Certificate” means a certificate substantially in the form of Exhibit B, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed on behalf of each Grantor.

“Pledged Collateral” has the meaning assigned to such term in Section 2.01.

“Pledged Debt” has the meaning assigned to such term in Section 2.01.

“Pledged Equity” has the meaning assigned to such term in Section 2.01.

“Pledged Securities” means any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all Pledged Equity, Pledged Debt and all other certificates, instruments or other documents representing or evidencing any Pledged Collateral.

“Proceeds” means (a) all “proceeds” as defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral, and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.

4

“Secured Obligations” means the “Finance Obligations” (as defined in the Credit Agreement); it being acknowledged and agreed that the term “Secured Obligations” as used herein shall include each extension of credit under the Credit Agreement, in each case, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.

“Security” shall mean any “security” as such term is defined in Article 8 of the Uniform Commercial Code, any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

“Security Agreement Supplement” means an instrument substantially in the form of Exhibit A hereto.

“Security Interest” has the meaning assigned to such term in Section 3.01(a).

“Term Debt Collateral Agent” has the meaning assigned to such term in the Intercreditor Agreement.

“Term Debt First Lien Collateral” has the meaning assigned to such term in the Intercreditor Agreement.

“Term Debt Security Documents” has the meaning assigned to such term in the Intercreditor Agreement.

“Trademark License” means any written agreement, now or hereafter in effect, granting to any third party any right to use any Trademark now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any trademark now or hereafter owned by any third party, and all rights of any Grantor under any such agreement.

“Trademarks” means all of the following now owned or hereafter acquired by any Grantor: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now owned or hereafter adopted, acquired or assigned to, all registrations and applications filed in connection therewith, including registrations and applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, including those listed on Schedule V and (b) any and all (i) rights and privileges arising under applicable Law with respect to such Grantor’s use of any trademarks, (ii) renewals thereof and amendments thereto, (iii) income, fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with respect thereto, including damages, claims and payments for past, present or future Infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present and future Infringements thereof.

5

“Uniform Commercial Code” means the UCC (as defined in the Credit Agreement)

ARTICLE II

Pledge of Securities

Section 2.01 Pledge. As security for the payment or performance, as the case may be, in full of the Secured Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest in, all of such Grantor’s right, title and interest in, to and under:

(a) (i) all Equity Interests held by it and listed on Schedule III and any other Equity Interests obtained in the future by such Grantor and the certificates representing all such Equity Interests (the “Pledged Equity”); provided that (x) pledges of voting Equity Interests of each Foreign Subsidiary shall be limited to 65% of the total combined voting power of all Equity Interests of such Foreign Subsidiary at any time; and (y) the Pledged Equity shall not include (A) the Equity Interests of Unrestricted Subsidiaries (until such time as any Unrestricted Subsidiary becomes a Restricted Subsidiary in accordance with the Credit Agreement, at which time, and without further action, this clause (y)(A) shall no longer apply to the Equity Interests of such Subsidiary), (B) Equity Interests of any Subsidiary of a Foreign Subsidiary, (C) Equity Interests of a Person that is not a direct or indirect wholly owned Subsidiary of a Grantor to the extent prohibited by the terms of such Subsidiary’s Organization Documents, (D) any Margin Stock owned by such Grantor, (E) pledges prohibited by law or by agreements containing anti-assignment clauses not overridden by applicable Law, (F) Equity Interests of Domestic Subsidiaries that are not Material Domestic Subsidiaries of such Grantor and (G) Equity Interests of any Restricted Subsidiary acquired pursuant to a Permitted Acquisition financed with Indebtedness incurred pursuant to Section 7.03(h) or 7.03(i) of the Credit Agreement if such Equity Interests are pledged as security for such Indebtedness, until such Indebtedness is repaid or becomes unsecured, and (H) Equity Interests of any Subsidiary with respect to which the Collateral Agent has confirmed in writing to the Lead Borrower its reasonable determination that the costs or other consequences (including adverse tax consequences in the reasonable judgment of the Lead Borrower confirmed in writing by notice to the Collateral Agent) of providing a pledge of its Equity Interests or perfection thereof is excessive in view of the benefits to be obtained by the Lenders; (ii)(A) the promissory notes and any instruments evidencing indebtedness owned by it and listed opposite the name of such Grantor on Schedule III and (B) any promissory notes and instruments evidencing indebtedness obtained in the future by such Grantor (the “Pledged Debt”); (iii) all other property that may be delivered to and held by the Collateral Agent pursuant to the terms of this Section 2.01; (iv) subject to Section 2.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clauses (i) and (ii) above; (v) subject to Section 2.06, all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (i), (ii), (iii) and (iv) above; and (vi) all Proceeds of, and Security Interests in, any of the foregoing (the items referred to in clauses (i) through (vi) above being collectively referred to as the “Pledged Collateral”).

6

Notwithstanding the foregoing and anything in this Agreement to the contrary, the Pledged Collateral shall not include Equity Interests and other securities of a Subsidiary to the extent that the pledge of such Equity Interests or other securities results in the Lead Borrower or Holdings being required to file separate financial statements of such Subsidiary with the SEC (or any other governmental agency), but only to the extent necessary to not be subject to such requirement and only for so long as such requirement is in existence. In addition, in the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation or another law, rule or regulation is adopted which would require) the filing with the SEC (or another governmental agency) of separate financial statements of any Subsidiary due to the fact that the Subsidiary’s Capital Stock or other securities secure any Secured Obligations, then the Equity Interests or other securities of such Subsidiary will automatically be deemed to be excluded from the Pledged Collateral, but only to the extent necessary to not be subject to such requirement and only for so long as is required to not be subject to such requirement. In such event, this Agreement may be amended or modified, without the consent of any Secured Party, to the extent necessary to release the security interests in the Equity Interests or other securities that are so deemed to be excluded from the Pledged Collateral. In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted which would permit) such Subsidiary’s Equity Interests or other securities to secure the Secured Obligations in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Equity Interests or other securities of such Subsidiary will automatically be deemed to no longer be excluded from the Pledged Collateral, but only to the extent necessary to not be subject to any such financial statement requirement.

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the benefit of the applicable Secured Parties, forever; subject, however, to the terms, covenants and conditions hereinafter set forth.

Section 2.02 Delivery of the Pledged Collateral. (a) Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent, for the benefit of the applicable Secured Parties, any and all Pledged Securities (other than any uncertificated securities, but only for so long as such securities remain uncertificated) (unless the Term Debt Collateral Agent is granted a prior security interest in such Pledged Securities and the same are required to be delivered (and are delivered) to the Term Debt Collateral Agent pursuant to the Intercreditor Agreement) and to the extent such Pledged Securities are promissory notes and instruments evidencing Indebtedness, only as are required to be delivered under clause (b) immediately below.

(b) Each Grantor will cause any Indebtedness for borrowed money having an aggregate principal amount equal to or in excess of $5,000,000, which for avoidance of doubt excludes accounts receivable in the ordinary course of business, owed to such Grantor by any Person (other than a Loan Party) to be evidenced by a duly executed promissory note that is pledged and delivered to the Collateral Agent, for the benefit of the applicable Secured Parties, pursuant to the terms hereof (unless the Term Debt Collateral Agent is granted a prior security interest in such Pledged Securities and the same are required to be delivered (and are delivered) to the Term Debt Collateral Agent pursuant to the Intercreditor Agreement).

7

(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be accompanied by stock or bond powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be deemed to supplement Schedule III and be made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.

Section 2.03 Representations, Warranties and Covenants. Each Grantor represents, warrants and covenants, as to itself and the other Grantors, to and with the Collateral Agent, for the benefit of the Secured Parties, that:

(a) Schedule III correctly sets forth the percentage of the issued and outstanding units of each class of the Equity Interests of the issuer thereof represented by the Pledged Equity and includes all Equity Interests, the promissory notes and instruments required to be pledged in order to satisfy the Collateral and Guarantee Requirement;

(b) the Pledged Equity issued by the Grantors and Pledged Debt (solely with respect to Pledged Debt issued by a Person other than the Lead Borrower or a Subsidiary of the Lead Borrower, to the best of the Lead Borrower’s knowledge) have been duly and validly authorized and issued by the issuers thereof and (i) in the case of Pledged Equity (other than Pledged Equity consisting of limited liability company interests or partnership interests which, pursuant to the relevant organizational or formation documents, cannot be fully paid and non-assessable), are fully paid and non-assessable and (ii) in the case of Pledged Debt (solely with respect to Pledged Debt issued by a Person other than the Lead Borrower or a Subsidiary of the Lead Borrower, to the best of the Lead Borrower’s knowledge), are legal, valid and binding obligations of the issuers thereof;

(c) except for the security interests granted hereunder, each of the Grantors (i) is and, subject to any transfers made in compliance with the Credit Agreement, will continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule III as owned by such Grantors, (ii) holds the same free and clear of all Liens, other than (A) Liens created by the Collateral Documents and the Term Debt Security Documents and (B) nonconsensual Permitted Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than (A) Liens created by the Collateral Documents and the Term Debt Security Documents and (B) Permitted Liens, and (iv) will defend its title or interest thereto or therein against any and all Liens (other than the Liens permitted pursuant to this Section 2.03(c)), however arising, of all Persons whomsoever;

8

(d) except for (i) restrictions and limitations imposed by the Loan Documents or securities laws generally, (ii) in the case of Pledged Equity of Persons that are not wholly owned Subsidiaries, transfer restrictions that exist at the time of acquisition of Equity Interest in such Persons, and (iii) except as described in the Perfection Certificate, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect in any manner material and adverse to the Secured Parties the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder;

(e) each of the Grantors has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated (it being understood that such Grantor’s power and authority to pledge the Equity Interests of a non-wholly owned Subsidiary may be limited by the Organization Documents of such Subsidiary);

(f) except as described in Section 2.03(d) above, no consent or approval of any Governmental Authority, any securities exchange or any other Person was or is necessary to the validity of the pledge effected hereby (other than such as have been obtained and are in full force and effect);

(g) by virtue of the execution and delivery by the Grantors of this Agreement, when any Pledged Securities are delivered to the Collateral Agent in accordance with this Agreement, the Collateral Agent will obtain a legal, valid and perfected lien upon and security interest in such Pledged Securities as security for the payment and performance of the Secured Obligations; and

(h) the pledge effected hereby is effective to vest in the Collateral Agent, for the benefit of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral as set forth herein.

Section 2.04 Certification of Limited Liability Company and Limited Partnership Interests. Each interest in any limited liability company or limited partnership controlled by any Grantor and pledged under Section 2.01, to the extent such limited liability company elects to treat its limited liability company interests as “securities” within the meaning of Article 8 of the Uniform Commercial Code, shall be represented by a certificate, shall be a “security” within the meaning of Article 8 of the Uniform Commercial Code and shall be governed by Article 8 of the Uniform Commercial Code; provided that any interest in any limited liability company in existence on the Closing Date that is not certificated at such time shall be certificated within the period set forth on Schedule 6.13(c) to the Credit Agreement.

Section 2.05 Registration in Nominee Name; Denominations. If an Event of Default shall occur and be continuing and the Collateral Agent shall give the Lead Borrower notice of its intent to exercise such rights, subject to the terms of the Intercreditor Agreement, (a) the Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned

9

in blank or in favor of the Collateral Agent and each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Grantor and (b) the Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement; provided that, notwithstanding the foregoing, if a Bankruptcy Event of Default shall have occurred and be continuing, the Collateral Agent shall not be required to give the notice referred to above in order to exercise the rights described above.

Section 2.06 Voting Rights; Dividends and Interest. (a) Unless and until an Event of Default or a Cash Dominion Event, as applicable, shall have occurred and be continuing and the Collateral Agent shall have notified the Lead Borrower that the rights of the Grantors under this Section 2.06 are being suspended:

(i) Each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement, the Credit Agreement and the other Loan Documents; provided that such rights and powers shall not be exercised in any manner that could materially and adversely affect the rights inuring to a holder of any Pledged Securities or the rights and remedies of any of the Collateral Agent or the other Secured Parties under this Agreement, the Credit Agreement or any other Loan Document or the ability of the Secured Parties to exercise the same.

(ii) The Collateral Agent shall promptly execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above.

(iii) Each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Securities, to the extent (and only to the extent) that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Credit Agreement, the other Loan Documents and applicable Laws; provided that any noncash dividends, interest, principal or other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any Grantor, shall not be commingled by such Grantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent and the applicable Secured Parties and shall be forthwith delivered to the Collateral Agent (unless the same are required to be delivered (and are delivered) to the Term Debt Collateral Agent pursuant to the Intercreditor Agreement) in the same form as so received (with any necessary endorsement reasonably requested by the

10

Collateral Agent). So long as no Default or Event of Default has occurred and is continuing, the Collateral Agent shall promptly deliver to each Grantor any Pledged Securities in its possession if requested to be delivered to the issuer thereof in connection with any exchange or redemption of such Pledged Securities.

(b) Upon the occurrence and during the continuance of a Cash Dominion Event, after the Collateral Agent shall have notified the Lead Borrower of the suspension of the rights of the Grantors under Section 2.06(a)(iii), then all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to Section 2.06(a)(iii) shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions, subject to the terms of the Intercreditor Agreement. All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 2.06 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be forthwith delivered to the Collateral Agent upon demand (unless the same are required to be delivered (and are delivered) to the Term Debt Collateral Agent pursuant to the Intercreditor Agreement) in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 4.02. At such time as a Cash Dominion Event is no longer continuing, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of Section 2.06(a)(iii) in the absence of a Cash Dominion Event and that remain in such account.

(c) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified the Lead Borrower of the suspension of the rights of the Grantors under Section 2.06(a)(i), then all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to Section 2.06(a)(i), and the obligations of the Collateral Agent under Section 2.06(a)(ii), shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers, subject to the terms of the Intercreditor Agreement; provided that the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights. After all Events of Default have been cured or waived, each Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that such Grantor would otherwise be entitled to exercise pursuant to the terms of Section 2.06(a)(i), and the obligations of the Collateral Agent under Section 2.06(a)(ii) shall be reinstated.

(d) Any notice given by the Collateral Agent to the Lead Borrower suspending the rights of the Grantors under Section 2.06(a) (i) shall be given in writing, (ii) may be given with respect to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the Grantors under Section 2.06(a)(i) or (iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time

11

to time suspending other rights so long as a Cash Dominion Event or an Event of Default, as applicable, has occurred and is continuing. Notwithstanding anything to the contrary contained in Section 2.06(a), (b) or (c), if a Bankruptcy Event of Default shall have occurred and be continuing, the Collateral Agent shall not be required to give any notice referred to in said Section in order to exercise any of its rights described in such Section, and the suspension of the rights of each of the Grantors under each such Section shall be automatic upon the occurrence of such Bankruptcy Event of Default.

Section 2.07 Collateral Agent Not a Partner or Limited Liability Company Member. Nothing contained in this Agreement shall be construed to make the Collateral Agent or any other Secured Party liable as a member of any limited liability company or as a partner of any partnership and neither the Collateral Agent nor any other Secured Party by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become the absolute owner of Pledged Equity consisting of a limited liability company interest or a partnership interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Collateral Agent, any other Secured Party, any Grantor and/or any other Person.

ARTICLE III

Security Interests in Personal Property

Section 3.01 Security Interest. (a) As security for the payment or performance, as the case may be, in full of the Secured Obligations, including the Guaranty, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest (the “Security Interest”) in, all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Article 9 Collateral”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all Documents;

(iv) all Equipment;

(v) all General Intangibles;

(vi) all Instruments;

(vii) all books and records pertaining to the Article 9 Collateral;

(viii) all Goods and Fixtures;

12

(ix) all Money and Deposit Accounts;

(x) all Commercial Tort Claims described on Schedule IV from time to time;

(xi) the Collateral Account, and all cash, securities and other investments deposited therein;

(xii) all Supporting Obligations;

(xiii) all Security Entitlements in any or all of the foregoing;

(xiv) all Intellectual Property Collateral;

(xv) all Inventory; and

(xvi) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

provided that (i) this Agreement shall not constitute a grant of security interest in Intellectual Property to the extent that such a grant of a security interest would result in the forfeiture of the Grantor’s rights in such property, including, without limitation, any Trademark applications filed in the United States Patent and Trademark Office on the basis of any Grantor’s “intent to use,” unless and until a “Statement of Use” or “Amendment to Allege Use” has been filed and accepted in the United States Patent and Trademark Office, whereupon such Trademark application shall be automatically subject to the security interest granted herein and deemed to be included in the Collateral and (ii) notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute a grant of a security interest in (A) motor vehicles and other assets subject to certificates of title, (B) the Equity Interests of Unrestricted Subsidiaries (until such time as any Unrestricted Subsidiary becomes a Restricted Subsidiary in accordance with the Credit Agreement, at which time, and without further action, this clause (ii)(B) shall no longer apply to the Equity Interests of such Subsidiary), (C) (1) more than 65% of the total combined voting power of all Equity Interests of any Foreign Subsidiary and (2) Equity Interests of any Subsidiary of a Foreign Subsidiary, (D) any specifically identified asset with respect to which the Collateral Agent has confirmed in writing to the Lead Borrower its determination (to be made in consultation with the Lead Borrower) that the burden or costs of providing a security interest in such asset or perfection thereof is excessive in view of the benefits to be obtained by the Lenders, (E) Equity Interests of a Person that is not a direct or indirect wholly owned Subsidiary of a Grantor to the extent prohibited by the terms of such Subsidiary’s Organizational Documents or any applicable law, (F) Equity Interests of Domestic Subsidiaries that are not Material Domestic subsidiaries of such Grantor, (G) Equity Interests of any Restricted Subsidiary acquired pursuant to a Permitted Acquisition financed with Indebtedness incurred pursuant to Section 7.03(h) or 7.03(i) of the Credit Agreement if such Equity Interests are pledged as security for such Indebtedness, until such Indebtedness is repaid or becomes unsecured, and (H) any Margin Stock owned by such Grantor, (I) rights and assets of a Grantor arising under any agreement, contract, lease, instrument, license or other document if (but only to the extent that) the grant of a security interest therein would (1) constitute a violation of a valid

13

and enforceable restriction in respect of such rights in favor of a third party or under any Law, regulation, permit, order or decree of any Governmental Authority, unless and until all required consents shall have been obtained (for the avoidance of doubt, the restrictions described herein are not negative pledges or similar undertakings in favor of a lender or other financial counterparty) or (2) expressly give any other party (other than a Grantor) in respect of any such agreement, contract, lease, instrument, license or other document, the right to terminate or to effect the abandonment, cancellation, acceleration, invalidation or unenforceability of any right, title or interest of any Grantor therein or its obligations thereunder, or to effect a modification of such agreement, contract, lease, instrument, license or other document resulting in a material adverse change to the terms thereof for such Grantor, (J) (1) Specified Government Accounts and Specified Government Receivables Deposit Accounts and (2) Excluded Accounts and (K) assets to the extent a security interest in such assets would result in material adverse tax consequences as reasonably determined by the Lead Borrower, provided that the limitation set forth in clause (K) above shall not affect, limit, restrict or impair the grant by a Grantor of a security interest pursuant to this Agreement in any such Collateral to the extent that an otherwise applicable prohibition or restriction on such grant is rendered ineffective by any applicable Law, including the UCC and provided, further, that the Proceeds from any such contract, lease, instrument or other document shall not be excluded from the definition of Article 9 Collateral to the extent that the assignment of such Proceeds is not prohibited. Each Grantor shall, if requested to do so by the Collateral Agent, use commercially reasonable efforts to obtain any such required consent that is reasonably obtainable with respect to Collateral which the Collateral Agent reasonably determines to be material. Notwithstanding the foregoing and anything in this Agreement to the contrary, the Collateral shall not include Equity Interests and other securities of a Subsidiary to the extent that the pledge of such Equity Interests or other securities results in the Lead Borrower or Holdings being required to file separate financial statements of such Subsidiary with the SEC (or any other governmental agency), but only to the extent necessary to not be subject to such requirement and only for so long as such requirement is in existence. In addition, in the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation or another law, rule or regulation is adopted which would require) the filing with the SEC (or another governmental agency) of separate financial statements of any Subsidiary due to the fact that the Subsidiary’s Capital Stock or other securities secure any Secured Obligations, then the Equity Interests or other securities of such Subsidiary will automatically be deemed to be excluded from the Collateral, but only to the extent necessary to not be subject to such requirement and only for so long as is required to not be subject to such requirement. In such event, this Agreement may be amended or modified, without the consent of any Secured Party, to the extent necessary to release the security interests in the Equity Interests or other securities that are so deemed to be excluded from the Collateral. In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted which would permit) such Subsidiary’s Equity Interests or other securities to secure the Secured Obligations in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Equity Interests or other securities of such Subsidiary will automatically be deemed to no longer be excluded from the Collateral, but only to the extent necessary to not be subject to any such financial statement requirement.

14

(b) Each Grantor hereby irrevocably authorizes the Collateral Agent for the benefit of the Secured Parties at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that (i) indicate the Collateral as all assets of such Grantor or words of similar effect as being of an equal or lesser scope or with greater detail, and (ii) contain the information required by Article 9 of the Uniform Commercial Code or the analogous legislation of each applicable jurisdiction for the filing of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor and (B) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates. Each Grantor agrees to provide such information to the Collateral Agent promptly upon request.

(c) The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral.

(d) Each Grantor hereby further authorizes the Collateral Agent to file a Grant of Security Interest substantially in the form of Exhibit C, D or E, as applicable, covering relevant Intellectual Property Collateral with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country), as applicable, or any similar offices in any other country and such other documents executed by any Grantor as may be necessary or reasonably advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by such Grantor hereunder, and naming such Grantor, as debtor, and the Collateral Agent, as secured party.

(e) Notwithstanding anything to the contrary in this Agreement or the Credit Agreement, none of the Grantors shall be required to enter into any deposit account control agreement or securities account control agreement (other than any Deposit Account Control Agreements contemplated by Section 6.18 of the Credit Agreement and other than with respect to any cash collateral agreements contemplated under the Credit Agreement) with respect to any deposit account or securities account or Money.

Section 3.02 Representations and Warranties. Each Grantor represents and warrants, as to itself and the other Grantors, to the Collateral Agent and the Secured Parties that:

(a) Each Grantor has good and valid rights (not subject to any Liens other than Permitted Liens) and/or title in the Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder (which rights and/or title, are in any event, sufficient under Section 9-203 of the Uniform Commercial Code), and has full power and authority to grant to the Collateral Agent the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval that has been

15

(b) The Perfection Certificate has been duly prepared, completed, executed and delivered to the Collateral Agent and the information set forth therein, including the exact legal name of each Grantor, is correct and complete in all material respects as of the Closing Date. The Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations prepared by the Collateral Agent based upon the information provided to the Collateral Agent in the Perfection Certificate for filing in each governmental, municipal or other office in the jurisdiction of organization of each Grantor specified in Section 2(a) of the Perfection Certificate (or specified by notice from the applicable Grantor to the Collateral Agent after the Closing Date in the case of filings, recordings or registrations required by Section 6.11 of the Credit Agreement), are all the filings, recordings and registrations that are necessary to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable Law with respect to the filing of continuation statements. Each Grantor represents and warrants that, as of the Closing Date, fully executed Grants of Security Interest in the form attached as Exhibit C, D or E, as applicable, containing a description of all Collateral consisting of Intellectual Property with respect to United States Patents (and Patents for which United States applications are pending), registered United States Trademarks (and Trademarks for which United States applications to register are pending) or United States registered Copyrights, as applicable, have been delivered to the Collateral Agent for recording in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder or to any similar offices in any other country, as required by applicable Law in such jurisdiction.

(c) The Security Interest constitutes (i) a legal and valid security interest in all the Article 9 Collateral securing the payment and performance of the Secured Obligations, (ii) subject to the filings described in Section 3.02(b), a perfected security interest in all Article 9 Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political subdivision thereof) and its territories and possessions pursuant to the Uniform Commercial Code and (iii) a security interest that shall be perfected in all Collateral in which a security interest may be perfected upon the receipt and recording of the relevant Grants of Security Interest substantially in the form of Exhibits C, D or E hereto with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, within the three month period (commencing as of the date hereof) pursuant to 35 U.S.C. § 261 or 15 U.S.C. § 1060 or the one month period (commencing as of the date hereof) pursuant to 17 U.S.C. § 205 and otherwise as may be required pursuant to the laws of any other necessary jurisdiction. The Security Interest is and shall be prior to any other Lien on any of the Article 9 Collateral, other than any nonconsensual Permitted Lien that has priority as a matter of law and other than, with respect to Term Debt First Lien Collateral, Liens created by the Term Debt Security Documents, subject to the terms of the Intercreditor Agreement.

(d) The Article 9 Collateral is owned by the Grantors free and clear of any Lien, except for Permitted Liens. None of the Grantors has filed or consented to the filing of (i)

16

any financing statement or analogous document under the Uniform Commercial Code or any other applicable Laws covering any Article 9 Collateral, (ii) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Collateral with the United States Patent and Trademark Office or the United States Copyright Office, or (iii) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Permitted Liens.

(e) All Commercial Tort Claims of each Grantor in excess of $20,000,000 in existence on the date of this Agreement (or on the date upon which such Grantor becomes a party to this Agreement) are described on Schedule IV hereto.

Section 3.03 Covenants. (a) The Borrower agrees to promptly notify the Collateral Agent of any change (i) in the legal name of any Grantor, (ii) in the identity or type of organization or corporate structure of any Grantor, (iii) in the jurisdiction of organization of any Grantor, (iv) in the “location” (as determined in accordance with Section 9-307 of the Uniform Commercial Code) of any Grantor or (v) in the organizational identification number of any Grantor. In addition, if any Grantor does not have an organizational identification number on the Closing Date (or the date such Grantor becomes a party to this Agreement) and later obtains one, the Lead Borrower shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interests (and the priority thereof) of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.

(b) Each Grantor shall, at its own expense, take any and all commercially reasonable actions necessary to defend title to the Article 9 Collateral against all Persons and to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien that is not a Permitted Lien.

(c) Each year, at the time of delivery of annual financial statements with respect to the preceding fiscal year pursuant to Section 6.01 of the Credit Agreement, the Borrower shall deliver to the Collateral Agent a certificate executed by the chief financial officer and the chief legal officer of the Borrower setting forth the information required pursuant to Sections 1(a), 1(b), 2(a) and 2(c) of the Perfection Certificate or confirming that there has been no change in such information since the date of such certificate or the date of the most recent certificate delivered pursuant to this Section 3.03(c).

(d) The Lead Borrower agrees, on its own behalf and on behalf of each other Grantor, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount payable (other than by a Loan

17

Party) under or in connection with any of the Article 9 Collateral that equals or exceeds $5,000,000 shall be or become evidenced by any promissory note or instrument, such note or instrument shall be promptly pledged and delivered to the Collateral Agent (unless the same is required to be delivered (and is delivered) to the Term Debt Collateral Agent pursuant to the Intercreditor Agreement), for the benefit of the Secured Parties, duly endorsed in a manner reasonably satisfactory to the Collateral Agent.

(e) At its option, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral (other than Permitted Liens), and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Credit Agreement or this Agreement and within a reasonable period of time after the Collateral Agent has requested that it do so, and each Grantor jointly and severally agrees to reimburse the Collateral Agent within 10 days after demand for any payment made or any reasonable expense incurred by the Collateral Agent pursuant to the foregoing authorization, provided however, that a Grantor shall not be obligated to reimburse the Collateral Agent with respect to any Intellectual Property Collateral which any Grantor has failed to maintain or pursue, or otherwise has allowed to lapse, terminate or put in the public domain, in accordance with Section 4.02(f). Nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Loan Documents.

(f) If at any time any Grantor shall take a security interest in any property of an Account Debtor or any other Person the value of which equals or exceeds $5,000,000 to secure payment and performance of an Account, such Grantor shall promptly assign such security interest to the Collateral Agent for the benefit of the applicable Secured Parties. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other Person granting the security interest.

(g) Each Grantor (rather than the Collateral Agent or any Secured Party) shall remain liable (as between itself and any relevant counterparty) to observe and perform all the conditions and obligations to be observed and performed by it under each contract agreement or instrument relating to the Article 9 Collateral, all in accordance with the terms and conditions thereof, and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance.

Section 3.04 Other Actions. In order to further insure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the Security Interest, each Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with respect to the following Article 9 Collateral:

(a) Instruments. If any Grantor shall at any time hold or acquire any Instrument constituting Collateral and evidencing an amount equal to or in excess of $5,000,000

18

such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent for the benefit of the applicable Secured Parties (unless the same is required to be delivered (and is delivered) to the Term Debt Collateral Agent pursuant to the Intercreditor Agreement), accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request.

(b) Investment Property. Except to the extent otherwise provided in Article II, if any Grantor shall at any time hold or acquire any certificated securities, such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent for the benefit of the applicable Secured Parties (unless the same are required to be delivered (and are delivered) to the Term Debt Collateral Agent pursuant to the Intercreditor Agreement), accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request. If any securities now or hereafter acquired by any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, upon the Collateral Agent’s request and following the occurrence of an Event of Default such Grantor shall promptly notify the Collateral Agent thereof and, at the Collateral Agent’s reasonable request, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, unless such Grantor is required to do so (and does so) in favor of the Term Debt Collateral Agent, either (i) cause the issuer to agree to comply with instructions from the Collateral Agent as to such securities, without further consent of any Grantor or such nominee, or (ii) arrange for the Collateral Agent to become the registered owner of the securities. If any securities, whether certificated or uncertificated, or other investment property are held by any Grantor (or its nominee through a securities intermediary or commodity intermediary) for more than 45 days and such securities or other investment property exceed $2,000,000 in value, upon the Collateral Agent’s request and following the occurrence of an Event of Default, such Grantor shall immediately notify the Collateral Agent thereof and at the Collateral Agent’s request and option, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent shall, unless such Grantor is required to do so (and does so) in favor of the Term Debt Collateral Agent, either (i) cause such securities intermediary or (as the case may be) commodity intermediary to agree to comply with entitlement orders or other instructions from the Collateral Agent to such securities intermediary as to such security entitlements, or (as the case may be) to apply any value distributed on account of any commodity contract as directed by the Collateral Agent to such commodity intermediary, in each case without further consent of any Grantor or such nominee, or (ii) in the case of financial assets or other Investment Property held through a securities intermediary, arrange for the Collateral Agent to become the entitlement holder with respect to such Investment Property, with the Grantor being permitted, only with the consent of the Collateral Agent, to exercise rights to withdraw or otherwise deal with such Investment Property. The Collateral Agent agrees with each of the Grantors that the Collateral Agent shall not give any such entitlement orders or instructions or directions to any such issuer, securities intermediary or commodity intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by any Grantor, unless an Event of Default has occurred and is continuing. The provisions of this paragraph shall not apply to any financial assets credited to a securities account for which the Collateral Agent is the securities intermediary. Each Grantor that is the issuer of Pledged Equity agrees that it will be bound by the terms of this Agreement with respect to the Pledged Equity issued by it and will comply with such terms insofar as such terms are applicable to it.

19

(c) Commercial Tort Claims. If any Grantor shall at any time after the date of this Agreement acquire a Commercial Tort Claim in an amount (taking the greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of $20,000,000 or more, such Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor and provide supplements to Schedule IV describing the details thereof and shall grant to the Collateral Agent a security interest therein and in the proceeds thereof, all upon the terms of this Agreement.

ARTICLE IV

Special Provisions Concerning Intellectual Property Collateral

Section 4.01 Grant of License to Use Intellectual Property. Without limiting the provisions of Section 3.01 hereof or any other rights of the Collateral Agent as the holder of a Security Interest in any Intellectual Property Collateral, for the purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor shall, upon request by the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, grant to the Collateral Agent to the full extent such Grantor is permitted to grant such a license and to the extent that the Collateral Agent does not exercise its rights pursuant to Section 6.01(vi) herein, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Grantors) to use, license or, solely to the extent necessary to exercise such rights and remedies, sublicense any of the Intellectual Property Collateral now owned or hereafter acquired by such Grantor, and wherever the same may be located (whether or not any license agreement by and between any Grantor and any other Person relating to the use of such Intellectual Property Collateral may be terminated hereafter), and, to the extent permitted by such Grantor’s existing contractual obligations, including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Collateral Agent may be exercised, subject to the terms of the Intercreditor Agreement, at the option of the Collateral Agent, during the continuation of an Event of Default; provided that any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure of an Event of Default and provided, further, that the terms of any license or sublicense shall include all terms and restrictions that customarily required to ensure the continuing validity and effectiveness of the Intellectual Property at issue, such as, without limitation, quality control and inure provisions with regard to Trademarks, patent designation provisions with regard to Patents, and copyright notices and restrictions or decompilation and reverse engineering of copyrighted software. In the event the license set forth in this Section 4.01 is exercised with regard to any Trademarks, then the following shall apply: (i) all goodwill arising from any licensed or sublicensed use of any Trademark shall inure to the Grantor; (ii) the licensed or sublicensed Trademarks shall only be used in association with goods or services of a quality and nature consistent with the quality and reputation with which such Trademarks were associated when used by Grantor prior to the exercise of the license rights set forth herein; and (iii) at the Grantor's request and expense, licensees and sublicensees shall provide reasonable cooperation in any effort by the Grantor to maintain the registration or otherwise secure the ongoing validity and effectiveness of such licensed Trademarks, including, without limitation the actions and conduct described in Section 4.02 below.

20

Section 4.02 Protection of Collateral Agent’s Security. (a) Except to the extent that failure to act could not reasonably be expected to have a Material Adverse Effect, with respect to any registration or pending application of each item of its Intellectual Property Collateral for which such Grantor has standing to do so, each Grantor agrees to take, at its expense, all reasonable steps, including, without limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright Office and any other governmental authority located in the United States or with any similar offices in any other country, to (i) maintain the validity and enforceability of any registered Intellectual Property Collateral and maintain such Intellectual Property Collateral in full force and effect, and (ii) pursue the registration and maintenance of each Patent, Trademark, or Copyright registration or application, now or hereafter included in such Intellectual Property Collateral of such Grantor, including, without limitation, the payment of required fees and taxes, the filing of responses to office actions issued by the U.S. Patent and Trademark Office, the U.S. Copyright Office or other governmental authorities or any similar offices in any other country, the filing of applications for renewal or extension, the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing of divisional, continuation, continuation-in-part, reissue and renewal applications or extensions, the payment of maintenance fees and the participation in interference, reexamination, opposition, cancellation, and Infringement proceedings.

(b) Except to the extent that failure to act could not reasonably be expected to have a Material Adverse Effect, no Grantor shall do or permit any act or knowingly omit to do any act whereby any of its Intellectual Property Collateral may prematurely lapse, be terminated, or become invalid or unenforceable or placed in the public domain (or in case of a trade secret, become publicly known).

(c) Except to the extent that failure to act could not reasonably be expected to have a Material Adverse Effect, each Grantor shall take all reasonable steps to preserve and protect each item of its Intellectual Property Collateral, including, without limitation, maintaining the quality of any and all products or services used or provided in connection with any of the Trademarks, consistent with the quality of the products and services as of the date hereof, and taking all reasonable steps necessary to ensure that all licensed users of any of the Trademarks abide by the applicable license’s terms with respect to the standards of quality.

(d) Each Grantor agrees that, should it obtain an ownership or other interest in any Intellectual Property Collateral after the Closing Date (i) the provisions of this Agreement shall automatically apply thereto, and (ii) any such Intellectual Property and, in the case of Trademarks, the goodwill symbolized thereby, shall automatically become part of the Intellectual Property Collateral subject to the terms and conditions of this Agreement with respect thereto.

(e) Subject to the requirements and exclusions of Section 3.01, once every fiscal year of the Lead Borrower, each Grantor shall sign and deliver to the Collateral Agent an appropriate Security Agreement Supplement or related Grant of Security Interest substantially in the form of Exhibits A, C, D and E, as applicable, with respect to all such Intellectual Property owned or exclusively licensed by it as licensee as of the last day of such period, to the extent that such Intellectual Property is not covered by any previous Security Agreement Supplement (or

21

Grant of Security Interests) so signed and delivered by it. In each case, it will promptly cooperate as reasonably necessary to enable the Collateral Agent to make any necessary or reasonably desirable recordations with the U.S. Copyright Office or the U.S. Patent and Trademark Office.

(f) Notwithstanding the foregoing provisions of this Section 4.02 or elsewhere in this Agreement, nothing in this Agreement shall prevent any Grantor from disposing of, discontinuing the use or maintenance of, causing or permitting expiration, lapse or abandonment, or failing to renew any applications or registrations of any of its Intellectual Property Collateral to the extent not prohibited by the Credit Agreement if such Grantor determines in its reasonable business judgment that such actions are desirable in the conduct of its business.

ARTICLE V

Collections

(a) Each Grantor, in its capacity as a Loan Party, shall at all times comply with the cash management provisions of Section 6.18 of the Credit Agreement including, without limitation, after the occurrence and during the continuance of a Cash Dominion Event, causing the sweep on each Business Day of all available cash receipts into the Concentration Account as provided for in the Credit Agreement.

(b) Without the prior written consent of the Collateral Agent, no Grantor shall modify or amend the instructions pursuant to any of the Deposit Account Control Agreements. So long as no Cash Dominion Event has occurred and is continuing, each Grantor shall, and the Collateral Agent hereby authorizes each Grantor to, enforce and collect all amounts owing on the Inventory and Accounts, for the benefit and on behalf of the Collateral Agent and the other Secured Parties; provided that such authorization may, at the direction of the Collateral Agent, be terminated after the occurrence and during the continuance of any Cash Dominion Event.

ARTICLE VI

Remedies

Section 6.01 Remedies Upon Default. Upon the occurrence and during the continuance of an Event of Default, it is agreed that the Collateral Agent shall have the right to exercise any and all rights afforded to a secured party with respect to the Secured Obligations, as applicable, under the Uniform Commercial Code or other applicable Law, and also may, subject to the terms of the Intercreditor Agreement, (i) require each Grantor to, and each Grantor agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of the Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place and time to be designated by the Collateral Agent that is reasonably convenient to both parties; (ii) occupy any premises owned or, to the extent lawful and permitted, leased by any of the Grantors where the Collateral or any part thereof is assembled or located for a reasonable period in order to effectuate its rights and remedies hereunder or under law, without obligation to such Grantor in respect of such occupation; provided that the Collateral Agent shall provide the

22

applicable Grantor with notice thereof prior to or promptly after such occupancy; (iii) exercise any and all rights and remedies of any of the Grantors under or in connection with the Collateral, or otherwise in respect of the Collateral; provided that the Collateral Agent shall provide the applicable Grantor with notice thereof prior to or promptly after such exercise; (iv) withdraw any and all cash or other Collateral from any Collateral Account and apply such cash and other Collateral to the payment of any and all Secured Obligations in the manner provided in Section 6.02 of this Agreement; (v) subject to the mandatory requirements of applicable Law and the notice requirements described below, sell or otherwise dispose of all or any part of the Collateral securing the Secured Obligations at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate and (vi) with respect to any Intellectual Property Collateral, on demand, cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Intellectual Property Collateral by the applicable Grantors to the Collateral Agent, or license or sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, any such Intellectual Property Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall determine; provided that such terms shall include all terms and restrictions customarily required to ensure the continuing validity and effectiveness of the Intellectual Property at issue, such as, without limitation, quality control and inure provisions with regard to Trademarks, patent designation provisions with regard to Patents, and copyright notices and restrictions or decompilation and reverse engineering of copyrighted software. The Grantors recognize that (a) the Collateral Agent may be unable to effect a public sale of all or a part of the Collateral consisting of securities by reason of certain prohibitions contained in the Securities Act of 1933, 15 U.S.C. §77, (as amended and in effect, the “Securities Act”) or the Securities laws of various states (the “Blue Sky Laws”), but may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such securities for their own account, for investment and not with a view to the distribution or resale thereof, (b) that private sales so made may be at prices and upon other terms less favorable to the seller than if such securities were sold at public sales, (c) that neither the Collateral Agent nor any other Secured Party has any obligation to delay sale of any of the Collateral for the period of time necessary to permit such securities to be registered for public sale under the Securities Act or the Blue Sky Laws, and (d) that private sales made under the foregoing circumstances shall be deemed to have been made in a commercially reasonable manner. Upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any sale of Collateral shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.

The Collateral Agent shall give the applicable Grantors 10 days’ written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the Uniform Commercial Code or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange.

23

Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. The Collateral Agent may conduct one or more going out of business sales, in the Collateral Agent’s own right or by one or more agents and contractors. Such sale(s) may be conducted upon any premises owned, leased, or occupied by any Grantor. The Collateral Agent and any such agent or contractor, in conjunction with any such sale, may augment the Inventory with other goods (all of which other goods shall remain the sole property of the Collateral Agent or such agent or contractor). Any amounts realized from the sale of such goods which constitute augmentations to the Inventory (net of an allocable share of the costs and expenses incurred in their disposition) shall be the sole property of the Collateral Agent or such agent or contractor and neither any Grantor nor any Person claiming under or in right of any Grantor shall have any interest therein. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor. For purposes of determining the Grantors’ rights in the Collateral, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Secured Obligations paid in full, provided that such terms shall include all terms and restrictions that customarily required to ensure the continuing validity and effectiveness of the Intellectual Property at issue, such as, without limitation, quality control and inure provisions with regard to Trademarks, patent designation provisions with regard to patents, and copyright notices and restrictions or decompilation and reverse engineering of copyrighted software. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court appointed receiver. Any sale pursuant to the provisions of this Section 6.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the Uniform Commercial Code or its equivalent in other jurisdictions.

24

Subject to the terms of the Intercreditor Agreement, each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) during the continuance of an Event of Default and after notice to the Borrower of its intent to exercise such rights (except in the case of a Bankruptcy Event of Default, in which case no such notice shall be required), for the purpose of (i) making, settling and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance, (ii) making all determinations and decisions with respect thereto and (iii) obtaining or maintaining the policies of insurance required by Section 6.07 of the Credit Agreement as they relate to Collateral or to pay any premium in whole or in part relating thereto. All sums disbursed by the Collateral Agent in connection with this paragraph, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, within 10 days of demand, by the Grantors to the Collateral Agent and shall be additional Secured Obligations secured hereby.

By accepting the benefits of this Agreement and each other Collateral Document, the Secured Parties expressly acknowledge and agree that this Agreement and each other Collateral Document may be enforced only by the action of the Collateral Agent and that no other Secured Party shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Parties upon the terms of this Agreement and the other Collateral Documents.

Section 6.02 Application of Proceeds. The Collateral Agent shall apply the proceeds of any collection or sale of Collateral, including any Collateral consisting of cash, in accordance with the provisions of Section 8.04 of the Credit Agreement, subject to the terms of the Intercreditor Agreement. The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof. It is understood and agreed that the Grantors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Secured Obligations.

ARTICLE VII

Indemnity, Subrogation and Subordination

Each Grantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Borrowers or any other Grantor that arise from the existence, payment, performance or enforcement of such Grantor’s Secured

25

Obligations under or in respect of this Agreement or any other Finance Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Secured Party against the Borrowers or any other Grantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Borrowers or any other Grantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Secured Obligations (other than contingent indemnity obligations for then unasserted claims) and all other amounts payable under this Agreement shall have been paid in full, all Letters of Credit, all Secured Hedge Agreements and all Secured Cash Management Agreements shall have expired or been terminated and the Revolving Credit Commitments shall have expired or been terminated. If any amount shall erroneously be paid to any Borrower or any other Grantor on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right or (ii) any such indebtedness of any Borrower or any other Grantor, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Collateral Agent to be credited against the payment of the Secured Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement and the other Loan Documents.

ARTICLE VIII

Miscellaneous

Section 8.01 Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit Agreement.

Section 8.02 Waivers; Amendment. (a) No failure or delay by any Senior Credit Party in exercising any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder, or any abandonment or discontinuance of steps to enforce such a right, remedy, power or privilege, preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges of the Senior Credit Parties hereunder and under the other Loan Documents are cumulative and are not exclusive of any other rights, remedies, powers and privileges that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 8.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Revolving Credit Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether any Senior Credit Party may have had notice or knowledge of such Default or Event of Default at the time.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment or

26

modification is to apply, subject to any consent required in accordance with Section 10.01 of the Credit Agreement. This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.

Section 8.03 Collateral Agent’s Fees and Expenses; Indemnification. (a) The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its expenses incurred hereunder as provided in Section 10.04 of the Credit Agreement.

(b) Without limitation of its indemnification obligations under the other Loan Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees against, and hold each Indemnitee harmless from, any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, and reasonably related expenses and disbursements (including the reasonable fees, charges and disbursements of counsel) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to, arising out of, in connection with or as a result of (a) the execution, delivery, enforcement, performance or administration of this Agreement or any other Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, or (b) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto and, in each case, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or of any Affiliate, director, officer, employee or agent of such Indemnitee (y) a material breach of this Agreement by such Indemnitee or of any Affiliate, director, officer, employee or agent of such Indemnitee or (z) any dispute among Indemnitees other than claims against any Indemnitee in its capacity or in fulfilling its role as an agent or arranger or any other similar role hereunder and other than any claims arising out of any act or omission of the Borrowers or their Affiliates.

(c) Any such amounts payable as provided hereunder shall be additional Secured Obligations secured by the Collateral Documents. The provisions of this Section 8.03 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Secured Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section 8.03 shall be payable within 10 Business Days of written demand therefor.

Section 8.04 Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors

27

and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

Section 8.05 Survival of Agreement. All covenants, agreements, indemnities, representations and warranties made by the Grantors in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Revolving Credit Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and, notwithstanding that any Senior Credit Party may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended, and shall continue in full force and effect until this Agreement is terminated as provided in Section 8.13 hereof, or with respect to such Grantor or such Grantor is otherwise released from its obligations under this Agreement in accordance with the terms hereof.

Section 8.06 Counterparts; Effectiveness; Several Agreement. This Agreement and each other Loan Document may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by telecopier or by electronic pdf copy of an executed counterpart of a signature page to this Agreement and each other Loan Document shall be effective as delivery of an original executed counterpart of this Agreement and such other Loan Document. This Agreement shall become effective when it shall have been executed by the Grantors and the Collateral Agent and thereafter shall be binding upon and inure to the benefit of each Grantor and the Collateral Agent and their respective permitted successors and assigns, except that no Grantor shall have the right to assign its rights hereunder or any interest herein except as otherwise permitted hereby or by the Credit Agreement. This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, restated, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.

Section 8.07 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 8.08 Right of Set-Off. In addition to any rights and remedies of the Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default, each Lender and its Affiliates and each L/C Issuer and its Affiliates is authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, without prior notice to the Lead Borrower or any other Loan Party, any such notice being waived by the Lead Borrower (on its own behalf and on behalf of each Loan Party and its Subsidiaries) to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held by, and other Indebtedness at any time owing by, such Lender and its Affiliates or such L/C

28

Issuer and its Affiliates, as the case may be, to or for the credit or the account of the respective Loan Parties and their Subsidiaries against any and all Obligations owing to such Lender and its Affiliates or such L/C Issuer and its Affiliates hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not such Agent or such Lender and its Affiliates or such L/C Issuer and its Affiliates have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or are owed to a branch or office of such Lender or L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness. Notwithstanding anything to the contrary contained herein, no Lender or its Affiliates and no L/C Issuer or its Affiliates shall have a right to set off and apply any deposits held or other Indebtedness owing by such Lender or its Affiliates or such L/C Issuer or its Affiliates, as the case may be, to or for the credit or the account of any Subsidiary of a Loan Party which is not a “United States person” within the meaning of Section 7701(a)(30) of the Code unless such Subsidiary is not a direct or indirect subsidiary of the Borrowers. Each Lender and L/C Issuer agrees to notify the Lead Borrower and the Administrative Agent promptly after any such set off and application made by such Lender or L/C Issuer, as the case may be; provided that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Administrative Agent, each Lender and each L/C Issuer under this Section 8.08 are in addition to other rights and remedies (including other rights of setoff) that the Administrative Agent, such Lender and such L/C Issuer may have. Notwithstanding the provisions of this Section 8.08, if at any time any Lender, the L/C Issuers or any of their respective Affiliates maintains one or more deposit accounts for any Borrower or any other Loan Party into which Specified Government Accounts are deposited, such Person shall waive the right of setoff set forth herein.

Section 8.09 GOVERNING LAW. (a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

(b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR AND THE COLLATERAL AGENT CONSENT, IN EACH CASE FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GRANTOR AND THE COLLATERAL AGENT IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION OR OTHER JURISDICTION CHOSEN BY THE AGENTS IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.

29

Section 8.10 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 8.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 8.11 Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

Section 8.12 Security Interest Absolute. All rights of the Collateral Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Secured Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document, or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Secured Obligations or (d) subject only to termination of a Grantor’s obligations hereunder in accordance with the terms of Section 8.13, but without prejudice to reinstatement rights under Section 2.04 of the Guaranty, any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Secured Obligations or this Agreement.

Section 8.13 Termination or Release. (a) This Agreement, the Security Interest and all other security interests granted hereby shall terminate with respect to all Secured Obligations when (i) the Revolving Credit Commitments have expired or been terminated, (ii) the principal of and interest on each Revolving Credit Loan (including Swing Line Loans) and all fees and other Secured Obligations (other than (x) obligations under Secured Hedge Agreements, (y) Cash Management Obligations and (z) contingent indemnity obligations) shall have been paid in full, (iii) all Letters of Credit shall have expired or terminated (or been cash collateralized or backstopped in an amount equal to 101.5% of the L/C Obligations or in respect of which other arrangements reasonably satisfactory to the Administrative Agent and L/C Issuers

30

have been made) and (iv) all L/C Obligations have been reduced to zero (or been cash collateralized or backstopped in an amount equal to 101.5% of the L/C Obligations or in respect of which other arrangements reasonably satisfactory to the Administrative Agent and L/C Issuers have been made); provided that in connection with the termination of this Agreement, the Collateral Agent may require such indemnities as it shall reasonably deem necessary or appropriate to protect the Secured Parties against loss on account of credits previously applied to the Secured Obligations that may subsequently be reversed or revoked.

(b) A Grantor which is a Restricted Subsidiary shall automatically be released from its obligations hereunder and the Security Interest in the Collateral of such Grantor shall be automatically released upon the consummation of any transaction permitted by the Credit Agreement as a result of which such Grantor ceases to be a Restricted Subsidiary of a Borrower or a Material Subsidiary; provided that the Required Lenders shall have consented to such transaction (to the extent required by the Credit Agreement) and the terms of such consent did not provide otherwise.

(c) Upon any sale or other transfer by any Grantor of any Collateral that is permitted under the Credit Agreement, or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 9.10 or 10.01 of the Credit Agreement, the security interest in such Collateral shall be automatically released.

(d) In connection with any termination or release pursuant to paragraph (a), (b), or (c), the Collateral Agent shall promptly (after reasonable advance notice) execute and deliver to any Grantor, at such Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 8.13 shall be without recourse to or warranty by the Collateral Agent.

(e) At any time that the respective Grantor desires that the Collateral Agent take any action described in immediately preceding clause (d), it shall, upon request of the Collateral Agent, deliver to the Collateral Agent an officer’s certificate certifying that the release of the respective Collateral is permitted pursuant to paragraph (a), (b) or (c). The Collateral Agent shall have no liability whatsoever to any Secured Party as the result of any release of Collateral by it as permitted (or which the Collateral Agent in good faith believes to be permitted) by this Agreement.

Section 8.14 Additional Restricted Subsidiaries. Pursuant to Section 6.11 of the Credit Agreement, certain Restricted Subsidiaries of the Loan Parties that were not in existence or not Restricted Subsidiaries on the date of the Credit Agreement are required to enter in this Agreement as Grantors upon becoming Restricted Subsidiaries. Upon execution and delivery by the Collateral Agent and a Restricted Subsidiary of a Security Agreement Supplement, such Restricted Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of any such instrument shall not require the consent of any other Loan Party hereunder. The rights and obligations of each Loan Party hereunder shall remain in full force and effect notwithstanding the addition of any new Loan Party as a party to this Agreement.

31

Section 8.15 Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof at any time after and during the continuance of a Cash Dominion Event or an Event of Default, as applicable, which appointment is irrevocable and coupled with an interest. Without limiting the generality of the foregoing, the Collateral Agent shall have the right, (i) upon the occurrence and during the continuance of a Cash Dominion Event and (unless a Bankruptcy Event of Default has occurred and is continuing) delivery of notice by the Collateral Agent to the Borrower of its intent to exercise such rights, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to take actions required to be taken by the Grantors under Article V of this Agreement; and (b) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; and (ii) upon the occurrence and during the continuance of an Event of Default and (unless a Bankruptcy Event of Default has occurred and is continuing) delivery of notice by the Collateral Agent to the Borrower of its intent to exercise such rights, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (b) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral; (c) to send verifications of Accounts to any Account Debtor; (d) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (e) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; (f) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent or to a Collateral Account and adjust, settle or compromise the amount of payment of any Account; and (g) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct or that of any of their Affiliates, directors, officers, employees, counsel, agents or attorneys-in-fact.

Section 8.16 Recourse; Limited Obligations. This Agreement is made with full recourse to each Grantor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Grantor contained herein, in the Loan Documents and the other Loan Documents and otherwise in writing in connection herewith or therewith, with respect to the Secured Obligations of each applicable Secured Party. It is the desire and intent of each Grantor and each applicable Secured Party that this Agreement shall be enforced against each Grantor to the fullest extent permissible under the laws applied in each jurisdiction in which enforcement is sought.

32

Section 8.17 Mortgages. In the event that any of the Collateral hereunder is also subject to a valid and enforceable Lien under the terms of a Mortgage and the terms thereof are inconsistent with the terms of this Agreement, then with respect to such Collateral, the terms of such Mortgage shall control in the case of Fixtures and real estate leases, letting and licenses of, and contracts, and agreements relating to the lease of, real property, and the terms of this Agreement shall control in the case of all other Collateral.

Section 8.18 Intercreditor Agreement. Reference is made to the Intercreditor Agreement. Notwithstanding any other provision contained herein, this Agreement, the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions of the Intercreditor Agreement and, to the extent provided therein, the applicable Term Debt Security Documents. In the event of any conflict or inconsistency between the provisions of this Agreement and the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall control.

[Signature Pages Follow]

33

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

SKY ACQUISITION LLC
By:	/s/ Michael Dal Bello
	Name:	Michael Dal Bello
	Title:

SKY MERGER SUB CORPORATION
By:	/s/ Michael Dal Bello
	Name:	Michael Dal Bello
	Title:

S-1

[Signature Page to the ABL Security Agreement]

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

APRIA HEALTHCARE GROUP INC. APRIA HEALTHCARE, INC. APRIACARE MANAGEMENT SYSTEMS, INC. APRIADIRECT.COM, INC. APRIA HEALTHCARE OF NEW YORK STATE, INC. CORAM, INC.
By:	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	Executive Vice President
		General Counsel and Secretary

S-2

[Signature Page to the ABL Security Agreement]

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

CORAM CLINICAL TRIALS, INC. T2 MEDICAL, INC. CORAM SPECIALTY INFUSION SERVICES, INC. CORAM HEALTHCARE CORPORATION OF ALABAMA CORAM HEALTHCARE CORPORATION OF FLORIDA CORAM HEALTHCARE CORPORATION OF GREATER D.C. CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK CORAM HEALTHCARE CORPORATION OF INDIANA CORAM HEALTHCARE CORPORATION OF MICHIGAN CORAM HEALTHCARE CORPORATION OF MISSISSIPPI CORAM HEALTHCARE CORPORATION OF NEVADA CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA CORAM HOMECARE OF MINNESOTA, INC. CORAM ALTERNATE SITE SERVICES, INC. CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS CORAM HEALTHCARE CORPORATION OF NEW YORK CORAM HEALTHCARE CORPORATION OF NORTH TEXAS CORAM HEALTHCARE CORPORATION OF UTAH CORAMRX, LLC CORAM HEALTHCARE OF WYOMING, L.L.C. HEALTHINFUSION, INC. H.M.S.S., INC. CORAM SERVICE CORPORATION
By:	/s/ Michael E. Dell
	Name:	Michael E. Dell
	Title:	V.P., General Counsel & Secretary

S-3

[Signature Page to the ABL Security Agreement]

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

BANK OF AMERICA, N.A.
By:	/s/ Michael Lemiszko
	Name:	Michael Lemiszko
	Title:	Senior Vice President

S-4

[Signature Page to the ABL Security Agreement]

SCHEDULE I TO SECURITY AGREEMENT

BORROWERS

Apria Healthcare Group Inc.

Apria Healthcare, Inc.

Apria Healthcare of New York State, Inc.

ApriaCare Management Systems, Inc.

ApriaDirect.Com, Inc.

Coram, Inc.

Coram Alternate Site Services, Inc.

Coram Clinical Trials, Inc.

Coram Healthcare Corporation of Alabama

Coram Healthcare Corporation of Florida

Coram Healthcare Corporation of Greater D.C.

Coram Healthcare Corporation of Greater New York

Coram Healthcare Corporation of Indiana

Coram Healthcare Corporation of Massachusetts

Coram Healthcare Corporation of Michigan

Coram Healthcare Corporation of Mississippi

Coram Healthcare Corporation of Nevada

Coram Healthcare Corporation of New York

Coram Healthcare Corporation of North Texas

Coram Healthcare Corporation of Northern California

Coram Healthcare Corporation of South Carolina

Coram Healthcare Corporation of Southern California

Coram Healthcare Corporation of Southern Florida

Coram Healthcare Corporation of Utah

Coram Healthcare of Wyoming, L.L.C.

Coram Homecare of Minnesota, Inc.

Coram Service Corporation

Coram Specialty Infusion Services, Inc.

CoramRx, LLC

HealthInfusion, Inc.

H.M.S.S., INC.

T² MEDICAL, INC.

SCHEDULE II TO SECURITY AGREEMENT

GUARANTORS

Sky Acquisition LLC

Apria Healthcare, Inc.

Apria Healthcare of New York State, Inc.

ApriaCare Management Systems, Inc.

ApriaDirect.Com, Inc.

Coram, Inc.

Coram Alternate Site Services, Inc.

Coram Clinical Trials, Inc.

Coram Healthcare Corporation of Alabama

Coram Healthcare Corporation of Florida

Coram Healthcare Corporation of Greater D.C.

Coram Healthcare Corporation of Greater New York

Coram Healthcare Corporation of Indiana

Coram Healthcare Corporation of Massachusetts

Coram Healthcare Corporation of Michigan

Coram Healthcare Corporation of Mississippi

Coram Healthcare Corporation of Nevada

Coram Healthcare Corporation of New York

Coram Healthcare Corporation of North Texas

Coram Healthcare Corporation of Northern California

Coram Healthcare Corporation of South Carolina

Coram Healthcare Corporation of Southern California

Coram Healthcare Corporation of Southern Florida

Coram Healthcare Corporation of Utah

Coram Healthcare of Wyoming, L.L.C.

Coram Homecare of Minnesota, Inc.

Coram Service Corporation

Coram Specialty Infusion Services, Inc.

CoramRx, LLC

HealthInfusion, Inc.

H.M.S.S., INC.

T² MEDICAL, INC.

SCHEDULE III TO SECURITY AGREEMENT

EQUITY INTERESTS

LEGAL NAME	JURISDICTION	STOCK OR EQUITY INTERESTS OUTSTANDING	CERTIFICATE NO.	PERCENTAGE OWNERSHIP
				RECORD OWNER	%
Apria Healthcare Group Inc.	DE	100 Shares	1	Sky Acquisition LLC	100	%
Apria Healthcare, Inc.	DE	1,000 Shares	1	Apria Healthcare Group Inc.	100	%
Apria Healthcare of New York State, Inc.	NY	300 Shares	1	Apria Healthcare, Inc.	100	%
ApriaCare Management Systems, Inc.	DE	100 Shares	1	Apria Healthcare, Inc.	100	%
ApriaDirect.Com, Inc.	DE	1,000 Shares	1	Apria Healthcare, Inc.	100	%
Coram, Inc.	DE	1,000 Shares	1	Apria Healthcare, Inc.	100	%
Coram Alternate Site Services, Inc.	DE	100 Shares	4	Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, Inc.)	100	%
Coram Clinical Trials, Inc. (Formerly CTI Network, Inc.)	DE	500 Shares	3	Coram, Inc.	100	%
Coram Healthcare Corporation of Alabama	DE	100 Shares	03	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Florida	DE	500 Shares	03	T2 MEDICAL, INC.	100	%

Coram Healthcare Corporation of Greater D.C.	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Greater New York	NY	500 Shares	04	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Indiana	DE	100 Shares	03	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Massachusetts	DE	500 Shares	3	Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, Inc.)	100	%
Coram Healthcare Corporation of Michigan	DE	100 Shares	03	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Mississippi	DE	100 Shares	03	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Nevada	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of New York	NY	100 Shares	4	Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, Inc.)	100	%
Coram Healthcare Corporation of North Texas	DE	1,000 Shares	4	Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, Inc.)	100	%
Coram Healthcare Corporation of Northern California	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of South Carolina	DE	100 Shares	03	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Southern California	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Southern Florida	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Utah	DE	500 Shares	3	Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, Inc.)	100	%

Coram Homecare of Minnesota, Inc.	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Service Corporation	DE	1000 Shares	13	T2 MEDICAL, INC.	100	%
Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, inc.)	DE	100 Shares	04	T2 MEDICAL, INC.	100	%
HealthInfusion, Inc.	FL	100 Shares	H12088	Coram, Inc.	100	%
H.M.S.S., INC.	DE	1000 Shares	5	Coram, Inc.	100	%
T2 MEDICAL, INC.	DE	100 Shares	TC17402	Coram, Inc.	100	%
Coram Healthcare of Wyoming, L.L.C.	DE	N/A	N/A	Coram Specialty Infusion Services, Inc.	100	%
CoramRx, LLC	DE	N/A	N/A	Coram Specialty Infusion Services, Inc.	100	%

PROMISSORY NOTES

Borrower	UNITED SEATING AND MOBILITY, L.L.C.
Lender/Grantor	APRIA HEALTHCARE, INC.
Principal	$500,000.00
Repayment Schedule	January 1, 2009	$250,000.00
	July 1, 2009	$250,000.00

SCHEDULE IV TO SECURITY AGREEMENT

COMMERCIAL TORT CLAIMS

None.

SCHEDULE V TO SECURITY AGREEMENT

U.S. COPYRIGHT REGISTRATIONS AND APPLICATIONS

TRADEMARKS

APRIA TRADEMARKS
Country	Trademark	Serial No.	Filing Date	Reg. No.	Reg. Date	Status	Renewal Due
USA	APRIA	78/538,197	12/24/2004	3,437,644	05/27/2008	Registered	5/27/2018
USA	APRIA GREAT ESCAPES	75/919,113	9/9/1999	2,724,757	6/10/2003	Registered	6/10/2013
USA	APRIA HEALTHCARE (Class 05,42)	75/389,297	11/13/1997	2,297,368	12/7/1999	Registered	12/7/2009
USA	APRIA HEALTHCARE (Class 05, 10, 12)	78/538,198	12/24/2004	3,437,645	05/27/2008	Registered	5/27/2018
Mexico	APRIA HEALTHCARE & DESIGN	457559	11/10/2000	693136	3/30/2001	Registered	3/30/2011
USA	APRIA HEALTHCARE	74/710,078	8/2/1995	2,232,498	3/16/1999	Registered	3/16/2009
USA	APRIA HOMECARE ESSENTIALS	76/321,047	10/4/2001	2,645,595	11/5/2002	Registered	11/5/2012
USA	APRIA PHARMACY NETWORK	78/538,195	12/24/2004	3,303,530	10/2/2007	Registered	10/2/2017
USA	APRIA RESPIRATORY ASSIST	78/539,988	12/30/2004	3,054,223	1/31/2006	Registered	1/31/2016
USA	HEALING BEGINS AT HOME	78/570,839	2/18/2005	3,220,639	3/20/2007	Registered	3/20/2017
USA	OXYGEN ASSIST	78/380,103	3/8/2004	2,987,407	8/23/2005	Registered	8/23/2015
USA	RESPIMED	74/148,131	3/15/1991	1,699,458	7/7/1992	Registered	7/7/2012
USA	STAR MEDICAL RX	76/273,832	6/20/2001	2,748,165	8/5/2003	Registered	8/5/2013
USA	WASSEROTT’S	73/811,928	7/11/1989	1,618,113	10/16/1990	Registered	10/16/2010
USA	W WASSEROTT’S EVERTHING MEDICAL SINCE 1924 & DESIGN	76/450,880	9/17/2002	2,844,293	5/25/2004	Registered	5/25/2014
USA	APRIA HEALTHCARE	78/539,998	12/30/2004	N/A	N/A	Pending	N/A
USA	APRIA HEALTHCARE	78/980,515	12/30/2004	N/A	N/A	Pending	N/A

CORAM TRADEMARKS
Name of Mark	Registration/App#	Registration Date	Declaration Date	End Date
CORAM	2,763,963	09/16/2003	09/16/2008	09/16/2013
CORAM HEALTHCARE	2,763,962	09/16/2003	09/16/2008	09/16/2013
CELEBRATION OF LIFE CIRCLE AND DESIGN	2,755,831	08/26/2003	08/26/2008	08/26/2013
HEMO-PHIL-A-SAURUS AND DESIGN (CHARACTER)	2,889,862	09/28/2004	09/28/2009	09/28/2014
VON-W-RAPTOR AND DESIGN (CHARACTER)	2,889,864	09/28/2004	09/28/2009	09/28/2014
VON-W-RAPTOR (CHARACTER)	2,889,863	09/28/2004	09/28/2009	09/28/2014
COAG-A-DACTYL	3,014,544	11/15/2005	11/15/2010	11/15/2015
COAG-A-DACTYL DESIGN (CHARACTER)	2,930,441	03/08/2005	03/08/2010	03/08/2015
DAWN-W-RAPTOR	2,947,475	05/10/2005	05/10/2010	05/10/2015
DAWN-W RAPTOR DESIGN (CHARACTER)	2,935,932	03/29/2005	03/26/2010	03/09/2015
CORAM HEALTHCARE ONE TO ONE NUTRITION SUPPORT CONSUMER SATISFACTION PROGRAM	2,761,457	09/09/2003	09/09/2008	09/09/2013
CORAM’S DINO-MITE TEAM	3,014,543	11/15/2005	11/15/2010	11/15/2015
CORAM SPECIALTY INFUSION SERVICES	3,374,859	01/29/2008
RX ORAM SPECIALTY INFUSION SERVICES	3,374,860	01/29/2008

CORAM TRADEMARKS

Name of Mark	Registration/App#	Registration Date	Declaration Date	End Date
CORAM SPECIALTY INFUSION SERVICES	3,374,861	01/29/2008
RX CORAM SPECIALTY INFUSION SERVICES	3,374,862	01/29/2008
CORAMRX SPECIALTY PHARMACY SERVICES	3,374,863	01/29/2008
RX CORAMRX SPECIALTY PHARMACY SERVICES	3,374,867	01/29/2008
CORAMRX SPECIALTY PHARMACY SERVICES	3,374,866	01/29/2008
CORAMRX SPECIALTY PHARMACY SERVICES	3,374,864	01/29/2008
HEMO-PHIL-A-SAURUS DESIGN	2,917,777	01/11/2005
EYEON	77/475,470	05/15/2008 (Filing Date)
EYEON THERAPY MANAGEMENT	77/412,866	03/04/2008 (Filing Date)
CORAM SPECIALTY INFUSION SERVICES AN APRIA HEALTHCARE COMPANY	77/405,503	02/25/2008 (Filing Date)
CORAM SPECIALTY INFUSION SERVICES AN APRIA HEALTHCARE COMPANY	77/405,468	02/25/2008 (Filing Date)
CORAMRX SPECIALTY PHARMACY SERVICES AN APRIA HEALTHCARE COMPANY	77/405,488	02/25/2008 (Filing Date)
CORAMRX SPECIALTY PHARMACY SERVICES AN APRIA HEALTHCARE COMPANY	77/405,479	02/25/2008 (Filing Date)
RX CORAM SPECIALTY INFUSION SERVICES AN APRIA HEALTHCARE COMPANY	77/405,496	02/25/2008 (Filing Date)

CORAM TRADEMARKS

Name of Mark	Registration/App#	Registration Date	Declaration Date	End Date
RX CORAM SPECIALTY INFUSION SERVICES AN APRIA HEALTHCARE COMPANY	77/405,464	02/25/2008 (Filing Date)
RX CORAMRX SPECIALTY PHARMACY SERVICES AN APRIA HEALTHCARE COMPANY	77/405,483	02/25/2008 (Filing Date)
RX CORAMRX SPECIALTY PHARMACY SERVICES AN APRIA HEALTHCARE COMPANY	77/405,473	02/25/2008 (Filing Date)

PATENTS

Name	Application #	Filing Date	Preliminary Class	End Date
NURSING STAFF MODEL FOR SPECIALTY HOME INFUSION	12/104,021	04/16/2008	604	N/A

COPYRIGHTS

Country	Copyright	Reg. No.	Reg. Date	Status	Renewal Due
USA	APRIA RESPIRATORY ASSIST PROGRAM: Patient education for COPD management	TX-5-875-895	11/28/2003	Registered	07/31/2098

Domain Name	Expiration Date
aiscare.com	03/27/2010
apria.com	03/08/2012
apriacare.com	03/06/2012
apriahealthcare.com	03/24/2013
apriajobs.com	05/19/2013
apriapharmacynetwork.com	09/06/2009
coramais.com	03/27/2010
coramboard.com	10/11/2011
coramclinicaltrials.com	05/12/2010
coramct.com	05/12/2010
coramcti.com	05/12/2010
coramhc.com	07/22/2013
coram-hc.com	02/10/2010
coramhc.net	12/20/2016
coramhealthcare.com	07/19/2013
coram-healthcare.com	02/10/2010
coramhemophilia.com	12/27/2014
coraminc.com	06/14/2016
coramrx.com	08/09/2010
ctinetworkinc.com	03/24/2010
erespimed.com	09/08/2013
e-respimed.com	09/08/2013
factorforward.com	10/08/2009
ivmed.com	02/06/2010

Domain Name	Expiration Date
myapria.com	06/28/2009
mycoram.com	10/11/2011
nourish.bz	08/04/2011
respimed.com	06/10/2013
starmedicalrx.com	07/31/2009
wenourish.com	08/04/2011
wenourish.net	08/04/2011
wenourish.org	08/04/2011

EXHIBIT A TO SECURITY AGREEMENT

FORM OF SECURITY AGREEMENT SUPPLEMENT

SUPPLEMENT NO.      dated as of                 , to the Security Agreement (as amended, restated, supplemented or otherwise modified, the “Security Agreement”), dated as of October 28, 2008, by and among Apria Healthcare Group Inc., a Delaware corporation and successor in interest to Sky Merger Sub Corporation (the “Lead Borrower”), the other Borrowers party thereto, Holdings, the other Guarantors party thereto and Bank of America, N.A., as Administrative Agent and Collateral Agent (in such capacity, the “Collateral Agent”) for the Secured Parties.

A. Reference is made to the Credit Agreement, dated as of October 28, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, Holdings, Collateral Agent, the Lenders and other agents from time to time party thereto

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Security Agreement referred to therein.

C. The Grantors have entered into the Security Agreement in order to induce (x) the Lenders to make Loans and (y) each L/C Issuer to issue Letters of Credit. Section 8.14 of the Security Agreement provides that additional Restricted Subsidiaries of the Grantors may become Grantors under the Security Agreement by execution and delivery of an instrument substantially in the form of this Supplement. The undersigned Restricted Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Subsidiary Party under the Security Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously made.

Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

Section 1. In accordance with Section 8.14 of the Security Agreement, the New Subsidiary by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all respects as of such earlier date. In furtherance of the foregoing, the New Subsidiary, as security for the payment and performance in full of the Secured Obligations does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Subsidiary’s right, title and interest in and to the Collateral (as defined in the Security Agreement) of the New Subsidiary. Each reference to a “Grantor” in the Security Agreement shall be deemed to include the New Subsidiary. The Security Agreement is hereby incorporated herein by reference.

Section 2. The New Subsidiary represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

Section 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary and the Collateral Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

Section 4. The New Subsidiary hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of the location of any and all Collateral of the New Subsidiary and (b) set forth under its signature hereto is the true and correct legal name of the New Subsidiary, its jurisdiction of formation and the location of its chief executive office (or if different, its “location” as determined in accordance with Section 9-307 of the Uniform Commercial Code).

Section 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

Section 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto 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.

Section 8. All communications and notices hereunder shall be in writing and given as provided in Section 8.01 of the Security Agreement.

Section 9. The New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including all Attorney Costs of counsel for the Collateral Agent.

2

IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the date first above written.

[NAME OF NEW SUBSIDIARY]
By:
	Name:
	Title:
	Legal Name:
	Jurisdiction of Formation:
	Location of Chief Executive Office:

BANK OF AMERICA, N.A., as Collateral Agent
By:
	Name:
	Title:

3

SCHEDULE I TO SECURITY AGREEMENT SUPPLEMENT

LOCATION OF COLLATERAL

Description Location

EQUITY INTERESTS

Issuer Number of
Certificate Registered
Owner Number and
Class of
Equity Interest Percentage
of Equity  Interests

PROMISSORY NOTES

Issuer Principal
Amount as of the  date of
issuance (or delivery) Date of Note/Instrument Maturity Date

COMMERCIAL TORT CLAIMS

INTELLECTUAL PROPERTY

((a) U.S. Patents, U.S. Patent Applications, (b) U.S. Trademark Registrations and Applications, (c) U.S. Copyright Registrations and Applications, (d) Domain Names, (e) exclusive Licenses of U.S. Patents, Patent Applications, Trademark Registrations or Applications and Copyrights where the New Subsidiary is the Licensee)

REAL PROPERTY (LEASED AND OWNED)

BANK ACCOUNTS

1

EXHIBIT B TO SECURITY AGREEMENT

Form of Perfection Certificate

1

EXHIBIT C TO SECURITY AGREEMENT

GRANT OF SECURITY INTEREST

IN UNITED STATES TRADEMARKS

This Trademark Security Agreement, dated as of [                    ] by and between [Name of Grantor], a [            ] formed under the laws of [            ] (the “Grantor”), in favor of BANK OF AMERICA, N.A., in its capacity as Collateral Agent pursuant to the Credit Agreement dated as of the date hereof (in such capacity, the “Grantee”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement of even date herewith (the “Security Agreement”) in favor of the Grantee pursuant to which the Grantor is required to execute and deliver this Trademark Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Grantee, for the benefit of the Secured Parties, to enter into the Credit Agreement, the Grantor hereby agrees with the Grantee as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

SECTION 2. Grant of Security Interest in Trademark Collateral. The Grantor hereby pledges and grants to the Grantee for the benefit of the Secured Parties a lien on and security interest in and to all of its right, title and interest in, to and under all the Trademarks of the Grantor including, without limitation, those items listed on Schedule I attached hereto and all Proceeds of any and all of the foregoing; provided that with respect to any United States Trademark, applications in the United States Patent and Trademark Office on the basis of any Grantor’s “intent to use” such Trademarks will not be deemed to be Collateral unless and until a “Statement of Use” or “Amendment to Allege Use” has been filed and accepted in the United States Patent and Trademark Office, whereupon such application shall be automatically subject to the security interest granted herein and deemed to be included in the Collateral.

SECTION 3. Security Agreement. The security interest granted pursuant to this Trademark Security Agreement is granted in connection with the Security Agreement and is expressly subject to the terms and conditions thereof. Grantor hereby acknowledges and affirms that the rights and remedies of the Grantee with respect to the security interest in the Trademarks made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. The Security Agreement (and all rights and remedies of the Lenders thereunder) shall remain in full force and effect in accordance with its terms. In the event that any provision of this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

SECTION 4. Purpose. This Agreement has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein with the United States Patent and Trademark Office.

SECTION 5. Termination. Upon the payment in full of the Obligations and termination of the Security Agreement, the Grantee shall, at the reasonable request of the Grantor, execute, acknowledge, and deliver to the Grantor an instrument in writing in recordable form releasing the collateral pledge, grant, lien and security interest in the Trademarks listed on Schedule I attached hereto.

SECTION 6. Counterparts. This Trademark Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Trademark Security Agreement by signing and delivering one or more counterparts.

[signature page follows]

2

IN WITNESS WHEREOF, the Grantor has caused this Trademark Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

Very truly yours,
[NAME OF GRANTOR]
By:
	Name:
	Title:

Accepted and Agreed:

BANK OF AMERICA, N.A.,

as Collateral Agent and Grantee

By:
	Name:
	Title:

3

SCHEDULE I

to

GRANT OF SECURITY INTEREST

IN UNITED STATES TRADEMARKS

Owner Trademark Registration No. or Serial No.

4

EXHIBIT D TO SECURITY AGREEMENT

GRANT OF SECURITY INTEREST

IN UNITED STATES PATENTS

This Patent Security Agreement, dated as of [                    ], by and between [Name of Grantor], a [            ] formed under the laws of [            ] (the “Grantor”), in favor of BANK OF AMERICA, N.A., in its capacity as Collateral Agent pursuant to the Credit Agreement dated as of the date hereof (in such capacity, the “Grantee”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement of even date herewith (the “Security Agreement”) in favor of the Grantee pursuant to which the Grantor is required to execute and deliver this Patent Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Grantee, for the benefit of the Secured Parties, to enter into the Credit Agreement, the Grantor hereby agrees with the Grantee as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

SECTION 2. Grant of Security Interest in Patent Collateral. The Grantor hereby pledges and grants to the Grantee for the benefit of the Secured Parties a lien on and security interest in and to all of its right, title and interest in, to and under all the Patents of the Grantor including, without limitation, those items listed on Schedule I attached hereto and all Proceeds of any and all of the foregoing.

SECTION 3. Security Agreement. The security interest granted pursuant to this Patent Security Agreement is granted in connection with the Security Agreement and is expressly subject to the terms and conditions thereof. Grantor hereby acknowledges and affirms that the rights and remedies of the Grantee with respect to the security interest in the Patents made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. The Security Agreement (and all rights and remedies of the Lenders thereunder) shall remain in full force and effect in accordance with its terms. In the event that any provision of this Patent Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

SECTION 4. Purpose. This Agreement has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein with the United States Patent and Trademark Office.

SECTION 5. Termination. Upon the payment in full of the Obligations and termination of the Security Agreement, the Grantee shall, at the reasonable request of the Grantor, execute, acknowledge, and deliver to the Grantor an instrument in writing in recordable form releasing the collateral pledge, grant, lien and security interest in the Patents listed on Schedule I attached hereto.

SECTION 6. Counterparts. This Patent Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Patent Security Agreement by signing and delivering one or more counterparts.

[signature page follows]

2

IN WITNESS WHEREOF, the Grantor has caused this Patent Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

Very truly yours,
	[NAME OF GRANTOR]
By:
	Name:
	Title:

Accepted and Agreed:

BANK OF AMERICA, N.A.,

as Collateral Agent and Grantee

By:
	Name:
	Title:

3

SCHEDULE I

to

GRANT OF SECURITY INTEREST

IN UNITED STATES PATENTS

OWNER PATENT AND PATENT APPLICATION NUMBER TITLE

4

EXHIBIT E TO SECURITY AGREEMENT

GRANT OF SECURITY INTEREST

IN UNITED STATES COPYRIGHTS

This Copyright Security Agreement, dated as of [                    ], by and between [Name of Grantor], a [            ] formed under the laws of [            ] (the “Grantor”), in favor of BANK OF AMERICA, N.A., in its capacity as Collateral Agent pursuant to the Credit Agreement dated as of the date hereof (in such capacity, the “Grantee”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement of even date herewith (the “Security Agreement”) in favor of the Grantee pursuant to which the Grantor is required to execute and deliver this Copyright Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Grantee, for the benefit of the Secured Parties, to enter into the Credit Agreement, the Grantor hereby agrees with the Grantee as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

SECTION 2. Grant of Security Interest in Copyright Collateral. The Grantor hereby pledges and grants to the Grantee for the benefit of the Secured Parties a lien on and security interest in and to all of its right, title and interest in, to and under all the Copyrights of the Grantor including, without limitation, those items listed on Schedule I attached hereto and all Proceeds of any and all of the foregoing.

SECTION 3. Security Agreement. The security interest granted pursuant to this Copyright Security Agreement is granted in connection with the Security Agreement and is expressly subject to the terms and conditions thereof. Grantor hereby acknowledges and affirms that the rights and remedies of the Grantee with respect to the security interest in the Copyrights made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. The Security Agreement (and all rights and remedies of the Lenders thereunder) shall remain in full force and effect in accordance with its terms. In the event that any provision of this Copyright Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

SECTION 4. Purpose. This Agreement has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein with the United States Copyright Office.

SECTION 5. Termination. Upon the payment in full of the Obligations and termination of the Security Agreement, the Grantee shall, at the reasonable request of the Grantor, execute,

acknowledge, and deliver to the Grantor an instrument in writing in recordable form releasing the collateral pledge, grant, lien and security interest in the Copyrights listed on Schedule I attached hereto.

SECTION 6. Counterparts. This Copyright Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Copyright Security Agreement by signing and delivering one or more counterparts.

[signature page follows]

2

IN WITNESS WHEREOF, the Grantor has caused this Copyright Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

Very truly yours,
	[NAME OF GRANTOR]
By:
	Name:
	Title:

Accepted and Agreed:

BANK OF AMERICA, N.A.,

as Collateral Agent and Grantee

By:
	Name:
	Title:

3

SCHEDULE I

to

GRANT OF SECURITY INTEREST

IN UNITED STATES COPYRIGHTS

Title Registration
Number

4

EX-10.24

Exhibit 10.24

SECURITY AGREEMENT SUPPLEMENT

SUPPLEMENT NO. 1 dated as of July 13, 2010, to the Security Agreement (as amended, restated, supplemented or otherwise modified, the “Security Agreement”), dated as of October 28, 2008, by and among Apria Healthcare Group Inc., a Delaware corporation and successor in interest to Sky Merger Sub Corporation (the “Lead Borrower”), the other Borrowers party thereto, Holdings, the other Guarantors party thereto and Bank of America, N.A., as Administrative Agent and Collateral Agent (in such capacity, the “Collateral Agent”) for the Secured Parties.

A. Reference is made to the Credit Agreement, dated as of October 28, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, Holdings, Collateral Agent, the Lenders and other agents from time to time party thereto.

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Security Agreement referred to therein.

C. The Grantors have entered into the Security Agreement in order to induce (x) the Lenders to make Loans and (y) each L/C Issuer to issue Letters of Credit. Section 8.14 of the Security Agreement provides that certain Restricted Subsidiaries of the Loan Parties are required (pursuant to the terms of the Credit Agreement), to become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement. Each undersigned Restricted Subsidiary (each, a “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Grantor under the Security Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously made.

Accordingly, the Collateral Agent and each New Subsidiary agree as follows:

Section 1. In accordance with Section 8.14 of the Security Agreement, each New Subsidiary by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and each New Subsidiary hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all respects as of such earlier date and provided further that references to Schedule III of the Security Agreement shall be deemed to refer to the “Equity Interests” section of Schedule I hereto with respect to each of the New Subsidiaries. In furtherance of the foregoing, each New Subsidiary, as security for the payment and performance in full of the Secured Obligations does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Subsidiary’s right, title and interest in and to the Collateral (as defined in the Security Agreement) of the New Subsidiary. Each reference to a “Grantor” in the Security Agreement shall be deemed to include each New Subsidiary. The Security Agreement is hereby incorporated herein by reference.

Section 2. Each New Subsidiary represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

Section 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of each New Subsidiary and the Collateral Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

Section 4. Each New Subsidiary hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of the location of any and all Collateral of such New Subsidiary and (b) set forth under its signature hereto is the true and correct legal name of such New Subsidiary, its jurisdiction of formation and the location of its chief executive office (or if different, its “location” as determined in accordance with Section 9-307 of the Uniform Commercial Code).

Section 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

Section 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto 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.

Section 8. All communications and notices hereunder shall be in writing and given as provided in Section 8.01 of the Security Agreement.

Section 9. Each New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent.

2

IN WITNESS WHEREOF, each New Subsidiary and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the date first above written.

AHNY-IV LLC
By:	/s/ Robert S. Holcombe
	Name: Robert S. Holcombe
	Title: Executive Vice President, General Counsel and Secretary
		Legal Name: AHNY-IV LLC
		Jurisdiction of Formation: New York
		Location of Chief Executive Office: 26220 Enterprise Court, Lake Forest, CA 92630
AHNY-DME LLC
By:	/s/ Robert S. Holcombe
	Name: Robert S. Holcombe
	Title: Executive Vice President, General Counsel and Secretary
		Legal Name: AHNY-DME LLC
		Jurisdiction of Formation: New York
		Location of Chief Executive Office: 26220 Enterprise Court, Lake Forest, CA 92630

[Security Agreement Supplement]

BANK OF AMERICA, N.A., as Collateral Agent
By:	/s/ Adam Seiden
	Name: Adam Seiden
	Title: Vice-President

[Security Agreement Supplement]

SCHEDULE I TO SECURITY AGREEMENT SUPPLEMENT

LOCATION OF COLLATERAL

AHNY-IV LLC

Description Location

None

AHNY-DME LLC

Description Location

None

EQUITY INTERESTS

AHNY-IV LLC

Issuer	Number of Certificate	Registered Owner	Number and Class of Equity Interest	Percentage of Equity Interests
ANHY-IV LLC	N/A	Apria Healthcare, Inc.	100 shares	100	%

AHNY-DME LLC

Issuer	Number of Certificate	Registered Owner	Number and Class of Equity Interest	Percentage of Equity Interests
AHNY-DME LLC	N/A	Apria Healthcare of New York State, Inc.	100 shares	100	%

1

PROMISSORY NOTES

AHNY-IV LLC

Issuer Principal
Amount as of the date of
issuance (or delivery) Date of Note/Instrument Maturity Date

None

AHNY-DME LLC

Issuer Principal
Amount as of the date of
issuance (or delivery) Date of Note/Instrument Maturity Date

None

COMMERCIAL TORT CLAIMS

AHNY-IV LLC

None

AHNY-DME LLC

None

2

INTELLECTUAL PROPERTY

AHNY-IV LLC

None

((a) U.S. Patents, U.S. Patent Applications, (b) U.S. Trademark Registrations and Applications, (c) U.S. Copyright Registrations and Applications, (d) Domain Names, (e) exclusive Licenses of U.S. Patents, Patent Applications, Trademark Registrations or Applications and Copyrights where the New Subsidiary is the Licensee)

AHNY-DME LLC

None

((a) U.S. Patents, U.S. Patent Applications, (b) U.S. Trademark Registrations and Applications, (c) U.S. Copyright Registrations and Applications, (d) Domain Names, (e) exclusive Licenses of U.S. Patents, Patent Applications, Trademark Registrations or Applications and Copyrights where the New Subsidiary is the Licensee)

REAL PROPERTY (LEASED AND OWNED)

AHNY-IV LLC

None

AHNY-DME LLC

None

3

BANK ACCOUNTS

AHNY-IV LLC

None

AHNY-DME LLC

None

4

EX-10.25

Exhibit 10.25

EXECUTION COPY

SECURITY AGREEMENT

Dated as of October 28, 2008

among

SKY MERGER SUB CORPORATION

(to be merged with and into APRIA HEALTHCARE GROUP INC.)

SKY ACQUISITION LLC,

CERTAIN OTHER SUBSIDIARIES OF SKY ACQUISITION LLC

IDENTIFIED HEREIN

and

BANK OF AMERICA, N.A.,

as COLLATERAL AGENT

Table of Contents	Page
ARTICLE I
Definitions	1
Section 1.01 Definitions	1
Section 1.02 Other Defined Terms	2
ARTICLE II
Pledge of Securities	6
Section 2.01 Pledge	6
Section 2.02 Delivery of the Pledged Collateral	8
Section 2.03 Representations, Warranties and Covenants	8
Section 2.04 Certification of Limited Liability Company and Limited Partnership Interests	10
Section 2.05 Registration in Nominee Name; Denominations	10
Section 2.06 Voting Rights; Dividends and Interest	10
Section 2.07 Collateral Agent Not a Partner or Limited Liability Company Member	12
ARTICLE III
Security Interests in Personal Property	12
Section 3.01 Security Interest	12
Section 3.02 Representations and Warranties	16
Section 3.03 Covenants	17
Section 3.04 Other Actions	19
ARTICLE IV
Special Provisions Concerning Intellectual Property Collateral	20
Section 4.01 Grant of License to Use Intellectual Property	20
Section 4.02 Protection of Collateral Agent’s Security	21

i

ARTICLE V
Collections	22
ARTICLE VI
Remedies	22
Section 6.01 Remedies Upon Default	22
Section 6.02 Application of Proceeds	25
ARTICLE VII
Indemnity, Subrogation and Subordination	26
ARTICLE VIII
Miscellaneous	26
Section 8.01 Notices	26
Section 8.02 Waivers; Amendment	26
Section 8.03 Collateral Agent’s Fees and Expenses; Indemnification	27
Section 8.04 Successors and Assigns	28
Section 8.05 Survival of Agreement	28
Section 8.06 Counterparts; Effectiveness; Several Agreement	28
Section 8.07 Severability	28
Section 8.08 Right of Set-Off	29
Section 8.09 GOVERNING LAW	29
Section 8.10 WAIVER OF RIGHT TO TRIAL BY JURY	30
Section 8.11 Headings	30
Section 8.12 Security Interest Absolute	30
Section 8.13 Termination or Release	31
Section 8.14 Additional Restricted Subsidiaries	32
Section 8.15 Collateral Agent Appointed Attorney-in-Fact	32

ii

Section 8.16 Recourse; Limited Obligations	33
Section 8.17 Mortgages	33

SCHEDULES

Schedule I	-	Guarantors
Schedule II	-	Pledged Equity; Pledged Debt
Schedule III	-	Commercial Tort Claims
Schedule IV	-	Intellectual Property
EXHIBITS
Exhibit A	-	Form of Security Agreement Supplement
Exhibit B	-	Form of Perfection Certificate
Exhibit C	-	Form of Grant of Security Interest in Trademarks
Exhibit D	-	Form of Grant of Security Interest in Patents
Exhibit E	-	Form of Grant of Security Interest in Copyrights

iii

SECURITY AGREEMENT (as amended, supplemented, restated or otherwise modified from time to time pursuant to the terms hereof, this “Agreement”) is entered into as of October 28, 2008 by and among SKY MERGER SUB CORPORATION (prior to the Merger (as defined below), the “Borrower”), a Delaware corporation to be merged (the “Merger”) with and into APRIA HEALTHCARE GROUP INC., a Delaware corporation (after the Merger, the “Borrower”), SKY ACQUISITION LLC, a Delaware limited liability company (“Holdings”), the Guarantors set forth on Schedule I hereto (together with the Borrower and Holdings, collectively, the “Grantors”), and BANC OF AMERICA BRIDGE LLC as Administrative Agent and BANK OF AMERICA, N.A. as Collateral Agent (in such capacity, the “Collateral Agent”) for the Secured Parties. Capitalized terms used herein and defined in Article I are used herein as therein defined.

Reference is made to the Senior Secured Bridge Loan Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Bridge Loan Agreement”), by and among the Borrower, Holdings, the Guarantors from time to time party thereto, the Administrative Agent, the Collateral Agent, and the other agents and Lenders from time to time party thereto.

The Lenders have agreed to extend credit to the Borrower, subject to the terms and conditions set forth in the Bridge Loan Agreement. The obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement by each of the Grantors. The Grantors are affiliates of one another, are an integral part of a consolidated enterprise and will derive substantial direct and indirect benefits from the extensions of credit to the Borrower pursuant to the Bridge Loan Agreement, and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit.

The Borrower may, after the date hereof, issue Senior Secured Notes due 2014 (together with any Exchange Notes (as defined in the Secured Exchange Note Indenture) with respect thereto, the “Senior Secured Notes”) pursuant to the Secured Exchange Note Indenture. The obligations of the Noteholders to purchase the Senior Secured Notes will be conditioned upon, among other things, the execution and delivery of this Agreement by each of the Grantors.

The Borrower may, after the date hereof, borrow term loans pursuant to the Exchange Loan Agreement. The obligations of the Term Lenders to make extensions of credit to the Borrower will be conditioned upon, among other things, the execution and delivery of this Agreement by each of the Grantors.

Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

Section 1.01 Definitions. (a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Bridge Loan Agreement. Unless otherwise defined in the Bridge Loan Agreement, all terms defined in the Uniform Commercial Code and used but not defined in this Agreement have the meanings specified in the Uniform Commercial Code; the term “instrument” shall have the meaning specified in Article 9 of the Uniform Commercial Code.

(b) The rules of construction specified in Article I of the Bridge Loan Agreement also apply to this Agreement.

Section 1.02 Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“Account Debtor” means any Person who is or who may become obligated to any Grantor under, with respect to or on account of an Account.

“Agreement” has the meaning assigned to such term in the preamble.

“Article 9 Collateral” has the meaning assigned to such term in Section 3.01(a).

“Bankruptcy Event of Default” shall mean any Event of Default under Sections 8.01(a)(vi) or (vii) of the Bridge Loan Agreement and equivalent provision under any other Term Debt Document; provided that for the purposes of this Agreement only, in determining whether such an Event of Default has occurred, any reference in any such clause to any Significant Subsidiary shall be deemed not to include (i) any Subsidiary that is not a Material Subsidiary affected by any event or circumstances referred to in any such clause (it being agreed that all such Significant Subsidiaries affected by any event or circumstance referred to in any such clause shall be considered together, as a single consolidated Significant Subsidiary, for purposes of determining whether they constitute Material Subsidiaries) nor (ii) any Significant Subsidiary that is not a Loan Party affected by any event or circumstances referred to in any such clause.

“Collateral” means, collectively, the Article 9 Collateral and the Pledged Collateral.

“Collateral Account” means any cash collateral account established pursuant to, or in connection with, any Term Debt Document, which cash collateral account shall be maintained with, and under the sole dominion and control of, the Collateral Agent for the benefit of the relevant Secured Parties.

“Collateral Agent” has the meaning assigned to such term in the preamble.

“Copyright License” means any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now or hereafter owned by any Grantor or that such Grantor otherwise has the right to license, or granting any right to any Grantor under any Copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement.

“Copyrights” means all of the following now owned or hereafter acquired by or assigned to any Grantor: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, whether registered or unregistered and whether published or unpublished, (b) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, supplemental registrations and pending applications for registration in the United States Copyright Office, including those copyright registrations and applications listed on Schedule IV and all (i) rights and privileges arising under applicable Law with respect to such Grantor’s use of such copyrights, (ii) renewals and extensions thereof and amendments thereto, (iii) income, fees, royalties, damages, claims and payments

2

now or hereafter due and/or payable with respect thereto, including damages and payments for past, present or future Infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present or future Infringements thereof.

“Bridge Loan Agreement” has the meaning assigned to such term in the preamble.

“Domain Names” means all Internet domain names and associated URL addresses in or to which any Grantor now or hereafter has any right, title or interest.

“Equipment” shall mean (x) any “equipment” as such term is defined in Article 9 of the Uniform Commercial Code and in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, appliances, furniture, fixtures, tools, and vehicles now or hereafter owned by any Grantor in each case, regardless of whether characterized as equipment under the Uniform Commercial Code (but excluding any such items which constitute Inventory) and (y) and any and all additions, substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefore, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.

“Excluded Accounts” means (i) Deposit Accounts the balance of which consists exclusively of (A) withheld income taxes and federal, state or local employment taxes in such amounts as are required in the reasonable judgment of the Borrower to be paid to the Internal Revenue Service or state or local government agencies within the following two months with respect to employees of any of the Loan Parties and (B) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of employees of one or more Loan Parties and (ii) all segregated Deposit Accounts constituting (and the balance of which consists solely of funds set aside in connection with) taxes accounts, payroll accounts and trust accounts.

“General Intangibles” has the meaning provided in Article 9 of the Uniform Commercial Code and shall in any event include all chooses in action and causes of action and all other intangible personal property of every kind and nature (other than Accounts) now owned or hereafter acquired by any Grantor, as the case may be, including corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Swap Contracts and other agreements), goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor.

“Grant of Security Interest” means a Grant of Security Interest in certain Intellectual Property in the form of Exhibit C, D or E attached hereto.

“Grantors” has the meaning assigned to such term in the preamble.

“Holdings” has the meaning assigned to such term in the preamble.

“Infringement” means infringement, misappropriation, dilution, tarnishment, impairment or other violation.

“Intellectual Property” means all intellectual and similar property of every kind and nature now owned or hereafter acquired by any Grantor, including (a) inventions, designs, Domain Names, Patents, Copyrights, Licenses, Trademarks, Trade Secrets, and (b) confidential or proprietary technical and business information, know how, show how, or other proprietary data or information relating to its business, software, databases, and all other proprietary information relating to its business.

3

“Intellectual Property Collateral” means Collateral consisting of Intellectual Property.

“Intercreditor Agreement” means the Lien Subordination and Intercreditor Agreement, dated as of October 28, 2008, among Bank of America, N.A., as collateral agent for the Revolving Facility Secured Parties referred to therein, the Collateral Agent, Sky Merger Sub Corporation, Holdings, the Borrower and the subsidiaries of the Borrower named therein (as amended, restated, supplemented or otherwise modified from time to time).

“License” means any Patent License, Trademark License, Copyright License or other intellectual property license or sublicense agreement relating solely to Intellectual Property to which any Grantor is a party, including those listed on Schedule IV.

“Margin Stock” means any “margin stock” (as defined in Regulation U issued by the Board of Governors of the Federal Reserve System).

“Patent License” means any written agreement, now or hereafter in effect, granting to any third party any right to make, have made, use, sell, offer to sell or import any invention covered in whole or in part by a Patent, now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to make, have made, use, sell, offer to sell or import any invention covered in whole or in part by a patent, now or hereafter owned by any third party, and all rights of any Grantor under any such agreement.

“Patents” means all of the following now owned or hereafter acquired by any Grantor: (a) all letters patent of the United States or the equivalent thereof in any other country, all registrations thereof, and all applications for letters patent of the United States or the equivalent thereof in any other country, including registrations and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, including those listed on Schedule IV, and (b) all (i) rights and privileges arising under applicable Law with respect to such Grantor’s use of any patents, (ii) inventions and improvements described and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof and amendments thereto, (iv) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto including damages and payments for past, present or future Infringements thereof, (v) rights corresponding thereto throughout the world and (vi) rights to sue for past, present or future Infringements thereof.

“Perfection Certificate” means a certificate substantially in the form of Exhibit B, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed on behalf of each Grantor.

“Pledged Collateral” has the meaning assigned to such term in Section 2.01.

“Pledged Debt” has the meaning assigned to such term in Section 2.01.

“Pledged Equity” has the meaning assigned to such term in Section 2.01.

“Pledged Securities” means any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all Pledged Equity, Pledged Debt and all other certificates, instruments or other documents representing or evidencing any Pledged Collateral.

4

“Proceeds” means (a) all “proceeds” as defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral, and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.

“Revolving Facility Collateral Agent” has the meaning assigned to such term in the Intercreditor Agreement.

“Revolving Facility Documents” has the meaning assigned to such term in the Intercreditor Agreement.

“Revolving Facility First Lien Collateral” has the meaning assigned to such term in the Intercreditor Agreement.

“Revolving Facility Security Documents” has the meaning assigned to such term in the Intercreditor Agreement.

“Secured Obligations” means the “Finance Obligations” (under and as defined in the Bridge Loan Agreement), the “Finance Obligations” (under and as defined in the Exchange Loan Agreement) and all comparable “Obligations” (under and as defined in the Secured Exchange Note Indenture”); it being acknowledged and agreed that the term “Secured Obligations” as used herein shall include each extension of credit under each of the foregoing, in each case, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.

“Secured Parties” means the “Secured Parties” as such term is defined in the Bridge Loan Agreement, the “Secured Parties” as such term is defined in the Exchange Loan Agreement and the “Secured Parties” as such term is defined in the Secured Exchange Note Indenture.

“Security” shall mean any “security” as such term is defined in Article 8 of the Uniform Commercial Code, any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

“Security Agreement Supplement” means an instrument substantially in the form of Exhibit A hereto.

“Security Interest” has the meaning assigned to such term in Section 3.01(a).

“Term Debt Documents” has the meaning assigned to such term in the Intercreditor Agreement.

“Term Debt Intercreditor Agreement” means the Intercreditor and Collateral Agency Agreement dated as of October 28, 2008 among the Collateral Agent, Banc of America Bridge LLC, as the Bridge Loan Agent, Sky Merger Sub Corporation, the Company and the subsidiaries of the Company named therein (as amended, restated, supplemented or modified from time to time).

5

“Trademark License” means any written agreement, now or hereafter in effect, granting to any third party any right to use any Trademark now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any trademark now or hereafter owned by any third party, and all rights of any Grantor under any such agreement.

“Trademarks” means all of the following now owned or hereafter acquired by any Grantor: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now owned or hereafter adopted, acquired or assigned to, all registrations and applications filed in connection therewith, including registrations and applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, including those listed on Schedule IV and (b) any and all (i) rights and privileges arising under applicable Law with respect to such Grantor’s use of any trademarks, (ii) renewals thereof and amendments thereto, (iii) income, fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with respect thereto, including damages, claims and payments for past, present or future Infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present and future Infringements thereof.

“Uniform Commercial Code” means the UCC (as defined in the Bridge Loan Agreement)

ARTICLE II

Pledge of Securities

Section 2.01 Pledge. As security for the payment or performance, as the case may be, in full of the Secured Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest in all of such Grantor’s right, title and interest in, to and under:

(a) (i) all Equity Interests held by it and listed on Schedule II and any other Equity Interests obtained in the future by such Grantor and the certificates representing all such Equity Interests (the “Pledged Equity”); provided that (x) pledges of voting Equity Interests of each Foreign Subsidiary shall be limited to 65% of the total combined voting power of all Equity Interests of such Foreign Subsidiary at any time; and (y) the Pledged Equity shall not include (A) the Equity Interests of Unrestricted Subsidiaries (until such time as any Unrestricted Subsidiary becomes a Restricted Subsidiary in accordance with the Term Debt Documents, at which time, and without further action, this clause (y)(A) shall no longer apply to the Equity Interests of such Subsidiary), (B) Equity Interests of any Subsidiary of a Foreign Subsidiary, (C) Equity Interests of a Person that is not a direct or indirect wholly owned Subsidiary of a Grantor to the extent prohibited by the terms of such Subsidiary’s Organization Documents, (D) any Margin Stock owned by such Grantor, (E) pledges prohibited by law or by agreements containing anti-assignment clauses not overridden by applicable Law, (F) Equity Interests of Domestic

6

Subsidiaries that are not Material Domestic Subsidiaries of such Grantor and (G) Equity Interests of any Restricted Subsidiary acquired pursuant to a permitted acquisition financed with Indebtedness permitted to be secured under the Bridge Loan Agreement and any other Term Debt Document, if such Equity Interests are pledged as security for such Indebtedness, until such Indebtedness is repaid or becomes unsecured, and (H) Equity Interests of any Subsidiary with respect to which the Collateral Agent has confirmed in writing to the Borrower its reasonable determination that the costs or other consequences (including adverse tax consequences in the reasonable judgment of the Borrower confirmed in writing by notice to the Collateral Agent) of providing a pledge of its Equity Interests or perfection thereof is excessive in view of the benefits to be obtained by the Secured Parties; (ii)(A) the promissory notes and any instruments evidencing indebtedness owned by it and listed opposite the name of such Grantor on Schedule II and (B) any promissory notes and instruments evidencing indebtedness obtained in the future by such Grantor (the “Pledged Debt”); (iii) all other property that may be delivered to and held by the Collateral Agent pursuant to the terms of this Section 2.01; (iv) subject to Section 2.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clauses (i) and (ii) above; (v) subject to Section 2.06, all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (i), (ii), (iii) and (iv) above; and (vi) all Proceeds of, and Security Interests in, any of the foregoing (the items referred to in clauses (i) through (vi) above being collectively referred to as the “Pledged Collateral”).

Notwithstanding the foregoing and anything in this Agreement to the contrary, the Pledged Collateral shall not include Equity Interests and other securities of a Subsidiary to the extent that the pledge of such Equity Interests or other securities results in the Borrower or Holdings being required to file separate financial statements of such Subsidiary with the SEC (or any other governmental agency), but only to the extent necessary to not be subject to such requirement and only for so long as such requirement is in existence. In addition, in the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation or another law, rule or regulation is adopted which would require) the filing with the SEC (or another governmental agency) of separate financial statements of any Subsidiary due to the fact that the Subsidiary’s Capital Stock or other securities secure any Secured Obligations, then the Equity Interests or other securities of such Subsidiary will automatically be deemed to be excluded from the Pledged Collateral, but only to the extent necessary to not be subject to such requirement and only for so long as is required to not be subject to such requirement. In such event, this Agreement may be amended or modified, without the consent of any Secured Party, to the extent necessary to release the security interests in the Equity Interests or other securities that are so deemed to be excluded from the Pledged Collateral. In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted which would permit) such Subsidiary’s Equity Interests or other securities to secure the Secured Obligations in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Equity Interests or other securities of such Subsidiary will automatically be deemed to no longer be excluded from the Pledged Collateral, but only to the extent necessary to not be subject to any such financial statement requirement.

7

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the benefit of the applicable Secured Parties, forever; subject, however, to the terms, covenants and conditions hereinafter set forth.

Section 2.02 Delivery of the Pledged Collateral. (a) Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent, for the benefit of the applicable Secured Parties, any and all Pledged Securities (other than any uncertificated securities, but only for so long as such securities remain uncertificated) and to the extent such Pledged Securities are promissory notes and instruments evidencing Indebtedness, only as are required to be delivered under clause (b) immediately below.

(b) Each Grantor will cause any Indebtedness for borrowed money having an aggregate principal amount equal to or in excess of $5,000,000, which for avoidance of doubt excludes accounts receivable in the ordinary course of business, owed to such Grantor by any Person (other than a Loan Party) to be evidenced by a duly executed promissory note that is pledged and delivered to the Collateral Agent, for the benefit of the applicable Secured Parties, pursuant to the terms hereof (unless the Revolving Facility Collateral Agent is granted a prior security interest in such Pledged Securities and the same are required to be delivered (and are delivered) to the Revolving Facility Collateral Agent pursuant to the Intercreditor Agreement).

(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be accompanied by stock or bond powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be deemed to supplement Schedule II and be made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.

Section 2.03 Representations, Warranties and Covenants. Each Grantor represents, warrants and covenants, as to itself and the other Grantors, to and with the Collateral Agent, for the benefit of the Secured Parties, that:

(a) Schedule II correctly sets forth the percentage of the issued and outstanding units of each class of the Equity Interests of the issuer thereof represented by the Pledged Equity and includes all Equity Interests, the promissory notes and instruments required to be pledged in order to satisfy the Collateral and Guarantee Requirement;

(b) the Pledged Equity issued by the Grantors and Pledged Debt (solely with respect to Pledged Debt issued by a Person other than the Borrower or a Subsidiary of the Borrower, to the best of the Borrower’s knowledge) have been duly and validly authorized and issued by the issuers thereof and (i) in the case of Pledged Equity (other than Pledged Equity consisting of limited liability company interests or partnership interests which, pursuant to the relevant organizational or formation documents, cannot be fully paid and non-assessable), are

8

fully paid and non-assessable and (ii) in the case of Pledged Debt (solely with respect to Pledged Debt issued by a Person other than the Borrower or a Subsidiary of the Borrower, to the best of the Borrower’s knowledge), are legal, valid and binding obligations of the issuers thereof;

(c) except for the security interests granted hereunder, each of the Grantors (i) is and, subject to any transfers made in compliance with the Bridge Loan Agreement and any other Term Debt Documents, will continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule II as owned by such Grantors, (ii) holds the same free and clear of all Liens, other than (A) Liens created by the Collateral Documents and the Revolving Facility Security Documents and (B) nonconsensual Permitted Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than (A) Liens created by the Collateral Documents and the Revolving Facility Documents and (B) Permitted Liens, and (iv) will defend its title or interest thereto or therein against any and all Liens (other than the Liens permitted pursuant to this Section 2.03(c)), however arising, of all Persons whomsoever;

(d) except for (i) restrictions and limitations imposed by the Term Debt Documents or securities laws generally, (ii) in the case of Pledged Equity of Persons that are not wholly owned Subsidiaries, transfer restrictions that exist at the time of acquisition of Equity Interest in such Persons, and (iii) except as described in the Perfection Certificate, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect in any manner material and adverse to the Secured Parties the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder;

(e) each of the Grantors has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated (it being understood that such Grantor’s power and authority to pledge the Equity Interests of a non-wholly owned Subsidiary may be limited by the Organization Documents of such Subsidiary);

(f) except as described in Section 2.03(d) above, no consent or approval of any Governmental Authority, any securities exchange or any other Person was or is necessary to the validity of the pledge effected hereby (other than such as have been obtained and are in full force and effect);

(g) by virtue of the execution and delivery by the Grantors of this Agreement, when any Pledged Securities are delivered to the Collateral Agent in accordance with this Agreement, the Collateral Agent will obtain a legal, valid and perfected lien upon and security interest in such Pledged Securities as security for the payment and performance of the Secured Obligations; and

(h) the pledge effected hereby is effective to vest in the Collateral Agent, for the benefit of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral as set forth herein.

9

Section 2.04 Certification of Limited Liability Company and Limited Partnership Interests. Each interest in any limited liability company or limited partnership controlled by any Grantor and pledged under Section 2.01, to the extent such limited liability company elects to treat its limited liability company interests as “securities” within the meaning of Article 8 of the Uniform Commercial Code, shall be represented by a certificate, shall be a “security” within the meaning of Article 8 of the Uniform Commercial Code and shall be governed by Article 8 of the Uniform Commercial Code; provided that any interest in any limited liability company in existence on the Closing Date that is not certificated at such time shall be certificated within the period set forth on Schedule 6.21(c) to the Bridge Loan Agreement and such equivalent provision in any other Term Debt Document.

Section 2.05 Registration in Nominee Name; Denominations. If an Event of Default shall occur and be continuing and the Collateral Agent shall give the Borrower notice of its intent to exercise such rights, subject to the terms of the Intercreditor Agreement, (a) the Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent and each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Grantor and (b) the Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement; provided that, notwithstanding the foregoing, if a Bankruptcy Event of Default shall have occurred and be continuing, the Collateral Agent shall not be required to give the notice referred to above in order to exercise the rights described above.

Section 2.06 Voting Rights; Dividends and Interest. (a) Unless and until an Event of Default shall have occurred and be continuing and the Collateral Agent shall have notified the Borrower that the rights of the Grantors under this Section 2.06 are being suspended:

(i) Each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement and the other Term Debt Documents; provided that such rights and powers shall not be exercised in any manner that could materially and adversely affect the rights inuring to a holder of any Pledged Securities or the rights and remedies of any of the Collateral Agent or the other Secured Parties under this Agreement or any other Term Debt Document or the ability of the Secured Parties to exercise the same.

(ii) The Collateral Agent shall promptly execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above.

(iii) Each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of

10

the Pledged Securities, to the extent (and only to the extent) that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Bridge Loan Agreement, any other Term Debt Documents and applicable Laws; provided that any non-cash dividends, interest, principal or other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any Grantor, shall not be commingled by such Grantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent and the applicable Secured Parties and shall be forthwith delivered to the Collateral Agent (unless the same are required to be delivered (and are delivered) to the Revolving Facility Collateral Agent pursuant to the Intercreditor Agreement) in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent). So long as no Default or Event of Default has occurred and is continuing, the Collateral Agent shall promptly deliver to each Grantor any Pledged Securities in its possession if requested to be delivered to the issuer thereof in connection with any exchange or redemption of such Pledged Securities.

(b) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified the Borrower of the suspension of the rights of the Grantors under Section 2.06(a)(iii), then all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to Section 2.06(a)(iii) shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions, subject to the terms of the Intercreditor Agreement. All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 2.06 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be forthwith delivered to the Collateral Agent upon demand (unless the same are required to be delivered (and are delivered) to the Revolving Facility Collateral Agent pursuant to the Intercreditor Agreement) in the same form as so received (with any necessary endorsement reasonably requested by the Collateral Agent). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 4.02. At such time as an Event of Default is no longer continuing, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of Section 2.06(a)(iii) in the absence of an Event of Default and that remain in such account.

(c) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified the Borrower of the suspension of the rights of the Grantors under Section 2.06(a)(i), then all rights of any Grantor to exercise the voting and

11

consensual rights and powers it is entitled to exercise pursuant to Section 2.06(a)(i), and the obligations of the Collateral Agent under Section 2.06(a)(ii), shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers, subject to the terms of the Intercreditor Agreement; provided that the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights. After all Events of Default have been cured or waived, each Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that such Grantor would otherwise be entitled to exercise pursuant to the terms of Section 2.06(a)(i), and the obligations of the Collateral Agent under Section 2.06(a)(ii) shall be reinstated.

(d) Any notice given by the Collateral Agent to the Borrower suspending the rights of the Grantors under Section 2.06(a) (i) shall be given in writing, (ii) may be given with respect to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the Grantors under Section 2.06(a)(i) or (iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long as an Event of Default, has occurred and is continuing. Notwithstanding anything to the contrary contained in Section 2.06(a), (b) or (c), if a Bankruptcy Event of Default shall have occurred and be continuing, the Collateral Agent shall not be required to give any notice referred to in said Section in order to exercise any of its rights described in such Section, and the suspension of the rights of each of the Grantors under each such Section shall be automatic upon the occurrence of such Bankruptcy Event of Default.

Section 2.07 Collateral Agent Not a Partner or Limited Liability Company Member. Nothing contained in this Agreement shall be construed to make the Collateral Agent or any other Secured Party liable as a member of any limited liability company or as a partner of any partnership and neither the Collateral Agent nor any other Secured Party by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become the absolute owner of Pledged Equity consisting of a limited liability company interest or a partnership interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Collateral Agent, any other Secured Party, any Grantor and/or any other Person.

ARTICLE III

Security Interests in Personal Property

Section 3.01 Security Interest. (a) As security for the payment or performance, as the case may be, in full of the Secured Obligations, including the Guaranty, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest (the “Security Interest”) in, all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Article 9 Collateral”):

(i) all Accounts;

12

(ii) all Chattel Paper;

(iii) all Documents;

(iv) all Equipment;

(v) all General Intangibles;

(vi) all Instruments;

(vii) all books and records pertaining to the Article 9 Collateral;

(viii) all Goods and Fixtures;

(ix) all Money and Deposit Accounts;

(x) all Commercial Tort Claims described on Schedule III from time to time;

(xi) the Collateral Account, and all cash, securities and other investments deposited therein;

(xii) all Supporting Obligations;

(xiii) all Security Entitlements in any or all of the foregoing;

(xiv) all Intellectual Property Collateral;

(xv) all Inventory; and

(xvi) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

provided that (i) this Agreement shall not constitute a grant of security interest in Intellectual Property to the extent that such a grant of a security interest would result in the forfeiture of the Grantor’s rights in such property, including, without limitation, any Trademark applications filed in the United States Patent and Trademark Office on the basis of any Grantor’s “intent to use,” unless and until a “Statement of Use” or “Amendment to Allege Use” has been filed and accepted in the United States Patent and Trademark Office, whereupon such Trademark application shall be automatically subject to the security interest granted herein and deemed to be included in the Collateral and (ii) notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute a grant of a security interest in (A) motor vehicles and other assets subject to certificates of title, (B) the Equity Interests of Unrestricted Subsidiaries (until

13

such time as any Unrestricted Subsidiary becomes a Restricted Subsidiary in accordance with the Bridge Loan Agreement and any other Term Debt Document, at which time, and without further action, this clause (ii)(B) shall no longer apply to the Equity Interests of such Subsidiary), (C) (1) more than 65% of the total combined voting power of all Equity Interests of any Foreign Subsidiary and (2) Equity Interests of any Subsidiary of a Foreign Subsidiary, (D) any specifically identified asset with respect to which the Collateral Agent has confirmed in writing to the Borrower its determination (to be made in consultation with the Borrower) that the burden or costs of providing a security interest in such asset or perfection thereof is excessive in view of the benefits to be obtained by the Secured Parties, (E) Equity Interests of a Person that is not a direct or indirect wholly owned Subsidiary of a Grantor to the extent prohibited by the terms of such Subsidiary’s Organizational Documents or any applicable law, (F) Equity Interests of Domestic Subsidiaries that are not Material Domestic subsidiaries of such Grantor, (G) Equity Interests of any Restricted Subsidiary acquired pursuant to a permitted acquisition financed with Indebtedness permitted to be secured under the Bridge Loan Agreement and any other Term Debt Document if such Equity Interests are pledged as security for such Indebtedness, until such Indebtedness is repaid or becomes unsecured, and (H) any Margin Stock owned by such Grantor, (I) rights and assets of a Grantor arising under any agreement, contract, lease, instrument, license or other document if (but only to the extent that) the grant of a security interest therein would (1) constitute a violation of a valid and enforceable restriction in respect of such rights in favor of a third party or under any Law, regulation, permit, order or decree of any Governmental Authority, unless and until all required consents shall have been obtained (for the avoidance of doubt, the restrictions described herein are not negative pledges or similar undertakings in favor of a lender or other financial counterparty) or (2) expressly give any other party (other than a Grantor) in respect of any such agreement, contract, lease, instrument, license or other document, the right to terminate or to effect the abandonment, cancellation, acceleration, invalidation or unenforceability of any right, title or interest of any Grantor therein its obligations thereunder, or to effect a modification of such agreement, contract, lease, instrument, license or other document resulting in a material adverse change to the terms thereof for such Grantor, (J) (1) Specified Government Accounts and Specified Government Receivables Deposit Accounts and (2) Excluded Accounts, (K) assets to the extent a security interest in such assets would result in material adverse tax consequences as reasonably determined by the Borrower and (M) any property of Holdings other than its right, title and interest in and to the Capital Stock of the Borrower and all Proceeds and products related thereto, provided that the limitation set forth in clause (K) above shall not affect, limit, restrict or impair the grant by a Grantor of a security interest pursuant to this Agreement in any such Collateral to the extent that an otherwise applicable prohibition or restriction on such grant is rendered ineffective by any applicable Law, including the UCC and provided, further, that the Proceeds from any such contract, lease, instrument or other document shall not be excluded from the definition of Article 9 Collateral to the extent that the assignment of such Proceeds is not prohibited. Each Grantor shall, if requested to do so by the Collateral Agent, use commercially reasonable efforts to obtain any such required consent that is reasonably obtainable with respect to Collateral which the Collateral Agent reasonably determines to be material. Notwithstanding the foregoing and anything in this Agreement to the contrary, the Collateral shall not include Equity Interests and other securities of a Subsidiary to the extent that the pledge of such Equity Interests or other securities results in the Borrower or Holdings being required to file separate financial statements of such Subsidiary with the SEC (or any other governmental agency), but only to the extent

14

necessary to not be subject to such requirement and only for so long as such requirement is in existence. In addition, in the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation or another law, rule or regulation is adopted which would require) the filing with the SEC (or another governmental agency) of separate financial statements of any Subsidiary due to the fact that the Subsidiary’s Capital Stock or other securities secure any Secured Obligations, then the Equity Interests or other securities of such Subsidiary will automatically be deemed to be excluded from the Collateral, but only to the extent necessary to not be subject to such requirement and only for so long as is required to not be subject to such requirement. In such event, this Agreement may be amended or modified, without the consent of any Secured Party, to the extent necessary to release the security interests in the Equity Interests or other securities that are so deemed to be excluded from the Collateral. In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted which would permit) such Subsidiary’s Equity Interests or other securities to secure the Secured Obligations in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Equity Interests or other securities of such Subsidiary will automatically be deemed to no longer be excluded from the Collateral, but only to the extent necessary to not be subject to any such financial statement requirement.

(b) Each Grantor hereby irrevocably authorizes the Collateral Agent for the benefit of the Secured Parties at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that (i) indicate the Collateral as all assets of such Grantor or words of similar effect as being of an equal or lesser scope or with greater detail, and (ii) contain the information required by Article 9 of the Uniform Commercial Code or the analogous legislation of each applicable jurisdiction for the filing of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor and (B) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates. Each Grantor agrees to provide such information to the Collateral Agent promptly upon request.

(c) The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral.

(d) Each Grantor hereby further authorizes the Collateral Agent to file a Grant of Security Interest substantially in the form of Exhibit C, D or E, as applicable, covering relevant Intellectual Property Collateral with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country), as applicable, or any similar offices in any other country and such other documents executed by any Grantor as may be necessary or reasonably advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by such Grantor hereunder, and naming such Grantor, as debtor, and the Collateral Agent, as secured party.

15

(e) Notwithstanding anything to the contrary in this Agreement, the Bridge Loan Agreement or any other Term Debt Document, none of the Grantors shall be required to enter into any deposit account control agreement or securities account control agreement with respect to any deposit account or securities account or Money.

Section 3.02 Representations and Warranties. Each Grantor represents and warrants, as to itself and the other Grantors, to the Collateral Agent and the Secured Parties that:

(a) Each Grantor has good and valid rights (not subject to any Liens other than Permitted Liens) and/or title in the Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder (which rights and/or title, are in any event, sufficient under Section 9-203 of the Uniform Commercial Code), and has full power and authority to grant to the Collateral Agent the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval that has been

(b) The Perfection Certificate has been duly prepared, completed, executed and delivered to the Collateral Agent and the information set forth therein, including the exact legal name of each Grantor, is correct and complete in all material respects as of the Closing Date. The Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations prepared by the Collateral Agent based upon the information provided to the Collateral Agent in the Perfection Certificate for filing in each governmental, municipal or other office in the jurisdiction of organization of each Grantor specified in Section 2(a) of the Perfection Certificate (or specified by notice from the applicable Grantor to the Collateral Agent after the Closing Date in the case of filings, recordings or registrations required by Section 6.19, 6.21 or Article VII of the Bridge Loan Agreement (or such equivalent provision in any other Term Debt Document)), are all the filings, recordings and registrations that are necessary to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable Law with respect to the filing of continuation statements. Each Grantor represents and warrants that, as of the Closing Date, fully executed Grants of Security Interest in the form attached as Exhibit C, D or E, as applicable, containing a description of all Collateral consisting of Intellectual Property with respect to Patents (and Patents for which United States applications are pending), registered Trademarks (and Trademarks for which United States applications to register are pending) or United States registered Copyrights, as applicable, have been delivered to the Collateral Agent for recording in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder or to any similar offices in any other country, as required by applicable Law in such jurisdiction.

(c) The Security Interest constitutes (i) a legal and valid security interest in all the Article 9 Collateral securing the payment and performance of the Secured Obligations, (ii)

16

subject to the filings described in Section 3.02(b), a perfected security interest in all Article 9 Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political subdivision thereof) and its territories and possessions pursuant to the Uniform Commercial Code and (iii) a security interest that shall be perfected in all Collateral in which a security interest may be perfected upon the receipt and recording of the relevant Grants of Security Interest substantially in the form of Exhibits C, D or E hereto with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, within the three month period (commencing as of the date hereof) pursuant to 35 U.S.C. § 261 or 15 U.S.C. § 1060 or the one month period (commencing as of the date hereof) pursuant to 17 U.S.C. § 205 and otherwise as may be required pursuant to the laws of any other necessary jurisdiction. The Security Interest is and shall be prior to any other Lien on any of the Article 9 Collateral, other than any nonconsensual Permitted Lien that has priority as a matter of law and other than, with respect to Revolving Facility First Lien Collateral, Liens created by the Revolving Facility Documents, subject to the terms of the Intercreditor Agreement.

(d) The Article 9 Collateral is owned by the Grantors free and clear of any Lien, except for Permitted Liens. None of the Grantors has filed or consented to the filing of (i) any financing statement or analogous document under the Uniform Commercial Code or any other applicable Laws covering any Article 9 Collateral, (ii) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Collateral with the United States Patent and Trademark Office or the United States Copyright Office, or (iii) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Permitted Liens.

(e) All Commercial Tort Claims of each Grantor in excess of $20,000,000 in existence on the date of this Agreement (or on the date upon which such Grantor becomes a party to this Agreement) are described on Schedule III hereto.

Section 3.03 Covenants. (a) The Borrower agrees to promptly notify the Collateral Agent of any change (i) in the legal name of any Grantor, (ii) in the identity or type of organization or corporate structure of any Grantor, (iii) in the jurisdiction of organization of any Grantor, (iv) in the “location” (as determined in accordance with Section 9-307 of the Uniform Commercial Code) of any Grantor or (v) in the organizational identification number of any Grantor. In addition, if any Grantor does not have an organizational identification number on the Closing Date (or the date such Grantor becomes a party to this Agreement) and later obtains one, the Borrower shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interests (and the priority thereof) of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.

(b) Each Grantor shall, at its own expense, take any and all commercially reasonable actions necessary to defend title to the Article 9 Collateral against all Persons and to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien that is not a Permitted Lien.

17

(c) Each year, at the time of delivery of annual financial statements with respect to the preceding fiscal year pursuant to Section 6.03 of the Bridge Loan Agreement (or such equivalent provision of any other Term Debt Document), the Borrower shall deliver to the Collateral Agent a certificate executed by the chief financial officer and the chief legal officer of the Borrower setting forth the information required pursuant to Sections 1(a), 1(b), 2(a) and 2(c) of the Perfection Certificate or confirming that there has been no change in such information since the date of such certificate or the date of the most recent certificate delivered pursuant to this Section 3.03(c).

(d) The Borrower agrees, on its own behalf and on behalf of each other Grantor, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount payable (other than by a Loan Party) under or in connection with any of the Article 9 Collateral that equals or exceeds $5,000,000 shall be or become evidenced by any promissory note or instrument, such note or instrument shall be promptly pledged and delivered to the Collateral Agent (unless the same is required to be delivered (and is delivered) to the Revolving Facility Collateral Agent pursuant to the Intercreditor Agreement), for the benefit of the Secured Parties, duly endorsed in a manner reasonably satisfactory to the Collateral Agent.

(e) At its option, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral (other than Permitted Liens), and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Bridge Loan Agreement, any other Term Debt Document or this Agreement and within a reasonable period of time after the Collateral Agent has requested that it do so, and each Grantor jointly and severally agrees to reimburse the Collateral Agent within 10 days after demand for any payment made or any reasonable expense incurred by the Collateral Agent pursuant to the foregoing authorization, provided however, that a Grantor shall not be obligated to reimburse the Collateral Agent with respect to any Intellectual Property Collateral which any Grantor has failed to maintain or pursue, or otherwise has allowed to lapse, terminate or put in the public domain, in accordance with Section 4.02(f). Nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Term Debt Documents.

(f) If at any time any Grantor shall take a security interest in any property of an Account Debtor or any other Person the value of which equals or exceeds $5,000,000 to secure payment and performance of an Account, subject to the terms of the Intercreditor

18

Agreement, such Grantor shall promptly assign such security interest to the Collateral Agent for the benefit of the applicable Secured Parties. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other Person granting the security interest.

(g) Each Grantor (rather than the Collateral Agent or any Secured Party) shall remain liable (as between itself and any relevant counterparty) to observe and perform all the conditions and obligations to be observed and performed by it under each contract agreement or instrument relating to the Article 9 Collateral, all in accordance with the terms and conditions thereof, and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance.

Section 3.04 Other Actions. In order to further insure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the Security Interest, each Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with respect to the following Article 9 Collateral:

(a) Instruments. If any Grantor shall at any time hold or acquire any Instrument constituting Collateral and evidencing an amount equal to or in excess of $5,000,000 such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent for the benefit of the applicable Secured Parties (unless the same is required to be delivered (and is delivered) to the Revolving Facility Collateral Agent pursuant to the Intercreditor Agreement), accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request.

(b) Investment Property. Except to the extent otherwise provided in Article II, if any Grantor shall at any time hold or acquire any certificated securities, such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent for the benefit of the applicable Secured Parties (unless the same are required to be delivered (and are delivered) to the Revolving Facility Collateral Agent pursuant to the Intercreditor Agreement), accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request. If any securities now or hereafter acquired by any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, upon the Collateral Agent’s request and following the occurrence of an Event of Default such Grantor shall promptly notify the Collateral Agent thereof and, at the Collateral Agent’s reasonable request, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, unless such Grantor is required to do so (and does so) in favor of the Revolving Facility Collateral Agent, either (i) cause the issuer to agree to comply with instructions from the Collateral Agent as to such securities, without further consent of any Grantor or such nominee, or (ii) arrange for the Collateral Agent to become the registered owner of the securities. If any securities, whether certificated or uncertificated, or other investment property are held by any Grantor (or its nominee through a securities intermediary or commodity intermediary) for more than 45 days and such securities or other investment property exceed $2,000,000 in value, upon the Collateral Agent’s request and following the occurrence of an Event of Default, such Grantor shall immediately notify the Collateral Agent thereof and at the Collateral Agent’s request and option, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral

19

Agent shall, unless such Grantor is required to do so (and does so) in favor of the Revolving Facility Collateral Agent, either (i) cause such securities intermediary or (as the case may be) commodity intermediary to agree to comply with entitlement orders or other instructions from the Collateral Agent to such securities intermediary as to such security entitlements, or (as the case may be) to apply any value distributed on account of any commodity contract as directed by the Collateral Agent to such commodity intermediary, in each case without further consent of any Grantor or such nominee, or (ii) in the case of financial assets or other Investment Property held through a securities intermediary, arrange for the Collateral Agent to become the entitlement holder with respect to such Investment Property, with the Grantor being permitted, only with the consent of the Collateral Agent, to exercise rights to withdraw or otherwise deal with such Investment Property. The Collateral Agent agrees with each of the Grantors that the Collateral Agent shall not give any such entitlement orders or instructions or directions to any such issuer, securities intermediary or commodity intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by any Grantor, unless an Event of Default has occurred and is continuing. The provisions of this paragraph shall not apply to any financial assets credited to a securities account for which the Collateral Agent is the securities intermediary. Each Grantor that is the issuer of Pledged Equity agrees that it will be bound by the terms of this Agreement with respect to the Pledged Equity issued by it and will comply with such terms insofar as such terms are applicable to it.

(c) Commercial Tort Claims. If any Grantor shall at any time after the date of this Agreement acquire a Commercial Tort Claim in an amount (taking the greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of $20,000,000 or more, such Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor and provide supplements to Schedule III describing the details thereof and shall grant to the Collateral Agent a security interest therein and in the proceeds thereof, all upon the terms of this Agreement.

ARTICLE IV

Special Provisions Concerning Intellectual Property Collateral

Section 4.01 Grant of License to Use Intellectual Property. Without limiting the provisions of Section 3.01 hereof or any other rights of the Collateral Agent as the holder of a Security Interest in any Intellectual Property Collateral, for the purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor shall, upon request by the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, grant to the Collateral Agent to the full extent such Grantor is permitted to grant such a license and to the extent that the Collateral Agent does not exercise its rights pursuant to Section 6.01(vi) herein, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Grantors) to use, license or, solely to the extent necessary to exercise such rights and remedies, sublicense any of the Intellectual Property Collateral now owned or hereafter acquired by such Grantor, and wherever the same may be located (whether or not any license agreement by and between any Grantor and any other Person relating to the use of such Intellectual Property Collateral may be terminated hereafter), and, to the extent permitted by such Grantor’s existing contractual obligations, including in such license reasonable access to

20

all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Collateral Agent may be exercised, subject to the terms of the Intercreditor Agreement, at the option of the Collateral Agent, during the continuation of an Event of Default; provided that any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure of an Event of Default and provided, further, that the terms of any license or sublicense shall include all terms and restrictions that customarily required to ensure the continuing validity and effectiveness of the Intellectual Property at issue, such as, without limitation, quality control and inure provisions with regard to Trademarks, patent designation provisions with regard to Patents, and copyright notices and restrictions or decompilation and reverse engineering of copyrighted software. In the event the license set forth in this Section 4.01 is exercised with regard to any Trademarks, then the following shall apply: (i) all goodwill arising from any licensed or sublicensed use of any Trademark shall inure to the Grantor; (ii) the licensed or sublicensed Trademarks shall only be used in association with goods or services of a quality and nature consistent with the quality and reputation with which such Trademarks were associated when used by Grantor prior to the exercise of the license rights set forth herein; and (iii) at the Grantor’s request and expense, licensees and sublicensees shall provide reasonable cooperation in any effort by the Grantor to maintain the registration or otherwise secure the ongoing validity and effectiveness of such licensed Trademarks, including, without limitation the actions and conduct described in Section 4.02 below.

Section 4.02 Protection of Collateral Agent’s Security. (a) Except to the extent that failure to act could not reasonably be expected to have a Material Adverse Effect, with respect to any registration or pending application of each item of its Intellectual Property Collateral for which such Grantor has standing to do so, each Grantor agrees to take, at its expense, all reasonable steps, including, without limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright Office and any other governmental authority located in the United States or with any similar offices in any other country, to (i) maintain the validity and enforceability of any registered Intellectual Property Collateral and maintain such Intellectual Property Collateral in full force and effect, and (ii) pursue the registration and maintenance of each Patent, Trademark, or Copyright registration or application, now or hereafter included in such Intellectual Property Collateral of such Grantor, including, without limitation, the payment of required fees and taxes, the filing of responses to office actions issued by the U.S. Patent and Trademark Office, the U.S. Copyright Office or other governmental authorities or any similar offices in any other country, the filing of applications for renewal or extension, the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing of divisional, continuation, continuation-in-part, reissue and renewal applications or extensions, the payment of maintenance fees and the participation in interference, reexamination, opposition, cancellation, and Infringement proceedings.

(b) Except to the extent that failure to act could not reasonably be expected to have a Material Adverse Effect, no Grantor shall do or permit any act or knowingly omit to do any act whereby any of its Intellectual Property Collateral may prematurely lapse, be terminated, or become invalid or unenforceable or placed in the public domain (or in case of a trade secret, become publicly known).

21

(c) Except to the extent that failure to act could not reasonably be expected to have a Material Adverse Effect, each Grantor shall take all reasonable steps to preserve and protect each item of its Intellectual Property Collateral, including, without limitation, maintaining the quality of any and all products or services used or provided in connection with any of the Trademarks, consistent with the quality of the products and services as of the date hereof, and taking all reasonable steps necessary to ensure that all licensed users of any of the Trademarks abide by the applicable license’s terms with respect to the standards of quality.

(d) Each Grantor agrees that, should it obtain an ownership or other interest in any Intellectual Property Collateral after the Closing Date (i) the provisions of this Agreement shall automatically apply thereto, and (ii) any such Intellectual Property and, in the case of Trademarks, the goodwill symbolized thereby, shall automatically become part of the Intellectual Property Collateral subject to the terms and conditions of this Agreement with respect thereto.

(e) Subject to the requirements and exclusions of Section 3.01, once every fiscal year of the Borrower, each Grantor shall sign and deliver to the Collateral Agent an appropriate Security Agreement Supplement or related Grant of Security Interest substantially in the form of Exhibits A, C, D and E, as applicable, with respect to all such Intellectual Property owned or exclusively licensed by it as licensee as of the last day of such period, to the extent that such Intellectual Property is not covered by any previous Security Agreement Supplement (or Grant of Security Interests) so signed and delivered by it. In each case, it will promptly cooperate as reasonably necessary to enable the Collateral Agent to make any necessary or reasonably desirable recordations with the U.S. Copyright Office or the U.S. Patent and Trademark Office.

(f) Notwithstanding the foregoing provisions of this Section 4.02 or elsewhere in this Agreement, nothing in this Agreement shall prevent any Grantor from disposing of, discontinuing the use or maintenance of, causing or permitting expiration, lapse or abandonment, or failing to renew any applications or registrations of any of its Intellectual Property Collateral to the extent not prohibited by the Bridge Loan Agreement or any other Term Debt Document if such Grantor determines in its reasonable business judgment that such actions are desirable in the conduct of its business.

ARTICLE V

[Reserved]

ARTICLE VI

Remedies

Section 6.01 Remedies Upon Default. Upon the occurrence and during the continuance of an Event of Default, it is agreed that the Collateral Agent shall have the right to exercise any and all rights afforded to a secured party with respect to the Secured Obligations, as applicable, under the Uniform Commercial Code or other applicable Law, and also may, subject to the terms of the Intercreditor Agreement, (i) require each Grantor to, and each Grantor agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part

22

of the Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place and time to be designated by the Collateral Agent that is reasonably convenient to both parties; (ii) occupy any premises owned or, to the extent lawful and permitted, leased by any of the Grantors where the Collateral or any part thereof is assembled or located for a reasonable period in order to effectuate its rights and remedies hereunder or under law, without obligation to such Grantor in respect of such occupation; provided that the Collateral Agent shall provide the applicable Grantor with notice thereof prior to or promptly after such occupancy; (iii) exercise any and all rights and remedies of any of the Grantors under or in connection with the Collateral, or otherwise in respect of the Collateral; provided that the Collateral Agent shall provide the applicable Grantor with notice thereof prior to or promptly after such exercise; (iv) withdraw any and all cash or other Collateral from any Collateral Account and apply such cash and other Collateral to the payment of any and all Secured Obligations in the manner provided in Section 6.02 of this Agreement; (v) subject to the mandatory requirements of applicable Law and the notice requirements described below, sell or otherwise dispose of all or any part of the Collateral securing the Secured Obligations at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate and (vi) with respect to any Intellectual Property Collateral, on demand, cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Intellectual Property Collateral by the applicable Grantors to the Collateral Agent, or license or sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, any such Intellectual Property Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall determine; provided that such terms shall include all terms and restrictions customarily required to ensure the continuing validity and effectiveness of the Intellectual Property at issue, such as, without limitation, quality control and inure provisions with regard to Trademarks, patent designation provisions with regard to Patents, and copyright notices and restrictions or decompilation and reverse engineering of copyrighted software. The Grantors recognize that (a) the Collateral Agent may be unable to effect a public sale of all or a part of the Collateral consisting of securities by reason of certain prohibitions contained in the Securities Act of 1933, 15 U.S.C. §77, (as amended and in effect, the “Securities Act”) or the Securities laws of various states (the “Blue Sky Laws”), but may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such securities for their own account, for investment and not with a view to the distribution or resale thereof, (b) that private sales so made may be at prices and upon other terms less favorable to the seller than if such securities were sold at public sales, (c) that neither the Collateral Agent nor any other Secured Party has any obligation to delay sale of any of the Collateral for the period of time necessary to permit such securities to be registered for public sale under the Securities Act or the Blue Sky Laws, and (d) that private sales made under the foregoing circumstances shall be deemed to have been made in a commercially reasonable manner. Upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any sale of Collateral shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.

23

The Collateral Agent shall give the applicable Grantors 10 days’ written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the Uniform Commercial Code or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. The Collateral Agent may conduct one or more going out of business sales, in the Collateral Agent’s own right or by one or more agents and contractors. Such sale(s) may be conducted upon any premises owned, leased, or occupied by any Grantor. The Collateral Agent and any such agent or contractor, in conjunction with any such sale, may augment the Inventory with other goods (all of which other goods shall remain the sole property of the Collateral Agent or such agent or contractor). Any amounts realized from the sale of such goods which constitute augmentations to the Inventory (net of an allocable share of the costs and expenses incurred in their disposition) shall be the sole property of the Collateral Agent or such agent or contractor and neither any Grantor nor any Person claiming under or in right of any Grantor shall have any interest therein. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor. For purposes of determining the Grantors’ rights in the Collateral, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Secured Obligations paid in full, provided that such terms shall include all terms and restrictions that customarily required to ensure the continuing validity and effectiveness of the Intellectual Property at issue, such as, without

24

limitation, quality control and inure provisions with regard to Trademarks, patent designation provisions with regard to patents, and copyright notices and restrictions or decompilation and reverse engineering of copyrighted software. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court appointed receiver. Any sale pursuant to the provisions of this Section 6.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the Uniform Commercial Code or its equivalent in other jurisdictions.

Subject to the terms of the Intercreditor Agreement, each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) during the continuance of an Event of Default and after notice to the Borrower of its intent to exercise such rights (except in the case of a Bankruptcy Event of Default, in which case no such notice shall be required), for the purpose of (i) making, settling and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance, (ii) making all determinations and decisions with respect thereto and (iii) obtaining or maintaining the policies of insurance required by the Term Debt Documents as they relate to Collateral or to pay any premium in whole or in part relating thereto. All sums disbursed by the Collateral Agent in connection with this paragraph, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, within 10 days of demand, by the Grantors to the Collateral Agent and shall be additional Secured Obligations secured hereby.

By accepting the benefits of this Agreement and each other Collateral Document, the Secured Parties expressly acknowledge and agree that this Agreement and each other Collateral Document may be enforced only by the action of the Collateral Agent and that no other Secured Party shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Parties upon the terms of this Agreement and the other Collateral Documents.

Section 6.02 Application of Proceeds. The Collateral Agent shall apply the proceeds of any collection or sale of Collateral, including any Collateral consisting of cash, (x) among the Bridge Lenders, the Term Lenders and the Senior Secured Note Holders, in accordance with the provisions of the Term Debt Intercreditor Agreement and (y) within each class of the Term Debt, in accordance of the provisions of Section 8.04 of the Bridge Loan Agreement or such equivalent provision of any other Term Debt Document, as applicable, subject to the terms of the Intercreditor Agreement. The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof. It is understood and agreed

25

that the Grantors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Secured Obligations.

ARTICLE VII

Indemnity, Subrogation and Subordination

Each Grantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Borrower or any other Grantor that arise from the existence, payment, performance or enforcement of such Grantor’s Secured Obligations under or in respect of this Agreement or any other Term Debt Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Secured Party against the Borrower or any other Grantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Borrower or any other Grantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Secured Obligations (other than contingent indemnity obligations for then unasserted claims) and all other amounts payable under this Agreement shall have been paid in full and all Secured Hedge Agreements shall have expired or been terminated. If any amount shall erroneously be paid to the Borrower or any other Grantor on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right or (ii) any such indebtedness of the Borrower or any other Grantor, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Collateral Agent to be credited against the payment of the Secured Obligations, whether matured or unmatured, in accordance with the terms of the Bridge Loan Agreement and the other Term Debt Documents.

ARTICLE VIII

Miscellaneous

Section 8.01 Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the Bridge Loan Agreement (or such equivalent provision of any other Term Debt Document).

Section 8.02 Waivers; Amendment. (a) No failure or delay by any Secured Party in exercising any right, remedy, power or privilege hereunder or under any other Term Debt Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder, or any abandonment or discontinuance of steps to enforce such a right, remedy, power or privilege, preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges of the Secured Parties hereunder and under the other Term Debt Documents are cumulative and are not exclusive of any other rights, remedies, powers and privileges that they would otherwise have. No waiver of any provision of any Term Debt Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 8.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the

26

generality of the foregoing, the making of any Loans or purchase of any Notes shall not be construed as a waiver of any Default or Event of Default, regardless of whether any Secured Party may have had notice or knowledge of such Default or Event of Default at the time.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with the Term Debt Intercreditor Agreement and Section 10.01 of the Bridge Loan Agreement (or such equivalent provision of any other Term Debt Document). This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.

Section 8.03 Collateral Agent’s Fees and Expenses; Indemnification. (a) The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its expenses incurred hereunder as provided in Section 10.04 of the Bridge Loan Agreement (or such equivalent provision of any other Term Debt Document).

(b) Without limitation of its indemnification obligations under the other Term Debt Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees against, and hold each Indemnitee harmless from, any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, and reasonably related expenses and disbursements (including the reasonable fees, charges and disbursements of counsel) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to, arising out of, in connection with or as a result of (a) the execution, delivery, enforcement, performance or administration of this Agreement or any other Term Debt Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, or (b) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto and, in each case, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or of any Affiliate, director, officer, employee or agent of such Indemnitee (y) a material breach of this Agreement by such Indemnitee or of any Affiliate, director, officer, employee or agent of such Indemnitee or (z) any dispute among Indemnitees other than claims against any Indemnitee in its capacity or in fulfilling its role as an agent or arranger or any other similar role hereunder and other than any claims arising out of any act or omission of the Borrower or its Affiliates.

(c) Any such amounts payable as provided hereunder shall be additional Secured Obligations secured by the Collateral Documents. The provisions of this Section 8.03

27

shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Term Debt Document, the consummation of the transactions contemplated hereby, the repayment of any of the Secured Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Term Debt Document, or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section 8.03 shall be payable within 10 Business Days of written demand therefor.

Section 8.04 Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

Section 8.05 Survival of Agreement. All covenants, agreements, indemnities, representations and warranties made by the Grantors in the Term Debt Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Term Debt Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Term Debt Documents and the making of any Loans and purchase of any Notes, regardless of any investigation made by any such other party or on its behalf and, notwithstanding that any Secured Party may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended, and shall continue in full force and effect until this Agreement is terminated as provided in Section 8.13 hereof, or with respect to such Grantor or such Grantor is otherwise released from its obligations under this Agreement in accordance with the terms hereof.

Section 8.06 Counterparts; Effectiveness; Several Agreement. This Agreement and each other Term Debt Document may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by telecopier or by electronic pdf copy of an executed counterpart of a signature page to this Agreement and each other Term Debt Document shall be effective as delivery of an original executed counterpart of this Agreement and such other Term Debt Document. This Agreement shall become effective when it shall have been executed by the Grantors and the Collateral Agent and thereafter shall be binding upon and inure to the benefit of each Grantor and the Collateral Agent and their respective permitted successors and assigns, except that no Grantor shall have the right to assign its rights hereunder or any interest herein except as otherwise permitted hereby or by the Bridge Loan Agreement and any other Term Debt Document. This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, restated, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.

Section 8.07 Severability. If any provision of this Agreement or the other Term Debt Documents is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement and the other Term Debt Documents shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

28

Section 8.08 Right of Set-Off. In addition to any rights and remedies of the Lenders, Exchange Lenders and Exchange Note Holders provided by Law, upon the occurrence and during the continuance of any Event of Default, each Lender, Exchange Lender and Exchange Note Holder and their respective Affiliates is authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, without prior notice to the Borrower or any other Loan Party, any such notice being waived by the Borrower (on its own behalf and on behalf of each Loan Party and its Subsidiaries) to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held by, and other Indebtedness at any time owing by, such Lender, Exchange Lender or Exchange Note Holder and their respective Affiliates to or for the credit or the account of the respective Loan Parties and their Subsidiaries against any and all Obligations owing to such Lender, Exchange Lender or Exchange Note Holder and their respective Affiliates hereunder or under any other Term Debt Document, now or hereafter existing, irrespective of whether or not such Agent or such Lender, Exchange Lender or Exchange Note Holder and their respective Affiliates have made demand under this Agreement or any other Term Debt Document and although such Obligations may be contingent or unmatured or are owed to a branch or office of such Lender, Exchange Lender or Exchange Note Holder different from the branch or office holding such deposit or obligated on such indebtedness. Notwithstanding anything to the contrary contained herein, no Lender, Exchange Lender or Exchange Note Holder or their respective Affiliates shall have a right to set off and apply any deposits held or other Indebtedness owing by such Secured Party or its Affiliates to or for the credit or the account of any Subsidiary of a Loan Party which is not a “United States person” within the meaning of Section 7701(a)(30) of the Code unless such Subsidiary is not a direct or indirect subsidiary of the Borrower. Each Secured Party agrees to notify the Borrower and the Administrative Agent promptly after any such set off and application made by such Secured Party; provided that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Administrative Agent and each Secured Party under this Section 8.08 are in addition to other rights and remedies (including other rights of setoff) that the Administrative Agent and such Secured Party may have. Notwithstanding the provisions of this Section 8.08, if at any time any Secured Party or any of its Affiliates maintains one or more deposit accounts for the Borrower or any other Loan Party into which Specified Government Accounts are deposited, such Person shall waive the right of setoff set forth herein.

Section 8.09 GOVERNING LAW. (a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.

(b) ANY LEGAL ACTION OR PROCEEDING ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR

29

INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR AND THE COLLATERAL AGENT CONSENT, IN EACH CASE FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GRANTOR AND THE COLLATERAL AGENT IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION OR OTHER JURISDICTION CHOSEN BY THE AGENTS IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.

Section 8.10 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 8.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 8.11 Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

Section 8.12 Security Interest Absolute. All rights of the Collateral Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Bridge Loan Agreement, any other Term Debt Document, any agreement with respect to any of the Secured Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Bridge Loan Agreement, any other Term Debt Document, or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Secured Obligations or (d) subject only to termination of a Grantor’s obligations hereunder in accordance with the terms of Section 8.13, but without prejudice to reinstatement rights under

30

Article VII of the Bridge Loan Agreement (or such equivalent provision of any other Term Debt Document), any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Secured Obligations or this Agreement.

Section 8.13 Termination or Release. (a) This Agreement, the Security Interest and all other security interests granted hereby shall terminate with respect to all Secured Obligations when (i) the principal of and interest on each Loan and all fees and other Secured Obligations (other than (x) obligations under Secured Hedge Agreements and (y) contingent indemnity obligations) shall have been paid in full and (ii) at such other time as provided in Section 2.05 of the Intercreditor Agreement or Section 9.10 of the Bridge Loan Agreement; provided that in connection with the termination of this Agreement, the Collateral Agent may require such indemnities as it shall reasonably deem necessary or appropriate to protect the Secured Parties against loss on account of credits previously applied to the Secured Obligations that may subsequently be reversed or revoked.

(b) A Grantor which is a Restricted Subsidiary shall automatically be released from its obligations hereunder and the Security Interest in the Collateral of such Grantor shall be automatically released upon the consummation of any transaction permitted by the Bridge Loan Agreement and any other Term Debt Document as a result of which such Grantor ceases to be a Restricted Subsidiary of a Borrower or a Material Subsidiary; provided that the Required Lenders (and the equivalent thereof under any other Term Debt Document) shall have consented to such transaction (to the extent required by the Bridge Loan Agreement or any other Term Debt Document) and the terms of such consent did not provide otherwise.

(c) Upon any sale or other transfer by any Grantor of any Collateral that is permitted under the Bridge Loan Agreement and any other Term Debt Document, or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 9.10 or 10.01 of the Bridge Loan Agreement (or such equivalent provision of any other Term Debt Document), the security interest in such Collateral shall be automatically released.

(d) In connection with any termination or release pursuant to paragraph (a), (b), or (c), the Collateral Agent shall promptly (after reasonable advance notice) execute and deliver to any Grantor, at such Grantor’s expense, all documents that such Grantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 8.13 shall be without recourse to or warranty by the Collateral Agent.

(e) At any time that the respective Grantor desires that the Collateral Agent take any action described in immediately preceding clause (d), it shall, upon request of the Collateral Agent, deliver to the Collateral Agent an officer’s certificate certifying that the release of the respective Collateral is permitted pursuant to paragraph (a), (b) or (c). The Collateral Agent shall have no liability whatsoever to any Secured Party as the result of any release of Collateral by it as permitted (or which the Collateral Agent in good faith believes to be permitted) by this Agreement.

31

Section 8.14 Additional Restricted Subsidiaries. Pursuant to Section 6.16 of the Bridge Loan Agreement (or such equivalent provision of any other Term Debt Document), certain Restricted Subsidiaries of the Loan Parties that were not in existence or not Restricted Subsidiaries on the date of the Bridge Loan Agreement are required to enter in this Agreement as Grantors upon becoming Restricted Subsidiaries. Upon execution and delivery by the Collateral Agent and a Restricted Subsidiary of a Security Agreement Supplement, such Restricted Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of any such instrument shall not require the consent of any other Loan Party hereunder. The rights and obligations of each Loan Party hereunder shall remain in full force and effect notwithstanding the addition of any new Loan Party as a party to this Agreement.

Section 8.15 Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof at any time after and during the continuance of an Event of Default, which appointment is irrevocable and coupled with an interest. Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default and (unless a Bankruptcy Event of Default has occurred and is continuing) delivery of notice by the Collateral Agent to the Borrower of its intent to exercise such rights, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (b) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral; (c) to send verifications of Accounts to any Account Debtor; (d) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (e) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; (f) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent or to a Collateral Account and adjust, settle or compromise the amount of payment of any Account; and (g) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct or that of any of their Affiliates, directors, officers, employees, counsel, agents or attorneys-in-fact.

32

Section 8.16 Recourse; Limited Obligations. This Agreement is made with full recourse to each Grantor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Grantor contained herein, in the Term Debt Documents and the other Term Debt Documents and otherwise in writing in connection herewith or therewith, with respect to the Secured Obligations of each applicable Secured Party. It is the desire and intent of each Grantor and each applicable Secured Party that this Agreement shall be enforced against each Grantor to the fullest extent permissible under the laws applied in each jurisdiction in which enforcement is sought.

Section 8.17 Mortgages. In the event that any of the Collateral hereunder is also subject to a valid and enforceable Lien under the terms of a Mortgage and the terms thereof are inconsistent with the terms of this Agreement, then with respect to such Collateral, the terms of such Mortgage shall control in the case of Fixtures and real estate leases, letting and licenses of, and contracts, and agreements relating to the lease of, real property, and the terms of this Agreement shall control in the case of all other Collateral.

Section 8.18 Intercreditor Agreement. Reference is made to the Intercreditor Agreement. Notwithstanding any other provision contained herein, this Agreement, the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions of the Intercreditor Agreement and, to the extent provided therein, the applicable Revolving Facility Security Documents (as defined therein). In the event of any conflict or inconsistency between the provisions of this Agreement and the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall control.

Section 8.19 Term Debt Intercreditor Agreement. Reference is made to the Term Debt Intercreditor Agreement. Notwithstanding any other provision contained herein, this Agreement, the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions of the Term Debt Intercreditor Agreement. In the event of any conflict or inconsistency between the provisions of this Agreement and the Term Debt Intercreditor Agreement, the provisions of the Term Debt Intercreditor Agreement shall control.

[Signature Pages Follow]

33

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

SKY ACQUISITION LLC
By:	/s/ Michael Dal Bello
	Name:	Michael Dal Bello
	Title:
SKY MERGER SUB CORPORATION
By:	/s/ Michael Dal Bello
	Name:	Michael Dal Bello
	Title:

S-1

[Signature Page to the Bridge Security Agreement]

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

APRIA HEALTHCARE GROUP INC.
APRIA HEALTHCARE, INC.
APRIACARE MANAGEMENT SYSTEMS, INC.
APRIADIRECT.COM, INC.
APRIA HEALTHCARE OF NEW YORK STATE, INC.
CORAM, INC.
By:	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	Executive Vice President
		General Counsel and Secretary

S-2

[Signature Page to the Bridge Security Agreement]

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

CORAM CLINICAL TRIALS, INC.
T2 MEDICAL, INC.
CORAM SPECIALTY INFUSION SERVICES, INC.
CORAM HEALTHCARE CORPORATION OF ALABAMA
CORAM HEALTHCARE CORPORATION OF FLORIDA
CORAM HEALTHCARE CORPORATION OF GREATER D.C.
CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK
CORAM HEALTHCARE CORPORATION OF INDIANA
CORAM HEALTHCARE CORPORATION OF MICHIGAN
CORAM HEALTHCARE CORPORATION OF MISSISSIPPI
CORAM HEALTHCARE CORPORATION OF NEVADA
CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA
CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA
CORAM HOMECARE OF MINNESOTA, INC.
CORAM ALTERNATE SITE SERVICES, INC.
CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS
CORAM HEALTHCARE CORPORATION OF NEW YORK
CORAM HEALTHCARE CORPORATION OF NORTH TEXAS
CORAM HEALTHCARE CORPORATION OF UTAH
CORAMRX, LLC
CORAM HEALTHCARE OF WYOMING, L.L.C.
HEALTHINFUSION, INC.
H.M.S.S., INC.
CORAM SERVICE CORPORATION
By:	/s/ Michael E. Dell
	Name:	Michael E. Dell
	Title:	V.P., General Counsel & Secretary

S-3

[Signature Page to the Bridge Security Agreement]

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

BANK OF AMERICA, N.A.
By:	/s/ David H. Strickert
	Name:	David H. Strickert
	Title:	Senior Vice President

S-4

[Signature Page to the Bridge Security Agreement]

SCHEDULE I TO SECURITY AGREEMENT

GUARANTORS

Apria Healthcare, Inc.

Apria Healthcare of New York State, Inc.

ApriaCare Management Systems, Inc.

ApriaDirect.Com, Inc.

Coram, Inc.

Coram Alternate Site Services, Inc.

Coram Clinical Trials, Inc.

Coram Healthcare Corporation of Alabama

Coram Healthcare Corporation of Florida

Coram Healthcare Corporation of Greater D.C.

Coram Healthcare Corporation of Greater New York

Coram Healthcare Corporation of Indiana

Coram Healthcare Corporation of Massachusetts

Coram Healthcare Corporation of Michigan

Coram Healthcare Corporation of Mississippi

Coram Healthcare Corporation of Nevada

Coram Healthcare Corporation of New York

Coram Healthcare Corporation of North Texas

Coram Healthcare Corporation of Northern California

Coram Healthcare Corporation of South Carolina

Coram Healthcare Corporation of Southern California

Coram Healthcare Corporation of Southern Florida

Coram Healthcare Corporation of Utah

Coram Healthcare of Wyoming, L.L.C.

Coram Homecare of Minnesota, Inc.

Coram Service Corporation

Coram Specialty Infusion Services, Inc.

CoramRx, LLC

HealthInfusion, Inc.

H.M.S.S., INC.

T² MEDICAL, INC.

SCHEDULE II TO SECURITY AGREEMENT

EQUITY INTERESTS

LEGAL NAME	JURISDICTION	STOCK OR EQUITY INTERESTS OUTSTANDING	CERTIFICATE NO.	PERCENTAGE OWNERSHIP
				RECORD OWNER	%
Apria Healthcare Group Inc.	DE	100 Shares	1	Sky Acquisition LLC	100	%
Apria Healthcare, Inc.	DE	1,000 Shares	1	Apria Healthcare Group Inc.	100	%
Apria Healthcare of New York State, Inc.	NY	300 Shares	1	Apria Healthcare, Inc.	100	%
ApriaCare Management Systems, Inc.	DE	100 Shares	1	Apria Healthcare, Inc.	100	%
ApriaDirect.Com, Inc.	DE	1,000 Shares	1	Apria Healthcare, Inc.	100	%
Coram, Inc.	DE	1,000 Shares	1	Apria Healthcare, Inc.	100	%
Coram Alternate Site Services, Inc.	DE	100 Shares	4	Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, Inc.)	100	%
Coram Clinical Trials, Inc. (Formerly CTI Network, Inc.)	DE	500 Shares	3	Coram, Inc.	100	%
Coram Healthcare Corporation of Alabama	DE	100 Shares	03	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Florida	DE	500 Shares	03	T2 MEDICAL, INC.	100	%

Coram Healthcare Corporation of Greater D.C.	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Greater New York	NY	500 Shares	04	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Indiana	DE	100 Shares	03	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Massachusetts	DE	500 Shares	3	Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, Inc.)	100	%
Coram Healthcare Corporation of Michigan	DE	100 Shares	03	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Mississippi	DE	100 Shares	03	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Nevada	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of New York	NY	100 Shares	4	Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, Inc.)	100	%
Coram Healthcare Corporation of North Texas	DE	1,000 Shares	4	Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, Inc.)	100	%
Coram Healthcare Corporation of Northern California	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of South Carolina	DE	100 Shares	03	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Southern California	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Southern Florida	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Healthcare Corporation of Utah	DE	500 Shares	3	Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, Inc.)	100	%

Coram Homecare of Minnesota, Inc.	DE	500 Shares	3	T2 MEDICAL, INC.	100	%
Coram Service Corporation	DE	1000 Shares	13	T2 MEDICAL, INC.	100	%
Coram Specialty Infusion Services, Inc. (Formerly Curaflex Health Services, inc.)	DE	100 Shares	04	T2 MEDICAL, INC.	100	%
HealthInfusion, Inc.	FL	100 Shares	H12088	Coram, Inc.	100	%
H.M.S.S., INC.	DE	1000 Shares	5	Coram, Inc.	100	%
T2 MEDICAL, INC.	DE	100 Shares	TC17402	Coram, Inc.	100	%
Coram Healthcare of Wyoming, L.L.C.	DE	N/A	N/A	Coram Specialty Infusion Services, Inc.	100	%
CoramRx, LLC	DE	N/A	N/A	Coram Specialty Infusion Services, Inc.	100	%

PROMISSORY NOTES

Borrower	UNITED SEATING AND MOBILITY, L.L.C.
Lender/Grantor	APRIA HEALTHCARE, INC.
Principal	$500,000.00
Repayment Schedule	January 1, 2009	$250,000.00
	July 1, 2009	$250,000.00

SCHEDULE III TO SECURITY AGREEMENT

COMMERCIAL TORT CLAIMS

None.

SCHEDULE IV TO SECURITY AGREEMENT

U.S. COPYRIGHT REGISTRATIONS AND APPLICATIONS

TRADEMARKS

APRIA TRADEMARKS

Country	Trademark	Serial No.	Filing Date	Reg. No.	Reg. Date	Status	Renewal Due
USA	APRIA	78/538,197	12/24/2004	3,437,644	05/27/2008	Registered	5/27/2018
USA	APRIA GREAT ESCAPES	75/919,113	9/9/1999	2,724,757	6/10/2003	Registered	6/10/2013
USA	APRIA HEALTHCARE (Class 05,42)	75/389,297	11/13/1997	2,297,368	12/7/1999	Registered	12/7/2009
USA	APRIA HEALTHCARE (Class 05, 10, 12)	78/538,198	12/24/2004	3,437,645	05/27/2008	Registered	5/27/2018
Mexico	APRIA HEALTHCARE & DESIGN	457559	11/10/2000	693136	3/30/2001	Registered	3/30/2011
USA	APRIA HEALTHCARE	74/710,078	8/2/1995	2,232,498	3/16/1999	Registered	3/16/2009
USA	APRIA HOMECARE ESSENTIALS	76/321,047	10/4/2001	2,645,595	11/5/2002	Registered	11/5/2012
USA	APRIA PHARMACY NETWORK	78/538,195	12/24/2004	3,303,530	10/2/2007	Registered	10/2/2017
USA	APRIA RESPIRATORY ASSIST	78/539,988	12/30/2004	3,054,223	1/31/2006	Registered	1/31/2016
USA	HEALING BEGINS AT HOME	78/570,839	2/18/2005	3,220,639	3/20/2007	Registered	3/20/2017
USA	OXYGEN ASSIST	78/380,103	3/8/2004	2,987,407	8/23/2005	Registered	8/23/2015
USA	RESPIMED	74/148,131	3/15/1991	1,699,458	7/7/1992	Registered	7/7/2012
USA	STAR MEDICAL RX	76/273,832	6/20/2001	2,748,165	8/5/2003	Registered	8/5/2013
USA	WASSEROTT’S	73/811,928	7/11/1989	1,618,113	10/16/1990	Registered	10/16/2010
USA	W WASSEROTT’S EVERTHING MEDICAL SINCE 1924 & DESIGN	76/450,880	9/17/2002	2,844,293	5/25/2004	Registered	5/25/2014
USA	APRIA HEALTHCARE	78/539,998	12/30/2004	N/A	N/A	Pending	N/A

APRIA TRADEMARKS

Country	Trademark	Serial No.	Filing Date	Reg. No.	Reg. Date	Status	Renewal Due
USA	APRIA HEALTHCARE	78/980,515	12/30/2004	N/A	N/A	Pending	N/A

CORAM TRADEMARKS

Name of Mark	Registration/App#	Registration Date	Declaration Date	End Date
CORAM	2,763,963	09/16/2003	09/16/2008	09/16/2013
CORAM HEALTHCARE	2,763,962	09/16/2003	09/16/2008	09/16/2013
CELEBRATION OF LIFE CIRCLE AND DESIGN	2,755,831	08/26/2003	08/26/2008	08/26/2013
HEMO-PHIL-A-SAURUS AND DESIGN (CHARACTER)	2,889,862	09/28/2004	09/28/2009	09/28/2014
VON-W-RAPTOR AND DESIGN (CHARACTER)	2,889,864	09/28/2004	09/28/2009	09/28/2014
VON-W-RAPTOR (CHARACTER)	2,889,863	09/28/2004	09/28/2009	09/28/2014
COAG-A-DACTYL	3,014,544	11/15/2005	11/15/2010	11/15/2015
COAG-A-DACTYL DESIGN (CHARACTER)	2,930,441	03/08/2005	03/08/2010	03/08/2015
DAWN-W-RAPTOR	2,947,475	05/10/2005	05/10/2010	05/10/2015
DAWN-W RAPTOR DESIGN (CHARACTER)	2,935,932	03/29/2005	03/26/2010	03/09/2015
CORAM HEALTHCARE ONE TO ONE NUTRITION SUPPORT CONSUMER SATISFACTION PROGRAM	2,761,457	09/09/2003	09/09/2008	09/09/2013
CORAM’S DINO-MITE TEAM	3,014,543	11/15/2005	11/15/2010	11/15/2015
CORAM SPECIALTY INFUSION SERVICES	3,374,859	01/29/2008
RX ORAM SPECIALTY INFUSION SERVICES	3,374,860	01/29/2008

2

CORAM TRADEMARKS

Name of Mark	Registration/App#	Registration Date	Declaration Date	End Date
CORAM SPECIALTY INFUSION SERVICES	3,374,861	01/29/2008
RX CORAM SPECIALTY INFUSION SERVICES	3,374,862	01/29/2008
CORAMRX SPECIALTY PHARMACY SERVICES	3,374,863	01/29/2008
RX CORAMRX SPECIALTY PHARMACY SERVICES	3,374,867	01/29/2008
CORAMRX SPECIALTY PHARMACY SERVICES	3,374,866	01/29/2008
CORAMRX SPECIALTY PHARMACY SERVICES	3,374,864	01/29/2008
HEMO-PHIL-A-SAURUS DESIGN	2,917,777	01/11/2005
EYEON	77/475,470	05/15/2008 (Filing Date)
EYEON THERAPY MANAGEMENT	77/412,866	03/04/2008 (Filing Date)
CORAM SPECIALTY INFUSION SERVICES AN APRIA HEALTHCARE COMPANY	77/405,503	02/25/2008 (Filing Date)
CORAM SPECIALTY INFUSION SERVICES AN APRIA HEALTHCARE COMPANY	77/405,468	02/25/2008 (Filing Date)
CORAMRX SPECIALTY PHARMACY SERVICES AN APRIA HEALTHCARE COMPANY	77/405,488	02/25/2008 (Filing Date)
CORAMRX SPECIALTY PHARMACY SERVICES AN APRIA HEALTHCARE COMPANY	77/405,479	02/25/2008 (Filing Date)
RX CORAM SPECIALTY INFUSION SERVICES AN APRIA HEALTHCARE COMPANY	77/405,496	02/25/2008 (Filing Date)

3

CORAM TRADEMARKS

Name of Mark	Registration/App#	Registration Date	Declaration Date	End Date
RX CORAM SPECIALTY INFUSION SERVICES AN APRIA HEALTHCARE COMPANY	77/405,464	02/25/2008 (Filing Date)
RX CORAMRX SPECIALTY PHARMACY SERVICES AN APRIA HEALTHCARE COMPANY	77/405,483	02/25/2008 (Filing Date)
RX CORAMRX SPECIALTY PHARMACY SERVICES AN APRIA HEALTHCARE COMPANY	77/405,473	02/25/2008 (Filing Date)

PATENTS

Name	Application #	Filing Date	Preliminary Class	End Date
NURSING STAFF MODEL FOR SPECIALTY HOME INFUSION	12/104,021	04/16/2008	604	N/A

COPYRIGHTS

Country	Copyright	Reg. No.	Reg. Date	Status	Renewal Due
USA	APRIA RESPIRATORY ASSIST PROGRAM: Patient education for COPD management	TX-5-875-895	11/28/2003	Registered	07/31/2098

4

Domain Name	Expiration Date
aiscare.com	03/27/2010
apria.com	03/08/2012
apriacare.com	03/06/2012
apriahealthcare.com	03/24/2013
apriajobs.com	05/19/2013
apriapharmacynetwork.com	09/06/2009
coramais.com	03/27/2010
coramboard.com	10/11/2011
coramclinicaltrials.com	05/12/2010
coramct.com	05/12/2010
coramcti.com	05/12/2010
coramhc.com	07/22/2013
coram-hc.com	02/10/2010
coramhc.net	12/20/2016
coramhealthcare.com	07/19/2013
coram-healthcare.com	02/10/2010
coramhemophilia.com	12/27/2014
coraminc.com	06/14/2016
coramrx.com	08/09/2010
ctinetworkinc.com	03/24/2010
erespimed.com	09/08/2013
e-respimed.com	09/08/2013
factorforward.com	10/08/2009
ivmed.com	02/06/2010
myapria.com	06/28/2009
mycoram.com	10/11/2011
nourish.bz	08/04/2011
respimed.com	06/10/2013
starmedicalrx.com	07/31/2009
wenourish.com	08/04/2011
wenourish.net	08/04/2011
wenourish.org	08/04/2011

EXHIBIT A TO SECURITY AGREEMENT

FORM OF SECURITY AGREEMENT SUPPLEMENT

SUPPLEMENT NO.      dated as of                     , to the Security Agreement (as amended, restated, supplemented or otherwise modified, the “Security Agreement”), dated as of October 28, 2008, by and among Sky Merger Sub Corporation and Apria Healthcare Group Inc., a Delaware corporation and successor in interest to Sky Merger Sub Corporation (the “Borrower”), Holdings, the other Grantors party thereto and Bank of America, N.A. as Collateral Agent (in such capacity, the “Collateral Agent”) for the Secured Parties.

A. Reference is made to the Senior Secured Bridge Loan Agreement, dated as of October 28, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “Bridge Loan Agreement”), by and among the Borrower, Guarantors, Administrative Agent, Collateral Agent, the Lenders and other agents from time to time party thereto.¹

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Bridge Loan Agreement and the Security Agreement referred to therein.

C. The Grantors have entered into the Security Agreement in order to induce the Lenders to make Loans. Section 8.14 of the Security Agreement provides that additional Restricted Subsidiaries of the Grantors may become Grantors under the Security Agreement by execution and delivery of an instrument substantially in the form of this Supplement. The undersigned Restricted Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Bridge Loan Agreement to become a Subsidiary Party under the Security Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously made.

Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

Section 1. In accordance with Section 8.14 of the Security Agreement, the New Subsidiary by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all respects as of such earlier date. In furtherance of the foregoing, the New Subsidiary, as security for the payment and performance in full of the Secured Obligations does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Subsidiary’s right, title and interest in and to the Collateral (as defined in the Security Agreement) of the New Subsidiary. Each reference to a “Grantor” in the Security Agreement shall be deemed to include the New Subsidiary. The Security Agreement is hereby incorporated herein by reference.

¹ Recitals to be amended if Senior Secured Notes and Term Loans are issued at time of executing this exhibit.

2

Section 2. The New Subsidiary represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

Section 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary and the Collateral Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

Section 4. The New Subsidiary hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of the location of any and all Collateral of the New Subsidiary and (b) set forth under its signature hereto is the true and correct legal name of the New Subsidiary, its jurisdiction of formation and the location of its chief executive office (or if different, its “location” as determined in accordance with Section 9-307 of the Uniform Commercial Code).

Section 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

Section 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto 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.

Section 8. All communications and notices hereunder shall be in writing and given as provided in Section 8.01 of the Security Agreement.

Section 9. The New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including all Attorney Costs of counsel for the Collateral Agent.

3

IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the date first above written.

[NAME OF NEW SUBSIDIARY]
By:
	Name:
	Title:
Legal Name:
Jurisdiction of Formation:
Location of Chief Executive Office:
BANK OF AMERICA, N.A. as Collateral Agent
By:
	Name:
	Title:

4

SCHEDULE I TO SECURITY AGREEMENT SUPPLEMENT

LOCATION OF COLLATERAL

Description Location

EQUITY INTERESTS

Issuer Number of Certificate Registered Owner Number and Class of Equity Interest Percentage of Equity Interests

PROMISSORY NOTES

Issuer Principal Amount as of the date of issuance (or delivery) Date of Note/Instrument Maturity Date

COMMERCIAL TORT CLAIMS

INTELLECTUAL PROPERTY

((a) U.S. Patents, U.S. Patent Applications, (b) U.S. Trademark Registrations and Applications, (c) U.S. Copyright Registrations and Applications, (d) Domain Names, (e) exclusive Licenses of U.S. Patents, Patent Applications, Trademark Registrations or Applications and Copyrights where the New Subsidiary is the Licensee)

REAL PROPERTY (LEASED AND OWNED)

BANK ACCOUNTS

I

EXHIBIT B TO SECURITY AGREEMENT

Form of Perfection Certificate

I

EXHIBIT C TO SECURITY AGREEMENT

GRANT OF SECURITY INTEREST

IN UNITED STATES TRADEMARKS

This Trademark Security Agreement, dated as of [                    ] by and between [Name of Grantor], a [    ] formed under the laws of [    ] (the “Grantor”), in favor of BANK OF AMERICA, N.A., in its capacity as Collateral Agent pursuant to the Bridge Loan Agreement dated as of the date hereof (in such capacity, the “Grantee”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement of even date herewith (the “Security Agreement”) in favor of the Grantee pursuant to which the Grantor is required to execute and deliver this Trademark Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Grantee, for the benefit of the Secured Parties, to enter into the Bridge Loan Agreement, the Grantor hereby agrees with the Grantee as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

SECTION 2. Grant of Security Interest in Trademark Collateral. The Grantor hereby pledges and grants to the Grantee for the benefit of the Secured Parties a lien on and security interest in and to all of its right, title and interest in, to and under all the Trademarks of the Grantor including, without limitation, those items listed on Schedule I attached hereto and all Proceeds of any and all of the foregoing; provided that with respect to any United States Trademark, applications in the United States Patent and Trademark Office on the basis of any Grantor’s “intent to use” such Trademarks will not be deemed to be Collateral unless and until a “Statement of Use” or “Amendment to Allege Use” has been filed and accepted in the United States Patent and Trademark Office, whereupon such application shall be automatically subject to the security interest granted herein and deemed to be included in the Collateral.

SECTION 3. Security Agreement. The security interest granted pursuant to this Trademark Security Agreement is granted in connection with the Security Agreement and is expressly subject to the terms and conditions thereof. Grantor hereby acknowledges and affirms that the rights and remedies of the Grantee with respect to the security interest in the Trademarks made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. The Security Agreement (and all rights and remedies of the Lenders thereunder) shall remain in full force and effect in accordance with its terms. In the event that any provision of this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

SECTION 4. Purpose. This Agreement has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein with the United States Patent and Trademark Office.

SECTION 5. Termination. Upon the payment in full of the Obligations and termination of the Security Agreement, the Grantee shall, at the reasonable request of the Grantor, execute, acknowledge, and deliver to the Grantor an instrument in writing in recordable form releasing the collateral pledge, grant, lien and security interest in the Trademarks listed on Schedule I attached hereto.

SECTION 6. Counterparts. This Trademark Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Trademark Security Agreement by signing and delivering one or more counterparts.

[signature page follows]

2

IN WITNESS WHEREOF, the Grantor has caused this Trademark Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

Very truly yours,
[NAME OF GRANTOR]
By:
	Name:
	Title:

Accepted and Agreed:

BANK OF AMERICA, N.A.
as Collateral Agent and Grantee
By:
	Name:
	Title:

3

SCHEDULE I

to

GRANT OF SECURITY INTEREST

IN UNITED STATES TRADEMARKS

Owner Trademark Registration No. or Serial No.

4

EXHIBIT D TO SECURITY AGREEMENT

GRANT OF SECURITY INTEREST

IN UNITED STATES PATENTS

This Patent Security Agreement, dated as of [                    ], by and between [Name of Grantor], a [    ] formed under the laws of [    ] (the “Grantor”), in favor of BANK OF AMERICA, N.A., in its capacity as Collateral Agent pursuant to the Bridge Loan Agreement dated as of the date hereof (in such capacity, the “Grantee”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement of even date herewith (the “Security Agreement”) in favor of the Grantee pursuant to which the Grantor is required to execute and deliver this Patent Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Grantee, for the benefit of the Secured Parties, to enter into the Bridge Loan Agreement, the Grantor hereby agrees with the Grantee as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

SECTION 2. Grant of Security Interest in Patent Collateral. The Grantor hereby pledges and grants to the Grantee for the benefit of the Secured Parties a lien on and security interest in and to all of its right, title and interest in, to and under all the Patents of the Grantor including, without limitation, those items listed on Schedule I attached hereto and all Proceeds of any and all of the foregoing.

SECTION 3. Security Agreement. The security interest granted pursuant to this Patent Security Agreement is granted in connection with the Security Agreement and is expressly subject to the terms and conditions thereof. Grantor hereby acknowledges and affirms that the rights and remedies of the Grantee with respect to the security interest in the Patents made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. The Security Agreement (and all rights and remedies of the Lenders thereunder) shall remain in full force and effect in accordance with its terms. In the event that any provision of this Patent Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

SECTION 4. Purpose. This Agreement has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein with the United States Patent and Trademark Office.

SECTION 5. Termination. Upon the payment in full of the Obligations and termination of the Security Agreement, the Grantee shall, at the reasonable request of the Grantor, execute, acknowledge, and deliver to the Grantor an instrument in writing in recordable form releasing the collateral pledge, grant, lien and security interest in the Patents listed on Schedule I attached hereto.

SECTION 6. Counterparts. This Patent Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Patent Security Agreement by signing and delivering one or more counterparts.

[signature page follows]

2

IN WITNESS WHEREOF, the Grantor has caused this Patent Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

Very truly yours,
	[NAME OF GRANTOR]
By:
	Name:
	Title:

Accepted and Agreed:

BANK OF AMERICA, N.A.
as Collateral Agent and Grantee
By:
	Name:
	Title:

3

SCHEDULE I

to

GRANT OF SECURITY INTEREST

IN UNITED STATES PATENTS

OWNER PATENT AND PATENT APPLICATION NUMBER TITLE

4

EXHIBIT E TO SECURITY AGREEMENT

GRANT OF SECURITY INTEREST

IN UNITED STATES COPYRIGHTS

This Copyright Security Agreement, dated as of [                    ], by and between [Name of Grantor], a [    ] formed under the laws of [    ] (the “Grantor”), in favor of BANK OF AMERICA, N.A., in its capacity as Collateral Agent pursuant to the Bridge Loan Agreement dated as of the date hereof (in such capacity, the “Grantee”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement of even date herewith (the “Security Agreement”) in favor of the Grantee pursuant to which the Grantor is required to execute and deliver this Copyright Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the Grantee, for the benefit of the Secured Parties, to enter into the Bridge Loan Agreement, the Grantor hereby agrees with the Grantee as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

SECTION 2. Grant of Security Interest in Copyright Collateral. The Grantor hereby pledges and grants to the Grantee for the benefit of the Secured Parties a lien on and security interest in and to all of its right, title and interest in, to and under all the Copyrights of the Grantor including, without limitation, those items listed on Schedule I attached hereto and all Proceeds of any and all of the foregoing.

SECTION 3. Security Agreement. The security interest granted pursuant to this Copyright Security Agreement is granted in connection with the Security Agreement and is expressly subject to the terms and conditions thereof. Grantor hereby acknowledges and affirms that the rights and remedies of the Grantee with respect to the security interest in the Copyrights made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. The Security Agreement (and all rights and remedies of the Lenders thereunder) shall remain in full force and effect in accordance with its terms. In the event that any provision of this Copyright Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

SECTION 4. Purpose. This Agreement has been executed and delivered by the Grantor for the purpose of recording the grant of security interest herein with the United States Copyright Office.

SECTION 5. Termination. Upon the payment in full of the Obligations and termination of the Security Agreement, the Grantee shall, at the reasonable request of the Grantor, execute,

acknowledge, and deliver to the Grantor an instrument in writing in recordable form releasing the collateral pledge, grant, lien and security interest in the Copyrights listed on Schedule I attached hereto.

SECTION 6. Counterparts. This Copyright Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Copyright Security Agreement by signing and delivering one or more counterparts.

[signature page follows]

2

IN WITNESS WHEREOF, the Grantor has caused this Copyright Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

Very truly yours,
	[NAME OF GRANTOR]
By:
	Name:
	Title:

Accepted and Agreed:

BANK OF AMERICA, N.A.
as Collateral Agent and Grantee
By:
	Name:
	Title:

3

SCHEDULE I

to

GRANT OF SECURITY INTEREST

IN UNITED STATES COPYRIGHTS

Title Registration
Number

4

EX-10.26

Exhibit 10.26

Execution Version

SECURITY AGREEMENT SUPPLEMENT

SUPPLEMENT NO. 1, dated as of July 13, 2010, to the Security Agreement (as amended, restated, supplemented or otherwise modified, the “Security Agreement”), dated as of October 28, 2008, by and among Sky Merger Sub Corporation and Apria Healthcare Group Inc., a Delaware corporation and successor in interest to Sky Merger Sub Corporation, Holdings, the other Grantors party thereto and Bank of America, N.A. (“BofA”) as the initial collateral agent for the Secured Parties.

A. On August 13, 2009, U.S. Bank National Association succeeded BofA as the collateral agent (the “Collateral Agent”) for the Secured Parties pursuant to Section 6.11 of the Intercreditor and Collateral Agency Agreement, dated as of May 27, 2009.

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement.

C. Section 8.14 of the Security Agreement provides that additional Restricted Subsidiaries of the Grantors may become Grantors under the Security Agreement by execution and delivery of an instrument substantially in the form of this Supplement. The undersigned Restricted Subsidiaries (each, a “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Security Agreement to become a Subsidiary Party under the Security Agreement.

Accordingly, the Collateral Agent and each New Subsidiary agree as follows:

Section 1. In accordance with Section 8.14 of the Security Agreement, each New Subsidiary by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and each New Subsidiary hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all respects as of such earlier date and provided further that references to Schedule II of the Security Agreement shall be deemed to refer to the “Equity Interests” section of Schedule I hereto with respect to each of the New Subsidiaries. In furtherance of the foregoing, each New Subsidiary, as security for the payment and performance in full of the Secured Obligations does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of such New Subsidiary’s right, title and interest in and to the Collateral (as defined in the Security Agreement) of such New Subsidiary. Each reference to a “Grantor” in the Security Agreement shall be deemed to include each New Subsidiary. The Security Agreement is hereby incorporated herein by reference.

Section 2. Each New Subsidiary represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable

against it in accordance with its terms.

Section 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of each New Subsidiary and the Collateral Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

Section 4. Each New Subsidiary hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of the location of any and all Collateral of such New Subsidiary and (b) set forth under its signature hereto is the true and correct legal name of each New Subsidiary, its jurisdiction of formation and the location of its chief executive office (or if different, its “location” as determined in accordance with Section 9-307 of the Uniform Commercial Code).

Section 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

Section 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto 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.

Section 8. All communications and notices hereunder shall be in writing and given as provided in Section 8.01 of the Security Agreement.

Section 9. Each New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including all Attorney Costs of counsel for the Collateral Agent.

IN WITNESS WHEREOF, each New Subsidiary and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the date first above written.

AHNY-DME LLC
By:	/S/    ROBERT S. HOLCOMBE
Name:	Robert S. Holcombe
Title:	Executive Vice-President, General Counsel and Secretary
	Legal Name: AHNY-DME LLC
	Jurisdiction of Formation: New York
	Location of Chief Executive Office: 26220 Enterprise Court, Lake Forest, CA 92630

AHNY-IV LLC
By:	/S/    ROBERT S. HOLCOMBE
Name:	Robert S. Holcombe
Title:	Executive Vice-President, General Counsel and Secretary
	Legal Name: AHNY-IV LLC
	Jurisdiction of Formation: New York
	Location of Chief Executive Office: 26220 Enterprise Court, Lake Forest, CA 92630

U.S. Bank National Association, as Collateral Agent
By:	/S/    RAYMOND S. HAVERSTOCK
Name:	Raymond S. Haverstock
Title:	Vice President

SCHEDULE I TO SECURITY AGREEMENT SUPPLEMENT

LOCATION OF COLLATERAL

		AHNY-DME LLC
	Description		Location
		None.
		AHNY-IV LLC
Description				Location
		None.
		EQUITY INTERESTS
		AHNY-DME LLC
Issuer AHNY-DME LLC	Number of Certificate N/A	Registered Owner Apria Healthcare of New York State, Inc.	Number and Class of Equity Interest 100 shares	Percentage of Equity Interests 100%
		AHNY-IV LLC
Issuer AHNY-IV LLC	Number of Certificate N/A	Registered Owner Apria Healthcare, Inc.	Number and Class of Equity Interest 100 shares	Percentage of Equity Interests 100%
		PROMISSORY NOTES
		AHNY-DME LLC
Issuer	Principal Amount as of the date of issuance (or delivery)	Date of Note/Instrument	Maturity Date
		None.

	AHNY-IV LLC
Issuer	Principal Amount as of the date of issuance (or delivery)	Date of Note/Instrument	Maturity Date
	None.

COMMERCIAL TORT CLAIMS

AHNY-DME LLC

None.

AHNY-IV LLC

None.

INTELLECTUAL PROPERTY

AHNY-DME LLC

((a) U.S. Patents, U.S. Patent Applications, (b) U.S. Trademark Registrations and Applications, (c) U.S. Copyright Registrations and Applications, (d) Domain Names, (e) exclusive Licenses of U.S. Patents, Patent Applications, Trademark Registrations or Applications and Copyrights where such New Subsidiary is the Licensee)

None.

AHNY-IV LLC

((a) U.S. Patents, U.S. Patent Applications, (b) U.S. Trademark Registrations and Applications, (c) U.S. Copyright Registrations and Applications, (d) Domain Names, (e) exclusive Licenses of U.S. Patents, Patent Applications, Trademark Registrations or Applications and Copyrights where such New Subsidiary is the Licensee)

None.

REAL PROPERTY (LEASED AND OWNED)

AHNY-DME LLC

None.

AHNY-IV LLC

None.

BANK ACCOUNTS

AHNY-DME LLC

None.

AHNY-IV LLC

None.

EX-10.27

Exhibit 10.27

EXECUTION VERSION

LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT

dated as of

October 28, 2008,

among

BANK OF AMERICA, N.A.,

as Revolving Facility Collateral Agent

BANK OF AMERICA, N.A.,

as Term Debt Collateral Agent,

SKY ACQUISITION LLC,

SKY MERGER SUB CORPORATION,

APRIA HEALTHCARE GROUP INC.

and

the subsidiaries of Apria Healthcare Group Inc. named herein

LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT dated as of October 28, 2008 among BANK OF AMERICA, N.A., as collateral agent for the Revolving Facility Secured Parties referred to herein and BANK OF AMERICA, N.A., as collateral agent for the Term Debt Secured Parties referred to herein, SKY ACQUISITION LLC, SKY MERGER SUB CORPORATION, APRIA HEALTHCARE GROUP INC. and the subsidiaries of APRIA HEALTHCARE GROUP INC. named herein.

Reference is made to (a) the Revolving Facility Credit Agreement (such term and each other capitalized term used and not otherwise defined herein having the meaning assigned to it in Article I), under which the Revolving Facility Lenders have extended and agreed to extend credit to the Borrowers, and (b) the Term Debt Documents. In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Revolving Facility Collateral Agent (for itself and on behalf of the Revolving Facility Secured Parties), the Term Debt Collateral Agent (for itself and on behalf of the Term Debt Secured Parties), the Company and the subsidiaries of the Company party hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Construction; Certain Defined Terms. (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (iii) the words “herein”, “hereof and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles, Sections and Annexes of this Agreement, (v) unless otherwise expressly qualified herein, the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (vi) the term “or” is not exclusive.

1

(b) As used in this Agreement, the following terms have the meanings specified below:

“Asset Sale Proceeds Account” means one or more deposit accounts or securities accounts established or maintained by the Term Debt Collateral Agent or the Revolving Facility Collateral Agent for the sole purpose of holding the proceeds of any sale or other disposition of any Term Debt First Lien Collateral that are required to be held in trust in such account or accounts pursuant to the terms of the Term Debt Documents as in effect on the date hereof (or as modified from time to time to the extent such modifications, taken as a whole, are not materially adverse to the Revolving Facility Secured Parties).

“Bankruptcy Code” means Title 11 of the United States Code.

“Borrowers” means Sky Merger Sub Corporation (to be merged with and into the Company) and the subsidiaries of the Company that are borrowers under the Revolving Facility Credit Agreement.

“Capital Stock” means (a) in the case of a corporation, corporate stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited), and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Collateral” means the Revolving Facility Collateral and the Term Debt Collateral.

“Company” means Apria Healthcare Group Inc., a Delaware corporation.

“Event of Default” means an “Event of Default” under and as defined in the Revolving Facility Documents or the Term Debt Documents, as the context may require.

“Grantor” means Holdings, the Company and each subsidiary of the Company that shall have granted any Lien in favor of the Revolving Facility Collateral Agent or the Term Debt Collateral Agent on any of its assets or properties to secure any of the Obligations.

“Holdings” means Sky Acquisition LLC, a Delaware limited liability company.

“Junior Documents” means (a) in respect of the Term Debt First Lien Collateral, the Revolving Facility Documents, and (b) in respect of the Revolving Facility First Lien Collateral, the Term Debt Documents.

“Junior Liens” means (a) in respect of the Revolving Facility First Lien Collateral, the Term Debt Liens on such Collateral, and (b) in respect of the Term Debt First Lien Collateral, the Revolving Facility Liens on such Collateral.

2

“Junior Representative” means (a) with respect to the Term Debt First Lien Collateral, the Revolving Facility Collateral Agent, and (b) with respect to the Revolving Facility First Lien Collateral, the Term Debt Collateral Agent.

“Junior Secured Obligations” means (a) with respect to the Term Debt Obligations (to the extent such Obligations are secured by the Term Debt First Lien Collateral), the Revolving Facility Obligations, and (b) with respect to Revolving Facility Obligations (to the extent such Obligations are secured by the Revolving Facility First Lien Collateral), the Term Debt Obligations.

“Junior Secured Obligations Collateral” means the Collateral in respect of which the Junior Representative (on behalf of itself and the Junior Secured Obligations Secured Parties) holds a Junior Lien.

“Junior Secured Obligations Secured Parties” means (a) with respect to the Term Debt First Lien Collateral, the Revolving Facility Secured Parties, and (b) with respect to the Revolving Facility First Lien Collateral, the Term Debt Secured Parties.

“Junior Secured Obligations Security Documents” means (a) with respect to the Revolving Facility First Lien Collateral, the Term Debt Security Documents, and (b) with respect to the Term Debt First Lien Collateral, the Revolving Facility Security Documents.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any other agreement to give a security interest therein and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes of any jurisdiction) with respect thereto; provided, however, that in no event shall an operating lease be deemed to constitute a Lien.

“Mortgages” means the Term Debt Mortgages and the Revolving Facility Mortgages.

“New York UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York.

“Obligations” means the Term Debt Obligations and the Revolving Facility Obligations.

“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, joint-stock company, trust, unincorporated organization, association, corporation, government or any agency or political subdivision thereof or any other entity.

3

“Representative” means (a) in the case of any Term Debt Obligations, the Term Debt Collateral Agent, and (b) in the case of any Revolving Facility Obligations, the Revolving Facility Collateral Agent.

“Revolving Facility Administrative Agent” means Bank of America, N.A., in its capacity as administrative agent under the Revolving Facility Credit Agreement, and its successors in such capacity.

“Revolving Facility Collateral” means all assets and properties subject to Liens created by the Revolving Facility Security Documents to secure the Revolving Facility Obligations.

“Revolving Facility Collateral Agent” means Bank of America, N.A., in its capacity as collateral agent under the Revolving Facility Documents, and its successors in such capacity.

“Revolving Facility Credit Agreement” means the Credit Agreement dated as of October 28, 2008, among Holdings, the Company, the other Borrowers named therein, the administrative agent and the collateral agent thereunder, the Revolving Facility Lenders and other agents from time to time party thereto, as amended, extended, renewed, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time, in each case with the same or different lenders and agents.

“Revolving Facility Documents” means the Revolving Facility Credit Agreement and the Revolving Facility Security Documents.

“Revolving Facility First Lien Collateral” means any and all of the following Revolving Facility Collateral now owned or at any time hereafter acquired by the Company or any other Grantor or in which any such Person may have now or in the future any right, title or interest:

(a) all Accounts;

(b) all Inventory;

(c) to the extent evidencing, governing, securing or otherwise related to the items referred to in the preceding clauses (a) and (b), all (i) General Intangibles, (ii) Chattel Paper, (iii) Instruments and (iv) Documents;

(d) all Payment Intangibles (including corporate tax refunds), other than any Payment Intangibles that represent tax refunds in respect of or otherwise relate to real property, Fixtures or Equipment;

(e) all indebtedness of the Company or any of its subsidiaries that arises from cash advances made after the date hereof to enable the obligor or obligors thereon to acquire Inventory;

4

(f) all money and collection accounts, deposit accounts, lock-boxes, securities accounts and commodity accounts and any cash or other assets in any such accounts and all "Cash Equivalents" as defined in the Revolving Facility Credit Agreement on the date hereof (or as modified from time to time to the extent such modifications, taken as a whole, are not materially adverse to the Term Debt Secured Parties)) (other than (i) identifiable cash proceeds in respect of real estate, Fixtures or Equipment and (ii) amounts held in any Asset Sale Proceeds Account to the extent that such amounts (A) do not exceed the amount of proceeds of the sale or other disposition of any Term Debt First Lien Collateral that are deposited in such Asset Sales Proceeds Account plus interest, dividends, earnings and other proceeds thereof, and minus withdrawals thereof that are applied as provided in the applicable Term Debt Document, and (B) are then required to be held in trust in such account under the terms of the applicable Term Debt Document as in effect on the date hereof (or as modified from time to time to the extent such modifications, taken as a whole, are not materially adverse to the Revolving Facility Secured Parties));

(g) all books and records related to the foregoing; and

(h) all Products and Proceeds (including Proceeds of Proceeds) and Supporting Obligations of any and all of the foregoing in whatever form received, including proceeds of insurance policies related to Inventory of any Grantor and business interruption insurance and all collateral security and guarantees given by any other Person with respect to any of the foregoing; provided that Proceeds of Revolving First Lien Collateral described in clause (f) above shall not constitute Revolving First Lien Collateral unless such Proceeds are otherwise described in any of the foregoing clauses (a)—(g).

All capitalized terms used in this definition and not defined elsewhere in this Agreement have the meanings assigned to them in the New York UCC.

“Revolving Facility First Lien Collateral Transition Date” means the earlier of (a) the date on which all the Revolving Facility Obligations shall have been paid in full (other than indemnity payments not yet accrued under the Revolving Facility Documents) and all commitments to extend credit under the Revolving Facility Credit Agreement shall have been terminated and (b) the date on which all Senior Liens on the Revolving Facility First Lien Collateral shall have been released from the Liens created under the Revolving Facility Documents.

“Revolving Facility Lenders” means the Lenders under and as defined in the Revolving Facility Credit Agreement.

“Revolving Facility Liens” means Liens on the Revolving Facility Collateral created under Revolving Facility Security Documents to secure the Revolving Facility Obligations.

5

“Revolving Facility Mortgages” means the mortgages, deeds of trust, leasehold mortgages, assignments of leases and rents, modifications and other security documents that convey or evidence a Lien in favor of the Revolving Facility Collateral Agent (on behalf of the Revolving Facility Secured Parties) on fee or leasehold interests in real property of a Grantor to secure the Revolving Facility Obligations, as amended, extended, renewed, restated, supplemented or otherwise modified from time to time.

“Revolving Facility Obligations” means all “Finance Obligations” (as such term is defined in the Revolving Facility Credit Agreement) under the Revolving Facility Documents, the Secured Hedge Agreements and the Secured Cash Management Agreements (as such terms are defined in the Revolving Facility Credit Agreement).

“Revolving Facility Secured Parties” means, at any time, the Revolving Facility Collateral Agent, the Revolving Facility Administrative Agent, each Revolving Facility Lender, each L/C Issuer (as defined in the Revolving Facility Credit Agreement), each counterparty under any Secured Hedge Agreements and the Secured Cash Management Agreements, the beneficiaries of each indemnification obligation undertaken by any Grantor under any Revolving Facility Document and each other holder of, or obligee in respect of, any Revolving Facility Obligations outstanding at such time.

“Revolving Facility Security Agreement” means the Security Agreement dated as of October 28, 2008 among Holdings, the Company, the subsidiaries of the Company party thereto and the Revolving Facility Collateral Agent, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.

“Revolving Facility Security Documents” means the Revolving Facility Security Agreement, the Grant of Security Interest (as defined in the Revolving Facility Security Agreement), the Deposit Account Control Agreements (as defined in the Revolving Facility Credit Agreement) and any other documents now existing or entered into after the date hereof that create Liens on any assets or properties of any Grantor or any of its subsidiaries to secure any Revolving Facility Obligations.

“Secured Parties” means the Term Debt Secured Parties and the Revolving Facility Secured Parties.

“Security Documents” means the Term Debt Security Documents and the Revolving Facility Security Documents.

“Senior Documents” means (a) in respect of the Term Debt First Lien Collateral, the Term Debt Documents, and (b) in respect of the Revolving Facility First Lien Collateral, the Revolving Facility Documents.

“Senior Liens” means (a) in respect of the Revolving Facility First Lien Collateral, the Revolving Facility Liens on such Collateral, and (b) in respect of the Term Debt First Lien Collateral, the Term Debt Liens on such Collateral.

6

“Senior Representative” means (a) with respect to the Term Debt First Lien Collateral, the Term Debt Collateral Agent, and (b) with respect to the Revolving Facility First Lien Collateral, the Revolving Facility Collateral Agent.

“Senior Secured Bridge Loan Agreement” means the Senior Secured Bridge Loan Agreement, dated as of the date hereof, among the Company, as borrower thereunder, the guarantors party thereto, the administrative agent and collateral agent thereunder and the other agents and lenders from time to time party thereto, as amended, extended, renewed, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time, in each case with the same or different lenders and agents.

“Senior Secured Bridge Loan Documents” means the Senior Secured Bridge Loan Agreement and all other agreements, instruments and other documents (including collateral documents with respect thereto) pursuant to which the Senior Secured Bridge Loans have been or will be made or otherwise setting forth the terms of the Senior Secured Bridge Loans.

“Senior Secured Bridge Loans” means the senior secured fixed rate bridge loans together with any rollover loans, in each case, made pursuant to the Senior Secured Bridge Loan Agreement.

“Senior Secured Notes” means the senior secured notes of the Company issued and sold on or after the Closing Date (as defined in the Senior Secured Notes Indenture) pursuant to the Senior Secured Notes Documents and any exchange notes issued in exchange therefor, in each case, pursuant to the Senior Secured Notes Indenture.

“Senior Secured Notes Documents” means the Senior Secured Notes Indenture, the purchase agreement among the Company, the guarantors party thereto, and the initial purchasers thereunder with respect to the Senior Secured Notes and all other agreements, instruments and other documents (including collateral documents with respect thereto) pursuant to which the Senior Secured Notes have been or will be issued or otherwise setting forth the terms of the Senior Secured Notes.

“Senior Secured Notes Indenture” means the Indenture with respect to the Senior Secured Notes among the Company, as issuer thereunder, the guarantors party thereto and the trustee thereunder.

“Senior Secured Obligations” means (a) with respect to the Revolving Facility Obligations (to the extent such Obligations are secured by the Term Debt First Lien Collateral), the Term Debt Obligations, and (b) with respect to Term Debt Obligations (to the extent such Obligations are secured by the Revolving Facility First Lien Collateral), the Revolving Facility Obligations.

“Senior Secured Obligations Collateral” means the Collateral in respect of which the Senior Representative (on behalf of itself and the applicable Senior Secured Obligations Secured Parties) holds a Senior Lien.

7

“Senior Secured Obligations Secured Parties” means (a) with respect to the Term Debt First Lien Collateral, the Term Debt Secured Parties, and (b) with respect to the Revolving Facility First Lien Collateral, the Revolving Facility Secured Parties.

“Senior Secured Obligations Security Documents” means (a) with respect to the Revolving Facility First Lien Collateral, the Revolving Facility Security Documents, and (b) with respect to the Term Debt First Lien Collateral, the Term Debt Security Documents.

“Senior Secured Term Loan Agreement” means the Term Loan Agreement with respect to the Senior Secured Term Loans among the Company, as borrower thereunder, the guarantors party thereto, the administrative agent and collateral agent thereunder and the other agents and lenders from time to time party thereto.

“Senior Secured Term Loan Documents” means the Senior Secured Term Loan Agreement and all other agreements, instruments and other documents (including collateral documents with respect thereto) pursuant to which the Senior Secured Term Loans have been or will be made or otherwise setting forth the terms of the Senior Secured Term Loans.

“Senior Secured Term Loans” means the senior secured term loans made pursuant to the Senior Secured Term Loan Agreement.

“subsidiary” means, with respect to any Person, (a) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of the Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of that Person or a combination thereof, and (b) any partnership, joint venture or limited liability company of which (i) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (ii) such Person or any subsidiary of such person is a controlling general partner or otherwise controls such entity.

“Term Debt Collateral” means all assets and properties subject to Liens created by the Term Debt Security Documents to secure the Term Debt Obligations.

“Term Debt Collateral Agent” means Bank of America, N.A., in its capacity as collateral agent under each of the Term Debt Security Documents, and its successors in such capacity.

“Term Debt Documents” means the Senior Secured Bridge Loan Documents, the Senior Secured Term Loan Documents and the Senior Secured Notes Documents, as such may be effective from time to time.

8

“Term Debt First Lien Collateral” means any and all Term Debt Collateral other than the Revolving Facility First Lien Collateral.

“Term Debt Liens” means Liens on the Term Debt Collateral created under the Term Debt Security Documents to secure the Term Debt Obligations.

“Term Debt Mortgages” means the mortgages, deeds of trust, leasehold mortgages, assignments of leases and rents, modifications and other security documents that convey or evidence a Lien in favor of the Term Debt Collateral Agent (in each case on behalf of the Term Debt Parties) on fee or leasehold interests in real property of a Grantor to secure Term Debt Obligations, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.

“Term Debt Obligations” means the Senior Secured Bridge Loans, the Senior Secured Term Loans and the Senior Secured Notes, as such may be outstanding from time to time.

“Term Debt Parties” means the Lenders under and as defined in the Senior Secured Bridge Loan Agreement, the Lenders under and as defined in the Senior Secured Term Loan Agreement, and the Noteholders and Holders as defined in the Senior Secured Notes Indenture.

“Term Debt Secured Parties” means, at any time, the Term Debt Collateral Agent, each Term Debt Party, the beneficiaries of each indemnification obligation undertaken by any Grantor under any Term Debt Document and each other holder of, or obligee in respect of, any Term Debt Obligations outstanding at such time.

“Term Debt Security Agreement” means the Security Agreement dated as of October 28, 2008, among Holdings, the Company, the subsidiaries of the Company party thereto and the Term Debt Collateral Agent, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.

“Term Debt Security Documents” means the Term Debt Security Agreement, the Term Debt Mortgages, the Grant of Security Interest (as defined in the Term Debt Security Agreement) and any other documents now existing or entered into after the date hereof that create Liens on any assets or properties of any Grantor to secure any Term Debt Obligations.

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on the date hereof.

9

ARTICLE II

Subordination of Junior Liens; Certain Agreements

SECTION 2.01. Subordination of Junior Liens (a) All Junior Liens in respect of any Collateral are expressly subordinated and made junior in right, priority, operation and effect to any and all Senior Liens in respect of such Collateral, notwithstanding anything contained in this Agreement, the Term Debt Documents, the Revolving Facility Documents or any other agreement or instrument to the contrary, and irrespective of the time, order or method of creation, attachment or perfection of such Junior Liens and Senior Liens or any failure, defect or deficiency or alleged failure, defect or deficiency in any of the foregoing.

(b) It is acknowledged that (i) the aggregate amount of the Senior Secured Obligations may be increased from time to time, (ii) a portion of the Senior Secured Obligations consists or may consist of Indebtedness that is revolving in nature, and the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and (iii) the Senior Secured Obligations may be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, refinanced or otherwise amended or modified from time to time, all without affecting the subordination of the Junior Liens hereunder or the provisions of this Agreement defining the relative rights of the Revolving Facility Secured Parties and the Term Debt Secured Parties. The lien priorities provided for herein shall not be altered or otherwise affected by any amendment, modification, supplement, extension, increase, replacement, renewal, restatement or refinancing of either the Junior Secured Obligations (or any part thereof) or the Senior Secured Obligations (or any part thereof), by the release of any Collateral or of any guarantees for any Senior Secured Obligations or by any action that any Representative or Secured Party may take or fail to take in respect of any Collateral.

SECTION 2.02. No Action With Respect to Junior Secured Obligations Collateral Subject to Senior Liens. No Junior Representative or other Junior Secured Obligations Secured Party shall commence or instruct any Junior Representative to commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, any Junior Secured Obligations Collateral under any Junior Secured Obligations Security Document, applicable law or otherwise, at any time when such Junior Secured Obligations Collateral shall be subject to any Senior Lien and any Senior Secured Obligations secured by such Senior Lien shall remain outstanding or any commitment to extend credit that would constitute Senior Secured Obligations secured by such Senior Lien shall remain in effect, it being agreed that only the Senior Representative, acting in accordance with the applicable Senior Secured Obligations Security Documents, shall be entitled to take any such actions or exercise any such remedies. Notwithstanding the foregoing, any Junior Representative may, subject to Section 2.05, take all such actions as it shall deem necessary to perfect or continue the perfection of its Junior Liens.

10

SECTION 2.03. No Duties of Senior Representative. Each Junior Secured Obligations Secured Party acknowledges and agrees that neither the Senior Representative nor any other Senior Secured Obligations Secured Party shall have any duties or other obligations to such Junior Secured Obligations Secured Party with respect to any Senior Secured Obligations Collateral, other than to transfer to the Junior Representative any proceeds of any such Collateral that constitutes Junior Secured Obligations Collateral remaining in its possession following any sale, transfer or other disposition of such Collateral (in each case, unless the Junior Liens on all such Junior Secured Obligations Collateral are terminated and released prior to or concurrently with such sale, transfer, disposition, payment or satisfaction), the payment and satisfaction in full of the Senior Secured Obligations secured thereby and the termination of any commitment to extend credit that would constitute Senior Secured Obligations secured thereby, or, if the Senior Representative shall be in possession of all or any part of such Collateral after such payment and satisfaction in full and termination, such Collateral or any part thereof remaining, in each case without representation or warranty on the part of the Senior Representative or any Senior Secured Obligations Secured Party. In furtherance of the foregoing, each Junior Secured Obligations Secured Party acknowledges and agrees that until the Senior Secured Obligations secured by any Collateral in respect of which such Junior Secured Obligations Secured Party holds a Junior Lien shall have been paid and satisfied in full and any commitment to extend credit that would constitute Senior Secured Obligations secured thereby shall have been terminated, the Senior Representative shall be entitled, for the benefit of the holders of such Senior Secured Obligations, to sell, transfer or otherwise dispose of or deal with such Collateral as provided herein and in the Senior Secured Obligations Security Documents without regard to any Junior Lien or any rights to which the holders of the Junior Secured Obligations would otherwise be entitled as a result of such Junior Lien. Without limiting the foregoing, each Junior Secured Obligations Secured Party agrees that neither the Senior Representative nor any other Senior Secured Obligations Secured Party shall have any duty or obligation first to marshal or realize upon any type of Senior Secured Obligations Collateral (or any other collateral securing the Senior Secured Obligations), or to sell, dispose of or otherwise liquidate all or any portion of such Collateral (or any other collateral securing the Senior Secured Obligations), in any manner that would maximize the return to the Junior Secured Obligations Secured Parties, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the Junior Secured Obligations Secured Parties from such realization, sale, disposition or liquidation. Each of the Junior Secured Obligations Secured Parties waives any claim such Junior Secured Obligations Secured Party may now or hereafter have against the Senior Representative or any other Senior Secured Obligations Secured Party (or their representatives) arising out of (i) any actions which the Senior Representative or the Senior Secured Obligations Secured Parties take or omit to take (including, actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral and actions with respect to the collection of any claim for all or any

11

part of the Senior Secured Obligations from any account debtor, guarantor or any other party) in accordance with the Senior Secured Obligations Security Documents or any other agreement related thereto or to the collection of the Senior Secured Obligations or the valuation, use, protection or release of any security for the Senior Secured Obligations, (ii) any election by the Senior Representative or any Senior Secured Obligations Secured Parties, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code or (iii) subject to Section 2.06, any borrowing by, or grant of a security interest or administrative expense priority under Section 364 of the Bankruptcy Code by, the Company or any of its subsidiaries, as debtor-in-possession.

SECTION 2.04. No Interference; Payment Over; Reinstatement. (a) Each Junior Secured Obligations Secured Party agrees that (i) it will not take or cause to be taken any action the purpose or effect of which is, or could be, to make any Junior Lien pari passu with, or to give such Junior Secured Obligations Secured Party any preference or priority relative to, any Senior Lien with respect to the Collateral subject to such Senior Lien and Junior Lien or any part thereof, (ii) it will not challenge or question in any proceeding the validity or enforceability of any Senior Secured Obligations or Senior Secured Obligations Security Document, or the validity, attachment, perfection or priority of any Senior Lien, or the validity or enforceability of the priorities, rights or duties established by or other provisions of this Agreement, (iii) it will not take or cause to be taken any action the purpose or intent of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of the Collateral subject to any Junior Lien by any Senior Secured Obligations Secured Parties secured by Senior Liens on such Collateral or any Senior Representative acting on their behalf, (iv) it shall have no right to (A) direct any Senior Representative or any holder of Senior Secured Obligations to exercise any right, remedy or power with respect to the Collateral subject to any Junior Lien or (B) consent to the exercise by any Senior Representative or any other Senior Secured Obligations Secured Party of any right, remedy or power with respect to the Collateral subject to any Junior Lien, (v) it will not institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against any Senior Representative or other Senior Secured Obligations Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to, and neither any Senior Representative nor any other Senior Secured Obligations Secured Party shall be liable for, any action taken or omitted to be taken by such Senior Representative or other Senior Secured Obligations Secured Party with respect to any Collateral securing such Senior Secured Obligations that is subject to any Junior Lien, (vi) it will not seek, and hereby waives any right, to have any Senior Secured Obligations Collateral subject to any Junior Lien or any part thereof marshaled upon any foreclosure or other disposition of such Collateral and (vii) it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement.

(b) The Junior Representative and each other Junior Secured Obligations Secured Party hereby agrees that if it shall obtain possession of any Senior Secured Obligations Collateral or shall realize any proceeds or payment in respect of any such

12

Collateral, pursuant to any Junior Secured Obligations Security Document or by the exercise of any rights available to it under applicable law or in any bankruptcy, insolvency or similar proceeding or through any other exercise of remedies, at any time when any Senior Secured Obligations secured or intended to be secured by such Collateral shall remain outstanding or any commitment to extend credit that would constitute Senior Secured Obligations secured or intended to be secured by such Senior Lien shall remain in effect, then it shall hold such Collateral, proceeds or payment in trust for the Senior Secured Obligations Secured Parties and transfer such Collateral, proceeds or payment, as the case may be, to the Senior Representative reasonably promptly after obtaining actual knowledge or notice from the Senior Secured Obligations Secured Parties that it has possession of such Senior Secured Obligations Collateral or proceeds or payments in respect thereof. Each Junior Secured Obligations Secured Party agrees that if, at any time, it receives notice or obtains actual knowledge that all or part of any payment with respect to any Senior Secured Obligations previously made shall be rescinded for any reason whatsoever, such Junior Secured Obligations Secured Party shall promptly pay over to the Senior Representative any payment received by it and then in its possession or under its control in respect of any Collateral subject to any Senior Lien securing such Senior Secured Obligations and shall promptly turn any Collateral subject to any such Senior Lien then held by it over to the Senior Representative, and the provisions set forth in this Agreement shall be reinstated as if such payment had not been made, until the payment and satisfaction in full of the Senior Secured Obligations. Anything contained herein to the contrary notwithstanding, this Section 2.04(b) shall not apply to any proceeds of Senior Secured Obligations Collateral realized in a transaction not prohibited by the Senior Documents and as to which the possession or receipt thereof by the Junior Representative or other Junior Secured Obligations Secured Party is otherwise permitted by the Senior Documents.

SECTION 2.05. Automatic Release of Junior Liens. (a) The Junior Representative and each other Junior Secured Obligations Secured Party agree that (i) in the event the Senior Secured Obligations Secured Parties release their Lien on any Senior Secured Obligations Collateral subject to any Junior Lien (other than a release in connection with a sale, transfer or other disposition of Senior Secured Obligations Collateral, which shall be governed by clause (a)(ii) below), such Junior Lien on such Collateral shall terminate and be released automatically and without further action unless, at the time of such release by the Senior Secured Obligations Secured Parties, an Event of Default shall then have occurred and be continuing under the Junior Documents (provided that any Junior Lien that would have otherwise been released and terminated pursuant to this clause (a)(i) in the absence of such an Event of Default under the Junior Documents shall terminate and be released automatically and without further action when such Event of Default (and all other Events of Default under the Junior Documents) cease to exist); and (ii) in the event of a sale, transfer or other disposition of Senior Secured Obligations Collateral subject to any Junior Lien (regardless of whether or not an Event of Default has occurred and is continuing under the Junior Documents at the time of such sale, transfer or other disposition), such Junior Lien on such Collateral shall terminate and be released automatically and without further action if the applicable Senior Liens on such Collateral are released and if such sale, transfer or other disposition either (A) is then not prohibited by the Junior Documents or (B) occurs in connection with the

13

foreclosure upon or other exercise of rights and remedies with respect to such Senior Secured Obligations Collateral; provided that such Junior Lien shall remain in place with respect to any proceeds of a sale, transfer or other disposition under this clause (a)(ii) that remain after the satisfaction in full of the Senior Secured Obligations. In addition, for the avoidance of doubt, the Junior Representative and each Junior Secured Obligations Secured Party agree that, with respect to any property or assets that would otherwise constitute Senior Secured Obligations Collateral, the requirement that a Junior Lien attach to, or be perfected with respect to, such property or assets shall be waived automatically and without further action so long as the requirement that a Senior Lien attach to, or be perfected with respect to, such property or assets is waived by the Senior Secured Obligations Secured Parties (or the Senior Representative) in accordance with the Senior Documents and so long as no Event of Default under the Junior Documents shall have occurred, be continuing or would result therefrom at such time.

(b) The Junior Representative agrees to execute and deliver (at the sole cost and expense of the Grantors) all such releases and other instruments as shall reasonably be requested by the Senior Representative to evidence and confirm any release of Junior Secured Obligations Collateral provided for in this Section.

(c) Notwithstanding anything herein to the contrary:

(i) in the event that the Revolving Facility Obligations have been satisfied in full, and the Revolving Facility Collateral Agent and the Revolving Facility Secured Parties release their Lien on the Revolving Facility First Lien Collateral, the Term Debt Liens with respect to the Revolving Facility First Lien Collateral shall not be released.

(ii) in the event that the Term Debt Obligations have been satisfied in full, and the Term Debt Collateral Agent and the Term Debt Secured Parties release their Lien on the Term Debt First Lien Collateral, the Revolving Facility Liens with respect to the Term Debt First Lien Collateral (other than the Revolving Facility Liens with respect to the equity interests of the Restricted Subsidiaries (as defined in the Revolving Facility Credit Agreement) of Holdings pledged to the Revolving Facility Secured Parties pursuant to Article II of the Revolving Facility Security Agreement) shall be released; and

(iii) To the extent that, subsequent to the release of the Term Debt Liens on Collateral, such Term Debt Liens are reinstated or the Grantors grant similar Senior Liens on the Term Debt First Lien Collateral to secure obligations similar to the Term Debt Obligations, then all Revolving Facility Liens on the Term Debt First Lien Collateral in favor of the Revolving Facility Collateral Agent and the Revolving Facility Secured Parties that were released pursuant to the foregoing clause (ii) shall be reinstated as Junior Liens on such Term Debt First Lien Collateral.

SECTION 2.06. Certain Agreements With Respect to Bankruptcy or Insolvency Proceedings. (a) This Agreement shall continue in full force and effect

14

notwithstanding the commencement of any proceeding under the Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law by or against the Company or any of its subsidiaries.

(b) If the Company or any of its subsidiaries shall become subject to a case under the U.S. Bankruptcy Code and shall, as debtor(s)-in-possession, move for approval of financing (“DIP Financing”) to be provided by one or more lenders (the “DIP Lenders”) under Section 364 of the U.S. Bankruptcy Code or the use of cash collateral under Section 363 of the U.S. Bankruptcy Code, each Junior Secured Obligations Secured Party agrees that it will raise no objection to any such financing or to the Liens on the Senior Secured Obligations Collateral securing the same (“DIP Financing Liens”) or to any use of cash collateral that constitutes Senior Secured Obligations Collateral, unless the Senior Secured Obligations Secured Parties, or a representative authorized by the Senior Secured Obligations Secured Parties, shall then oppose or object to such DIP Financing or such DIP Financing Liens or use of cash collateral (and, to the extent that such DIP Financing Liens are senior to, or rank pari passu with, the Senior Liens, the Junior Representative will, for itself and on behalf of the other Junior Secured Obligations Secured Parties, subordinate the Junior Liens on the Senior Secured Obligations Collateral to the Senior Liens and the DIP Financing Liens), so long as the Junior Secured Obligations Secured Parties retain Liens on all the Junior Secured Obligations Collateral, including proceeds thereof arising after the commencement of such proceeding, with the same priority as existed prior to the commencement of the case under the U.S. Bankruptcy Code.

(c) Each Junior Secured Obligations Secured Party agrees that it will not object to or oppose a sale or other disposition of any Senior Secured Obligations Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code if the Senior Secured Obligations Secured Parties shall have consented to such sale or disposition of such Senior Secured Obligations Collateral.

SECTION 2.07. Reinstatement. In the event that any of the Senior Secured Obligations shall be paid in full and such payment or any part thereof shall subsequently, for whatever reason (including an order or judgment for disgorgement of a preference under Title 11 of the United Stated Code, or any similar law, or the settlement of any claim in respect thereof), be required to be returned or repaid, the terms and conditions of this Article II shall be fully applicable thereto until all such Senior Secured Obligations shall again have been paid in full in cash.

SECTION 2.08. Entry Upon Premises by the Revolving Facility Collateral Agent and the Revolving Facility Lenders (a) If the Revolving Facility Collateral Agent takes any enforcement action with respect to the Revolving Facility First Lien Collateral, the Term Debt Secured Parties (i) shall cooperate with the Revolving Facility Collateral Agent (at the sole cost and expense of the Revolving Facility Collateral Agent and subject to the condition that the Term Debt Secured Parties shall have no obligation or duty to take any action or refrain from taking any action that could reasonably be expected to result in the incurrence of any liability or damage to the Term Debt Secured

15

Parties) in its efforts to enforce its security interest in the Revolving Facility First Lien Collateral and to finish any work-in-process and assemble the Revolving Facility First Lien Collateral, (ii) shall not take any action designed or intended to hinder or restrict in any respect the Revolving Facility Collateral Agent from enforcing its security interest in the Revolving Facility First Lien Collateral or from finishing any work-in-process or assembling the Revolving Facility First Lien Collateral, and (iii) subject to the rights of any landlords under real estate leases, shall permit the Revolving Facility Collateral Agent, its employees, agents, advisers and representatives, at the sole cost and expense of the Revolving Facility Secured Parties and upon reasonable advance notice, to enter upon and use the Term Debt First Lien Collateral (including (A) equipment, processors, computers and other machinery related to the storage or processing of records, documents or files and (B) intellectual property), for a period not to exceed 180 days after the taking of such enforcement action, for purposes of (1) assembling and storing the Revolving Facility First Lien Collateral and completing the processing of and turning into finished goods of any Revolving Facility First Lien Collateral consisting of work-in-process, (2) selling any or all of the Revolving Facility First Lien Collateral located on such Term Debt First Lien Collateral, whether in bulk, in lots or to customers in the ordinary course of business or otherwise, (3) removing any or all of the Revolving Facility First Lien Collateral located on such Term Debt First Lien Collateral, or (4) taking reasonable actions to protect, secure and otherwise enforce the rights of the Revolving Facility Secured Parties in and to the Revolving Facility First Lien Collateral; provided, however, that nothing contained in this Agreement shall restrict the rights of the Term Debt Collateral Agent from selling, assigning or otherwise transferring any Term Debt First Lien Collateral prior to the expiration of such 180-day period if the purchaser, assignee or transferee thereof agrees to be bound by the provisions of this Section. If any stay or other order prohibiting the exercise of remedies with respect to the Revolving Facility First Lien Collateral has been entered by a court of competent jurisdiction, such 180-day period shall be tolled during the pendency of any such stay or other order. If the Revolving Facility Collateral Agent conducts a public auction or private sale of the Revolving Facility First Lien Collateral at any of the real property included within the Term Debt First Lien Collateral, the Revolving Facility Collateral Agent shall provide the Term Debt Collateral Agent with reasonable notice and use reasonable efforts to hold such auction or sale in a manner which would not unduly disrupt the Term Debt Collateral Agent’s use of such real property.

(b) During the period of actual occupation, use or control by the Revolving Facility Secured Parties or their agents or representatives of any Term Debt First Lien Collateral, the Revolving Facility Secured Parties shall (i) be responsible for the ordinary course third-party expenses related thereto, including costs with respect to heat, light, electricity, water and real property taxes with respect to that portion of any premises so used or occupied, and (ii) be obligated to repair at their expense any physical damage to such Term Debt First Lien Collateral or other assets or property resulting from such occupancy, use or control, and to leave such Term Debt First Lien Collateral or other assets or property in substantially the same condition as it was at the commencement of such occupancy, use or control, ordinary wear and tear excepted. The Revolving Facility Secured Parties jointly and severally agree to pay, indemnify and hold the Term Debt Collateral Agent and their respective officers, directors, employees and

16

agents harmless from and against any liability, cost, expense, loss or damages, including legal fees and expenses, resulting from the gross negligence or willful misconduct of the Revolving Facility Collateral Agent or any of its agents, representatives or invitees in its or their operation of such facilities. In the event, and only in the event, that in connection with its use of some or all of the premises constituting Term Debt First Lien Collateral, the Revolving Facility Collateral Agent requires the services of any employees of the Company or any of its subsidiaries, the Revolving Facility Collateral Agent shall pay directly to any such employees the appropriate, allocated wages of such employees, if any, during the time periods that the Revolving Facility Collateral Agent requires their services. Notwithstanding the foregoing, in no event shall the Revolving Facility Secured Parties have any liability to the Term Debt Secured Parties pursuant to this Section as a result of any condition (including any environmental condition, claim or liability) on or with respect to the Term Debt First Lien Collateral existing prior to the date of the exercise by the Revolving Facility Secured Parties of their rights under this Section and the Revolving Facility Secured Parties shall have no duty or liability to maintain the Term Debt First Lien Collateral in a condition or manner better than that in which it was maintained prior to the use thereof by the Revolving Facility Secured Parties, or for any diminution in the value of the Term Debt First Lien Collateral that results solely from ordinary wear and tear resulting from the use of the Term Debt First Lien Collateral by the Revolving Facility Secured Parties in the manner and for the time periods specified under this Section 2.08. Without limiting the rights granted in this paragraph, the Revolving Facility Collateral Agent, to the extent that rights have been exercised under this Section 2.08 by the Revolving Facility Collateral Agent, shall cooperate with the Term Debt Secured Parties in connection with any efforts made by the Term Debt Secured Parties to sell the Term Debt First Lien Collateral.

SECTION 2.09. Insurance. Unless and until written notice by the Revolving Facility Collateral Agent to the Term Debt Collateral Agent that the Revolving Facility Obligations have been paid in full and all commitments to extend credit under the Revolving Facility Credit Agreement shall have been terminated, as between the Revolving Facility Collateral Agent, on the one hand, and the Term Debt Collateral Agent on the other hand, only the Revolving Facility Collateral Agent will have the right (subject to the rights of the Grantors under the Revolving Facility Documents and the Term Debt Documents) to adjust or settle any insurance policy or claim covering or constituting Revolving Facility First Lien Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding affecting the Revolving Facility First Lien Collateral. Unless and until written notice by the Term Debt Collateral Agent to the Revolving Facility Collateral Agent that the Term Debt Obligations have been paid in full, as between the Revolving Facility Collateral Agent, on the one hand, and the Term Debt Collateral Agent, on the other hand, only the Term Debt Collateral Agent will have the right (subject to the rights of the Grantors under the Revolving Facility Documents and the Term Debt Documents) to adjust or settle any insurance policy covering or constituting Term Debt First Lien Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding solely affecting the Term Debt First Lien Collateral. To the extent that an insured loss covers or constitutes both Revolving Facility First Lien Collateral and Term Debt First Lien Collateral, then the Revolving Facility Collateral Agent and the Term

17

Debt Collateral Agent will work jointly and in good faith to collect, adjust or settle (subject to the rights of the Grantors under the Revolving Facility Documents and the Term Debt Documents) under the relevant insurance policy.

SECTION 2.10. Refinancings. The Revolving Facility Obligations and the Term Debt Obligations may be refinanced or replaced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is otherwise required to permit the refinancing transaction under any Revolving Facility Document or any Term Debt Document) of any Revolving Facility Secured Party or any Term Debt Secured Party, all without affecting the Lien priorities provided for herein or the other provisions hereof; provided, however, that the holders of any such refinancing or replacement indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of this Agreement pursuant to such documents or agreements (including amendments or supplements to this Agreement) as the Revolving Facility Collateral Agent or the Term Debt Collateral Agent, as the case may be, shall reasonably request and in form and substance reasonably acceptable to the Revolving Facility Collateral Agent or the Term Debt Collateral Agent, as the case may be. In connection with any refinancing or replacement contemplated by this Section 2.10, this Agreement may be amended at the request and sole expense of the Company, and without the consent of either Representative, (a) to add parties (or any authorized agent or trustee therefor) providing any such refinancing or replacement indebtedness, (b) to establish that Liens on any Term Debt First Lien Collateral securing such refinancing or replacement indebtedness shall have the same priority as the Liens on any Term Debt First Lien Collateral securing the indebtedness being refinanced or replaced, and (c) to establish that the Liens on any Revolving Facility First Lien Collateral securing such refinancing or replacement indebtedness shall have the same priority as the Liens on any Revolving Facility First Lien Collateral securing the indebtedness being refinanced or replaced, all on the terms provided for herein immediately prior to such refinancing or replacement.

SECTION 2.11. Amendments to Security Documents (a) Without the prior written consent of the Senior Representative, no Junior Secured Obligations Security Document may be amended, supplemented or otherwise modified or entered into to the extent such amendment, supplement or modification, or the terms of any new Junior Secured Obligations Security Document, would be prohibited by, or would require any Grantor to act or refrain from acting in a manner that would violate, any of the terms of this Agreement.

(b) In the event that the Senior Secured Obligations Secured Parties or the Senior Representative enters into any amendment, waiver or consent in respect of any of the Senior Secured Obligations Security Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Senior Secured Obligations Security Document or changing in any manner the rights of the Senior Representative, the Senior Secured Obligations Secured Parties, the Company or any other Grantor thereunder (including the release of any Liens in Senior Secured Obligations Collateral permitted by Section 2.05), then such amendment, waiver or consent shall apply automatically to any comparable provision of the comparable Junior

18

Secured Obligations Security Document without the consent of the Junior Representative or any Junior Secured Obligations Secured Party and without any action by the Junior Representative, the Company or any other Grantor; provided, however, that written notice of such amendment, waiver or consent shall have been given to the Junior Representative.

SECTION 2.12. Legends. The Revolving Facility Collateral Agent acknowledges with respect to the Revolving Facility Credit Agreement and the Revolving Facility Security Documents, and the Term Debt Collateral Agent acknowledge with respect to the Term Debt Documents and the Term Debt Security Documents, that the Revolving Facility Credit Agreement, the Term Debt Documents and each Term Debt Security Document will contain an appropriate legend substantially similar to the one set forth on Annex I.

ARTICLE III

Gratuitous Bailment for Perfection of Certain Security Interests; Rights Under Permits and Licenses

SECTION 3.01. General. The Senior Representative agrees that if it shall at any time hold a Senior Lien on any Junior Secured Obligations Collateral that can be perfected by the possession or control of such Collateral or of any account in which such Collateral is held, and if such Collateral or any such account is in fact in the possession or under the control of the Senior Representative, the Senior Representative will serve as gratuitous bailee for the Junior Representative for the sole purpose of perfecting the Junior Lien of the Junior Representative on such Collateral. It is agreed that the obligations of the Senior Representative and the rights of the Junior Representative and the other Junior Secured Obligations Secured Parties in connection with any such bailment arrangement will be in all respects subject to the provisions of Article II. Notwithstanding anything to the contrary herein, the Senior Representative will be deemed to make no representation as to the adequacy of the steps taken by it to perfect the Junior Lien on any such Collateral and shall have no responsibility, duty, obligation or liability to the Junior Representative or other Junior Secured Obligations Secured Party or any other person for such perfection or failure to perfect, it being understood that the sole purpose of this Article is to enable the Junior Secured Obligations Secured Parties to obtain a perfected Junior Lien in such Collateral to the extent, if any, that such perfection results from the possession or control of such Collateral or any such account by the Senior Representative. Subject to Section 2.07, at such time as the Senior Secured Obligations secured by the Senior Lien of the Senior Representative shall have been paid and satisfied in full and any commitment to extend credit that would constitute such Senior Secured Obligations shall have been terminated, the Senior Representative shall take all such actions in its power as shall reasonably be requested by the Junior Representative (at the sole cost and expense of the Grantors) to transfer possession or control of such Collateral or any such account (in each case to the extent the Junior Representative has a Lien on such Collateral or account after giving effect to any prior or concurrent releases of Liens) to the Junior Representative.

19

SECTION 3.02. Deposit Accounts. The Company and its subsidiaries, to the extent required by the Revolving Facility Credit Agreement, may maintain from time to time deposit accounts (the “Deposit Accounts) with certain depositary banks in which collections from Inventory and Accounts may be deposited. To the extent that any such Deposit Account is under the control of the Revolving Facility Collateral Agent at any time, the Revolving Facility Collateral Agent will act as gratuitous bailee for the Term Debt Collateral Agent for the purpose of perfecting the Liens of the Term Debt Secured Parties in such Deposit Accounts and the cash and other assets therein as provided in Section 3.01 (but will have no duty, responsibility or obligation to the Term Debt Secured Parties (including, without limitation, any duty, responsibility or obligation as to the maintenance of such control, the effect of such arrangement or the establishment of such perfection) except as set forth in the last sentence of this Section). Unless the Junior Liens on such Revolving Facility First Lien Collateral shall have been or concurrently are released, after the occurrence of the Revolving Facility First Lien Collateral Transition Date, the Revolving Facility Collateral Agent shall (a) to the extent that the same are then under the sole dominion and control of the Revolving Facility Collateral Agent and that such action is otherwise within the power and authority of the Revolving Facility Collateral Agent pursuant to the Revolving Facility Documents, at the request of the Term Debt Collateral Agent, transfer all cash and other assets in any such Deposit Account maintained with the Revolving Facility Collateral Agent to the Term Debt Collateral Agent (and each Grantor hereby authorizes and consents to any such transfer) and (b) at the request of the Term Debt Collateral Agent, cooperate with the Company and the Term Debt Collateral Agent (at the expense of the Company) in permitting control of any other Deposit Accounts to be transferred to the Term Debt Collateral Agent (or for other arrangements with respect to each such Deposit Accounts satisfactory to the Term Debt Collateral Agent to be made).

20

SECTION 3.03. Rights under Permits and Licenses. The Term Debt Collateral Agent agrees that if the Revolving Facility Collateral Agent shall require rights available under any permit or license controlled by the Term Debt Collateral Agent (as certified to the Term Debt Collateral Agent by the Revolving Facility Collateral Agent, upon which the Term Debt Collateral Agent may rely) in order to realize on any Revolving Facility First Lien Collateral, the Term Debt Collateral Agent shall (subject to the terms of the applicable Term Debt Document, including the Term Debt Collateral Agent’s rights to indemnification thereunder) take all such actions as shall be available to it (at the sole expense of the Grantors), consistent with applicable law and reasonably requested by the Revolving Facility Collateral Agent in writing, to make such rights available to the Revolving Facility Collateral Agent, subject to the Term Debt Liens. The Revolving Facility Collateral Agent agrees that if the Term Debt Collateral Agent shall require rights available under any permit or license controlled by the Revolving Facility Collateral Agent (as certified to the Revolving Facility Collateral Agent by the Term Debt Collateral Agent, upon which the Revolving Facility Collateral Agent may rely) in order to realize on any Term Debt First Lien Collateral, the Revolving Facility Collateral Agent shall take all such actions as shall be available to it (at the sole expense of the Grantors), consistent with applicable law and reasonably requested by the Term Debt Collateral Agent in writing, to make such rights available to the Term Debt Collateral Agent, subject to the Revolving Facility Liens.

ARTICLE IV

Existence and Amounts of Liens and Obligations

Whenever a Representative shall be required, in connection with the exercise of its rights or the performance of its obligations hereunder, to determine the existence or amount of any Senior Secured Obligations (or the existence of any commitment to extend credit that would constitute Senior Secured Obligations) or Junior Secured Obligations, or the existence of any Lien securing any such obligations, or the Collateral subject to any such Lien, it may request that such information be furnished to it in writing by the other Representative and shall be entitled to make such determination on the basis of the information so furnished; provided, however, that if a Representative shall fail or refuse reasonably promptly to provide the requested information, the requesting Representative shall be entitled to make any such determination by such method as it may, in the exercise its good faith judgment, determine, including by reliance upon a certificate of the Company. Each Representative may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to the Company or any of its subsidiaries, any Secured Party or any other person as a result of such determination.

21

ARTICLE V

Consent of Grantors

Each Grantor hereby consents to the provisions of this Agreement and the intercreditor arrangements provided for herein and agrees that the obligations of the Grantors under the Security Documents will in no way be diminished or otherwise affected by such provisions or arrangements (except as expressly provided herein).

ARTICLE VI

Representations and Warranties

SECTION 6.01. Representations and Warranties of Each Party. Each party hereto represents and warrants to the other parties hereto as follows:

(a) Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to enter into and perform its obligations under this Agreement.

(b) This Agreement has been duly executed and delivered by such party.

(c) The execution, delivery and performance by such party of this Agreement (i) do not require any consent or approval of, registration or filing with or any other action by any governmental authority of which the failure to obtain could reasonably be expected to have a Material Adverse Effect (as defined in the Revolving Facility Credit Agreement), (ii) will not violate any applicable law or regulation or any order of any governmental authority or any indenture, agreement or other instrument binding upon such party which could reasonably be expected to have a Material Adverse Effect and (iii) will not violate the charter, by-laws or other organizational documents of such party.

SECTION 6.02. Representations and Warranties of Each Representative. Each of the Term Debt Collateral Agent and the Revolving Facility Collateral Agent represents and warrants to the other parties hereto that it is authorized under the applicable Term Debt Document and the Revolving Facility Credit Agreement, respectively, to enter into this Agreement.

22

ARTICLE VII

Miscellaneous

SECTION 7.01. Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail, as follows:

(a) if to the Revolving Facility Collateral Agent, to it at Bank of America, N.A., 335 Madison Avenue, 6th Floor, New York, New York 10017, Attention of Adam Seiden (Telephone No. (212) 503-7421;

(b) if to the Term Debt Collateral Agent, to it at Bank of America, N.A., 1455 Market Street, Mail Code: CA5-701-05-19, San Francisco, CA 94103, Attention of Kevin Ahart (Telephone No. (415)-436-2750);

(c) if to the Company, to it at 26220 Enterprise Court, Lake Forest, California, Attention of General Counsel (Telecopy No. (949) 639-4332)); and

(d) if to any other Grantor, to it in care of the Company as provided in clause (c) above.

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto (and for this purpose a notice to the Company shall be deemed to be a notice to each Grantor). All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt (if a Business Day) and on the next Business Day thereafter (in all other cases) if delivered by hand or overnight courier service or sent by telecopy or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 7.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 7.01. As agreed to in writing among the Company, the Term Debt Collateral Agent and the Revolving Facility Collateral Agent from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable person provided from time to time by such person.

SECTION 7.02. Waivers; Amendment (a) No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.

23

(b) Neither this Agreement nor any provision hereof may be terminated, waived, amended or modified except pursuant to an agreement or agreements in writing entered into by each Representative and the Company; provided, however, that this Agreement may be amended from time to time (x) as provided in Section 2.10 and (y) at the sole request and expense of the Company, and without the consent of either Representative, (i) (A) to add other parties (or any authorized agent thereof or trustee therefor) holding other Term Debt Obligations that are incurred in compliance with the Revolving Facility Documents and the Term Debt Documents, (B) to establish that the Liens on any Term Debt First Lien Collateral securing such other Term Debt Obligations shall be pari passu hereunder with the Liens on such Term Debt First Lien Collateral securing the Term Debt Obligations and senior to the Liens on such Term Debt First Lien Collateral securing any Revolving Facility Obligations, all on the terms provided for herein immediately prior to such amendment and (C) to establish that the Liens on any Revolving Facility First Lien Collateral securing such other Term Debt Obligations shall be pari passu hereunder with the Liens on such Revolving Facility First Lien Collateral securing the Term Debt Obligations and junior and subordinated to the Liens on such Revolving Facility First Lien Collateral securing any Revolving Facility Obligations, all on the terms provided for herein immediately prior to such amendment, and (ii) (A) to add other parties (or any authorized agent thereof or trustee therefor) holding ABL Lenders Debt (as defined in the Senior Secured Bridge Loan Agreement) that is incurred in compliance with the Revolving Facility Documents and the Term Debt Documents, (B) to establish that the Liens on any Revolving Facility First Lien Collateral securing such ABL Lenders Debt shall be pari passu hereunder with the Liens on such Revolving Facility First Lien Collateral securing the Revolving Facility Obligations and senior to the Liens on such Revolving Facility First Lien Collateral securing any Term Debt Obligations, all on the terms provided for herein immediately prior to such amendment and (C) to establish that the Liens on any Term Debt First Lien Collateral securing such ABL Lenders Debt shall be pari passu hereunder with the Liens on such Term Debt First Lien Collateral securing the Revolving Facility Obligations and junior and subordinated to the Liens on such Term Debt First Lien Collateral securing any Term Debt Obligations, all on the terms provided for herein immediately prior to such amendment. Any such additional party and each party hereto shall be entitled to rely upon a certificate delivered by an officer of the Company certifying that such other Term Debt Obligations or ABL Lenders Debt, as the case may be, were issued or borrowed in compliance with the Revolving Facility Documents and the Term Debt Documents. Any amendment of this Agreement that is proposed to be effected without the consent of a Representative as permitted by the proviso to the preceding sentence shall be submitted to such Representative for its review at least 5 Business Days prior to the proposed effectiveness of such amendment.

SECTION 7.03. Parties in Interest. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, as well as the other Term Debt Secured Parties and Revolving Facility Secured Parties, all of whom are intended to be bound by, and to be third party beneficiaries of, this Agreement.

24

SECTION 7.04. Survival of Agreement. All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.

SECTION 7.05. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

SECTION 7.06. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 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.

SECTION 7.07. Governing Law; Jurisdiction; Consent to Service of Process (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party hereto may otherwise have to bring any action or proceeding relating to this Agreement in the courts of any jurisdiction.

(c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

25

(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 7.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 7.08. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 7.09. Headings. Article, Section and Annex headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

SECTION 7.10. Conflicts. In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of any of the other Revolving Facility Documents and/or Term Debt Documents, the provisions of this Agreement shall control; provided, however, that if any of the provisions of the Term Debt Security Documents limit, qualify or conflict with the duties imposed by the provisions of the TIA, the TIA shall control.

SECTION 7.11. Provisions Solely to Define Relative Rights. The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the Revolving Facility Secured Parties, on the one hand, and the Term Debt Secured Parties, on the other hand. None of the Company, any other Grantor or any other creditor thereof shall have any rights or obligations hereunder, except as expressly provided in this Agreement (provided that nothing in this Agreement (other than Sections 2.05, 2.06, 2.10, 2.11 or Article VII) is intended to or will amend, waive or otherwise modify the provisions of the Revolving Facility Credit Agreement or the Term Debt Documents), and neither the Company nor any other Grantor may rely on the terms hereof (other than Sections 2.05, 2.06, 2.10, 2.11, Article VI and Article VII). Nothing in this Agreement is intended to or shall impair the obligations of the Company or any other Grantor, which are absolute and unconditional, to pay the Obligations under the Term Debt Documents and the Revolving Facility Documents as and when the same shall become due and payable in accordance with their terms. Notwithstanding anything to the

26

contrary herein, in any Term Debt Document or any Revolving Facility Document, the Grantors shall not be required to act or refrain from acting (a) pursuant to this Agreement or any Term Debt Document with respect to any Revolving Facility First Lien Collateral in any manner that would cause a default under any Revolving Facility Document, or (b) pursuant to this Agreement or any Revolving Facility Document with respect to any Term Debt First Lien Collateral in any manner that would cause a default under any Term Debt Document.

SECTION 7.12. Certain Terms Concerning Revolving Facility Collateral Agent and Term Debt Collateral Agent. Each of the Revolving Facility Collateral Agent and the Term Debt Collateral Agent is executing and delivering this Agreement solely in its capacity as such and pursuant to direction set forth in the Revolving Facility Credit Agreement or the applicable Term Debt Document; and in so doing, neither the Term Debt Collateral Agent nor the Revolving Facility Collateral Agent shall be responsible for the terms or sufficiency of this Agreement for any purpose. Neither the Term Debt Collateral Agent nor the Revolving Facility Collateral Agent shall have any duties or obligations under or pursuant to this Agreement other than such duties as may be expressly set forth in this Agreement as duties on its part to be performed or observed. In entering into this Agreement, or in taking (or forbearing from) any action under or pursuant to the Agreement, each of the Term Debt Collateral Agent and the Revolving Facility Collateral Agent shall have and be protected by all of the rights, immunities, indemnities and other protections granted to it under the Term Debt Documents and, in the case of the Term Debt Collateral Agent, the Term Debt Security Agreement.

SECTION 7.13. Certain Terms Concerning Revolving Facility Collateral Agent and Term Debt Collateral Agent. Neither the Revolving Facility Collateral Agent nor the Term Debt Collateral Agent shall have any liability or responsibility for the actions or omissions of any other Secured Party, or for any other Secured Party’s compliance with (or failure to comply with) the terms of this Agreement. Neither the Revolving Facility Collateral Agent nor the Term Debt Collateral Agent shall have individual liability to any Person if it shall mistakenly pay over or distribute to any Secured Party (or the Company) any amounts in violation of the terms of this Agreement, so long as the Revolving Facility Collateral Agent or Term Debt Collateral Agent, as the case may be, is acting in good faith.

[Remainder of this page intentionally left blank]

27

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

BANK OF AMERICA, N.A., as Revolving Facility Collateral Agent,
By:	/s/ Michael Lemiszko
	Name: Michael Lemiszko
	Title: Senior Vice President
BANK OF AMERICA, N.A., as Term Debt Collateral Agent,
By:	/s/ Michael Lemiszko
	Name: Michael Lemiszko
	Title: Senior Vice President

S-1

[Signature page to the Lien Subordination and Intercreditor Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

SKY ACQUISITION LLC
By:	/s/ Michael Dal Bello
	Name:
	Title:
SKY MERGER SUB CORPORATION
By:	/s/ Michael Dal Bello
	Name:
	Title:

S-2

[Signature page to the Lien Subordination and Intercreditor Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

APRIA HEALTHCARE GROUP INC. APRIA HEALTHCARE, INC. APRIACARE MANAGEMENT SYSTEMS, INC. APRIADIRECT.COM, INC. APRIA HEALTHCARE OF NEW YORK STATE, INC. CORAM, INC.
By:	/s/ Robert S. Holcombe
	Name:	Robert S. Holcombe
	Title:	Executive Vice President
		General Counsel and Secretary

S-3

[Signature page to the Lien Subordination and Intercreditor Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

CORAM CLINICAL TRIALS, INC.
T2 MEDICAL, INC.
CORAM SPECIALTY INFUSION SERVICES, INC.
CORAM HEALTHCARE CORPORATION OF ALABAMA
CORAM HEALTHCARE CORPORATION OF FLORIDA
CORAM HEALTHCARE CORPORATION OF GREATER D.C.
CORAM HEALTHCARE CORPORATION OF GREATER NEW YORK
CORAM HEALTHCARE CORPORATION OF INDIANA
CORAM HEALTHCARE CORPORATION OF MICHIGAN
CORAM HEALTHCARE CORPORATION OF MISSISSIPPI
CORAM HEALTHCARE CORPORATION OF NEVADA
CORAM HEALTHCARE CORPORATION OF NORTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTH CAROLINA
CORAM HEALTHCARE CORPORATION OF SOUTHERN CALIFORNIA
CORAM HEALTHCARE CORPORATION OF SOUTHERN FLORIDA
CORAM HOMECARE OF MINNESOTA, INC.
CORAM ALTERNATE SITE SERVICES, INC.
CORAM HEALTHCARE CORPORATION OF MASSACHUSETTS
CORAM HEALTHCARE CORPORATION OF NEW YORK
CORAM HEALTHCARE CORPORATION OF NORTH TEXAS
CORAM HEALTHCARE CORPORATION OF UTAH
CORAMRX, LLC
CORAM HEALTHCARE OF WYOMING, L.L.C.
HEALTHINFUSION, INC.
H.M.S.S., INC.
CORAM SERVICE CORPORATION
By:	/s/ Michael E. Dell
	Name:	Michael E. Dell
	Title:	V.P., General Counsel & Secretary

S-4

[Signature page to the Lien Subordination and Intercreditor Agreement]

ANNEX I

Provision for the Revolving Facility Credit Agreement and the Term Debt Documents.

Reference is made to the Lien Subordination and Intercreditor Agreement dated as of October 28, 2008, among Bank of America, N.A., as collateral agent for the Revolving Facility Secured Parties referred to therein and Bank of America, N.A., as collateral agent for the Term Debt Secured Parties referred to therein; Sky Acquisition LLC; Apria Healthcare Group Inc. and the subsidiaries of Apria Healthcare Group Inc. named therein (the “Intercreditor Agreement”). Each [Lender][Term Debt Party] (a) consents to the subordination of Liens provided for in the Intercreditor Agreement, (b) agrees that it will be bound by and will take no actions contrary to the provisions of the Intercreditor Agreement and (c) authorizes and instructs the [Revolving Facility Collateral Agent][Term Debt Collateral Agent] to enter into the Intercreditor Agreement as [Revolving Facility Collateral Agent][Term Debt Collateral Agent] and on behalf of such [Lender][Term Debt Party]. The foregoing provisions are intended as an inducement to the [Revolving Facility Lenders][Term Debt Parties] to enter into arrangements contemplated by the [Revolving Facility Documents][Term Debt Documents] and such [Lenders] [Term Debt Parties] are intended third party beneficiaries of such provisions and the provisions of the Intercreditor Agreement.

Provision for Revolving Facility Security Documents and Term Debt Security Documents

Reference is made to the Lien Subordination and Intercreditor Agreement dated as of October 28, 2008, among Bank of America, N.A., as collateral Agent for the Revolving Facility Secured Parties referred to therein, Bank of America, N.A., as collateral agent for the Term Debt Secured Parties referred to therein; Sky Acquisition LLC; Apria Healthcare Group Inc. and the subsidiaries of Apria Healthcare Group Inc. named therein (the “Intercreditor Agreement”). Notwithstanding any other provision contained herein, this Agreement, the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions of the Intercreditor Agreement and, to the extent provided therein, the applicable Senior Secured Obligations Security Documents (as defined in the Intercreditor Agreement). In the event of any conflict or inconsistency between the provisions of this Agreement and the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall control.

EX-12.1

Exhibit 12.1

Ex-12.1 Computation Of Ratio Of Earnings To Fixed Charges

	Year Ended December 31,						Period January 1, 2008 to October 28, 2008		Period October 29, 2008 to December 31, 2008			Year Ended December 31, 2009			Three Months Ended March 31, 2009		Three Months Ended March 31, 2010
	2005		2006		2007
	(Predecessor)		(Predecessor)		(Predecessor)		(Predecessor)		(Successor)			(Successor)			(Successor)		(Successor)
	(dollars in thousands)
Earnings:
Income (loss) before taxes	$	109,160	$	117,560	$	138,037	$	90,645	$	(1,235	)	$	(12,258	)	$	703	$	(1,687	)
Fixed charges:
Interest Expense		22,972		31,205		22,447		31,838		26,167			129,200			32,422		32,572
Estimate of interest implicit in rental expense		49,391		48,373		50,310		45,456		9,136			36,933			13,332		9,110
Total fixed charges		72,363		79,578		72,757		77,294		35,303			166,133			45,754		41,682
Earnings before fixed charges and income taxes	$	181,523	$	197,138	$	210,794	$	167,939	$	34,068		$	153,875		$	46,457	$	39,995
Ratio of earnings to fixed charges		2.5		2.5		2.9		2.2		.97			0.9			1.0		.96
Earnings deficiency to cover fixed charges	$	—	$	—	$	—	$	—	$	(1,235	)	$	(12,258	)	$	—	$	(1,687	)

EX-21.1

Exhibit 21.1

Subsidiaries of Apria Healthcare Group Inc.

Name	Jurisdiction of Incorporation / Organization
Apria Healthcare of New York State, Inc.	New York
Apria Healthcare, Inc.	Delaware
ApriaCare Management Systems, Inc.	Delaware
ApriaDirect.Com, Inc.	Delaware
Coram Alternate Site Services, Inc.	Delaware
Coram Clinical Trials, Inc.	Delaware
Coram Healthcare Corporation of Alabama	Delaware
Coram Healthcare Corporation of Florida	Delaware
Coram Healthcare Corporation of Greater D.C.	Delaware
Coram Healthcare Corporation of Greater New York	New York
Coram Healthcare Corporation of Indiana	Delaware
Coram Healthcare Corporation of Massachusetts	Delaware
Coram Healthcare Corporation of Mississippi	Delaware
Coram Healthcare Corporation of Nevada	Delaware
Coram Healthcare Corporation of New York	New York
Coram Healthcare Corporation of North Texas	Delaware
Coram Healthcare Corporation of Northern California	Delaware
Coram Healthcare Corporation of South Carolina	Delaware
Coram Healthcare Corporation of Southern California	Delaware
Coram Healthcare Corporation of Southern Florida	Delaware
Coram Healthcare Corporation of Utah	Delaware
Coram Healthcare of Wyoming, L.L.C	Delaware
Coram Homecare of Minnesota, Inc.	Delaware
Coram Service Corporation	Delaware
Coram Specialty Infusion Services, Inc.	Delaware
Coram, Inc.	Delaware
CoramRx, LLC	Delaware
H.M.S.S., Inc.	Delaware
T2 Medical, Inc.	Delaware
HealthInfusion, Inc.	Florida
AHNY-DME LLC	New York
AHNY-IV LLC	New York

EX-23.4

Exhibit 23.4

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND REPORT ON SCHEDULE

To the Board of Directors and Stockholders of

Apria Healthcare Group Inc., a wholly-owned subsidiary of Sky Acquisition LLC

Lake Forest, California

We consent to the use in this Registration Statement on Form S-4 of our report dated March 2, 2010 (July 16, 2010 as to Note 15 and Note 17), relating to the consolidated financial statements of Apria Healthcare Group Inc. and subsidiaries (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the merger of the Company with and into Sky Merger Sub Corporation, a Delaware corporation, a wholly-owned subsidiary of Sky Acquisition LLC, a Delaware limited liability company on October 28, 2008), appearing in the Prospectus, which is a part of this Registration Statement, and to the references to us under the headings “Summary Historical Consolidated Financial Data”, “Selected Historical Consolidated Financial Data” and “Experts” in such Prospectus.

Our audits of the consolidated financial statements referred to in our aforementioned report also included the financial statement schedule of the Company listed in Item 21(b). This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/ DELOITTE & TOUCHE LLP

Costa Mesa, California

July 16, 2010

EX-25.1

Exhibit 25.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER

THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

Check if an Application to Determine Eligibility of

a Trustee Pursuant to Section 305(b)(2)

U.S. BANK NATIONAL ASSOCIATION

(Exact name of Trustee as specified in its charter)

31-0841368

I.R.S. Employer Identification No.

800 Nicollet Mall Minneapolis, Minnesota	55402
(Address of principal executive offices)	(Zip Code)

Raymond S. Haverstock

U.S. Bank National Association

60 Livingston Avenue

St. Paul, MN 55107

(651) 495-3909

(Name, address and telephone number of agent for service)

Apria Healthcare Group Inc.

(Issuer with respect to the Securities)

See table of additional Registrants

Delaware	33-0488566
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

26220 Enterprise Court Lake Forest, CA	92630
(Address of Principal Executive Offices)	(Zip Code)

11.25% Senior Secured Notes due 2014 (Series A-1)

12.375% Senior Secured Notes due 2014 (Series A-2)

(Title of the Indenture Securities)

Table of Additional Registrant Guarantors

Exact Name of Registrant Guarantor as Specified in its Charter	State or     Other Jurisdiction     of Incorporation or Organization	I.R.S. Employer     Identification Number	Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant Guarantor’s Principal Executive Offices
Apria Healthcare of New York State, Inc	New York	16-1031905	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000
Apria Healthcare, Inc.	Delaware	33-0057155	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000
ApriaCare Management Systems, Inc	Delaware	33-0675340	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000
ApriaDirect.Com, Inc.	Delaware	27-2820256	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000
Coram Alternate Site Services, Inc	Delaware	76-0215922	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Clinical Trials, Inc	Delaware	58-2160656	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Alabama	Delaware	58-1813484	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Florida	Delaware	58-1949695	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Greater D.C.	Delaware	58-2035129	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Greater New York	New York	58-1844719	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Indiana	Delaware	58-1813491	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Massachusetts	Delaware	33-0532814	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Mississippi	Delaware	58-1813479	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Nevada	Delaware	58-1972771	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of New York	New York	33-0458457	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of North Texas	Delaware	33-0556959	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Northern California	Delaware	58-1972773	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973

2

Exact Name of Registrant Guarantor as Specified in its Charter	State or     Other Jurisdiction     of Incorporation or Organization	I.R.S. Employer     Identification Number	Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant Guarantor’s Principal Executive Offices
Coram Healthcare Corporation of South Carolina	Delaware	58-1813494	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Southern California	Delaware	58-2006708	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Southern Florida	Delaware	58-1949686	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare Corporation of Utah	Delaware	95-4446209	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Healthcare of Wyoming, L.L.C	Delaware	84-1463833	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Homecare of Minnesota, Inc	Delaware	58-1874630	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Service Corporation	Delaware	58-1910054	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram Specialty Infusion Services, Inc.	Delaware	58-1813486	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
Coram, Inc	Delaware	84-1300129	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
CoramRx, LLC	Delaware	25-1923172	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
H.M.S.S., Inc	Delaware	76-0005650	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
T2 Medical, Inc.	Delaware	59-2405366	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
HealthInfusion, Inc	Florida	65-0163627	555 17th Street, Suite 1500 Denver, CO 80202 (303) 292-4973
AHNY-DME LLC	New York	27-2955068	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000
AHNY-IV LLC	New York	27-2954951	26220 Enterprise Court Lake Forest, CA 92630 (949) 639-2000

3

FORM T-1

Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.

a) Name and address of each examining or supervising authority to which it is subject.

Comptroller of the Currency

Washington, D.C.

b) Whether it is authorized to exercise corporate trust powers.

Yes

Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation.

None

Items 3-15 Items 3-15 are not applicable because to the best of the Trustee’s knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification.

1. A copy of the Articles of Association of the Trustee.*

2. A copy of the certificate of authority of the Trustee to commence business.*

3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers.*

4. A copy of the existing bylaws of the Trustee.**

5. A copy of each Indenture referred to in Item 4. Not applicable.

6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.

7. Report of Condition of the Trustee as of March 31, 2010 published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

* Incorporated by reference to Exhibit 25.1 to Amendment No. 2 to registration statement on S-4, Registration Number 333-128217 filed on November 15, 2005.

** Incorporated by reference to Exhibit 25.1 to registration statement on S-4, Registration Number 333-159463 filed on August 24, 2009.

4

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of St. Paul, State of Minnesota on the 1^st of July, 2010.

By:	/s/ Raymond S. Haverstock
	Raymond S. Haverstock Vice President

By:	/s/ Joshua Hahn
	Joshua Hahn
	Assistant Vice President

5

Exhibit 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: July 1^st, 2010

By:	/s/ Raymond S. Haverstock
	Raymond S. Haverstock Vice President

By:	/s/ Joshua Hahn
	Joshua Hahn Assistant Vice President

6

Exhibit 7

U.S. Bank National Association

Statement of Financial Condition

Exhibit 7

As of 3/31/2010

($000’s)

	3/31/2010
Assets
Cash and Balances Due From	$	8,396,049
Depository Institutions
Securities		45,269,095
Federal Funds		3,774,651
Loans & Lease Financing Receivables		180,918,939
Fixed Assets		5,108,242
Intangible Assets		13,355,160
Other Assets		20,687,148
Total Assets	$	277,509,284
Liabilities
Deposits	$	194,167,405
Fed Funds		9,849,249
Treasury Demand Notes		0
Trading Liabilities		362,519
Other Borrowed Money		31,906,386
Acceptances		0
Subordinated Notes and Debentures		7,629,967
Other Liabilities		6,648,045
Total Liabilities	$	250,563,571
Equity
Minority Interest in Subsidiaries	$	1,611,596
Common and Preferred Stock		18,200
Surplus		12,642,020
Undivided Profits		12,673,897
Total Equity Capital	$	26,945,713
Total Liabilities and Equity Capital	$	277,509,284

To the best of the undersigned’s determination, as of the date hereof, the above financial information is true and correct.

U.S. Bank National Association
By:	/s/ Raymond S. Haverstock
	Vice President

Date: July 1^st, 2010

7

EX-99.1

Exhibit 99.1

LETTER OF TRANSMITTAL

Apria Healthcare Group Inc.

OFFERS TO EXCHANGE

$700,000,000 AGGREGATE PRINCIPAL AMOUNT OF 11.25% SENIOR SECURED NOTES DUE 2014

(SERIES A-1), WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED (THE “SECURITIES ACT”), FOR ANY AND ALL OUTSTANDING 11.25% SENIOR

SECURED NOTES DUE 2014 (SERIES A-1)

$317,500,000 AGGREGATE PRINCIPAL AMOUNT OF 12.375% SENIOR SECURED NOTES DUE

2014 (SERIES A-2), WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, FOR ANY

AND ALL OUTSTANDING 12.375% SENIOR SECURED NOTES DUE 2014 (SERIES A-2)

THE EXCHANGE OFFERS AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,

NEW YORK CITY TIME, ON                     , 2010 (the

“EXPIRATION DATE”) UNLESS THE APPLICABLE EXCHANGE OFFER IS EXTENDED.

TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE

EXPIRATION DATE.

Delivery to: U.S. Bank National Association, Exchange Agent

By Mail or Overnight Courier:	By Facsimile:	By Hand Delivery:
U. S. Bank National Association 60 Livingston Ave. St. Paul, Minnesota 55107 Attn: Specialized Finance	651/495- 8158	U. S. Bank National Association 60 Livingston Ave. 1st Floor—Bond Drop Window St. Paul, Minnesota 55107
	To Confirm by Telephone: 1-800-934-6802

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERY OF DOCUMENTS TO THE DEPOSITORY TRUST COMPANY (“DTC”) DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. THIS LETTER OF TRANSMITTAL, INCLUDING THE ACCOMPANYING INSTRUCTIONS, SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

Holders of Outstanding Notes (as defined below) should complete this Letter of Transmittal either if Outstanding Notes are to be forwarded herewith or if tenders of Outstanding Notes are to be made by book-entry transfer to an account maintained by the Exchange Agent at DTC pursuant to the procedures set forth in “The Exchange Offers—Book-Entry Delivery Procedures” and “The Exchange Offers—Procedures for Tendering Outstanding Notes” in the Prospectus (as defined below) and an “Agent’s Message” (as defined below) is not delivered. If tender is being made by book-entry transfer, the holder must have an Agent’s Message delivered in lieu of this Letter of Transmittal.

Holders of Outstanding Notes whose certificates (the “Certificates”) for such Outstanding Notes are not immediately available or who cannot deliver their Certificates and all other required documents to the Exchange

Agent on or prior to the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth in “The Exchange Offers—Guaranteed Delivery Procedures” in the Prospectus.

As used in this Letter of Transmittal, the term “holder” with respect to the Exchange Offers (as defined below) means any person in whose name Outstanding Notes are registered on the books of Apria Healthcare Group Inc., a Delaware corporation (the “Issuer”), or, with respect to interests in the Outstanding Notes held by DTC, any DTC participant listed in an official DTC proxy. The undersigned has completed, signed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offers. Holders who wish to tender their Outstanding Notes must complete this Letter of Transmittal in its entirety.

The undersigned hereby acknowledges receipt of the Prospectus dated                     , 2010 (as it may be amended or supplemented from time to time, the “Prospectus”) of the Issuer and certain domestic subsidiaries of the Issuer (the “Guarantors,” and each, a “Guarantor”) and this Letter of Transmittal, which together constitute the offers (the “Exchange Offers”) to exchange (i) an aggregate principal amount of up to $700,000,000 of the Issuer’s 11.25% Senior Secured Notes due 2014 (Series A-1), guaranteed by the Guarantors, that have been registered under the Securities Act (the “Exchange Series A-1 Notes”) for an equal aggregate principal amount of the Issuer’s 11.25% Senior Secured Notes due 2014 (Series A-1), guaranteed by the Guarantors, that were originally sold pursuant to a private offering in May 2009 (the “Outstanding Series A-1 Notes”) and (ii) an aggregate principal amount of up to $317,500,000 of the Issuer’s 12.375% Senior Secured Notes due 2014 (Series A-2), guaranteed by the Guarantors, that have been registered under the Securities Act (the “Exchange Series A-2 Notes” and, together with the Exchange Series A-1 Notes, the “Exchange Notes”) for an equal aggregate principal amount of the Issuer’s 12.375% Senior Secured Notes due 2014 (Series A-2), guaranteed by the Guarantors, that were originally sold pursuant to a private offering in August 2009 (the “Outstanding Series A-2 Notes” and, together with the Outstanding Series A-1 Notes, the “Outstanding Notes”). The Outstanding Notes are unconditionally guaranteed (the “Old Guarantees”) by the Guarantors, and the Exchange Notes will be unconditionally guaranteed (the “New Guarantees”) by the Guarantors. Upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to all Exchange Notes issued in the Exchange Offers in exchange for the Old Guarantees of the Outstanding Notes for which such Exchange Notes are issued in the Exchange Offers. Throughout this Letter of Transmittal, unless the context otherwise requires and whether so expressed or not, references to the “Exchange Offers” include the Guarantors’ offer to exchange the New Guarantees for the Old Guarantees, references to the “Exchange Notes” include the related New Guarantees and references to the “Outstanding Notes” include the related Old Guarantees.

Capitalized terms used but not defined herein have the meaning given to them in the Prospectus.

For each Outstanding Note accepted for exchange, the holder of such Outstanding Note will receive an Exchange Note having a principal amount equal to that of the surrendered Outstanding Note.

YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS INCLUDED IN THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT, WHOSE ADDRESS AND TELEPHONE NUMBER APPEAR ON THE FRONT PAGE OF THIS LETTER OF TRANSMITTAL.

2

The undersigned has completed the appropriate boxes below and signed this Letter of Transmittal to indicate the action that the undersigned desires to take with respect to the Exchange Offers.

List below the Outstanding Notes to which this Letter of Transmittal relates. If the space below is inadequate, the Certificate or registration numbers and principal amounts of Outstanding Notes should be listed on a separately signed schedule affixed hereto.

Box 1 Description of Outstanding Notes Tendered
Name(s) and Address(es) of Registered Holder(s) (Please fill in, if blank, exactly as name(s) appear(s) on Certificate(s))	Series of Outstanding Notes	Certificate or Registration Number(s) of Outstanding Notes*	Aggregate Principal Amount Represented by Outstanding Notes	Aggregate Principal Amount of Outstanding Notes Being Tendered**
		Total

* Need not be completed by book-entry holders (see below).

** The minimum permitted tender is $2,000 in principal amount. All tenders must be in integral multiples of $1,000 in principal amount. The aggregate principal amount of all of the Outstanding Notes represented by the Outstanding Notes identified in this column, or delivered to the Exchange Agent herewith, will be deemed tendered unless a lesser amount is specified in this column. See Instruction 4.

Box 2

Book-Entry Transfer

¨ CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:

Name of Tendering Institution:                                                                                                                                                    

DTC Account Number:                                                                                                                                                                   

Transaction Code Number:                                                                                                                                                            

3

Holders of Outstanding Notes that are tendering by book-entry transfer to the Exchange Agent’s account at DTC can execute the tender through DTC’s Automated Tender Offer Program (“ATOP”) for which the transaction will be eligible. DTC participants that are accepting the Exchange Offers must transmit their acceptances to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent’s account at DTC. DTC will then send a computer-generated message (an “Agent’s Message”) to the Exchange Agent for its acceptance in which the holder of the Outstanding Notes acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter of Transmittal, and the DTC participant confirms on behalf of itself and the beneficial owners of such Outstanding Notes all provisions of this Letter of Transmittal (including any representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent. Each DTC participant transmitting an acceptance of the Exchange Offers through the ATOP procedures will be deemed to have agreed to be bound by the terms of this Letter of Transmittal. Delivery of an Agent’s Message by DTC will satisfy the terms of the Exchange Offers as to execution and delivery of a Letter of Transmittal by the participant identified in the Agent’s Message. DTC participants may also accept the Exchange Offers by submitting a Notice of Guaranteed Delivery through ATOP.

Box 3

Notice of Guaranteed Delivery

(See Instruction 2 below)

¨       CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

Name(s) of Registered Holder(s):                                                                                                                                         

Window Ticket Number (if any):                                                                                                                                          

Date of Execution of Notice of Guaranteed Delivery:                                                                                                   

Name of Eligible Guarantor Institution which Guaranteed Delivery:                                                                     

IF GUARANTEED DELIVERY IS TO BE MADE BY BOOK-ENTRY TRANSFER:

Name of Tendering Institution:                                                                                                                                             

DTC Account Number:                                                                                                                                                            

Transaction Code Number:                                                                                                                                                     

Box 4

Return of Non-Exchanged Outstanding Notes

Tendered by Book-Entry Transfer

¨       CHECK HERE IF OUTSTANDING NOTES TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OUTSTANDING NOTES ARE TO BE RETURNED BY CREDITING THE ACCOUNT NUMBER SET FORTH ABOVE.

4

Box 5

Participating Broker-Dealer

¨       CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OUTSTANDING NOTES FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A “PARTICIPATING BROKER-DEALER”) AND WISH TO RECEIVE TEN (10) ADDITIONAL COPIES OF THE PROSPECTUS AND OF ANY AMENDMENTS OR SUPPLEMENTS THERETO, AS WELL AS ANY NOTICES FROM THE ISSUER TO SUSPEND AND RESUME USE OF THE PROSPECTUS. PROVIDE THE NAME OF THE INDIVIDUAL WHO SHOULD RECEIVE, ON BEHALF OF THE HOLDER, ADDITIONAL COPIES OF THE PROSPECTUS, AND AMENDMENTS AND SUPPLEMENTS THERETO, AND ANY NOTICES TO SUSPEND AND RESUME USE OF THE PROSPECTUS.

Name:                                                                                                                                                                                             

Address:                                                                                                                                                                                         

Telephone No.:                                                                                                                                                                            

Facsimile No.:                                                                                                                                                                              

If the undersigned is not a broker-dealer, the undersigned represents that it is acquiring the Exchange Notes in the ordinary course of its business, it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes, it represents that the Outstanding Notes to be exchanged for the Exchange Notes were acquired by it as a result of market making activities or other trading activities and it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale or transfer of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. A broker-dealer may not participate in the exchange offers with respect to Outstanding Notes acquired other than as a result of market making activities or other trading activities. Any broker-dealer who purchased Outstanding Notes from the Issuer to resell pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act must comply with the registration and prospectus delivery requirements under the Securities Act.

5

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offers, the undersigned hereby tenders to the Issuer the aggregate principal amount of the Outstanding Notes indicated above. Subject to, and effective upon, the acceptance for exchange of the Outstanding Notes tendered hereby in accordance with the terms and conditions of the Exchange Offers (including if the Exchange Offers is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Issuer all right, title and interest in and to such Outstanding Notes as are being tendered hereby.

The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent also acts as agent of the Issuer) with respect to the tendered Outstanding Notes, with full power of substitution and resubstitution (such power of attorney being deemed an irrevocable power coupled with an interest) to (1) deliver certificates representing such Outstanding Notes, or transfer ownership of such Outstanding Notes on the account books maintained by DTC, together, in each such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Issuer, (2) present and deliver such Outstanding Notes for transfer on the books of the Issuer, (3) receive all benefits or otherwise exercise all rights and incidents of beneficial ownership of such Outstanding Notes and (4) otherwise to cause the Outstanding Notes to be assigned, transferred and exchanged, all in accordance with the terms of the Exchange Offers.

The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to tender, exchange, assign and transfer the Outstanding Notes tendered hereby, (b) when such tendered Outstanding Notes are accepted for exchange, the Issuer will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and (c) the Outstanding Notes tendered for exchange are not subject to any adverse claims or proxies when the same are accepted by the Issuer. The undersigned hereby further represents that any Exchange Notes acquired in exchange for Outstanding Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the undersigned, that neither the holder of such Outstanding Notes nor any such other person is engaged in, or intends to engage in, a distribution of such Exchange Notes within the meaning of the Securities Act, or has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes, and that neither the holder of such Outstanding Notes nor any such other person is an “affiliate,” as such term is defined in Rule 405 under the Securities Act, of the Issuer or any Guarantor.

The undersigned also acknowledges that this Exchange Offers is being made based on the Issuer’s understanding of an interpretation by the staff of the United States Securities and Exchange Commission (the “SEC”) as set forth in no-action letters issued to third parties, including Morgan Stanley & Co., Inc. (available June 5, 1991), Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Sterling (available July 2, 1993), or similar no-action letters, that the Exchange Notes issued in exchange for the Outstanding Notes pursuant to the Exchange Offers may be offered for resale, resold and otherwise transferred by each holder thereof (other than a broker-dealer who acquires such Exchange Notes directly from the Issuer for resale pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act or any such holder that is an “affiliate” of the Issuer or any Guarantor within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such holder’s business and such holder is not engaged in, and does not intend to engage in, a distribution of such Exchange Notes and has no arrangement or understanding with any person to participate in the distribution of such Exchange Notes. If a holder of the Outstanding Notes is an affiliate of the Issuer or any Guarantor, is not acquiring the Exchange Notes in the ordinary course of its business, is engaged in, or intends to engage in, a

6

distribution of the Exchange Notes or has any arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offers, such holder (x) may not rely on the applicable interpretations of the staff of the SEC and (y) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction. If the undersigned is a broker-dealer that will receive the Exchange Notes for its own account in exchange for the Outstanding Notes, it represents that the Outstanding Notes to be exchanged for the Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale or transfer of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

The undersigned will, upon request, execute and deliver any additional documents deemed by the Issuer or the Exchange Agent to be necessary or desirable to complete the exchange, assignment and transfer of the Outstanding Notes tendered hereby. The undersigned further agrees that acceptance of any and all validly tendered Outstanding Notes by the Issuer and the issuance of Exchange Notes in exchange therefor shall constitute performance in full by the Issuer and the Guarantors of their obligations under (i) with respect to the Series A-1 Notes, the Registration Rights Agreement, dated as of May 27, 2009, among the Issuer, the guarantors named therein and Banc of America Securities LLC, Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC), Barclays Capital Inc. and Scotia Capital (USA) Inc., as initial purchasers of the Outstanding Series A-1 Notes and (ii) with respect to the Series A-2 Notes and the exchange Series A-2 Notes, the Registration Rights Agreement, dated as of August 13, 2009, among the Issuer, the guarantors named therein and Banc of America Securities LLC, Wells Fargo Securities, LLC, Barclays Capital Inc. and Scotia Capital (USA) Inc., as initial purchasers of the Outstanding Series A-2 Notes, and that, in each case, the Issuer and the Guarantors shall have no further obligations or liabilities thereunder except as provided in Section 8 of such agreements. The undersigned will comply with its obligations under the applicable registration rights agreement.

The Exchange Offers are subject to certain conditions as set forth in the Prospectus under the caption “The Exchange Offers—Conditions to the Exchange Offers.” The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Issuer), as more particularly set forth in the Prospectus, the Issuer may not be required to exchange any of the Outstanding Notes tendered hereby and, in such event, the Outstanding Notes not exchanged will be returned to the undersigned at the address shown above, promptly following the expiration or termination of the Exchange Offers. In addition, the Issuer may amend the Exchange Offers at any time prior to the Expiration Date if any of the conditions set forth under “The Exchange Offers—Conditions to the Exchange Offers” occur.

All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. Tendered Outstanding Notes may be withdrawn at any time prior to the Expiration Date in accordance with the procedures set forth in the Prospectus.

Unless otherwise indicated herein in the box entitled “Special Issuance Instructions” below, please deliver the Exchange Notes (and, if applicable, substitute certificates representing the Outstanding Notes for any Outstanding Notes not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of the Outstanding Notes, please credit the account indicated above maintained at DTC. Similarly, unless otherwise indicated in the box entitled “Special Delivery Instructions” below, please send the Exchange Notes (and, if applicable, substitute certificates representing the Outstanding Notes for any Outstanding Notes not exchanged) to the undersigned at the address shown above in the box entitled “Description of Outstanding Notes Tendered.”

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED “DESCRIPTION OF OUTSTANDING NOTES TENDERED” ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OUTSTANDING NOTES AS SET FORTH IN SUCH BOX.

7

Box 6

Special Issuance Instructions

(See Instructions 1, 5 and 6 below)

To be completed ONLY if Exchange Notes or Outstanding Notes not tendered are to be issued in the name of someone other than the registered holder(s) of the Outstanding Notes whose name(s) appear(s) above.

Issue

¨       Exchange Notes to:

¨       Outstanding Notes not tendered to:

Name(s)                                                                                   

(Please Type or Print)

Address                                                                                    

(Include Zip Code)

Daytime Telephone No.                                                     

DTC Participant No.                                                           

(Taxpayer Identification or Social Security Number)

Box 7

Special Delivery Instructions

(See Instructions 1, 5 and 6 below)

To be completed ONLY if Exchange Notes or Outstanding Notes not tendered are to be sent to someone other than the registered holder(s) of the Outstanding Notes whose name(s) appear(s) above, or to such registered holder(s) at an address other than that shown above.

Deliver

¨       Exchange Notes to:

¨       Outstanding Notes not tendered to:

Name(s)                                                                                   

(Please Type or Print)

Address                                                                                    

(Include Zip Code)

Daytime Telephone No.                                                     

DTC Participant No.                                                           

(Taxpayer Identification or Social Security Number)

8

Box 8

PLEASE SIGN HERE

Tendering Holder Signature

In addition, U.S. persons should complete accompanying Substitute Form W-9—See Box 9

Signature of registered holder(s) or

Authorized Signatory(ies): ___________________________________________________________________

Date: ____________________________________________________________________________________

Note: The above lines must be signed by the registered holder(s) of the Outstanding Notes as their name(s) appear(s) on the Outstanding Notes or on a security position listing as the owner of the Outstanding Notes or by person(s) authorized to become registered holder(s) by properly completed bond powers or endorsements transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. See Instruction 5.

Name(s): _________________________________________________________________________________

(Please Type or Print)

Capacity (full title): ________________________________________________________________________

Address: _________________________________________________________________________________

(Including Zip Code)

Area Code and Telephone Number: ____________________________________________________________

Taxpayer Identification or Social Security Number: _______________________________________________

SIGNATURE GUARANTEE

(IF REQUIRED BY INSTRUCTION 5)

Signature(s) Guaranteed by

an Eligible Guarantor Institution: _____________________________________________________________

(Authorized Signature)

_______________________________________________________________________________________

(Title)

_______________________________________________________________________________________

(Name and Firm)

_______________________________________________________________________________________

(Address)

Date: ____________________________________________________________________________________

Area Code and Telephone Number: ____________________________________________________________

Taxpayer Identification or Social Security Number: _______________________________________________

9

Box 9 PAYER’S NAME: Apria Healthcare Group Inc.
SUBSTITUTE FORM W-9 Department of the Treasury Internal Revenue Service Payer’s Request for Taxpayer Identification Number (TIN) Â Sign Here	Part 1—PLEASE PROVIDE YOUR NAME AND TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.	____________________ Name ____________________ Social Security Number OR ____________________ Employer Identification Number
	Part 2 Certification—Under penalties of perjury, I certify that: (1)    The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2)    I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and
	(3)    I am a U.S. person (including a U.S. resident alien).	Part 3— ¨  Awaiting TIN
	CERTIFICATE INSTRUCTIONS—You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2).
	The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding. SIGNATURE ______________________________________________________________________________ DATE ______________________________________________________________________________

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP

WITHHOLDING OF UP TO 28% OF ANY REPORTABLE PAYMENTS MADE TO YOU PURSUANT TO

THE EXCHANGE OFFERS. PLEASE REVIEW

THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED

THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment 28% of all reportable payments made to me will be withheld.

Signature                                                                                                                                         Date                      , 2010

10

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON

SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number for the Payee (You) to Give the Payer.—Social security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employee identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer. All “Section” references are to the Internal Revenue Code of 1986, as amended. “IRS” is the Internal Revenue Service.

For this type of account:		Give the social security number of—
1.	Individual	The individual
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined fund, the first individual on the account.(1)
3.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)
4.	a. The usual revocable savings trust account (grantor is also trustee)	The grantor-trustee(1)
	b. So-called trust that is not a legal or valid trust under state law	The actual owner(1)
5.	Sole proprietorship or disregarded entity owned by an individual	The owner(3)

For this type of account:		Give the employer identification number of—
6.	Disregarded entity not owned by an individual.	The owner
7.	A valid trust, estate, or pension trust	The legal entity(4)
8.	Corporate	The corporation
9.	Association, club, religious, charitable, educational, or other tax-exempt organization account	The organization
10.	Partnership	The partnership
11.	A broker or registered nominee	The broker or nominee
12.	Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments	The public entity

(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person’s number must be furnished.

(2) Circle the minor’s name and furnish the minor’s social security number.

(3) You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your social security number or your employer identification number (if you have one).

(4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

11

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9

Obtaining a Number

If you don’t have a taxpayer identification number or you don’t know your number, obtain Form SS-5, Application for a Social Security Card, at the local Social Security Administration office, or Form SS-4, Application for Employer Identification Number, by calling 1 (800) TAX-FORM, and apply for a number.

Payees Exempt from Backup Withholding

Payees specifically exempted from withholding include:

• An organization exempt from tax under Section 501(a), an individual retirement account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2).

• The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or wholly-owned agency or instrumentality of any one or more of the foregoing.

• An international organization or any agency or instrumentality thereof.

• A foreign government and any political subdivision, agency or instrumentality thereof.

Payees that may be exempt from backup withholding include:

• A corporation.

• A financial institution.

• A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States.

• A real estate investment trust.

• A common trust fund operated by a bank under Section 584(a).

• An entity registered at all times during the tax year under the Investment Company Act of 1940.

• A middleman known in the investment community as a nominee or custodian.

• A futures commission merchant registered with the Commodity Futures Trading Commission.

• A foreign central bank of issue.

• A trust exempt from tax under Section 664 or described in Section 4947.

Payments of dividends and patronage dividends generally exempt from backup withholding include:

• Payments to nonresident aliens subject to withholding under Section 1441.

• Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner.

• Payments of patronage dividends not paid in money.

• Payments made by certain foreign organizations.

• Section 404(k) payments made by an ESOP.

12

Payments of interest generally exempt from backup withholding include:

• Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and you have not provided your correct taxpayer identification number to the payer.

• Payments described in Section 6049(b)(5) to nonresident aliens.

• Payments on tax-free covenant bonds under Section 1451.

• Payments made by certain foreign organizations.

• Mortgage interest paid to you.

Certain payments, other than payments of interest, dividends, and patronage dividends, that are exempt from information reporting are also exempt from backup withholding. For details, see the regulations under sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N.

Exempt payees described above must file Form W-9 or a substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” ON THE FACE OF THE FORM, SIGN AND DATE THE FORM, AND RETURN IT TO THE PAYER.

Privacy Act Notice.—Section 6109 requires you to provide your correct taxpayer identification number to payers, who must report the payments to the IRS. The IRS uses the number for identification purposes and may also provide this information to various government agencies for tax enforcement or litigation purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to payer. Certain penalties may also apply.

Penalties

(1) Failure to Furnish Taxpayer Identification Number.—If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) Civil Penalty for False Information With Respect to Withholding.—If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

(3) Criminal Penalty for Falsifying Information.—Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE

13

INSTRUCTIONS TO LETTER OF TRANSMITTAL FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFERS

General

Please do not send Outstanding Notes or Letters of Transmittal directly to the Issuer. Your Outstanding Notes, together with your signed and completed Letter of Transmittal and any required supporting documents, should be delivered to the Exchange Agent at the address set forth on the first page hereof. The method of delivery of Certificates, this Letter of Transmittal and all other required documents is at your sole option and risk and the delivery will he deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, or overnight or hand delivery service is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

1. Delivery of this Letter of Transmittal and Certificates.

This Letter of Transmittal is to be completed by holders of Outstanding Notes (which term, for purposes of the Exchange Offers, includes any participant in DTC whose name appears on a security position listing as the holder of such Outstanding Notes) if either (a) Certificates for such Outstanding Notes are to be forwarded herewith or (b) tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in “The Exchange Offers—Book-Entry Delivery Procedures” in the Prospectus and an Agent’s Message (as defined below) is not delivered. The term “Agent’s Message” means a message, transmitted by DTC to, and received by, the Exchange Agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by, and makes the representations and warranties contained in, this Letter of Transmittal and that the Issuer may enforce this Letter of Transmittal against such participant. Certificates representing the tendered Outstanding Notes, or timely confirmation of a book-entry transfer of such Outstanding Notes into the Exchange Agent’s account at DTC, as well as a properly completed and duly executed copy of this Letter of Transmittal, or a facsimile hereof (or, in the case of a book-entry transfer, an Agent’s Message), a Substitute Form W-9 and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein on or prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Outstanding Notes may be tendered in whole or in part in the principal amount of $2,000 and integral multiples of $1,000 in excess thereof.

2. Guaranteed Delivery Procedures.

Holders who wish to tender their Outstanding Notes and (i) whose Outstanding Notes are not immediately available or (ii) who cannot deliver their Outstanding Notes, this Letter of Transmittal and all other required documents to the Exchange Agent on or prior to the Expiration Date or (iii) who cannot complete the procedures for delivery by book-entry transfer on a timely basis, may effect a tender by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in “The Exchange Offers—Guaranteed Delivery Procedures” in the Prospectus and by completing Box 3. Pursuant to these procedures, holders may tender their Outstanding Notes if: (i) the tender is made by or through an Eligible Guarantor Institution (as defined below); (ii) a properly completed and signed Notice of Guaranteed Delivery in the form provided with this Letter of Transmittal is delivered to the Exchange Agent on or before the Expiration Date (by facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of Outstanding Notes, the registered number(s) of such Outstanding Notes and the amount of Outstanding Notes tendered, stating that the tender is being made thereby; and (iii) the Certificates or a confirmation of book-entry transfer and a properly completed and signed Letter of Transmittal is delivered to the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date. The Notice of Guaranteed Delivery may be delivered by hand, facsimile or mail to the Exchange Agent, and a guarantee by an Eligible Guarantor Institution must be included in the form described in the notice.

14

Any holder who wishes to tender Outstanding Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery relating to such Outstanding Notes prior to the Expiration Date. Failure to complete the guaranteed delivery procedures outlined above will not, of itself, affect the validity or effect a revocation of any Letter of Transmittal form properly completed and executed by a holder who attempted to use the guaranteed delivery procedures.

The Issuer will not accept any alternative, conditional or contingent tenders. Each tendering holder of Outstanding Notes, by execution of a Letter of Transmittal (or facsimile thereof), waives any right to receive any notice of the acceptance of such tender.

No signature guarantee on this Letter of Transmittal is required if:

(i) this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this document, shall include any participant in DTC whose name appears on a security position listing as the owner of the Outstanding Notes) of Outstanding Notes tendered herewith, unless such holder(s) has (have) completed either the box entitled “Special Issuance Instructions” (Box 6) or “Special Delivery Instructions” (Box 7) above; or

(ii) such Outstanding Notes are tendered for the account of a firm that is an Eligible Guarantor Institution.

In all other cases, an Eligible Guarantor Institution must guarantee the signature(s) in Box 8 on this Letter of Transmittal. See Instruction 5.

If the space provided in the box captioned “Description of Outstanding Notes Tendered” (Box 1) is inadequate, the Certificate or registration number(s) and/or the principal amount of Outstanding Notes and any other required information should he listed an a separate, signed schedule and attached to this Letter of Transmittal.

3. Beneficial Owner Instructions.

Only a holder of Outstanding Notes (i.e., a person in whose name Outstanding Notes are registered on the books of the registrar or, with respect to interests in the Outstanding Notes held by DTC, a DTC participant listed in an official DTC proxy), or the legal representative or attorney-in-fact of a holder, may execute and deliver this Letter of Transmittal. Any beneficial owner of Outstanding Notes who wishes to accept the Exchange Offers must arrange promptly for the appropriate holder to execute and deliver this Letter of Transmittal on his or her behalf through the execution and delivery to the appropriate holder of the “Instructions to Registered Holder and/or DTC Participant from Beneficial Owner of 11.25% Senior Secured Notes due 2014 (Series A-1) and/or 12.375% Senior Secured Notes due 2014 (Series A-2)” form accompanying this Letter of Transmittal.

4. Partial Tenders; Withdrawals.

Tenders of Outstanding Notes will be accepted only in the principal amount of $2,000 and integral multiples of $1,000, in excess thereof. If less than the entire principal amount of Outstanding Notes evidenced by a submitted Certificate is tendered, the tendering holder(s) should fill in the aggregate principal amount tendered in the column entitled “Aggregate Principal Amount of Outstanding Notes Being Tendered” in Box 1 above. A newly issued Certificate for the principal amount of Outstanding Notes submitted but not tendered will be sent to such holder as soon as practicable after the Expiration Date, unless otherwise provided in the appropriate box on this Letter of Transmittal. All Outstanding Notes delivered to the Exchange Agent will be deemed to have been tendered in full unless otherwise indicated.

Outstanding Notes tendered pursuant to the Exchange Offers may be withdrawn at any time prior to the Expiration Date, after which tenders of Outstanding Notes are irrevocable. To be effective, a written,

15

telegraphic or facsimile transmission notice of withdrawal must be timely received by the Exchange Agent at the address set forth on the first page hereof. Any such notice of withdrawal must (i) specify the name of the person having deposited the Outstanding Notes to be withdrawn (the “Depositor”), (ii) identify the Outstanding Notes to be withdrawn (including the registration number(s) and principal amount of such Outstanding Notes, or, in the case of Outstanding Notes transferred by book-entry transfer, the name and number of the account at DTC to be credited), (iii) be signed by the holder in the same manner as the original signature on this Letter of Transmittal (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee with respect to the Outstanding Notes register the transfer of such Outstanding Notes in the name of the person withdrawing the tender, (iv) specify the name in which any such Outstanding Notes are to be registered, if different from that of the Depositor and (v) include a statement that the Depositor is withdrawing its election to have such Outstanding Notes exchanged. All questions as to the validity, form and eligibility (including time of receipt) of such notices will he determined by the Issuer, whose determination shall be final and binding on all parties. Any Outstanding Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offers and no Exchange Notes will be issued with respect thereto unless the Outstanding Notes so withdrawn are validly re-tendered. Any Outstanding Notes which have been tendered but which are not accepted for exchange for any reason will be returned to the holder thereof without cost to such holder (or, in the case of Outstanding Notes tendered by book-entry transfer into the Exchange Agent’s account at the book entry transfer facility pursuant to the book-entry transfer procedures described above, such Outstanding Notes will be credited to an account with such book-entry transfer facility specified by the holder) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offers. Properly withdrawn Outstanding Notes may be retendered by following one of the procedures described under the caption “The Exchange Offers—Procedures for Tendering Outstanding Notes” in the Prospectus at any time prior to the Expiration Date.

Neither the Issuer, the Guarantors, any affiliates or assigns of the Issuer, the Exchange Agent nor any other person will be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give such notification (even if such notice is given to other persons).

5. Signature on Letter of Transmittal; Written Instruments and Endorsements; Guarantee of Signatures.

If this Letter of Transmittal is signed by the registered holder(s) of the Outstanding Notes tendered hereby, the signature must correspond exactly with the name(s) as written on the face of the Certificates without alteration, addition, enlargement or any change whatsoever. If this Letter of Transmittal is signed by a participant in DTC, the signature must correspond with the name as it appears on the security position listing as the owner of the Outstanding Notes.

If any of the Outstanding Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

If a number of Outstanding Notes registered in different names are tendered, it will he necessary to complete, sign and submit as many separate copies of this Letter of Transmittal (or facsimiles thereof) as there are different registrations of Outstanding Notes.

If this Letter of Transmittal is signed by the registered holder(s) of Outstanding Notes (which term, for the purposes described herein, shall include a participant in DTC whose name appears on a security position listing as the owner of the Outstanding Notes) listed and tendered hereby, no endorsements of the tendered Outstanding Notes or separate written instruments of transfer or exchange are required. In any other case, the registered holder(s) (or acting holder(s)) must either properly endorse the Outstanding Notes or transmit properly completed bond powers with this Letter of Transmittal (in either case, executed exactly as the name(s) of the registered holder(s) appear(s) on the Outstanding Notes, and, with respect to a participant in DTC whose name appears on such security position listing), with the signature on the Outstanding Notes or bond power guaranteed by an Eligible Guarantor Institution (except where the Outstanding Notes are tendered for the account of an Eligible Guarantor Institution).

16

If this Letter of Transmittal, any Certificates, bond powers or separate written instruments of transfer or exchange are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Issuer, must submit proper evidence satisfactory to the Issuer, in its sole discretion, of such persons’ authority to so act.

Endorsements on certificates for the Outstanding Notes or signatures on bond powers or separate written instruments of transfer or exchange required by this Instruction 5 must be guaranteed by a firm that is a member of the Security Transfer Agent Medallion Signature Program or by any other “Eligible Guarantor Institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.

Signatures on this Letter of Transmittal need not be guaranteed by an Eligible Guarantor Institution only if the Outstanding Notes are tendered: (i) by a registered holder of the Outstanding Notes (which term, for purposes of the Exchange Offers, includes any participant in the DTC system whose name appears on a security position listing as the owner of such Outstanding Notes) tendered who has not completed Box 6 entitled “Special Issuance Instructions” or Box 7 entitled “Special Delivery Instructions” on this Letter of Transmittal or (ii) for the account of an Eligible Guarantor Institution.

6. Special Issuance and Delivery Instructions.

Tendering holders should indicate, in the applicable Box 6 or Box 7, the name and address in/to which the Exchange Notes and/or substitute certificates evidencing Outstanding Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name(s) and address(es) of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification number or social security number of the person named must also be indicated and the tendering holder should complete the applicable box. A holder tendering the Outstanding Notes by book-entry transfer may request that the Outstanding Notes not exchanged be credited to such account maintained at DTC as such holder may designate hereof (See Box 4).

If no instructions are given, the Exchange Notes (and any Outstanding Notes not tendered or not accepted) will be issued in the name of and sent to the holder signing this Letter of Transmittal or deposited into such holder’s account at DTC.

7. Transfer Taxes.

The Issuer will pay all transfer taxes, if any, applicable to the transfer and exchange of Outstanding Notes to it or its order pursuant to the Exchange Offers. If, however, a transfer tax is imposed because Exchange Notes are delivered or issued in the name of a person other than the registered holder or if a transfer tax is imposed for any other reason other than the transfer and exchange of Outstanding Notes to the Issuer or its order pursuant to the Exchange Offers, the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed to the tendering holder by the Exchange Agent.

Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the Outstanding Notes listed in the Letter of Transmittal.

8. Waiver of Conditions.

The Issuer reserves the right to waive, in whole or in part, any of the conditions to the Exchange Offers set forth in the Prospectus.

17

9. Mutilated, Lost, Stolen or Destroyed Outstanding Notes.

Any holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed should promptly contact the Exchange Agent at the address set forth on the first page hereof for further instructions. The holder will then be instructed as to the steps that must be taken in order to replace the Certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen Certificate(s) have been completed.

10. Questions and Request for Assistance or Additional Copies.

Questions relating to the procedure for tendering as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number set forth on the first page hereof.

11. Validity and Form; No Conditional Tenders; No Notice of Irregularities.

All questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered Outstanding Notes and withdrawal of tendered Outstanding Notes will be determined by the Issuer in its sole discretion, which determination will be final and binding. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of their Outstanding Notes for exchange. The Issuer also reserves the right, in its reasonable judgment, to waive any defects, irregularities or conditions of tender as to particular Outstanding Notes. The Issuer’s interpretation of the terms and conditions of the Exchange Offers (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Outstanding Notes must be cured within such time as the Issuer shall determine. Although the Issuer intends to notify holders of defects or irregularities with respect to tenders of Outstanding Notes, neither the Issuer, the Exchange Agent nor any other person is under any obligation to give such notice nor shall they incur any liability for failure to give such notification. Tenders of Outstanding Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Outstanding Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holder as soon as practicable following the Expiration Date.

IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH OUTSTANDING NOTES OR CONFIRMATION OF BOOK ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.

18

IMPORTANT TAX INFORMATION

Under U.S. federal income tax law, a tendering holder whose Outstanding Notes are accepted for exchange may be subject to backup withholding unless the holder provides the Exchange Agent with either (i) such holder’s correct taxpayer identification number (“TIN”) on the Substitute Form W-9 attached hereto, certifying (A) that the TIN provided on Substitute Form W-9 is correct (or that such holder of Outstanding Notes is awaiting a TIN), (B) that the holder of Outstanding Notes is not subject to backup withholding because (x) such holder of Outstanding Notes is exempt from backup withholding, (y) such holder of Outstanding Notes has not been notified by the Internal Revenue Service that he or she is subject to backup withholding as a result of a failure to report all interest or dividends or (z) the Internal Revenue Service has notified the holder of Outstanding Notes that he or she is no longer subject to backup withholding and (C) that the holder of Outstanding Notes is a U.S. person (including a U.S. resident alien); or (ii) an adequate basis for exemption from backup withholding. If such holder is an individual, the TIN is such holder’s social security number. If the Exchange Agent is not provided with the correct TIN, the holder may also be subject to certain penalties imposed by the Internal Revenue Service and any reportable payments that are made to such holder may be subject to backup withholding (see below).

Certain holders of Outstanding Notes (including, among others, all corporations and certain foreign holders) are not subject to these backup withholding and reporting requirements. However, exempt holders of Outstanding Notes should indicate their exempt status on the Substitute Form W-9, by writing “Exempt” on the face of the form. For example, a corporation should complete the Substitute Form W-9, providing its TIN and indicating that it is exempt from backup withholding. In order for a foreign holder to qualify as an exempt recipient, the holder must submit a Form W-8BEN (or other applicable Form W-8), signed under penalties of perjury, attesting to that holder’s exempt status. A Form W-8BEN (or other applicable Form W-8) can be obtained from the Exchange Agent. See the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for more instructions. Holders are encouraged to consult their own tax advisors to determine whether they are exempt from these backup withholding and reporting requirements.

If backup withholding applies, the Exchange Agent is required to withhold 28% of any reportable payments made to the holder of Outstanding Notes or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service, provided the required information is furnished. The Exchange Agent cannot refund amounts withheld by reason of backup withholding.

A holder who does not have a TIN may check the box in Part 3 of the Substitute Form W-9 if the surrendering holder of Outstanding Notes has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the holder of Outstanding Notes or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Exchange Agent will withhold 28% of all reportable payments made prior to the time a properly certified TIN is provided to the Exchange Agent and, if the Exchange Agent is not provided with a TIN within 60 days, such amounts will be paid over to the Internal Revenue Service. The holder of Outstanding Notes is required to give the Exchange Agent the TIN (e.g., social security number or employer identification number) of the record owner of the Outstanding Notes. If the Outstanding Notes are in more than one name or are not in the name of the actual owner, consult the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for additional guidance on which number to report.

19

EX-99.2

Exhibit 99.2

Apria Healthcare Group Inc.

OFFERS TO EXCHANGE

$700,000,000 AGGREGATE PRINCIPAL AMOUNT OF 11.25% SENIOR SECURED NOTES DUE 2014 (SERIES A-1), WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), FOR ANY AND ALL OUTSTANDING 11.25% SENIOR SECURED NOTES DUE 2014 (SERIES A-1)

$317,500,000 AGGREGATE PRINCIPAL AMOUNT OF 12.375% SENIOR SECURED NOTES DUE 2014 (SERIES A-2), WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, FOR ANY AND ALL OUTSTANDING 12.375% SENIOR SECURED NOTES DUE 2014 (SERIES A-2)

                    , 2010

To Brokers, Dealers, Commercial Banks,

Trust Companies and Other Nominees:

As described in the enclosed Prospectus, dated                     , 2010 (as the same may be amended or supplemented from time to time, the “Prospectus”) and Letter of Transmittal (the “Letter of Transmittal”), Apria Healthcare Group Inc. (the “Issuer”) and certain domestic subsidiaries of the Issuer (the “Guarantors”) are offering to exchange (the “Exchange Offers”) (i) an aggregate principal amount of up to $700,000,000 of the Issuer’s 11.25% Senior Secured Notes due 2014 (Series A-1), guaranteed by the Guarantors, that have been registered under the Securities Act (the “Exchange Series A-1 Notes”) for an equal aggregate principal amount of the Issuer’s 11.25% Senior Secured Notes due 2014 (Series A-1), guaranteed by the Guarantors, that were originally sold pursuant to a private offering in May 2009 (the “Outstanding Series A-1 Notes”) and (ii) an aggregate principal amount of up to $317,500,000 of the Issuer’s 12.375% Senior Secured Notes due 2014 (Series A-2), guaranteed by the Guarantors, that have been registered under the Securities Act (the “Exchange Series A-2 Notes” and, together with the Exchange Series A-1 Notes, the “Exchange Notes”) for an equal aggregate principal amount of the Issuer’s 12.375% Senior Secured Notes due 2014 (Series A-2), guaranteed by the Guarantors, that were originally sold pursuant to a private offering in August 2009 (the “Outstanding Series A-2 Notes” and, together with the Outstanding Series A-1 Notes, the “Outstanding Notes”), in denominations of $2,000 and integral multiples of $1,000 in excess thereof, upon the terms and subject to the conditions of the enclosed Prospectus and the enclosed Letter of Transmittal. The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Outstanding Notes for which they may be exchanged pursuant to the Exchange Offers, except that the Exchange Notes are freely transferable by holders thereof, upon the terms and subject to conditions set forth in the enclosed Prospectus. The Outstanding Notes are unconditionally guaranteed (the “Old Guarantees”) by the Guarantors, and the Exchange Notes will be unconditionally guaranteed (the “New Guarantees”) by the Guarantors. Upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to all Exchange Notes issued in the Exchange Offers in exchange for the Old Guarantees of the Outstanding Notes for which such Exchange Notes are issued in the Exchange Offers. Throughout this Letter of Transmittal, unless the context otherwise requires and whether so expressed or not, references to the “Exchange Offers” include the Guarantors’ offer to exchange the New Guarantees for the Old Guarantees, references to the “Exchange Notes” include the related New Guarantees and references to the “Outstanding Notes” include the related Old Guarantees. The Issuer will accept for exchange any and all Outstanding Notes properly tendered according to the terms of the Prospectus and the Letter of Transmittal. Consummation of the Exchange Offers are subject to certain conditions described in the Prospectus.

WE URGE YOU TO PROMPTLY CONTACT YOUR CLIENTS FOR WHOM YOU HOLD OUTSTANDING NOTES REGISTERED IN YOUR NAME OR IN THE NAME OF YOUR NOMINEE OR WHO HOLD OUTSTANDING NOTES REGISTERED IN THEIR OWN NAMES. PLEASE NOTE THAT THE EXCHANGE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                     , 2010 (THE “EXPIRATION DATE”) UNLESS THE ISSUER EXTENDS THE APPLICABLE EXCHANGE OFFER.

The Issuer will not pay any fees or commissions to you for soliciting tenders of Outstanding Notes pursuant to the Exchange Offers. The Issuer will pay all transfer taxes, if any, applicable to the tender of Outstanding Notes to it or its order, except as otherwise provided in the Prospectus and the Letter of Transmittal.

Enclosed are copies of the following documents:

1. The Prospectus.

2. The Letter of Transmittal for your use in connection with the tender of Outstanding Notes and for the information of your clients, including a Substitute Form W-9 and Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 (providing information relating to U.S. federal income tax backup withholding).

3. A form of Notice of Guaranteed Delivery.

4. A form of letter which you may send, as a cover letter to accompany the Prospectus and related materials, to your clients for whose accounts you hold Outstanding Notes registered in your name or the name of your nominee, with space provided for obtaining the client’s instructions regarding the Exchange Offers.

Your prompt action is requested. Tendered Outstanding Notes may be withdrawn, subject to the procedures described in the Prospectus, at any time prior to 5:00 p.m., New York City time, on the Expiration Date.

To participate in the Exchange Offers, certificates for Outstanding Notes, together with a duly executed and properly completed Letter of Transmittal or facsimile thereof, or a timely confirmation of a book-entry transfer of such Outstanding Notes into the account of U.S. Bank National Association (the “Exchange Agent”), at the Depository Trust Company, with any required signature guarantees, and any other required documents, must be received by the Exchange Agent by the Expiration Date as indicated in the Prospectus and the Letter of Transmittal.

If holders of the Outstanding Notes wish to tender, but it is impracticable for them to forward their Outstanding Notes prior to the Expiration Date or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus and in the Letter of Transmittal.

Additional copies of the enclosed material may be obtained from, and any inquiries you may have with respect to the Exchange Offers procedures should be addressed to, the Exchange Agent at its address or telephone number set forth on the first page of the Letter of Transmittal.

Very truly yours,

APRIA HEALTHCARE GROUP INC.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF THE ISSUER OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM IN CONNECTION WITH THE EXCHANGE OFFERS, OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS EXPRESSLY CONTAINED THEREIN.

2

EX-99.3

Exhibit 99.3

Apria Healthcare Group Inc.

OFFERS TO EXCHANGE

$700,000,000 AGGREGATE PRINCIPAL AMOUNT OF 11.25% SENIOR SECURED NOTES DUE 2014 (SERIES A-1), WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), FOR ANY AND ALL OUTSTANDING 11.25% SENIOR

SECURED NOTES DUE 2014 (SERIES A-1)

$317,500,000 AGGREGATE PRINCIPAL AMOUNT OF 12.375% SENIOR SECURED NOTES DUE 2014 (SERIES A-2), WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, FOR ANY AND ALL OUTSTANDING 12.375% SENIOR SECURED NOTES DUE 2014 (SERIES A-2)

                    , 2010

To Our Clients:

Enclosed for your consideration is a Prospectus, dated                     , 2010 (as the same may be amended or supplemented from time to time, the “Prospectus”), and a Letter of Transmittal (the “Letter of Transmittal”), relating to the offers (the “Exchange Offers”) by Apria Healthcare Group Inc. (the “Issuer”) and certain domestic subsidiaries of the Issuer (the “Guarantors”) to exchange (i) an aggregate principal amount of up to $700,000,000 of the Issuer’s 11.25% Senior Secured Notes due 2014 (Series A-1), guaranteed by the Guarantors, that have been registered under the Securities Act (the “Exchange Series A-1 Notes”) for an equal aggregate principal amount of the Issuer’s 11.25% Senior Secured Notes due 2014 (Series A-1), guaranteed by the Guarantors, that were originally sold pursuant to a private offering in May 2009 (the “Outstanding Series A-1 Notes”) and (ii) an aggregate principal amount of up to $317,500,000 of the Issuer’s 12.375% Senior Secured Notes due 2014 (Series A-2), guaranteed by the Guarantors, that have been registered under the Securities Act (the “Exchange Series A-2 Notes” and, together with the Exchange Series A-1 Notes, the “Exchange Notes”) for an equal aggregate principal amount of the Issuer’s 12.375% Senior Secured Notes due 2014 (Series A-2), guaranteed by the Guarantors, that were originally sold pursuant to a private offering in August 2009 (the “Outstanding Series A-2 Notes” and, together with the Outstanding Series A-1 Notes, the “Outstanding Notes”), in denominations of $2,000 and integral multiples of $1,000 in excess thereof, upon the terms and subject to the conditions of the enclosed Prospectus and the enclosed Letter of Transmittal. The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Outstanding Notes for which they may be exchanged pursuant to the Exchange Offers, except that the Exchange Notes are freely transferable by holders thereof, upon the terms and subject to conditions set forth in the enclosed Prospectus. The Outstanding Notes are unconditionally guaranteed (the “Old Guarantees”) by the Guarantors, and the Exchange Notes will be unconditionally guaranteed (the “New Guarantees”) by the Guarantors. Upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to all Exchange Notes issued in the Exchange Offers in exchange for the Old Guarantees of the Outstanding Notes for which such Exchange Notes are issued in the Exchange Offers. Throughout this letter, unless the context otherwise requires and whether so expressed or not, references to the “Exchange Offers” include the Guarantors’ offer to exchange the New Guarantees for the Old Guarantees, references to the “Exchange Notes” include the related New Guarantees and references to the “Outstanding Notes” include the related Old Guarantees. The Issuer will accept for exchange any and all Outstanding Notes properly tendered according to the terms of the Prospectus and the Letter of Transmittal. Consummation of the Exchange Offers are subject to certain conditions described in the Prospectus.

This material is being forwarded to you as the beneficial owner of Outstanding Notes held by us for your account but not registered in your name. A tender of such Outstanding Notes may only be made by us as the registered holder and pursuant to your instructions. Therefore, the Issuer urges beneficial owners of Outstanding Notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee to contact such registered holder promptly if such beneficial owners wish to tender Outstanding Notes in the Exchange Offers.

Accordingly, we request instructions as to whether you wish to tender any or all such Outstanding Notes held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal. If you wish to have us do so, please so instruct us by completing, signing and returning to us the instruction form that appears below. If we do not receive written instructions in accordance with the below and the procedures presented in the Prospectus and the Letter of Transmittal, we will not tender any of the Outstanding Notes in your account. We urge you to read the Prospectus and the Letter of Transmittal carefully before instructing us as to whether or not to tender your Outstanding Notes.

Your instructions to us should be forwarded as promptly as possible in order to permit us to tender Outstanding Notes on your behalf in accordance with the provisions of the Exchange Offers. THE EXCHANGE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                     , 2010, UNLESS THE APPLICABLE EXCHANGE OFFER IS EXTENDED BY THE ISSUER. The time the applicable Exchange Offer expires is referred to as the “Expiration Date.” Tenders of Outstanding Notes may be withdrawn at any time prior to the Expiration Date.

The accompanying Letter of Transmittal is furnished to you for your information only and may not be used by you to tender Outstanding Notes held by us and registered in our name for your account or benefit.

2

INSTRUCTIONS

TO REGISTERED HOLDER AND/OR DTC PARTICIPANT FROM BENEFICIAL OWNER OF 11.25%

SENIOR SECURED NOTES DUE 2014 (SERIES A-1) AND/OR 12.375% SENIOR SECURED NOTES

DUE 2014 (SERIES A-2)

The undersigned beneficial owner acknowledge(s) receipt of your letter and the accompanying Prospectus dated                     , 2010 (as the same may be amended or supplemented from time to time, the “Prospectus”), and a Letter of Transmittal (the “Letter of Transmittal”), relating to the offer by Apria Healthcare Group Inc. (the “Issuer”) and certain domestic subsidiaries of the Issuer (the “Guarantors”) to exchange (the “Exchange Offers”) (i) an aggregate principal amount of up to $700,000,000 of the Issuer’s 11.25% Senior Secured Notes due 2014 (Series A-1), guaranteed by the Guarantors, that have been registered under the Securities Act (the “Exchange Series A-1 Notes”) for an equal aggregate principal amount of the Issuer’s 11.25% Senior Secured Notes due 2014 (Series A-1), guaranteed by the Guarantors, that were originally sold pursuant to a private offering in May 2009 (the “Outstanding Series A-1 Notes”) and (ii) an aggregate principal amount of up to $317,500,000 of the Issuer’s 12.375% Senior Secured Notes due 2014 (Series A-2), guaranteed by the Guarantors, that have been registered under the Securities Act (the “Exchange Series A-2 Notes” and, together with the Exchange Series A-1 Notes, the “Exchange Notes”) for an equal aggregate principal amount of the Issuer’s 12.375% Senior Secured Notes due 2014 (Series A-2), guaranteed by the Guarantors, that were originally sold pursuant to a private offering in August 2009 (the “Outstanding Series A-2 Notes” and, together with the Outstanding Series A-1 Notes, the “Outstanding Notes”), in denominations of $2,000 and integral multiples of $1,000 in excess thereof, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal.

Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus.

This will instruct you, the registered holder, as to the action to be taken by you relating to the Exchange Offers with respect to the Outstanding Notes held by you for the account of the undersigned.

Series and Principal Amount of Outstanding Notes Held For Account Holder(s) Principal Amount of Outstanding Notes To be Tendered*

* Unless otherwise indicated, the entire principal amount of Outstanding Notes held for the account of the undersigned will be tendered.

If the undersigned instructs you to tender the Outstanding Notes held by you for the account of the undersigned, it is understood that you are authorized (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner of the Outstanding Notes, including but not limited to the representations that the undersigned (i) is not an affiliate, as defined in Rule 405 under the Securities Act, of the Issuer or the Guarantors, (ii) is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of Exchange Notes, (iii) is acquiring the Exchange Notes in the ordinary course of its business, (iv) is not a broker-dealer tendering Outstanding Notes acquired for its own account directly from the Issuer. If a holder of the Outstanding Notes is an affiliate of the Issuer or the Guarantors, is not acquiring the Exchange Notes in the ordinary course of its business, is engaged in or intends to engage in a distribution of the Exchange Notes or has any arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offers, such holder may not rely on the applicable interpretations of the staff of the Securities and Exchange Commission relating to exemptions from the registration and prospectus delivery requirements of the Securities Act and must comply with such requirements in connection with any secondary resale transaction.

3

SIGN HERE

Dated:                                                                                                                                                                          

Signature(s):                                                                                                                                                                

Print Name(s):                                                                                                                                                            

Address:                                                                                                                                                                      

________________________________________________________________________________________

(Please include Zip Code)

Telephone Number:                                                                                                                                                   

(Please include Area Code)

Taxpayer Identification or Social Security Number:                                                                                               

My Account Number With You:                                                                                                                              

4

EX-99.4

Exhibit 99.4

NOTICE OF GUARANTEED DELIVERY

Apria Healthcare Group Inc.

OFFERS TO EXCHANGE

$700,000,000 AGGREGATE PRINCIPAL AMOUNT OF 11.25% SENIOR SECURED NOTES DUE 2014 (SERIES A-1), WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), FOR ANY AND ALL OUTSTANDING 11.25% SENIOR SECURED NOTES DUE 2014 (SERIES A-1)

$317,500,000 AGGREGATE PRINCIPAL AMOUNT OF 12.375% SENIOR SECURED NOTES DUE 2014 (SERIES A-2), WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, FOR ANY AND ALL OUTSTANDING 12.375% SENIOR SECURED NOTES DUE 2014 (SERIES A-2)

This Notice of Guaranteed Delivery, or one substantially equivalent hereto, must be used to accept the Exchange Offers made by Apria Healthcare Group Inc. (the “Issuer”) and certain domestic subsidiaries of the Issuer (the Guarantors”), pursuant to the Prospectus, dated                     , 2010 (as amended or supplemented from time to time, the “Prospectus”), and the enclosed Letter of Transmittal (the “Letter of Transmittal”) if the Outstanding Notes are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date of the Exchange Offers. This Notice of Guaranteed Delivery may be delivered or transmitted by facsimile transmission, mail or hand delivery to U.S. Bank National Association (the “Exchange Agent”) as set forth below. Capitalized terms not defined herein have the meanings ascribed to them in the Letter of Transmittal.

Delivery to: U.S. Bank National Association, Exchange Agent

By Mail or Overnight Courier:	By Facsimile:	By Hand Delivery:
U. S. Bank National Association	651/495- 8158	U. S. Bank National Association
60 Livingston Ave.		60 Livingston Ave.
St. Paul, Minnesota 55107		1st Floor – Bond Drop Window
Attn: Specialized Finance		St. Paul, Minnesota 55107
	To Confirm by Telephone: 1-800-934-6802

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature or a Letter of Transmittal is required by an Eligible Guarantor Institution (as defined in the Prospectus), such signature guarantee must appear in the additional space provided on the Letter of Transmittal for Signature Guarantee.

Please read the accompanying instructions carefully.

Ladies and Gentlemen:

Upon the terms and subject to the conditions set forth in the Prospectus and the accompanying Letter of Transmittal, receipt of which is hereby acknowledged, the undersigned hereby tenders to the Issuer the principal amount of the Outstanding Notes set forth below, pursuant to the guaranteed delivery procedures described in “The exchange offer—Guaranteed delivery procedures” section of the Prospectus.

Name of Tendering Holder:                                                                                                                                                                        

Series and Principal Amount of the Outstanding Notes Tendered:                                                                                              

Certificate Nos. (or Account Number of Book-Entry Facility):                                                                                                    

Signature(s):                                                                                                                                                                                                     

Name of Registered or Acting Holder:                                                                                                                                                   

Signature(s):                                                                                                                                                                                                    

Dated:                                                                                                                                                                                                                 

Address:                                                                                                                                                                                                             

(Zip Code)

(Daytime Area Code and Telephone No.)

¨ Check this Box if the Outstanding Notes will he delivered by book-entry transfer to The Depository Trust Company.

DTC Account Number:                                                                                                                                                                                

THE ACCOMPANYING GUARANTEE MUST BE COMPLETED.

2

GUARANTEE OF DELIVERY

(NOT TO BE USED FOR SIGNATURE GUARANTEE)

The undersigned, a member of a recognized signature medallion program or an “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), hereby (a) represents that the above person(s) “own(s)” the Outstanding Notes tendered hereby within the meaning of Rule 14e-4(b)(2) under the Exchange Act, (b) represents that the tender of those Outstanding Notes complies with Rule 14e-4 under the Exchange Act, and (c) guarantees to deliver to the Exchange Agent, at its address set forth in the Notice of Guaranteed Delivery, the certificates representing all tendered Outstanding Notes, in proper form for transfer, or a book-entry confirmation (a confirmation of a book-entry transfer of the Outstanding Notes into the Exchange Agent’s account at The Depository Trust Company), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, and any other documents required by the Letter of Transmittal within three (3) New York Stock Exchange trading days after the Expiration Date.

Name of Firm:                                                                                                                                                                                       

(Authorized Signature)

Address:                                                                                                                                                                                                   

(Zip Code)

Area Code and Tel. No.:                                                                                                                                                                    

Name:                                                                                                                                                                                                        

(Please Type or Print)

Title:                                                                                                                                                                                                          

Dated:                                                                                                                                                                                                        

NOTE: DO NOT SEND CERTIFICATES FOR OUTSTANDING NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL SURRENDER OF CERTIFICATES FOR OUTSTANDING NOTES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

3

INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY

1. Delivery of this Notice of Guaranteed Delivery. A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at its address set forth on the cover page hereof prior to the Expiration Date of the Exchange Offer. The method of delivery of this Notice of Guaranteed Delivery and any other required documents to the Exchange Agent is at the election and risk of holders and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. Instead of delivery by mail, it is recommended that holders use an overnight or hand delivery service. In all cases sufficient time should be allowed to assure timely delivery. For a description of the guaranteed delivery procedure, see Instruction 2 of the Letter of Transmittal. No Notice of Guaranteed Delivery should be sent to the Issuer.

2. Signatures on this Notice of Guaranteed Delivery. If this Notice of Guaranteed Delivery is signed by the registered holder(s) of the Outstanding Notes referred to herein, the signatures must correspond with the name(s) written on the face of the Outstanding Notes without alteration, addition, enlargement, or any change whatsoever.

If this Notice of Guaranteed Delivery is signed by a person other than the registered holder(s) of any Outstanding Notes listed, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers, signed as the name of the registered holder(s) appear(s) on the Outstanding Notes without alteration, addition, enlargement, or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and, unless waived by the Issuer, evidence satisfactory to the Issuer of their authority so to act must be submitted with this Notice of Guaranteed Delivery.

3. Questions and Requests for Assistance or Additional Copies. Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the address set forth on the cover hereof. Holders may also contact their broker, dealer, commercial bank, trust company, or other nominee for assistance concerning the Exchange Offer.

4