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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (date of earliest event reported): June 20, 1995
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ROTECH MEDICAL CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED ON ITS CHARTER)
Florida 59-2115892
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(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4506 L.B. McLeod Road, Suite F, Orlando, Florida 32811
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 841-2115
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Not Applicable
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(former name or former address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c). Exhibits.
2.1 Subscription Agreement and Investment Intent Letter for
Partnership Interest in Marshall-Bell, Limited dated June 2, 1995 between the
Registrant and Marshall-Bell, Limited, Agreement for the Sale of Partnership
Interest between the Registrant and The Marshall Family Charitable Remainder
Trust, Agreement for the Sale of Partnership Interest dated June 5, 1995 between
the Registrant and Sheila A. Bell and the Agreement for the Sale of Partnership
Interest dated June 5, 1995 between the Registrant and Thomas D. Marshall
(collectively referred to as "Agreements"). Pursuant to Item 601(b)(2) of
Regulation S-K, schedules to these Agreements have been omitted. The Registrant
hereby undertakes to furnish supplementally a copy of such schedules to the
Commission upon request.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment of Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
RoTech Medical Corporation,
a Florida Corporation
Dated: June 30, 1995 By: /s/ Rebecca R. Irish
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Rebecca R. Irish, Treasurer
and Chief Financial Officer
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EXHIBIT 2.1
SUBSCRIPTION AGREEMENT
AND
INVESTMENT INTENT LETTER
FOR PARTNERSHIP INTEREST
IN
MARSHALL-BELL, LIMITED
(A TEXAS GENERAL PARTNERSHIP)
THIS SUBSCRIPTION AGREEMENT AND INVESTMENT INTENT LETTER is executed and
effective this 2nd day of June, 1995, by and between MARSHALL-BELL, LIMITED, a
Texas General Partnership (the "Partnership") and DISTINCT HOME HEALTH CARE,
INC., a Florida corporation (the "Investor").
WHEREAS, Thomas D. Marshall is currently the owner of a 51% capital and
profits interest in the Partnership and Sheila A. Bell is currently the owner of
49% capital and profits interest in the partnership; and
WHEREAS, the Partnership is actively engaged in the sale and rental of home
health care equipment with its principal place of business located at 720 Pine
Street, Texarkana, Bowie County, Texas; and
WHEREAS, the Partnership desires to raise additional equity capital and the
investor desires to invest in the Partnership and acquire a 28.772% capital and
profits interest in the Partnership;
NOW, THEREFORE, in consideration of the representations, warranties and
mutual promises and covenants contained herein, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
1. Acquisition of Partnership Interest; Consideration. The Investor
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hereby agrees to acquire a 28.772% capital and profits interest in the
Partnership (the "Partnership Interest") for and in consideration of the cash
contribution of Four Million One Hundred Thousand and 00/100 Dollars
($4,100,000) payable upon execution of this Agreement.
2. Investor's Representations and Warranties. The Investor hereby
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acknowledges, warrants and represents that:
(a) it is acquiring the partnership interest subscribed for hereunder for
its own account, solely for investment purposes and not with a view to the
resale of said securities or further distribution thereof;
(b) the offer and sale of the partnership interest subscribed hereby has
not been registered with the Securities and Exchange Commission or with any
State securities
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department, but is being made pursuant to exemptions from the registration
provisions of the Securities Act of 1933, as amended, and the Texas Securities
Act, as amended;
(c) the Investor understands that the partnership interest must be held
indefinitely unless the sale thereof is subsequently registered under the
Securities Act of 1933, as amended, the Texas Securities Act, as amended or an
exemption from registration is available;
(d) there are risks relating to this investment, and the entire investment
in the partnership interest could become worthless;
(e) it has such knowledge and experience in business matters which enables
it to be capable of evaluating the risks and merits of this investment;
(f) it is able to bear the economic risks of this investment;
(g) any certificate representing units of partnership interest subscribed
hereby which may be issued to the Investor will bear an appropriate restrictive
legend that the same may not be resold or otherwise transferred or assigned
without appropriate compliance with the registration provisions of the
Securities Act of 1933 and any applicable state securities act and in accordance
with the provisions of the Partnership Agreement as well as the provision of any
other agreements by and among the Partnership and its partners;
RESTRICTIVE LEGEND FOR PARTNERSHIP CERTIFICATES OF
MARSHALL-BELL LIMITED
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE TEXAS SECURITIES ACT,
AS AMENDED. THESE SECURITIES MAY NOT BE OFFERED, SOLD TRANSFERRED,
PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION OR THE AVAILABILITY
OF AN EXCEPTION FROM REGISTRATION OR THE AVAILABILITY OF AN EXCEPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE TEXAS
SECURITIES ACT. IN ADDITION, THIS CERTIFICATE IS TRANSFERRABLE ONLY UPON
COMPLIANCE WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT BY AND AMONG
THE PARTNERS OF THE PARTNERSHIP, A COPY OF WHICH IS ON FILE AT THE OFFICE
OF THE PARTNERSHIP.
(h) it has been provided with or permitted access to all information
with which it deems material to formulating its investment decisions, INCLUDING,
BUT LIMITED TO THE FOLLOWING ITEMS:
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(1) the Partnership Agreement between the partners and all
amendments and proposed amendments thereto, a copy of which is attached hereto
as Exhibit "A";
(2) financial statements for the Partnership;
(3) current salary information for the employees and officers of
the Partnership;
(i) all documents, records, and financial information pertaining to
this investment has been made available for inspection by the Investor, its
attorney, accountant and/or investor representative;
(j) the Investor and/or its advisor(s) have had a reasonable
opportunity to ask questions of and receive answers from the Partnership, or a
person or persons acting on its behalf, concerning the partnership interest
being acquired by Investor, and all such questions have been answered to the
full satisfaction of the Investor;
(k) the Investor is investing in its own name and for its own account;
(l) the Investor was not solicited by any form of general solicitation
or general advertising, including, but limited to the following;
(1) any advertisement, article, notice, or other communication published in
any newspaper, magazine, or similar media or broadcast over television or radio;
or
(2) any seminar or meeting whose attendees had been invited by any general
solicitation or general advertising.
(m) the Investor (i) has adequate means of providing for its current
needs and possible contingencies, (ii) has no need for liquidity in this
investment, (iii) is able to bear the substantial economic risks of an
investment in the partnership interest for an indefinite period, and (iv) at the
present time, could afford a complete loss of such investment.
(n) the Investor realizes that it may not be able to sell or dispose
of its partnership interest as there will be no public market for such interest.
(o) Upon execution of this Agreement, the Investor agrees to become a
party to the Partnership Agreement by executing a Statement of Acceptance in the
form attached hereto as Exhibit "B";
(p) no commission or other remuneration is being paid or given
directly or indirectly to any person for the issuance of the partnership
interest subscribed for hereunder.
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3. Joint and Several Representations and Warranties of the Partnership,
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Sheila A. Bell and Thomas D. Marshall. The Partnership, Sheila A. Bell and
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Thomas D. Marshall (the latter two individuals referred to herein as the
"Partners") hereby jointly and severally represent and warrant to the Investor
as follows:
(a) Organization and Standing. The Partnership is a Texas general
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partnership and has all requisite power and authority to own its assets, carry
on its business as presently conducted and to execute, deliver and perform its
obligations under this Agreement.
(b) Financial Statements. The Partnership has delivered to the
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Investor true and correct copies of the Partnerships most recent unaudited
balance sheet and related statement of income and retained earnings for the
period ended December 31, 1994, (collectively, the "Financial Statements").
Except as otherwise specifically set forth in this Agreement and to the best of
the partnership's and the Partner's knowledge, the Financial Statements have
been prepared from the books and records of the Partnership in accordance with
generally accepted accounting principles consistently applied and present fairly
in all material respects the financial position and results of operations of the
Partnership as of the date thereof and for the period covered thereby.
(c) Litigation. Except as set forth in this Agreement, there is no
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claim, action, suit, litigation, audit, investigation or other proceeding
pending, or, to the knowledge of the Partnership or the Partners, threatened
against the Partnership or any of its assets, properties or business, or the
transactions contemplated by this agreement. Neither the partnership nor its
assets or properties are subject to our bound by any order, writ, injunction,
judgment or decree of any court, or governmental regulatory agency, commission,
board of administrative body.
(d) Tax Matters. Except as specifically set forth in this Agreement
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or in writing delivered to the Investor prior to the date the partnership
interest is acquired, the Partnership has timely filed (or obtained the approved
extension for the filing) all tax returns, reports and forms which the
Partnership was obligated to file under applicable law, rule or regulation with
the appropriate governmental authorities; (ii) all such tax returns, reports and
forms were properly prepared in accordance with all applicable laws, rules and
regulations and truly and accurately reflect the tax liabilities of the
Partnership for the periods covered thereby; (iii) all taxes shown to be due on
such returns, reports and forms, as well as any and all other taxes required by
applicable law, rule or regulation to be paid by the Partners, have been timely
paid in full to the appropriate taxing authority; (iv) no tax liens have been
filed against the Partnership, its assets or properties and no claims, audits,
investigations, or proceedings are pending, or to the knowledge of the
Partnership or the Partners, is threatened with respect to any taxes; (v) the
Partnership has properly withheld or otherwise collected all taxes and other
amounts which it was required to withhold or collect under any applicable law,
and all such amounts have been timely remitted to the proper authorities; and
(vi) the
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Partnership has not filed an election under Section 754 of the Internal Revenue
Code of 1986, as amended, for the current tax year.
(e) No Undisclosed Liabilities. Except as otherwise expressly
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reflected or reserved against in the Partnership's balance sheet, or as
expressly disclosed to the Investor in writing, the Partnership has no
indebtedness or liabilities or other obligations of any nature whatsoever
(whether direct or indirect, asserted or unasserted, known or unknown, accrued,
absolute, contingent or otherwise), except accounts payable and other current
liabilities incurred in the ordinary and customary course of business. A list of
all Partnership outstanding indebtedness and liabilities as of May 31, 1995 is
attached hereto as Exhibit"C."
4. Assignment. This Agreement and the rights, obligations and duties of
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the parties hereto shall not be assignable or otherwise transferrable.
5. Survival. The acknowledgements, representations, warranties and
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obligations of the parties hereto shall survive the transfer and assignment of
the partnership interest to Investor.
6. Modification. No provision contained herein may be modified, amended
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or waived except by written agreement signed by the party to be bound thereby.
7. Binding Effect and Benefit. This Agreement shall inure to the benefit
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of, and shall be binding upon, the parties hereto, their heirs, executors,
administrators, personal representatives and successors.
8. Headings and Captions. Subject headings and captions are included for
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convenience purposes only and shall not affect the interpretation of this
Agreement.
9. Gender and Pronouns. Throughout this Agreement, the masculine shall
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include the feminine and neuter and the singular shall include the plural and
vice versa as the context requires.
10. Entire Agreement. This document constitutes the entire agreement of
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the parties and supersedes any and all other prior agreements, oral or written,
with respect to the subject matter contained herein.
11. Governing Law. This Agreement shall be subject to and governed by the
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laws of the State of Texas.
12. Third Party Beneficiaries. This Agreement shall not create any rights
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for the benefit of any third party.
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13. Facsimile Execution Accepted. In the absence of a party's original
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signature on the Agreement, an executed photocopy or facsimile reproduction of
such party's signature shall have the same validity, force and effect as the
original signature of such party, provided that such signature page bears at
least one (1) original signature by another party to the Agreement.
14. Counterparts. This Agreement may be executed in multiple
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counterparts, and all counterparts so executed shall constitute one agreement,
binding on all of the parties hereto, notwithstanding that all parties are not
signatories to the original or the same counterpart.
15. Consent to IRC Section 754 Election. The Partnership and the Partners
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hereby agree that upon the demand or action of the Investor, the Partnership
shall file, in accordance with applicable Treasury Regulations, a timely and
proper election under Section 754 of the IRC of 1986, as amended, such election
to be effective for the taxable year of the Partnership in which the Investor
acquires the Partnership interest subscribed for hereby.
16. Assumption of Pro Rata Share of Debt. By this document, Investor
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hereby assumes and agrees to pay debt of the Partnership equal to its pro-rata
interest in the capital profits of the Partnership, to-wit, 28.77 percent.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
PARTNERSHIP:
MARSHALL-BELL, LIMITED,
a Texas General Partnership
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THOMAS D. MARSHALL, PARTNER
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SHEILA A. BELL, PARTNER
INVESTOR:
DISTINCT HOME HEALTH, INC.
By:
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STEPHEN GRIGGS, PRESIDENT
EXHIBIT "A"
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STATEMENT OF ACCEPTANCE
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Reference is made to the MARSHALL-BELL, LIMITED Partnership Agreement (the
"Agreement") dated January 1, 1992, by and among all of the then partners of
MARSHALL-BELL, LIMITED a Texas general partnership. As a proposed recipient of
a partnership interest covered by the Agreement, the undersigned hereby agrees
that such partnership interest upon receipt shall remain subject to all of the
terms and conditions of the Agreement and all rights and obligations thereunder
arising prior to such receipt, that upon such receipt the undersigned shall be
deemed automatically to have accepted all of the terms and conditions of the
Agreement and that the undersigned thereafter shall be deemed automatically to
have accepted all of the terms and conditions of the Agreement and that the
undersigned thereafter shall be deemed to be a signatory party to the Agreement
in the position of one of the partners. It is understood that the executed
Statement of Acceptance shall be attached to the Agreement and shall form a part
thereof without any further action.
DATED this ______ day of ______________________________, 1995.
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EXHIBIT"B"
PARTNERSHIP AGREEMENT
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THIS PARTNERSHIP AGREEMENT is made and entered into effective the first day
of January, 1992, by and between THOMAS D. MARSHALL, SR. and SHEILA A. BELL,
(whose names, addresses, and interests in the Partnership are listed on Exhibit
A attached hereto and made a part hereof), hereinafter collectively referred to
as the Partners.
RECITAL
For and in consideration of the mutual covenants herein contained, the
Partners hereby form and create a general partnership (herein called the
Partnership), under and pursuant to the Texas Uniform Partnership Act (Art.
6132B of the Revised Civil Statutes of the State of Texas) for the purposes and
upon the terms, provisions, and conditions as hereinafter set forth:
ARTICLE I.
NAME AND PLACE OF BUSINESS
Name
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1.01. The activities and business of the Partnership shall be conducted
under the name of MARSHALL BELL, LTD. in Texas, and under such variations of
this name as may be necessary to comply with the laws of other states within
which the Partnership may do business or make investments.
Place of Business
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1.02. The principal place of business of the Partnership shall be
Texarkana, Bowie County, Texas, but additional places of business may be located
elsewhere.
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Address
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1.03. The mailing address of the Partnership shall be 720 Pine Street,
Texarkana, Texas 75501.
ARTICLE II.
PURPOSES OF THE PARTNERSHIP
The purposes of the Partnership shall be as follows:
MEDICAL HEALTH CARE SUPPLY
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To engage generally in the medical health care supply business and all
related activities in the general retail, wholesale and renting of medical
equipment and supplies.
ARTICLE III.
TERM OF PARTNERSHIP
The Partnership shall begin on January 1, 1992, and shall continue
thereafter from year to year unless sooner terminated as specifically provided
in this Agreement.
ARTICLE IV.
CONTRIBUTIONS TO PARTNERSHIP
Initial Contributions
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4.01. The Partners acknowledge that each Partner shall be obligated to
contribute and, will, upon demand, contribute to the Partnership the amount of
cash or property of agreed fair market value set out opposite the name of each
on Exhibit A as their initial capital contributions.
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Future Contributions
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4.02. Each Partner shall be obligated to make the advances as
hereinafter set forth in this paragraph. 4.02. Each partner shall advance to
the Partnership, upon written request by the Manager of the partnership, the
Partner's pro rata share (the ownership percentage set opposite the name of each
Partner in Exhibit A) of all costs, expenses, or charges with respect to the
operation of the Partnership and the ownership, operation, maintenance, and
upkeep of any Partnership Property including but not limited to ad valorem
taxes, debt amortization (including interest payments), insurance premiums,
repairs, costs of capital improvements made upon approval by the Partners as
herein provided, management fees or salaries, advertising expenses, professional
fees, wages and utility costs, to the extent such costs, expenses, or charges
exceed the income, if any, derived from the Partnership and the proceeds of any
loans made to the Partnership. The Manager of the Partnership may estimate the
cash requirements of the Partnership for periods of up to one (1) year in
advance and request payment of each Partner's pro rata share of said estimated
cash requirements, and each Partner shall pay said amount within thirty (30)
days after receiving a statement thereof. At the end of each period covered by
the estimate, the Manager of the Partnership shall render an accounting to each
Partner as to the amount actually expended for such costs, expenses, or charges,
and, if the estimate paid by the Partners exceeds the actual cash expenditures,
the Manager of the Partnership shall either refund the excess to the Partners or
apply the same against the estimate of cash requirements for the next succeeding
period.
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Conditions Secured
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4.03. Each Partner hereby grants to the Manager of the partnership a lien
on his or her interest in the Partnership to secure payment of any and all
contributions required or permitted hereunder.
ARTICLE V.
PROFITS-LOSSES-LIABILITIES
Interest of Each Partner
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5.01. The interest of each Partner in and to any net profits of the
Partnership and the obligation and liability of each Partner as among themselves
with respect to any and all liabilities and losses in connection with the
business of the Partnership shall be the percentage set opposite each Partner's
name in Exhibit A. In the event of a default hereunder by a Partner, the
defaulting Partner does hereby indemnify the other Partner against any loss or
liability exceeding the percentages set forth in Exhibit A by reason of any
liability or loss resulting from such default. No Partner shall have any right
to compensation solely be reason of his or her contribution to the Partnership,
except to share in the net profits in the percentage set opposite each Partner's
name in Exhibit A unless otherwise provided herein. Any Partner may, however,
loan to the Partnership such additional funds as the Partners may agree upon and
interest at the prevailing rate per annum shall be paid thereon and charged as
an expense of the partnership business.
Distributions
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5.02. Distributions from the Partnership to the respective Partners shall
be made at such times and in such amounts as may be determined by a unanimous
vote of the Partners;
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however, any distributions from the Partnership shall be made proportionately to
all Partners in the percentage set opposite each Partner's name in Exhibit A.
ARTICLE VI.
OWNERSHIP OF PARTNERSHIP PROPERTY
All real or personal property, including all improvements placed or located
thereon, acquired by the Partnership shall be owned by the Partnership, such
ownership being subject to the other terms and provisions of this Agreement.
Each Partner hereby expressly waives the right to require partition of any
Partnership Property or any part thereof.
ARTICLE VII.
FISCAL MATTERS
Fiscal Year
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7.01. The accounting year of the Partnership shall be the calendar
year.
Books and Records
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7.02. Proper books and records shall be kept with reference to all
Partnership transactions, and each Partner shall at all reasonable times during
business hours have access thereto. The books shall be kept upon such method of
accounting as shall properly reflect the income of the Partnership and as shall
be agreed upon by the Partners. The books and records shall include the
designation and identification of any property in which the Partnership owns a
beneficial interest; such records shall include the designation and
identification of any property in which the Partnership owns a beneficial
interest; such records shall include, but shall not be limited to, the ownership
of property (real, personal, and mixed), as well as any property in which the
Partnership owns an interest and the title to such property has been recorded or
is maintained, in the name of one or more designated Partners without
designation of the Partnership. The books and records of
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the Partnership shall be reviewed annually at the expense of the Partners by a
certified public accountant selected by the Partners, who shall annually prepare
and deliver to the Partnership, for filing, the appropriate Federal Partnership
Income Tax Return.
Partnership Accounts
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7.03. All funds of the Partnership shall be deposited in its name in
an account or accounts maintained at a national or state bank designated by the
Manager of the Partnership or with an agent designated by the Manager of the
Partnership. Checks shall be drawn upon the Partnership account or accounts only
for purposes of the Partnership and shall be signed by the Manager of the
Partnership or by an officer or authorized agent of the Manager of the
Partnership.
ARTICLE VIII.
MANAGEMENT OF PARTNERSHIP AFFAIRS
Management
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8.01. Control of the Partnership and all of its affairs shall be in
the Partners, who shall have equal rights in the management and conduct of the
partnership investments and activities. In order to simplify the operations of
the Partnership, the Partners shall have the right to designate a Manager of the
Partnership to serve in such capacity until such time as the Partners designate
a new Manager. The Manager shall receive no salary. The term of the individual
as the Manager shall be the first one-year period of the Partnership's
existence.
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The Manager of the Partnership is hereby delegated the responsibility
for the day-to-day management and administerial acts of the Partnership. The
Manager of the Partnership shall have the right and power to bind the
Partnership, subject to the conditions and limitations contained in Paragraph
8.02 and elsewhere in this Agreement. It is agreed that the general management
and final determination of all questions relating to the usual daily business
affairs and ministerial acts of the Partnership shall rest in the Manager of the
Partnership. In this connection, and not by way of limitation, the Manager of
the Partnership is authorized to do any and all things and to execute any and
all documents, contracts, evidences of indebtedness, security agreements,
financing statements, etc., necessary or expedient to carry out and effectuate
the purpose of the parties as expressed in this Partnership Agreement. All
business arrangements entered into shall be upon such terms and conditions as
generally would be characteristic of a businessman in similar circumstances
exercising prudent and sound business judgment. The Manager of the Partnership
shall devote such attention, and business capacity to the affairs of the
Partnership as may be reasonably necessary. In this connection, the parties
hereby acknowledge that the Manager of the Partnership manages, and may continue
to manage, other Partnerships, and may continue to engage in other distinct or
related businesses.
Restriction on Authority of Manager and Partners
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8.02. The individual Partners and the Manager of the Partnership
shall not have any authority with respect to the Partnership and this agreement
to:
(1) Do any act in contravention of this Agreement;
(2) Do any act which would make it impossible to carry on the business
of the Partnership;
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(3) Possess Partnership Property or assign the right of the
Partnership or its Partners in specific Partnership Property for other than a
Partnership purpose;
(4) Make, execute, or deliver any general assignments for the benefit
of creditors, or any bond, guaranty, indemnity bond, or surety bond;
(5) Assign, transfer, pledge, compromise, or release any claim of the
Partnership except for full payment, or arbitrate, or consent to the arbitration
of any of its disputes or controversies;
(6) Make, execute, or deliver any deed, long-term ground lease,
contract to sell all or any part of any Partnership Property, or execute any new
note or mortgage to renew and extend without increasing any existing note or
mortgage, without first having obtained the unanimous consent of the Partners;
or
(7) Do any of the following without the unanimous consent of all
Partners:
a. Confess a judgment;
b. Make, execute, or deliver for the Partnership any bond, mortgage,
deed of trust, guarantee, indemnity bond, surety bond, or
accommodation paper or accommodation endorsement;
c. Amend or otherwise change this Agreement so as to modify the rights
or obligations of the Partners as set forth herein; or
d. Create any personal liability for any Partner other than that
personal liability to which any Partner may have agreed to in writing.
Meetings of the Partners
------------------------
8.03 The Partners shall hold regular quarterly meetings at times and
places to be selected by the Partners. In addition, any Partner may call a
special meeting to be held in Bowie County at any time after the giving of five
(5) days' notice to the other Partner. Any
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Partner may waive notice of or attendance at any meeting of the Partners, and
may attend by telephone or any other electronic communication device or may
execute a signed written consent. At such meeting, the Partners shall transact
such business as may properly be brought before the meeting.
The Partners shall keep regular minutes of all their proceedings. The
minutes shall be placed in the minute book of the Partnership.
Unless otherwise indicated in this Agreement, a unanimous vote of the
Partners shall be required to authorize an action of the Partnership.
No new Partner will be admitted to this Partnership without the unanimous
consent of all the existing Partners.
Action Without Meeting
----------------------
8.04. Any action required by statute or by this Agreement to be taken
at a meeting of the Partners, or any action which may be taken at a meeting of
the Partners, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the Partners entitled to
vote with respect to the subject matter thereof and such consent shall have the
same force and effect as a unanimous vote of the Partners. Any such signed
consent, or a signed copy thereof, shall be placed in the minute book of the
Partnership.
ARTICLE IX
RESTRICTION OF TRANSFERS
Prohibition Against Transfer
----------------------------
9.01. No Partner may sell, assign, transfer, encumber, or otherwise
dispose of any interest in the Partnership, Partnership Property, or assets of
the Partnership, without the
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unanimous consent of all the Partners. Any such prohibited transfer, if made,
shall be void and without force and effect, and any attempt by any Partner to
dispose of his or her interest in violation of this prohibition shall constitute
a material default hereunder.
Retirement, death, disability,
------------------------------
or Insanity of a Partner
------------------------
9.02. A Partner may voluntarily retire from the Partnership. In order
to do so, he or she must give the Partnership thirty (30) days written notice of
such intent. In the event that he or she and the Partners cannot agree on an
effective date for his or her retirement, said date shall take effect on the
last day of the month in which occurs the written announcement of the partner of
his or her intent to retire.
In the event of the death of a Partner, the effective date of the
termination of such deceased Partner from the partnership shall be the date of
death.
In the event a Partner is declared legally insane, or becomes disabled,
then in such event, there shall be a dissolution of the Partnership.
Upon the retirement, death, disability or insanity of a Partner, the
Partnership will terminate pursuant to Article XIII of this Agreement. However,
any remaining Partner shall have the option to purchase the interest of the
terminating Partner. If this option is exercised, the business itself will
then remain in existence as a sole proprietorship with the terminating partner's
interest having been purchased by the remaining Partner.
The interest of the terminating Partner shall be a fair market value of
such interest as said fair market value is determined according to Article XII
of this Agreement. Once such figure is determined, the purchase price of said
interest shall be paid as follows: The purchase
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price to be paid shall be paid in cash, or, at the option of the purchasing
Partner, by the execution and delivery of his Note payable to the order of the
terminating Partner in the amount of the purchase price. Said Note shall bear
interest at the rate of ten (10%) percent per annum and shall be payable in
sixty (60) equal monthly installments of principal and interest, the first such
payment to be made one (1) month from the date of execution and delivery of such
Note, and with such Note containing full prepayment privileges without penalty.
In the event a terminating Partner does not have his or her interst in the
Partnership redeemed by the remaining Partner, then the Partnership shall be
terminated pursuant to the provisions of this Agreement.
In the event the option to redeem is exercised by the remaining Partner,
and upon receipt of the purchase price (cash or note) by the terminating
Partner, such Partner shall have no further interest in the Partnership or its
business or assets and the terminating Partner shall execute and deliver such
assignments and other instruments as may be reasonable to evidence and fully and
effectively transfer the interest of the terminating Partner to the remaining
Partner. In the event the appropriate instruments are not delivered, the
remaining Partner, after delivery of such consideration to the terminating
Partner as represents the fair market value of his or her interest in the
Partnership, may execute such instruments as the terminating Partner's
irrevocable agent, that may be necessary in order to effectuate the transfer of
the terminating Partner's interest in the business.
19
<PAGE>
ARTICLE X
DEFAULT BY PARTNER
Events of Default
-----------------
10.01. The following events shall be deemed to be events of default by a
Partner:
(1) Failure of a Partner to make when due any contribution or advance
required to be made under the terms of this Agreement and continuance of such
failure for a period of ten (10) days after written notice thereof from the
Manager of the partnership to such Partner.
(2) Violation of any of the other provisions of this Agreement and failure
to remedy or cure such violation within ten (10) days after written notice of
such violation from the Manager of the Partnership or the other Partners.
(3) The making of an assignment for benefit of creditors or the filing of a
petition under any section or chapter of the National Bankruptcy Act, as
amended, or under any similar law or statute of the United States or any state
thereof.
(4) Adjudication of Partner as a bankrupt or insolvent in proceedings filed
against the Partner under any section or chapter of the National Bankruptcy Act,
as amended, or under any similar law or statute of the United States, or any
state thereof without further possibility of appeal or review.
(5) The appointment of a receiver for all or substantially all of the
assets of a partner and the failure to have such receiver discharged within
thirty (30) days after appointment.
20
<PAGE>
(6) The bringing of any legal action against a Partner by his or her
creditor, resulting in litigation which, in the opinion of the remaining
Partner, creates a real and substantial risk of involvement of the Partnership
Property which will probably:
a. Act to their financial detriment; or
b. Result in such creditor, or his assigns, succeeding in or to all or a
part of the interest of such Partner in the Partnership.
Effect of Default
-----------------
10.02. Upon the occurrence of an event of default by a Partner, the
remaining Partner shall have the right, upon giving the defaulting Partner ten
(10) days' written notice to require that the defaulting Partner terminate his
or her interest in the Partnership. In the event the defaulting Partner does
not oppose this request, the remaining Partner shall be required to purchase the
terminating Partner's interest pursuant to terms already outlined in this
Agreement. If the defaulting Partner does not agree to a termination of his or
her interest, the remaining Partner shall have the option to initiate
appropriate court action for the purpose of terminating such interest or shall
proceed to terminate this Partnership.
In the event that a defaulting Partner's interest in the Partnership is
purchased and no further procedures are necessary under this section, the
purchase price to be paid to the defaulting Partner shall be paid in cash or, at
the option of the Purchasing partner, by the execution and delivery of the
Purchasing Partner's note payable to the order of the defaulting Partner, in the
amount of the purchase price. Said note shall bear interest at the rate of ten
(10)%) percent per annum and shall be payable in sixty (60) equal monthly
installments of principal and interest, the first such payment to be made one
(1) month from the date of
21
<PAGE>
execution and delivery of such note, and with such note containing full
prepayment privileges without penalty. In the event the Purchasing Partner
elects to exercise the option contained in this Paragraph 10.01, the purchase
price to be paid to the defaulting Partner shall be the air market value as
determined in the manner set forth in Article XII hereof.
Upon receipt of the aforesaid purchase price (cash or note), if any, by the
defaulting Partner, the defaulting Partner shall have no further interest in the
Partnership or its business or assets and the defaulting Partner shall execute
and deliver such assignments and other instruments as may be reasonable to
evidence and fully and effectively transfer the interest of the defaulting
Partner to the nondefaulting Partner. In the event the appropriate instruments
are not delivered, after notice by the Manager of the partnership that the
consideration is available to the defaulting Partner, the Manager of the
Partnership may deliver such consideration to the defaulting Partner and execute
as the defaulting Partner's irrevocable agent, any such legal instruments to the
appropriate continuing Partner. However, all parties hereto agree that the
Manager of the partnership shall not have any individual liability for any
actions taken in this connection.
No assignment or transfer of a defaulting Partner's interest as provided
herein, shall relieve the defaulting Partner from any personal liability for
outstanding indebtednesses, liabilities, liens, and obligations relating to the
partnership which may exist on the date of the assignment or transfer. The
default of any Partner hereunder shall not relieve the remaining Partner from
his/her agreements, liabilities, and obligations hereunder. A defaulting
Partner's interest in the Partnership shall not be considered in any Partnership
voting requirement.
22
<PAGE>
Option to Assist Defaulting Partner
-----------------------------------
10.03 Any Partner may agree to assist the other Partner in the event
of default and said agreement or any advancement or payment made thereunder
shall be secured by a lien upon the interest of the defaulting Partner in the
Partnership which lien may be foreclosed, at the option of the assisting
Partner, by the Manager of the Partnership.
Option to Cure Defaults
-----------------------
10.04 If any Partner shall default in the performance of observance
of any covenant, condition, or other provision of this partnership Agreement to
be performed or observed, the remaining Partner may, without waiving any claim
for breach of this Partnership Agreement, and after written notice which is
reasonable under the circumstances, cure such default for the account of the
defaulting Partner, and the defaulting Partner shall reimburse or repay any
reasonable amount paid and any reasonable expense or contractual liability so
incurred, with interest at the highest lawful rate; and said obligation to
reimburse and repay shall be secured by a lien upon the interest of the
defaulting Partner in the Partnership, which lien may be foreclosed, at the
option of the Partner exercising this option to cure default, by the Manager of
the Partnership.
Foreclosure for Default
-----------------------
10.05. In the event a Partner is in default under the terms of this
Partnership Agreement, the lien provided for in Paragraph 4.03 hereof, may be
foreclosed by the Manager of the Partnership.
23
<PAGE>
Transfer by Attorney in Fact
----------------------------
10.06. Each Partner hereby makes, constitutes, and appoints the
Manager of the Partnership as his attorney in fact in the event he becomes a
defaulting Partner whose interest in the Partnership has been foreclosed in the
manner prescribed above and upon such foreclosure, the Manager of the
Partnership is authorized and allowed to execute and deliver a full assignment
or other transfer of the defaulting Partner's interest in the Partnership and
the Manager of the Partnership shall have no liability to any person in making
such assignment or transfer.
Additional Effects of Default
-----------------------------
10.07. Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies provided by law, nor shall pursuit of any
remedy herein provided constitute a forfeiture or waiver of any amount due to
the remaining Partner hereunder or of any damages accruing to him by reason of
the violation of any of the terms, provisions, and covenants herein contained.
No waiver by the remaining Partner of any violation or breach shall be deemed or
construed to constitute a waiver of any other violation or breach of any of the
terms, provisions, and covenants herein contained and forbearance by him to
enforce one or more of the remedies herein provided upon an event of default
shall not be deemed or construed to constitute a waiver of such default.
24
<PAGE>
ARTICLE XI.
AMENDMENT
Subject to the provisions of Article VIII, this Agreement may be
amended or modified by the Partners from time to time but only by a written
instrument executed by both Partners in the Partnership.
ARTICLE XII.
DETERMINING FAIR MARKET VALUE
12.01 As used in this Agreement, Fair Market Value of the partnership
shall be determined by multiplying the previous calendar year's gross annual
sales by 85%. This figure shall then be multiplied by the individual partner's
percentage of ownership as set forth in Exhibit "A". The resulting figure is the
Fair Market Value of that Partner's interest in the partnership.
ARTICLE XIII
TERMINATION OF THE PARTNERSHIP
The Partnership may be terminated at any time at a specially called
meeting upon the unanimous vote of the Partners. Upon such termination, the
assets of the Partnership shall be applied as follows: to payment of the
outstanding Partnership liabilities, although an appropriate reserve may be
maintained and the amount determined by the Manager of the Partnership for any
contingent liability until said contingent liability is satisfied, and the
balance of such reserve, if any, shall be distributed together with any other
sums remaining after payment of the outstanding Partnership liabilities to the
Partners as their interest appears on Exhibit A unless otherwise provided
herein.
25
<PAGE>
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
Notices
-------
14.01. Except as may be otherwise specifically provided in this
Agreement, all notices required or permitted hereunder shall be in writing and
shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, registered or certified mail, return receipt requested,
addressed to the parties at the respective addresses set forth on Exhibit A or
at such other addresses as may have been theretofore specified by written notice
delivered in accordance herewith.
Texas Law To Apply
------------------
14.02. This Agreement shall be construed under and in accordance with
laws of the State of Texas, and all obligations of the parties created hereunder
are performable in Bowie County, Texas.
Other Instruments
-----------------
14.03. The parties hereto covenant and agree that they will execute
such other and further instruments and documents as are or may become necessary
or convenient to effectuate and carry out the Partnership created by this
Agreement.
14.04 The headings used in this Agreement are used for administrative
purposes only and do not constitute substantive matter to be considered in
construing the terms of this Agreement.
26
<PAGE>
Parties Bound
-------------
14.05. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
legal representatives, successors, and assigns where permitted by this
Agreement.
Legal Construction
------------------
14.06. In case any one or more of the provisions contained in this
Partnership Agreement shall, for any reason, be held to be invalid, illegal, or
unenforceable in any resspect, such invalidity, illegality, or unenforceability
shall not affect any other provision thereof and this Partnership Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had
never been contained herein.
Counterparts
------------
14.07. This Partnership Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original.
Gender
------
14.08. Wherever the context shall so require, all words herein in the
male gender shall be deemed to include the female or neuter gender, all singular
words shall include the plural, and all plural words shall include the singular.
Prior Agreements Superseded
---------------------------
14.09. This Agreement supersedes any prior understandings or written
or oral agreements between the parties respecting the within subject matter.
27
<PAGE>
EXECUTED at Texarkana, Texas, as of the day and year above first
written.
---------------------------------------------
Thomas D. Marhsall
---------------------------------------------
Sheila A. Bell
THE STATE OF TEXAS
COUNTY OF BOWIE
This instrument was acknowledged before me on this 1st day of January,
1992 by THOMAS D. MARSHALL.
-----------------------------------------------
Notary Public in and for the
State of TEXAS
My Commission Expires:
________________________
-----------------------------------------------
Printed Name of Notary Public
28
<PAGE>
THE STATE OF TEXAS
COUNTY OF BOWIE
This instrument was acknowledged before me on this 1st day of January,
1992 by Sheila A. Bell.
-----------------------------------------------
Notary Public in and for the
State of TEXAS
My Commission Expires:
_________________________
-----------------------------------------------
Printed Name of Notary Public
29
<PAGE>
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST
------------------------------------------
THIS AGREEMENT is made on June 5, 1995, between THE MARSHALL FAMILY
CHARITABLE REMAINDER TRUST (the "Seller"), and DISTINCT HOME HEALTH CARE, INC.,
a Florida Corporation with its principal place of business located at 4506 L. B.
McLeod Road, Suite F, Orlando, Orange County, Florida (the "Purchaser").
RECITALS
Seller owns an approximate Thirty-Five and 088/1000 percent (35.088%)
profits and capital interest in MARSHALL-BELL, LIMITED, a Texas general
partnership with its principal place of business located at 720 Pine Street,
Texarkana, Bowie County, Texas (the "Partnership"); and
Seller desires to sell and Purchaser desires to purchase all of the
interest in the Partnership held by Seller on the terms and for the
consideration hereafter set forth in this Agreement.
In consideration of the mutual promises of the parties, in reliance on the
representations, warranties, covenants, and conditions contained in this
Agreement and for other good and valuable consideration, the parties agree as
follows:
ARTICLE ONE
SALE AND TRANSFER OF PARTNERSHIP INTEREST
Seller, for and in consideration of the payment of Five Million and No/100
Dollars ($5,000,000.00) Cash (the "Cash Consideration"), irrevocably assigns,
transfers and passes to Purchaser all of its right, title and interest in the
Partnership.
<PAGE>
ARTICLE TWO
PAYMENT OF PURCHASE PRICE
The Cash Consideration shall be payable to Seller contemporaneously
with the execution of this Agreement (the "Closing").
ARTICLE THREE
SELLER'S REPRESENTATIONS AND WARRANTIES
Seller hereby represents and warrants to Purchaser that the following
facts and circumstances regarding the Partnership are true and correct:
3.01 Status of Partnership. Marshall-Bell, Limited is a general
---------------------
partnership duly organized, validly existing and in good standing under the laws
of the State of Texas and has requisite power and authority to carry on its
business as it is presently being conducted.
3.02 Litigation. There are no actions, suits or proceedings which
----------
are pending or threatened against the Partnership or affecting any of its
properties or rights, at law or in equity, or before any federal, state,
municipal or other governmental agency or instrumentality, domestic or foreign,
nor is Seller aware of any facts which to her knowledge might reasonably be
expected to result in any such action, suit or proceeding. The Partnership is
not in default with respect to any order or decree of any court or of any such
governmental agency or instrumentality.
3.03 Compliance With Laws and Other Instruments. The Partnership is
------------------------------------------
not in violation of any term or provision of any mortgage, indenture, contract,
agreement, instrument, judgment, decree, order, statute, rule or regulation, and
the execution and
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 31
- ------------------------------------------
<PAGE>
delivery of and performance and compliance with this Agreement by Seller will
not result in the violation of or be in conflict with or constitute a default
under any such term or provision or result in the creation of any mortgage,
lien, encumbrance or charge upon any of the properties or assets of the
Partnership pursuant to any such term or provision.
3.04 Title to Assets. The Partnership has good and indefeasible
---------------
title to all of its assets, subject to only those liens disclosed on Exhibits
hereto.
3.05 No Default. The Partnership is not in default in any respect
----------
under any of the contracts, agreements, leases, documents or other commitments
to which it is a party or otherwise bound.
3.06 Employment Contracts and Employees. There are no written
----------------------------------
contracts of employment between the Partnership and any employee of the
Partnership. The information contained on the Schedule of Personnel Payroll and
Advances attached hereto as Exhibit "A" is accurate and complete.
3.07 Employee Benefit Plans. Except for the profit-sharing plan
----------------------
disclosed on the attached Exhibit "B", the Partnership has no pension, bonus,
profit-sharing or retirement plans for partners or employees of the Partnership,
nor is the Partnership required to contribute to any such plan, participated in
by the Partnership's employees. The Partnership shall be responsible for
submitting appropriate information to its employees of rights, obligations and
duties created by the sale of the Partnership pursuant to the terms of this
Agreement, and shall terminate the existing profit-sharing plan at the
Partnership's expense.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 32
- ------------------------------------------
<PAGE>
3.08 Insurance. All inventories, buildings and fixed assets owned or
---------
leased by the Partnership are and will be adequately insured against fire
through the date of Closing. The information contained on the Schedule of
Insurance Policies, attached hereto as Exhibit "C", is accurate and complete.
3.09 Disclosure. No representation or warranty by Seller in this
----------
Agreement or in any writing attached hereto, contains or will contain any untrue
statement of material fact or omits or will omit to state any material fact, of
which the Seller has knowledge or notice required to make the statements herein
or therein contained not misleading.
3.10 Partners of the Partnership. As of the date of Closing, Thomas
---------------------------
D. Marshall, The Marshall Family Charitable Remainder Trust, Sheila A. Bell and
Purchaser are all of the partners of the Partnership.
3.11 Cash Receipts. The information contained on the Schedule of
-------------
Collections for the period commencing January 1, 1994, and ending May 31, 1995,
attached hereto as Exhibit "D", is accurate and complete.
3.12 Accounts Receivable. The information contained on the Schedule
-------------------
of Accounts Receivable Data as of May 31, 1995, attached hereto as Exhibit "E",
is accurate and complete. The Seller further warrants and represents that all
of the Partnership's accounts receivable shown on Exhibit "E" are legally
billable and that no less than the balance represented as collectible on the
Exhibit is collectible.
3.13 Inventory and Fixed Assets. The information contained on the
--------------------------
Schedule of Inventory and Fixed Assets as of May 31, 1995, attached hereto as
Exhibit "F", is accurate and complete.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 33
- ------------------------------------------
<PAGE>
3.14 Leases, Contracts and Agreements. The information contained on
--------------------------------
the Schedule of Leases, Contracts and Agreements as of May 31, 1995, attached
hereto as Exhibit "G", is accurate and complete.
3.15 Existing Obligations. To the best of Seller's knowledge and
--------------------
belief, all of the debts, liabilities and obligations of the Partnership are
listed on the Exhibits attached hereto, and such Exhibits are complete and
accurately reflect all of the Partnership's "Existing Obligations" (as
hereinafter defined) as of the date of Closing. "Existing Obligations" shall
mean and refer to all of the Partnership's debts, liabilities and obligations of
any nature (whether absolute, accrued, contingent or otherwise) on the date of
Closing, including but not limited to any and all accounts payable, note
payable, trade payables, lease obligations, indebtedness for borrowed money,
accrued interest, contractual obligations, etc. All debts, liabilities and
obligations of the Partnership shall have been paid in full as of the date of
Closing.
3.16 Tax Returns and Financial Statements. Seller has furnished
------------------------------------
Purchaser with tax returns of the Partnership (the "Tax Returns") for the
periods ended December 31, 1993, and December 31, 1994, and has furnished
Purchaser with financial statements (the "Financial Statements") for the
periods ended December 31, 1993, December 31, 1994, and for the short period
ended April 30, 1995 (the "Financial Statement Dates"), copies of which are
attached hereto as Exhibit "H" and by this reference made a part hereof. The
Financial Statements:
(a) Are in accordance with the books and records of the Partnership;
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 34
- ------------------------------------------
<PAGE>
(b) Fairly represent the financial condition of the Partnership at
such dates and the results of its operations for the periods specified;
(c) Were prepared in accordance with generally accepted accounting
principles applied upon a basis consistent with prior accounting periods;
(d) Reflect adequate reserves for all reasonably anticipated losses
and costs in excess of anticipated income, with respect to all contracts and
commitments of the Partnership; and
(e) Disclose all of the debts, liabilities and obligations of any
nature (whether absolute, accrued, contingent or otherwise) of the Partnership
at the Financial Statement Dates, with respect to any balance sheets, and
include the appropriate reserves for all taxes and other accrued liabilities;
provided, however, that certain contingent liabilities, if not disclosed on such
balance sheets, shall be considered to be disclosed pursuant to this subsection
if disclosed on an Exhibit to this Agreement.
3.17 Adverse Business Developments. No notice has been received by
-----------------------------
the Seller of any new or substantially expanded firm or individual engaged in a
business directly competitive to the Partnership in its primary service area
within six (6) months prior to the date hereof. Nor has Seller received, either
orally or in writing, any notice specific to the Partnership of pending or
threatened adverse action with respect to any Medicare, Medicaid, private
insurance or third party payor reimbursement method, practice or allowance as to
any business activity in which the Partnership is engaged, nor has the
Partnership received nor been threatened with any claim for refund specific to
the
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 35
- ------------------------------------------
<PAGE>
Partnership in excess of Five Hundred and No/100 Dollars ($500.00) by a Medicare
or Medicaid carrier, except as disclosed in the Schedule of Proceedings attached
hereto as Exhibit "I".
ARTICLE FOUR
PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser hereby represents and warrants to Seller that the following
facts and circumstances are true and correct:
4.01 Organization. Purchaser is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of Florida and
is qualified to do business in the States of Texas, Louisiana, Arkansas and
Mississippi. Purchaser is a wholly-owned subsidiary of RoTech Medical
Corporation ("RoTech").
4.02 Corporate Authority. Purchaser is duly authorized by law and
-------------------
corporate policy and approval to:
(a) Enter into this Agreement;
(b) Make all warranties and representations made by Purchaser herein;
and
(c) Issue all considerations provided for under the terms hereof.
4.03 Authorization of Officers. All signatures and agents designated
-------------------------
as agents or officers for Purchaser for signing purposes have the authority to
bind the Purchaser to the terms of this Agreement.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 36
- ------------------------------------------
<PAGE>
ARTICLE FIVE
CONDITIONS PRECEDENT TO CLOSING BY PURCHASER
The obligation of Purchaser to consummate this Agreement is subject to
and conditioned upon the satisfaction, at or prior to the date of Closing, of
each of the following conditions:
5.01 Compliance with Agreement. All of the terms and conditions of
-------------------------
this Agreement to be complied with and performed by the Seller on or before the
date of Closing shall have been complied with and performed.
5.02 Representations and Warranties. The representations and
------------------------------
warranties of the Seller in Article Three shall be deemed to have been made
again on the date of Closing and then be true and correct, subject to any
changes contemplated by this Agreement. There shall have been no materially
adverse change in the financial condition of the Partnership.
5.03 Non-Compete Agreements. Thomas D. Marshall and Sheila A. Bell
----------------------
shall enter into a non-compete agreement substantially in the form attached
hereto as Exhibit "J" and by this reference made a part hereof.
5.04 Employment Agreements. Sheila A. Bell shall have entered into
---------------------
an Employment Agreement substantially in the form attached hereto as Exhibit "K"
and by this reference we made a part hereof.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 37
- ------------------------------------------
<PAGE>
ARTICLE SIX
CONDITIONS PRECEDENT TO CLOSING BY SELLER
The obligation of Seller to consummate this Agreement is subject to
and conditioned upon the satisfaction, at or prior to the date of Closing, of
each of the following conditions:
6.01 Corporate Action. Purchaser and RoTech Medical Corporation
----------------
shall take appropriate corporate action regarding this transaction, which shall
be evidenced by resolutions of their respective boards of directors and
shareholders and certified by the respective corporate secretaries, authorizing
Purchaser to enter into and complete this transaction for the consideration
recited.
ARTICLE SEVEN
INDEMNIFICATION
7.01 Seller's Indemnification of Purchaser. Seller shall and hereby
-------------------------------------
agrees to indemnify and hold harmless Purchaser at all times from after the date
of Closing against and in respect to any damages, as hereinafter defined,
provided, however, Seller's obligation to Purchaser under this indemnification
shall not exceed the full amount of the Purchase Price for a period not to
exceed the ending date of the statute of limitations applicable to any claims
for indemnification hereunder. Damages as used herein, shall include any
claims, actions, demands, losses, costs, expenses, liabilities (joint and
several), penalties, and damages, including counsel fees incurred in
investigating or in attempting to avoid the same or oppose the imposition
thereof, relating to the Purchaser from:
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 38
- ------------------------------------------
<PAGE>
(a) Any materially inaccurate representation made by Seller in or
under this Agreement;
(b) Breach of any warranties made by Seller in or under this
Agreement; and
(c) Breach of default in the performance by Seller of any of the
covenants to be performed by it hereunder.
7.02 Purchaser's Indemnification of Seller. Purchaser shall and
-------------------------------------
hereby agrees to indemnify and hold harmless Seller at all times from after the
date of Closing against and in respect to any damages, as hereinafter defined,
for a period not to exceed the ending date of the statute of limitations
applicable to any claims for indemnification hereunder. Damages as used herein,
shall include any claims, actions, demands, losses, costs, expenses, liabilities
(joint and several), penalties, and damages, including counsel fees incurred in
investigating or in attempting to avoid the same or oppose the imposition
thereof, relating to the Seller from:
(a) Any materially inaccurate representation made by Purchaser in or
under this Agreement and the related documents executed herewith;
(b) Breach of any warranties made by Purchaser in or under this
Agreement and the related documents executed herewith; and
(c) Breach of default in the performance by Purchaser of any of the
covenants to be performed by it hereunder or under the other documents executed
herewith.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 39
- ------------------------------------------
<PAGE>
ARTICLE EIGHT
MISCELLANEOUS PROVISIONS
8.01 Survival of Representations and Warranties. The representations
------------------------------------------
and warranties of Seller and Purchaser contained in and made pursuant to this
Agreement shall survive the execution of this Agreement.
8.02 Instruments of Conveyance and Transfer. At the Closing Seller
--------------------------------------
will deliver to Purchaser good and sufficient instruments of conveyance and
transfer in form sufficient to sell, assign and transfer all of its interest in
the Partnership, which documents shall be effective to vest in Purchaser good,
absolute, and marketable title to the interest in the Partnership being
transferred to Purchaser hereunder, free and clear of all liens, charges,
encumbrances and restrictions of any kind, except as disclosed on Exhibits
hereto.
8.03 Sale and Transfer Taxes Fees. All applicable sales, transfer,
----------------------------
use, filing and other taxes and fees that may be due or payable as a result of
conveyance, assignment, transfer or delivery of the interest of the Partnership
to be conveyed and transferred as provided herein, whether levied on Seller or
Purchaser, shall be borne by Purchaser, and Purchaser fully indemnifies Seller
in the event the Seller incurs expenses pertaining to such taxes and fees.
8.04 Use of Partnership and Other Assumed Names. Seller agrees to
------------------------------------------
take all actions necessary to assist Purchaser in obtaining the rights to
utilize the general partnership and assumed names "Marshall-Bell," "Caremed,"
"Samaritan Medical Equipment Company," and "Marshall Home Health Care,"
including but not limited to the execution of any assignments and consents for
use.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 40
- ------------------------------------------
<PAGE>
8.05 Prepaid Items and Deposits. All prepaid insurance premiums,
--------------------------
rent and utility deposits and similar items paid by or owing to the Partnership
by any person, firm or governmental entity (except customer accounts
receivables) shall, upon the consummation of the transactions contemplated by
this Agreement, remain the property of the Partnership as then constituted.
8.06 Assignment. This Agreement shall not be assignable by Seller or
----------
Purchaser without the written consent of the other. Nothing in this Agreement,
expressed or implied, is intended to confer upon any person, other than the
parties hereto and their successors, any rights or remedies under or by reason
of this Agreement.
8.07 Expenses. Except as otherwise stated herein, each of the
--------
parties shall bear all expenses incurred by them in connection with this
Agreement and in consummation of the transactions contemplated hereby in
preparation thereof.
8.08 Amendment and Waiver. This Agreement may be amended or modified
--------------------
at any time and in all respects, and any provisions may be waived by an
instrument in writing executed by Purchaser and Seller, or either of them in the
case of a waiver.
8.09 Notices. All notices of request, demand and other
-------
communications hereunder shall be addressed to the parties as follows:
TO SELLER: THE MARSHALL FAMILY CHARITABLE
REMAINDER TRUST
C/O Sheila A. Bell, Trustee
Post Office Box 2055
Texarkana, Texas 75504-2055
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 41
- ------------------------------------------
<PAGE>
TO BUYER: DISTINCT HOME HEALTH CARE, INC.
4506 L. B. McLeod Road, Suite F
Orlando, Florida 32811
Attn: Stephen P. Griggs
8.10 Choice of Law. It is the intention of the parties that the laws
-------------
of the State of Texas shall govern the validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
parties. Any action involving or relating to this Agreement shall be brought in
the court of appropriate jurisdiction located in Bowie County, Texas.
8.11 Articles, Sections and Other Headings. Article, section and
-------------------------------------
other headings contained in this Agreement are for reference purposes only and
shall not effect in any way the meaning nor interpretation of this Agreement.
8.12 Counterpart Execution. This Agreement may be executed in two or
---------------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one in the same agreement. Facsimile signatures
may be deemed binding for this Agreement, or any modification or amendment
thereto, or any leases or other documents contemplated hereby, provided that
originals of same are delivered within a reasonable time.
8.13 Gender. All personal pronouns used in this Agreement shall
------
include the other genders whether used in the masculine or feminine or neuter
gender, and the singular shall include the plural whenever and as often as may
be appropriate.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 42
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<PAGE>
8.14 Parties in Interest. All the terms and provisions of this
-------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by Seller and Purchaser and their respective successors and assigns.
8.15 Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties hereto, and there are no agreements,
understandings, restrictions, warranties or representations between the parties
other than those set forth herein or herein provided.
8.16 Effective Time and Date of Ownership Transfer. The parties
---------------------------------------------
hereto acknowledge and agree that the Partnership will suspend the conduct of
its business on June 5, 1995, until the Closing is consummated, at which time
Purchaser shall assume full operational control of the Partnership and its
business, and all transactions and business conducted on June 5, 1995, shall be
for and inure to the sole benefit of Purchaser.
8.17 Consent to IRC Section 754 Election. Seller hereby agrees that,
-----------------------------------
upon the demand of Purchaser, Seller shall consent to the filing by the
Partnership, in accordance with applicable Treasury Regulations, a timely and
proper election under Section 754 of the Internal Revenue Code of 1986 as
amended, such election to be effective for the taxable year of the Partnership
in which Purchaser acquires the partnership interest of Seller.
8.18 Allocation of Income, Loss, Etc. The parties agree that the
--------------------------------
books of the Partnership shall be closed on June 4, 1995, for purposes of
allocating items of net income and loss, and all other tax benefits and
detriments of the Partnership through such date and that such allocation shall
be made on the basis of the number of days each partner was a partner in the
Partnership during such period. The parties further agree that, except
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 43
- ------------------------------------------
<PAGE>
as provided in the preceding sentence, all items of net income and loss, and all
other tax benefits and detriments of the Partnership for the tax period up to
but not including the date of purchase of the partnership interest shall be
exclusively allocated to partners other than Purchaser.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first stated above.
SELLER: PURCHASER:
THE MARSHALL FAMILY DISTINCT HOME HEALTH CARE, INC.,
CHARITABLE REMAINDER TRUST A Florida Corporation
By: /s/ Sheila A. Bell By: /s/ Stephen P. Griggs
----------------------- ----------------------------
Sheila A. Bell, Trustee Stephen P. Griggs, President
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 44
- ------------------------------------------
<PAGE>
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST
------------------------------------------
THIS AGREEMENT is made on June 5, 1995, between SHEILA A. BELL, an
individual residing in Miller County, Arkansas (the "Seller"), and DISTINCT HOME
HEALTH CARE, INC., a Florida Corporation with its principal place of business
located at 4506 L. B. McLeod Road, Suite F, Orlando, Orange County, Florida (the
"Purchaser").
RECITALS
Seller owns an approximate Thirty-Four and 902/1000 percent (34.902%)
profits and capital interest in MARSHALL-BELL, LIMITED, a Texas general
partnership with its principal place of business located at 720 Pine Street,
Texarkana, Bowie County, Texas (the "Partnership"); and
Seller desires to sell and Purchaser desires to purchase all of the
interest in the Partnership held by Seller on the terms and for the
consideration hereafter set forth in this Agreement.
In consideration of the mutual promises of the parties, in reliance on the
representations, warranties, covenants, and conditions contained in this
Agreement and for other good and valuable consideration, the parties agree as
follows:
ARTICLE ONE
SALE AND TRANSFER OF PARTNERSHIP INTEREST
Seller, for and in consideration of the payment of One Million Three
Hundred Thousand and No/100 Dollars ($1,300,000.00) Cash (the "Cash
Consideration") and One Hundred Forty-Six Thousand Nine Hundred Forty and No/100
(146,940) shares of the common capital stock, par value $.0002, of RoTech
Medical Corporation, said shares
<PAGE>
having a fair market value of Twenty-Five and No/100 Dollars ($25.00) per share
and a total fair market value of Three Million Six Hundred Seventy-Three
Thousand Five Hundred and No/100 Dollars ($3,673,500.00) (the "RoTech Stock"),
irrevocably assigns, transfers and passes to Purchaser all of its right, title
and interest in the Partnership.
ARTICLE TWO
PAYMENT OF PURCHASE PRICE
2.01 Cash Consideration. The Cash Consideration shall be payable to Seller
------------------
contemporaneously with the execution of this Agreement (the "Closing").
2.02 RoTech Stock Consideration. The RoTech Stock shall be issued at
--------------------------
Closing with share certificates titled in the name of Seller with the
restrictive legend required by Section 3.06 printed thereon and subject to the
escrow conditions set forth in Article Four and Purchaser's right of offset set
forth in Article Five.
ARTICLE THREE
CHARACTERISTICS OF ROTECH STOCK.
3.01 Investment. The RoTech Stock which the Seller is acquiring hereunder
----------
is being acquired for Seller's own account, not as a nominee or agent, and not
with a view to the sale or distribution of any part thereof for the purposes of
the Securities Act of 1933, as amended (the "Securities Act").
3.02 RoTech Stock Unregistered. The Seller understands that the RoTech
-------------------------
Stock has not been registered under the Securities Act on the ground that the
issuance of such securities hereunder is exempt from registration under the
Securities Act and that
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 46
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<PAGE>
Purchaser's reliance on such exemption is predicated on Seller's representations
set forth in this Article Three.
3.03 Rule 144 Stock. The Seller acknowledges that the RoTech Stock must be
--------------
held indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. Seller is aware of the
provisions of Rule 144 promulgated under the Securities Act which permit limited
resale of securities purchased in a private placement subject to the
satisfaction of certain conditions. Rule 144 requires, among other things, that
current information on the issuer be available to the public and that the
shareholder intending to sell under the Rule hold shares for at least two (2)
years. In the event any of the RoTech Stock held by Seller becomes eligible for
sale pursuant to Rule 144 and an opinion of Purchaser's counsel is necessary to
effectuate the transfer of RoTech Stock thereunder, Purchaser shall bear the
costs of obtaining such opinion of counsel in connection with transfers under
Rule 144. Purchaser shall process any requests for transfer of RoTech Stock
pursuant to Rule 144 in an efficient and prompt manner.
3.04 Access to Data. Seller has received and reviewed information about
--------------
RoTech and has had an opportunity to ask questions of, and receive answers from,
Purchaser concerning RoTech's business management, legal and financial affairs
and to obtain additional information (to the extent Purchaser possesses such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished. Seller also had
the opportunity to inspect RoTech's facilities. Seller understands that such
discussions, as well as any written information issued by Purchaser,
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 47
- ------------------------------------------
<PAGE>
were intended to describe the aspects of Purchaser's business and prospects
which it believes to be material, but were not necessarily a thorough or
exhaustive description.
3.05 Investment Experience. Seller is experienced in evaluating and
---------------------
investing in high risk companies such as Buyer and by reason of its business and
financial experience has the capacity to protect its own interests in connection
with the transactions completed by this Agreement and has the ability to bear
the economic risk of its investment.
3.06 Restrictive Legends. Each certificate representing RoTech Stock,
-------------------
including any securities issued as a dividend or other distribution with respect
to, in exchange for, or in replacement of such RoTech Stock, shall be stamped or
otherwise imprinted with the following legend as well as any other legends
required by applicable state securities laws:
The securities represented by this stock certificate or warrant have
been acquired pursuant to an investment representation on the part of
the purchaser thereof and shall not be sold, pledged, hypothecated,
donated, or otherwise transferred, whether or not for consideration,
by the purchaser except upon the issuance to the company of a
favorable opinion of its counsel and/or the submission to the company
of such other evidence as may be satisfactory to counsel to the
company, in either case to the effect that any such transfer shall not
be in violation of the Securities Act of 1933, as amended, and
applicable state securities laws.
3.07 No Registration Rights. Seller acknowledges that it possesses no
----------------------
rights whatsoever to have any of the RoTech Stock registered.
3.08 Opinion of Purchaser's Counsel. The Purchaser shall deliver to the
------------------------------
Seller, in the forms attached hereto as Exhibit "A", all of the following:
(a) An opinion of Purchaser's counsel that, as of the date hereof, Rule
144 promulgated under the Securities Act, provides for the Seller's holding
period of the
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 48
- ------------------------------------------
<PAGE>
RoTech Stock to commence at the time of the conveyance of the RoTech Stock from
Purchaser to Seller;
(b) The form of the letter to be sent by Purchaser's counsel to Seller at
the time of release to Seller of the RoTech Stock held in escrow; and
(c) The form of the opinion of RoTech's counsel that will be delivered to
RoTech's transfer agent upon the sale by Seller of shares of RoTech Stock
pursuant to Rule 144, provided that Rule 144 has not been modified or repealed
during the period commencing on the date hereof and ending on the date of sale.
3.09 Release Upon Abatement of Need for Security. Purchaser has the option
-------------------------------------------
to release some or all of the shares of RoTech Stock from the Escrow Agreement
prior to the end of the Escrow Period in the event Purchaser deems, in the
exercise of its sole discretion, that the need for such security has abated.
Purchaser affirmatively states at this time, however, that it has no intention
to exercise this option and intends to have the RoTech Stock held in escrow
during the entire Escrow Period.
3.10 Seller's Stock Rights. During the time that Seller owns the RoTech
---------------------
Stock, Seller shall be entitled to:
(a) Any and all cash or stock dividends declared which pertain to the
RoTech Stock;
(b) Vote all shares of RoTech Stock; and
(c) Any and all rights which pertain to the RoTech stock arising from any
and all recapitalizations which affect the shares issued;
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 49
- ------------------------------------------
<PAGE>
provided, however, that Seller's rights in (a) through (c) hereof shall be
subject to the security rights of Purchaser pursuant to the Escrow Agreement.
ARTICLE FOUR
SELLER'S COLLATERAL PLEDGE OF ROTECH STOCK TO PURCHASER
4.01 Security. The RoTech Stock shall be pledged to Purchaser by Seller at
--------
Closing to secure the terms of Article Six regarding the future operational
performance of the business acquired herein by Purchaser.
4.02 Escrow Arrangement. The RoTech Stock shall be pledged pursuant to the
------------------
terms of that certain Stock Pledge and Security Agreement, in the form attached
hereto as Exhibit "B" and by reference made a part hereof (the "Pledge
Agreement"), and shall be placed in escrow for a period of twenty-four (24)
months (the "Escrow Period") with the law firm of Winderweedle, Haines, Ward &
Woodman, P.A. (the "Escrow Agent"), to be held by Escrow Agent pursuant to the
terms of that certain Escrow Agreement, in the form attached hereto as Exhibit
"C" and by reference made a part hereof (the "Escrow Agreement").
4.03 Delivery to Agent. Purchaser shall cause the RoTech Stock to be
-----------------
delivered directly to Escrow Agent within thirty (30) days from Closing.
ARTICLE FIVE
PURCHASER'S RIGHT OF OFFSET AGAINST THE ROTECH STOCK
5.01 Purchaser's Reliance on Seller's Representations. Seller acknowledges
------------------------------------------------
that the purchase price for its interest in the Partnership is based upon the
accuracy of Seller's representations and warranties contained in this Agreement.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 50
- ------------------------------------------
<PAGE>
5.02 Right of Offset. In the event that:
---------------
(a) Purchaser must pay any debts or liabilities of the Partnership after
Closing which exceed the amount identified in the Schedule of Liabilities
Assumed attached hereto as Exhibit "D" (the "Liabilities Deficiency");
(b) Purchaser does not collect, during the twelve (12)-month period
immediately following the date of Closing, the aggregate value of the
Partnership's collectible accounts receivable identified in the Schedule of
Accounts Receivable Data attached hereto as Exhibit "E" (the "Receivables
Collection Deficiency");
(c) The Partnership has, since May 1, 1995, except as disclosed or in the
ordinary course of business:
(1) Made other expenditures or incurred obligations or liabilities;
(2) Discharged or satisfied any liens or encumbrances;
(3) Declared or made any payments or distributions to partners;
(4) Mortgaged, pledged or subjected to lien or encumbrance any of its
assets;
(5) Sold or transferred any assets;
(6) Suffered any damage or loss materially affecting its properties,
whether or not covered by insurance;
(7) Waived any rights of substantial value; or
(8) Entered into any transaction other than in the ordinary course of
business
(collectively, the "Subsequent Event Deficiency"); or
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 51
- ------------------------------------------
<PAGE>
(d) Any debts, liabilities or obligations of any nature (whether
absolute, accrued, contingent or otherwise) other than those subject to
subparagraphs (a) through (c) of this Article Five become known or are uncovered
or arise after Closing and pertain to any actions, omissions, debts, liabilities
or obligations of the Partnership or any of its partners, created or arising on
or before or after Closing (the "Contingent Liabilities Deficiency"),
then Purchaser shall have the right, during the Escrow Period, to make written
request for payment from Seller of any deficiency defined above and, upon
Seller's failure to remit payment within the time provided below, to make offset
against the RoTech Stock, in accordance with the terms and conditions of the
Pledge Agreement and the Escrow Agreement, in amounts from time to time equal to
any Liabilities Deficiency, Receivables Collection Deficiency, Subsequent Event
Deficiency or Contingent Liabilities Deficiency which becomes known, is
uncovered or arises during the Escrow Period.
5.03 Stock Value Determination for Offset. During the Escrow Period, in
------------------------------------
the event Purchaser makes written request to Seller hereunder and Seller fails
to make the requested payment within ten (10) days from the date of such written
request, Purchaser shall have the right to make offset against the RoTech Stock
with the RoTech Stock valued, for purposes of such offset, at Twenty-Five and
No/100 Dollars ($25.00) per share.
5.04 Right of Offset After Escrow Period. Purchaser's right of offset
-----------------------------------
against the RoTech Stock shall terminate upon the expiration of the Escrow
Period; provided, however, that notwithstanding anything contained in this
Agreement, the Pledge Agreement or the Escrow Agreement to the contrary, the
right of offset shall extend past the Escrow Period
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 52
- ------------------------------------------
<PAGE>
in the event a claim is in dispute at the expiration of the Escrow Period. In
such an instance, the right of offset shall not terminate with respect to the
disputed claim until after its settlement, and shares of RoTech Stock, valued at
Twenty-Five and No/100 Dollars ($25.00) per share, having a value of twice the
amount of the disputed claim shall continue to be held in escrow beyond the
Escrow Period until such claim is resolved.
5.05 Release of RoTech Stock After Escrow Period. All shares of RoTech
-------------------------------------------
Stock, except those retained as permitted in this Article Five, shall be
released to Seller within ten (10) days after the expiration of the Escrow
Period.
5.06 Costs of Enforcement of Right of Offset. Purchaser shall be entitled
---------------------------------------
to reimbursement from Seller of the amount of any reasonable legal fees and
expenses (including court costs and the costs of appeal) incurred by Purchaser
to enforce the collection of amounts owed Purchaser by Seller hereunder.
ARTICLE SIX
CONTINGENT REDUCTION OF SELLER'S SHARES OF ROTECH STOCK
-------------------------------------------------------
6.01 Reduction of Shares Contingent Upon Performance Level. In the event
-----------------------------------------------------
the "First Two Years' Average Operating Profits" (as that term is defined in
Exhibit "F" attached hereto) of the Partnership's business from June 1, 1995
through May 31, 1997 (the "Measurement Period") is less than Three Million and
No/100 Dollars ($3,000,000.00) (the "Threshold Amount"), the number of shares of
RoTech Stock required to be delivered to Seller upon the termination of the
Escrow Period shall be reduced in the manner set forth below.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 53
- ------------------------------------------
<PAGE>
6.02 Calculation of Value of Reduction. The Threshold Amount less the
---------------------------------
First Two Year's Average Operating Profits shall equal the "Reduction Value".
6.03 Calculation of Number of Shares of Reduction. The number of shares of
--------------------------------------------
RoTech Stock comprising five (5) times the Reduction Value, where the RoTech
Stock is valued at Twenty-Five and No/100 Dollars ($25.00) per share, shall be
retained by the Escrow Agent for the account of Purchaser as if Purchaser were
at all times the sole owner of such shares with complete title to and possession
of the same.
6.04 Example of Reduction Calculation. For example and purposes of
--------------------------------
illustration, assume the following:
(a) The First Two Years' Average Operating Profits of the Partnership's
business during the Measurement Period is Two Million Nine Hundred Thousand and
No/100 Dollars ($2,900,000.00).
(b) The Reduction Value is One Hundred Thousand and No/100 Dollars
($100,000.00).
The calculation of (b) times five (5), the product of which is divided by
Twenty-Five and No/100 Dollars ($25.00), or [($100,000 x 5) / $25], results in a
reduction of Twenty Thousand (20,000) shares of RoTech Stock, with all of such
Twenty Thousand (20,000) shares of RoTech Stock being returned to Purchaser by
Escrow Agent and the remaining balance of shares of RoTech Stock delivered to
Seller at upon termination of the Escrow Period.
6.05 Delivery of RoTech Stock After Escrow Period and Calculation. Upon
------------------------------------------------------------
the termination of the Escrow Period and after the final determination of the
First Two Years'
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 54
- ------------------------------------------
<PAGE>
Average Operating Profits (but in no event later than ten (10) days after the
termination of the Escrow Period), the RoTech Stock shall be delivered to Seller
and, if applicable, to Purchaser.
6.06 Applicability of Offset Provisions. The provisions of this Article
----------------------------------
Six shall remain subject to the offset provisions of Article Five.
ARTICLE SEVEN
SELLER'S PUT OPTION
-------------------
7.01 Amount and Price. Seller shall have the right to require Purchaser to
----------------
repurchase some or all of the RoTech Stock delivered to Seller after the
termination of the Escrow Period at a repurchase price equal to Twenty-Five and
No/100 Dollars ($25.00) per share (the "Option Price").
7.02 Restrictions on Exercise. This Put Option is not negotiable, but
------------------------
Seller may submit such shares of RoTech Stock as have been released to Seller
from the Escrow Agreement for redemption by Purchaser at the Option Price at
anytime after June 4, 1997 and before 5:00 p.m., E.S.T., June 4, 1998. This Put
Option may only be exercised in blocks of Five Thousand (5,000) shares or more;
provided, however, that should Seller own less than Five Thousand (5,000) shares
of RoTech Stock subject to this Put Option at anytime prior to this Put Option's
expiration, Seller shall be permitted to tender all of such shares in one block
for redemption pursuant to the terms of this Put Option. This Put Option is not
assignable in any respect and can only be exercised by Seller.
7.03 Term of Option. All shares of RoTech Stock submitted pursuant to this
--------------
Put Option must be delivered to the executive offices of Purchaser, at the
address set forth on
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 55
- ------------------------------------------
<PAGE>
page 1 hereof (or at such other address as is communicated by Purchaser to
Seller in writing). At 5:00 p.m., E.S.T., June 4, 1998, this Put Option shall
expire and shall thereafter have no prospective effect.
7.04 Exercise of Put Option and Delivery of Shares. To validly exercise
---------------------------------------------
this Put Option, Seller must execute a statement in which Seller warrants that
it has full and clear title to the applicable shares of RoTech Stock, free of
all liens and encumbrances. Such statement must be accompanied by original
stock certificates evidencing not less than the number of shares of RoTech Stock
for which the option exercise is made. Further, such certificates must be
accompanied by a validly executed stock power, with signature guaranteed by a
member of the New York Stock Exchange (and who is also a member of the Medallion
Group) or a commercial bank who is a member of the Federal Reserve System (and
who is also a member of the Medallion Group).
7.05 Settlement. Settlement for any shares of RoTech Stock redeemed
----------
pursuant to this Put Option shall occur within five (5) business days from the
date such shares are submitted to Purchaser with all required documentation.
Such payment shall be made without interest.
ARTICLE EIGHT
SELLER'S REPRESENTATIONS AND WARRANTIES
Seller hereby represents and warrants to Purchaser that the following facts
and circumstances regarding the Partnership are true and correct:
8.01 Status of Partnership. Marshall-Bell, Limited is a general
---------------------
partnership duly organized, validly existing and in good standing under the laws
of the State of Texas and
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 56
- ------------------------------------------
<PAGE>
has requisite power and authority to carry on its business as it is presently
being conducted.
8.02 Litigation. There are no actions, suits or proceedings which are
----------
pending or threatened against the Partnership or affecting any of its properties
or rights, at law or in equity, or before any federal, state, municipal or other
governmental agency or instrumentality, domestic or foreign, nor is Seller aware
of any facts which to her knowledge might reasonably be expected to result in
any such action, suit or proceeding. The Partnership is not in default with
respect to any order or decree of any court or of any such governmental agency
or instrumentality.
8.03 Compliance With Laws and Other Instruments. The Partnership is not in
------------------------------------------
violation of any term or provision of any mortgage, indenture, contract,
agreement, instrument, judgment, decree, order, statute, rule or regulation, and
the execution and delivery of and performance and compliance with this Agreement
by Seller will not result in the violation of or be in conflict with or
constitute a default under any such term or provision or result in the creation
of any mortgage, lien, encumbrance or charge upon any of the properties or
assets of the Partnership pursuant to any such term or provision.
8.04 Title to Assets. The Partnership has good and indefeasible title to
---------------
all of its assets, subject to only those liens disclosed on Exhibits hereto.
8.05 No Default. The Partnership is not in default in any respect under
----------
any of the contracts, agreements, leases, documents or other commitments to
which it is a party or otherwise bound.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 57
- ------------------------------------------
<PAGE>
8.06 Employment Contracts and Employees. There are no written
----------------------------------
contracts of employment between the Partnership and any employee of the
Partnership. The information contained on the Schedule of Personnel Payroll and
Advances attached hereto as Exhibit "G" is accurate and complete.
8.07 Employee Benefit Plans. Except for the profit-sharing plan disclosed
----------------------
on the attached Exhibit "H", the Partnership has no pension, bonus, profit-
sharing or retirement plans for partners or employees of the Partnership, nor is
the Partnership required to contribute to any such plan, participated in by the
Partnership's employees. The Partnership shall be responsible for submitting
appropriate information to its employees of rights, obligations and duties
created by the sale of the Partnership pursuant to the terms of this Agreement,
and shall terminate the existing profit-sharing plan at the Partnership's
expense.
8.08 Insurance. All inventories, buildings and fixed assets owned or
---------
leased by the Partnership are and will be adequately insured against fire
through the date of Closing. The information contained on the Schedule of
Insurance Policies, attached hereto as Exhibit "I", is accurate and complete.
8.09 Disclosure. No representation or warranty by Seller in this Agreement
----------
or in any writing attached hereto, contains or will contain any untrue statement
of material fact or omits or will omit to state any material fact, of which the
Seller has knowledge or notice required to make the statements herein or therein
contained not misleading.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 58
- ------------------------------------------
<PAGE>
8.10 Partners of the Partnership. As of the date of Closing, Thomas
---------------------------
D. Marshall, The Marshall Family Charitable Remainder Trust, Sheila A. Bell and
Purchaser are all of the partners of the Partnership.
8.11 Cash Receipts. The information contained on the Schedule of
-------------
Collections for the period commencing January 1, 1994, and ending May 31, 1995,
attached hereto as Exhibit "J", is accurate and complete.
8.12 Accounts Receivable. The information contained on the Schedule of
-------------------
Accounts Receivable Data as of May 31, 1995, attached hereto as Exhibit "E", is
accurate and complete. The Seller further warrants and represents that all of
the Partnership's accounts receivable shown on Exhibit "E" are legally billable
and that no less than the balance represented as collectible on the Exhibit is
collectible. Purchaser shall use its best efforts to collect the Receivables;
however, any Receivables not collected as of that date which is twelve (12)
months from the date of Closing shall be deemed uncollectible, and Purchaser may
immediately exercise any rights of offset that it may have pursuant to Article
Five hereof as a result of such uncollectibility.
8.13 Inventory and Fixed Assets. The information contained on the Schedule
--------------------------
of Inventory and Fixed Assets as of May 31, 1995, attached hereto as Exhibit
"K", is accurate and complete.
8.14 Leases, Contracts and Agreements. The information contained on the
--------------------------------
Schedule of Leases, Contracts and Agreements as of May 31, 1995, attached hereto
as Exhibit "L", is accurate and complete.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 59
- ------------------------------------------
<PAGE>
8.15 Existing Obligations. To the best of Seller's knowledge and belief,
--------------------
all of the debts, liabilities and obligations of the Partnership are listed on
the Exhibits attached hereto, and such Exhibits are complete and accurately
reflect all of the Partnership's "Existing Obligations" (as hereinafter defined)
as of the date of Closing. "Existing Obligations" shall mean and refer to all of
the Partnership's debts, liabilities and obligations of any nature (whether
absolute, accrued, contingent or otherwise) on the date of Closing, including
but not limited to any and all accounts payable, note payable, trade payables,
lease obligations, indebtedness for borrowed money, accrued interest,
contractual obligations, etc. All debts, liabilities and obligations of the
Partnership shall have been paid in full as of the date of Closing.
8.16 Tax Returns and Financial Statements. Seller has furnished Purchaser
------------------------------------
with tax returns of the Partnership (the "Tax Returns") for the periods ended
December 31, 1993, and December 31, 1994, and has furnished Purchaser with
financial statements (the "Financial Statements") for the periods ended December
31, 1993, December 31, 1994, and for the short period ended April 30, 1995 (the
"Financial Statement Dates"), copies of which are attached hereto as Exhibit "M"
and by this reference made a part hereof. The Financial Statements:
(a) Are in accordance with the books and records of the Partnership;
(b) Fairly represent the financial condition of the Partnership at such
dates and the results of its operations for the periods specified;
(c) Were prepared in accordance with generally accepted accounting
principles applied upon a basis consistent with prior accounting periods;
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 60
- ------------------------------------------
<PAGE>
(d) Reflect adequate reserves for all reasonably anticipated losses
and costs in excess of anticipated income, with respect to all contracts and
commitments of the Partnership; and
(e) Disclose all of the debts, liabilities and obligations of any
nature (whether absolute, accrued, contingent or otherwise) of the Partnership
at the Financial Statement Dates, with respect to any balance sheets, and
include the appropriate reserves for all taxes and other accrued liabilities;
provided, however, that certain contingent liabilities, if not disclosed on such
balance sheets, shall be considered to be disclosed pursuant to this subsection
if disclosed on an Exhibit to this Agreement.
8.17 Adverse Business Developments. No notice has been received by the
-----------------------------
Seller of any new or substantially expanded firm or individual engaged in a
business directly competitive to the Partnership in its primary service area
within six (6) months prior to the date hereof. Nor has Seller received, either
orally or in writing, any notice specific to the Partnership of pending or
threatened adverse action with respect to any Medicare, Medicaid, private
insurance or third party payor reimbursement method, practice or allowance as to
any business activity in which the Partnership is engaged, nor has the
Partnership received nor been threatened with any claim for refund specific to
the Partnership in excess of Five Hundred and No/100 Dollars ($500.00) by a
Medicare or Medicaid carrier, except as disclosed in the Schedule of Proceedings
attached hereto as Exhibit "N".
ARTICLE NINE
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 61
- ------------------------------------------
<PAGE>
PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser hereby represents and warrants to Seller that the following
facts and circumstances are true and correct:
9.01 Organization. Purchaser is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of Florida and
is qualified to do business in the States of Texas, Louisiana, Arkansas and
Mississippi. Purchaser is a wholly-owned subsidiary of RoTech Medical
Corporation ("RoTech").
9.02 Corporate Authority. Purchaser is duly authorized by law and
corporate policy and approval to:
(a) Enter into this Agreement;
(b) Make all warranties and representations made by Purchaser
herein; and
(c) Issue all considerations provided for under the terms
hereof.
9.03 Authorization of Officers. All signatures and agents designated
-------------------------
as agents or officers for Purchaser for signing purposes have the authority to
bind the Purchaser to the terms of this Agreement.
9.04 Authority to Issue RoTech Stock. Purchaser has the authority to
-------------------------------
cause the RoTech Stock to be issued in accordance with the terms of this
Agreement.
9.05 Warranty of Performance Calculation. Purchaser warrants that
-----------------------------------
the "First Two Years' Average Operating Profits" will be calculated in
accordance with Exhibit "F" hereto.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 62
- ------------------------------------------
<PAGE>
ARTICLE TEN
CONDITIONS PRECEDENT TO CLOSING BY PURCHASER
The obligation of Purchaser to consummate this Agreement is subject to
and conditioned upon the satisfaction, at or prior to the date of Closing, of
each of the following conditions:
10.01 Compliance with Agreement. All of the terms and conditions of
-------------------------
this Agreement to be complied with and performed by the Seller on or before the
date of Closing shall have been complied with and performed.
10.02 Representations and Warranties. The representations and
------------------------------
warranties of the Seller in Article Eight shall be deemed to have been made
again on the date of Closing and then be true and correct, subject to any
changes contemplated by this Agreement. There shall have been no materially
adverse change in the financial condition of the Partnership.
10.03 Non-Compete Agreements. Thomas D. Marshall and Sheila A. Bell
----------------------
shall enter into a non-compete agreement substantially in the forms attached
hereto as Exhibit "O" and by this reference made a part hereof.
10.04 Employment Agreements. Sheila A. Bell shall have entered into
---------------------
an Employment Agreement substantially in the form attached hereto as Exhibit "P"
and by this reference we made a part hereof.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 63
- ------------------------------------------
<PAGE>
ARTICLE ELEVEN
CONDITIONS PRECEDENT TO CLOSING BY SELLER
The obligation of Seller to consummate this Agreement is subject to
and conditioned upon the satisfaction, at or prior to the date of Closing, of
each of the following conditions:
11.01 Corporate Action. Purchaser and RoTech Medical Corporation
----------------
shall take appropriate corporate action regarding this transaction, which shall
be evidenced by resolutions of their respective boards of directors and
shareholders and certified by the respective corporate secretaries, authorizing
Purchaser to enter into and complete this transaction for the consideration
recited.
ARTICLE TWELVE
INDEMNIFICATION
12.01 Seller's Indemnification of Purchaser. Seller shall and hereby
-------------------------------------
agrees to indemnify and hold harmless Purchaser at all times from after the date
of Closing against and in respect to any damages, as hereinafter defined,
provided, however, Seller's obligation to Purchaser under this indemnification
shall not exceed the full amount of the Purchase Price for a period not to
exceed the ending date of the statute of limitations applicable to any claims
for indemnification hereunder. Damages as used herein, shall include any
claims, actions, demands, losses, costs, expenses, liabilities (joint and
several), penalties, and damages, including counsel fees incurred in
investigating or in attempting to avoid the same or oppose the imposition
thereof, relating to the Purchaser from:
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 64
- ------------------------------------------
<PAGE>
(a) Any materially inaccurate representation made by Seller in
or under this Agreement;
(b) Breach of any warranties made by Seller in or under this
Agreement; and
(c) Breach of default in the performance by Seller of any of
the covenants to be performed by it hereunder.
12.02 Purchaser's Remedies Inclusive. The remedies of Purchaser
------------------------------
pursuant to this Article Twelve shall include, but not be limited to, the right
of offset against any RoTech Stock held in escrow pursuant to Article Five
hereof; provided, however, that before Purchaser exercises such right of offset
pursuant to Article Five hereof, Purchaser shall provide Seller with the notice
required by Article Five hereof.
12.03 Purchaser's Indemnification of Seller. Purchaser shall and
-------------------------------------
hereby agrees to indemnify and hold harmless Seller at all times from after the
date of Closing against and in respect to any damages, as hereinafter defined,
for a period not to exceed the ending date of the statute of limitations
applicable to any claims for indemnification hereunder. Damages as used herein,
shall include any claims, actions, demands, losses, costs, expenses, liabilities
(joint and several), penalties, and damages, including counsel fees incurred in
investigating or in attempting to avoid the same or oppose the imposition
thereof, relating to the Seller from:
(a) Any materially inaccurate representation made by Purchaser in or
under this Agreement and the related documents executed herewith;
(b) Breach of any warranties made by Purchaser in or under this
Agreement and the related documents executed herewith; and
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 65
- ------------------------------------------
<PAGE>
(c) Breach of default in the performance by Purchaser of any of the
covenants to be performed by it hereunder or under the other documents executed
herewith.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
13.01 Survival of Representations and Warranties. The
------------------------------------------
representations and warranties of Seller and Purchaser contained in and made
pursuant to this Agreement shall survive the execution of this Agreement.
13.02 Instruments of Conveyance and Transfer. At the Closing Seller
--------------------------------------
will deliver to Purchaser good and sufficient instruments of conveyance and
transfer in form sufficient to sell, assign and transfer all of its interest in
the Partnership, which documents shall be effective to vest in Purchaser good,
absolute, and marketable title to the interest in the Partnership being
transferred to Purchaser hereunder, free and clear of all liens, charges,
encumbrances and restrictions of any kind, except as disclosed on Exhibits
hereto.
13.03 Sale and Transfer Taxes Fees. All applicable sales, transfer,
----------------------------
use, filing and other taxes and fees that may be due or payable as a result of
conveyance, assignment, transfer or delivery of the interest of the Partnership
to be conveyed and transferred as provided herein, whether levied on Seller or
Purchaser, shall be borne by Purchaser, and Purchaser fully indemnifies Seller
in the event the Seller incurs expenses pertaining to such taxes and fees.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 66
- ------------------------------------------
<PAGE>
13.04 Use of Partnership and Other Assumed Names. Seller agrees to
------------------------------------------
take all actions necessary to assist Purchaser in obtaining the rights to
utilize the general partnership and assumed names "Marshall-Bell," "Caremed,"
"Samaritan Medical Equipment Company," and "Marshall Home Health Care,"
including but not limited to the execution of any assignments and consents for
use.
13.05 Prepaid Items and Deposits. All prepaid insurance premiums,
--------------------------
rent and utility deposits and similar items paid by or owing to the Partnership
by any person, firm or governmental entity (except customer accounts
receivables) shall, upon the consummation
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 67
- ------------------------------------------
<PAGE>
of the transactions contemplated by this Agreement, remain the property of the
Partnership as then constituted.
13.06 Assignment. This Agreement shall not be assignable by Seller
----------
or Purchaser without the written consent of the other. Nothing in this
Agreement, expressed or implied, is intended to confer upon any person, other
than the parties hereto and their successors, any rights or remedies under or by
reason of this Agreement.
13.07 Expenses. Except as otherwise stated herein, each of the
--------
parties shall bear all expenses incurred by them in connection with this
Agreement and in consummation of the transactions contemplated hereby in
preparation thereof.
13.08 Amendment and Waiver. This Agreement may be amended or
--------------------
modified at any time and in all respects, and any provisions may be waived by an
instrument in writing executed by Purchaser and Seller, or either of them in the
case of a waiver.
13.09 Notices. All notices of request, demand and other
-------
communications hereunder shall be addressed to the parties as follows:
TO SELLER: SHEILA A. BELL
Post Office Box 2055
Texarkana, Texas 75504-2055
TO BUYER: DISTINCT HOME HEALTH CARE, INC.
4506 L. B. McLeod Road, Suite F
Orlando, Florida 32811
Attn: Stephen P. Griggs
13.10 Choice of Law. It is the intention of the parties that the
-------------
laws of the State of Texas shall govern the validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
parties. Any action involving or relating to this
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 68
- ------------------------------------------
<PAGE>
Agreement shall be brought in the court of appropriate jurisdiction located in
Bowie County, Texas.
13.11 Articles, Sections and Other Headings. Article, section and
-------------------------------------
other headings contained in this Agreement are for reference purposes only and
shall not effect in any way the meaning nor interpretation of this Agreement.
13.12 Counterpart Execution. This Agreement may be executed in two
---------------------
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one in the same agreement. Facsimile
signatures may be deemed binding for this Agreement, or any modification or
amendment thereto, or any leases or other documents contemplated hereby,
provided that originals of same are delivered within a reasonable time.
13.13 Gender. All personal pronouns used in this Agreement shall
------
include the other genders whether used in the masculine or feminine or neuter
gender, and the singular shall include the plural whenever and as often as may
be appropriate.
13.14 Parties in Interest. All the terms and provisions of this
-------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by Seller and Purchaser and their respective successors and assigns.
13.15 Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties hereto, and there are no agreements,
understandings, restrictions, warranties or representations between the parties
other than those set forth herein or herein provided.
13.16 Effective Time and Date of Ownership Transfer. The parties
---------------------------------------------
hereto acknowledge and agree that the Partnership will suspend the conduct of
its business on
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 69
- ------------------------------------------
<PAGE>
June 5, 1995, until the Closing is consummated, at which time Purchaser shall
assume full operational control of the Partnership and its business, and all
transactions and business conducted on June 5, 1995, shall be for and inure to
the sole benefit of Purchaser.
13.17 Consent to IRC Section 754 Election. Seller hereby agrees
-----------------------------------
that, upon the demand of Purchaser, Seller shall consent to the filing by the
Partnership, in accordance with applicable Treasury Regulations, a timely and
proper election under Section 754 of the Internal Revenue Code of 1986 as
amended, such election to be effective for the taxable year of the Partnership
in which Purchaser acquires the partnership interest of Seller.
13.18 Allocation of Income, Loss, Etc. The parties agree that the
--------------------------------
books of the Partnership shall be closed on June 4, 1995, for purposes of
allocating items of net income and loss, and all other tax benefits and
detriments of the Partnership through such date and that such allocation shall
be made on the basis of the number of days each partner was a partner in the
Partnership during such period. The parties further agree that, except as
provided in the preceding sentence, all items of net income and loss, and all
other tax benefits and detriments of the Partnership for the tax period up to
but not including the date of purchase of the partnership interest shall be
exclusively allocated to partners other than Purchaser.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 70
- ------------------------------------------
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first stated above.
SELLER: PURCHASER:
DISTINCT HOME HEALTH CARE, INC.,
A Florida Corporation
/s/ Sheila A. Bell By: /s/ Stephen P. Griggs
- ----------------------------- ----------------------------
Sheila A. Bell Stephen P. Griggs, President
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 71
- ------------------------------------------
<PAGE>
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST
------------------------------------------
THIS AGREEMENT is made on June 5, 1995, between THOMAS D. MARSHALL, an
individual residing in Miller County, Arkansas (the "Seller"), and DISTINCT HOME
HEALTH CARE, INC., a Florida Corporation with its principal place of business
located at 4506 L. B. McLeod Road, Suite F, Orlando, Orange County, Florida (the
"Purchaser").
RECITALS
Seller owns an approximate One and 210/1000 percent (1.210%) profits and
capital interest in MARSHALL-BELL, LIMITED, a Texas general partnership with its
principal place of business located at 720 Pine Street, Texarkana, Bowie County,
Texas (the "Partnership"); and
Seller desires to sell and Purchaser desires to purchase all of the
interest in the Partnership held by Seller on the terms and for the
consideration hereafter set forth in this Agreement.
In consideration of the mutual promises of the parties, in reliance on the
representations, warranties, covenants, and conditions contained in this
Agreement and for other good and valuable consideration, the parties agree as
follows:
ARTICLE ONE
SALE AND TRANSFER OF PARTNERSHIP INTEREST
Seller, for and in consideration of the payment of One Hundred Seventy-Six
Thousand Five Hundred and No/100 Dollars ($176,500.00) Cash (the "Cash
Consideration"), irrevocably assigns, transfers and passes to Purchaser all of
its right, title and interest in the Partnership.
<PAGE>
ARTICLE TWO
PAYMENT OF PURCHASE PRICE
The Cash Consideration shall be payable to Seller contemporaneously
with the execution of this Agreement (the "Closing").
ARTICLE THREE
SELLER'S REPRESENTATIONS AND WARRANTIES
Seller hereby represents and warrants to Purchaser that the following
facts and circumstances regarding the Partnership are true and correct:
3.01 Status of Partnership. Marshall-Bell, Limited is a general
---------------------
partnership duly organized, validly existing and in good standing under the laws
of the State of Texas and has requisite power and authority to carry on its
business as it is presently being conducted.
3.02 Litigation. There are no actions, suits or proceedings which
----------
are pending or threatened against the Partnership or affecting any of its
properties or rights, at law or in equity, or before any federal, state,
municipal or other governmental agency or instrumentality, domestic or foreign,
nor is Seller aware of any facts which to her knowledge might reasonably be
expected to result in any such action, suit or proceeding. The Partnership is
not in default with respect to any order or decree of any court or of any such
governmental agency or instrumentality.
3.03 Compliance With Laws and Other Instruments. The Partnership is
------------------------------------------
not in violation of any term or provision of any mortgage, indenture, contract,
agreement, instrument, judgment, decree, order, statute, rule or regulation, and
the execution and
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 73
- ------------------------------------------
<PAGE>
delivery of and performance and compliance with this Agreement by Seller will
not result in the violation of or be in conflict with or constitute a default
under any such term or provision or result in the creation of any mortgage,
lien, encumbrance or charge upon any of the properties or assets of the
Partnership pursuant to any such term or provision.
3.04 Title to Assets. The Partnership has good and indefeasible
---------------
title to all of its assets, subject to only those liens disclosed on Exhibits
hereto.
3.05 No Default. The Partnership is not in default in any respect
----------
under any of the contracts, agreements, leases, documents or other commitments
to which it is a party or otherwise bound.
3.06 Employment Contracts and Employees. There are no written
----------------------------------
contracts of employment between the Partnership and any employee of the
Partnership. The information contained on the Schedule of Personnel Payroll and
Advances attached hereto as Exhibit "A" is accurate and complete.
3.07 Employee Benefit Plans. Except for the profit-sharing plan
----------------------
disclosed on the attached Exhibit "B", the Partnership has no pension, bonus,
profit-sharing or retirement plans for partners or employees of the Partnership,
nor is the Partnership required to contribute to any such plan, participated in
by the Partnership's employees. The Partnership shall be responsible for
submitting appropriate information to its employees of rights, obligations and
duties created by the sale of the Partnership pursuant to the terms of this
Agreement, and shall terminate the existing profit-sharing plan at the
Partnership's expense.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 74
- ------------------------------------------
<PAGE>
3.08 Insurance. All inventories, buildings and fixed assets owned or
---------
leased by the Partnership are and will be adequately insured against fire
through the date of Closing. The information contained on the Schedule of
Insurance Policies, attached hereto as Exhibit "C", is accurate and complete.
3.09 Disclosure. No representation or warranty by Seller in this
----------
Agreement or in any writing attached hereto, contains or will contain any untrue
statement of material fact or omits or will omit to state any material fact, of
which the Seller has knowledge or notice required to make the statements herein
or therein contained not misleading.
3.10 Partners of the Partnership. As of the date of Closing, Thomas
---------------------------
D. Marshall, The Marshall Family Charitable Remainder Trust, Sheila A. Bell and
Purchaser are all of the partners of the Partnership.
3.11 Cash Receipts. The information contained on the Schedule of
-------------
Collections for the period commencing January 1, 1994, and ending May 31, 1995,
attached hereto as Exhibit "D", is accurate and complete.
3.12 Accounts Receivable. The information contained on the Schedule
-------------------
of Accounts Receivable Data as of May 31, 1995, attached hereto as Exhibit "E",
is accurate and complete. The Seller further warrants and represents that all
of the Partnership's accounts receivable shown on Exhibit "E" are legally
billable and that no less than the balance represented as collectible on the
Exhibit is collectible.
3.13 Inventory and Fixed Assets. The information contained on the
--------------------------
Schedule of Inventory and Fixed Assets as of May 31, 1995, attached hereto as
Exhibit "F", is accurate and complete.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 75
- ------------------------------------------
<PAGE>
3.14 Leases, Contracts and Agreements. The information contained on
--------------------------------
the Schedule of Leases, Contracts and Agreements as of May 31, 1995, attached
hereto as Exhibit "G", is accurate and complete.
3.15 Existing Obligations. To the best of Seller's knowledge and
--------------------
belief, all of the debts, liabilities and obligations of the Partnership are
listed on the Exhibits attached hereto, and such Exhibits are complete and
accurately reflect all of the Partnership's "Existing Obligations" (as
hereinafter defined) as of the date of Closing. "Existing Obligations" shall
mean and refer to all of the Partnership's debts, liabilities and obligations of
any nature (whether absolute, accrued, contingent or otherwise) on the date of
Closing, including but not limited to any and all accounts payable, note
payable, trade payables, lease obligations, indebtedness for borrowed money,
accrued interest, contractual obligations, etc. All debts, liabilities and
obligations of the Partnership shall have been paid in full as of the date of
Closing.
3.16 Tax Returns and Financial Statements. Seller has furnished
------------------------------------
Purchaser with tax returns of the Partnership (the "Tax Returns") for the
periods ended December 31, 1993, and December 31, 1994, and has furnished
Purchaser with financial statements (the "Financial Statements") for the
periods ended December 31, 1993, December 31, 1994, and for the short period
ended April 30, 1995 (the "Financial Statement Dates"), copies of which are
attached hereto as Exhibit "H" and by this reference made a part hereof. The
Financial Statements:
(a) Are in accordance with the books and records of the Partnership;
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 76
- ------------------------------------------
<PAGE>
(b) Fairly represent the financial condition of the Partnership at
such dates and the results of its operations for the periods specified;
(c) Were prepared in accordance with generally accepted accounting
principles applied upon a basis consistent with prior accounting periods;
(d) Reflect adequate reserves for all reasonably anticipated losses
and costs in excess of anticipated income, with respect to all contracts and
commitments of the Partnership; and
(e) Disclose all of the debts, liabilities and obligations of any
nature (whether absolute, accrued, contingent or otherwise) of the Partnership
at the Financial Statement Dates, with respect to any balance sheets, and
include the appropriate reserves for all taxes and other accrued liabilities;
provided, however, that certain contingent liabilities, if not disclosed on such
balance sheets, shall be considered to be disclosed pursuant to this subsection
if disclosed on an Exhibit to this Agreement.
3.17 Adverse Business Developments. No notice has been received by
-----------------------------
the Seller of any new or substantially expanded firm or individual engaged in a
business directly competitive to the Partnership in its primary service area
within six (6) months prior to the date hereof. Nor has Seller received, either
orally or in writing, any notice specific to the Partnership of pending or
threatened adverse action with respect to any Medicare, Medicaid, private
insurance or third party payor reimbursement method, practice or allowance as to
any business activity in which the Partnership is engaged, nor has the
Partnership received nor been threatened with any claim for refund specific to
the
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 77
- ------------------------------------------
<PAGE>
Partnership in excess of Five Hundred and No/100 Dollars ($500.00) by a Medicare
or Medicaid carrier, except as disclosed in the Schedule of Proceedings attached
hereto as Exhibit "I".
ARTICLE FOUR
PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser hereby represents and warrants to Seller that the following
facts and circumstances are true and correct:
4.01 Organization. Purchaser is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of Florida and
is qualified to do business in the States of Texas, Louisiana, Arkansas and
Mississippi. Purchaser is a wholly-owned subsidiary of RoTech Medical
Corporation ("RoTech").
4.02 Corporate Authority. Purchaser is duly authorized by law and
-------------------
corporate policy and approval to:
(a) Enter into this Agreement;
(b) Make all warranties and representations made by Purchaser herein;
and
(c) Issue all considerations provided for under the terms hereof.
4.03 Authorization of Officers. All signatures and agents designated
-------------------------
as agents or officers for Purchaser for signing purposes have the authority to
bind the Purchaser to the terms of this Agreement.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 78
- ------------------------------------------
<PAGE>
ARTICLE FIVE
CONDITIONS PRECEDENT TO CLOSING BY PURCHASER
The obligation of Purchaser to consummate this Agreement is subject to
and conditioned upon the satisfaction, at or prior to the date of Closing, of
each of the following conditions:
5.01 Compliance with Agreement. All of the terms and conditions of
-------------------------
this Agreement to be complied with and performed by the Seller on or before the
date of Closing shall have been complied with and performed.
5.02 Representations and Warranties. The representations and
------------------------------
warranties of the Seller in Article Three shall be deemed to have been made
again on the date of Closing and then be true and correct, subject to any
changes contemplated by this Agreement. There shall have been no materially
adverse change in the financial condition of the Partnership.
5.03 Non-Compete Agreements. Thomas D. Marshall and Sheila A. Bell
----------------------
shall enter into a non-compete agreement substantially in the form attached
hereto as Exhibit "J" and by this reference made a part hereof.
5.04 Employment Agreements. Sheila A. Bell shall have entered into
---------------------
an Employment Agreement substantially in the form attached hereto as Exhibit "K"
and by this reference we made a part hereof.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 79
- ------------------------------------------
<PAGE>
ARTICLE SIX
CONDITIONS PRECEDENT TO CLOSING BY SELLER
The obligation of Seller to consummate this Agreement is subject to
and conditioned upon the satisfaction, at or prior to the date of Closing, of
each of the following conditions:
6.01 Corporate Action. Purchaser and RoTech Medical Corporation
----------------
shall take appropriate corporate action regarding this transaction, which shall
be evidenced by resolutions of their respective boards of directors and
shareholders and certified by the respective corporate secretaries, authorizing
Purchaser to enter into and complete this transaction for the consideration
recited.
ARTICLE SEVEN
INDEMNIFICATION
7.01 Seller's Indemnification of Purchaser. Seller shall and hereby
-------------------------------------
agrees to indemnify and hold harmless Purchaser at all times from after the date
of Closing against and in respect to any damages, as hereinafter defined,
provided, however, Seller's obligation to Purchaser under this indemnification
shall not exceed the full amount of the Purchase Price for a period not to
exceed the ending date of the statute of limitations applicable to any claims
for indemnification hereunder. Damages as used herein, shall include any
claims, actions, demands, losses, costs, expenses, liabilities (joint and
several), penalties, and damages, including counsel fees incurred in
investigating or in attempting to avoid the same or oppose the imposition
thereof, relating to the Purchaser from:
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 80
- ------------------------------------------
<PAGE>
(a) Any materially inaccurate representation made by Seller in or
under this Agreement;
(b) Breach of any warranties made by Seller in or under this
Agreement; and
(c) Breach of default in the performance by Seller of any of the
covenants to be performed by it hereunder.
7.02 Purchaser's Indemnification of Seller. Purchaser shall and
-------------------------------------
hereby agrees to indemnify and hold harmless Seller at all times from after the
date of Closing against and in respect to any damages, as hereinafter defined,
for a period not to exceed the ending date of the statute of limitations
applicable to any claims for indemnification hereunder. Damages as used herein,
shall include any claims, actions, demands, losses, costs, expenses, liabilities
(joint and several), penalties, and damages, including counsel fees incurred in
investigating or in attempting to avoid the same or oppose the imposition
thereof, relating to the Seller from:
(a) Any materially inaccurate representation made by Purchaser in or
under this Agreement and the related documents executed herewith;
(b) Breach of any warranties made by Purchaser in or under this
Agreement and the related documents executed herewith; and
(c) Breach of default in the performance by Purchaser of any of the
covenants to be performed by it hereunder or under the other documents executed
herewith.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 81
- ------------------------------------------
<PAGE>
ARTICLE EIGHT
MISCELLANEOUS PROVISIONS
8.01 Survival of Representations and Warranties. The representations
------------------------------------------
and warranties of Seller and Purchaser contained in and made pursuant to this
Agreement shall survive the execution of this Agreement.
8.02 Instruments of Conveyance and Transfer. At the Closing Seller
--------------------------------------
will deliver to Purchaser good and sufficient instruments of conveyance and
transfer in form sufficient to sell, assign and transfer all of its interest in
the Partnership, which documents shall be effective to vest in Purchaser good,
absolute, and marketable title to the interest in the Partnership being
transferred to Purchaser hereunder, free and clear of all liens, charges,
encumbrances and restrictions of any kind, except as disclosed on Exhibits
hereto.
8.03 Sale and Transfer Taxes Fees. All applicable sales, transfer,
----------------------------
use, filing and other taxes and fees that may be due or payable as a result of
conveyance, assignment, transfer or delivery of the interest of the Partnership
to be conveyed and transferred as provided herein, whether levied on Seller or
Purchaser, shall be borne by Purchaser, and Purchaser fully indemnifies Seller
in the event the Seller incurs expenses pertaining to such taxes and fees.
8.04 Use of Partnership and Other Assumed Names. Seller agrees to
------------------------------------------
take all actions necessary to assist Purchaser in obtaining the rights to
utilize the general partnership and assumed names "Marshall-Bell," "Caremed,"
"Samaritan Medical Equipment Company," and "Marshall Home Health Care,"
including but not limited to the execution of any assignments and consents for
use.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 82
- ------------------------------------------
<PAGE>
8.05 Prepaid Items and Deposits. All prepaid insurance premiums,
--------------------------
rent and utility deposits and similar items paid by or owing to the Partnership
by any person, firm or governmental entity (except customer accounts
receivables) shall, upon the consummation of the transactions contemplated by
this Agreement, remain the property of the Partnership as then constituted.
8.06 Assignment. This Agreement shall not be assignable by Seller or
----------
Purchaser without the written consent of the other. Nothing in this Agreement,
expressed or implied, is intended to confer upon any person, other than the
parties hereto and their successors, any rights or remedies under or by reason
of this Agreement.
8.07 Expenses. Except as otherwise stated herein, each of the
--------
parties shall bear all expenses incurred by them in connection with this
Agreement and in consummation of the transactions contemplated hereby in
preparation thereof.
8.08 Amendment and Waiver. This Agreement may be amended or modified
--------------------
at any time and in all respects, and any provisions may be waived by an
instrument in writing executed by Purchaser and Seller, or either of them in the
case of a waiver.
8.09 Notices. All notices of request, demand and other
-------
communications hereunder shall be addressed to the parties as follows:
TO SELLER: THOMAS D. MARSHALL
3503 Tiffany Lane
Texarkana, Arkansas 75502
TO BUYER: DISTINCT HOME HEALTH CARE, INC.
4506 L. B. McLeod Road, Suite F
Orlando, Florida 32811
Attn: Stephen P. Griggs
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 83
- ------------------------------------------
<PAGE>
8.10 Choice of Law. It is the intention of the parties that the laws
-------------
of the State of Texas shall govern the validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
parties. Any action involving or relating to this Agreement shall be brought in
the court of appropriate jurisdiction located in Bowie County, Texas.
8.11 Articles, Sections and Other Headings. Article, section and
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other headings contained in this Agreement are for reference purposes only and
shall not effect in any way the meaning nor interpretation of this Agreement.
8.12 Counterpart Execution. This Agreement may be executed in two or
---------------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one in the same agreement. Facsimile signatures
may be deemed binding for this Agreement, or any modification or amendment
thereto, or any leases or other documents contemplated hereby, provided that
originals of same are delivered within a reasonable time.
8.13 Gender. All personal pronouns used in this Agreement shall
------
include the other genders whether used in the masculine or feminine or neuter
gender, and the singular shall include the plural whenever and as often as may
be appropriate.
8.14 Parties in Interest. All the terms and provisions of this
-------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by Seller and Purchaser and their respective successors and assigns.
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 84
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<PAGE>
8.15 Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties hereto, and there are no agreements,
understandings, restrictions, warranties or representations between the parties
other than those set forth herein or herein provided.
8.16 Effective Time and Date of Ownership Transfer. The parties
---------------------------------------------
hereto acknowledge and agree that the Partnership will suspend the conduct of
its business on June 5, 1995, until the Closing is consummated, at which time
Purchaser shall assume full operational control of the Partnership and its
business, and all transactions and business conducted on June 5, 1995, shall be
for and inure to the sole benefit of Purchaser.
8.17 Consent to IRC Section 754 Election. Seller hereby agrees that,
-----------------------------------
upon the demand of Purchaser, Seller shall consent to the filing by the
Partnership, in accordance with applicable Treasury Regulations, a timely and
proper election under Section 754 of the Internal Revenue Code of 1986 as
amended, such election to be effective for the taxable year of the Partnership
in which Purchaser acquires the partnership interest of Seller.
8.18 Allocation of Income, Loss, Etc. The parties agree that the
--------------------------------
books of the Partnership shall be closed on June 4, 1995, for purposes of
allocating items of net income and loss, and all other tax benefits and
detriments of the Partnership through such date and that such allocation shall
be made on the basis of the number of days each partner was a partner in the
Partnership during such period. The parties further agree that, except as
provided in the preceding sentence, all items of net income and loss, and all
other tax benefits and detriments of the Partnership for the tax period up to
but not including the date
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 85
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<PAGE>
of purchase of the partnership interest shall be exclusively allocated to
partners other than Purchaser.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first stated above.
SELLER: PURCHASER:
DISTINCT HOME HEALTH CARE, INC.,
A Florida Corporation
/s/ Thomas D. Marshall By: /s/ Stephen P. Griggs
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Thomas D. Marshall Stephen P. Griggs, President
AGREEMENT FOR SALE OF PARTNERSHIP INTEREST - Page 86
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