Document:

Form of Common Stock Option Agreement

 Exhibit 4.1 
  
 ROTECH HEALTHCARE INC. 
  
 COMMON STOCK OPTION PLAN 
  
 STOCK OPTION AGREEMENT 
  
 INCENTIVE STOCK OPTION 
  
 THIS AGREEMENT made as of             , 2004, by and between Rotech Healthcare
Inc., a Delaware corporation (the “Company”), and              (the “Optionee”). 
  
 WITNESSETH: 
  
 WHEREAS, the Company has adopted the Rotech Healthcare Inc. Common Stock Option Plan (the “Plan”) for the benefit of a select group of
employees, nonemployee directors and consultants; 
  
 WHEREAS, due
to the Optionee’s position in the Company, the Optionee is eligible for a grant of stock options under the Plan; and 
  
 WHEREAS, the Board has authorized the grant to the Optionee of an Incentive Stock Option under the Plan, on the terms and conditions set forth in the Plan
and as hereinafter provided. 
  
 NOW, THEREFORE, in consideration
of the premises contained herein, the Company and the Optionee hereby agree as follows: 
  
 1. Definitions. 
  
 Terms
used in this Agreement which are defined in the Plan shall have the same meaning as set forth in the Plan. 
  
 2. Grant of Option. 
  
 Pursuant to the Board’s authorization, an option to purchase              Shares
is hereby granted to the Optionee effective             , for an option price per Share equal to $            
(the “Option”). The Option is intended by the Board to be an Incentive Stock Option and the provisions hereof shall be interpreted on a basis consistent with such intent. 
  
 3. Exercise of Option. 
  
 (a) Exercisability. Subject to Subsection (b) below and such other applicable conditions set forth in this Agreement and the Plan,
all or part of the Option may be exercised prior to its expiration to the extent it has vested; provided, however, that the Option may not be exercised for a fraction of a Share unless such exercise is with respect to the final
installment of stock subject to the Option and a fractional share (or cash in lieu thereof) must be issued to permit the Optionee to exercise completely such final installment. Any fractional share with respect to which an installment of the Option
cannot be exercised because of the limitation contained in the preceding sentence shall remain subject to the Option and shall be available for later purchase by the Optionee in accordance with the terms hereof. 
  
 (b) Vesting. The Option shall vest over a period of
four (4) years in sixteen (16) equal quarterly installments with vesting deemed to have commenced on             . In the event of a Change of Control, the entire unvested
portion of 

 the Option shall vest upon the closing of the Change of Control and in the event of an Initial Public
Offering, one-quarter (25%) of the Option shall vest and the remaining unvested portion of the Option, if any, shall continue to vest according to the vesting schedule set forth in this Section 3(b) (For purposes of illustration, assuming the
Optionee was granted in the beginning of Year 1 an option to purchase 100,000 Shares and at the end of Year 2 the Company was to consummate an Initial Public Offering, such option would vest and become exercisable as follows: (A) 25,000 Shares at
the end of Year 1, (B) 25,000 Shares at the end of Year 2 and (C) an additional 25,000 Shares in Year 2. The remaining 25,000 Shares would vest and become exercisable at the end of Year 3). 
  
 4. Change in Status 
  
 Notwithstanding anything to the contrary in Paragraphs 2, 3
or 4, above, in the event the Optionee, by way of involuntary or voluntary transfer, demotion, or corporation reorganization, moves from a position within the Company that entitles the Optionee to participate in the Plan to a position within the
Company that does not entitle the Optionee to participate in the Plan, all of the options granted to the Optionee pursuant to Paragraph 2, above, shall stop vesting as of the effective date of the change of position and all of the stock options that
had not vested prior to the change in position shall be automatically cancelled. The Optionee shall retain all options that had vested, if any, prior to the change in position and will retain the right to exercise said vested options pursuant to the
terms of this Agreement and the Plan. 
  
 5. Method of
Exercising Option. 
  
 (a) Notice of
Exercise. The Optionee or the Optionee’s representative may exercise the Option by giving written notice to the Company. The notice shall specify the election to exercise the Option, the number of Shares for which it is being exercised and
the form of payment. The notice shall be signed by the person exercising the Option. In the event that the Option, or portion thereof, is being exercised by the representative of the Optionee, the notice shall be accompanied by proof (satisfactory
to the Company) of the representative’s right to exercise the Option. The Optionee or the Optionee’s representative shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 5 for the full
amount of the Purchase Price. For purposes of this Agreement, “Purchase Price” shall mean the exercise price set forth in Section 2 above multiplied by the number of Shares with respect to which the Option is being exercised. 

 
 (b) Issuance of Shares. After receiving a proper
notice of exercise, the Company shall cause to be issued a certificate or certificates for the Shares as to which the Option has been exercised, registered in the name of the person exercising the Option (or in the names of such person and his or
her spouse as community property or as joint tenants with right of survivorship). The Company shall cause such certificate or certificates to be delivered to or upon the order of the person exercising the Option. 
  
 (c) Withholding Taxes. In the event that the Company
determines that it is required to withhold any tax as a result of the exercise of the Option, the Optionee, as a condition to the exercise of the Option, shall make arrangements satisfactory to the Company to enable it to satisfy all withholding
requirements. The Optionee shall also 
  

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 make arrangements satisfactory to the Company to enable it to satisfy any withholding requirements that
may arise in connection with the vesting or disposition of Shares purchased by exercising the Option. 
  
 6. Payment For Stock. 
  
 (a) Cash. All or part of the Purchase Price may be paid in cash or cash equivalents. 
  
 (b) Surrender of Stock. All or any part of the
Purchase Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on
the date when the Option is exercised. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the purchase price if such action would cause the Company to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting purposes. 
  
 (c) Exercise/Sale. All or part of the Purchase Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by
the Company to sell Shares and to deliver all or part of the sales proceeds to the Company. 
  
 (d) Exercise/Pledge. All or part of the Purchase Price and any withholding taxes may be paid by the delivery (on a form prescribed
by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company. 
  
 7. Option Terms and Exercise Period. 
  
 (a) The Option shall be exercised, and payment by the
Optionee of the Option price shall be made, pursuant to the terms of the Plan and this Agreement. 
  
 (b) Except as otherwise provided for in the Plan or in this Agreement, the Option shall terminate on the earlier of (i) the tenth (10th)
anniversary (the fifth (5th) anniversary if the Optionee is a Ten Percent Shareholder) of the date of this Agreement, or (ii) the date the Option is fully exercised. 
  
 (c) Upon the termination of the Optionee’s employment with the Company other than by reason of death,
Disability or retirement of the Optionee on or after the age of 65, the Option shall expire and terminate on the earliest of the following occasions: 
  
 (i) The termination date determined pursuant to Subsection (b) above; or 
  
 (ii) The date ninety (90) days after the termination of the Optionee’s employment for any reason.

  
 The Optionee may exercise all or part of the Option at any time before its
termination under the preceding sentence, but only to the extent that the Option had become exercisable (i.e., vested) before the effective date of the termination of the Optionee’s employment. In the event that the 
  

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 Optionee dies after his or her termination of employment but before the expiration of the Option, all or part of the
Option may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired the Option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to
the extent that the Option had become exercisable before the Optionee’s employment terminated. 
  
 (d) Upon the termination of the Optionee’s employment with the Company by reason of death, Disability or retirement on or after the
age of 65 of the Optionee, the Option shall expire and terminate on the termination date determined pursuant to Subsection (b) above. 
  
 All or part of the Option may be exercised at any time before its expiration under the preceding sentence by the executors or administrators of the Optionee’s estate
or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that the Option had become exercisable before the Optionee’s death. When the Optionee dies, the
Option shall expire immediately with respect to the number of Shares for which the Option is not yet exercisable. 
  
 (e) Notwithstanding any of the provisions set forth herein, the exercise of the Option, or any portion thereof, after termination of the
Optionee’s employment with the Company shall be subject to satisfaction of the conditions precedent that the Optionee not breach or otherwise violate any confidentiality, non-disclosure, non-solicitation, or non-competition covenant contained
in the Employment Agreement. In the event of such adjudged breach or violation, any unexercised portion of the Option, whether vested or not, shall immediately terminate and expire. 
  
 (f) The Option will cease to qualify for favorable tax treatment as an Incentive Stock Option to the extent
it is exercised (i) more than three (3) months after the date the Optionee ceases to be an employee of the Company for any reason other than death or permanent and total disability (as defined in Section 22(e)(3) of the Code), or (ii) more than
twelve (12) months after the date the Optionee ceases to be an employee of the Company by reason of such permanent and total disability. 
  
 (g) A transfer of the Optionee’s employment between the Company and any subsidiary of the Company, or between any subsidiaries of the
Company, shall not be deemed to be a termination of the Optionee’s employment for purposes of the Option. 
  
 8. Restrictions on Transfer of Option. 
  
 This Agreement and the Option shall not be transferable otherwise than by will or by the laws of descent and distribution, and the Option shall be
exercisable, during the Optionee’s lifetime, solely by the Optionee, except on account of the Optionee’s Disability or death. 
  
 9. Regulation by the Board. 
  
 This Agreement and the Option shall be subject to any administrative procedures and rules as the Board shall adopt. All decisions of the Board upon any
question arising under the Plan or under this Agreement, shall be conclusive and binding upon the Optionee and any person or persons to whom any portion of the Option has been transferred by will or by the laws of descent and distribution.

  
 10. Rights as a Shareholder. 
  
 The Optionee shall have no rights as a shareholder with respect to Shares
subject to the Option until certificates for Shares are issued to the Optionee. 
  

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 11. Reservation of Shares. 
  
 With respect to the Option, the Company hereby agrees to at all times reserve for issuance and/or delivery upon payment by
the Optionee of the Option price, such number of Shares as shall be required for issuance and/or delivery upon such payment pursuant to the Option. 
  
 12. Delivery of Share Certificates. 
  
 Within a reasonable time after the exercise of the Option, the Company shall cause to be delivered to the Optionee, his or her legal representative or his
or her beneficiary, a certificate for the Shares purchased pursuant to the exercise of the Option. 
  
 13. Amendment. 
  
 The Board may amend this Agreement at any time and from time to time; provided, however, that no amendment of this Agreement that would alter or impair
any of the Optionee’s rights or obligations with respect to the Option shall be effective without the written consent of the Optionee (unless such amendment is required in order to cause the Award hereunder to qualify as
“performance-based” compensation within the meaning of Section 162 (m) of the Code and applicable interpretive authority thereunder). 
  
 14. Capital Changes and Business Successions. 
  
 It is the purpose of this Option to encourage the Optionee to work for the best interests of the Company and its stockholders. Since, for example, that
might require the issuance of a stock dividend or a merger with another corporation, the purpose of this Option would not be served if such a stock dividend, merger or similar occurrence would cause the Optionee’s rights hereunder to be diluted
or terminated and thus be contrary to the Optionee’s interest. Section 3(b) of the Plan contains extensive provisions designed to preserve options at full value in a number of contingencies. Therefore, provisions in the Plan for adjustment with
respect to stock subject to options and the related provisions with respect to successors to the business of the company are hereby made applicable hereunder and are incorporated herein by reference. 
  
 15. No Retention Rights. 
  
 Nothing in this Stock Option Agreement, the grant of the Option or in the
Plan shall confer upon the Optionee any right to continue in the employment of the Company for any period of specific duration. 
  
 16. Plan Terms. 
  
 The terms of the Plan are hereby incorporated herein by reference. 
  
 17. Effective Date of Grant. 
  
 The Option shall be effective as of the date first written above. 
  

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 18. Optionee Acknowledgment. 
  
 By executing this Agreement, the Optionee hereby acknowledges that he has received and read the Plan and this Agreement and
that he agrees to be bound by all of the terms of both the Plan and this Agreement. 
  

					
	 ATTEST:
	 	ROTECH HEALTHCARE INC.
			
	  

	 	By:	 	  

	 	 	 	 	Philip L. Carter
	 	 	Its:	 	President and Chief Executive Officer
		
	 	 	PRINT NAME
	 WITNESS:
	 	 
		
	  

	 	  

		
	 	 	 Social Security Number:

  

 6Trust Agreement dated July 27, 2004

  
 Exhibit 10.1

  
 TRUST AGREEMENT 
  
 THIS AGREEMENT made this 27th day of July, 2004, by and among Rotech
Healthcare, Inc., a Delaware corporation (hereinafter referred to as “Company”, which term shall include all successors and/or related entities thereto which have adopted the Rotech Healthcare Inc. Employees Plan (the “Plan”)
and/or agreed to be bound by this Trust Agreement) and Wachovia Bank, National Association as directed trustee (“Directed Trustee”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, Company this day maintains the Plan for its employees; and 
  
 WHEREAS, the Plan, is designed to comply with applicable provisions of the
Internal Revenue Code of 1986 as amended (“Code”) and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). 
  
 WHEREAS, the Company has established a Trust and desires to appoint Wachovia Bank, National Association to serve as the Directed Trustee to hold and
administer property contributed by the Company (and the income thereon) pursuant to the terms of the Plan and this Trust Agreement. 
  
 NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained and intending to be legally bound hereby, it is agreed by and
between the Company and the Directed Trustee as follows: 
  
 ARTICLE I 
  
 ESTABLISHMENT OF THE TRUST FUND

  
 1.1 The Company hereby establishes with the Directed
Trustee a trust consisting of such sums of money or property as shall from time to time be paid to the Directed Trustee under the Plan, and such earnings, profits, increments, additions and appreciation thereto and thereon as may accrue from time to
time. All such sums of money, all investments made therewith or proceeds thereof, and all earnings, profits, increments, appreciation and additions thereto and thereon, less the payments which shall have been made by the Directed Trustee, as
authorized herein, to carry out the Plan, are referred to herein as the “Trust Fund”. 
  
 1.2 The Directed Trustee shall not be responsible for the collection of any funds required by the Plan to be paid by the Company to the Directed Trustee,
nor shall the Directed Trustee be responsible for ensuring the timely payment of contributions. The Directed Trustee is not obligated to see that funds deposited with it are deposited according to the provisions of the Plan. 
  
 1.3 It shall be the duty of the Directed Trustee hereunder: 
  
 (a) To hold, invest, and reinvest the Trust Fund, as
provided in Article II, and to manage, and administer the Trust Fund. 
  
 (b) From time to time, on the written direction of the plan administrator for the Plan (the “Plan Administrator”), to make payments out of the Trust Fund to such 

  

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persons, in such manner, in such amounts, and for such purposes as may be specified in such written direction. The Directed Trustee shall be under no
liability for any payment made by it pursuant to such a direction except to the extent of the Directed Trustee’s negligence, willful misconduct or lack of good faith. 
  
 1.4 The Directed Trustee may refuse to accept any property which it, in its sole discretion, deems unsuitable. 

 
 ARTICLE II 
  
 INVESTMENT OF THE TRUST FUND 
  
 2.1 The Directed Trustee shall invest and reinvest the principal and income
of the Trust Fund pursuant to the written, telephone or computer generated direction of the Company, the “Named Fiduciary” (as authorized under the Plan document), a duly authorized “Investment Advisor” (within the meaning of 29
C.F.R. 2910.3-21(c)) or a Plan Participant (if permitted under the Plan document), or by any other party to whom authority to give such directions, requests or approvals is delegated by the Company and keep the same invested without distinction
between principal and income. The Directed Trustee shall not make any determination which shall cause it to be deemed a “Fiduciary” (as defined under Section 3(21) of ERISA) under the Plan with regard to such investment or reinvestment.

  
 2.2 The Directed Trustee shall have the following powers in
addition to the powers customarily vested in trustees by law and in no way in derogation thereof: 
  
 (a) With any cash at any time held by it, to purchase or subscribe for any authorized investment, and to retain such authorized investment
in trust. 
  
 (b) To sell for cash or on credit,
convert, redeem, exchange for another authorized investment, or otherwise dispose of, any authorized investment at any time held by it. 
  
 (c) To retain uninvested all or any part of the Trust Fund and to deposit the same in an interest-bearing account in any banking or
savings institution including the Directed Trustee’s savings department, but solely in accordance with and as directed in writing by the Company or its authorized representative. 
  
 (d) To exercise any option appurtenant to any authorized investment in which the Trust Fund is invested for
conversion thereof into another authorized investment, or to exercise any rights to subscribe for additional authorized investments and to make all necessary payments therefor, in accordance with and as directed in writing by the Company or its
authorized representative. 
  
 (e) Pursuant to
the written direction of the Company or its authorized representative, to join in, consent to, dissent from, or oppose, the reorganization, recapitalization, consolidation, sale, merger, foreclosure, or readjustment of the finances of any
corporations or properties in which the Trust Fund may be invested, or the sale, mortgage, pledge or lease of any such property or the property of any such corporation upon such terms and conditions as it may deem wise; to do any act (including the
exercise of options, making of agreements or subscriptions, and payment of expenses, assessments, or subscriptions) which may be deemed necessary or advisable in 

  

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connection therewith; and to accept any authorized investment which may be issued in or as a result of any such proceeding, and thereafter to hold the same.

  
 (f) To vote, in person or by general or
limited proxy, at any election of any corporation in which the Trust Fund is invested, and similarly to exercise, personally or by a general or limited power of attorney, any right appurtenant to any authorized investment held in the Trust Fund, in
accordance with and as directed in writing by the Company or its authorized representative. 
  
 (g) Pursuant to the written direction of the Company or its authorized representative, to sell, either at public or private sale, option
to sell, mortgage, lease for a term of years less than or continuing beyond the possible date of the termination of the Trust Fund created hereunder, partition or exchange any real property which may from time to time or at any time constitute a
portion of the Trust Fund, for such prices and upon such terms as it may deem best, and to make, execute and deliver to the purchasers thereof good and sufficient deeds of conveyance therefor and all assignments, transfers and other legal
instruments, either necessary or convenient for passing the title and ownership thereof to the purchaser, free and discharged of all trusts and without liability on the part of such purchasers to see to the proper application of the purchase price.

  
 (h) To purchase authorized investments at a
premium or discount in accordance with and as directed in writing by the Company or its authorized representative. 
  
 (i) To employ suitable agents, actuaries, accountants, investment advisors or managers and counsel and to pay their reasonable expenses
and compensation. 
  
 (j) To cause any investment
in the Trust Fund to be registered in, or transferred into, its name as Directed Trustee or the name of its nominee or nominees or to retain them unregistered or in form permitting transfer by delivery, but the books and records of the Directed
Trustee shall at all times show that all such investments are part of the Trust Fund, and the Directed Trustee shall be fully responsible for any misappropriation or defalcation in respect of any investment held by its nominee or held in
unregistered form and shall cause the indicia of ownership to be maintained within the jurisdiction of the district courts of the United States. 
  
 (k) To do all acts which it may deem necessary or proper and to exercise any and all powers of the Directed Trustee under this Agreement
upon such terms and conditions which it may deem are for the best interests of the Trust Fund. 
  
 2.3 “Authorized Investment” as used in this Article II shall mean bonds, debentures, notes, or other evidences of indebtedness; stocks (regardless of class), or other evidences of ownership, in any
corporation, mutual investment fund, put or call options traded on a national exchange, common or collective trust fund, pooled investment fund, investment company, association, or business trust; life insurance, retirement income or annuity
contracts; and real and personal property of all kinds, including leaseholds on improved and unimproved real estate. “Authorized Investments” shall not be limited to that class of investments which are defined as legal investments for
trust funds under the laws of North Carolina or of any other jurisdiction. Obligations or securities of the Company which constitute qualifying employer securities within the meaning of Section 407(d) of ERISA, as amended, shall not be excluded from
the term “authorized investments”, provided, however, that this provision shall not be construed as purporting to exempt employer securities (or any employer real estate which constitutes 

  

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qualifying employer real property within the meaning of Section 407(d) of ERISA, as amended) from any limitation of investment imposed thereon by federal
statute. 
  
 ARTICLE III 
  
 ACCOUNTS TO BE KEPT AND RENDERED BY THE DIRECTED TRUSTEE 
  
 3.1 The Directed Trustee shall keep accurate and detailed accounts of all
investments, receipts and disbursements and other transactions hereunder, including such specific records as shall be required by law and such additional records as may be agreed upon in writing between the Company and the Directed Trustee. In
compiling such information with respect to any investment which does not have a readily ascertainable market value, including but not limited to Company stock, the Directed Trustee shall be entitled to rely on the Company’s determination of
value and shall have no duty to verify the accuracy of the Company’s determination. All accounts, books and records relating thereto shall be open to inspection and audit by any person or persons designated by the Plan Administrator or the
Company, at all reasonable times. 
  
 3.2 Within ninety (90) days
following the close of each year of the Plan or the receipt of the Company’s contribution for such year, whichever is the latter, the Directed Trustee shall file with the Plan Administrator a written account, setting forth all investments,
receipts and disbursements, and other transactions effected by it during such year of the Plan or during the period from the close of the last preceding year of the Plan to the date of such removal or resignation, including a description of all
securities and investments purchased and sold with the cost or net proceeds of such purchases or sales, and showing all cash, securities and other property held at the end of such year or as of the date of removal or resignation, as the case may be.
Neither the Company nor the Plan Administrator nor any other person shall have the right to demand or to be entitled to any further or different accounting by the Directed Trustee, except as may be required by statute or by regulations published by
federal government agencies with respect to reporting and disclosure. 
  
 3.3 Upon the expiration of one hundred eighty (180) days from the date of filing such annual or other account, the Directed Trustee shall be forever released and discharged from any liability or accountability to anyone with respect to the
propriety of its acts or transactions shown in such account, except with respect to any acts or transactions as to which the Plan Administrator shall within such ninety-day period file with the Directed Trustee a written statement claiming
negligence or willful misconduct or lack of good faith on the part of the Directed Trustee. With respect to alleged breaches under ERISA (and amendments thereto), the Directed Trustee shall be entitled to rely upon the statutes of limitations set
forth therein. 
  
 ARTICLE IV 
  
 THE DIRECTED TRUSTEE 
  
 4.1 The Directed Trustee accepts the Trust Fund hereby created and agrees to
perform the duties hereby required by it, subject, however, to the following conditions: 
  
 (a) The Directed Trustee shall incur no liability to anyone for any action taken pursuant to a direction, request or approval given by the
Company, the Plan Administrator or by any other party to whom authority to give such directions, requests or approvals is delegated under the powers conferred under the Plan or this Trust 

  

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Agreement, except to the extent of the Directed Trustee’s negligence, willful misconduct or lack of good faith. 
  
 (b) The Directed Trustee shall receive as compensation for
its services such amounts as may be agreed upon at the time of execution of this Trust Agreement, subject to change at any time and from time to time by agreement between the Company and the Directed Trustee. Except as otherwise provided herein, the
Directed Trustee’s compensation and any other proper expense of the Directed Trustee for the Trust Fund (unless payable out of the Directed Trustee’s compensation) including all real and personal property taxes, income taxes, transfer
taxes, and other taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws of any jurisdiction upon or in respect of the Trust Fund hereby created, or any money, property or securities forming a part thereof
shall be paid out of the Trust Fund. The Company shall have the option, but not the obligation, to pay any such expenses, in whole or in part, and by so doing, to relieve the Trust Fund from the obligation of bearing such expenses. 
  
 (c) The Directed Trustee shall not be answerable for any
action taken pursuant to any direction, consent, request, or other paper or document on the belief that the same is genuine and signed by the proper person if such direction, consent, request or other paper or document relates to a matter with
respect to which the purported initiator or signatory has authority under the Plan, except to the extent of the Directed Trustee’s negligence, willful misconduct or lack of good faith. 
  
 (d) The Directed Trustee shall be indemnified and held
harmless by the Company against any actions, claims, demands, losses, damage, or expense of any kind (including attorneys fees), or liabilities (referred to collectively as “Claims”) which it or any of its agents, employees, nominees, or
affiliated organization may at any time sustain or incur if such claims arise out of the events occurring by reason of Directed Trustee having acted pursuant to any direction, consent, request, or other paper or document it believed to be genuine,
except to the extent of the Directed Trustee’s negligence, willful misconduct or lack of good faith. The Directed Trustee may begin, maintain or defend any litigation necessary in connection with the administration of the Plan, except that the
Directed Trustee is not obligated or required to do so unless indemnified to its satisfaction. 
  
 4.2 Upon the appointment of the Plan Administrator and upon any change in the Plan Administrator, the Company shall advise the Directed Trustee in writing thereof, and the Directed Trustee shall be fully protected in
assuming that there has been no change until so advised by the Company. 
  
 4.3 The Directed Trustee acting hereunder may resign at any time by giving sixty (60) days’ written notice to the Plan Administrator and may be removed at any time, with or without cause, by the Board of Directors of the Company. The
Company may terminate the Directed Trustee at any time by giving sixty (60) days written notice to the Directed Trustee. Within forty-five (45) days of the date of the notice of termination or resignation, the Company shall notify the Directed
Trustee in writing of the name of the successor trustee. The above notwithstanding, resignation or termination may be made effective at any time upon mutual consent of the parties. Upon the effective date of the resignation or removal of the
Directed Trustee, or upon the date on which there is no longer any property held under the Trust, if earlier, the Directed Trustee shall be forever released and discharged from any liability or accountability to anyone with respect to its actions as
Directed Trustee. 
  

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 4.4 Except to the extent specifically provided under this Trust Agreement, the Directed Trustee shall not
act, nor be under any obligation to act, absent direction of the Company or Named Fiduciary. 
  
 ARTICLE V 
  
 AMENDMENTS
TO TRUST AGREEMENT - 
 DISCONTINUANCE OF PLAN 
  
 5.1 The provisions of this Trust Agreement may be amended at any time and from time to time by the Company provided that:

  
 (a) No such amendment shall be effective
unless the Plan and the Trust Agreement, as so amended, shall be for the exclusive benefit of the employees of the Company or their respective beneficiaries. 
  

(b) No such amendment shall operate to deprive a Participant of any right or benefit irrevocably vested in him under the Plan or Trust
Agreement prior to such amendment. 
  
 (c) No
such amendment which may affect the Directed Trustee shall be effective until the Directed Trustee has consented thereto. 
  
 (d) Each such amendment shall be effective when adopted by the Board of Directors of the Company, and filed with the Directed Trustee,
except that where the consent of the Directed Trustee is required, any such amendment shall not become effective until the Directed Trustee has given its consent by approving the copy of the amendment filed with it. 
  
 ARTICLE VI 
  
 MISCELLANEOUS PROVISIONS 
  
 6.1 Any person dealing with the Directed Trustee may rely upon a copy of this
Trust Agreement and any amendments hereto, certified to be a true and correct copy by any officer of the Directed Trustee. 
  
 6.2 Other than as provided in Section 4.1 and 6.3 hereof, in no circumstances, whether upon amendment or termination of this Trust Agreement, or
otherwise, shall any part of the Trust Fund be used for or diverted to any purposes other than the exclusive benefit of employees of the Company who are Participants under the Plan, or their beneficiaries. 
  
 6.3 Neither this Trust Agreement nor the Plan shall prohibit any of the
following transactions, each of which is specifically authorized hereby, to the extent permitted by Section 403(c) of ERISA: 
  
 (a) The return to the Company of all or any part of one or more contributions made by the Company by reason of a mistake of fact if such
return is made within one (1) year after the payment of such contribution; 
  

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 (b) The return to the Company of all or any part of one or more contributions made by the
Company if all of the following conditions apply: (i) the contribution was conditioned on the qualification of the Plan under Section 401 or 403(a) of the Internal Revenue Code of 1986 (or successor provisions of that or other statutes of similar
intent), (ii) the Plan is found not to so qualify, and (iii) the contribution(s) is/are returned to the Company within one (1) year of the date of denial of qualification of the Plan; and 
  
 (c) The return to the Company of any contribution for which
a federal income tax deduction is wholly or partially disallowed under Section 404 of the Internal Revenue Code of 1986 (or successor provisions of that or other statutes of similar intent), to the extent of such disallowances, if the (i)
contribution, when made, was conditioned upon its deductibility for federal income tax purposes and (ii) the return of the contribution occurs within one (1) year after the disallowance of the deduction. 
  
 This Section 6.3 shall not be construed to permit any payment which would deprive the Trust
Fund of its exempt status. 
  
 6.4 In the event of any conflict
between the provisions of the Plan and the Trust Agreement, the latter shall control. 
  
 6.5 The term “Plan” whenever used herein shall mean the Plan as amended from time to time, and the Company will cause a copy of any amendment or a copy of the Plan, as amended, revised or changed, in any way
and from time to time to be delivered to the Directed Trustee. 
  
 6.6 Any term used herein which is defined in the Plan shall be considered to have the same meaning as in the Plan unless the contrary is clearly indicated. 
  
 6.7 This Trust Agreement may be executed in any number of counterparts, each of which shall be deemed an original and said
counterparts shall constitute one and the same instrument. 
  
 6.8
This Trust Agreement shall be construed, enforced and regulated under federal law, and to the extent (if any) not preempted thereby, under the laws of the State of North Carolina. 
  
 IN WITNESS WHEREOF, the Company and the Directed Trustee have caused this Trust Agreement to be executed and attested as of
the day and year first above written. 
  

									
	 Wachovia Bank, National Association
	 	 	 	 Rotech Healthcare, Inc.

					
	 By:
	 	 	 	 	 	 By:
	 	 
					
	 Title:
	 	 	 	 	 	 Title:
	 	 

  

 -7-

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