APRIA HEALTHCARE GROUP INC
RESIGNATION AND GENERAL RELEASE AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<FILENAME>exh10-10.txt
<DESCRIPTION>RESIGNATION AND GENERAL RELEASE AGREEMENT
<TEXT>
                                                                   EXHIBIT 10.10


                    RESIGNATION AND GENERAL RELEASE AGREEMENT


     THIS  RESIGNATION AND GENERAL RELEASE  AGREEMENT (this  "Agreement"),  made
February 12, 2002, by and between Philip L. Carter, an individual ("Executive"),
and  Apria  Healthcare  Group  Inc.,  a  Delaware  corporation  ("Apria"),  is a
resignation   agreement  which  includes  a  general   release  of  claims.   In
consideration  of the covenants  undertaken  and the releases  contained in this
Agreement, Executive and Apria agree as follows:

     1. Executive  shall  voluntarily  resign from his position as an officer of
Apria and all of its affiliates and subsidiaries,  including his position as the
Chief  Executive  Officer  and as a  Director  of  Apria,  as well  as from  his
employment with Apria and its affiliates and subsidiaries in any other capacity,
by  executing  Exhibit A  attached  hereto,  such  resignation  to be  effective
immediately.

     2. Apria shall pay or provide to Executive the following consideration:

          (a)  $2,606,354.00,  representing  an  amount  equal  to the  Contract
     Balance,  as such term is defined in Section  IV-D-3(c)  of the  Employment
     Agreement  dated as of December 7, 2000,  between Apria and Executive  (the
     "Employment  Agreement"),  subject to standard  withholding for federal and
     state  taxes  and paid in one lump sum  within  eight  days of  Executive's
     execution of this Agreement;

          (b) $1,303,177.00,  representing an amount equal to the total payments
     described in Section 3(b) of the Nondisclosure and Noncompetition Agreement
     dated  as  of  December  7,  2000,   between  Apria  and   Executive   (the
     "Nondisclosure Agreement"), subject to standard withholding for federal and
     state taxes and payable in  fifty-two  (52) equal  weekly  installments  in
     accordance with Section 3(c) of the Nondisclosure Agreement;

          (c) For a period of one year from the date hereof,  Apria will provide
     Executive  with an  appropriate  office and  associated  services  (such as
     secretarial, photocopying, telephone and delivery) at a mutually acceptable
     location, provided, however, that Apria shall not be required to spend more
     than $50,000 to provide this benefit to Executive;

          (d)  Within  45  days  of the  date  hereof,  Executive  shall  submit
     appropriate documentation of any unreimbursed business expenses incurred by
     Executive  prior to the  date  hereof  in  accordance  with the  Employment
     Agreement.  Apria  shall  reimburse  such  expenses  within  20 days  after
     submission of such documentation;

          (e) All of Executive's vested rights under retirement, 401(k), SERP or
     similar  benefit plans of any of Apria Releasee (as defined in Section 4 of
     this  Agreement),  in the  amounts  and at the times  provided  for in such
     plans;

          (f) To the extent not theretofore paid or provided, Apria shall timely
     pay or provide  Executive any other amounts or benefits required to be paid
     or provided  or which  Executive  is  eligible  to receive  under any plan,
     program,  policy,  practice,   contract  or  agreement  of  Apria  and  its
     affiliated  companies  (such other amounts and benefits  being  hereinafter
     referred to as "Other Benefits") in accordance with the terms of such plan,
     program,  policy, practice,  contract or agreement;  such Other Benefits to
     include,  without  limitation or  duplication,  the Accrued  Obligations as
     defined in Section  IV-D-1 of the  Employment  Agreement  and all  benefits
     under Executive's  outstanding stock option agreements which shall continue
     in full force and effect in accordance with their terms; and

          (g) An additional amount equal to the sum of $60,833.33  (constituting
     one month's base compensation) plus $500.00 (for a total of $61,333.33).

     No amount under this Section 2 shall be required to be paid by Apria before
the 8th day after Execution of this Agreement by Executive.

     3. Executive agrees that,  following the termination of his employment with
Apria, he will, at no cost to him,  cooperate with any reasonable  request Apria
may make f or information  and assistance  with respect to any matter  involving
Executive during his period of employment.

     4. Except for those obligations created by or arising out of this Agreement
for which receipt or satisfaction has not been acknowledged herein, and with the
exception  of (a) rights to  indemnity  that  Executive  in his  capacity  as an
officer  or  director  or  consultant  to  Apria  or  its  predecessors  or  any
subsidiaries  or  affiliates,  past and  present,  of Apria or its  predecessors
(collectively,  including  Apria,  the "Apria  Releasees")  under  provision  of
Delaware law, the Certificate of  Incorporation or Bylaws of any Apria Releasee,
or any indemnification agreement for the benefit of or between Executive and any
Apria Releasee and (b) any rights Executive may have under stock option plans or
agreements,  retirement,  401(k),  SERP or  similar  benefit  plans of any Apria
Releasee, Executive on behalf of himself and his descendants, dependents, heirs,
executors,  administrators,  assigns and  successors,  and each of them,  hereby
covenants not to sue and fully releases and discharges the Apria Releasees,  and
each of them,  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 has at any time
heretofore  owned  or  held  or may in the  future  hold as  against  any  Apria
Releasee,  arising  out of or in any  way  connected  to  his  consulting  with,
employment  by and/or  director  relationship  with any Apria  Releasee,  or his
voluntary  resignation  as a director  or  employee  or any other  transactions,
occurrences,  actions,  claims  or  omissions  or any  loss,  damage  or  injury
whatsoever,  known or unknown, suspected or unsuspected,  resulting from any act
or omission by or on the part of the Apria Releasees,  or any of them, committed
or omitted prior to the date of this Agreement,  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 California Fair
Employment and Housing Act, the  California  Family Rights Act, or any claim for
notice pay,  severance pay, bonus,  sick leave,  holiday pay, vacation pay, life
insurance,  health or medical  insurance or any other fringe  benefit,  workers'
compensation or disability.

     5.  Except  for  those  obligations  created  by or  arising  out  of  this
Agreement,  Apria, on behalf of itself and all Apria Releasees, hereby covenants
not to sue and fully releases and discharges  Executive with respect to and from
any and all claims, 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 any Apria  Releasee
now  owns or holds  or has at any  time  heretofore  owned or held or may in the
future  hold as against  Executive,  arising out of or in any way  connected  to
Executive's consulting with, employment by and/or director relationship with his
voluntary  resignation as an employee or director from any Apria Releasee or any
other  transactions,  occurrences,  actions,  claims or  omissions  or any loss,
damage  or  injury  whatsoever,  known or  unknown,  suspected  or  unsuspected,
resulting  from any act or omission by or on the part of Executive  committed or
omitted prior to the date of this Agreement.

     6. It is the intention of Executive and Apria in executing  this  Agreement
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,
Executive  and Apria  hereby  expressly  waive any and all rights  and  benefits
conferred  upon them, and each of them, by the provisions of SECTION 1542 OF THE
CALIFORNIA CIVIL CODE, and expressly  consent that this Agreement 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  FAVOR AT THE TIME OF  EXECUTING  THE
     RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
     WITH THE DEBTOR."

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

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

          (a) In return for this Agreement,  he will receive compensation beyond
     that which he was already  entitled to receive  before  entering  into this
     Agreement;

          (b) He was orally  advised  and are hereby  advised in writing by this
     Agreement to consult with an attorney before signing this Agreement;

          (c) He was given a copy of this  Agreement on February  12, 2002,  and
     informed  that  he had  twenty-one  days  within  which  to  consider  this
     Agreement; and

          (d) He was  informed  that he has  seven  days  following  the date of
     execution of this Agreement in which to revoke this Agreement.

     8. Executive and the Apria  Releasees  shall keep  confidential,  and Apria
shall use its reasonable best efforts to cause the officers and directors of the
Apria Releasees to keep  confidential,  the fact or existence of this Agreement,
the terms and conditions of this Agreement,  all communications  made during the
negotiation of this Agreement, all facts and claims upon which this Agreement is
based (collectively  referred to as the "Confidential  Information"),  and shall
not directly or indirectly,  whether orally, in writing,  by signal,  gesture or
any other means, disclose such Confidential  Information to any person or entity
(including,  but not limited to, any current or former employee,  agent, partner
or contractor of Apria or its affiliates, past or present) or in any way respond
to,  participate  in or contribute to, whether  orally,  in writing,  by signal,
gesture  or any other  means,  any  inquiry,  discussion,  notice  or  publicity
concerning any aspect of the  Confidential  Information.  The only exceptions to
the  obligations  imposed by this  paragraph  are that  Executive  may  disclose
Confidential  Information  as required by law, or to (i) his medical,  or health
care  providers,  but only such portion as essential for the provision of health
care  services;  (ii)  pastoral  counselors or  psychotherapists,  but only such
portion as essential for the provision of such  counseling or therapy  services;
(iii)  professional  accountants  and tax  advisers,  but only such  portion  as
essential for the provision of such professional accounting or tax services; and
(iv)  attorneys,  but only such portion as essential  for the  provision of such
professional  legal  services;   provided,  however,  that  Executive  shall  be
permitted to make the  disclosures  permitted by the  preceding  clauses only if
before such  disclosure is made, the person or entity that will be receiving the
disclosure  is  informed  of and  agrees  to be  bound  by this  confidentiality
provision.   Apria  may  disclose  Confidential   Information  as  necessary  to
effectuate  the terms of this Agreement or as required by law. The parties agree
to the Press  Release  attached  hereto as  Exhibit B, and agree that such Press
Release may be issued on or after  February  13,  2002.  Nothing in this section
shall be construed to preclude  Executive or Apria from  complying with a lawful
court order or process requiring disclosure,  written, oral or otherwise, of any
Confidential Information, provided that the party served gives immediate written
notice to the other by hand  delivery at its or his  business  address,  of such
court  order or process  and  cooperates  fully with and  supports  through  all
reasonable  means all  efforts  by the other to oppose  any such  disclosure  of
Confidential Information. Executive and Apria agree that disclosure by either of
them of  Confidential  Information  shall,  at the  option of the  nondisclosing
party,  constitute and shall be treated as a material  breach of this Agreement.
In any arbitration  alleging a breach of this section, the arbitrator shall have
the authority to award  compensatory  and/or punitive damages.  Executive agrees
that he will not  disparage in any manner any of the Apria  Releasees and Apria,
on behalf of itself and all of the Apria Releasees, agrees that it will not, and
Apria shall use its reasonable  best efforts to cause the officers and directors
of the Apria Releasees to not, disparage Executive in any manner.

     9.  Executive  and Apria  each  warrant  and  represent  that  neither  has
heretofore  assigned or  transferred to any person not a party to this Agreement
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.

     10. (a) All amounts payable under this Agreement or any other  compensation
payable  to, on behalf or for the benefit of  Executive  shall be subject to any
tax withholding  required by law. Any such amounts  required to be withheld from
any non-cash  payment or from any payment made  directly to a third party may be
withheld from cash otherwise payable to Executive hereunder. Executive shall pay
all  taxes  required  by law to be paid by him as a result of the  payments  and
benefits provided hereunder.

          (b) The  provisions  of  Exhibit  C are  incorporated  herein  by this
     reference.

     11. This  Agreement  constitutes  and  contains  the entire  agreement  and
understanding  concerning  Executive's  employment and  directorship,  voluntary
resignation from the same and the other subject matters addressed herein between
the  parties,  and  supersedes  and  replaces  all  prior  negotiations  and all
agreements  proposed  or  otherwise,  whether  written or oral,  concerning  the
subject  matters  hereof,  including  without  limiting  the  generality  of the
foregoing,  the Employment Agreement and all prior employment agreements between
Executive  and  Apria.  This  is an  integrated  document.  Notwithstanding  the
foregoing,  the Nondisclosure Agreement remains in full force and effect, and it
is  understood  that the  payments  described  in Section 2 hereof  include  all
compensation  to which Executive is entitled under the  Nondisclosure  Agreement
and no further payments shall be made under the Nondisclosure Agreement.

     12.  Executive may revoke this  Agreement in its entirety  during the seven
days following execution of this Agreement by Executive.  Any revocation of this
Agreement must be in writing and hand delivered to the General  Counsel of Apria
during the revocation period.

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

     14. This  Agreement  has been  executed and  delivered  within the State of
California,  and the rights and  obligation  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.

     15. Each party has  cooperated  in the  drafting  and  preparation  of this
Agreement.  Hence, 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.

     16. This Agreement 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.

     17. 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  Agreement or the subject  matter hereof,  or
otherwise in any way arising out of, related to, or connected with  Executive' s
employment  with Apria or any Apria  Releasee or the  termination of Executive's
employment with Apria or any Apria Releasee, shall be resolved through final and
binding arbitration in Orange County,  California,  pursuant to California Civil
Procedure  Code ss.ss.  1282-1284.2,  with the  exception  of Sections  1283 and
1283.05.  In the  event  of such  arbitration,  the  prevailing  party  shall be
entitled to recover all reasonable costs and expenses  incurred by such party in
connection  therewith,  including attorneys' fees. The nonprevailing party shall
also be solely responsible for all costs of the arbitration,  including, but not
limited to, the  arbitrator's  fees,  court reporter fees, and any and all other
administrative  costs of the  arbitration,  and  promptly  shall  reimburse  the
prevailing party for any portion of such costs previously paid by the prevailing
party.  Any  dispute as to the  reasonableness  of costs and  expenses  shall be
determined by the arbitrator.  Except as may be necessary to enter judgment upon
the award or to the extent required by applicable law, all claims,  defenses and
proceedings  (including,  without limiting the generality of the foregoing,  the
existence  of  the  controversy  and  the  fact  that  there  is an  arbitration
proceeding)  shall be treated in a confidential  manner by the  arbitrator,  the
parties and their  counsel,  and each of their  agents,  and  employees  and all
others  acting  on behalf of or in  concert  with  them.  Without  limiting  the
generality of the  foregoing,  no one shall divulge to any third party or person
not directly involved in the arbitration the contents of the pleadings,  papers,
orders,  hearings,  trials,  or  awards  in the  arbitration,  except  as may be
necessary to enter  judgment  upon an award as required by  applicable  law. Any
court  proceedings  relating to the arbitration  hereunder,  including,  without
limiting the generality of the foregoing, to prevent or compel arbitration or to
confirm,  correct,  vacate or otherwise enforce an arbitration  award,  shall be
filed under seal with the court, to the extent permitted by law.

     18. No waiver of any  breach  of any term or  provision  of this  Agreement
shall be  construed  to be, or 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.

     19.  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  basic  terms  and  intent  of this
Agreement and which are not inconsistent with its terms.

     I have read the foregoing  Agreement and 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.

     IN WITNESS  WHEREOF,  the  undersigned  have  executed and  delivered  this
Agreement this February 12, 2002, at Orange County, California.

                             Executive


                             ----------------------------------------
                             Philip L.Carter




                             APRIA HEALTHCARE GROUP INC.


                             By
                                -------------------------------------
                                Lawrence M. Higby
                                Chief Executive Officer

<PAGE>


                                   ENDORSEMENT

     I, Philip L. Carter, hereby acknowledge that I was given twenty-one days to
consider the foregoing  Agreement and  voluntarily  chose to sign this Agreement
prior to the expiration of the twenty-one day period.

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

     EXECUTED this 12th day of February, 2002, at Orange County, California.


                                ---------------------------------------
                                Philip L. Carter

<PAGE>


                                    EXHIBIT A

                                   RESIGNATION


                                PHILIP L. CARTER
                                  108 PANORAMA
                         COTO DE CAZA, CALIFORNIA 92679

                                February 12, 2002





Apria Healthcare Group Inc.
26220 Enterprise Court
Lake Forest, California 92630


Gentlemen:

     This is to advise you that, effective today, I hereby voluntarily resign my
position as the Chief  Executive  Officer and as a Director of Apria  Healthcare
Group Inc. (the  "Company"),  and my  employment in any other  capacity with the
Company and its subsidiaries and affiliates.

                                Sincerely yours,


                                ---------------------------------------
                                Philip L. Carter
<PAGE>


                                    EXHIBIT B

                                  PRESS RELEASE
<PAGE>

                                    EXHIBIT C

                                   EXCISE TAX

     A. 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  Apria  or  any
affiliate,  whether  pursuant  to this  Agreement  or  otherwise  (collectively,
"Covered  Payments"),  is or may become subject to the tax imposed under Section
4999 of the  Internal  Revenue  Code of 1986,  as amended  (the  "Code") (or any
successor provision or any comparable  provision of state, local or foreign law)
("Excise Tax"),  Apria 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 the
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 Exhibit C,  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 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
Payment.

     B. [Intentionally left blank]

     C.  Notwithstanding  the  foregoing  provisions of this Section A, if Apria
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 C. Apria shall notify Executive of any intent to reduce
the amount of any Covered  Payments  in  accordance  with this  Section C (which
notice, if practicable,  shall be given prior to the occurrence of an event that
would give rise to a Covered  Parachute  Payment),  and 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 Apria,  such election  would cause  Executive to be
subject to the Excise Tax.

     D.  The  determination  of  whether  an  event  described  in Code  Section
280G(b)(2)(A)(i) has occurred, the amount of any Reimbursement Amount and/or the
amounts  described in Section C above shall be made  initially by an  accounting
firm mutually acceptable to Apria and Executive; 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.

     E.  Executive  shall  promptly  notify Apria in writing of any claim by any
taxing  authority  that, if successful,  would require the payment by Apria 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 Exhibit C except to the extent of actual  damages  suffered by
Apria as a result of such failure. If Apria 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:

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

     2. take such action in connection with contesting such claim as Apria 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 Apria that is reasonably acceptable to Executive;

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

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

provided,  however,  that Apria's actions do not unreasonably  interfere with or
prejudice Executive's disputes with the taxing authority as to other issues; and
provided, further, that Apria 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.







</TEXT>
</DOCUMENT>
