AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 24, 2004
REGISTRATION NO. (333- )
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
CHEMED CORPORATION
(FORMERLY ROTO-ROOTER, INC.)
(Exact name of Registrant as specified in its charter)
DELAWARE 7699 31-0791746
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
2600 CHEMED CENTER
255 EAST FIFTH STREET
CINCINNATI, OHIO 45202-4726
(513) 762-6900
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive office)
SEE INSIDE FRONT COVER FOR INFORMATION REGARDING REGISTRANT GUARANTORS.
NAOMI C. DALLOB
Vice President and Secretary
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
(513) 762-6900
(Name, address, including zip code, and telephone number, including
area code, of agent for service for Registrant)
----------------------
COPY TO:
THOMAS E. DUNN
Cravath, Swaine & Moore LLP
Worldwide Plaza, 825 Eighth Avenue
New York, New York 10019
(212) 474-1000
----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after the effective time of this
Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
----------------------
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
UNIT(1) PRICE(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Floating Rate Senior Secured Notes due 2010 $110,000,000 100% $110,000,000 $13,937
- -----------------------------------------------------------------------------------------------------------------------------------
Guarantees of Floating Rate Senior Secured Notes
due 2010(2) (3) (3) (3) (4)
===================================================================================================================================
(1) Estimated solely for purposes of determining the registration fee
pursuant to Rule 457(f)(2) under the Securities Act of 1933.
(2) See inside facing page for table of registrant guarantors.
(3) No separate consideration will be received for the guarantees.
(4) No further fee is payable pursuant to Rule 457(n).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
REGISTRANT GUARANTORS
EXACT NAME OF REGISTRANT AS SPECIFIED STATE OF INCORPORATION PRIMARY STANDARD INDUSTRIAL I.R.S. EMPLOYER
IN ITS CHARTER OR ORGANIZATION CLASSIFICATION CODE NUMBERS IDENTIFICATION NUMBER
CCR of Ohio Inc. Delaware 7699 31-1527335
Comfort Care Holdings Co. Nevada 8082 31-1078128
Complete Plumbing Services, Inc. New York 7699 31-1541716
Consolidated HVAC, Inc. Ohio 7623 31-1329854
Jet Resource, Inc. Delaware 7699 31-1331308
Nurotoco of Massachusetts, Inc. Massachusetts 7699 31-1102223
Nurotoco of New Jersey, Inc. Delaware 7699 31-1226376
R.R. UK, Inc. Delaware 7699 31-1269173
Roto-Rooter Corporation Iowa 7699 42-0499295
Roto-Rooter Development Company Delaware 7699 31-1258229
Roto-Rooter Management Company Delaware 7699 31-1119469
Roto-Rooter Services Company Iowa 7699 42-0499300
RR Plumbing Services Corporation New York 7699 31-1143999
Service America Network, Inc. Florida 7623 56-1486390
Hospice Care Incorporated Delaware 8082 65-0153175
Hospice, Inc. Delaware 8082 65-0160635
Vitas Healthcare Corporation Delaware 8082 59-2318357
Vitas Healthcare Corporation of Delaware 8082 33-0644510
California
Vitas Healthcare Corporation of Delaware 8082 65-0668678
Central Florida
Vitas Healthcare Corporation of Florida 8082 65-0160635
Florida
Vitas Healthcare Corporation of Delaware 8082 65-1094333
Illinois
Vitas Healthcare Corporation of Ohio Delaware 8082 65-0392352
Vitas Healthcare Corporation of Delaware 8082 65-0458856
Pennsylvania
Vitas Healthcare Corporation of Delaware 8082 65-1094336
Wisconsin
Vitas HME Solutions, Inc. Delaware 8082 65-0989593
Vitas Holdings Corporation Delaware 8082 65-0866301
Vitas Hospice Services, L.L.C. Delaware 8082 65-1094331
Vitas Healthcare of Texas, L.P. Texas 8082 65-0866305
The address, including zip code, and telephone number, including area code, of
the registrant guarantors listed above are the same as those of Chemed
Corporation.
The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell nor does it seek an offer to
buy these securities in any jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, dated May 24, 2004
PROSPECTUS
CHEMED CORPORATION
(FORMERLY ROTO-ROOTER, INC.)
OFFER TO EXCHANGE
UP TO $110,000,000 PRINCIPAL AMOUNT OUTSTANDING OF
FLOATING RATE SENIOR SECURED NOTES DUE 2010
FOR
A LIKE PRINCIPAL AMOUNT OF NEW FLOATING RATE SENIOR SECURED NOTES DUE 2010
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
-----------------
We are offering to exchange registered new Floating Rate Senior Secured
Notes due 2010 (the "New Notes") for all of our outstanding unregistered
Floating Rate Senior Secured Notes due 2010 (the "Original Notes"). The New
Notes will be free of the transfer restrictions that apply to our outstanding
unregistered Original Notes that you currently hold, but will otherwise have
substantially the same terms of such outstanding Original Notes. This offer
will expire at 5:00 p.m., New York City time, on [ ], 2004, unless we extend
it. The New Notes will not trade on any established exchange.
Each broker-dealer that receives New Notes for its own account pursuant
to this exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. The letter of transmittal
accompanying this prospectus states that by so acknowledging and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This prospectus, as it
may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Notes received in exchange for
outstanding Original Notes where such Original Notes were acquired by such
broker-dealer as a result of market- making activities or other trading
activities. We have agreed that, for a period of 180 days after the expiration
of this exchange offer, we will make this prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
-----------------
SEE "RISK FACTORS" BEGINNING ON PAGE 9 TO READ ABOUT IMPORTANT FACTORS
YOU SHOULD CONSIDER BEFORE TENDERING YOUR ORIGINAL NOTES IN THIS EXCHANGE
OFFER.
-----------------
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY UNITED
STATES FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR
DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------------
Prospectus dated , 2004
-----------------
TABLE OF CONTENTS
PAGE
----
WHERE YOU CAN FIND MORE INFORMATION...................................... i
INCORPORATION BY REFERENCE............................................... i
FORWARD-LOOKING STATEMENTS............................................... iv
SUMMARY.................................................................. 1
RISK FACTORS............................................................. 9
THE EXCHANGE OFFER....................................................... 14
USE OF PROCEEDS.......................................................... 23
RATIOS OF EARNINGS TO FIXED CHARGES...................................... 23
DESCRIPTION OF THE NEW NOTES............................................. 24
EXCHANGE OFFER AND REGISTRATION RIGHTS................................... 82
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS.................. 85
PLAN OF DISTRIBUTION..................................................... 86
BOOK-ENTRY; DELIVERY AND FORM............................................ 87
LEGAL MATTERS............................................................ 90
EXPERTS.................................................................. 90
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WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission (the "SEC") a
registration statement on Form S-4 with respect to the New Notes offered in
this prospectus. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits to that registration
statement. For further information with respect to us and the New Notes, we
refer you to the registration statement and its exhibits. We also file annual,
quarterly and special reports, proxy statements and other information with the
SEC. You may read and copy any document we file at the Public Reference Room
of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms.
Our SEC filings are also available to the public from the SEC's website at
http://www.sec.gov and on our website at http://www.chemed.com. Reports and
other information concerning us can also be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005, phone
(212) 656-5060. Our capital stock is listed and traded on the New York Stock
Exchange under the trading symbol "CHE." With the exception of the documents
we file with the SEC, the information contained on our website is not
incorporated by reference in this prospectus and you should not consider it a
part of this prospectus.
INCORPORATION BY REFERENCE
We are incorporating by reference the information that we file with the
SEC, which means that we are disclosing important information to you in those
documents. The information incorporated by reference is an important part of
this prospectus, and the information that we subsequently file with the SEC
will automatically update and supercede information in this prospectus and in
our other filings with the SEC. We incorporate by reference into this
prospectus the documents listed below, as amended and
i
supplemented, and any future filings we make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the
date of this prospectus and prior to the time the exchange offer made hereby
is completed; we are not, however, incorporating by reference any documents or
portions thereof, whether specifically listed below or filed in the future,
that are not deemed "filed" with the SEC, including any information furnished
pursuant to Items 9 or 12 of Form 8-K:
o Annual Report on Form 10-K for the year ended December 31,
2003, filed on March 12, 2004;
o Quarterly Report on Form 10-Q for the quarter ended March 31,
2004, filed on May 10, 2004; and
o Amended Current Report on Form 8-K/A filed on February 23,
2004, Current Report on Form 8-K filed on February 24, 2004,
and Current Report on Form 8-K filed on April 7, 2004 and
Current Report on Form 8-K filed on May 18, 2004.
Any statement contained in this prospectus, or in a document all or a
portion of which is incorporated by reference in this prospectus, will be
deemed to be modified or superceded for purposes of this prospectus to the
extent that a statement contained in this prospectus modifies or supercedes
the statement. Any such statement or document so modified or superceded will
not be deemed, except as so modified or superceded, to constitute a part of
this prospectus.
You may request a copy of any of our filings with the SEC, or any of the
agreements or other documents that constitute exhibits to those filings, at no
cost, by writing or telephoning us at the following address or phone number:
Chemed Corporation
c/o Investor Relations
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
Telephone: (800) 224-3622 or (513) 762-6463
TO OBTAIN TIMELY DELIVERY OF ANY OF OUR FILINGS, AGREEMENTS OR OTHER
DOCUMENTS, YOU MUST MAKE YOUR REQUEST TO US NO LATER THAN FIVE BUSINESS DAYS
BEFORE THE EXPIRATION DATE OF THE EXCHANGE OFFER. THE EXCHANGE OFFER WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON [ ], 2004. THE EXCHANGE OFFER CAN
BE EXTENDED BY US IN OUR SOLE DISCRETION. SEE THE SECTION ENTITLED "THE
EXCHANGE OFFER" FOR MORE DETAILED INFORMATION.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE
YOU WITH ADDITIONAL OR DIFFERENT INFORMATION. YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE
ON THE FRONT COVER OF THIS PROSPECTUS.
MARKET DATA
The market data and certain industry forecasts contained or incorporated
by reference in this prospectus are based on internal surveys, market
research, publicly available information, industry publications or good faith
estimates of our management. Industry publications generally state that the
information contained therein has been obtained from sources believed to be
reliable, but that the
ii
accuracy and completeness of such information is not guaranteed. Similarly,
internal surveys, industry forecasts and market research, while believed to be
reliable, have not been independently verified, and we make no representation
as to the accuracy of such information.
-----------------
"Chemed," "Roto-Rooter," "Service America" and "Vitas" are trademarks of
Chemed Corporation. All other trademarks, service marks or trade names
referred to in this prospectus are the property of their respective owners.
iii
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of
the federal securities laws. These forward-looking statements generally can be
identified by use of statements that include words such as "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe" and other words
and terms of similar meaning, although not all forward-looking statements
contain such words. Statements that describe our objectives, plans or goals
are also forward-looking statements. These forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
materially from those currently anticipated. Factors that could materially
affect these forward-looking statements can be found in our periodic reports
filed with the SEC and herein under the heading "Risk Factors." Potential
investors and other readers are urged to consider these factors carefully in
evaluating the forward-looking statements and are cautioned not to place undue
reliance on these forward-looking statements. The forward-looking statements
included in this prospectus are made only as of the date of this prospectus,
and we undertake no obligation to publicly update these forward-looking
statements to reflect new information, future events or otherwise. In light of
these risks, uncertainties and assumptions, the forward-looking events might
or might not occur. We cannot assure you that projected results or events will
be achieved.
iv
SUMMARY
This summary highlights some of the information included in other parts
of this prospectus and the documents we incorporate by reference herein. This
summary may not contain all the information that may be important to you. You
should carefully read the entire prospectus, including the "Risk Factors"
section and the financial data and related notes, and the documents
incorporated by reference herein, before investing in New Notes. As used in
this prospectus, unless otherwise indicated or the context otherwise requires,
the terms "Chemed," "we," "the Company," "us" and "our" refer to Chemed
Corporation together with its subsidiaries.
BUSINESS
We are involved in three lines of business: plumbing and drain cleaning
services, heating/air-conditioning repair, and hospice care. We entered the
hospice care business when we acquired the remaining 63% of Vitas Healthcare
Corporation ("Vitas") that we did not previously own on February 24, 2004.
We believe our Roto-Rooter business is the largest provider of plumbing
and drain cleaning services in North America, providing repair and maintenance
services to residential and commercial accounts. We operate through more than
100 company-owned branches and independent contractors and 500 franchisees. We
offer services to more than 90% of the U.S. population and approximately 55%
of the Canadian population. We also have licensed master franchisees in
Australia, China, Indonesia, Japan, Mexico, the Philippines and the United
Kingdom.
Our Service America business provides residential and commercial
appliance and heating/air-conditioning repair, maintenance and replacement
services. Service America also sells air conditioning equipment and duct
cleaning services.
Vitas is the nation's largest provider of hospice services for patients
with severe, life-limiting illnesses. This type of care is aimed at making the
terminally ill patient's final days as comfortable and pain free as possible.
Hospice care is typically available to patients who have been initially
certified as terminally ill (i.e., a prognosis of six months or less).
Vitas' hospice operations began in South Florida in 1978 and Vitas was
incorporated as a for-profit corporation in 1983. Today, Vitas provides a
comprehensive range of hospice services through 26 operating programs covering
many of the large population areas in the U.S., including Florida, California,
Texas and Illinois. Vitas has over 6,000 employees including approximately
2,400 nurses and 1,500 home health aides.
We are a holding company and derive all of our operating income from our
subsidiaries.
The Company's name was Roto-Rooter, Inc. until May 17, 2004, when its
name became Chemed Corporation.
OUR ADDRESS
Our executive offices are located at 225 E. Fifth Street, Cincinnati,
Ohio 45202 and our telephone number is (513) 762-6900. Our website is located
at http://www.chemed.com. The information on our website is not part of this
prospectus.
1
EXCHANGE OFFER
Background................... On February 24, 2004, we completed a private
placement of the Original Notes. In connection
with that private placement, we entered into a
registration rights agreement in which we
agreed, among other things, to complete an
exchange offer.
The Exchange Offer........... We are offering to exchange our New Notes which
have been registered under the Securities Act of
1933 (the "Securities Act") for a like principal
amount of our outstanding, unregistered Original
Notes.
As of the date of this prospectus, $110,000,000
in aggregate principal amount of our Original
Notes are outstanding.
Resale of New Notes.......... We believe that New Notes issued pursuant to the
exchange offer in exchange for Original Notes
may be offered for resale, resold and otherwise
transferred by you without compliance with the
registration and prospectus delivery provisions
of the Securities Act, provided that:
o you are acquiring the New Notes in the
ordinary course of your business;
o you have not engaged in, do not intend to
engage in, and have no arrangement or
understanding with any person to participate in
the distribution of the New Notes; and
o you are not our affiliate as defined
under Rule 405 of the Securities Act.
Each participating broker-dealer that receives
New Notes for its own account pursuant to the
exchange offer in exchange for Original Notes,
where such Original Notes were acquired as a
result of market-making activities or other
trading activities, must acknowledge that it
will deliver a prospectus in connection with any
resale of such New Notes. See "Plan of
Distribution."
Any holder of Original Notes who:
o is our affiliate;
o does not acquire New Notes in the ordinary
course of its business;
o tenders in the exchange offer with the
intention to participate, or for the purpose
of participating, in a distribution of New
Notes; or
o is a broker-dealer that acquired the
Original Notes directly from us,
must comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with the resale of New Notes.
2
Consequences If You Do Not
Exchange Your Original Notes..Original Notes that are not tendered in the
exchange offer or are not accepted for exchange
will continue to bear legends restricting their
transfer. You will not be able to offer or sell
the Original Notes unless:
o pursuant to an exemption from the
requirements of the Securities Act;
o the Original Notes are registered under
the Securities Act; or
o the transaction requires neither such an
exemption nor registration.
After the exchange offer is closed, we will no
longer have an obligation to register the
Original Notes, except for some limited
exceptions. See "Risk Factors - Failure to
Exchange Your Original Notes."
Expiration Date.............. 5:00 p.m., New York City time, on [ ], 2004,
unless we extend the exchange offer.
Certain Conditions to
the Exchange Offer........... The exchange offer is subject to certain
customary conditions, which we may waive.
Special Procedures for
Beneficial Holders........... If you beneficially own Original Notes that are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and you wish to tender in the exchange offer,
you should contact such registered holder
promptly and instruct such person to tender on
your behalf. If you wish to tender in the
exchange offer on your own behalf, you must,
prior to completing and executing the letter of
transmittal and delivering your Original Notes,
either arrange to have the Original Notes
registered in your name or obtain a properly
completed bond power from the registered holder.
The transfer of registered ownership may take a
considerable time.
Withdrawal Rights............ You may withdraw your tender of Original Notes
at any time before the offer expires.
Accounting Treatment......... We will not recognize any gain or loss for
accounting purposes upon the completion of the
exchange offer. The expenses of the exchange
offer that we pay will increase our deferred
financing costs in accordance with generally
accepted accounting principles. See "The
Exchange Offer & Accounting Treatment."
Certain Tax Consequences..... The exchange pursuant to the exchange offer
generally should not be a taxable event for U.S.
Federal income tax purposes.
3
Use of Proceeds.............. We will not receive any proceeds from the
exchange or the issuance of New Notes in
connection with the exchange offer.
Exchange Agent............... Wells Fargo Bank, N.A. is serving as exchange
agent with respect to the New Notes in
connection with the exchange offer.
4
SUMMARY DESCRIPTION OF THE NEW NOTES
The New Notes have the same financial terms and covenants as the Original
Notes, which are as follows below. For a more complete description of the New
Notes, please refer to the section of this prospectus entitled "Description of
the New Notes."
Issuer....................... Chemed Corporation.
New Notes Offered............ $110,000,000 aggregate principal amount of
Floating Rate Senior Secured Notes due 2010.
Maturity Date................ February 24, 2010.
Issue Price.................. 100% plus accrued interest, if any, from the
issue date.
Interest..................... Interest accrues at a rate equal to three-month
LIBOR plus 3.75% per year, payable quarterly in
arrears on February 15, May 15, August 15 and
November 15 of each year beginning May 15, 2004.
The initial three-month interest rate was
determined on the second London banking day
immediately preceding the issue date. The
initial interest rate was 4.88% per annum, based
on LIBOR of 1.13% as of February 11, 2004.
Optional Redemption.......... At any time, we may redeem some or all of the
New Notes at the following redemption prices
(expressed as a percentage of the principal
amount) plus accrued but unpaid interest to the
redemption date, if redeemed during the 12-month
period commencing on February 24 of the year set
forth below:
Year Redemption Price
---- ----------------
2004.................. 101.000%
2005 and thereafter... 102.000%
Change of Control............ If a Change of Control of the Company occurs,
subject to certain conditions, we must offer to
purchase the New Notes at a purchase price in
cash equal to 101% of each New Note, plus
accrued but unpaid interest to the date of
redemption. The term "Change of Control" is
defined in the "Description of the New Notes"
section of this prospectus.
Collateral................... The New Notes will be secured by a first
priority security interest (subject to permitted
liens) in all of our assets that secure our
senior secured credit facilities governed by the
Credit Agreement dated February 24, 2004, among
us, certain of our subsidiaries and Bank One,
NA, as Administrative Agent (the "Credit
Agreement"), which document is filed as an
exhibit hereto and incorporated by reference
herein (on an equal basis with the first
priority security interest granted with respect
to such Credit Agreement), subject to certain
exceptions (consisting principally of cash or
cash equivalents
5
that will collateralize letters of credit under
our Credit Agreement). The collateral securing
the New Notes and the indebtedness under our
Credit Agreement initially includes without
limitation, capital stock and other equity
interests owned by us in Vitas and our other
United States subsidiaries and, through secured
guarantees, assets of such subsidiaries. Under
certain circumstances, the collateral securing
the New Notes may be released without the
consent of the holders of the New Notes. See
"Description of the New Notes - Security."
Guarantees................... The New Notes will be unconditionally
guaranteed, jointly and severally, on a senior
basis by each of our subsidiaries that guarantee
the indebtedness under our Credit Agreement.
Under certain circumstances, the guarantees of
the New Notes may be released without the
consent of the holders of the New Notes. See
"Description of the New Notes - Subsidiary
Guarantees."
Ranking...................... The New Notes will rank:
o equal in right of payment with our existing
and future senior indebtedness; and
o senior in right of payment to our existing and
future indebtedness subordinated to the New
Floating Rate Notes.
As of March 31, 2004, we had approximately
$335.6 million of indebtedness, of which
approximately $320.0 million was senior
indebtedness and $170.0 million was secured
indebtedness.
Collateral Sharing
Agreement.................... Pursuant to a collateral sharing agreement, the
liens securing the New Notes are first-priority
liens that are equal and ratable with all liens
(subject to certain exceptions) that secure (1)
obligations under our Credit Agreement, (2)
certain other future indebtedness permitted to
be incurred under the indenture governing the
New Notes and (3) certain obligations under our
hedging and foreign exchange arrangements. Such
liens are evidenced by security documents for
the benefit of the holders of the New Notes, the
lenders under our Credit Agreement and the
holders of certain other future indebtedness and
obligations. Except in certain limited
circumstances, the release of the first-
priority liens upon any collateral approved by
the lenders under our Credit Agreement will also
release the first- priority liens securing the
New Notes on the same collateral. So long as the
indebtedness under our Credit Agreement or other
future indebtedness or obligations secured by
first-priority liens in the collateral are
outstanding in certain minimum amounts, the
agent for such lenders may
6
enter into amendments or waivers of the security
documents that apply equally to our Credit
Agreement or are not materially adverse to the
holders of the New Notes.
Sharing of
First-Priority Lien.......... In certain circumstances, we may secure
specified indebtedness permitted to be incurred
by the covenant described in "Description of the
New Notes & Certain Covenants & Limitation on
Indebtedness" by granting liens upon any or all
of the collateral securing the New Notes, on an
equal and ratable basis with the first-priority
liens securing our the indebtedness under our
Credit Agreement and the New Notes.
Certain Covenants............ The indenture governing the New Notes contains
covenants that, among other things, limit our
and our restricted subsidiaries' ability to:
o incur additional debt;
o pay dividends, make redemptions and purchases
of capital stock and make other restricted
payments;
o issue and sell capital stock of subsidiaries;
o sell assets;
o engage in transactions with affiliates;
o restrict distributions from subsidiaries;
o incur liens;
o engage in businesses other than permitted
businesses;
o engage in sale/leaseback transactions; and
o engage in mergers or consolidations.
All of these covenants are subject to a number
of important exceptions and qualifications
described in "Description of the New Notes -
Certain Covenants."
Exchange Offer and
Registration Rights.......... Under a registration rights agreement, we agreed
to:
o file a registration statement within 90
days after the issue date of the Original
Notes enabling the holders of the Original
Notes to exchange the Original Notes for
publicly registered notes with substantially
the same terms;
7
o use our reasonable best efforts to cause
the registration statement to become effective
within 180 days after the issue date of the
Original Notes;
o use our reasonable best efforts to consummate
the exchange offer by the earlier of 210 days
after the issue date of the Original Notes and
60 days after the registration statement
becomes effective, subject to certain
exceptions;
o file a shelf registration statement for the
resale of the Original Notes if we cannot
effect an exchange offer within the time
period listed above and in some other
circumstances; and
o if a shelf registration statement is required,
use our reasonable best efforts to cause the
shelf registration statement to be declared
effective and to keep the shelf registration
statement effective until the earlier of two
years from the date of the effectiveness of
the shelf registration statement or the time
when all the Original Notes covered by the
shelf registration statement have been sold or
when they may be sold pursuant to Rule 144
under the Securities Act, subject to certain
exceptions.
See "Exchange Offer and Registration Rights."
Book-Entry; Delivery
and Form..................... Initially, the New Notes will be represented by
one or more permanent global certificates in
definitive, fully registered form deposited with
a custodian for, and registered in the name of,
a nominee of The Depository Trust Company. See
"Book-Entry; Delivery and Form."
Absence of a Public Market
for the New Notes............ There is no public trading market for the New
Notes, and we do not intend to apply for listing
of the New Notes on any national securities
exchange or for quotation of the New Notes on
any automated dealer quotation system. See "Risk
Factors - Risks Related to the New Notes - An
active trading market may not develop for the
New Notes, which could reduce their value."
RISK FACTORS
Prior to acquiring any of the New Notes or exchanging any of the Original
Notes, you should consider carefully all the information contained and
incorporated by reference in this prospectus and, in particular, should
evaluate the specific factors under the section "Risk Factors" beginning on
page 9.
8
RISK FACTORS
You should carefully consider the following risk factors and all the
information and risk factors set forth in this prospectus and incorporated
herein before deciding to acquire any of the New Notes or to exchange any of
the Original Notes.
RISKS RELATED TO THE NEW NOTES
IF YOU FAIL TO EXCHANGE YOUR ORIGINAL NOTES, THEY WILL CONTINUE TO BE
RESTRICTED SECURITIES AND MAY BECOME LESS LIQUID.
Original Notes which you do not tender or we do not accept will,
following the exchange offer, continue to be restricted securities, and you
may not offer to sell them except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act and applicable state securities
law. We will issue New Notes in exchange for the Original Notes pursuant to
the exchange offer only following the satisfaction of the procedures and
conditions set forth in "The Exchange Offer - Procedures for Tendering." Such
procedures and conditions include timely receipt by the exchange agent of such
Original Notes and of a properly completed and duly executed letter of
transmittal.
Because we anticipate that most holders of Original Notes will elect to
exchange such Original Notes, we expect that the liquidity of the market for
any Original Notes remaining after the completion of the exchange offer may be
substantially limited. Any Original Notes tendered and exchanged in the
exchange offer will reduce the aggregate principal amount at maturity of the
Original Notes outstanding. Following the exchange offer, if you did not
tender your Original Notes you generally will not have any further
registration rights, and such Original Notes will continue to be subject to
certain transfer restrictions. Accordingly, the liquidity of the market for
such Original Notes could be adversely affected. The Original Notes are
currently eligible for sale pursuant to Rule 144A through the Private
Offerings, Resale and Trading through Automated Linkages market of the
National Association of Securities Dealers, Inc. ("PORTAL").
WE ARE A HOLDING COMPANY, AND WE MAY NOT HAVE ACCESS TO SUFFICIENT CASH TO
MAKE PAYMENTS ON THE NEW NOTES.
We are a holding company with no direct operations. Our principal assets
are the equity interests we hold in our operating subsidiaries. As a result,
we are dependent upon dividends and other payments from our subsidiaries to
generate the funds necessary to meet our outstanding debt and other
obligations. Our subsidiaries may not generate sufficient cash from operations
to enable us to make principal and interest payments on our indebtedness,
including the New Notes. Our subsidiaries are permitted under the terms of our
indebtedness to incur additional indebtedness that may restrict payments from
our subsidiaries to us. We cannot assure you that agreements governing current
and future indebtedness of our subsidiaries will permit those subsidiaries to
provide us with sufficient cash to fund payments on the New Notes when due.
IF THERE IS A DEFAULT, THE VALUE OF THE COLLATERAL MAY NOT BE SUFFICIENT TO
REPAY BOTH THE OTHER FIRST-PRIORITY SECURED CREDITORS AND THE HOLDERS OF THE
NEW NOTES.
The New Notes and the guarantees of the New Notes will be secured by a
first-priority lien, subject to permitted liens, that is equal and ratable
with the first-priority lien on the collateral securing obligations under our
Credit Agreement, subject to certain exceptions. As of March 31, 2004, we had,
in addition to the Original Notes, $60.0 million of indebtedness outstanding
under
9
our Credit Agreement, plus $43.6 million in revolving credit availability and
$31.4 million in outstanding letters of credit. We will also be permitted to
grant first-priority liens in the collateral to secure certain other future
indebtedness permitted to be incurred by us or a guarantor under the indenture
governing the New Notes. Although the holders of other obligations secured by
first-priority liens on the collateral and the holders of the New Notes will
share, on an equal and ratable basis, in the proceeds of this collateral, the
proceeds from any realization of the collateral may not be sufficient to repay
both the other first-priority creditors and the holders of the New Notes.
The value of the collateral in the event of liquidation will depend on
market and economic conditions, the availability of buyers and other factors.
In addition, the book value of the collateral should not be relied on as a
measure of realizable value. We cannot assure you that the collateral could be
sold in a short period of time. A significant portion of the collateral
includes assets which may only be usable as part of our existing operating
business. Accordingly, any such sale of collateral, including the real
property portion of it, separate from the other portion of the collateral
relating to our operating business, may not be feasible or of significant
value to any buyers. In addition, to the extent that third parties enjoy
permitted liens, these third parties may have rights and remedies with respect
to the property subject to the permitted liens that, if exercised, could
adversely affect the value or availability of the collateral. Furthermore, the
ability of holders of the New Notes to realize upon any of the collateral may
be subject to bankruptcy law limitations in the event of our bankruptcy.
We cannot assure you that the proceeds from the sale of all such
collateral would be sufficient to satisfy in full the amounts outstanding
under the New Notes, the obligations under our Credit Agreement and any other
obligations secured by the first-priority liens. If such proceeds were not
sufficient to repay amounts outstanding under the New Notes, then holders of
the New Notes (to the extent not repaid from the proceeds of the sale of the
collateral) would only have an unsecured claim against our remaining assets.
See "Description of the New Notes - Certain Covenants - Limitation on
Indebtedness."
THE RIGHTS OF THE HOLDERS OF THE NEW NOTES WITH RESPECT TO THE COLLATERAL ARE
LIMITED.
With respect to the collateral securing the New Notes, the rights of the
holders of the New Notes will be limited pursuant to the terms of the
collateral sharing agreement. Under the collateral sharing agreement, at any
time that obligations under our Credit Agreement are outstanding and no
insolvency or liquidation proceeding is continuing, any actions that may be
taken in respect of the collateral, including the ability to cause the
commencement of enforcement proceedings against the collateral and to control
the conduct of such proceedings, and the approval of amendments to, and
waivers of past defaults under, the collateral documents, will be at the
direction of the lenders under our senior secured credit facilities, and the
trustee, on behalf of the holders of the New Notes, will not have the ability
to control or direct such actions, except as necessary to take any action (not
adverse to the right of the collateral trustee to exercise, and the credit
agreement lenders to direct exercise of, remedies) in order to preserve or
protect its rights in the liens securing the New Notes or the subsidiary
guarantees. In the event of that an insolvency or liquidation proceeding is
continuing, the trustee, on behalf of the holders of New Notes, will not be
permitted to enforce the security interests except in certain limited
circumstances. Except in certain limited instances, releases of the
first-priority liens upon collateral approved by the holders of obligations
under our Credit Agreement will also release the first-priority liens securing
the New Notes on the same collateral. Additional releases of collateral from
the first-priority lien securing the New Notes will be permitted under some
10
circumstances without the consent of the holders of the New Notes. See
"Description of the New Notes - Security" and "Description of the New Notes -
Amendments and Waiver."
The indenture governing the New Notes permits us to use the proceeds of
asset sales permitted by the indenture governing the New Notes, including the
sale of assets that constitute collateral, to repay amounts outstanding under
our Credit Agreement or other senior indebtedness without making an offer to
purchase the New Notes, except in certain circumstances.
RELEASES OF THE GUARANTEES OF THE NEW NOTES OR ADDITIONAL GUARANTEES MAY BE
CONTROLLED BY THE COLLATERAL AGENT UNDER OUR CREDIT AGREEMENT.
The New Notes will be guaranteed by each of our current and future
domestic, restricted subsidiaries that guarantees the obligations under our
Credit Agreement. If we create or acquire a domestic restricted subsidiary in
the future and the collateral agent under our Credit Agreement does not
require that subsidiary to guarantee the obligations under our Credit
Agreement, then the subsidiary will not be required to guarantee the New
Notes. In addition, under the terms of the indenture governing the New Notes,
a guarantee of the New Notes may be released without any action on the part of
the trustee or any holder of New Notes if the collateral agent under our
Credit Agreement releases the guaranty of the obligations under our Credit
Agreement, subject to certain limitations. Additional releases of the
guarantees of the New Notes are permitted under some circumstances without the
consent of the holders of the New Notes. See "Description of the New Notes -
Subsidiary Guarantees."
IN THE EVENT OF A BANKRUPTCY OF US OR ANY SUBSIDIARY GUARANTOR, THE ABILITY OF
THE HOLDERS OF THE NEW NOTES TO REALIZE UPON THEIR COLLATERAL WILL BE SUBJECT
TO CERTAIN BANKRUPTCY LAW LIMITATIONS.
The ability of holders of the New Notes to realize upon their collateral
will be subject to certain bankruptcy law limitations in the event of a
bankruptcy of us or any of the subsidiary guarantors. Under applicable federal
bankruptcy laws, secured creditors are prohibited from repossessing their
security from a debtor in a bankruptcy case, or from disposing of security
repossessed from such a debtor, without bankruptcy court approval. Moreover,
applicable federal bankruptcy laws generally permit the debtor to continue to
retain collateral even though the debtor is in default under the applicable
debt instruments, provided generally that the secured creditor is given
"adequate protection." The meaning of the term "adequate protection" may vary
according to the circumstances, but is intended in general to protect the
value of the secured creditor's interest in the collateral at the commencement
of the bankruptcy case and may include cash payments or the granting of
additional security, if and at such times as the court in its discretion
determines, for any diminution in the value of the collateral as a result of
the stay of repossession or disposition of the collateral by the debtor during
the pendency of the bankruptcy case. In view of the lack of a precise
definition of the term "adequate protection" and the broad discretionary
powers of a bankruptcy court, we cannot predict whether payments under the New
Notes would be made following a commencement of and during a bankruptcy case,
whether or when the trustee under the indenture for the New Notes could
foreclose upon or sell the collateral or whether or to what extent holders of
New Notes would be compensated for any delay in payment or loss of value of
the collateral through the requirement of "adequate protection."
11
WE MAY BE UNABLE TO PURCHASE THE NEW NOTES UPON A CHANGE OF CONTROL OR TO
RAISE THE FUNDS NECESSARY TO FINANCE SUCH PURCHASES.
Upon a change of control event, holders of the New Notes may require us
to purchase the New Notes for cash at a price equal to 101% of their aggregate
principal amount, plus accrued and unpaid interest, if any.
Our Credit Agreement provides that the occurrence of certain events that
would constitute a change in control for the purposes of the indenture
governing the New Notes will constitute a default under such indebtedness.
Other future debt may contain prohibitions of events that would constitute a
change in control or would require such debt to be repurchased upon a change
in control. Moreover, the exercise by holders of New Notes of their right to
require us to repurchase their New Notes could cause a default under our
existing or future debt, even if the change in control itself does not result
in a default under existing or future debt, due to the financial effect of
such repurchase on us. Finally, our ability to pay cash to holders of New
Notes upon a repurchase may be limited by our financial resources at the time
of such repurchase. Therefore, we cannot assure you that we will be permitted
to comply with the change of control or that sufficient funds will be
available when necessary to make any required repurchases. Our failure to
purchase New Notes in connection with a change in control would result in a
default under the indentures governing the New Notes. Such a default may, in
turn, constitute a default under future debt as well.
AN ACTIVE TRADING MARKET MAY NOT DEVELOP FOR THE NEW NOTES, WHICH COULD REDUCE
THEIR VALUE.
There is no existing trading market for the New Notes. We do not intend
to apply for listing of the New Notes on a securities exchange or for
inclusion of the New Notes in any automated quotation system. The Original
Notes currently trade in the PORTAL market. However, there can be no assurance
that an active trading market will develop for the New Notes. If an active
trading market does not develop or is not maintained, the market prices of the
New Notes may decline and you may not be able to sell your New Notes.
UNDER UNITED STATES FEDERAL AND STATE FRAUDULENT TRANSFER OR CONVEYANCE
STATUTES, A COURT COULD VOID OUR OBLIGATIONS AND THOSE OF OUR SUBSIDIARY
GUARANTORS OR TAKE OTHER ACTIONS DETRIMENTAL TO THE HOLDERS OF THE NEW NOTES.
The issuance of the New Notes, the guarantees of the New Notes or the
incurrence of the first-priority liens securing the New Notes may be subject
to review under U.S. bankruptcy law and comparable provisions of state
fraudulent transfer or conveyance laws if a bankruptcy case or lawsuit is
commenced by or against us or a subsidiary guarantor or if a lawsuit is
commenced against us or a subsidiary guarantor by unpaid creditors. Under
these laws, if a court were to find in such a bankruptcy or reorganization
case or lawsuit that, at the time the Company issued the New Notes or at the
time a subsidiary guarantor issued the guarantee of the New Notes or granted
the lien securing the New Notes:
(1) it issued the New Notes or the guarantee or granted the lien with
the intent to delay, hinder or defraud present or future creditors;
or
(2) (a) it received less than reasonably equivalent value or fair
consideration for issuing the New Notes or the guarantee or
granting the lien; and
12
(b) at the time it issued the New Notes or the guarantee or granted
the lien:
(i) it was insolvent or rendered insolvent by reason of
issuing the New Notes or the guarantee or granting the
lien;
(ii) it was engaged, or about to engage, in a business or
transaction for which its remaining assets constituted
unreasonably small capital to carry on its businesses; or
(iii) it intended to incur, or believed or reasonably should
have believed that it would incur, debts beyond its
ability to pay such debts as they matured or became due;
then, in either case, a court of competent jurisdiction could (1) void, in
whole or in part, the New Notes or the guarantee of the New Notes or the lien
securing the guarantee and direct the repayment of any amounts paid thereunder
to our other creditors, (2) subordinate the New Notes or the guarantee of the
New Notes or the lien securing the guarantee to our or the applicable
guarantor's other debt or (3) take other actions detrimental to the holders of
the New Notes.
The measure of insolvency will vary depending upon the law applied in the
case. Generally, however, a person would be considered insolvent if the sum of
its debts, including contingent liabilities, was greater than all of its
assets at fair valuation or if the present fair saleable value of its assets
was less than the amount that would be required to pay the probable liability
on its existing debts, including contingent liabilities, as they become
absolute and matured. An entity may be presumed to be insolvent if it is not
paying its debts as they became due.
We cannot predict:
o what standard a court would apply in order to determine
whether we or a subsidiary guarantor were insolvent as of the
date we issued the New Notes or such guarantor issued the
guarantee or we or such guarantor granted the liens, as
applicable, or that regardless of the method of valuation, a
court would determine that we or a subsidiary guarantor were
insolvent on that date; or
o whether a court would determine that the payments
constituted fraudulent transfers or conveyances on other
grounds.
In addition, under U.S. federal bankruptcy law, if a bankruptcy case were
initiated by or against us or the guarantors within 90 days after a payment by
us with respect to the New Notes or by the guarantors under their guarantees,
if we or the guarantors were insolvent at the time of such payment, and if
certain other conditions were met, all or a portion of such payment could be
avoided as a preferential transfer and the recipient of such payment could be
required to return such payment to us for distribution to other creditors.
Certain states have enacted similar insolvency statutes with varying periods
and other provisions.
13
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the Original Notes, we entered into a
registration rights agreement with the purchasers, under which we agreed to
use our best efforts to file and have declared effective an exchange offer
registration statement under the Securities Act.
We are making the exchange offer in reliance on the position of the SEC
as set forth in certain no-action letters. However, we have not sought our own
no-action letter. Based upon these interpretations by the SEC, we believe that
a holder of New Notes, but not a holder who is our "affiliate" within the
meaning of Rule 405 of the Securities Act, who exchanges Original Notes for
New Notes in the exchange offer, generally may offer the New Notes for resale,
sell the New Notes and otherwise transfer the New Notes without further
registration under the Securities Act and without delivery of a prospectus
that satisfies the requirements of Section 10 of the Securities Act. We also
believe that a holder may offer, sell or transfer the New Notes only if the
holder acquires the New Notes in the ordinary course of its business and is
not participating, does not intend to participate and has no arrangement or
understanding with any person to participate in a distribution of the New
Notes.
Any holder of the Original Notes using the exchange offer to participate
in a distribution of New Notes cannot rely on the no-action letters referred
to above. A broker-dealer that acquired Original Notes directly from us, but
not as a result of market-making activities or other trading activities must
comply with the registration and prospectus delivery requirements of the
Securities Act in the absence of an exemption from such requirements.
Each broker-dealer that receives New Notes for its own account in
exchange for Original Notes, where such Original Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Notes received in exchange for Original Notes where such
Original Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The letter of
transmittal states that by acknowledging and delivering a prospectus, a
broker-dealer will not be considered to admit that it is an "underwriter"
within the meaning of the Securities Act. We have agreed that for a period of
180 days after the expiration date, we will make this prospectus available to
broker-dealers for use in connection with any such resale. See "Plan of
Distribution."
Except as described above, this prospectus may not be used for an offer
to resell, resale or other transfer of New Notes.
The exchange offer is not being made to, nor will we accept tenders for
exchange from, holders of Original Notes in any jurisdiction in which the
exchange offer or the acceptance of it would not be in compliance with the
securities or blue sky laws of such jurisdiction.
TERMS OF THE EXCHANGE
Upon the terms and subject to the conditions of the exchange offer, we
will accept any and all Original Notes validly tendered prior to 5:00 p.m.,
New York City time, on the expiration date. The date of acceptance for
exchange of the Original Notes, and completion of the exchange
14
offer, is the exchange date, which will be the first business day following
the expiration date (unless extended as described in this document). We will
issue, on or promptly after the exchange date, an aggregate principal amount
of up to $110,000,000 of New Notes for a like principal amount of outstanding
Original Notes tendered and accepted in connection with the exchange offer.
The New Notes issued in connection with the exchange offer will be delivered
on the earliest practicable date following the exchange date. Holders may
tender some or all of their Original Notes in connection with the exchange
offer, but only in $1,000 increments of principal amount at maturity.
The terms of the New Notes are identical in all material respects to the
terms of the Original Notes, except that the New Notes have been registered
under the Securities Act and are issued free from any covenant regarding
registration, including the payment of liquidated damages upon a failure to
file or have declared effective an exchange offer registration statement or to
complete the exchange offer by certain dates. The New Notes will evidence the
same debt as the Original Notes and will be issued under the same indenture
and entitled to the same benefits under that indenture as the Original Notes
being exchanged. As of the date of this prospectus, $110,000,000 in aggregate
principal amount of Original Notes are outstanding.
In connection with the issuance of the Original Notes, we arranged for
the Original Notes originally purchased by qualified institutional buyers
under the Securities Act to be issued and transferable in book-entry form
through the facilities of The Depository Trust Company ("DTC"), acting as
depositary. Except as described under "Book-Entry, Delivery and Form," the New
Notes will be issued in the form of global notes registered in the name of DTC
or its nominee and each beneficial owner's interest in it will be transferable
in book-entry form through DTC. See "Book-Entry, Delivery and Form."
Holders of Original Notes do not have any appraisal or dissenters' rights
in connection with the exchange offer. Original Notes which are not tendered
for exchange or are tendered but not accepted in connection with the exchange
offer will remain outstanding and be entitled to the benefits of the indenture
under which they were issued, but will not be entitled to any registration
rights under the registration rights agreement.
We shall be considered to have accepted validly tendered Original Notes
if and when we have given oral or written notice to the exchange agent. The
exchange agent will act as agent for the tendering holders for the purposes of
receiving the New Notes from us.
If any tendered old Original Notes are not accepted for exchange because
of an invalid tender, the occurrence of certain other events described in this
prospectus or otherwise, we will return the Original Notes, without expense,
to the tendering holder as quickly as possible after the expiration date.
Holders who tender Original Notes will not be required to pay brokerage
commissions or fees or, subject to the instructions in the letter of
transmittal, transfer taxes on exchange of Original Notes in connection with
the exchange offer. We will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the exchange offer. See
"- Fees and Expenses."
15
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The expiration date for the exchange offer is 5:00 p.m., New York City
time, on [ ], 2004, unless extended by us in our sole discretion (but in no
event to a date later than [ ], 2004), in which case the term "expiration
date" shall mean the latest date and time to which the exchange offer is
extended.
We reserve the right, in our sole discretion:
o to delay accepting any Original Notes, to extend the offer or to
terminate the exchange offer if, in our reasonable judgment, any of
the conditions described below shall not have been satisfied, by
giving oral or written notice of the delay, extension or termination
to the exchange agent, or
o to amend the terms of the exchange offer in any manner.
If we amend the exchange offer in a manner that we consider material, we
will disclose such amendment by means of a prospectus supplement, and we will
extend the exchange offer for a period of five to ten business days.
If we determine to make a public announcement of any delay, extension,
amendment or termination of the exchange offer, we will do so by making a
timely release through an appropriate news agency.
CONDITIONS TO THE EXCHANGE OFFER
Despite any other term of the exchange offer, we will not be required to
accept for exchange, or exchange New Notes for, any Original Notes and may
terminate the exchange offer as provided in this prospectus before the
acceptance of the Original Notes, if:
o any action or proceeding is instituted or threatened in any court or
by or before any governmental agency relating to the exchange offer
which, in our reasonable judgment, might materially impair our
ability to proceed with the exchange offer or materially impair the
contemplated benefits of the exchange offer to us, or any material
adverse development has occurred in any existing action or
proceeding relating to us or any of our subsidiaries;
o any change, or any development involving a prospective change, in
our business or financial affairs or any of our subsidiaries has
occurred which, in our reasonable judgment, might materially impair
our ability to proceed with the exchange offer or materially impair
the contemplated benefits of the exchange offer to us;
o any law, statue, rule or regulation is proposed, adopted or enacted,
which in our reasonable judgment, might materially impair our
ability to proceed with the exchange offer or materially impair the
contemplated benefits of the exchange offer to us; or
o any governmental approval has not been obtained, which approval we,
in our reasonable discretion, consider necessary for the completion
of the exchange offer as contemplated by this prospectus.
16
The conditions listed above are for our sole benefit and may be asserted
by us regardless of the circumstances giving rise to any of these conditions.
We may waive these conditions in our reasonable discretion in whole or in part
at any time and from time to time. The failure by us at any time to exercise
any of the above rights shall not be considered a waiver of such right, and
such right shall be considered an ongoing right which may be asserted at any
time and from time to time.
If we determine in our reasonable discretion that any of the conditions
are not satisfied, we may:
o refuse to accept any Original Notes and return all tendered Original
Notes to the tendering holders;
o extend the exchange offer and retain all Original Notes tendered
before the expiration of the exchange offer, subject, however, to
the rights of holders to withdraw these Original Notes (see "-
Withdrawal of Tenders" below); or
o waive unsatisfied conditions relating to the exchange offer and
accept all properly tendered Original Notes which have not been
withdrawn.
PROCEDURES FOR TENDERING
Unless the tender is being made in book-entry form, to tender in the
exchange offer, a holder must
o complete, sign and date the letter of transmittal, or a facsimile of
it,
o have the signatures guaranteed if required by the letter of
transmittal, and
o mail or otherwise deliver the letter of transmittal or the
facsimile, the Original Notes and any other required documents to
the exchange agent prior to 5:00 p.m., New York City time, on the
expiration date.
Any financial institution that is a participant in DTC's Book-Entry
Transfer Facility system may make book-entry delivery of the Original Notes by
causing DTC to transfer the Original Notes into the exchange agent's account.
Although delivery of Original Notes may be effected through book-entry
transfer into the exchange agent's account at DTC, the letter of transmittal
(or facsimile), with any required signature guarantees and any other required
documents, must, in any case, be transmitted to and received or confirmed by
the exchange agent at its address set forth under the caption "Exchange Agent"
below, prior to 5:00 p.m., New York City time, on the expiration date.
Delivery of documents to DTC in accordance with its procedures does not
constitute delivery to the exchange agent.
The tender by a holder of Original Notes will constitute an agreement
between us and the holder in accordance with the terms and subject to the
conditions set forth in this prospectus and in the letter of transmittal.
The method of delivery of Original Notes and the letter of transmittal
and all other required documents to the exchange agent is at the election and
risk of the holders. Instead of delivery by mail, we recommend that holders
use an overnight or hand delivery service. In all cases, holders should allow
sufficient time to assure delivery to the exchange agent before the
17
expiration date. No letter of transmittal of Original Notes should be sent to
us. Holders may request their respective brokers, dealers, commercial banks,
trust companies or nominees to effect the tenders for such holders.
Any beneficial owner whose Original Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct such
registered holder to tender on behalf of the beneficial owner. If the
beneficial owner wishes to tender on that owner's own behalf, the owner must,
prior to completing and executing the letter of transmittal and delivery of
such owner's Original Notes, either make appropriate arrangements to register
ownership of the Original Notes in the owners' name or obtain a properly
completed bond power from the registered holder. The transfer of registered
ownership may take considerable time.
Signature on a letter of transmittal or a notice of withdrawal must be
guaranteed by an eligible guarantor institution within the meaning of Rule
17Ad-15 under the Securities Exchange Act of 1934, unless the Original Notes
tendered pursuant thereto are tendered:
o by a registered holder who has not completed the box entitled
"Special Issuance Instructions" or "Special Delivery Instructions"
on the letter of transmittal, or
o for the account of an eligible guarantor institution.
o In the event that signatures on a letter of transmittal or a notice
of withdrawal are required to be guaranteed, such guarantee must be
by:
o a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.,
o a commercial bank or trust company having an office or correspondent
in the United States, or
o an "eligible guarantor institution."
If the letter of transmittal is signed by a person other than the
registered holder of any Original Notes, the Original Notes must be endorsed
by the registered holder or accompanied by a properly completed bond power, in
each case signed or endorsed in blank by the registered holder.
If the letter of transmittal or any Original Notes or bond powers are
signed or endorsed by trustees, executors, administrators, guardians,
attorney-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing and,
unless waived by us, submit evidence satisfactory to us of their authority to
act in that capacity with the letter of transmittal.
We will determine all questions as to the validity, form, eligibility
(including time of receipt) and acceptance and withdrawal of tendered Original
Notes in our sole discretion. We reserve the absolute right to reject any and
all Original Notes not properly tendered or any Original Notes whose
acceptance by us would, in the opinion of our U.S. counsel, be unlawful. We
also reserve the right to waive any defects, irregularities or conditions of
tender as to any particular Original Notes either before or after the
expiration date. Our interpretation of the terms and conditions of the
exchange offer (including the instructions in the letter of transmittal) will
be
18
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Original Notes must be cured within a time
period we will determine. Although we intend to request the exchange agent to
notify holders of defects or irregularities relating to tenders of Original
Notes, neither we, the exchange agent nor any other person will have any duty
or incur any liability for failure to give such notification. Tenders of
Original Notes will not be considered to have been made until such defects or
irregularities have been cured or waived. Any Original Notes received by the
exchange agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the exchange
agent to the tendering holders, unless otherwise provided in the letter of
transmittal, as soon as practicable following the expiration date.
In addition, we reserve the right, as set forth above under the caption
"Conditions to the Exchange Offer," to terminate the exchange offer.
By tendering, each holder represents to us, among other things, that:
o the New Notes acquired in connection with the exchange offer are
being obtained in the ordinary course of business of the person
receiving the New Notes, whether or not such person is the holder;
o neither the holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of
such New Notes; and
o neither the holder nor any such other person is our "affiliate" (as
defined in Rule 405 under the Securities Act).
If the holder is a broker-dealer which will receive New Notes for its own
account in exchange for Original Notes, it will acknowledge that it acquired
such Original Notes as the result of market-making activities or other trading
activities and it will deliver a prospectus in connection with any resale of
such New Notes. See "Plan of Distribution."
GUARANTEED DELIVERY PROCEDURES
A holder who wishes to tender its Original Notes and:
o whose Original Notes are not immediately available;
o who cannot deliver the holder's Original Notes, the letter of
transmittal or any other required documents to the exchange agent
prior to the expiration date; or
o who cannot complete the procedures for book-entry transfer before
the expiration date
may effect a tender if
o the tender is made through an eligible guarantor institution;
o before the expiration date, the exchange agent receives from the
eligible guarantor institution:
19
o a properly completed and duly executed notice of guaranteed delivery
by facsimile transmission, mail or hand delivery,
o the name and address of the holder, and
o the certificate number(s) of the Original Notes and the principal
amount at maturity of Original Notes tendered, stating that the
tender is being made and guaranteeing that, within three New York
Stock Exchange trading days after the expiration date, the letter of
transmittal and the certificate(s) representing the Original Notes
(or a confirmation of book-entry transfer), and any other documents
required by the letter of transmittal will be deposited by the
eligible guarantor institution with the exchange agent; and
o the exchange agent receives, within three New York Stock Exchange
trading days after the expiration date, a properly completed and
executed letter of transmittal or facsimile, as well as the
certificate(s) representing all tendered Original Notes in proper
form for transfer or a confirmation of book-entry transfer, and all
other documents required by the letter of transmittal.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Original Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the
expiration date.
To withdraw a tender of Original Notes in connection with the exchange
offer, a written facsimile transmission notice of withdrawal must be received
by the exchange agent at its address set forth herein prior to 5:00 p.m., New
York City time, on the expiration date. Any such notice of withdrawal must:
o specify the name of the person who deposited the Original Notes to
be withdrawn,
o identify the Original Notes to be withdrawn (including the
certificate number or numbers and principal amount at maturity of
such Original Notes),
o be signed by the depositor in the same manner as the original
signature on the letter of transmittal by which such Original Notes
were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the trustee
register the transfer of such Original Notes into the name of the
person withdrawing the tender, and
o specify the name in which any such Original Notes are to be
registered, if different from that of the depositor.
We will determine all questions as to the validity, form and eligibility
(including time of receipt) of such withdrawal notices. Any Original Notes so
withdrawn will be considered not to have been validly tendered for purposes of
the exchange offer, and no New Notes will be issued unless the Original Notes
withdrawn are validly re-tendered. Any Original Notes which have been tendered
but which are not accepted for exchange or which are withdrawn will be
returned
20
to the holder without cost to such holder as soon as practicable after
withdrawal, rejection of tender or termination of the exchange offer. Properly
withdrawn Original Notes may be re-tendered by following one of the procedures
described above under the caption "Procedures for Tendering" at any time prior
to the expiration date.
EXCHANGE AGENT
Wells Fargo Bank, N.A. has been appointed as exchange agent for the New
Notes. Questions and requests for assistance, requests for additional copies
of this prospectus or of the letter of transmittal should be directed to Wells
Fargo Bank, N.A., at its offices at MAC N9303-121, P.O. Box 1517, Minneapolis,
MN 55480, Attention: Corporate Trust Operations, Reorganization. Wells Fargo
Bank N.A.'s telephone number is (800) 344-5128 and facsimile number is (612)
667-4927.
FEES AND EXPENSES
We will not make any payment to brokers, dealers or others soliciting
acceptances of the exchange offer. We will pay certain other expenses to be
incurred in connection with the exchange offer, including the fees and
expenses of the exchange agent and certain accounting and legal fees.
Holders who tender their Original Notes for exchange will not be
obligated to pay transfer taxes. If, however:
o New Notes are to be delivered to, or issued in the name of, any
person other than the registered holder of the Original Notes
tendered, or
o if tendered Original Notes are registered in the name of any person
other than the person signing the letter of transmittal, or
o if a transfer tax is imposed for any reason other than the exchange
of Original Notes in connection with the exchange offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption from them is not
submitted with the letter of transmittal, the amount of such transfer taxes
will be billed directly to the tendering holder.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Original
Notes as reflected in our accounting records on the date of the exchange.
Accordingly, we will not recognize any gain or loss for accounting purposes
upon the completion of the exchange offer. The expenses of the exchange offer
that we pay will increase our deferred financing costs in accordance with
generally accepted accounting principles.
CONSEQUENCES OF FAILURES TO PROPERLY TENDER ORIGINAL NOTES IN THE EXCHANGE
Issuance of the New Notes in exchange for the Original Notes under the
exchange offer will be made only after timely receipt by the exchange agent of
such Original Notes, a properly completed and duly executed letter of
transmittal and all other required documents. Therefore,
21
holders of the Original Notes desiring to tender such Original Notes in
exchange for New Notes should allow sufficient time to ensure timely delivery.
We are under no duty to give notification of defects or irregularities of
tenders of Original Notes for exchange. Original Notes that are not tendered
or that are tendered but not accepted by us will, following completion of the
exchange offer, continue to be subject to the existing restrictions upon
transfer thereof under the Securities Act, and, upon completion of the
exchange offer, certain registered rights under the registration rights
agreement will terminate.
In the event the exchange offer is completed, we will not be required to
register the remaining Original Notes. Remaining Original Notes will continue
to be subject to the following restrictions on transfer:
o the remaining Original Notes may be resold only if registered
pursuant to the Securities Act, if any exemption from registration
is available, or if neither such registration nor such exemption is
required by law, and
o the remaining Original Notes will bear a legend restricting transfer
in the absence of registration or an exemption.
We do not currently anticipate that we will register the remaining
Original Notes under the Securities Act. To the extent that Original Notes are
tendered and accepted in connection with the exchange offer, any trading
market for remaining Original Notes could be adversely affected.
22
USE OF PROCEEDS
This exchange offer is intended to satisfy our obligations under the
registration rights agreement entered into in connection with the issuance of
the Original Notes. We will not receive any cash proceeds from the issuance of
the New Notes in the exchange offer.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges
for the periods indicated:
For the Years Ended December 31, For the Three Months Ended
----------------------------------------------------------------- March 31, 2004
2003 --------------------------
--------------------------
1999 2000 2001 2002 Historical Pro Forma Historical Pro Forma
---- ---- ---- ---- ----------- --------- ---------- ---------
Ratio of Earnings to Fixed Charges 3.4x 3.7x - 0.6x 1.1x 1.2x 0.1x 0.7x
For purposes of computing the above ratios: (1) earnings consist of
income/(loss) from continuing operations before income taxes plus fixed charges
plus amortization of deferred financing costs less capitalized interest; and
(2) fixed charges consist of interest expense (excluding amortization of
deferred financing costs), the interest component of rent expense and
capitalized interest. In the years ended December 31, 2001 and 2002, and the
three months ended March 31, 2004 (historical and pro forma), our earnings were
insufficient to cover fixed charges by $15,727,000, $2,403,000, $3,284,000 and
$2,170,000, respectively.
23
DESCRIPTION OF THE NEW NOTES
Definitions of certain terms used in this Description of the New Notes
may be found under the heading "Certain Definitions." For purposes of this
section, the term "Company" refers only to Chemed Corporation (or any
successor thereto) and not to any of its Subsidiaries.
The Company issued the Original Notes under an Indenture dated as of
February 24, 2004 (the "Indenture"), among the Company, the Subsidiary
Guarantors and Wells Fargo Bank, N.A., as trustee (the "Trustee"), and the
obligations of the Company and the Subsidiary Guarantors are secured by a
first priority security interest in specified collateral, as described below,
under various Security Documents (as defined below). The Indenture and the
Security Documents are filed as exhibits hereto and are incorporated by
reference herein. The Indenture and the Security Documents contain provisions
which define your rights under the New Notes. In addition, the Indenture
governs the obligations of the Company and of each Subsidiary Guarantor
regarding the New Notes. The terms of the New Notes include those stated in
the Indenture and the Security Documents and those made part of the Indenture
by reference to the TIA. Unless specifically stated to the contrary, the
following description applies equally to the New Notes and the Original Notes.
The following description is meant to be only a summary of certain
provisions of the Indenture and the Security Documents. It does not restate
the terms of the Indenture and the Security Documents in their entirety. We
urge that you carefully read the Indenture and the Security Documents as they,
and not this description, govern your rights as Holders.
OVERVIEW OF THE NEW NOTES AND THE SUBSIDIARY GUARANTEES
The New Notes:
o will be general obligations of the Company secured by the
Collateral on a first-priority basis (subject to Permitted
Liens) shared equally with the first-priority interest securing
Credit Agreement Obligations, subject to certain exceptions;
o will rank equally in right of payment with all existing and
future Senior Indebtedness of the Company;
o will be senior in right of payment to all existing and future
Subordinated Obligations of the Company;
o will be guaranteed by each Subsidiary Guarantor to the same
extent as the Credit Agreement Obligations; and
o will be effectively subordinated to all liabilities (including
Trade Payables) and Preferred Stock of each Subsidiary of the
Company that is not a Subsidiary Guarantor.
PRINCIPAL, MATURITY AND INTEREST
We will issue New Notes in an aggregate principal amount of $110.0
million. The New Notes will mature on February 24, 2010. We will issue the
New Notes in fully registered form, without coupons, in denominations of $1,000
and any integral multiple of $1,000.
24
Each New Note we issue will accrue interest at a rate equal to LIBOR for
the applicable Interest Period plus 3.75% per annum beginning on February 24,
2004, or from the most recent date to which interest has been paid or provided
for. We will pay interest quarterly to Holders of record at the close of
business on the February 1, May 1, August 1 or November 1 immediately
preceding the interest payment date on February 15, May 15, August 15 and
November 15 of each year (each an "Interest Payment Date"). We will begin
paying interest to Holders on May 15, 2004. We will pay interest on overdue
principal at 1% per annum in excess of such rate, and we will pay interest on
overdue installments of interest at such higher rate to the extent lawful.
Interest will be paid on each Interest Payment Date. Interest for any
Interest Payment Date will accrue from and include the preceding Interest
Payment Date (or, in the case of the first Interest Payment Date, from and
including the Closing Date) to but excluding such Interest Payment Date.
Interest will accrue on the principal balance of the New Notes on the basis of
actual days outstanding of a 360-day year.
LIBOR for the initial Interest Period will be 1.13% per annum. The
Trustee will determine LIBOR for each Interest Period following the initial
Interest Period, on the second London Business Day prior to the first day of
such Interest Period (each a "LIBOR Determination Date"). For purposes of
calculating LIBOR, a London Business Day is any day on which dealings in
deposits in United States dollars are transacted in the London interbank
market. LIBOR shall be determined by the Trustee in accordance with the
following provisions:
(i) "LIBOR" means, as of any LIBOR Determination Date, the rate for
deposits in the United States dollars for a three-month period which appears
on Telerate Page 3750 (as defined in the 1987 Interest Rate and Currency
Exchange Definitions published by the International Swap Dealers Association,
Inc., or such other page as may replace such Telerate Page 3750) as of 11:00
a.m., London time, on such date, and
(ii) If, on any LIBOR Determination Date, such rate does not appear on
Telerate Page 3750 (or such other page as may replace such Telerate Page
3750), the rate for that LIBOR Determination Date will be determined on the
basis of the rates at which deposits in the United States dollars are offered
by four reference banks selected by the Trustee at approximately 11:00 a.m.,
London time, on that day to prime banks in the London interbank market for a
three- month period. The Trustee will request the principal London office of
each such bank to provide a quotation of its rate. If at least two such
quotations are provided as requested, the rate for that day will be the
arithmetic mean of the quotations. If fewer than two quotations are provided
as requested, the rate for that day will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee, at
approximately 11:00 a.m., New York City time, on that day for loans in United
States dollars to leading European banks for a three-month period. All
percentages resulting from a calculation in this clause (ii) shall be rounded,
if necessary, to the nearest one thirty-second of a percentage point.
We will also pay additional interest on the Original Notes to holders of
Original Notes if we fail to file a registration statement relating to the New
Notes or if the registration statement is not declared effective on a timely
basis or if certain other conditions are not satisfied. These provisions are
more fully explained under the heading "Exchange and Registration Rights
Agreement." References to "interest" in this description include any such
additional interest.
25
INDENTURE MAY BE USED FOR FUTURE ISSUANCES
We may issue up to $110.0 million aggregate principal amount of
additional New Notes having identical terms and conditions to the New Notes we
are currently offering (the "Additional New Notes"). We will only be permitted
to issue such Additional New Notes if at the time of such issuance we are in
compliance with the covenants contained in the Indenture and any other
agreements governing the Company's debt, such as the Credit Agreement and the
Indenture for the Fixed Rate Notes. Any Additional New Notes will be part of
the same issue as the New Notes that we are currently offering and will vote
on all matters with such New Notes.
PAYING AGENT AND REGISTRAR
We will pay the principal of, premium, if any, and interest on the New
Notes at any office of ours or any agency designated by us which is located in
the Borough of Manhattan, The City of New York. We have initially designated
the corporate trust office of the Trustee to act as the agent of the Company
in such matters. We, however, reserve the right to pay interest to Holders by
check mailed directly to Holders at their registered addresses.
Holders may exchange or transfer their New Notes at the same location
given in the preceding paragraph. No service charge will be made for any
registration of transfer or exchange of New Notes. We, however, may require
Holders to pay any transfer tax or other similar governmental charge payable
in connection with any such transfer or exchange.
OPTIONAL REDEMPTION
At any time we may redeem the New Notes in whole or in part on one or
more occasions, on not less than 30 nor more than 60 days' prior notice, at
the following redemption prices (expressed as percentages of principal
amount), plus accrued and unpaid interest to, but excluding, the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest, if any, due on the relevant Interest Payment Date), if
redeemed during the 12-month period commencing on February 24 of the years set
forth below:
Redemption
Year Price
---- ----------
2004 101.000%
2005 AND THEREAFTER 102.000%
Any notice of an optional redemption may provide that the redemption will
be subject to specified conditions, provided, that such conditions are not
solely within our control, such as the consummation of other transactions.
SELECTION
If we partially redeem New Notes, the Trustee will select the New Notes
to be redeemed on a pro rata basis, by lot or by such other method as the
Trustee in its sole discretion shall deem to be fair and appropriate, although
no New Note of $1,000 in original principal amount or less will be redeemed in
part. If we redeem any New Note in part only, the notice of redemption
relating to such New Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancelation of the original New Note. On and after the redemption date,
interest will cease to accrue on New Notes or portions thereof called for
26
redemption so long as we have deposited with the Paying Agent funds sufficient
to pay the principal of, plus accrued and unpaid interest and any premium on,
the New Notes to be redeemed.
RANKING
The New Notes will be secured Senior Indebtedness of the Company, will
rank equally in right of payment with all existing and future Senior
Indebtedness of the Company, will have the benefit of a shared first priority
security interest in the Collateral (subject to Permitted Liens), as described
under the heading "- Security", and will be senior in right of payment to all
existing and future Subordinated Obligations of the Company. The New Notes
will be guaranteed by each Subsidiary Guarantor to the same extent as the
Credit Agreement Obligations and will be effectively subordinated to all
liabilities (including Trade Payables) and Preferred Stock of each Subsidiary
of the Company that is not a Subsidiary Guarantor.
As of March 31, 2004, the Company had $320.0 million of Senior
Indebtedness, including the New Notes, of which $170.0 million would have been
Secured Indebtedness (including the New Notes but exclusive of unused
commitments of $43.6 million and $31.4 million in outstanding letters of
credit under the Credit Agreement). The Indebtedness under the Credit
Agreement and the New Notes would have represented all of such Secured
Indebtedness. The foregoing amounts do not include Indebtedness of
Subsidiaries of the Company.
SECURITY
The New Notes will be secured by a first-priority security interest
(subject to Permitted Liens) in the Collateral that is equal and ratable with
the first priority security interest in the Collateral securing the Credit
Agreement Obligations (other than with respect to cash and cash equivalent
collateral securing letter of credit obligations) from time to time. The
Collateral consists of all collateral that secures the Credit Agreement
Obligations (except that special provision is made with respect to cash and
cash equivalent collateral securing letter of credit obligations), which is
expected initially to consist (with certain exceptions) of 100% of the Capital
Stock of, or other equity interests in, existing and future Domestic
Subsidiaries that are owned directly by the Company or any of its Domestic
Subsidiaries (excluding Chemed Capital Trust and VNF).
From and after the date of the Indenture, if the Company or any
Subsidiary Guarantor creates any initial or additional Lien upon any of its
property or assets to secure the Credit Agreement Obligations (other than cash
and cash equivalent collateral securing letter of credit obligations) it must
concurrently grant to the Collateral Agent for the benefit of the Holders a
first-priority Lien (subject to Permitted Liens) that is equal and ratable
with such Liens upon such property or assets as security for the New Notes.
The Company, the Subsidiary Guarantors and the Collateral Agent entered
into certain security agreements (collectively, the "Security Documents") on
the Closing Date that define the terms of the security interests granted
thereunder to secure the Credit Agreement Obligations and the obligations
under the Indenture and the New Notes, on an equal and ratable basis (subject
to Permitted Liens). The security interests granted pursuant to the Security
Documents secure the payment and performance when due of all the obligations
of the Company and the Subsidiary Guarantors under the New Notes, the
Indenture, the Subsidiary Guarantees and the Security Documents.
27
The Company, the Trustee, the Collateral Agent and the Administrative
Agent under the Credit Agreement entered into Collateral Sharing Agreement on
the Closing Date. The Collateral Sharing Agreement provides for the sharing of
the security interests in the Collateral granted pursuant to the Security
Documents on an equal and ratable basis among the holders of Credit Agreement
Obligations and the Holders of the New Notes, the exercise of remedies under
the Security Documents and related intercreditor issues. In addition, the
Collateral Sharing Agreement provides for the sharing of the Collateral, on an
equal and ratable basis, with other Indebtedness secured by the Collateral
pursuant to a Permitted Lien described in clauses 7, 12 or 13 of the
definition thereof that is designated as a "First Lien Credit Facility" for
purposes of the Collateral Sharing Agreement. Any such designation may be made
without the consent of the Trustee or the Holders of New Notes.
Pursuant to the Collateral Sharing Agreement, each Holder of New Notes is
deemed to have consented to the appointment of the Collateral Agent as its
agent under the Collateral Sharing Agreement and Security Documents with the
authority to act as the exclusive agent of such Holder in respect of the
execution and amendment of the Security Documents and the enforcement of the
Security Documents and the Collateral Sharing Agreement and to agree, except
as provided in the Collateral Sharing Agreement and the Security Documents,
that such Holder will not take any action (other than through the Collateral
Agent) to enforce any provision of the Collateral Sharing Agreement or any
Security Document against the Company or any Subsidiary Guarantor. Pursuant to
the Collateral Sharing Agreement, (a) the Collateral Agent will not be subject
to any fiduciary duties to the Trustee or the Holders of New Notes, (b) the
Collateral Agent will not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Security Documents that the Collateral Agent is
required to exercise in writing by the Instructing Group, and (c) the
Collateral Agent will not have any duty to disclose any information relating
to the Company or any Subsidiary Guarantor that is obtained by the Collateral
Agent, except as set forth in the Collateral Sharing Agreement and the
Security Documents. Until the Discharge of Credit Agreement Obligations and so
long as no insolvency or liquidity proceeding involving the Company or any
Subsidiary Guarantor is continuing, the Instructing Group will be the lenders
under the Credit Agreement.
Subject to the appointment and acceptance of a successor collateral
agent, the Collateral Agent may resign at any time, or may be removed at any
time with or without cause by the Instructing Group. Upon any such resignation
or removal and prior to the Discharge of Credit Agreement Obligations, the
lenders under the Credit Agreement will have the right, in consultation with
the Company, to appoint a successor. Upon any such resignation or removal of
the Collateral Agent after the Discharge of Credit Agreement Obligations,
holders of a majority of the obligations secured by the Security Documents
will have the right, in consultation with the Company, to appoint a successor.
So long as the Discharge of Credit Agreement Obligations has not
occurred, and no insolvency or liquidation proceeding is continuing with
respect to the Company or any Subsidiary Guarantor, the Trustee will not be
permitted (nor will any other party secured by the Security Documents, other
than the lenders and the Administrative Agent under the Credit Agreement) to
enforce the security interests even if an Event of Default has occurred and
the New Notes have been accelerated, except as necessary to take any action
(not adverse to the rights of the Collateral Agent to exercise, or the
Instructing Group to direct exercise, of remedies) in order to preserve or
protect its rights in the liens securing the New Notes or the Subsidiary
Guarantees. In the event that any insolvency or liquidation proceeding is
continuing with respect to the Company or any Subsidiary Guarantor, the
Trustee will not be permitted to enforce the security interests except
28
(a) as necessary to file a claim or statement of interest with respect to its
secured interest or (b) as necessary to take any action (not adverse to the
rights of the Collateral Agent to exercise, or the Instruction Group to direct
exercise, remedies) in order to preserve or protect its rights in the liens
securing the New Notes or the Subsidiary Guarantees.
Subject to the terms of the Collateral Sharing Agreement, so long as the
Discharge of Credit Agreement Obligations has not occurred, the lenders under
the Credit Agreement shall exclusively direct the Collateral Agent's response
to (a) requests from the Company or a Subsidiary Guarantor in respect of
Collateral and the Security Documents and (b) the Collateral Agent's knowledge
of any nonperformance of any obligation set forth in the Security Documents by
the Company or any Subsidiary Guarantor. The release of any Collateral by the
Collateral Agent from the liens granted under any of the Security Documents
will be binding on the Trustee, provided that (except in the case of releases
in connection with the exercise of the Collateral Agent's remedies in respect
of the Collateral and releases expressly permitted by any Security Document to
be effective without consent) such release is permitted by or not prohibited
by the Indenture (and the Collateral Agent will be protected if it receives an
officer's certificate from the Company to that effect). Under the terms of the
Collateral Sharing Agreement, so long as the Aggregate Credit Agreement
Exposure is (a) greater than or equal to $55,000,000 or (b) greater than the
aggregate amount of New Notes outstanding, the Collateral Agent may enter into
amendments to, or grant waivers or consents in respect of, the Collateral
Sharing Agreement and the Security Documents, in each case that either apply
equally to the Credit Agreement Obligations or are not materially adverse to
the holders of the New Notes. If the Aggregate Credit Agreement Exposure is
(a) less than $55,000,000 or (b) less than or equal to the aggregate amount of
the New Notes outstanding, then any such amendment, waiver or consent shall
require the consent of the Holders of New Notes in accordance with the
Indenture. In addition, so long as the Discharge of the Credit Agreement
Obligations has not occurred, the Collateral Agent and the lenders under the
Credit Agreement will have the exclusive right, subject to the rights of the
Company and the Subsidiary Guarantors under the Security Documents, to adjust
the settlement for any insurance policy and approve any award granted in any
condemnation or similar proceeding affecting the collateral.
In the event of any foreclosure on the Collateral, the Collateral Agent,
in accordance with the provisions of the Collateral Sharing Agreement, will
distribute all cash proceeds (after payment of the costs of enforcement and
collateral administration and fees and expenses of the Collateral Agent,
including those advanced or paid by other secured parties) of the Collateral
received by it under the Security Documents for the ratable benefit of the
holders of obligations secured by the Collateral, including the Credit
Agreement Obligations, the New Notes and any other First Lien Credit Facility.
Any surplus remaining hereafter will be paid to the Company and the Subsidiary
Guarantors or whoever else is legally entitled to receive it. The Collateral
Sharing Agreement contains special provisions for the collateralization of
letters of credit and the release of funds from the cash collateral account.
If, at any time, the Trustee receives any collateral or proceeds thereof in
connection with the exercise of any right or remedy relating to such
Collateral and such receipt is not in compliance with the terms of the
Collateral Sharing Agreement, the Trustee is required to hold such Collateral
or proceeds thereof in trust and pay such Collateral or proceeds thereof over
to the Collateral Agent.
The Collateral Sharing Agreement does not limit the ability of any party
secured by the Security Documents and party to the Collateral Sharing
Agreement, including the Trustee on behalf of the Holders of the New Notes, to
initiate an insolvency or liquidation proceeding against the Company or any
Subsidiary Guarantor or to appear or be heard in any insolvency or liquidation
proceeding against the Company or any Subsidiary Guarantor, including, without
29
limitation, in respect of any post-petition usage of any Collateral or any
post-petition financing arrangement. The Trustee and the Holders of the New
Notes will not be permitted to (a) contest the validity or enforceability of,
seek to avoid, have declared fraudulent, or have set aside any of the
obligations secured by the Collateral, including the Credit Agreement
Obligations and any other First Lien Credit Facilities or the guaranties
thereof or (b) contest the validity, enforceability, perfection or priority of
the security interests and liens of any other party secured by the Security
Documents and party to the Collateral Sharing Agreement. If the Trustee or any
other party secured by the Security Documents and party to the Collateral
Sharing Agreement is required, in any insolvency or liquidation proceeding by
or against the Company or any Subsidiary Guarantor, to turn over or pay any
amount (the "Recovery") to the estate of the Company or any Subsidiary
Guarantor, then the obligations secured by the Collateral will be reinstated
to the extent of such Recovery. If the Collateral Sharing Agreement was
terminated prior to such Recovery, the Collateral Sharing Agreement will be
reinstated in full force and effect and the parties thereto, including the
Trustee on behalf of the Holders of the New Notes, will be required to comply
with the provisions thereof.
If, at any time following the Discharge of Credit Agreement Obligations,
the Company or any Subsidiary Guarantor (1) incurs Indebtedness under any
credit facility pursuant to clause (1) of paragraph (b) of the covenant
described under "& Limitation on Indebtedness," and (2) such Indebtedness is
designated as Credit Agreement Obligations, the Trustee will enter into one or
more amendments, supplements or replacements of the Security Documents and the
Collateral Sharing Agreement establishing and setting forth the respective
rights of the holders of such Credit Agreement Obligations and the holders of
the New Notes in respect of their shared first-priority security interest in
the Collateral. Any such amendment, supplement or replacement of the
Collateral Sharing Agreement shall include substantially the same terms as are
set forth in the initial Collateral Sharing Agreement.
Whether prior to or after the Discharge of Credit Agreement Obligations,
the Company or a Subsidiary Guarantor, as the case may be, will be entitled to
the release of any or all of its assets included in the Collateral from the
Liens securing the New Notes under any one or more of the following
circumstances:
(1) if all other Liens on that asset securing Credit Agreement
Obligations (including commitments thereunder) then secured
by that asset are released;
(2) if such asset is sold, transferred, leased or otherwise
disposed of in a transaction that constitutes an Asset
Disposition;
(3) if such asset is sold, transferred, leased or otherwise
disposed of in a transaction that does not constitute an
Asset Disposition as provided in clause (1) through (9) of
the definition thereof;
(4) if the Company provides substitute collateral with at least
an equivalent fair value as determined in good faith by the
Board of Directors;
(5) if any Subsidiary Guarantor is released from its Subsidiary
Guarantee in accordance with the terms of the Indenture,
the Security Documents and the Collateral Sharing
Agreement, then such Subsidiary's assets and the stock of
such Subsidiary that is pledged to the Collateral Agent
shall be released;
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(6) in respect of assets included in the Collateral with a fair
value, as determined in good faith by the Board of
Directors, of up to $1 million in any calendar year,
subject to a cumulative carryover for any amount not used
in any prior calendar year; or
(7) upon satisfaction by the Company of the conditions set
forth in the Indenture to its legal defeasance option, its
covenant defeasance option or the discharge of this
Indenture, all Liens on the Collateral of this Indenture
and the Security Documents shall be released;
provided, however, that the consent of Holders representing the Designated
Percentage of the aggregate principal amount of New Notes outstanding shall be
required for any such release pursuant to clause (1), (2) or (5) if the sum of
the aggregate fair value (as determined in good faith by the Board of
Directors) of Collateral released pursuant to clauses (1), (2) and (5) since
the Issue Date exceeds $50 million (including for purposes of such calculation
the instant release, but excluding all releases since the Closing Date that
are or were in connection with Asset Dispositions and that constitute or
constituted Ratable Paydown Dispositions under the covenant described under
"Certain Covenants - Limitation on Sales of Assets and Subsidiary Stock)."
Notwithstanding the foregoing, at any time when an Event of Default has
occurred and is continuing, the consent of Holders representing the Designated
Percentage of the aggregate principal amount of New Notes outstanding shall be
required for any release of Collateral pursuant to clauses (1), (2) or (5)
above unless such release is in connection with a Ratable Paydown Disposition
(as described above) or unless such release is in connection with a
disposition of Collateral in which the proceeds thereof are applied as
required by the Collateral Sharing Agreement. In addition, nothing in the
foregoing provisions shall limit or restrict the release of Collateral or
dispositions of assets in connection with the exercise of remedies by the
Collateral Agent pursuant to and in accordance with the terms of the
Collateral Sharing Agreement and the Security Documents.
The security interests on all Collateral securing the New Notes and the
Subsidiary Guarantees will also be released upon (i) payment in full of the
principal of, accrued and unpaid interest and any premium on the New Notes and
all other obligations under the Indenture, the Subsidiary Guarantees and the
Security Documents that are due and payable at or prior to the time such
principal, accrued and unpaid interest and any premium are paid, (ii) a
satisfaction and discharge of the Indenture and (iii) a legal defeasance or
covenant defeasance as described below under the caption "Defeasance."
SUBSIDIARY GUARANTEES
All of our existing subsidiaries, other than Roto-Rooter of Canada, Ltd.,
Chemed Capital Trust and VNF, and certain future subsidiaries of the Company
(as described below), as primary obligors and not merely as sureties, will
jointly and severally irrevocably and unconditionally Guarantee on a secured
senior basis the performance and full and punctual payment when due, whether
at Stated Maturity, by acceleration or otherwise, of all obligations of the
Company under the Indenture (including obligations to the Trustee) and the New
Notes, whether for payment of principal of or interest or any premium on the
New Notes, expenses, indemnification or otherwise (all such obligations
guaranteed by such Subsidiary Guarantors being herein called the "Guaranteed
Obligations"). Each Subsidiary Guarantor's Guarantee of the New Notes will be
secured by the portion (if any) of the Collateral owned by such Subsidiary
Guarantor (other than cash or cash equivalent collateral securing letter of
credit obligations). Such Subsidiary
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Guarantors will agree to pay, in addition to the amount stated above, any and
all costs and expenses (including reasonable counsel fees and expenses)
incurred by the Collateral Agent, the Trustee or the Holders in enforcing any
rights under the Indenture, the Security Documents or the Subsidiary
Guarantees. Each Subsidiary Guarantee will be limited in amount to an amount
not to exceed the maximum amount that can be Guaranteed by the applicable
Subsidiary Guarantor without rendering the Subsidiary Guarantee, as it relates
to such Subsidiary Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally. If a Subsidiary Guarantee were to be rendered
voidable, it could be subordinated by a court to all other Indebtedness
(including guarantees and contingent liabilities) of the applicable Subsidiary
Guarantor, and depending on the amount of such Indebtedness, a Subsidiary
Guarantor's liability in respect of its Subsidiary Guarantee could be reduced
to zero.
See "Risk Factors - Under United States federal and state fraudulent
transfer or conveyance statutes, a court could void our obligations and those
of our subsidiary guarantors or take other actions detrimental to the holders
of the Notes."
After the Closing Date, the Company will cause each Domestic Subsidiary
(other than Chemed Capital Trust and VNF) and Foreign Subsidiary that enters
into a Guarantee of any of the Credit Agreement Obligations, to execute and
deliver to the Trustee a supplemental indenture pursuant to which such
Subsidiary will Guarantee the payment and performance of all obligations under
the New Notes and the Indenture to the same extent as such Subsidiary
Guarantees such Credit Agreement Obligations. See "Certain Covenants - Future
Subsidiary Guarantors" below.
The Subsidiary Guarantee of each Subsidiary Guarantor:
o will be a senior obligation of such Subsidiary Guarantor
secured by the portion (if any) of the Collateral owned by such
Subsidiary Guarantor, which Collateral shall be shared equally
and ratably with the holders of Credit Agreement Obligations,
subject to certain exceptions;
o will rank equally in right of payment with all existing and
future Senior Indebtedness of such Subsidiary Guarantor; and
o will be senior in right of payment to all existing and future
Subordinated Obligations of such Subsidiary Guarantor.
Each Subsidiary Guarantee is a continuing guarantee and shall (a) remain
in full force and effect until payment in full of all the Guaranteed
Obligations, (b) be binding upon each Subsidiary Guarantor and its successors
and (c) inure to the benefit of, and be enforceable by, the Trustee, the
Holders and their successors, transferees and assigns, subject to the
Collateral Sharing Agreement.
Notwithstanding the foregoing, a Subsidiary Guarantee of the New Notes
provided by a Subsidiary Guarantor will be released without any actions
required on the part of the Trustee or any Holder:
(1) if (a) all of the Capital Stock of, or other equity interests in, or
all or substantially all of the assets of such Subsidiary Guarantor
is sold or otherwise disposed of (including by way of merger or
consolidation) to a person other than the Company or any of our
Domestic Subsidiaries or
32
(b) such Subsidiary Guarantor ceases to be a Restricted
Subsidiary, and in each case we otherwise comply, to the extent
applicable, with the covenants described below under the
captions "Certain Covenants - Limitation on Sales of Assets and
Subsidiary Stock", "Merger and Consolidation" and "- Limitation
on the Sale or Issuance of Capital Stock of Restricted
Subsidiaries;
(2) if we designate such Subsidiary Guarantor as an Unrestricted
Subsidiary;
(3) upon our request if the fair market value of the assets of the
applicable Subsidiary Guarantor (as determined in good faith by
the Board of Directors), together with the fair market value of
the assets of other Subsidiary Guarantors whose Subsidiary
Guarantee was released in the same calendar year, do not exceed
$1.0 million (subject to cumulative carryover for amounts not
used in any prior calendar year); or
(4) if the guarantee by such Subsidiary Guarantor of the Credit
Agreement Obligations is released; provided that any release of
the liens of the Security Documents on the assets or stock of
such Subsidiary in connection with such release is permitted
under the provisions described under "Security."
At any time when the Aggregate Credit Agreement Exposure is more than $55
million or more than the aggregate principal amount of outstanding New Notes,
the Collateral Agent, with the lenders under the Credit Agreement, may make
any amendment or modification to any Security Document or the Collateral
Sharing Agreement that applies equally to the lenders under the Credit
Agreement and the Holders or that does not materially adversely affect the
rights of the Holders; provided, however, that any amendment directly or
indirectly effecting a release of collateral must comply with the restrictions
described in "Security."
CHANGE OF CONTROL
Upon the occurrence of any of the following events (each a "Change of
Control"), each Holder will have the right to require the Company to purchase
all or any part of such Holder's New Notes at a purchase price in cash equal
to 101% of the principal amount thereof plus accrued and unpaid interest to
(but excluding) the date of purchase (subject to the right of Holders of
record on the relevant record date to receive interest, if any, due on the
relevant Interest Payment Date); provided, however, that notwithstanding the
occurrence of a Change of Control, the Company shall not be obligated to
purchase the New Notes pursuant to this section in the event that it has
exercised its right to redeem all the New Notes under the terms of the section
titled "Optional Redemption":
(1) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), is or becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that, for purposes of this clause, such
person or group shall be deemed to have "beneficial ownership"
of all shares that any such person or group has the right to
acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more
than 50% of the total voting power of the Voting Stock of the
Company;
33
(2) during any period of two consecutive years, individuals who at
the beginning of such period constituted the board of directors
of the Company (together with any new directors whose election
by the board of directors or whose nomination for election by
the shareholders of the Company was approved by a vote of 66
2/3% of the directors of the Company then still in office who
were either directors at the beginning of such period or whose
election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the applicable
board of directors then in office;
(3) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(4) the merger or consolidation of the Company with or into another
person or the merger of another person with or into the
Company, or the sale, lease, transfer, conveyance or other
disposition of all or substantially all the assets of the
Company, to another person and, in the case of any such merger
or consolidation, other than a transaction following which
holders of securities that represented 100% of the Voting Stock
of the Company outstanding immediately prior to such
transaction (or other securities into which such securities are
converted as part of such merger or consolidation transaction)
own directly or indirectly at least a majority of the voting
power of the Voting Stock of the surviving person in such
merger or consolidation transaction immediately after such
transaction and in substantially the same proportion as before
the transaction.
Within 30 days following any Change of Control, the Company shall mail a
notice to each Holder with a copy to the Trustee (the "Change of Control
Offer") stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase all or any part of
such Holder's New Notes at a purchase price in cash equal to
101% of the principal amount thereof, plus accrued and unpaid
interest to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive
interest on the relevant Interest Payment Date);
(2) the circumstances and relevant facts and financial information
regarding such Change of Control;
(3) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions, determined by the Company, consistent with
this covenant, that a Holder must follow in order to have its
New Notes purchased.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in the Indenture applicable to a Change of Control Offer made by the
Company and purchases all New Notes validly tendered and not withdrawn under
such Change of Control Offer.
34
The Company will comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the purchase of New Notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this covenant by virtue thereof.
The Change of Control purchase feature is a result of negotiations
between the Company, the Placement Agent and the initial holders of the New
Notes. Management has no present intention to engage in a transaction
involving a Change of Control, although it is possible that the Company would
decide to do so in the future. Subject to the limitations discussed below, the
Company could, in the future, enter into certain transactions, including
acquisitions, refinancings or recapitalizations, that would not constitute a
Change of Control under the Indenture, but that could increase the amount of
indebtedness outstanding at such time or otherwise affect the Company's
capital structure, credit worthiness or credit ratings. Restrictions on the
ability of the Company to Incur additional Indebtedness are contained in the
covenants described under "Certain Covenants - Limitation on Indebtedness", "-
Limitation on Liens" and "- Limitation on Sale/Leaseback Transactions." Such
restrictions can only be waived with the consent of the Holders of a majority
in principal amount of the New Notes then outstanding. Except for the
limitations contained in such covenants, however, the Indenture will not
contain any covenants or provisions that may afford Holders protection in the
event of a highly leveraged transaction.
The occurrence of certain of the events which would constitute a Change
of Control would constitute a default under the Credit Agreement. Upon the
occurrence of a Change of Control, the Company would also be required, under
the terms of the New Notes, to offer to repurchase the New Notes at a purchase
price in cash equal to 101% of the principal amount thereof plus accrued but
unpaid interest. Future Senior Indebtedness of the Company may contain
prohibitions of certain events which would constitute a Change of Control or
require such Senior Indebtedness to be repurchased or repaid upon a Change of
Control. Moreover, the exercise by the Holders of their right to require the
Company to purchase the New Notes could cause a default under such Senior
Indebtedness, even if the Change of Control itself does not, due to the
financial effect of such repurchase on the Company. Finally, the Company's
ability to pay cash to the Holders upon a purchase may be limited by the
Company's then existing financial resources. There can be no assurance that
sufficient funds will be available when necessary to make any required
purchases. The provisions under the Indenture relative to the Company's
obligation to make an offer to purchase the New Notes as a result of a Change
of Control may be waived or modified with the written consent of the Holders
of a majority in principal amount of the New Notes.
The definition of Change of Control includes a phrase relating to the
sale, lease or transfer of "all or substantially all" of the assets of the
Company. Although there is a developing body of case law interpreting the
phrase "substantially all," there is no precise established definition of the
phrase under applicable law. Accordingly, the ability of a Holder to require
the Company to purchase such New Notes as a result of a sale, lease or
transfer of less than all of the assets of the Company may be uncertain.
CERTAIN COVENANTS
The Indenture will contain covenants applicable to the Company and
certain of its Subsidiaries including, among others, those described below.
35
Limitation on Indebtedness. (a) The Company will not, and will not permit
any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Company and its Restricted Subsidiaries may Incur
Indebtedness if on the date of such Incurrence and after giving effect thereto
the Consolidated Leverage Ratio would be no greater than (i) 5.75 to 1, if
such Incurrence occurs on or prior to December 31, 2004 and (ii) 5.5 to 1, if
such Incurrence occurs after December 31, 2004.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness:
(1) Indebtedness Incurred pursuant to the Credit Agreement in an
aggregate principal amount not to exceed $135.0 million less the
aggregate amount of all Net Available Cash applied by the Company or
any of its Restricted Subsidiaries to repay Indebtedness under the
Credit Agreement pursuant to clause (A) of the covenant described
under "- Limitation on Sales of Assets and Subsidiary Stock" solely
to the extent the corresponding commitments relating to such
Indebtedness are permanently reduced;
(2) Indebtedness of the Company owed to and held by any Restricted
Subsidiary or Indebtedness of a Restricted Subsidiary owed to and
held by the Company or any Restricted Subsidiary; provided, however,
that (A) any subsequent issuance or transfer of any Capital Stock or
any other event that results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of
any such Indebtedness (except to the Company or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the issuer thereof and (B) if the
Company or a Subsidiary Guarantor is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the
prior payment in full in cash of all obligations with respect to the
New Notes or the Subsidiary Guarantees, as applicable;
(3) Indebtedness represented by (A) the New Notes (not including any
Additional New Notes), the Subsidiary Guarantees and any Exchange
Notes and (B) the Fixed Rate Notes (but not including any additional
Fixed Rate Notes but including any exchange notes under the
indenture for the Fixed Rate Notes);
(4) Indebtedness outstanding on the Closing Date (other than the
Indebtedness described in clauses (1), (2) or (3) above);
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on
or prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred in
contemplation of, in connection with, as consideration in, or to
provide all or any portion of the funds or credit support utilized
to consummate, the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a Subsidiary of
or was otherwise acquired by the Company); provided, however, that
on the date that such Restricted Subsidiary is acquired by the
Company, either (x) the Company would have been able to incur $1.00
of additional indebtedness pursuant to the
36
foregoing paragraph (a) after giving effect to such acquisition or
(y) the Consolidated Leverage Ratio after giving effect to such
acquisition and any related transactions would be no greater than
the Consolidated Leverage Ratio as of such date without giving
effect to such acquisition and any related transactions;
(6) Refinancing Indebtedness in respect of any Indebtedness Incurred
pursuant to paragraph (a) or clause (3), (4), this clause (6) or
clause (9) of this paragraph (b);
(7) Indebtedness (A) in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided
by the Company and the Restricted Subsidiaries in the ordinary
course of their business, and (B) under Interest Rate Agreements
entered into for bona fide hedging purposes of the Company in the
ordinary course of business; provided, however, that such Interest
Rate Agreements do not increase the Indebtedness of the Company
outstanding at any time other than as a result of fluctuations in
interest rates or by reason of fees, indemnities and compensation
payable thereunder;
(8) Purchase Money Indebtedness, mortgage financings and Capitalized
Lease Obligations in an aggregate principal amount not in excess of
$3.0 million at any time outstanding;
(9) Indebtedness Incurred at a Restricted Subsidiary, to the extent the
proceeds of such Indebtedness are used to repay Indebtedness under
the Credit Agreement and/or the New Notes;
(10) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided that
such Indebtedness is extinguished within five Business Days of its
Incurrence;
(11) the Incurrence by the Company or any of its Restricted Subsidiaries
of Indebtedness constituting reimbursement obligations with respect
to letters of credit issued in the ordinary course of business;
provided, however, that upon the drawing of such letters of credit,
such obligations are reimbursed within 30 days following such
drawing;
(12) obligations arising from or representing deferred compensation to
employees of the Company or its Subsidiaries that constitute or are
deemed to be Indebtedness under GAAP and that are Incurred in the
ordinary course of business; or
(13) Indebtedness (other than Indebtedness permitted to be Incurred
pursuant to the foregoing paragraph (a) or any other clause of this
paragraph (b)) in an aggregate principal amount on the date of
Incurrence that, when added to all other Indebtedness Incurred
pursuant to this clause (13) and then outstanding, will not exceed
$5.0 million.
37
(c) Notwithstanding the foregoing, neither the Company nor any Restricted
Subsidiary may Incur any Indebtedness pursuant to paragraph (b) above if the
proceeds thereof are used, directly or indirectly, to repay, prepay, redeem,
defease, retire, refund or refinance any Subordinated Obligations unless such
Indebtedness will be subordinated to the New Notes to at least the same extent
as such Subordinated Obligations.
(d) Notwithstanding any other provision of this covenant, the maximum
amount of Indebtedness that the Company or any Restricted Subsidiary may Incur
pursuant to this covenant shall not be deemed to be exceeded solely as a
result of fluctuations in the exchange rates of currencies. For purposes of
determining the outstanding principal amount of any particular Indebtedness
Incurred pursuant to this covenant:
(1) Indebtedness Incurred pursuant to the Credit Agreement prior to or
on the Closing Date shall be treated as Incurred pursuant to clause
(1) of paragraph (b) above,
(2) Indebtedness permitted by this covenant need not be permitted solely
by reference to one provision permitting such Indebtedness but may
be permitted in part by one such provision and in part by one or
more other provisions of this covenant permitting such Indebtedness,
and
(3) in the event that Indebtedness meets the criteria of more than one
of the types of Indebtedness described in this covenant, the
Company, in its sole discretion, shall classify such Indebtedness
and only be required to include the amount of such Indebtedness in
one of such clauses.
(e) In addition, the Company will not permit any of its Unrestricted
Subsidiaries to incur any Indebtedness other than Non-Recourse Debt (or issue
any shares of Disqualified Stock that is either mandatorily redeemable by the
Company or convertible or exchangeable for Indebtedness other than
Non-Recourse Debt). If at any time an Unrestricted Subsidiary becomes a
Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to
be Incurred by a Restricted Subsidiary of the Company as of such date (and, if
such Indebtedness is not permitted to be Incurred as of such date under this
clause (e), the Company shall be in Default of this covenant).
Limitation on Restricted Payments. (a) The Company will not, and will
not permit any Restricted Subsidiary, directly or indirectly, to:
(1) declare or pay any dividend, make any distribution on or in respect
of its Capital Stock or make any similar payment (including any
payment in connection with any merger or consolidation involving the
Company or any Subsidiary of the Company) to the direct or indirect
holders of its Capital Stock, except (x) dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock
or Preferred Stock) and (y) dividends or distributions payable to
the Company or a Restricted Subsidiary (and, if such Restricted
Subsidiary has shareholders other than the Company or other
Restricted Subsidiaries, to its other shareholders on a pro rata
basis),
38
(2) purchase, repurchase, redeem, retire or otherwise acquire for value
any Capital Stock of the Company or any Restricted Subsidiary held
by Persons other than the Company or a Restricted Subsidiary,
(3) purchase, repurchase, redeem, retire, defease or otherwise acquire
for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment any Subordinated Obligations (other
than the purchase, repurchase, redemption, retirement, defeasance or
other acquisition for value of Subordinated Obligations acquired in
anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of
the date of acquisition), or
(4) make any Investment (other than a Permitted Investment) in any
Person;
(any such dividend, distribution, payment, purchase, redemption, repurchase,
defeasance, retirement, or other acquisition or Investment described in clauses
(1) through (4) above being herein referred to as a "Restricted Payment") if at
the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(A) a Default will have occurred and be continuing (or would result
therefrom);
(B) after giving effect, on a pro forma basis, to such Restricted
Payment, the Company could not Incur at least $1.00 of
additional Indebtedness under paragraph (a) of the covenant
described under "- Limitation on Indebtedness"; or
(C) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in
cash, shall be the Fair Market Value of the property or other
non-cash assets that constitute such Restricted Payment)
declared or made subsequent to the Closing Date would exceed
the sum, without duplication, of:
(i) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the
beginning of the fiscal quarter immediately following the
fiscal quarter during which the Closing Date occurs to the
end of the most recent fiscal quarter ending at least 45
days prior to the date of such Restricted Payment (or, in
case such Consolidated Net Income will be a deficit, minus
100% of such deficit);
(ii) the aggregate Net Cash Proceeds received by the Company
from the issuance or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Closing Date (other
than an issuance or sale to (x) a Subsidiary of the
Company or (y) an employee stock ownership plan or other
trust established by the Company or any of its
Subsidiaries);
39
(iii) the amount by which Indebtedness of the Company or its
Restricted Subsidiaries is reduced on the Company's
balance sheet upon the conversion or exchange (other than
by a Subsidiary of the Company) subsequent to the Closing
Date of any Indebtedness of the Company or its Restricted
Subsidiaries issued after the Closing Date which is
convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any
cash or the Fair Market Value of other property
distributed by the Company or any Restricted Subsidiary
upon such conversion or exchange); and
(iv) an amount equal to the sum of (x) the net reduction in any
Investments (excluding Permitted Investments) made by the
Company or any Restricted Subsidiary in any Person
resulting from repurchases, repayments or redemptions of
such Investments by such Person, net cash proceeds
realized on the sale of such Investment and net cash
proceeds representing the return of capital (excluding
dividends and distributions), in each case received by the
Company or any Restricted Subsidiary, and (y) to the
extent such Person is an Unrestricted Subsidiary, the
portion (proportionate to the Company's equity interest in
such Subsidiary) of the Fair Market Value of the net
assets of such Unrestricted Subsidiary if such
Unrestricted Subsidiary is designated a Restricted
Subsidiary, with such Fair Market Value measured at the
time of any such designation; provided, however, that the
foregoing sum shall not exceed, in the case of any such
Person or Unrestricted Subsidiary, the amount of
Investments (excluding Permitted Investments) previously
made by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary and included in the
calculation of the amount of Restricted Payments.
The provisions of the foregoing paragraph (a) will not prohibit:
(1) any purchase, repurchase, redemption, retirement or other
acquisition for value of Capital Stock of the Company made by
exchange for, or out of the proceeds of the substantially concurrent
sale of, Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary of the
Company or an employee stock ownership plan or other trust
established by the Company or any of its Subsidiaries); provided,
however, that:
(A) such purchase, repurchase, redemption, retirement or other
acquisition for value will be excluded in the calculation of
the amount of Restricted Payments, and
40
(B) the Net Cash Proceeds from such sale applied in the manner set
forth in this clause (1) will be excluded from the calculation
of amounts under clause (4)(C)(ii) of paragraph (a) above;
(2) any prepayment, repayment, purchase, repurchase, redemption,
retirement, defeasance or other acquisition for value of
Subordinated Obligations of the Company made by exchange for, or out
of the proceeds of the substantially concurrent sale of,
Indebtedness of the Company that is permitted to be Incurred
pursuant to paragraph (b) of the covenant described under "-
Limitation on Indebtedness"; provided, however, that such
prepayment, repayment, purchase, repurchase, redemption, retirement,
defeasance or other acquisition for value will be excluded in the
calculation of the amount of Restricted Payments;
(3) any prepayment, repayment, purchase, repurchase, redemption,
retirement, defeasance or other acquisition for value of
Subordinated Obligations from Net Available Cash to the extent
permitted by the covenant described under "- Limitation on Sales of
Assets and Subsidiary Stock"; provided, however, that such
prepayment, repayment, purchase, repurchase, redemption, retirement,
defeasance or other acquisition for value will be excluded in the
calculation of the amount of Restricted Payments;
(4) dividends paid within 60 days after the date of declaration thereof
if at such date of declaration such dividends would have complied
with this covenant; provided, however, that such dividends will be
included in the calculation of the amount of Restricted Payments;
(5) any purchase, repurchase, redemption, retirement or other
acquisition for value of shares of, or options to purchase shares
of, Capital Stock of the Company or any of its Subsidiaries from
employees, former employees, directors or former directors of the
Company or any of its Subsidiaries (or permitted transferees of such
employees, former employees, directors or former directors),
pursuant to the terms of agreements (including employment
agreements) or plans (or amendments thereto) approved by the Board
of Directors under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such Capital
Stock; provided, however, that the aggregate amount of such
purchases, repurchases, redemptions, retirements and other
acquisitions for value will not exceed $2.0 million in any calendar
year; provided further, however, that such purchases, repurchases,
redemptions, retirements and other acquisitions for value shall be
excluded in the calculation of the amount of Restricted Payments;
(6) repurchases of Capital Stock deemed to occur upon exercise of stock
options if such Capital Stock represents a portion of the exercise
price of such options, and repurchases of Capital Stock of
Subsidiaries consisting of directors' qualifying shares or shares
issued to third parties in the ordinary course to the extent
necessary to satisfy any licensing requirements under applicable law
with respect to the Company's or any of its Subsidiary's business;
provided, however, that such Restricted
41
Payments shall be excluded in the calculation of the amount of
Restricted Payments;
(7) cash payments in lieu of the issuance of fractional shares in
connection with the exercise of warrants, options or other
securities convertible into or exchangeable for Capital Stock of the
Company; provided, however, that any such cash payment shall not be
for the purpose of evading the limitation of the covenant described
under this subheading (as determined in good faith by the Board of
Directors); provided further, however, that such payments shall be
included in the calculation of the amount of Restricted Payments;
(8) payments of intercompany subordinated Indebtedness, the Incurrence
of which was permitted under clause (2) of paragraph (b) of the
covenant described under "-Limitation on Indebtedness; provided,
however, that no Default has occurred and is continuing or would
otherwise result therefrom; provided further, however, that such
payments shall be excluded in the calculation of the amount of
Restricted Payment.
(9) the payment of cash dividends on the Capital Stock of the Company in
an amount not to exceed (x) $0.48 per share per fiscal year and (y)
$7.0 million in the aggregate for such dividends in any fiscal year;
provided, however, that such dividends shall be included in the
amount of Restricted Payments;
(10) the payment of scheduled, quarterly cash dividends on the Chemed
Preferred Securities declared on or prior to December 31, 2004 in an
amount not to exceed $2.00 per share per year, and the redemption of
the Chemed Preferred Securities and the Subordinated Chemed
Debentures at the applicable scheduled redemption prices on or prior
to December 31, 2004; provided that such dividends and redemption
amounts shall not be included in the amount of Restricted Payments;
(11) dividends or distributions of Capital Stock subject to the Closing
Date Stock Award Plan so long as the aggregate amount of such
dividends or distributions made pursuant to this clause (11) does
not exceed $2.8 million; provided, that such dividends or
distributions shall be excluded in the amount of Restricted
Payments; and
(12) other Restricted Payments in an aggregate amount not to exceed $5.0
million; provided, however, that such Restricted Payments shall be
included in the calculation of the amount of Restricted Payments.
Limitation on Restrictions on Distributions from Restricted Subsidiaries.
The Company will not, and will not permit any Restricted Subsidiary to, create
or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
or pay any Indebtedness or other obligations owed to the Company;
42
(2) make any loans or advances to the Company; or
(3) transfer any of its property or assets to the Company, except:
(A) with respect to clauses (1), (2) or (3):
(i) any encumbrance or restriction pursuant to applicable law
or an agreement in effect at or entered into on the
Closing Date;
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to
any Indebtedness Incurred by such Restricted Subsidiary
prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred
as consideration in, in contemplation of, or to provide
all or any portion of the funds or credit support utilized
to consummate the transaction or series of related
transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was otherwise acquired
by the Company) and outstanding on such date;
(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant
to an agreement referred to in clause (i) or (ii) of this
covenant or this clause (iii) or contained in any
amendment to an agreement referred to in clause (i) or
(ii) of this covenant or this clause (iii); provided,
however, that the encumbrances and restrictions contained
in any such Refinancing agreement or amendment, taken as a
whole, are not materially more disadvantageous to the
Holders than the encumbrances and restrictions contained
in such predecessor agreements (as determined by the
Company in good faith);
(iv) any encumbrance or restriction contained in the terms of
any Indebtedness Incurred pursuant to clause (b)(9) of the
covenant described under "- Limitation on Indebtedness" or
any agreement pursuant to which such Indebtedness was
Incurred; provided, however, that the encumbrances and
restrictions contained in such Indebtedness, taken as a
whole, are not materially more disadvantageous to the
holders of the New Notes than the encumbrances and
restrictions contained in the agreements for the
Indebtedness being repaid (as determined by the Company in
good faith);
(v) with respect to a Restricted Subsidiary, any encumbrance
or restriction imposed pursuant to an
43
agreement entered into in connection with the sale or
disposition of all or substantially all the Capital Stock
or assets of such Restricted Subsidiary; provided that in
any such case such encumbrance or restriction is in effect
only for the period pending the closing of such sale,
disposition or distribution; and
(B) in the case of clause (3), any encumbrance or restriction
(i) that restricts in a customary manner the subletting,
assignment or transfer of any property or asset that is
subject to a lease, license or similar contract, or
(ii) contained in security agreements securing Indebtedness of
a Restricted Subsidiary to the extent such encumbrance or
restriction restricts the transfer of the property subject
to such security agreements.
Limitation on Sales of Assets and Subsidiary Stock. (a) The Company will
not, and will not permit any Restricted Subsidiary to, make any Asset
Disposition unless:
(1) the Company or such Restricted Subsidiary receives consideration
(including by way of relief from, or by any other Person assuming
sole responsibility for, any liabilities, contingent or otherwise)
at the time of such Asset Disposition at least equal to the Fair
Market Value of the shares and assets subject to such Asset
Disposition,
(2) at least 75% of the consideration thereof received by the Company or
such Restricted Subsidiary is in the form of cash or cash
equivalents, and
(3) an amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be)
(A) first, to the extent the Company elects (or is required by the
terms of any Indebtedness), to prepay, repay, purchase,
repurchase, redeem, retire, defease or otherwise acquire for
value Senior Indebtedness of the Company or Senior Indebtedness
(other than obligations in respect of Preferred Stock) of a
Restricted Subsidiary (in each case other than Indebtedness
owed to the Company or an Affiliate of the Company and other
than obligations in respect of Disqualified Stock)
(collectively "Eligible Indebtedness") within one year from the
later of the date of such Asset Disposition or the receipt of
such Net Available Cash;
(B) second, to the extent of the balance of Net Available Cash
after application in accordance with clause (A), to the extent
the Company or such Restricted Subsidiary elects, to reinvest
in Additional Assets (including by means of an Investment in
Additional Assets by a Restricted Subsidiary with Net Available
44
Cash received by the Company or another Restricted Subsidiary)
within one year from the later of such Asset Disposition or the
receipt of such Net Available Cash;
(C) third, to the extent of the balance of such Net Available Cash
after application in accordance with clauses (A) and (B), to
make an Offer (as defined in paragraph (b) of this covenant
below) to purchase New Notes pursuant to and subject to the
conditions set forth in paragraph (b) of this covenant;
provided, however, that if the Company so elects (or is
required by the terms of any other Senior Indebtedness), such
Offer may be made ratably to purchase the New Notes and other
Senior Indebtedness of the Company; and
(D) fourth, to the extent of the balance of such Net Available Cash
after application in accordance with clauses (A), (B) and (C)
or the proviso following this clause (D), for any general
corporate purpose permitted by the terms of the Indenture;
provided, however, that for purposes of the proviso to the
penultimate paragraph under the caption "Security" with respect to
the release of Collateral, an Asset Disposition shall constitute a
"Ratable Paydown Disposition" if the Company shall apply all Net
Available Cash, to the extent not applied at the option of the
Company to reinvest in Additional Assets as provided in clause (B)
above, to make an Offer in accordance with subsection (b) of the
covenant described under "- Limitation on Sales of Assets and
Subsidiary Stock" and to repay Indebtedness under the Credit
Agreement (or, at the election of the Company, to pay or offer to
purchase any other Eligible Indebtedness in lieu of Indebtedness
under the Credit Agreement), in such respective amounts as are in
proportion to the respective aggregate outstanding amount of
Securities and outstanding Indebtedness under the Credit Agreement;
and provided, further, that in connection with any prepayment,
repayment, purchase, repurchase, redemption, retirement, defeasance
or other acquisition for value of Indebtedness pursuant to clause
(A) or (C) above, the Company or such Restricted Subsidiary will
retire such Indebtedness and will cause the related loan commitment
(if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid, purchased, repurchased,
redeemed, retired, defeased or otherwise acquired for value.
Notwithstanding the foregoing provisions of this covenant, the Company
and the Restricted Subsidiaries will not be required to apply any Net
Available Cash in accordance with the preceding paragraph of this covenant
except to the extent that the aggregate Net Available Cash from all Asset
Dispositions that is not otherwise applied in accordance with the preceding
paragraph exceeds $5.0 million.
For the purposes of this covenant, the following are deemed to be cash or
cash equivalents:
o the assumption of Indebtedness of the Company (other than
obligations in respect of Disqualified Stock of the Company) or
any Restricted Subsidiary and the release of the Company or
such Restricted Subsidiary
45
from all liability on such Indebtedness in connection with such
Asset Disposition and
o securities received by the Company or any Restricted Subsidiary
from the transferee that within 90 days are converted by the
Company or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase of
New Notes pursuant to clause (a)(3)(C) of this covenant or in respect of which
the Company elects to make an offer pursuant to the proviso to clause (a)(3)
of this covenant, the Company will be required (i) to purchase New Notes
tendered pursuant to an offer by the Company for the New Notes (the "Offer")
at a purchase price of 100% of their principal amount plus accrued and unpaid
interest to the date of purchase (subject to the right of Holders of record on
the relevant date to receive interest due on the relevant Interest Payment
Date) in accordance with the procedures (including prorating in the event of
oversubscription), set forth in the Indenture and (ii) to purchase other
Senior Indebtedness of the Company on the terms and to the extent contemplated
thereby (provided that in no event shall the Company offer to purchase such
other Senior Indebtedness of the Company at a purchase price in excess of 100%
of its principal amount (without premium), plus accrued and unpaid interest
thereon). If the aggregate purchase price of New Notes (and other Senior
Indebtedness) tendered pursuant to the Offer is less than the Net Available
Cash allotted to the purchase of the New Notes (and other Senior
Indebtedness), the Company will apply the remaining Net Available Cash in
accordance with clause (a)(3)(D) of this covenant. The Company will not be
required to make an Offer for New Notes (and other Senior Indebtedness)
pursuant to this covenant if the Net Available Cash available therefor (after
application of the proceeds as provided in clauses (a)(3)(A) and (B)) is less
than $5.0 million for any particular Asset Disposition or related series of
Asset Dispositions (which lesser amount will be carried forward for purposes
of determining whether an Offer is required with respect to the Net Available
Cash from any subsequent Asset Disposition). Upon completion of such an offer
to purchase, Net Available Cash will be deemed to be reduced by the aggregate
amount of such offer.
(c) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of New Notes pursuant to
this covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this covenant by virtue of its compliance
with such securities laws or regulations.
Limitation on Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, enter
into or conduct any transaction or series of related transactions (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Company (an "Affiliate Transaction") unless
such transaction is on terms that:
(1) are no less favorable to the Company or such Restricted Subsidiary,
as the case may be, than those that could be obtained at the time of
such transaction in arm's-length dealings with a Person who is not
such an Affiliate;
46
(2) in the event such Affiliate Transaction involves an aggregate amount
in excess of $5.0 million,
(A) are set forth in writing, and
(B) have been approved by a majority of the members of the Board of
Directors and by a majority of the members of such Board of
Directors having no personal stake in such transaction, if any
(and such majority or majorities, as the case may be,
determines that such Affiliate Transaction satisfies the
criteria in clause (1) above); and
(3) in the event such Affiliate Transaction involves an amount in excess
of $20.0 million, have been determined by a nationally recognized
appraisal or investment banking firm to be fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries or is not
less favorable to the Company and its Restricted Subsidiaries than
could reasonably be expected to be obtained at the time in an arms
length transaction with a Person who is not an Affiliate.
(b) The provisions of the foregoing paragraph (a) will not prohibit:
(1) any Investment or other Restricted Payment permitted to be made
pursuant to the covenant described under "- Limitation on Restricted
Payments,"
(2) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans
approved by the Board of Directors,
(3) the grant of stock options or similar rights to employees and
directors of the Company pursuant to plans approved by the Board of
Directors,
(4) loans or advances to employees in the ordinary course of business of
the Company or its Restricted Subsidiaries and consistent with
prudent practices and applicable law, not to exceed $2.0 million
outstanding at any one time,
(5) the payment of reasonable and customary fees, compensation or
employee benefit arrangements to and any indemnity provided for the
benefit of directors, officers or employees of the Company and its
Subsidiaries in the ordinary course of business,
(6) any transaction with a Restricted Subsidiary which would constitute
an Affiliate Transaction solely because the Company or a Restricted
Subsidiary owns an equity interest in, or otherwise controls, such
Restricted Subsidiary,
(7) the Transactions, or
47
(8) the making of severance payments to directors, officers or employees
of Vitas that are required pursuant to arrangements in effect prior
to the date that the Company acquired Vitas, in an aggregate amount
not to exceed $14.5 million (which arrangements may be modified so
long as such aggregate amount is not exceeded).
Limitation on the Sale or Issuance of Capital Stock of Restricted
Subsidiaries. The Company will not sell or otherwise dispose of any shares of
Capital Stock of a Restricted Subsidiary to any Person (other than the Company
or a Wholly Owned Subsidiary), and will not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell or otherwise dispose of any shares of
its Capital Stock (other than directors' qualifying shares or shares issued to
third parties in the ordinary course to the extent necessary to satisfy any
licensing requirements under applicable law with respect to the Company's or
any of its Subsidiary's business) to any Person (other than the Company or a
Wholly Owned Subsidiary), unless:
(1) immediately after giving effect to such issuance, sale or other
disposition, neither the Company nor any of its Restricted
Subsidiaries owns any Capital Stock of such Restricted Subsidiary;
or
(2) immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer constitute a Restricted
Subsidiary and any Investment in such Person remaining after giving
effect thereto would have been permitted to be made under the
covenant described under "- Limitation on Restricted Payments" if
made on the date of such issuance, sale or other disposition (and
such Investment shall be deemed to be an Investment for the purposes
of such covenant as of the effective date of the applicable
transaction).
The proceeds of any sale of such Capital Stock permitted under clause (1)
or (2) above will be treated as Net Available Cash from an Asset Disposition
and must be applied in accordance with the terms of the covenant described
under "- Limitation on Sales of Assets and Subsidiary Stock."
For avoidance of doubt, the Company will not be permitted to issue,
directly or indirectly, any of its Capital Stock that is exchangeable or
convertible, with or without conditions, into any Capital Stock of any
Restricted Subsidiary without complying with this covenant.
Limitation on Liens. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any
Lien of any nature whatsoever on any of its property or assets (including
Capital Stock of a Restricted Subsidiary, but excluding Capital Stock of an
Unrestricted Subsidiary), whether owned at the Closing Date or thereafter
acquired, other than Permitted Liens.
SEC Reports. Whether or not required by the SEC's rules and regulations,
so long as any New Notes are outstanding, the Company will furnish to the
Holders, within the time periods specified in the SEC's rules and regulations:
(1) quarterly and annual reports that would be required to be filed with
the SEC on Forms 10-Q and 10-K if the Company was required to file
such reports; and
48
(2) current reports that would be required to be filed with the SEC on
Form 8-K if the Company was required to file such reports.
All such reports will be prepared in all material respects in accordance with
all of the SEC's rules and regulations applicable to such reports, and each
annual report on Form 10-K will include a report on the Company's consolidated
financial statements by the Company's certified independent accountants. The
Company's reporting obligations with respect to clauses (1) and (2) above
shall be deemed satisfied in the event the Company files these reports with
the SEC on EDGAR.
If, at any time, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company will
nevertheless be required to continue to file the reports specified in the
preceding paragraph with the SEC within the time periods specified above
unless the SEC will not accept such a filing. The Company agrees that it will
not take any action for the sole purpose of causing the SEC not to accept any
such filings (it being understood and agreed that, if the Company is entitled
to suspend its reporting obligations under the Exchange Act, the Company shall
not be prevented from making any filings necessary to suspend such
obligations). If, notwithstanding the foregoing, the SEC will not accept the
Company's filings for any reason, the Company will post the reports referred
to in the preceding paragraph on its website within the time periods that
would apply if the Company was required to file those reports with the SEC.
In addition, the Company agrees that, for so long as any New Notes remain
outstanding, at any time they are not required to file the reports required by
the preceding paragraphs with the SEC, they will furnish to the Holders and to
securities analysts and prospective investors, upon their written request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Future Subsidiary Guarantors; Additional Security. The Company will cause
each Subsidiary (other than Chemed Capital Trust and VNF) that enters into a
Guarantee of any of the Credit Agreement Obligations to become a Subsidiary
Guarantor, and if applicable, execute and deliver to the Trustee a
supplemental indenture in the form set forth in the Indenture pursuant to
which such Subsidiary will Guarantee the payment and performance of all
obligations under the New Notes to the same extent as such Subsidiary
Guarantees such Credit Agreement Obligations. Each Subsidiary Guarantee will
be limited to an amount not to exceed the maximum amount that can be
Guaranteed by that Subsidiary Guarantor, without rendering the Subsidiary
Guarantee, as it relates to such Subsidiary Guarantor voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
If the Company or any Subsidiary Guarantor creates any initial or
additional Lien on any property to secure any Credit Agreement Obligations
(other than Liens on cash and cash equivalents to secure obligations in
respect of letters of credit), it shall concurrently grant a Lien that is
equal and ratable with such Lien upon such property as security for the New
Notes, in accordance with the Security Documents and the Collateral Sharing
Agreement. In connection therewith, the Company shall execute any and all
further Security Documents, financing statements, agreements and instruments,
upon substantially all the same terms as the Security Documents and in a form
reasonably satisfactory to the Collateral Agent, and take all such actions
(including the filing and recording of financing statements, fixture filings,
mortgages and other documents) that may be required under any applicable law,
or which the Collateral Agent may reasonably request to create such Lien, all
at the expense of the Company, including all reasonable fees and expenses of
counsel incurred by the Collateral Agent or the Trustee in
49
connection therewith and deliver to the Trustee an Opinion of Counsel,
reasonably satisfactory to the Trustee, that such Security Documents are
valid, binding and enforceable obligations of the Company subject to customary
exceptions for bankruptcy, fraudulent conveyance and equitable principles.
Limitation on Lines of Business. The Company will not, and will not
permit any Restricted Subsidiary to, engage in any business, other than a
Permitted Business.
Limitation on Sale/Leaseback Transactions. The Company will not, and will
not permit any Restricted Subsidiary to, enter into any Sale/Leaseback
Transaction with respect to any property unless:
(1) the Company or such Restricted Subsidiary would be entitled to:
(A) Incur Indebtedness in an amount equal to the Attributable Debt
with respect to such Sale/Leaseback Transaction pursuant to the
covenant described under "- Limitation on Indebtedness" and
(B) create a Lien on such property securing such Attributable Debt
without equally and ratably securing the New Notes pursuant to
the covenant described under "- Limitation on Liens",
(2) the net proceeds received by the Company or such Restricted
Subsidiary in connection with such Sale/Leaseback Transaction are at
least equal to the Fair Market Value of such property and
(3) the transfer of such property is permitted by, and the Company
applies the proceeds of such transaction in compliance with, the
covenant described under "Limitation on Sale of Assets and
Subsidiary Stock."
COVENANT TO OBTAIN RATINGS
As promptly as reasonably practicable after the Closing Date, the Company
will use its reasonable efforts to obtain a rating of the New Notes from
either Standard & Poor's Ratings Group, Inc. or Moody's Investors Service,
Inc.
MERGER AND CONSOLIDATION
The Company will not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
Company") will be a Person organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) will
expressly assume, by a supplemental indenture, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the New Notes and the
Indenture;
(2) immediately after giving pro forma effect to such transaction (and
treating any Indebtedness which becomes an obligation of the
Successor
50
Company or any Restricted Subsidiary as a result of such transaction
as having been Incurred by the Successor Company or such Restricted
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(3) immediately after giving pro forma effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness under paragraph (a) of the covenant described under
"Certain Covenants - Limitation on Indebtedness";
(4) immediately after giving pro forma effect to such transaction, the
Successor Company will have Consolidated Net Worth in an amount that
is not less than the Consolidated Net Worth of the Company
immediately prior to such transaction; and
(5) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture
(if any) comply with the Indenture.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under the Indenture, and the
predecessor Company, except in the case of a lease, shall be released from the
obligation to pay the principal of and interest on the New Notes.
In addition, the Company will not permit any Subsidiary Guarantor to, and
the Subsidiary Guarantors will not, consolidate with or merge with or into, or
convey, transfer or lease all or substantially all of its assets to any Person
unless:
(1) the resulting, surviving or transferee Person (the "Successor
Guarantor") will be a corporation organized and existing under the
laws of the United States of America, any State thereof or the
District of Columbia, and such Person (if not such Subsidiary
Guarantor) will expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee;
(2) immediately after giving effect to such transaction on a pro forma
basis (and treating any Indebtedness which becomes an obligation of
the Successor Guarantor or any Restricted Subsidiary as a result of
such transaction as having been Incurred by the Successor Guarantor
or such Restricted Subsidiary at the time of such transaction), no
Default shall have occurred and be continuing; and
(3) the Company will have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture
(if any) comply with the Indenture.
Notwithstanding the foregoing:
51
(A) any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company or
to any Subsidiary Guarantor;
(B) the Company may merge with an Affiliate incorporated solely for the
purpose of reincorporating the Company in another jurisdiction to
realize tax or other benefits; and
(C) nothing herein shall limit any conveyance, transfer or lease of
assets between or among any of the Company and the Subsidiary
Guarantors.
IMPAIRMENT OF SECURITY INTEREST
The Company will not, and will not permit any of its Restricted
Subsidiaries to, take or omit to take, any action which action or omission
would have the result of materially impairing the security interest with
respect to the Collateral for the benefit of the Holders; provided, however,
that the taking of any action with respect to the Collateral that is not
prohibited by the terms of the Security Documents or the Collateral Sharing
Agreement, or the failure to take any action with respect to the Collateral
that is not specifically required pursuant to the terms of the Security
Documents or the Collateral Sharing Agreement, will not be deemed to impair
such security interest. The Company will not, and will not permit any of its
Restricted Subsidiaries to, grant to any Person (other than the Collateral
Agent, for the benefit of the Holders and holders of any pari passu debt), any
interest whatsoever in any of the Collateral other than Permitted Liens and as
contemplated by the Security Documents.
DEFAULTS
Each of the following is an Event of Default:
(1) a default in any payment of interest on any New Note when due and
payable continued for 30 days,
(2) a default in the payment of principal of any New Note when due and
payable at its Stated Maturity, upon optional redemption, upon
declaration or otherwise the failure of the Company to purchase New
Notes when required,
(3) the failure by the Company or any Restricted Subsidiary to comply
with its obligations under the covenant described under "Merger and
Consolidation" above,
(4) a failure by the Company to comply, in any material respect, for 60
days after notice with any of its obligations under the covenants
described under "Change of Control" or "Certain Covenants" above
(other than a failure to purchase the New Notes),
(5) a failure by the Company to comply, for 90 days after notice, with
any of its obligations under covenants set forth in the Indenture
(other than those referred to in clause (1), (2), (3) or (4) above),
52
(6) the failure by the Company or any Significant Subsidiary to pay any
Indebtedness within any applicable grace period after final maturity
or the acceleration of any such Indebtedness by the holders thereof
because of a default if the total amount of such Indebtedness unpaid
or accelerated exceeds $5.0 million or its foreign currency
equivalent (the "cross acceleration provision"),
(7) certain events of bankruptcy, insolvency or reorganization of the
Company or a Significant Subsidiary (the "bankruptcy provisions"),
(8) the rendering of any judgment or decree for the payment of money in
excess of $5.0 million or its foreign currency equivalent against
the Company or a Significant Subsidiary if:
(A) an enforcement proceeding thereon is commenced by any creditor
or
(B) such judgment or decree remains outstanding for a period of 60
days following such judgment and is not discharged, waived or
stayed (the "judgment default provision").
(9) any Subsidiary Guarantee ceases to be in full force and effect
(except as contemplated by the terms thereof) or any Subsidiary
Guarantor or person acting by or on behalf of such Subsidiary
Guarantor denies or disaffirms such Subsidiary Guarantor's
obligations under the Indenture or any Subsidiary Guarantee and such
Default continues for 10 days after receipt of the notice specified
in the Indenture, or
(10) the material impairment of the security interests granted to the
Collateral Agent for the benefit of the Holders and the Trustee
under the Security Documents (other than in accordance with the
terms of the Security Documents, the Collateral Sharing Agreement
and the Indenture as each may be amended from time to time) for any
reason other than the satisfaction in full of all obligations under
the Indenture and discharge of the Security Documents and the
Indenture or any security interest granted to the Collateral Agent
for the benefit of the Holders and the Trustee thereunder shall be
declared invalid or unenforceable or the Company or any of its
Restricted Subsidiaries asserting, in any pleading in any court of
competent jurisdiction, that any such security interest is invalid
or unenforceable.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body.
However, a default under clause (4), (5) or (6) will not constitute an
Event of Default until the Trustee notifies the Company or the Holders of at
least 25% in principal amount of the outstanding New Notes notify the Company
and the Trustee of the default and the Company or the Subsidiary Guarantor
does not cure such default within the time specified in clause (4), (5) or (6)
hereof after receipt of such notice.
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If an Event of Default (other than an Event of Default relating to
certain events of bankruptcy, insolvency or reorganization of the Company)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the outstanding New Notes by notice to the Company may
declare the principal of and accrued but unpaid interest on all the New Notes
to be due and payable. Upon such a declaration, such principal, interest and
any premium will be due and payable immediately. If an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company occurs, the principal of and interest and any premium on all the New
Notes will become immediately due and payable without any declaration or other
act on the part of the Trustee or any Holders. Under certain circumstances,
the Holders of a majority in principal amount of the outstanding New Notes may
rescind any such acceleration with respect to the New Notes and its
consequences.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default occurs and is continuing, the Trustee
will be under no obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the Holders unless such
Holders have offered to the Trustee reasonable indemnity or security against
any loss, liability or expense. Except to enforce the right to receive payment
of principal, premium (if any) or interest when due, no Holder may pursue any
remedy with respect to the Indenture or the New Notes unless:
(1) such Holder has previously given the Trustee notice that an Event of
Default is continuing,
(2) Holders of at least 25% in principal amount of the outstanding New
Notes have requested the Trustee in writing to pursue the remedy,
(3) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense,
(4) the Trustee has not complied with such request within 60 days after
the receipt of the request and the offer of security or indemnity,
and
(5) the Holders of a majority in principal amount of the outstanding New
Notes have not given the Trustee a direction inconsistent with such
request within such 60-day period.
Subject to certain restrictions, the Holders of a majority in principal
amount of the outstanding New Notes will be given the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee.
The Trustee, however, may refuse to follow any direction that conflicts with
law, the Indenture or the Collateral Sharing Agreement or that the Trustee
determines is unduly prejudicial to the rights of any other Holder or that
would involve the Trustee in personal liability. Prior to taking any action
under the Indenture, the Trustee will be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses
caused by taking or not taking such action.
If a Default occurs and is continuing and is known to the Trustee, the
Trustee must mail to each Holder notice of the Default within the earlier of
90 days after it occurs or 30 days after it is known to a Trust Officer or
written notice of it is received by the Trustee. Except in the case of a
Default in the payment of principal of, premium (if any) or interest on any
New Note (including payments pursuant to the redemption provisions of such New
Note, if any), the Trustee may
54
withhold notice if and so long as a committee of its Trust Officers in good
faith determines that withholding notice is in the interests of the Holders.
In addition, the Company will be required to deliver to the Trustee, within
120 days after the end of each fiscal year, a certificate indicating whether
the signers thereof know of any Default that occurred during the previous
year. The Company will also be required to deliver to the Trustee, within 30
days after the occurrence thereof, written notice of any event which would
constitute certain Events of Default, their status and what action the Company
is taking or proposes to take in respect thereof.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Indenture or the New Notes may be
amended with the written consent of the Holders of a majority in principal
amount of the New Notes then outstanding and any past default or compliance
with any provisions may be waived with the consent of the Holders of a
majority in principal amount of the New Notes then outstanding. However,
without the consent of each Holder of an outstanding New Note affected, no
amendment may, among other things:
(1) reduce the amount of New Notes whose Holders must consent to an
amendment,
(2) reduce the rate of or extend the time for payment of interest on any
New Note,
(3) reduce the principal of or extend the Stated Maturity of any New
Note,
(4) reduce the premium payable upon the redemption of any New Note or
change the time at which any New Note may be redeemed as described
under "Optional Redemption" above,
(5) make any New Note payable in money other than that stated in the New
Note,
(6) impair the right of any Holder to receive payment of principal of
and interest or any premium on such Holder's New Notes on or after
the due dates therefore or to institute suit for the enforcement of
any payment on or with respect to such Holder's New Notes,
(7) make any change in the amendment provisions which require each
Holder's consent or in the waiver provisions, or
(8) waive any default or event of default in the payment of principal of
or interest or any premium on any New Note or any default arising
from the failure to redeem or purchase any New Note when required
pursuant to the Indenture.
Without the consent of any Holder, the Company, the Subsidiary Guarantors
and the Trustee may amend the Indenture to:
o cure any ambiguity, omission, defect or inconsistency,
55
o provide for the assumption by a successor corporation of the
obligations of the Company under the Indenture,
o provide for uncertificated New Notes in addition to or in place of
certificated New Notes (provided, however, that the uncertificated
New Notes are issued in registered form for purposes of Section
163(f) of the Code, or in a manner such that the uncertificated New
Notes are described in Section 163(f)(2)(B) of the Code),
o add Guarantees with respect to the New Notes,
o secure the New Notes,
o add to the covenants of the Company or any Subsidiary Guarantor for
the benefit of the Holders or to surrender any right or power
conferred upon the Company or any Subsidiary Guarantor,
o make any change that does not adversely affect the rights of any
Holder, subject to the provisions of the Indenture,
o provide for the issuance of the Exchange New Notes or Additional New
Notes,
o comply with any requirement of the SEC in connection with
qualifying, or maintaining the qualification of the Indenture under
the TIA,
o if necessary, in connection with any addition or release of
Collateral permitted under the terms of the Indenture, Security
Documents or the Collateral Agreement, or
o at any time when the Aggregate Credit Agreement Exposure is more
than $55 million or more than the aggregate principal amount of
outstanding Notes, make any amendment or modification to any
Security Document or the Collateral Sharing Agreement that applies
equally to the lenders under the Credit Agreement and the Holders or
that does not materially adversely affect the rights of the Holders;
provided, however, that no amendment under this clause shall
directly or indirectly effect a release of collateral that is not
permitted under the penultimate paragraph under the caption
"Security" without the consent of Holders representing the
Designated Percentage of the aggregate principal amount of New Notes
outstanding.
The consent of the Holders will not be necessary to approve the
particular form of any proposed amendment. It will be sufficient if such
consent approves the substance of the proposed amendment.
We will also be entitled to releases of the Collateral or the Note
Guarantees as described above under the captions "Subsidiary Guarantees" and
"Security." At any time when the Aggregate Credit Agreement Exposure is more
than $55 million or more than the aggregate principal amount of outstanding
New Notes, the Collateral Agent and the lenders under the Credit Agreement may
make any amendment or modification to any Security Document or the Collateral
Sharing Agreement that applies equally to the lenders under the Credit
Agreement and the Holders or that does not materially adversely affect the
rights of the Holders; provided,
56
however, that any amendment directly or indirectly effecting a release of
collateral must comply with the restrictions described under the caption
"Security."
The foregoing will not limit the right of the Company to amend, waive or
otherwise modify the Collateral Sharing Agreement, any Security Document or
any Subsidiary Guarantee in accordance with its terms.
After an amendment becomes effective, the Company is required to mail to
Holders a notice briefly describing such amendment. However, the failure to
give such notice to all Holders, or any defect therein, will not impair or
affect the validity of the amendment.
TRANSFER AND EXCHANGE
A Holder will be able to transfer or exchange New Notes in accordance
with the Indenture. Upon any transfer or exchange, the registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to
pay any taxes required by law or permitted by the Indenture. The Company will
not be required to transfer or exchange any New Note selected for redemption
or to transfer or exchange any New Note for a period of 15 days prior to a
selection of New Notes to be redeemed. The New Notes will be issued in
registered form and the Holder will be treated as the owner of such New Note
for all purposes.
DEFEASANCE
The Company may at any time terminate all its and its Subsidiaries'
obligations under the New Notes, the Subsidiary Guarantees and the Indenture
("legal defeasance"), except for certain obligations, including those
respecting the defeasance trust and obligations to register the transfer or
exchange of the New Notes, to replace mutilated, destroyed, lost or stolen New
Notes and to maintain a registrar and paying agent in respect of the New
Notes.
In addition, the Company may at any time terminate:
(1) its and its Subsidiaries' obligations under the covenants described
under "Certain Covenants",
(2) the operation of the bankruptcy provisions with respect to
Significant Subsidiaries and the judgment default provision
described under "Defaults" above and the limitations contained in
clauses (3) and (4) under the first paragraph of "Merger and
Consolidation" above ("covenant defeasance").
In the event that the Company exercises its legal defeasance option or
its covenant defeasance option, the Company and each Subsidiary will be
released from all their obligations with respect to the New Notes under the
Security Documents and the Subsidiary Guarantees and the Collateral securing
the New Notes will be released by the Trustee and the Collateral Agent.
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, payment of the New Notes may not be accelerated
because of an Event of Default with respect thereto. If the Company exercises
its covenant defeasance option, payment of the New Notes may not be
accelerated because of an Event of Default specified in clause (3), (4), (5),
(6) (7) (with respect
57
only to Significant Subsidiaries), (8), (9) or (10) under "Defaults" above or
because of the failure of the Company to comply with clause (3) or (4) under
the first paragraph of "Merger and Consolidation" above.
In order to exercise either defeasance option, the Company must
irrevocably deposit in trust (the "defeasance trust") with the Trustee money
in an amount sufficient or U.S. Government Obligations, the principal of and
interest on which will be sufficient, or a combination thereof sufficient, to
pay the principal, premium (if any) and interest on the New Notes to
redemption or maturity, as the case may be, and must comply with certain other
conditions, including delivery to the Trustee of an Opinion of Counsel to the
effect that Holders will not recognize income, gain or loss for Federal income
tax purposes as a result of such deposit and defeasance and will be subject to
Federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such deposit and defeasance had not
occurred (and, in the case of legal defeasance only, such Opinion of Counsel
must be based on a ruling of the Internal Revenue Service or other change in
applicable Federal income tax law).
CONCERNING THE TRUSTEE
The Trustee under the Indenture shall be appointed by the Company as
Registrar and Paying Agent with regard to the New Notes.
GOVERNING LAW
The Indenture and the New Notes will be governed by, and construed in
accordance with, the laws of the State of New York.
CERTAIN DEFINITIONS
"Additional Assets" means:
(1) any property or assets (other than Indebtedness and Capital Stock)
to be used by the Company or a Restricted Subsidiary in a Permitted
Business;
(2) the Capital Stock of a Person that becomes a Restricted Subsidiary
as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any Person that at
such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clauses
(2) or (3) above is primarily engaged in a Permitted Business.
"Administrative Agent" means Bank One, NA, in its capacity as
administrative agent under the Credit Agreement and any successor
Administrative Agent appointed pursuant to the Credit Agreement.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly,
58
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of the provisions described under "Certain Covenants -
Limitation on Transactions with Affiliates" and "Certain Covenants -
Limitation on Sales of Assets and Subsidiary Stock" only, "Affiliate" shall
also mean any beneficial owner of Capital Stock representing 5% or more of the
total voting power of the Voting Stock (on a fully diluted basis) of the
Company or of rights or warrants to purchase such Voting Stock (whether or not
currently exercisable) and any Person who would be an Affiliate of any such
beneficial owner pursuant to the first sentence hereof.
"Aggregate Credit Agreement Exposure" means at any time, without
duplication, the aggregate amount of Credit Agreement Obligations outstanding
plus the amount of all commitments of the lenders thereunder to extend credit
(whether by making loans or providing or participating in letters of credit or
otherwise), but excluding any letters of credit or obligations owing in
respect of letters of credit to the extent the same are secured by property
that does not secure the New Notes.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) by the Company
or any Restricted Subsidiary, including any disposition by means of a merger,
consolidation, or similar transaction (each referred to for the purposes of
this definition as a "disposition"), of property or assets including any
shares of Capital Stock of a Restricted Subsidiary other than:
(1) a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Restricted Subsidiary;
(2) with respect to Capital Stock of a Restricted Subsidiary, a
disposition of directors' qualifying shares or shares required by
applicable law to be held by a person other than the Company or a
Restricted Subsidiary;
(3) a disposition that constitutes a Restricted Payment that is not
prohibited by the covenant described under "Certain Covenants -
Limitation Restricted Payments" or a Permitted Investment or a
disposition of all or substantially all the assets of the Company or
a Subsidiary Guarantor in accordance with the provisions described
under "Mergers and Consolidations";
(4) a disposition of inventory in the ordinary course of business;
(5) a disposition of any obsolete, excess, damaged, surplus or worn-out
equipment, property or assets or of property or assets no longer
used or useful in the business of the Company and its Restricted
Subsidiaries;
(6) a disposition of cash or of Temporary Cash Investments;
(7) leases or licenses of assets in the ordinary course of business;
(8) the creation of Permitted Liens; or
(9) a disposition of assets with a Fair Market Value of less than
$100,000.
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"Attributable Debt" in respect of a Sale/Leaseback Transaction means, as
at the time of determination, the present value (discounted at the interest
rate borne by the New Notes, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing:
(1) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal
payment of such Indebtedness or scheduled redemption or similar
payment with respect to such Preferred Stock multiplied by the
amount of such payment by
(2) the sum of all such payments.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of the Board of Directors
of the Company.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible into such
equity.
"Capitalized Lease Obligations" means an obligation that is required to
be classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented
by such obligation shall be the capitalized amount of such obligation
determined in accordance with GAAP; and the Stated Maturity thereof shall be
the date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be prepaid by the lessee
without payment of a penalty.
"Chemed Capital Trust" means Chemed Capital Trust, a Delaware statutory
business trust.
"Chemed Preferred Securities" means the convertible trust preferred
securities of Chemed Capital Trust issued in exchange for shares of Company
capital stock pursuant to an exchange offer completed on February 1, 2000. As
of May 18, 2004, no Chemed Preferred Securities were outstanding.
"Closing Date" means the date of the Indenture.
"Closing Date Stock Award Plan" means the Company's employee stock award
plan in existence on the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all the collateral provided for under and described in
the Security Documents.
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"Collateral Agent" means Bank One, NA, in its capacity as collateral
agent under the Security Documents, together with its successors and permitted
assigns.
"Collateral Sharing Agreement" means the Collateral Sharing Agreement
dated as of February 24, 2004, among the Collateral Agent, the Trustee, the
Administrative Agent and the Company, as such agreement may be amended,
supplemented or replaced pursuant to the terms of the Indenture.
"Consolidated Indebtedness" means, as of any date of determination, the
total Indebtedness of the Company and its Consolidated Restricted
Subsidiaries, without duplication, other than, at any time prior to January 1,
2005, the Trust Securities.
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its Consolidated Restricted Subsidiaries, plus, to
the extent Incurred by the Company and its Consolidated Restricted
Subsidiaries in such period but not included in such interest expense, without
duplication:
(1) interest expense attributable to Capitalized Lease Obligations and
the interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction,
(2) amortization of debt discount and debt issuance costs, provided that
the fees paid by the Company to the lenders under the Credit
Agreement and to the placement agent in connection with the offering
and sale, on the Closing Date, of the Fixed Rate Notes and the New
Notes shall not be included,
(3) capitalized interest,
(4) noncash interest expense,
(5) commissions, discounts and other fees and charges attributable to
letters of credit and bankers' acceptance financing,
(6) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by the Company or any
Restricted Subsidiary,
(7) net costs associated with Hedging Obligations (including
amortization of fees),
(8) dividends in respect of all Disqualified Stock of the Company and
all Preferred Stock of any of the Subsidiaries of the Company, to
the extent held by Persons other than the Company or a Wholly Owned
Subsidiary; provided that regular, scheduled dividends on the Trust
Securities declared or paid prior to January 1, 2005, shall not be
included, and
(9) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan
or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or
trust.
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Notwithstanding anything to the contrary herein, any premium paid in
connection with the repayment of Indebtedness of the Company in connection
with the Transactions and interest on the Trust Securities paid on or prior to
January 1, 2005 shall not be included in Consolidated Interest Expense.
"Consolidated Leverage Ratio" as of any date of determination means the
ratio of:
(1) Consolidated Indebtedness at such time to
(2) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending at least 45 days prior to
the date of such determination;
provided, however, that:
(A) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains
outstanding on such date of determination or if the transaction
giving rise to the need to calculate the Consolidated Leverage
Ratio is an Incurrence of Indebtedness, EBITDA for such period
shall be calculated after giving effect on a pro forma basis to
such Indebtedness as if such Indebtedness had been Incurred on
the first day of such period and the discharge of any other
Indebtedness repaid, repurchased, defeased or otherwise
discharged with the proceeds of such new Indebtedness as if
such discharge had occurred on the first day of such period,
(B) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness
since the beginning of such period or if any Indebtedness is to
be repaid, repurchased, defeased or otherwise discharged (in
each case other than Indebtedness Incurred under any revolving
credit facility unless such Indebtedness has been permanently
repaid and has not been replaced) on the date of the
transaction giving rise to the need to calculate the
Consolidated Leverage Ratio, EBITDA for such period shall be
calculated on a pro forma basis as if such discharge had
occurred on the first day of such period and as if the Company
or such Restricted Subsidiary has not earned the interest
income actually earned during such period in respect of cash or
Temporary Cash Investments used to repay, repurchase, defease
or otherwise discharge such Indebtedness,
(C) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition,
the EBITDA for such period shall be reduced by an amount equal
to the EBITDA (if positive) directly attributable to the assets
that are the subject of such Asset Disposition for such period
or increased by an amount equal to the EBITDA (if negative)
directly attributable thereto for such period,
62
(D) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made
an Investment in any Restricted Subsidiary (or any Person that
becomes a Restricted Subsidiary) or an acquisition of assets,
including any acquisition of assets occurring in connection
with a transaction causing a calculation to be made hereunder,
which constitutes all or substantially all of an operating unit
of a business, EBITDA for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of
any Indebtedness) as if such Investment or acquisition occurred
on the first day of such period, and
(E) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with
or into the Company or any Restricted Subsidiary since the
beginning of such period) shall have Incurred any Indebtedness
or discharged any Indebtedness or made any Asset Disposition or
any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (C) or (D) above if
made by the Company or a Restricted Subsidiary during such
period, EBITDA for such period shall be calculated after giving
pro forma effect thereto as if such Incurrence, discharge,
Asset Disposition, Investment or acquisition of assets occurred
on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given
to any calculation under this definition, the pro forma calculations shall be
determined in good faith by a responsible financial or accounting Officer of
the Company and (i) shall comply, to the extent not inconsistent with the
provisions of the Indenture, with the requirements of Rule 11-02 of Regulation
S-X of the SEC and (ii) may include adjustments for operating expense
reductions that would be permitted by such Rule.
If any Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest expense on such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate
Agreement applicable to such Indebtedness if such Interest Rate Agreement has
a remaining term as at the date of determination in excess of 12 months).
"Consolidated Net Income" means, for any period, the net income (loss) of
the Company and its Consolidated Subsidiaries for such period; provided,
however, that there shall not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such Person
is not a Restricted Subsidiary, except that:
(A) subject to the limitations contained in clause (4) below, the
Company's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to
the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the
case of a dividend
63
or other distribution made to a Restricted Subsidiary, to the
limitations contained in clause (3) below) and
(B) the Company's equity in a net loss of any such Person for such
period shall be included in determining such Consolidated Net
Income;
(2) any net income (or loss) of any Person acquired by the Company or a
Subsidiary of the Company in a pooling of interests transaction for
any period prior to the date of such acquisition;
(3) any net income (or loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of
distributions by such Restricted Subsidiary, directly or indirectly,
to the Company, except that:
(A) subject to the limitations contained in clause (4) below, the
Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash
permitted to be distributed by such Restricted Subsidiary
during such period to the Company or another Restricted
Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution made to another
Restricted Subsidiary, to the limitation contained in this
clause) and
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining
such Consolidated Net Income;
(4) any gain (but not loss) realized upon the sale or other
disposition of any asset of the Company or its Consolidated
Subsidiaries (including pursuant to any Sale/Leaseback
Transaction) that is not sold or otherwise disposed of in
the ordinary course of business and any gain (but not loss)
realized upon the sale or other disposition of any Capital
Stock of any Person;
(5) the net after tax effect of any extraordinary gain or loss
(including all fees and expenses related to such
extraordinary gain or loss) or of any impairment loss on or
writedown of goodwill; and
(6) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purpose of the covenant described
under "Certain Covenants - Limitation on Restricted Payments" only, there shall
be excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries to the
Company or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under such
covenant pursuant to clause (a)(4)(C)(iv) thereof.
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"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its Restricted Subsidiaries, determined on a
Consolidated basis, as of the end of the most recent fiscal quarter of the
Company ending at least 45 days prior to the taking of any action for the
purpose of which the determination is being made, as
(1) the par or stated value of all outstanding Capital Stock of the
Company plus
(2) paid-in capital or capital surplus relating to such Capital Stock
plus
(3) any retained earnings or earned surplus less
(A) any accumulated deficit and
(B) any amounts attributable to Disqualified Stock.
"Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company in accordance with GAAP
consistently applied; provided, however, that "Consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary will
be accounted for as an investment. The term "Consolidated" has a correlative
meaning.
"Credit Agreement" means the credit agreement dated as of February 24,
2004, among the Company, Bank One, NA and others, together with any
guarantees, collateral documents, instruments and agreements executed in
connection therewith, in each case, as amended, restated, supplemented,
waived, replaced (whether or not upon termination, and whether with the
original lenders or otherwise), refinanced, restructured or otherwise modified
from time to time (except to the extent that any such amendment, restatement,
supplement, waiver, replacement, refinancing, restructuring or other
modification thereto would be prohibited by the terms of the Indenture, unless
otherwise agreed to by the Holders of at least a majority in aggregate
principal amount of New Notes at the time outstanding).
"Credit Agreement Obligations" means (i) all Indebtedness outstanding
under the Credit Agreement and (ii) all other obligations (not constituting
Indebtedness) of the Company or a Subsidiary Guarantor under the Credit
Agreement and (iii) all other obligations of the Company or any Subsidiary
Guarantor owing in connection with Hedging Obligations to any lender under the
Credit Agreement or any affiliate of any such lender, unless the Company and
such lender mutually agree that such Hedging Obligation does not constitute a
"Secured Obligation" as defined in the Credit Agreement.
"Currency Agreement" means with respect to any Person any foreign
exchange contract, currency swap agreements or other similar agreement or
arrangement to which such Person is a party or of which it is a beneficiary.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Designated Percentage" means a majority unless (i) the New Exchange
Offer (as defined in the Registration Rights Agreement) has not occurred, (ii)
a Notes Registration Statement (as
65
defined in the Registration Rights Agreement) is not then effective and (iii)
there are less than 15 Holders, in which case "Designated Percentage" means
67%.
"Discharge of Credit Agreement Obligations" means payment in full in cash
of the principal of and interest and premium, if any, on all Indebtedness
outstanding under the Credit Agreement or with respect to Hedging Obligations
that are Credit Agreement Obligations, or with respect to letters of credit
outstanding thereunder, delivery of cash collateral or backstop letters of
credit in respect thereof in compliance with such Credit Agreement, in each
case after or concurrently with termination of all commitments to extend
credit thereunder and payments in full of any other Credit Agreement
Obligations that are due and payable or otherwise accrued and owing at or
prior to the time such principal, interest and premium, if any, are paid.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise,
(2) is convertible or exchangeable for Indebtedness or Disqualified
Stock (excluding Capital Stock convertible or exchangeable solely at
the option of the Company or a Restricted Subsidiary; provided,
however, that any such conversion or exchange shall be deemed an
Incurrence of Indebtedness or Disqualified Stock, as applicable) or
(3) is redeemable at the option of the holder thereof, in whole or in
part,
in the case of each of clauses (1), (2) and (3), on or prior to the first
anniversary of the Stated Maturity of the New Notes; provided, however, that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the first anniversary of the Stated
Maturity of the New Notes shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital
Stock are not more favorable to the holders of such Capital Stock than the
provisions of the covenants described under "Change of Control" and "Certain
Covenants - Limitation on Sale of Assets and Subsidiary Stock."
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
other than a Foreign Subsidiary.
"EBITDA" for any period means the Consolidated Net Income for such
period, plus, without duplication, the following to the extent deducted in
calculating such Consolidated Net Income:
(1) income tax expense of the Company and its Consolidated Restricted
Subsidiaries,
(2) Consolidated Interest Expense,
(3) depreciation expense of the Company and its Consolidated Restricted
Subsidiaries,
66
(4) amortization expense of the Company and its Consolidated Restricted
Subsidiaries (including amortization recorded in connection with the
application of Financial Accounting Standard No. 142 (Goodwill and
Other Intangibles)),
(5) payments made in connection with the Non-Competition and Consulting
Agreement dated as of December 18, 2003, between the Company and
Hugh Westbrook (the "Westbrook Agreement") in the amount of $25.0
million and transaction fees and expenses paid in connection with
the Transactions,
(6) any severance payments related to the acquisition of Vitas, as
contemplated by the Private Placement Memorandum and not to exceed
$14.5 million, plus any related employment taxes and employee
benefit charges,
(7) dividends, distributions and payments not in excess of $2.8 million
under the Closing Date Stock Award Plan, and
(8) all other noncash charges of the Company and its Consolidated
Restricted Subsidiaries (excluding any such noncash charge to the
extent it represents an accrual of or reserve for cash expenditures
in any future period) less all non-cash items of income of the
Company and its Consolidated Restricted Subsidiaries,
in each case for such period.
Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and noncash
charges of, a Restricted Subsidiary of the Company shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income (loss) of such Restricted Subsidiary was
included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior approval (that has not
been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to such Restricted Subsidiary or its stockholders.
"Eligible Indebtedness" has the meaning assigned to it under clause 3(A)
of "Certain Covenants - Limitations on Sales of Assets and Subsidiary Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the debt securities of the Company issued pursuant
to the Indenture in exchange for, and in an aggregate principal amount equal
to, the New Notes, in compliance with the terms of the Registration Rights
Agreement.
"Fair Market Value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of
whom is under undue pressure or compulsion to complete the transaction. For
all purposes of the Indenture, the Fair Market Value of property or assets
which involve an aggregate amount in excess of $25.0 million shall be set
forth in a resolution approved
67
by the Board of Directors in good faith; provided that for property or assets,
other than cash, Indebtedness or readily marketable securities, in an
aggregate amount in excess of $50.0 million, Fair Market Value shall be
determined in writing by a nationally recognized appraisal or investment
banking firm.
"Fixed Rate Notes" means the 8 3/4% Fixed Rate Notes due 2011 issued by
the Company under the Indenture dated as of February 24, 2004, between the
Company and LaSalle Bank National Association, as trustee, and any exchange
notes issued under such indenture.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company that
is not organized under the laws of the United States of America or any State
thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including those set
forth in:
(1) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants,
(2) statements and pronouncements of the Financial Accounting Standards
Board,
(3) such other statements by such other entities as approved by a
significant segment of the accounting profession, and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff
accounting bulletins and similar written statements from the
accounting staff of the SEC.
All ratios and computations based on GAAP contained in the Indenture
shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of
any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or
services, to take- or-pay, or to maintain financial statement
conditions or otherwise) or
(2) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof
(in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a
68
corresponding meaning. The term "Guarantor" shall mean any Person Guaranteeing
any obligation.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" means the Person in whose name a New Note is registered on the
Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by
such Person at the time it becomes a Subsidiary. The term "Incurrence" when
used as a noun shall have a correlative meaning. Solely for purposes of
determining compliance with "Certain Covenants - Limitation of Indebtedness":
(1) amortization of debt discount or the accretion of principal with
respect to a non-interest bearing or other discount security;
(2) the payment of regularly scheduled interest in the form of
additional Indebtedness of the same instrument or the payment of
regularly scheduled dividends on Capital Stock (other than
Disqualified Stock) in the form of additional Capital Stock of the
same class and with the same terms; and
(3) the obligation to pay a premium in respect of Indebtedness arising
in connection with the issuance of a notice of redemption or the
making of a mandatory offer to purchase such Indebtedness
will not be deemed to be the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination, without duplication:
(1) the principal of and premium (if any) in respect of indebtedness of
such Person for borrowed money;
(2) the principal of and premium (if any) in respect of obligations of
such Person evidenced by bonds, debentures, New Notes or other
similar instruments;
(3) all obligations of such Person in respect of letters of credit or
other similar instruments (including reimbursement obligations with
respect thereto but excluding obligations in respect of letters of
credit securing obligations (other than obligations in clauses (1),
(2), (4) or (5) hereof) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the tenth Business Day following payment on
the letter of credit);
69
(4) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables or
other obligations arising in the ordinary course of business), which
purchase price is due more than six months after the date of placing
such property in service or taking delivery and title thereto or the
completion of such services;
(5) all Capitalized Lease Obligations and all Attributable Debt of such
Person;
(6) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock
or, with respect to any Subsidiary of such Person, any Preferred
Stock (but excluding, in each case, any accrued dividends);
(7) all Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of Indebtedness of such
Person shall be the lesser of:
(A) the Fair Market Value of such asset at such date of
determination and
(B) the amount of such Indebtedness of such other Persons;
(8) all net obligations of such person in respect of Interest Rate
Agreements or Currency Agreements; and
(9) all obligations of the type referred to in clauses (1) through (8)
of other Persons and all dividends of other Persons for the payment
of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise,
including by means of any Guarantee.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
"Interest Payment Date" has the meaning assigned to it under "Principal,
Maturity and Interest."
"Interest Period" means, for any Interest Payment Date, a period from and
including the preceding Interest Payment Date to but excluding such Interest
Payment Date, provided, however, that the initial Interest Period will be the
period from and including the series issuance date to but excluding the May
15, 2004 Interest Payment Date.
"Interest Rate Agreement" means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate
option agreement, interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate hedge agreement or other similar
agreement or arrangement to which such Person is party or of which it is a
beneficiary.
70
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or
other similar instruments issued by such Person. Except as otherwise provided
for herein, the amount of an Investment shall be its fair value at the time
the Investment is made and without giving effect to subsequent changes in
value. For purposes of the definition of "Unrestricted Subsidiary" and the
covenant described under "Certain Covenants - Limitation on Restricted
Payments":
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market
Value of the net assets of any Subsidiary of the Company at the time
that such Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to
have a permanent "Investment" in an Unrestricted Subsidiary in an
amount (if positive) equal to:
(A) the Company's "Investment" in such Subsidiary at the time of
such redesignation less
(B) the portion (proportionate to the Company's equity interest in
such Subsidiary) of the Fair Market Value of the net assets of
such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall
be valued at its Fair Market Value at the time of such transfer.
"Legal Holiday" means a Saturday, Sunday or other day on which banking
institutions are not required by law or regulation to be open in the State of
New York.
"LIBOR Determination Date" has the meaning assigned to such term under
"Principal, Maturity and Interest."
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and
proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to the properties or assets that
are the subject of such Asset Disposition or received in any other noncash
form) therefrom, in each case net of:
(1) all legal, accounting, investment, banking, title and recording tax
expenses, commissions and other fees and expenses incurred, and all
Federal, state, provincial, foreign and local taxes required to be
paid or
71
accrued as a liability under GAAP, as a consequence of such Asset
Disposition,
(2) all payments made on any Indebtedness other than Indebtedness under
the Indenture and the Credit Agreement which is secured by any
assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security agreement of any kind with
respect to such assets, or which must by its terms, or in order to
obtain a consent to such Asset Disposition, or by applicable law be
repaid out of the proceeds from such Asset Disposition,
(3) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of
such Asset Disposition and
(4) appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the
property or other assets disposed of in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such
Asset Disposition or liabilities under indemnification obligations
associated with such Asset Disposition or any purchase price
adjustments.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-Recourse Debt" means Indebtedness as to which neither the Company
nor any Restricted Subsidiary (a) provides any Guarantee or credit support of
any kind (including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as guarantor or otherwise); and (c) as to which there is no
recourse against any of the assets of the Company or its Restricted
Subsidiaries (other than assets or Capital Stock of Unrestricted Subsidiaries,
provided however, that Indebtedness of an Unrestricted Subsidiary which
consists of a Guarantee of Indebtedness of the Company or a Restricted
Subsidiary to a Person other than an Unrestricted Subsidiary, or a lien on
property or stock of an Unrestricted Subsidiary that secures Indebtedness of
the Company or a Restricted Subsidiary to a Person other than an Unrestricted
Subsidiary, shall be deemed to constitute Non-Recourse Debt as long as the
Unrestricted Subsidiary does not have recourse against the Company or a
Restricted Subsidiary under such Indebtedness.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the Chief Financial Officer, the President, any Vice President, the Treasurer
or the Secretary of the Company. "Officer" of a Subsidiary Guarantor has a
correlative meaning.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company, a Subsidiary Guarantor or the Trustee.
72
"Permitted Business" means any business engaged in by the Company or any
Restricted Subsidiary on the Closing Date and any related, ancillary or
complementary business.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that will, upon the
making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is
a Permitted Business;
(2) another Person if as a result of such Investment such other Person
is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted
Subsidiary; provided, however, that such Person's primary business
is a Permitted Business;
(3) Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade
terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances;
(5) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary
course of business;
(6) loans or advances to employees made in the ordinary course of
business consistent with prudent practices and applicable law and
not exceeding $2 million at any time outstanding;
(7) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company
or any Restricted Subsidiary or in satisfaction of judgments;
(8) any Person to the extent such Investment represents the noncash
portion of the consideration received for an Asset Disposition that
was made pursuant to and in compliance with the covenant described
under "Certain Covenants - Limitation on Sale of Assets and
Subsidiary Stock";
(9) any Person; provided, that the payment for such Investments consists
solely of Capital Stock of the Company (other than Disqualified
Stock);
(10) any Person consisting of the licensing of intellectual property
pursuant to joint ventures, strategic alliances or joint marketing
arrangements with such Person, in each case made in the ordinary
course of business;
73
(11) a vendor or supplier consisting of loans or advances to such vendor
or supplier in connection with any guarantees to the Company or any
Restricted Subsidiary of supply by, or to fund the supply capacity
of, such vendor or supplier, in any case not to exceed $2.0 million
at any one time outstanding;
(12) loans to and other Investments in independent contractors and
subcontractors of the Company or its Restricted Subsidiaries, not to
exceed $4.0 million at any one time outstanding; or
(13) any other Investments to the extent such Investments, when taken
together with all other Investments made pursuant to this clause
(13) outstanding on the date such Investment is made, do not exceed
$5.0 million.
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under worker's compensation laws,
unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for
the payment of Indebtedness) or leases to which such Person is a
party, or deposits to secure public or statutory obligations of such
Person or deposits of cash or United States government bonds to
secure surety or appeal bonds to which such Person is a party, or
deposits as security for contested taxes or import duties or for the
payment of rent, in each case Incurred in the ordinary course of
business;
(2) Liens imposed by law, such as landlords', carriers', warehousemen's
and mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceedings or other Liens
arising out of judgments or awards against such Person with respect
to which such Person shall then be proceeding with an appeal or
other proceedings for review;
(3) Liens for taxes, assessments or governmental charges or levies
either not yet due or payable or subject to penalties for
non-payment or which are being contested in good faith by
appropriate proceedings;
(4) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person
in the ordinary course of its business; provided, however, that such
letters of credit do not constitute Indebtedness;
(5) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights- of-way,
sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of
real property or Liens incidental to the conduct of the business of
such Person or to the ownership of its properties which were not
Incurred in connection with Indebtedness and which do not in the
aggregate materially adversely
74
affect the value of said properties or materially impair their use
in the operation of the business of such Person;
(6) Liens securing Indebtedness permitted to be Incurred pursuant to
clause (8) of the covenant described under "Certain Covenants -
Limitation on Indebtedness"; provided, however, that the Lien may
not extend to any other property owned by such Person or any of its
Subsidiaries at the time the Lien is Incurred;
(7) Liens to secure Indebtedness permitted pursuant to paragraph (a) or
clauses (1), (3)(A), (9) or (13) of paragraph (b) of the covenant
described under "Certain Covenants - Limitation on Indebtedness" and
other Credit Agreement Obligations;
(8) Liens existing on the Closing Date;
(9) Liens on property or shares of stock of another Person at the time
such other Person becomes a Subsidiary of such Person; provided,
however, that such Liens are not created, Incurred or assumed in
connection with, or in contemplation of, such other Person becoming
such a Subsidiary; provided further, however, that such Liens do not
extend to any other property owned by such Person or any of its
Subsidiaries;
(10) Liens on property at the time such Person or any of its Subsidiaries
acquires the property, including any acquisition by means of a
merger or consolidation with or into such Person or any Subsidiary
of such Person; provided, however, that such Liens are not created,
Incurred or assumed in connection with, or in contemplation of, such
acquisition; provided further, however, that the Liens do not extend
to any other property owned by such Person or any of its
Subsidiaries;
(11) Liens securing obligations under Hedging Obligations so long as such
obligations relate to Indebtedness permitted to be Incurred pursuant
to the covenant described under "Certain Covenants - Limitation on
Indebtedness" that is, and is permitted under the Indenture to be,
secured by a Lien on the same property securing such obligations;
(12) Liens to secure any Refinancing (or successive Refinancings) as a
whole, or in part, of any Indebtedness secured by any Lien referred
to in the foregoing clauses (6), (7), (8), (9) or (10); provided,
however, that:
(A) such new Lien shall be limited to all or part of the same
property that secured the original Lien (plus improvements to
or on such property) and
(B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of:
(i) the outstanding principal amount or, if greater, committed
amount of the Indebtedness secured by Liens described
under clauses (6), (7), (8), (9) or (10) at the
75
time the original Lien became a Permitted Lien under the
Indenture and
(ii) an amount necessary to pay any fees and expenses,
including premiums, related to such Refinancings; and
(13) Liens to secure Indebtedness permitted to be Incurred pursuant to
the covenant described under "Certain Covenants - Limitation on
Indebtedness" or other obligations in an aggregate principal amount
which, when taken together with all other Indebtedness and
obligations secured by Liens pursuant to this clause (13) and
remaining outstanding, does not exceed $10.0 million at any time.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) that is preferred
as to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over
shares of Capital Stock of any other class of such Person.
"principal" of a New Note means the principal of the New Note plus the
premium, if any, payable on the New Note which is due or overdue or is to
become due at the relevant time.
"Purchase Money Indebtedness" means Indebtedness:
(1) consisting of the deferred purchase price of property, conditional
sale obligations, obligations under any title retention agreement,
other purchase money obligations and obligations in respect of
industrial revenue bonds, in each case where the maturity of such
Indebtedness does not exceed the anticipated useful life of the
property being financed, and
(2) Incurred to finance the acquisition, construction or lease by the
Company or a Restricted Subsidiary of the property, including
additions and improvements thereto;
provided, however, that the Indebtedness is Incurred within 180 days after the
acquisition, construction or lease of the property by the Company or
Restricted Subsidiary.
"Refinance" means, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness exchange or replacement for, such Indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
Refinance any Indebtedness of the Company or any Restricted Subsidiary
existing on the Closing Date or Incurred in compliance with the Indenture
(including Indebtedness of the Company that Refinances Refinancing
Indebtedness); provided, however, that:
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(1) the Refinancing Indebtedness has a Stated Maturity no earlier than
the Stated Maturity of the Indebtedness being Refinanced,
(2) the Refinancing Indebtedness has an Average Life at the time such
Refinancing Indebtedness is Incurred that is equal to or greater
than the Average Life of the Indebtedness being Refinanced,
(3) such Refinancing Indebtedness is Incurred in an aggregate principal
amount (or if issued with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal
amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding of the Indebtedness being
Refinanced and
(4) if the Indebtedness being Refinanced is contractually subordinated
in right of payment to the New Notes, such Refinancing Indebtedness
is contractually subordinated in right of payment to the New Notes
at least to the same extent as the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not
include:
(A) Indebtedness of a Restricted Subsidiary that Refinances
Indebtedness of the Company or
(B) Indebtedness of the Company or a Restricted Subsidiary
that Refinances Indebtedness of an Unrestricted
Subsidiary.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of February 24, 2004, among the Company, the initial Holders, the
initial holders of the Fixed Rate Notes and certain other Persons.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or a Restricted Subsidiary transfers such property to a
Person and the Company or such Restricted Subsidiary leases it from such
Person, other than leases between the Company and a Wholly Owned Subsidiary or
between Wholly Owned Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured by a
Lien. "Secured Indebtedness" of a Subsidiary Guarantor has a correlative
meaning.
"Security Documents" has the meaning set forth under the heading
"Security."
"Senior Indebtedness" of the Company or any Subsidiary means the
principal of, premium (if any) and accrued and unpaid interest on (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization of the Company or any Subsidiary, regardless of whether or not
a claim for post-filing interest is allowed in such proceedings), and fees and
other amounts owing in respect of, Indebtedness of the Company or any
Subsidiary, as
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applicable, whether outstanding on the Closing Date or thereafter Incurred,
unless in the instrument creating or evidencing the same or pursuant to which
the same is outstanding it is provided that such obligations are subordinated
in right of payment to the New Notes or such Subsidiary's Subsidiary
Guarantee, as applicable; provided, however, that Senior Indebtedness of the
Company or any Subsidiary shall not include:
(1) any obligation of the Company to any Subsidiary of the Company or of
such Subsidiary to the Company or any other Subsidiary of the
Company;
(2) any liability for Federal, state, local or other taxes owed or owing
by the Company or such Subsidiary, as applicable;
(3) any accounts payable or other liability to trade creditors arising
in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities);
(4) any Indebtedness or obligation of the Company (and any accrued and
unpaid interest in respect thereof) that by its terms is subordinate
or junior in any respect to any other Indebtedness or obligation of
the Company or such Subsidiary, as applicable, including any Senior
Subordinated Indebtedness and any Subordinated Obligations of the
Company or such Subsidiary, as applicable;
(5) any obligations with respect to any Capital Stock; or
(6) any Indebtedness Incurred in violation of the Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the final payment of principal of
such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Chemed Debentures" means the Convertible Junior
Subordinated Debentures due 2030, issued by the Company pursuant to the
indenture dated as of February 7, 2000, between the Company and Firstar Bank,
National Association as trustee.
"Subordinated Obligation" means any Indebtedness of the Company (whether
outstanding on the Closing Date or thereafter Incurred) that is subordinate or
junior in right of payment to the New Notes pursuant to a written agreement.
"Subordinated Obligation" of a Subsidiary Guarantor has a correlative meaning,
except that the reference to "New Notes" in the preceding sentence shall be
deemed to refer to such Subsidiary's Subsidiary Guarantee.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total
voting power of shares of Capital Stock or
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other interests (including partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by:
(1) such Person,
(2) such Person and one or more Subsidiaries of such Person or
(3) one or more Subsidiaries of such Person.
"Subsidiary Guarantee" means each Guarantee of the obligations with
respect to the New Notes issued by a Subsidiary of the Company pursuant to the
terms of the Indenture.
"Subsidiary Guarantor" means any Subsidiary that has issued a Subsidiary
Guarantee.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States of America
or any agency thereof or obligations Guaranteed by the United States
of America or any agency thereof,
(2) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company that is
organized under the laws of the United States of America, any state
thereof or any foreign country recognized by the United States of
America having capital, surplus and undivided profits aggregating in
excess of $250,000,000 (or the foreign currency equivalent thereof)
and whose long-term debt is rated "A" (or such similar equivalent
rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities
Act),
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above
entered into with a bank meeting the qualifications described in
clause (2) above,
(4) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than
an Affiliate of the Company) organized and in existence under the
laws of the United States of America or any foreign country
recognized by the United States of America with a rating at the time
as of which any investment therein is made of "P-1" (or higher)
according to Moody's Investors Service, Inc. or "A-1" (or higher)
according to Standard and Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc. ("S&P"), and
(5) investments in securities with maturities of six months or less from
the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at
least "A" by S&P or "A" by Moody's Investors Service, Inc.
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"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the Closing Date.
"Trade Payables" means, with respect to any Person, any accounts payable
or any indebtedness or monetary obligation to trade creditors created, assumed
or Guaranteed by such Person arising in the ordinary course of business in
connection with the acquisition of goods or services.
"Transactions" means, collectively, the following transactions, which
shall be consummated on or about the date of the closing of the offering of
the New Notes: (i) the consummation of the merger of Vitas with and into an
indirect Wholly Owned Subsidiary of the Company pursuant to a merger agreement
dated as of December 18, 2003, among the Company, Vitas and Marlin Merger
Corp., (ii) the repayment of approximately $74.4 million of existing
indebtedness of Vitas, plus accrued interest thereon, (iii) the repayment of
approximately $29.4 million of existing indebtedness of the Company (including
a $3.0 million make whole premium), plus accrued interest thereon, (iv) the
assignment of the Westbrook Agreement by the Company to Vitas, the payment of
$25.0 million by Vitas to Hugh A. Westbrook pursuant to the Westbrook
Agreement and the performance of the other obligations under the Westbrook
Agreement, (v) the consummation of the offering and sale of New Notes, Fixed
Rate Notes and Capital Stock of the Company and the execution and delivery of
notes, indentures and other agreements in connection therewith, (vi) the
Company and certain of its Subsidiaries entering into the Credit Agreement and
the borrowing on the Closing Date of $75.0 million thereunder (vii) the
issuance or deemed issuance of letters of credit under the Credit Agreement to
replace or backstop, or the cash collateralization of, letters of credit
issued for the account of the Company or any of its Subsidiaries or Vitas or
any of its Subsidiaries, (viii) the cancelation of a warrant held by the
Company for shares of Vitas stock and (ix) the payment of fees and expenses in
connection with the foregoing.
"Trustee" means the party named as such in the Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Trust Securities" means the Chemed Preferred Securities, the
Subordinated Chemed Debentures and the guarantee by the Company to the holders
of the Chemed Preferred Securities of amounts payable thereunder.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary of the Company) to be
an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any
property of, the Company or any other Subsidiary of the Company that is not a
Subsidiary of the Subsidiary to be so designated; provided, however, that
either:
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(A) the Subsidiary to be so designated has total Consolidated
assets of $1,000 or less, or
(B) if such Subsidiary has Consolidated assets greater than $1,000,
then such designation would be permitted under the covenant
entitled "Certain Covenants - Limitation on Restricted
Payments."
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation:
(x) the Company could Incur $1.00 of additional Indebtedness under
paragraph (a) of the covenant described under "Certain Covenants -
Limitation on Indebtedness" and
(y) no Default shall have occurred and be continuing.
Any such designation of a Subsidiary as a Restricted Subsidiary or
Unrestricted Subsidiary by the Board of Directors shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Vitas" means Vitas Healthcare Corporation or any successor thereto by
any merger, consolidation or other transaction which is permitted hereunder.
"VNF" means Vitas of North Florida, Inc., a Florida not-for-profit
corporation and a Wholly Owned Subsidiary of Vitas.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding
and normally entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof.
"Westbrook Agreement" has the meaning assigned to such term in the
definition of "EBITDA."
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company
all the Capital Stock of which (other than directors' qualifying shares or
shares issued to third parties to the extent necessary to satisfy any
licensing requirements under applicable law with respect to the Company's or
any of its Subsidiaries' business) is owned by the Company or another Wholly
Owned Subsidiary.
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EXCHANGE OFFER AND REGISTRATION RIGHTS
We entered into a registration rights agreement relating in connection
with the issuance of the Original Notes. The following description is meant to
be only a summary of certain provisions of the registration rights agreement.
It does not restate the terms of the registration rights agreement in its
entirety.
EXCHANGE OFFER AND REGISTRATION RIGHTS RELATING TO THE ORIGINAL NOTES
Pursuant to the registration rights agreement, we agreed, for the benefit
of the holders of the Original Notes, that we would use our reasonable best
efforts, at our cost, to (i) file with the SEC on or prior to 90 days after
the date of issuance of the Original Notes a registration statement on Form
S-3 or Form S-4, if the use of such form is then available (the "Exchange
Offer Registration Statement"), and if not, on an appropriate form, relating
to a registered exchange offer for the Original Notes (such offer the
"Exchange Offer") under the Securities Act, (ii) use our reasonable best
efforts to cause the Exchange Offer Registration Statement to be declared
effective under the Securities Act within 180 days after the date of issuance
of the Original Notes and (iii) use our reasonable best efforts to complete
the Exchange Offer by the earlier of 210 days after the date of issuance of
the Original Notes and 60 days after the Exchange Offer Registration Statement
is declared effective. We agreed to offer to the holders of the Original Notes
the opportunity to exchange their Original Notes for a new series of notes
(the "Exchange Notes") that are identical in all material respects to such
Original Notes (except that the Exchange Notes will not contain terms with
respect to transfer restrictions or additional interest) and that would be
registered under the Securities Act. We agreed to keep the Exchange Offer open
for not less than 20 business days (or longer, if required by applicable law)
after the date on which notice of the Exchange Offer is mailed to the holders
of the Original Notes.
With regard to the Original Notes, if (i) because of any change in law or
applicable interpretations thereof by the staff of the SEC, we are not
permitted to effect the Exchange Offer as contemplated hereby, (ii) the
Exchange Offer is not consummated within 210 days of the issuance of the
Original Notes, or (iii) any holder of Original Notes (other than holders who
are broker-dealers electing to exchange Original Notes, acquired for its own
account as a result of market-making activities or other trading activities,
for applicable Exchange Notes (an "Exchanging Dealer")) is not eligible to
participate in the Exchange Offer or, (iv) in the case of any holder of
Original Notes (other than an Exchanging Dealer) that participates in the
Exchange Offer, and such holder does not receive freely tradable Exchange
Notes on the date of the exchange, then we agreed to file with the SEC at our
expense a shelf registration statement to cover resales of the Original Notes
and/or Exchange Notes that are not freely tradable by holders who satisfy
certain conditions relating to the provision of information in connection with
the shelf registration statement (the "Notes Shelf Registration Statement").
We agreed to use our reasonable best efforts to have the Exchange Offer
Registration Statement or, if applicable, the Notes Shelf Registration
Statement declared effective by the SEC within 180 days after the date of the
issuance of the Original Notes. Unless the Exchange Offer would not be
permitted by a policy of the SEC, we agreed to commence the Exchange Offer and
will use our reasonable best efforts to consummate the Exchange Offer as
promptly as practicable within 210 days after the date of issuance of the
Original Notes. If applicable, we will use our reasonable best efforts to keep
the Notes Shelf Registration Statement continuously effective for a period of
two years from the date of its effectiveness or such shorter period of time
that will terminate when all Original Notes covered by the Notes Shelf
Registration Statement (i) have
82
been sold pursuant thereto or (ii) are no longer restricted securities under
Rule 144 of the Securities Act, or any successor rule thereof.
If (i) the Exchange Offer Registration Statement is not filed with the
SEC within 90 days after the date of the issuance of the Original Notes, (ii)
the Exchange Offer is not commenced or the Notes Shelf Registration Statement
is not filed within 180 days after the date of the issuance of the Original
Notes, (iii) the Exchange Offer is not consummated or the Notes Shelf
Registration Statement is not declared effective within 210 days after the
date of the issuance of the Original Notes or (iv) after either the Exchange
Offer Registration Statement or the Notes Shelf Registration Statement is
declared effective, (a) such registration statement thereafter ceases to be
effective without being succeeded immediately by an additional registration
statement filed and declared effective by the SEC or (b) such registration
statement or the related prospectus ceases to be usable (subject to certain
exceptions in the case of the preceding clause (b)) (each such event referred
to in clauses (i) through (iv), a "Notes Registration Default"), we will be
obligated to pay additional interest to each holder of the Original Notes,
with respect to the first 90-day period immediately following the first Notes
Registration Default, in an amount equal to 0.25% per annum of the principal
amount of Original Notes held by such holder. The amount of additional
interest will increase by an additional 0.25% per annum with respect to each
subsequent 90-day period until all Notes Registration Defaults have been
cured, up to a maximum of 1.0% per annum. All additional interest will be paid
to holders in the same manner as interest payments on the Original Notes on
semi-annual or quarterly payment dates which correspond to interest payment
dates for the Original Notes. Following the cure of all Notes Registration
Defaults, the accrual of additional interest will cease. We believe the
likelihood that we will pay additional interest upon a Registration Default is
remote or incidental (within the meaning of the applicable U.S. Treasury
regulations). We therefore believe that the possible payment of additional
interest will not cause the Original Notes to be treated as having been issued
with original issue discount for U.S. federal income tax purposes and that a
holder will be required to treat the gross amount of any additional interest
as ordinary interest income at the time such amount is received or accrued in
accordance with such holder's method of accounting for U.S. federal income tax
purposes.
The registration rights agreement also provides that we will make
available for a period of 90 days after the consummation of the Exchange Offer
a prospectus meeting the requirements of the Securities Act to any broker-
dealer for use in connection with any resale of any such Exchange Notes.
Holders of Original Notes will be required to suspend their use of the
prospectus included in the Notes Shelf Registration Statement under certain
circumstances upon receipt of written notice to that effect from us.
Each holder of Original Notes who wishes to exchange such notes for
Exchange Notes in the Exchange Offer will be required to make certain
representations, including representations that (i) any such Exchange Notes to
be received by it will be acquired in the ordinary course of its business;
(ii) it has no arrangement or understanding with any person to participate in
the distribution of such Exchange Notes; and (iii) it is not our "affiliate"
(as defined in Rule 405 under the Securities Act), or if it is an affiliate,
that it will comply with the registration and prospectus delivery requirements
of the Securities Act to the extent applicable. In addition, if the holder is
not a broker-dealer, it will be required to represent that it is not engaged
in, and does not intend to engage in, the distribution of the Exchange Notes.
If the holder is a broker-dealer that will receive Exchange Notes for its own
account in exchange for Original Notes that were acquired as a result of
market-making activities or other trading activities, it will be required to
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes.
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Holders of Original Notes or Exchange Notes that are not freely tradable
will also be required to deliver information to be used in connection with any
Notes Shelf Registration Statement within certain time periods in order to
have such Original Notes or Exchange Notes included in the Notes Shelf
Registration Statement and benefit from the provisions regarding liquidated
damages set forth in the preceding paragraphs. A holder who sells such
Original Notes or Exchange Notes pursuant to the Notes Shelf Registration
Statement generally will be required to be named as a selling securityholder
in the related prospectus and to deliver a prospectus to purchasers, will be
subject to certain of the civil liability provisions under the Securities Act
in connection with such sales and will be bound by the provisions of the
exchange and registration rights agreement which are applicable to such a
holder (including certain indemnification obligations).
Original Notes not tendered in the Exchange Offer shall bear interest at
the rate set forth on the cover page of this prospectus and be subject to all
the terms and conditions specified in the indentures governing the Original
Notes and, for a period of two years after their issue date, to certain
transfer restrictions.
84
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of certain U.S. Federal income tax
consequences of the exchange offer to holders of Original Notes, but is not a
complete analysis of all potential tax effects. The summary below is based
upon the Internal Revenue Code of 1986, as amended (the "Code"), regulations
of the Treasury Department, administrative rulings and pronouncements of the
Internal Revenue Service and judicial decisions, all of which are subject to
change, possibly with retroactive effect. This summary does not address all of
the U.S. Federal income tax consequences that may be applicable to particular
holders, including dealers in securities, financial institutions, insurance
companies and tax-exempt organizations. In addition, this summary does not
consider the effect of any foreign, state, local, gift, estate or other tax
laws that may be applicable to a particular holder. This summary applies only
to a holder that acquired Original Notes at original issue for cash and holds
such Original Notes as a capital asset within the meaning of Section 1221 of
the Code.
An exchange of Original Notes for New Notes pursuant to the exchange
offer will not be treated as a taxable exchange or other taxable event for
U.S. Federal income tax purposes. Accordingly, there will be no U.S. Federal
income tax consequences to holders who exchange their Original Notes for New
Notes in connection with the exchange offer and any such holder will have the
same adjusted tax basis and holding period in the New Notes as it had in the
Original Notes immediately before the exchange.
The foregoing discussion of certain U.S. Federal income tax
considerations does not consider the facts and circumstances of any particular
holder's situation or status. Accordingly, each holder of Original Notes
considering this exchange offer should consult its own tax advisor regarding
the tax consequences of the exchange offer to it, including those under state,
foreign and other tax laws.
85
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant
to the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Original Notes
where such Original Notes were acquired as a result of market-making
activities or other trading activities. We have agreed that, for a period of
180 days after the expiration date, we will make this prospectus, as amended
or supplemented, available to any broker-dealer for use in connection with any
such resale. In addition, until the expiration date, all dealers effecting
transactions in the New Notes may be required to deliver a prospectus.
We will not receive any proceeds from any sale of New Notes by broker-
dealers. New Notes received by broker-dealers for their own account pursuant
to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from
any such broker- dealer or the purchasers of any such New Notes. Any
broker-dealer that resells New Notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such New Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of New Notes and any commission or concessions received by any
such persons may be deemed to be underwriting compensation under the
Securities Act. The letter of transmittal states that, by acknowledging that
it will deliver and by delivering a prospectus, a broker- dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
For a period of 180 days after the expiration date we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for the holders of the Original Notes)
other than commissions of concessions of any brokers or dealers and will
indemnify the holders of the Original Notes (including any broker-dealers)
against certain liabilities, including liabilities under the Securities Act.
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BOOK-ENTRY; DELIVERY AND FORM
GENERAL
Except as provided below, the New Notes will be represented by one or
more fully registered global securities, in denominations of $1,000 and any
integral multiple thereof which will be deposited with, or on behalf of, DTC
and registered in the name of Cede & Co., or "Cede,'' the nominee of DTC.
Beneficial interests in the global securities will be represented through
book- entry accounts of financial institutions acting on behalf of beneficial
owners as direct or indirect participants in DTC. Unless and until physical
New Notes in definitive, fully registered form, or "Definitive Notes," are
issued under the limited circumstances described below, all references in this
prospectus to actions by holders of New Notes will refer to actions taken by
DTC upon instructions from DTC participants, and all references to
distributions, notices, reports and statements to holders of New Notes will
refer, as the case may be, to distributions, notices, reports and statements
to DTC or Cede, as the registered holder of the New Notes, or to DTC
participants for distribution to holders of New Notes in accordance with DTC
procedures. The general DTC rules applicable to its participants are on file
with the SEC. More information on DTC is available at http://www.dtcc.com.
Except in the limited circumstances described below, owners of beneficial
interests in global securities will not be entitled to receive physical
delivery of Definitive Notes. The New Notes will not be issuable in bearer
form.
DTC has advised us that DTC is a limited-purpose trust company organized
under the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation'' within the meaning of the New York Uniform Commercial Code and
"clearing agency'' registered pursuant to Section 17A of the Securities
Exchange Act of 1934.
Under the New York Uniform Commercial Code, a "clearing corporation'' is
defined as:
o a person that is registered as a "clearing agency'' under the
federal securities laws;
o a federal reserve bank; or
o any other person that provides clearance or settlement services
with respect to financial assets that would require it to
register as a clearing agency under the federal securities laws
but for an exclusion or exemption from the registration
requirement, if its activities as a clearing corporation,
including promulgation of rules, are subject to regulation by a
federal or state governmental authority. A "clearing agency''
is an organization established for the execution of trades by
transferring funds, assigning deliveries and guaranteeing the
performance of the obligations of parties to trades.
DTC was created to hold securities for its participants and to facilitate
the clearance and settlement of securities transactions among DTC participants
through electronic book-entry transfers between the accounts of DTC
participants. The ability to execute transactions through book-entry transfers
in accounts eliminates the need for transfer of physical certificates. DTC
participants include both U.S. and foreign securities brokers and dealers,
banks, clearing
87
corporations and certain other organizations. DTC is a wholly owned subsidiary
of the Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is
owned by a number of DTC participants and by the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.
and certain clearing corporations. Banks, brokers, dealers, trust companies
and other entities that clear through or maintain a custodial relationship
with a DTC participant either directly or indirectly have indirect access to
the DTC system.
Under the rules, regulations and procedures creating and affecting DTC
and its operations, DTC is required to make book-entry transfers of the New
Notes among DTC participants and to receive and transmit distributions of
principal, premium, if any, and interest with respect to the New Notes. DTC
participants and indirect DTC participants with which holders of New Notes
have accounts similarly are required to make book-entry transfers and receive
and transmit such payments on behalf of their respective customers. Holders of
New Notes that are not DTC participants or indirect DTC participants but
desire to purchase, sell or otherwise transfer ownership of, or other
interests in, the New Notes may do so only through DTC participants and
indirect DTC participants. In addition, holders of New Notes will receive all
distributions of principal, premium, if any, and interest from us through DTC
participants or indirect DTC participants, as the case may be. Under a
book-entry format, holders of New Notes may experience some delay in their
receipt of payments because we will forward payments with respect to the New
Notes to Cede, as nominee for DTC. We expect DTC to forward payments in
same-day funds to each DTC participant who is credited with ownership of the
New Notes in an amount proportionate to the principal amount of that DTC
participant's holdings of beneficial interests in the New Notes, as shown on
the records of DTC or Cede. We also expect that DTC participants will forward
payments to indirect DTC participants or holders of New Notes, as the case may
be, in accordance with standing instructions and customary industry practices.
DTC participants will be responsible for forwarding distributions to holders
of New Notes. Accordingly, although holders of New Notes will not possess
physical certificates representing the New Notes, DTC's rules provide a
mechanism for holders of New Notes to receive payments on the New Notes and to
be able to transfer their interests.
Unless and until Definitive Notes are issued under the limited
circumstances described below, the only physical holder of a New Note will be
Cede, as nominee of DTC. Holders of New Notes will not be recognized by us as
registered owners of New Notes under the indentures governing the New Notes.
Holders of New Notes will be permitted to exercise the rights under the
indentures governing the New Notes only indirectly through DTC and DTC
participants. DTC has advised us that it will take any action permitted to be
taken by a holder of New Notes under the indentures governing the New Notes
only at the direction of one or more DTC participants to whose accounts with
DTC the New Notes are credited. Additionally, DTC has advised us that in the
event any action requires approval by holders of New Notes of a certain
percentage of ownership of the New Notes, DTC will take such action only at
the direction of and on behalf of DTC participants whose holdings include
undivided interests that satisfy any such percentage. DTC may take conflicting
actions with respect to other undivided interests to the extent that such
actions are taken on behalf of DTC participants whose holdings include those
undivided interests. DTC will convey notices and other communications to DTC
participants, and DTC participants will convey notices and other
communications to indirect DTC participants and to holders of New Notes in
accordance with arrangements among them. Arrangements among DTC and its direct
and indirect participants are subject to any statutory or regulatory
requirements as may be in effect from time to time. DTC's rules applicable to
itself and DTC participants are on file with the SEC.
88
The laws of some states require that certain purchasers of securities
take physical delivery of such securities. Such limits and such laws may limit
the market for beneficial interests in the global securities.
The ability of a holder of New Notes to pledge the New Notes to persons
or entities that do not participate in the DTC system, or otherwise to act
with respect to such New Notes, may be limited due to the lack of a physical
certificate to evidence ownership of the New Notes and because DTC can only
act on behalf of DTC participants, who in turn act on behalf of indirect DTC
participants.
We will have no liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the New Notes
held by Cede, as nominee for DTC, for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests or for the
performance by DTC, any DTC participant or any indirect DTC participant of
their respective obligations under the rules and procedures governing their
obligations.
DEFINITIVE NOTES
Definitive Notes will be issued in paper form to holders of New Notes or
their nominees, rather than to DTC or its nominee, only if we determine that
DTC is no longer willing or able to discharge properly its responsibilities as
depository with respect to the New Notes and we or the trustee are unable to
locate a qualified successor within 90 days of receipt of such notice.
If Definitive Notes are to be issued by us under the paragraph
immediately above, we will notify all holders of New Notes through DTC of the
availability of Definitive Notes. Upon surrender by DTC of the global
securities and receipt of instructions for re-registration, we will reissue
the New Notes as Definitive Notes to holders of Notes.
After Definitive Notes are issued, we or a paying agent will make
distributions of principal, premium, if any, and interest with respect to New
Notes directly to holders in whose names the New Notes were registered at the
close of business on the applicable record date. Except for the final payment
to be made with respect to a New Note, we or a paying agent will make
distributions by check mailed to the addresses of the registered holders as
they appear on the register maintained by us. We or a paying agent will make
the final payment with respect to any New Note only upon presentation and
surrender of the applicable New Note at the office or agency specified in the
notice of final distribution to holders of New Notes.
89
LEGAL MATTERS
Certain legal matters in connection with the New Notes offered hereby
will be passed upon for us by Naomi C. Dallob, Esq., our Vice President and
Secretary.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 2003 have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements of Vitas as of September 30, 2003
and 2002, and for each of the three years in the period ended September 30,
2003, incorporated by reference from our Form 8-K/A filed on February 23, 2004
with the SEC, have been audited by Ernst & Young LLP, independent auditors, as
stated in their report thereon included therein and are included in reliance
upon such report given on the authority of such firm as experts in accounting
and auditing.
90
$110,000,000
FLOATING RATE SENIOR SECURED NOTES DUE 2010
CHEMED CORPORATION
(FORMERLY ROTO-ROOTER, INC.)
OFFER TO EXCHANGE
UP TO $110,000,000 PRINCIPAL AMOUNT OUTSTANDING OF
FLOATING RATE SENIOR SECURED NOTES DUE 2010
FOR
A LIKE PRINCIPAL AMOUNT OF NEW FLOATING RATE SENIOR SECURED NOTES DUE 2010
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
________________
PROSPECTUS
________________
[ ], 2004
Until [ ], 2004, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Registrants Incorporated or Organized in Delaware
The following registrants are corporations incorporated in the state of
Delaware: Chemed Corporation, CCR of Ohio Inc., Jet Resource, Inc., Nurotoco
of New Jersey, Inc., R.R. UK, Inc., Roto-Rooter Development Company, Roto-
Rooter Management Company, Hospice Care Incorporated, Hospice, Inc., Vitas
Healthcare Corporation, Vitas Healthcare Corporation of California, Vitas
Healthcare Corporation of Central Florida, Vitas Healthcare Corporation of
Florida, Vitas Healthcare Corporation of Illinois, Vitas Healthcare
Corporation of Ohio, Vitas Healthcare Corporation of Pennsylvania, Vitas
Healthcare Corporation of Wisconsin, Vitas HME Solutions, Inc. and Vitas
Holdings Corporation. Section 145(a) of the Delaware General Corporation Law
(the "DGCL") provides in relevant part that a corporation may indemnify any
officer or director who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding (other than
an action by or in the right of the corporation) by reason of the fact that
such person is or was a director or officer of the corporation, or is or was
serving at the request of the corporation as a director or officer of another
entity, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such person's conduct
was unlawful. Under Section 145(b) of the DGCL, such eligibility for
indemnification may be further subject to the adjudication of the Delaware
Court of Chancery.
The articles of incorporation and/or by-laws of each of the following
Delaware corporation registrants provide that such registrant indemnifies its
officers and directors to the maximum extent allowed by Delaware law: Chemed
Corporation, Jet Resource, Inc., Vitas Healthcare Corporation, Vitas
Healthcare Corporation of California, Vitas Healthcare Corporation of
California, Vitas Healthcare Corporation of Illinois, Vitas Healthcare
Corporation of Ohio, Vitas Healthcare Corporation of Pennsylvania, Vitas
Healthcare Corporation of Wisconsin, Vitas HME Solutions, Inc., Vitas Holdings
Corporation, Hospice Care Incorporated and Vitas Healthcare Corporation of
Central Florida.
Furthermore, Section 102(b)(7) of the DGCL provides that a corporation
may in its certificate of incorporation eliminate or limit the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director except for liability: for
any breach of the director's duty of loyalty to the corporation or its
stockholders; for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; under Section 174 of the
DGCL (pertaining to certain prohibited acts including unlawful payment of
dividends or unlawful purchase or redemption of the corporation's capital
stock); or for any transaction from which the director derived an improper
personal benefit. The following Delaware corporation registrants eliminate
such personal liability of their directors: Chemed Corporation, CCR of Ohio,
Inc., Jet Resource, Inc., Vitas Healthcare Corporation of California, Vitas
Healthcare Corporation of Illinois, Vitas Healthcare Corporation of Ohio,
Vitas Healthcare Corporation of Pennsylvania, Vitas Healthcare Corporation of
Wisconsin, Vitas HME
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Solutions, Inc., Vitas Holdings Corporation, Hospice Care Incorporated and
Vitas Healthcare Corporation of Central Florida.
The following registrant is a limited liability company formed in the
state of Delaware: Vitas Hospice Services, L.L.C. Section 18-108 of the
Delaware Limited Liability Company Act provides that that subject to such
standards and restrictions, if any, as are set forth in its limited liability
company agreement, a limited liability company may, and shall have the power
to, indemnify and hold harmless any member or manager or other person from and
against any and all claims and demands whatsoever.
Section 7.8 of the limited liability company agreement of Vitas Hospice
Services, L.L.C. provides that, in accordance with Section 18-108 of the
Delaware Limited Liability Company Act, the company shall indemnify and hold
harmless the member of the company, any affiliate of the member or of the
company, any director, officer or employee of the company or any director,
officer, or employee of the member or of the company to the fullest extent
permitted by law from and against any and all losses, claims, demands, costs,
damages, liabilities (joint or several), expenses of any nature (including
attorneys' fees and disbursements), judgments, fines, settlements, and other
amounts arising from any and all claims, demands, actions, suits, or
proceedings, whether civil, criminal, administrative or investigative, in
which the indemnitee may be involved, or threatened to be involved, as a party
or otherwise, arising out of or incidental to the business or activities of or
relating to the company. Section 7.8.1(ii) of the company's limited liability
company agreement provides that, notwithstanding the foregoing sentence, no
director, officer, or employee of the company, and no director, officer or
employee of the member or any affiliate of the member or of the company, shall
be indemnified from any liability for a knowing violation of law which was
material to the cause of action as determined in a non-appealable order of a
court.
Registrants Incorporated or Organized in Florida
The following registrants are corporations incorporated in the state of
Florida: Service America Network, Inc. and Vitas Healthcare Corporation of
Florida. Section 607.0850(1) of the Florida Business Corporation Act empowers
a corporation to indemnify any person who was or is a party to any proceeding
(other than an action by, or in the right of, the corporation), by reason of
the fact that he or she is or was a director, officer, employee, or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against liability incurred in
connection with such proceeding, including any appeal thereof, if he or she
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any proceeding by judgment, order,
settlement, or conviction or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation or, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
Subsection (2) of 607.0850(1) provides that a corporation shall have
power to indemnify any person, who was or is a party to any proceeding by or
in the right of the corporation to procure a judgment in its favor by reason
of the fact that the person is or was a director, officer, employee, or agent
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or
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other enterprise, against expenses and amounts paid in settlement not
exceeding, in the judgment of the board of directors, the estimated expense of
litigating the proceeding to conclusion, actually and reasonably incurred in
connection with the defense or settlement of such proceeding, including any
appeal thereof. Such indemnification shall be authorized if such person acted
in good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation, except that no
indemnification shall be made under this subsection in respect of any claim,
issue, or matter as to which such person shall have been adjudged to be liable
unless, and only to the extent that, the court in which such proceeding was
brought, or any other court of competent jurisdiction, shall determine upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
Registrants Incorporated or Organized in Iowa
The following registrants are corporations incorporated in the state of
Iowa: Roto-Rooter Services Company and Roto-Rooter Corporation. The Iowa
Business Corporation Act ("IBCA") grants each corporation organized thereunder
the power to indemnify its directors and officers against liabilities for
certain of their acts. Under the IBCA, directors are not subject to personal
liability to corporations organized thereunder or their shareowners for acts
or failures to act except under certain circumstances. In addition, the IBCA
grants corporations organized thereunder the authority to adopt a provision in
their respective articles of incorporation eliminating or limiting, with
certain exceptions, the personal liability of a director to the corporation or
to its shareowners for monetary damages for certain breaches of fiduciary duty
as a director.
Section VII of the restated articles of incorporation of Roto-Rooter
Services Company provides that each director and officer of the corporation,
whether or not then in office, shall be indemnified by the corporation against
all costs, liabilities, judgments and expenses reasonably incurred by him or
imposed upon him in connection with or arising out of any action, suit or
proceedings in which he may be involved, directly or indirectly, or to which
he may be made a party by reason of his being or having been a director or
officer of the corporation, or by reason of any action at any time taken by
him as a director or officer of the corporation (such expenses to include the
cost of reasonable settlements made with a view to curtailment or avoidance of
cost of litigation, or where a settlement is deemed for the best interests of
the corporation under its obligation of indemnity), except in relation to
matters as to which he shall be finally adjudged in such action, suit or
proceeding, to have been guilty of misfeasance in the performance of his duty
as such director or officer. Section VII of the restated articles of
incorporation also provides that the foregoing right of indemnification shall
not be exclusive of other rights to which an officer or director may be
entitled as a matter of law.
Registrants Incorporated or Organized in New York
The following registrants are corporations incorporated in the state of
New York: Complete Plumbing Services, Inc. and RR Plumbing Services
Corporation. Under the New York Business Corporation Law ("NYBCL"), a
corporation may indemnify its directors and officers made, or threatened to be
made, a party to any action or proceeding, except for stockholder derivative
suits, if such director or officer acted in good faith, for a purpose which he
or she reasonably believed to be in or, in the case of service to another
corporation or enterprise, not opposed to, the best interests of the
corporation, and, in criminal proceedings, had no reasonable cause to believe
his or her conduct was unlawful. In the case of stockholder derivative suits,
the corporation may indemnify a director or officer if he or she acted in good
faith for a purpose
II-3
which he or she reasonably believed to be in or, in the case of service to
another corporation or enterprise, not opposed to the best interests of the
corporation, except that no indemnification may be made in respect of (i) a
threatened action, or a pending action which is settled or otherwise disposed
of, or (ii) any claim, issue or matter as to which such person has been
adjudged to be liable to the corporation, unless and only to the extent that
the court in which the action was brought, or, if no action was brought, any
court of competent jurisdiction, determines upon application that, in view of
all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such portion of the settlement amount and expenses
as the court deems proper.
Any person who has been successful on the merits or otherwise in the
defense of a civil or criminal action or proceeding will be entitled to
indemnification. Except as provided in the preceding sentence, unless ordered
by a court pursuant to the NYBCL, any indemnification under the NYBCL pursuant
to the above paragraph may be made only if authorized in the specific case and
after a finding that the director or officer met the requisite standard of
conduct by (i) the disinterested directors if a quorum is available, (ii) the
board upon the written opinion of independent legal counsel or (iii) the
stockholders.
The indemnification described above under the NYBCL is not exclusive of
other indemnification rights to which a director or officer may be entitled,
whether contained in the certificate of incorporation or bylaws or when
authorized by (i) such certificate of incorporation or bylaws; (ii) a
resolution of stockholders, (iii) a resolution of directors or (iv) an
agreement providing for such indemnification, provided that no indemnification
may be made to or on behalf of any director or officer if a judgment or other
final adjudication adverse to the director or officer establishes that his or
her acts were committed in bad faith or were the result of active and
deliberate dishonesty and were material to the cause of action so adjudicated,
or that he or she personally gained in fact a financial profit or other
advantage to which he or she was not legally entitled.
The certificate of incorporation of Complete Plumbing Services, Inc.
provides that, to the fullest extent permitted by the NYBCL, a director of
Complete Plumbing Services, Inc. shall not be liable to the corporation or its
shareholders for damages for any breach of duty as a director.
Registrants Incorporated or Organized in Massachusetts
The following registrant is a corporation incorporated in the state of
Massachusetts: Nurotoco of Massachusetts, Inc. Section 67 of Chapter 156B of
the Massachusetts Business Corporation Law (the "MBCL") provides that
indemnification of directors, officers, employees and other agents of a
corporation, and persons who serve at its request as directors, officers,
employees or other agents of another organization, or who serve at its request
in any capacity with respect to any employee benefit plan, may be provided by
it to whatever extent shall be specified in or authorized by (i) the articles
of organization or (ii) a by-law adopted by the stockholders or (iii) a vote
adopted by the holders of a majority of the shares of stock entitled to vote
on the election of directors. Section 67 of Chapter 156B of the MBCL also
provides that, except as the articles of organization or by-laws otherwise
require, indemnification of any persons referred to in the preceding sentence
who are not directors of the corporation may be provided by it to the extent
authorized by the directors. Such indemnification may include payment by the
corporation of expenses incurred in defending a civil or criminal action or
proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he shall be adjudicated to be not entitled to indemnification under this
section which undertaking may be accepted without reference to the financial
ability of
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such person to make repayment. Any such indemnification may be provided
although the person to be indemnified is no longer an officer, director,
employee or agent of the corporation or of such other organization or no
longer serves with respect to any such employee benefit plan.
Section 67 of Chapter 156B of the MBCL also provides that no
indemnification shall be provided for any person with respect to any matter as
to which he shall have been adjudicated in any proceeding not to have acted in
good faith in the reasonable belief that his action was in the best interest
of the corporation or to the extent that such matter relates to service with
respect to an employee benefit plan, in the best interests of the participants
or beneficiaries of such employee benefit plan. Section 67 of Chapter 156B of
the MBCL also provides that the absence of any express provision for
indemnification shall not limit any right of indemnification existing
independently of such Section 67 of Chapter 156B of the MBCL, and that a
corporation shall have power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or other agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or other agent of another organization or with
respect to any employee benefit plan, against any liability incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability.
Registrants Incorporated or Organized in Nevada
The following registrant is a corporation incorporated in the state of
Nevada: Comfort Care Holdings Co. Section 78.7502 of the Nevada General
Corporation Law (the "NGCL") provides that a corporation may indemnify (i) any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the right
of the corporation, by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with the
action, suit or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful and (ii) any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including amounts paid in settlement and attorneys' fees
actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit if he acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the corporation.
Section 78.7502 provides that indemnification under subsections (i) and
(ii) above is not available to a director or officer whose act or failure to
act constituted a breach of his fiduciary duties as a director or officer and
involved intentional misconduct, fraud or a knowing violation of law. Section
78.7502 also provides that to the extent a director, officer, employee or
agent of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections (i) and
(ii) above, or in defense of any claim, issue or matter therein, the
corporation shall indemnify him against expenses, including attorneys' fee,
actually and reasonably incurred by him in connection with the defense.
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Section 78.751 of the NGCL provides that any discretionary
indemnification pursuant to subsections (i) and (ii) above, unless ordered by
a court or advanced pursuant to subsection (ii), may be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made: (a) by the stockholders; (b) by
the board of directors by majority vote of a quorum consisting of directors
who were not parties to the action, suit or proceeding; (c) if a majority vote
of a quorum consisting of directors who were not parties to the action, suit
or proceeding so orders, by independent legal counsel in a written opinion; or
(d) if a quorum consisting of directors who were not parties to the action,
suit or proceeding cannot be obtained, by independent legal counsel in a
written opinion.
Section 78.751 of the NGCL also provides that the articles of
incorporation, the bylaws or an agreement made by the corporation may provide
that the expenses of officers and directors incurred in defending a civil or
criminal action, suit or proceeding must be paid by the corporation as they
are incurred and in advance of the final disposition of the action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified by the
corporation. Section 78.751 also provides that the indemnification pursuant to
Section 78.7502 and the advancement of expenses authorized in or ordered by a
court pursuant to Section 78.751 does not exclude any other rights to which a
person seeking indemnification or advancement of expenses may be entitled
under the articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either an action in
his official capacity or an action in another capacity while holding his
office, except that indemnification, unless ordered by a court pursuant to
Section 78.7502 or for the advancement of expenses made pursuant to subsection
(ii) above, may not be made to or on behalf of any director or officer if a
final adjudication establishes that his acts or omissions involved intentional
misconduct, fraud or a knowing violation of the law and was material to the
cause of action, and continues for a person who has ceased to be a director,
officer, employee or agent.
Registrants Incorporated or Organized in Ohio
The following registrant is a corporation incorporated in the state of
Ohio: Consolidated HVAC, Inc. Section 1701.13(E)(1) of the Ohio General
Corporation Law (the "OGCL") provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding, other than an action by or in the right of the corporation,
because the person is or was a director or officer, against liability
reasonably incurred by the director or officer in connection with the
proceeding if either: (i) the director or officer acted in good faith and in a
manner the director or officer reasonably believes to be in or not opposed to
the best interests of the corporation or (ii) with respect to any criminal
action or proceeding, the director or officer had no reasonable cause to
believe the director's or officer's conduct was unlawful.
Section 1701.13(E)(2) of the OGCL provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any proceeding, by or in the rights of the corporation to procure a
judgment in its favor, because the person is or was a director or officer
against liability reasonably incurred by the director or officer in connection
with the proceeding if the director or officer acted in good faith and in a
manner the director or officer reasonably believed to be in or not opposed to
the best interests of the corporation, except that a corporation may not
indemnify a director or officer if either: (i) the director or officer has
been adjudged to be liable for negligence or misconduct in the performance of
the director's or officer's duty to the corporation unless and only to the
extent that the court in which the
II-6
proceeding was brought determines that, in view of all the circumstances of
the case, the director or officer is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper or (ii) the only
liability asserted against a director in a proceeding is for the director
voting for or assenting to the following: (x) the payment of a dividend or
distribution, the making of a distribution of assets to shareholders, or the
purchase or redemption of the corporation's own shares in violation of Ohio
law or the corporation's articles of incorporation; (y) a distribution of
assets to shareholders during the winding up of the affairs of the
corporation, or dissolution or otherwise, without the payment of all known
obligations of the corporation or without making adequate provision for their
payment; or (z) the making of a loan, other than in the usual course of
business, to an officer, director or shareholder of the corporation other than
in the case of at the time of the making of the loan, a majority of the
disinterested directors of the corporation voted for the loan and taking into
account the terms and provisions of the loan and other relevant factors,
determined that the making of the loan could reasonably be expected to benefit
the corporation. To the extent that a director or officer has been successful
on the merits or otherwise in defense of the proceeding, the director or
officer must be indemnified against expenses actually and reasonably incurred
by him or her in connection with that proceeding.
Section 1701.13(E)(4) of the OGCL provides that any indemnification of a
director or officer under the previous two paragraphs, unless ordered by a
court, is subject to a determination that the director or officer has met the
applicable standard of conduct. The determination will be made by: (i) a
majority of a quorum of the directors who are not parties to such proceeding,
(ii) if there is not a quorum of such directors, or if a majority vote of such
directors so directs, independent counsel in a written opinion; (iii) by the
shareholders; or (iv) by the court of common pleas or by the court in which
the proceeding was brought.
The OGCL provides that the corporation must pay expenses as they are
incurred by the director or officer in defending the proceeding if the
director or officer agrees to (i) repay the amount if it determined that the
director's or officer's action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to the corporation or
undertaken with reckless disregard for the best interests of the corporation
and (ii) reasonably cooperate with the corporation concerning the proceeding.
A corporation may advance the expenses before the final disposition of a
proceeding if the director or officer undertakes to repay the amount if it is
ultimately determined that the director or officer is not entitled to
indemnification.
The OGCL gives a corporation the power to purchase and maintain insurance
on behalf of any director or officer against any liability asserted against,
and incurred in his or her capacity as a director or officer, whether or not
the corporation would have the power to indemnify the director or officer
against this liability under the OGCL.
Registrants Incorporated or Organized in Texas
The following registrant is a limited partnership organized in the state
of Texas: Vitas Healthcare of Texas, L.P. Section 11.02 of the Texas Revised
Limited Partnership Act ("TRLPA") provides that, if provided in a written
partnership agreement, a limited partnership may indemnify a person who was,
is or is threatened to be made a named defendant or respondent in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative, or investigative, any appeal in such an
action, suit or proceeding, and any inquiry or investigation that could lead
to such an action, suit, or proceeding (a "Proceeding"), because the person,
who, while a general partner of a limited partnership, is or
II-7
was serving at the request of the limited partnership as a partner, director,
officer, venturer, proprietor, trustee, employee, or agent (a
"Representative") of a foreign or domestic limited partnership, corporation,
employee benefit plan, or similar entity (an "Enterprise") or serving a
similar function for an Enterprise; and a Representative of an Enterprise that
is a general partner of the limited partnership (an "Indemnifiable General
Partner"), only if it is determined that the person: (i) acted in good faith;
(ii) reasonably believed: (a) in the case of conduct in the person's official
capacity as an Indemnifiable General Partner of the limited partnership, that
the person's conduct was in the limited partnership's best interests, and (b)
in all other cases, that the person's conduct was at least not opposed to the
limited partnership's best interests; and (iii) in the case of a criminal
Proceeding, had no reasonable cause to believe that the person's conduct was
unlawful. Section 11.03 of the TRLPA provides, however, except to the extent
described below, that a limited partnership may not indemnify an Indemnifiable
General Partner under Section 11.02 thereof in respect of a Proceeding in
which: (i) the person is found liable on the basis that the person improperly
received personal benefit, whether or not the benefit resulted from action
taken in the person's official capacity; or (ii) the person is found to be
liable to the limited partnership or the limited partners. Under Section 11.05
of the TRLPA, an Indemnifiable General Partner may be indemnified under
Section 11.02 thereof against judgments, penalties, including excise and
similar taxes, fines, settlements, and reasonable expenses (including court
costs and attorneys' fees) in connection with the Proceeding, except that if
the person is found liable to the limited partnership or the limited partners
or is found liable on the basis that personal benefit was improperly received
by the person, the indemnification (i) is limited to reasonable expenses
actually incurred by the person in connection with the Proceeding; and (ii)
shall not be made in respect of any Proceeding in which the person shall have
been found liable for willful or intentional misconduct in the performance of
the person's duty to the limited partnership or the limited partners.
Section 11.08 of the TRLPA provides that a limited partnership shall
indemnify an Indemnifiable General Partner against reasonable expenses
(including court costs and attorneys' fees) incurred by the person in
connection with a Proceeding in which the person is a named defendant or
respondent because the person is or was an Indemnifiable General Partner if
the person has been wholly successful, on the merits or otherwise, in the
defense of the Proceeding. Section 11.09 of the TRLPA provides that if in such
a suit for indemnification, a court of competent jurisdiction determines that
the Indemnifiable General Partner is entitled to indemnification thereunder,
the court shall order indemnification and shall award to the Indemnifiable
General Partner the expenses incurred in securing the indemnification.
In addition, Section 11.10 of the TRLPA provides that if, upon
application of an Indemnifiable General Partner, a court of competent
jurisdiction determines that the Indemnifiable General Partner is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not the person has met the requirements set forth
above or has been found liable in the circumstances described above, the court
may order the indemnification that the court determines is proper and
equitable; but if the person is found liable to the limited partnership or the
limited partners or is found liable on the basis that personal benefit was
improperly received by the person, whether or not the benefit resulted from an
action taken in the person's official capacity, the indemnification shall be
limited to reasonable expenses.
Section 11.11 of the TRLPA provides that reasonable expenses incurred by
an Indemnifiable General Partner who was or is threatened to be made a named
defendant or respondent in a Proceeding may be paid or reimbursed by the
corporation in advance of the final disposition of the Proceeding, without
further authorization or any other determinations as required under Article
11, after the limited partnership receives a written affirmation by the
II-8
person of the person's good faith belief that the person has met the standard
of conduct necessary for indemnification under Article 11 and a written
undertaking by or on the person's behalf, to repay the amount paid or
reimbursed if it is ultimately determined that indemnification of the person
against expenses incurred by him in connection with the Proceeding is
prohibited under Section 11.05 of the TRLPA.
Section 11.13 of the TRLPA provides that a provision for a limited
partnership to indemnify or advance expenses to an Indemnifiable General
Partner who was, is, or is threatened to be made a named defendant or
respondent in a Proceeding, whether contained in the limited partnership
agreement, a resolution of the general partners or the limited partners, an
agreement, or otherwise, except an insurance policy in accordance with Section
11.18 of the TRLPA, is valid only to the extent that it is consistent with
Article 11 or the applicable reimbursement provisions of the Texas Uniform
Partnership Act, or the Texas Revised Partnership Act, and its subsequent
amendments as limited by the limited partnership agreement, if such a
limitation exists.
Section 11.15 of the TRLPA provides that a limited partnership may
indemnify and advance expenses to a limited partner, employee, or agent of the
limited partnership to the same extent that it may indemnify and advance
expenses to an Indemnifiable General Partner under Article 11. Section 11.16
of the TRLPA provides that a limited partnership may indemnify and advance
expenses to persons who were not limited partners, employees, or agents of the
limited partnership but who are or were serving at the request of the limited
partnership as a Representative of another Enterprise to the same extent that
it may indemnify and advance expenses to an Indemnifiable General Partner
under Article 11. Under Section 11.17 of the TRLPA, a limited partnership may
further indemnify and advance expenses to a limited partner, employee, agent,
or person identified in Section 11.16 thereof and who is not an Indemnifiable
General Partner, to the extent, consistent with law, provided by its
partnership agreement, by general or specific action of its general partner,
by contract, or as permitted or required by common law.
Section 11.18 of the TRLPA provides further that, except as otherwise
provided by Article 11, and unless otherwise provided by the partnership
agreement, a limited partnership may purchase and maintain insurance or
another arrangement on behalf of any person who is or was a general partner,
limited partner, employee, or agent of the limited partnership, or who is or
was serving at the request of the limited partnership as a Representative of
another Enterprise, against any liability asserted against the person and
incurred by the person in such a capacity or arising out of the person's
status in that capacity, regardless of whether the limited partnership would
have the power to indemnify the person against that liability under Article
11.
Section 7.10 of the agreement of limited partnership of Vitas Healthcare
of Texas, L.P. provides that, if approved by the owners of more than 50% of
the percentage interests of the limited partners, the partnership shall
indemnify and hold harmless the general partner and any director, officer,
employee, agent or representative of the general partner, against all
liabilities, losses and damages incurred by any of them by reason of any act
performed or omitted to be performed in the name of or on behalf of the
partnership, or in connection with the partnership's business, including
attorneys' fees and any amounts expended in the settlement of any claims or
liabilities, losses or damages, to the fullest extent permitted by the TRLPA.
Section 7.10 also provides that, if approved by the owners of more than 50% of
the percentage interests of the limited partners, the partnership shall
indemnify and hold harmless any limited partner, employee, agent or
representative of the partnership, any person who is or was serving at the
request of the partnership acting through the general partner as a director,
officer, partner, trustee, employee, agent or representative of another
corporation, partnership, joint venture, trust or other
II-9
enterprise, but in no event shall such indemnification exceed the
indemnification permitted by the TRLPA.
Section 7.11 of the agreement of limited partnership of Vitas Healthcare
of Texas, L.P. provides that neither the general partner nor its directors,
officers, employees, agents or representatives shall be liable to the
partnership or any limited partner for errors in judgment or for any acts or
omissions that do not constitute negligence, fraud or willful or wanton
misconduct.
The foregoing statements are subject to the detailed provisions of the
applicable state laws and articles of incorporation and bylaws of the
registrants and should be read in conjunction therewith for a more
understanding of their effect on the registrants.
The registrants maintain liability insurance covering their directors and
officers.
II-10
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
3.1 Certificate of Incorporation of Chemed Form S-3 4.1
Corporation Reg. No. 33-44177
3.2 Certificate of Amendment to Form S-8 E-1
Certificate of Incorporation Reg. No. 333-109104
9/25/03
3.3 Certificate of Amendment to Form S-4 3.3
Certificate of Incorporation Reg. No.
333-115668
5/20/04
3.4 By-Laws of Chemed Corporation Form 10-K 2
3/28/89
4.4 Indenture, dated as of February 24, Form 10-K 4.4
2004, between Roto-Rooter, Inc. 3/12/04
and LaSalle Bank National Association
4.5 Indenture, dated as of February 24, 2004, Form 10-K 4.5
among Roto-Rooter, Inc., the subsidiary guarantors 3/12/04
listed on Schedule I thereto and Wells
Fargo Bank, N.A.
4.6 Form of Floating Rate Senior Secured Note
due 2010 (included in Exhibit 4.5)
5 Opinion of Naomi C. Dallob, Esq. *
10.1 Agreement and Plan of Merger among Form 8-K 1
Diversey U.S. Holdings, Inc., D.C. Acquisition Inc., 3/11/91
Chemed Corporation and DuBois Chemicals, Inc.,
dated as of February 25, 1991
10.2 Stock Purchase Agreement between Omnicare, Inc. Form 10-K 5
and Chemed Corporation dated as of August 5, 1992 3/25/93
10.3 Agreement and Plan of Merger among National Form 8-K 1
Sanitary Supply Company, Unisource Worldwide, Inc. 10/13/97
and TFBD, Inc.
II-11
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
10.4 Stock Purchase Agreement dated as of May 8, 2002 by Form 8-K 2.1
and between PCI Holding Corp. and Chemed 10/11/02
Corporation
10.5 Amendment No. 1 to Stock Purchase Agreement dated Form 8-K 2.2.
as of October 11, 2002 by and among PCI Holding Corp., 10/11/02
PCI-A Holding Corp. and Chemed Corporation
10.6 Senior Subordinated Promissory Note dated as of Form 8-K 2.3
October 11, 2002 by and among PCI Holding Corp. 10/11/02
and Chemed Corporation
10.7 Common Stock Purchase Warrant dated as of Form 8-K 2.4
October 11, 2002 by and between PCI Holding Corp. 10/11/02
and Chemed Corporation
10.8 1986 Stock Incentive Plan, as amended Form 10-K 9
through May 20, 1991 3/27/92, **
10.9 1986 Stock Incentive Plan, as amended Form 10-K 10
through May 20, 1991 3/27/92, **
10.10 1993 Stock Incentive Plan Form 10-K 10.8
3/29/94, **
10.11 1995 Stock Incentive Plan Form 10-K 10.14
3/28/96, **
10.12 1997 Stock Incentive Plan Form 10-K 10.10
3/27/98, **
10.13 1999 Stock Incentive Plan Form 10-K 10.11
3/29/00, **
10.14 1999 Long-Term Employee Incentive Plan as amended Form 10-K 10.16
through May 20, 2002 3/28/03, **
10.15 2002 Stock Incentive Plan Form 10-K 10.17
3/28/03, **
10.16 2002 Executive Long-Term Incentive Plan Form 10-K 10.18
3/28/03, **
10.17 Employment Contracts with Executives Form 10-K 10.12
3/28/89, **
II-12
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
10.18 Amendment to Employment Agreements with Kevin J. Form 10-K 10.20
McNamara, Thomas C. Hutton and Sandra E. Laney 3/28/03, **
dated August 7, 2002
10.19 Amendment to Employment Agreements with Timothy S. Form 10-K 10.21
O'Toole and Arthur V. Tucker dated August 7, 2002 3/28/03, **
10.20 Amendment to Employment Agreement with Spencer S. Lee Form 10-K 10.20
dated May 19, 2003 3/12/04, **
10.21 Amendment to Employment Agreement with Executives dated Form 10-K 10.16
January 1, 2002 3/28/02, **
10.22 Consulting Agreement between Timothy S. O'Toole and Form 10-K 10.26
PCI Holding Corp. effective October 11, 2002 3/28/03, **
10.23 Amendment No. 16 to Employment Agreement with Sandra Form 10-K 10.27
E. Laney dated March 1, 2003 3/28/03, **
10.24 Excess Benefits Plan, as restated and amended, effective Form 10-K 10.24
June 1, 2001 3/12/03, **
10.25 Amendment No. 1 to Excess Benefits Plan, effective Form 10-K 10.27
July 1, 2002 3/12/03, **
10.26 Amendment No. 2 to Excess Benefits Plan, effective Form 10-K 10.26
November 7, 2003 3/12/03, **
10.27 Non-Employee Directors' Deferred Compensation Plan Form 10-K 10.10
3/24/88, **
10.28 Chemed/Roto-Rooter Savings & Retirement Plan, effective Form 10-K 10.25
January 1, 1999 3/25/99, **
10.29 First Amendment to Chemed/Roto-Rooter Savings & Form 10-K 10.22
Retirement Plan effective September 6, 2000 3/28/02, **
10.30 Second Amendment to Chemed/Roto-Rooter Savings Form 10-K 10.23
& Retirement Plan effective January 1, 2001 3/28/02, **
II-13
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
10.31 Third Amendment to Chemed/Roto-Rooter Savings & Form 10-K 10.24
Retirement Plan effective December 12, 2001 3/28/02, **
10.32 Stock Purchase Plan by and among Banta Corporation, Form 8-K 10.21
Chemed Corporation and OCR Holding Company 10/13/97 **
10.33 Directors Emeriti Plan Form 10-Q 10.11
5/12/88, **
10.34 Second Amendment to Split Dollar Agreement with Form 10-K 10.26
Executives 3/29/00, **
10.35 Split Dollar Agreement with Sandra E. Laney Form 10-K 10.27
3/25/99, **
10.37 Split Dollar Agreement with Edward L. Hutton Form 10-K 10.16
3/28/96, **
10.38 Split Dollar Agreement with Spencer S. Lee Form 10-K 10.33
3/29/00, **
10.39 Promissory Note under the Executive Stock Purchase Form 10-K 10.40
Plan with Edward L. Hutton 3/28/01, **
10.40 Promissory Note under the Executive Stock Purchase Form 10-K 10.41
Plan with Kevin J. McNamara 3/28/01, **
10.41 Schedule to Promissory Note under the Executive Stock Form 10-K 10.41
Purchase Plan with Edward L. Hutton 3/12/04, **
10.42 Schedule to Promissory Note under the Executive Stock Form 10-K 10.42
Purchase Plan with Kevin J. McNamara 3/12/04, **
10.43 Roto-Rooter Deferred Compensation Plan No. 1, Form 10-K 10.37
as amended January 1, 1998 3/28/01, **
10.44 Roto-Rooter Deferred Compensation Plan No. 2 Form 10-K 10.38
3/28/01, **
10.45 Agreement and Plan of Merger, dated as of Form 8-K 99.2
December 18, 2003, among Roto-Rooter, Inc., 12/19/03
Marlin Merger Corp. and Vitas Healthcare Corporation
II-14
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
10.46 Credit Agreement, dated as of February 24, 2004, among Form 10-K 10.46
Roto-Rooter, Inc., the lenders from time to 3/12/04
time parties thereto and Bank One, NA, as
Administrative Agent.
10.47 Pledge and Security Agreement, dated as of February 24, From 10-K 10.47
2004, among Roto-Rooter, Inc., the subsidiaries of 3/12/04
Roto-Rooter, Inc. listed on the signature pages thereto
and Bank One, NA, as Collateral Agent.
10.48 Guaranty Agreement, dated as of February 24, 2004, From 10-K 10.48
among the subsidiaries of Roto-Rooter, Inc. listed on 3/12/04
the signature pages thereto and Bank One, NA, as
Administrative Agent.
10.49 Collateral Sharing Agreement, dated as of February *
24, 2004, among Bank Ine, NA, as Collateral Agent
and Administrative Agent, Wells Fargo Bank,
National Association, as Trustee, and Roto-Rooter, Inc.
12 Computation of Ratios of Earnings to Fixed Charges *
13 2003 Annual Report to Stockholders Form 10-K 13
3/12/04
21 Subsidiaries of Chemed Corporation Form 10-K 21
3/12/04
23.1 Form of Consent of Pricewaterhouse Coopers LLP, ***
Independent Accountants
23.2 Consent of Ernst & Young LLP, Independent Auditors *
23.3 Consent of Counsel (included in Exhibit 5) *
24 Power of Attorney *
25 Statement of Eligibility of Trustee on Form T-1 *
II-15
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
99.1 Form of Letter of Transmittal *
99.2 Form of Notice of Guaranteed Delivery *
99.3 Form of Letter to Clients *
99.4 Form of Letter to Broker, Dealers and Other Nominees *
______________
* Filed herewith.
** Management contract or compensatory plan or arrangement.
*** To be filed by amendment.
ITEM 22. UNDERTAKINGS
Chemed Corporation hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of Chemed
Corporation's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day or receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the provisions described in Item 20 above, or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
II-16
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-17
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cincinnati, State of
Ohio, on May 24, 2004.
CHEMED CORPORATION
By: /s/ Kevin J. McNamara
-------------------------------------
Name: Kevin J. McNamara
Title: President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on May 24, 2004 by the following
persons in the capacities indicated.
SIGNATURE TITLE
/s/ Kevin J. McNamara President, Chief Executive Officer
----------------------------- and Director (principal executive officer)
Kevin J. McNamara
/s/ David P. Williams Vice President and Chief Financial
----------------------------- Officer (principal financial officer)
David P. Williams
/s/ Arthur V. Tucker, Jr. Vice President and Controller (principal
----------------------------- accounting officer)
Arthur V. Tucker, Jr.
*
----------------------------- Director
Edward L. Hutton
----------------------------- Director
Charles H. Erhart, Jr.
*
----------------------------- Director
Joel F. Gemunder
*
----------------------------- Director
Thomas C. Hutton
*
----------------------------- Director
Sandra E. Laney
*
----------------------------- Director
Timothy S. O'Toole
*
----------------------------- Director
Donald E. Saunders
*
----------------------------- Director
George J. Walsh III
*
----------------------------- Director
Frank E. Wood
*By: /s/ Naomi C. Dallob
----------------------------
Naomi C. Dallob
Attorney-in-Fact
II-19
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
CCR OF OHIO INC.
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Kevin J. McNamara Vice Chairman and Director May 7, 2004
---------------------- (principal executive officer)
Kevin J. McNamara
/s/ Arthur V. Tucker Treasurer (principal financial officer May 7, 2004
---------------------- and principal accounting officer)
Arthur V. Tucker
*
---------------------- Director May 24, 2004
Edward L. Hutton
*
---------------------- Director May 24, 2004
Thomas J. Reilly
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-20
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
COMFORT CARE HOLDINGS CO.
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Edward L. Hutton President and Director May 10, 2004
------------------------- (principal executive officer)
Edward L. Hutton
/s/ Mark W. Stephens Assistant Treasurer (principal financial May 7, 2004
------------------------- officer and principal accounting
Mark W. Stephens officer)
*
------------------------- Director May 24, 2004
Kevin J. McNamara
*
------------------------- Director May 24, 2004
Timothy S. O'Toole
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-21
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
COMPLETE PLUMBING SERVICES, INC.
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Rick L. Arquilla
------------------------- President (principal executive officer) May 7, 2004
Rick L. Arquilla
/s/ David P. Williams
------------------------- Treasurer and Director (principal financial May 7, 2004
David P. Williams officer and principal accounting officer)
*
------------------------- Director May 24, 2004
Spencer S. Lee
*By:/s/ Naomi C. Dallob May 24, 2004
-------------------------
Naomi C. Dallob
Attorney-in-Fact
II-22
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
CONSOLIDATED HVAC, INC.
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Rick L. Arquilla President (principal executive officer) May 7, 2004
-------------------------
Rick L. Arquilla
/s/ Mark W. Stephens Assistant Treasurer (principal financial May 7, 2004
------------------------- officer and principal accounting officer)
Mark W. Stephens
*
------------------------- Director May 24, 2004
Kevin J. McNamara
*
------------------------- Director May 24, 2004
Spencer S. Lee
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-23
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
JET RESOURCE, INC.
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Sandra E. Laney President (principal executive officer) May 10, 2004
-------------------------
Sandra E. Laney
/s/ Arthur V. Tucker Treasurer and Director (principal financial May 7, 2004
------------------------- officer and principal accounting officer)
Arthur V. Tucker
*
------------------------- Director May 24, 2004
Stephen Ky Webb
*
------------------------- Director May 24, 2004
Marion M. Williams, Jr.
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-24
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
NUROTOCO OF MASSACHUSETTS, INC.
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Daniel Huntress President (principal executive officer) May 7, 2004
-------------------------
Daniel Huntress
/s/ Mark W. Stephens Assistant Treasurer (principal financial May 7, 2004
------------------------- officer and principal accounting officer)
Mark W. Stephens
*
------------------------- Director May 24, 2004
Rick L. Arquilla
*
------------------------- Director May 24, 2004
Matthew Gullo
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-25
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
NUROTOCO OF NEW JERSEY, INC.
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Rick L. Arquilla President (principal executive officer) May 7, 2004
-------------------------
Rick L. Arquilla
/s/ David P. Williams Treasurer and Director (principal financial May 7, 2004
------------------------- officer and principal accounting officer)
David P. Williams
*
------------------------- Director May 24, 2004
Spencer S. Lee
*
------------------------- Director May 24, 2004
Kevin J. McNamara
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-26
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
R.R. UK, INC.
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Gary C. Burger President (principal executive officer) May 7, 2004
-------------------------
Gary C. Burger
/s/ Mark W. Stephens Assistant Treasurer (principal financial May 7, 2004
------------------------- officer and principal accounting officer)
Mark W. Stephens
*
------------------------- Director May 24, 2004
Spencer S. Lee
*
------------------------- Director May 24, 2004
David P. Williams
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-27
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
ROTO-ROOTER CORPORATION
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Gary C. Burger President (principal executive officer) May 7, 2004
-------------------------
Gary C. Burger
/s/ Charles J. Scavo Vice President and Chief Financial May 7, 2004
------------------------- Officer (principal financial officer
Charles J. Scavo and principal accounting officer)
*
------------------------- Director May 24, 2004
Kevin J. McNamara
*
------------------------- Director May 24, 2004
Spencer S. Lee
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-28
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
ROTO-ROOTER DEVELOPMENT COMPANY
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Gary C. Burger President (principal executive officer) May 7, 2004
-------------------------
Gary C. Burger
/s/ Charles J. Scavo Vice President and Chief Financial May 7, 2004
------------------------- Officer (principal financial officer
Charles J. Scavo and principal accounting officer)
*
------------------------- Director May 24, 2004
Kevin J. McNamara
*
------------------------- Director May 24, 2004
Spencer S. Lee
*
------------------------- Director May 24, 2004
David P. Williams
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-29
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
ROTO-ROOTER MANAGEMENT COMPANY
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Spencer S. Lee Chairman, Chief Executive Officer and May 7, 2004
------------------------- Director (principal executive officer)
Spencer S. Lee
/s/ David P. Williams Sr. Vice President - Finance, Chief May 7, 2004
------------------------- Financial Officer and Director (principal
David P. Williams financial officer and principal
accounting officer)
*
------------------------- Director May 24, 2004
Kevin J. McNamara
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-30
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
ROTO-ROOTER SERVICES COMPANY
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Spencer S. Lee Chairman, Chief Executive Officer and May 7, 2004
------------------------- Director (principal executive officer)
Spencer S. Lee
/s/ David P. Williams Sr. Vice President - Finance, Chief May 7, 2004
------------------------- Financial Officer and Director (principal
David P. Williams financial officer and principal
accounting officer)
*
------------------------- Director May 24, 2004
Edward L. Hutton
*
------------------------- Director May 24, 2004
Kevin J. McNamara
*By:/s/ Naomi C. Dallob
----------------------- May 24, 2004
Naomi C. Dallob
Attorney-in-Fact
II-31
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
RR PLUMBING SERVICES COMPANY
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Keith A. Vadas President (principal executive officer) May 7, 2004
-------------------------
Keith A. Vadas
/s/ Mark W. Stephens Assistant Treasurer (principal financial May 7, 2004
------------------------- officer and principal accounting officer)
Mark W. Stephens
* Director May 24, 2004
-------------------------
Kevin J. McNamara
* Director May 24, 2004
-------------------------
David P. Williams
* Director May 24, 2004
-------------------------
Rick L. Arquilla
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-32
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
SERVICE AMERICA NETWORK, INC.
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ John M. Mount President, Chief Executive Officer and May 7, 2004
------------------------- Director (principal executive officer)
John M. Mount
/s/ Vivian Psinakis Sr. Vice President, Chief Financial May 6, 2004
------------------------- Officer and Treasurer (principal financial
Vivian Psinakis officer and principal accounting officer)
* Director May 24, 2004
-------------------------
Edward L. Hutton
* Director May 24, 2004
-------------------------
Kevin J. McNamara
*By:/s/ Naomi C. Dallob May 24, 2004
-----------------------
Naomi C. Dallob
Attorney-in-Fact
II-33
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
HOSPICE CARE INCORPORATED
HOSPICE, INC.
VITAS HEALTHCARE CORPORATION
VITAS HEALTHCARE CORPORATION OF
CALIFORNIA
VITAS HEALTHCARE CORPORATION OF
CENTRAL FLORIDA
VITAS HEALTHCARE CORPORATION OF
FLORIDA
VITAS HEALTHCARE CORPORATION OF
ILLINOIS
VITAS HEALTHCARE CORPORATION OF
OHIO
VITAS HEALTHCARE CORPORATION OF
PENNSYLVANIA
VITAS HEALTHCARE CORPORATION OF
WISCONSIN
VITAS HME SOLUTIONS, INC.
VITAS HOLDINGS CORPORATION
VITAS HOSPICE SERVICES, L.L.C.
By: /s/ Naomi C. Dallob
---------------------------------
Name: Naomi C. Dallob
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Kevin J. McNamara Chairman (principal executive officer) May 6, 2004
-------------------------
Kevin J. McNamara
/s/ Timothy S. O'Toole President and Chief Executive May 5, 2004
------------------------- Officer
Timothy S. O'Toole
/s/ David A. Wester Director May 5, 2004
-------------------------
David A. Wester
/s/ Robin Johnson Director May 5, 2004
-------------------------
Robin Johnson
II-34
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrants
listed above the signature line below have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on May 24, 2004.
VITAS HEALTHCARE OF TEXAS, L.P.
BY: VITAS HOSPICE SERVICES, L.L.C., its
general partner
By: /s/ Timothy S. O'Toole
--------------------------------------
Name: Timothy S. O'Toole
Title: President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Kevin J. McNamara Chairman (principal executive officer) May 6, 2004
-------------------------
Kevin J. McNamara
/s/ Timothy S. O'Toole President and Chief Executive Officer May 5, 2004
------------------------- (principal financial officer and
Timothy S. O'Toole principal accounting officer)
/s/ David A. Wester Director May 5, 2004
-------------------------
David A. Wester
/s/ Robin Johnson Director May 5, 2004
-------------------------
Robin Johnson
II-35
EXHIBITS
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
3.1 Certificate of Incorporation of Chemed Form S-3 4.1
Corporation Reg. No. 33-44177
3.2 Certificate of Amendment to Form S-8 E-1
Certificate of Incorporation Reg. No. 333-109104
9/25/03
3.3 Certificate of Amendment to Form S-4 3.3
Certificate of Incorporation Reg. No.
333-115668
5/20/04
3.4 By-Laws of Chemed Corporation Form 10-K 2
3/28/89
4.4 Indenture, dated as of February 24, Form 10-K 4.4
2004, between Roto-Rooter, Inc. 3/12/04
and LaSalle Bank National Association
4.5 Indenture, dated as of February 24, 2004, Form 10-K 4.5
among Roto-Rooter, Inc., the subsidiary guarantors 3/12/04
listed on Schedule I thereto and Wells
Fargo Bank, N.A.
4.6 Form of Floating Rate Senior Secured Note
due 2010 (included in Exhibit 4.5)
5 Opinion of Naomi C. Dallob, Esq. *
10.1 Agreement and Plan of Merger among Form 8-K 1
Diversey U.S. Holdings, Inc., D.C. Acquisition Inc., 3/11/91
Chemed Corporation and DuBois Chemicals, Inc.,
dated as of February 25, 1991
10.2 Stock Purchase Agreement between Omnicare, Inc. Form 10-K 5
and Chemed Corporation dated as of August 5, 1992 3/25/93
10.3 Agreement and Plan of Merger among National Form 8-K 1
Sanitary Supply Company, Unisource Worldwide, Inc. 10/13/97
and TFBD, Inc.
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
10.4 Stock Purchase Agreement dated as of May 8, 2002 by Form 8-K 2.1
and between PCI Holding Corp. and Chemed 10/11/02
Corporation
10.5 Amendment No. 1 to Stock Purchase Agreement dated Form 8-K 2.2.
as of October 11, 2002 by and among PCI Holding Corp., 10/11/02
PCI-A Holding Corp. and Chemed Corporation
10.6 Senior Subordinated Promissory Note dated as of Form 8-K 2.3
October 11, 2002 by and among PCI Holding Corp. 10/11/02
and Chemed Corporation
10.7 Common Stock Purchase Warrant dated as of Form 8-K 2.4
October 11, 2002 by and between PCI Holding Corp. 10/11/02
and Chemed Corporation
10.8 1986 Stock Incentive Plan, as amended Form 10-K 9
through May 20, 1991 3/27/92, **
10.9 1986 Stock Incentive Plan, as amended Form 10-K 10
through May 20, 1991 3/27/92, **
10.10 1993 Stock Incentive Plan Form 10-K 10.8
3/29/94, **
10.11 1995 Stock Incentive Plan Form 10-K 10.14
3/28/96, **
10.12 1997 Stock Incentive Plan Form 10-K 10.10
3/27/98, **
10.13 1999 Stock Incentive Plan Form 10-K 10.11
3/29/00, **
10.14 1999 Long-Term Employee Incentive Plan as amended Form 10-K 10.16
through May 20, 2002 3/28/03, **
10.15 2002 Stock Incentive Plan Form 10-K 10.17
3/28/03, **
10.16 2002 Executive Long-Term Incentive Plan Form 10-K 10.18
3/28/03, **
10.17 Employment Contracts with Executives Form 10-K 10.12
3/28/89 **
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
10.18 Amendment to Employment Agreements with Kevin J. Form 10-K 10.20
McNamara, Thomas C. Hutton and Sandra E. Laney 3/28/03, **
dated August 7, 2002
10.19 Amendment to Employment Agreements with Timothy S. Form 10-K 10.21
O'Toole and Arthur V. Tucker dated August 7, 2002 3/28/03, **
10.20 Amendment to Employment Agreement with Spencer S. Lee Form 10-K 10.20
dated May 19, 2003 3/12/04, **
10.21 Amendment to Employment Agreement with Executives dated Form 10-K 10.16
January 1, 2002 3/28/02, **
10.22 Consulting Agreement between Timothy S. O'Toole and Form 10-K 10.26
PCI Holding Corp. effective October 11, 2002 3/28/03, **
10.23 Amendment No. 16 to Employment Agreement with Sandra Form 10-K 10.27
E. Laney dated March 1, 2003 3/28/03, **
10.24 Excess Benefits Plan, as restated and amended, effective Form 10-K 10.24
June 1, 2001 3/12/03, **
10.25 Amendment No. 1 to Excess Benefits Plan, effective Form 10-K 10.27
July 1, 2002 3/12/03, **
10.26 Amendment No. 2 to Excess Benefits Plan, effective Form 10-K 10.26
November 7, 2003 3/12/03, **
10.27 Non-Employee Directors' Deferred Compensation Plan Form 10-K 10.10
3/24/88, **
10.28 Chemed/Roto-Rooter Savings & Retirement Plan, effective Form 10-K 10.25
January 1, 1999 3/25/99, **
10.29 First Amendment to Chemed/Roto-Rooter Savings & Form 10-K 10.22
Retirement Plan effective September 6, 2000 3/28/02, **
10.30 Second Amendment to Chemed/Roto-Rooter Savings Form 10-K 10.23
& Retirement Plan effective January 1, 2001 3/28/02, **
10.31 Third Amendment to Chemed/Roto-Rooter Savings & Form 10-K 10.24
Retirement Plan effective December 12, 2001 3/28/02, **
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
10.32 Stock Purchase Plan by and among Banta Corporation, Form 8-K 10.21
Chemed Corporation and OCR Holding Company 10/13/97 **
10.33 Directors Emeriti Plan Form 10-Q 10.11
5/12/88, **
10.34 Second Amendment to Split Dollar Agreement with Form 10-K 10.26
Executives 3/29/00, **
10.35 Split Dollar Agreement with Sandra E. Laney Form 10-K 10.27
3/25/99, **
10.37 Split Dollar Agreement with Edward L. Hutton Form 10-K 10.16
3/28/96, **
10.38 Split Dollar Agreement with Spencer S. Lee Form 10-K 10.33
3/29/00, **
10.39 Promissory Note under the Executive Stock Purchase Form 10-K 10.40
Plan with Edward L. Hutton 3/28/01, **
10.40 Promissory Note under the Executive Stock Purchase Form 10-K 10.41
Plan with Kevin J. McNamara 3/28/01, **
10.41 Schedule to Promissory Note under the Executive Stock Form 10-K 10.41
Purchase Plan with Edward L. Hutton 3/12/04, **
10.42 Schedule to Promissory Note under the Executive Stock Form 10-K 10.42
Purchase Plan with Kevin J. McNamara 3/12/04, **
10.43 Roto-Rooter Deferred Compensation Plan No. 1, Form 10-K 10.37
as amended January 1, 1998 3/28/01, **
10.44 Roto-Rooter Deferred Compensation Plan No. 2 Form 10-K 10.38
3/28/01, **
10.45 Agreement and Plan of Merger, dated as of Form 8-K 99.2
December 18, 2003, among Roto-Rooter, Inc., 12/19/03
Marlin Merger Corp. and Vitas Healthcare Corporation
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
10.46 Credit Agreement, dated as of February 24, 2004, among Form 10-K 10.46
Roto-Rooter, Inc., the lenders from time to 3/12/04
time parties thereto and Bank One, NA, as
Administrative Agent.
10.47 Pledge and Security Agreement, dated as of February 24, From 10-K 10.47
2004, among Roto-Rooter, Inc., the subsidiaries of 3/12/04
Roto-Rooter, Inc. listed on the signature pages thereto
and Bank One, NA, as Collateral Agent.
10.48 Guaranty Agreement, dated as of February 24, 2004, From 10-K 10.48
among the subsidiaries of Roto-Rooter, Inc. listed on 3/12/04
the signature pages thereto and Bank One, NA, as
Administrative Agent.
10.49 Collateral Sharing Agreement, dated as of February *
24, 2004, among Bank Ine, NA, as Collateral Agent
and Administrative Agent, Wells Fargo Bank,
National Association, as Trustee, and Roto-Rooter, Inc.
12 Computation of Ratios of Earnings to Fixed Charges *
13 2003 Annual Report to Stockholders Form 10-K 13
3/12/04
21 Subsidiaries of Chemed Corporation Form 10-K 21
3/12/04
23.1 Form of Consent of Pricewaterhouse Coopers LLP, ***
Independent Accountants
23.2 Consent of Ernst & Young LLP, Independent Auditors *
23.3 Consent of Counsel (included in Exhibit 5) *
24 Power of Attorney *
25 Statement of Eligibility of Trustee on Form T-1 *
Page Number
or
Incorporation by Reference
------------------------------------------
Exhibit File No. and Previous
Number Exhibit Description Filing Date Exhibit No.
- -------- -------------------------------------------------------------------- ------------------ ------------------
99.1 Form of Letter of Transmittal *
99.2 Form of Notice of Guaranteed Delivery *
99.3 Form of Letter to Clients *
99.4 Form of Letter to Broker, Dealers and Other Nominees *
______________
* Filed herewith.
** Management contract or compensatory plan or arrangement.
*** To be filed by amendment.
EXHIBIT 5
[Chemed Letterhead]
May 24, 2004
Ladies and Gentlemen:
I have acted as counsel to Chemed Corporation, a Delaware corporation
(the "Company"), in connection with the filing of the Registration Statement
on Form S-4 (the "Registration Statement") pursuant to the Securities Act of
1933, as amended (the "Securities Act"), with the Securities and Exchange
Commission (the "Commission"), relating to the issuance by the Company of
$110,000,000 aggregate principal amount of the Company's Floating Rate Senior
Secured Notes due 2010 (the "New Notes") and related guarantees (the
"Guarantees") registered under the Securities Act in exchange for a like
principal amount of the Company's outstanding unregistered Floating Rate
Senior Secured Notes due 2010 (the "Original Notes"). The New Notes are
issuable under an Indenture dated as of February 24, 2004 (the "Indenture"),
among the Company, the Company's subsidiaries listed on Schedule I thereto
(the "Guarantors") and Wells Fargo Bank, N.A., as trustee (the "Trustee").
In that connection, I have reviewed and examined the Indenture and such
certificates, documents, corporate records and other instruments as in my
judgment is necessary or appropriate to enable me to render the opinions
expressed below. I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals and the conformity
to original documents of all documents submitted to me as copies.
Based on the foregoing, I am of the opinion as follows:
1. The Indenture has been duly authorized, executed and delivered by the
Company and each of the Guarantors. The Indenture constitutes a legal, valid
and binding obligation of the Company and each Guarantor, enforceable against
the Company and each Guarantor in accordance with its terms (subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting creditors' rights generally from time
to time in effect and to general principles of equity, including concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether such enforceability is considered in a proceeding in equity or at
law).
2. The Company has duly authorized the execution of the New Notes. The
New Notes, when executed, issued and authenticated in accordance with the
provisions of the Indenture and delivered in exchange for the Original Notes,
will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled to
the benefits of the Indenture (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws
affecting creditors' rights generally from time to time in effect and subject,
as to enforceability, to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law).
3. The guarantee to be endorsed on the New Notes by each Guarantor has
been duly authorized by such Guarantor. When the New Notes have been executed,
issued and
authenticated in accordance with the provisions of the Indenture and delivered
in exchange for the Original Notes, the guarantees to be endorsed on the New
Notes will constitute legal, valid and binding obligations of the Guarantors
thereof, enforceable against each such Guarantor in accordance with their
terms (subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws affecting creditors' rights
generally from time to time in effect and subject, as to enforceability, to
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law).
This opinion is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated. I hereby
consent to the filing of this opinion with the Commission as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ NAOMI C. DALLOB
Naomi C. Dallob
Vice President and Secretary
EXHIBIT 10.49
EXECUTION COPY
COLLATERAL SHARING AGREEMENT
COLLATERAL SHARING AGREEMENT dated as of February 24, 2004, among
BANK ONE, NA, having its principal office in Chicago, Illinois ("Bank One"),
as Collateral Agent, Wells Fargo Bank, National Association, as Trustee for
the benefit of the holders of the Notes (such term and each other capitalized
term used herein having the meanings set forth in Section 1 below), Bank One,
as Administrative Agent for the benefit of the lenders under the Existing
Credit Agreement, and ROTO-ROOTER, INC.
W I T N E S S E T H:
WHEREAS, the Company, certain lenders, and the Administrative Agent,
are parties to the Credit Agreement dated as of February 24, 2004 (as amended,
restated, supplemented or otherwise modified from time to time, the "Existing
Credit Agreement");
WHEREAS, the Company, the Trustee and the Guarantors have entered
into the Indenture dated as of February 24, 2004 (as amended, supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
Company intends to issue the Notes; and
WHEREAS, pursuant to the Security Documents, the Company and each of
the other Grantors have granted a security interest in certain of their
respective assets to the Collateral Agent for the equal and ratable benefit of
the Secured Parties.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and for other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS AND TERMS GENERALLY.
1.1. Definitions. As used in this Agreement, the following terms
have the meanings specified below:
"Administrative Agent" means Bank One, NA, in its capacity as the
administrative agent under the Existing Credit Agreement.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Person
specified. Notwithstanding the foregoing, no individual shall be deemed to be
an Affiliate of a Person solely by reason of his or her being an officer or
director of such Person.
"Aggregate Credit Agreement Exposure" means at any time, without
duplication, the aggregate amount of Credit Agreement Obligations outstanding
plus the amount of all commitments of the Senior Lenders under the Senior Loan
Documents to extend credit (whether by making loans or providing or
participating in letters of credit or otherwise), but excluding any letters of
credit or obligations owing in respect of letters of credit to the extent the
same are secured in accordance with the Senior Credit Agreement by property
that does not secure the Notes.
"Applicable Secured Documents" means (a) in respect of any
Noteholder Claims, the Noteholder Documents and (b) in respect of any Senior
Lender Claims, the relevant Senior Loan Documents.
"Bankruptcy Law" means Title 11 of the United States Code and any
similar Federal, state or foreign law for the relief of debtors.
"Business Day" means any day other than a Saturday, a Sunday or a
day that is a legal holiday under the laws of the State of New York or the
State of Illinois or on which banking institutions in the State of New York or
the State of Illinois are required or authorized by law or other governmental
action to close.
"Collateral" means all assets or property of the Grantors, now owned
or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Collateral Account" has the meaning set forth in Section 4.1.
"Collateral Agent" means Bank One, NA, in its capacity as collateral
agent under the Security Documents and this Agreement.
"Collateral Agent Fees" means all fees, costs and expenses of, and
other amounts owing to, the Collateral Agent of the types referred to in
Section 2.4.
"Collateral Estate" has the meaning set forth in Section 2.1(b).
"Company" means Roto-Rooter, Inc., a Delaware corporation.
"Credit Agreement" means the Existing Credit Agreement together with
any guarantees, collateral documents, instruments and agreements executed in
connection therewith, in each case as amended, restated, supplemented, waived,
replaced (whether or not upon termination, and whether with the original
lenders or otherwise), refinanced, restructured, or otherwise modified from
time to time (except to the extent that any such amendment, restatement,
supplement, waiver, replacement, refinancing, restructuring or other
modification thereto would be prohibited by the terms of the Indenture, unless
otherwise agreed to by the Noteholders of a least a majority in aggregate
principal amount of Notes at the time outstanding).
"Credit Agreement Obligations" means (i) all Indebtedness
outstanding under the Senior Credit Agreement, (ii) all other obligations (not
constituting Indebtedness) of the Company or any Grantor under the Senior
Credit Agreement, and (iii) all other obligations of the Company or any
Grantor in connection with Hedging Obligations owing to any Senior Lender
under the Senior Credit Agreement or any affiliate of such Senior Lender,
unless the Company and such Senior Lender mutually agree that such Hedging
Obligation does not constitute a "Secured Obligation" under and as defined in
the Senior Credit Agreement.
"Credit Facilities" means one or more debt facilities (including the
Credit Agreement) or commercial paper facilities providing for revolving
credit loans, term loans,
2
receivables financing (including through the sale of receivables to lenders or
to special purpose entities formed to borrow from lenders against such
receivables) or letters of credit, or any debt securities or other form of
debt financing (including convertible or exchangeable debt instruments), in
each case, as amended, supplemented, modified, extended, renewed, restated or
refunded in whole or in part from time to time.
"Discharge of Senior Credit Agreement Claims" means, except to the
extent otherwise provided in Section 5.2, payment in full in cash of (a) the
principal of and interest and premium, if any, on all Indebtedness outstanding
under the Senior Credit Agreement constituting Senior Lender Claims or, with
respect to letters of credit outstanding thereunder, delivery of cash
collateral or backstop letters of credit in respect thereof in compliance with
the Senior Credit Agreement, in each case after or concurrently with
termination of all commitments to extend credit thereunder and (b) any other
Senior Lender Claims that are due and payable or otherwise accrued and owing
under the Senior Credit Agreement at or prior to the time such principal,
interest and premium, if any, are paid.
"Discharge of Credit Agreement Obligations" means payment in full in
cash of (a) the principal of and interest and premium, if any, on all
Indebtedness outstanding under the Credit Agreement or, with respect to
Hedging Obligations that are Credit Agreement Obligations, or with respect to
letters of credit outstanding thereunder, delivery of cash collateral or
backstop letters of credit in respect thereof in compliance with the Senior
Credit Agreement, in each case after or concurrently with termination of all
commitments to extend credit thereunder and (b) payment in full of any other
Credit Agreement Obligations that are due and payable or otherwise accrued and
owing at or prior to the time such principal, interest and premium, if any,
are paid.
"Distribution Date" means each date fixed by the Collateral Agent in
its sole discretion for a distribution pursuant to the applicable provisions
of this Agreement of any funds held in the Collateral Account.
"Existing Credit Agreement" has the meaning set forth in the
recitals hereto.
"First-Lien Credit Facilities" means (a) the Credit Facilities
provided pursuant to the Credit Agreement and (b) any other Credit Facility
(other than the Notes), that, in the case of both clauses (a) and (b), is
secured by the Collateral pursuant to a Permitted Lien (as defined in the
Indenture) described in clause (7), (12) or (13) of the definition thereof and
(except for the Credit Facilities provided pursuant to the Existing Credit
Agreement) is designated by the Company as a "First-Lien Credit Facility" for
purposes of this Agreement.
"Future First-Lien Credit Facility" means any First-Lien Credit
Facility (other than the Existing Credit Agreement), provided that the
Required Lenders under any Senior Credit Agreement then in effect have
consented to the designation of such Credit Facility as a "First-Lien Credit
Facility".
"Future Other First-Lien Obligations" means all Obligations of the
Company or any other Grantor, to a creditor under a First-Lien Credit
Facility, in respect of Hedging Obligations that are designated by the Company
as "Credit Agreement Obligations" for purposes
3
of the Indenture; provided that the Required Lenders under any Senior Credit
Agreement then in effect have consented to such designation.
"Grantors" means each of the Company and the Subsidiaries that has
executed and delivered a Security Document.
"Guarantors" means each of the Grantors other than the Company.
"Guaranty" means any guaranty entered into by any Subsidiary of the
Company in favor of any Secured Party guaranteeing the repayment of the
Secured Obligations.
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Person in respect of (a) any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate
collar agreement, interest rate hedge agreement or other similar agreement or
arrangement or (b) any foreign exchange contract, currency swap agreements or
other similar agreement or arrangement.
"Indebtedness" means and includes all obligations that constitute
"Indebtedness" within the meaning of the Indenture or the Senior Credit
Agreement.
"Indenture" has the meaning set forth in the recitals hereto.
"Insolvency or Liquidation Proceeding" means (a) any voluntary or
involuntary case or proceeding under any Bankruptcy Law with respect to any
Grantor, (b) any other voluntary or involuntary insolvency, reorganization or
bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding with respect to any Grantor
or with respect to any of their respective assets, (c) any liquidation,
dissolution, reorganization or winding up of any Grantor whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy or (d) any
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of any Grantor.
"Instructing Group" means (i) until the Discharge of Credit
Agreement Obligations has occurred and so long as no Insolvency or Liquidation
Proceeding is continuing, the Required Lenders, and (ii) after the Discharge
of Credit Agreement Obligations has occurred or during the continuance of any
Insolvency or Liquidation Proceeding, the Majority Secured Parties.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Majority Secured Parties" means, at any time, the Secured Party or
Secured Parties, acting through its (or their) respective Representative,
holding more than 50% of the aggregate amount of the Secured Obligations then
outstanding. In calculating the aggregate
4
amount of the Secured Obligations then outstanding represented by each
Representative, (a) the amount of Indebtedness outstanding shall be that
reflected on the applicable debtor's balance sheet, as determined in
accordance with GAAP, (b) the amount outstanding in respect of a letter of
credit shall be the face amount of such letter of credit less the amount of
any property that secures the repayment of such letter of credit (and not the
Notes) in accordance with the Senior Loan Documents, and (c) the amount
outstanding in respect of Hedging Obligations shall be the amount which would
be due and payable to a Secured Party holding such Hedging Obligations if such
Hedging Obligations were then terminated.
"Noteholder Claims" means all Obligations in respect of the Notes
and the guarantees of the Notes or arising under the Noteholder Documents or
any of them. Noteholder Claims shall include all interest accrued or accruing
(or which would, absent the commencement of any Insolvency or Liquidation
Proceeding, accrue) after the commencement of any Insolvency or Liquidation
Proceeding in accordance with and at the rate specified in the relevant
Noteholder Document whether or not the claim for such interest is allowed as a
claim in such Insolvency or Liquidation Proceeding. To the extent any payment
with respect to the Noteholder Claims (whether by or on behalf of any Grantor,
as proceeds of security, enforcement of any right of set-off or otherwise) is
declared to be fraudulent or preferential in any respect, set aside or
required to be paid to a debtor in possession, trustee, receiver or similar
Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
"Noteholder Documents" means (a) the Indenture and the Notes and (b)
any other related document or instrument executed and delivered pursuant to or
in connection with any Noteholder Document described in clause (a) above
evidencing or governing any Obligations thereunder. Notwithstanding the
foregoing, for purposes of this Agreement, "Noteholder Documents" shall be
deemed to exclude the Security Documents.
"Noteholders" means the Persons holding Noteholder Claims.
"Notes" means (a) the Floating Rate Senior Secured Notes due 2010 to
be issued by the Company, (b) the exchange notes issued in exchange therefor
as contemplated by the Registration Rights Agreement dated as of February 24,
2004, among the Company, the Guarantors and the "Purchasers" (as defined
therein) and (c) any additional notes issued under the Indenture by the
Company, to the extent permitted by the Indenture and the Senior Credit
Agreement.
"Obligations" means any and all obligations with respect to the
payment of (a) any principal of or interest (including interest accruing on or
after the commencement of any Insolvency or Liquidation Proceeding, whether or
not a claim for post-filing interest is allowed in such proceeding) or premium
on any Indebtedness, including any unpaid reimbursement obligation in respect
of any letter of credit, (b) any fees, indemnification obligations, expense
reimbursement obligations or other liabilities payable under the documentation
governing any Indebtedness, (c) any obligation to post cash collateral or
other property in respect of letters of credit and any other obligations or
(d) any Hedging Obligations.
"Other Secured Parties" means the Secured Parties holding Secured
Obligations
5
other than Secured Obligations under the Senior Credit Agreement.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America);
(b) investments in commercial paper maturing not more than one year
after the date of acquisition thereof and having, at such date of acquisition,
one of the two highest credit ratings obtainable from Standard & Poor's Rating
Service or from Moody's Investor Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing not more than one year after the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts and overnight bank deposits issued or offered by, any commercial bank
organized under the laws of the United States of America or any state thereof
or any foreign country recognized by the United States of America that has a
combined capital and surplus and undivided profits of not less than
$250,000,000 (or the foreign-currency equivalent thereof);
(d) fully collateralized repurchase agreements with a term of not
more than thirty (30) days for securities described in clause (a) above or
clause (e) or (f) below and entered into with a financial institution
satisfying the criteria described in clause (c) above;
(e) securities issued by any state of the United States of America
or any political subdivision of any such state or any public instrumentality
thereof having maturities of not more than six months from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest credit ratings obtainable from Standard & Poor's Rating Service or
from Moody's Investor Service, Inc.;
(f) securities issued by any foreign government or any political
subdivision of any foreign government or any public instrumentality thereof
having maturities of not more than six months from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest credit
ratings obtainable from Standard & Poor's Rating Service or from Moody's
Investor Service, Inc.; and
(g) investments in funds that invest solely in one or more types of
securities described in clauses (a), (e) and (f) above.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, entity or
other party, including any government and any political subdivision, agency or
instrumentality thereof.
"Pledged Collateral" means (a) the "Pledged Securities" under, and
as defined in, the Pledge and Security Agreement (as defined in the Existing
Credit Agreement), and (b) any other Collateral in the possession of the
Collateral Agent (or its agents or bailees), to the extent that possession
thereof is necessary to perfect a Lien thereon under the Uniform Commercial
Code.
6
"Recovery" has the meaning set forth in Section 6.2 hereof.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Representatives" means (a) in respect of any of the Senior Lender
Claims under the Existing Credit Agreement, the Administrative Agent, (b) in
respect of any other Senior Lender Claims, the agent or trustee in respect
thereof (or, if there is no agent or trustee, the holder or holders thereof)
and (c) in respect of any of the Noteholder Claims, the Trustee.
"Required Lenders" means, with respect to any amendment,
modification, termination, waiver, consent, direction or other action, those
Senior Credit Agreement Lenders the approval of which is required pursuant to
the Senior Credit Agreement or the Senior Loan Documents related thereto to
approve such amendment, modification, termination, waiver, consent, direction
or other action.
"Required Noteholders" means, with respect to any amendment,
modification, termination, waiver, consent, direction or other action, those
Noteholders, if any, the approval of which is required pursuant to the
Indenture to approve such amendment, modification, termination, waiver,
consent, direction or other action.
"Secured Obligations" means, without duplication, (a) the Senior
Lender Claims and (b) the Noteholder Claims.
"Secured Parties" means (a) the Senior Lenders, (b) the
Administrative Agent, (c) the Collateral Agent, and (d) the Trustee, for the
benefit of the holders from time to time of the Noteholder Claims.
"Security Documents" means the Collateral Documents (as defined in
the Existing Credit Agreement and the Indenture) and any other agreement,
document or instrument pursuant to which a Lien is granted securing any Senior
Lender Claims or Noteholder Claims or under which rights or remedies with
respect to such Liens are governed.
"Senior Credit Agreement" means the Existing Credit Agreement;
provided that if at any time a Discharge of Credit Agreement Obligations
occurs with respect to the Existing Credit Agreement (without giving effect to
Section 5.2), then, to the extent provided in Section 5.2, the term "Senior
Credit Agreement" means the Future First-Lien Credit Facility designated by
the Company as the "Senior Credit Agreement" in accordance with such Section.
"Senior Credit Agreement Lender" means any Senior Lender that holds
any Senior Lender Claim under the Senior Credit Agreement.
"Senior Lender Claims" means (a) all Indebtedness outstanding under
one or more of the Senior Loan Documents plus all unfunded commitments to
extend credit (including commitments to issue letters of credit) thereunder,
including any Future First-Lien Credit
7
Facilities, the Indebtedness under each of which (i) is permitted by the
Indenture and (ii) is secured by the Collateral pursuant to a Permitted Lien
(as defined in the Indenture) described in clause (7), (12) or (13) of the
definition thereof, (b) all other Obligations of the Company or any Grantor
under the Senior Loan Documents or any such other Future First-Lien Credit
Facility, including all Senior Lender Hedging Obligations and (c) all Future
Other First-Lien Obligations. Senior Lender Claims shall include all interest
accrued or accruing (or which would, absent the commencement of any Insolvency
or Liquidation Proceeding, accrue) after the commencement of any Insolvency or
Liquidation Proceeding in accordance with and at the rate specified in the
relevant Senior Loan Document whether or not the claim for such interest is
allowed as a claim in such Insolvency or Liquidation Proceeding. To the extent
any payment with respect to the Senior Lender Claims (whether by or on behalf
of any Grantor, as proceeds of security, enforcement of any right of set-off
or otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid to a debtor in possession, trustee, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred. Notwithstanding anything to the contrary contained in the
first sentence of this definition, any Obligation under the Senior Loan
Documents or any Future First-Lien Credit Facility (including any Hedging
Obligations) shall constitute a "Senior Lender Claim" if the Collateral Agent
or the relevant Senior Lender or Senior Lenders shall have received a written
representation from the Company in or in connection with the execution of such
Senior Loan Documents evidencing such Obligation that such Obligation
constitutes a "Credit Agreement Obligation" under and as defined in the
Indenture (whether or not such Obligation is at any time determined not to
have been permitted to be incurred under the Indenture).
"Senior Lender Hedging Obligations" means any Hedging Obligations
secured by any Collateral under the Security Documents.
"Senior Lenders" means the Persons holding Senior Lender Claims.
"Senior Loan Documents" means the Senior Credit Agreement, and each
of the other agreements, documents and instruments (including each agreement,
document or instrument providing for or evidencing a Senior Lender Hedging
Obligation) providing for or evidencing any other Obligation under the Credit
Agreement or any Future First-Lien Credit Facility or any Future Other
First-Lien Obligations, and any other related document or instrument executed
or delivered pursuant to any Senior Loan Document at any time or otherwise
evidencing any Senior Lender Claims. Notwithstanding the foregoing, for
purposes of this Agreement, "Senior Loan Documents" shall be deemed to exclude
the Security Documents.
"Subsidiary" means any "Subsidiary" of the Company, as defined in
the Indenture or the Senior Credit Agreement.
"Trustee" means Wells Fargo Bank, National Association, in its
capacity as trustee under the Indenture.
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code
as from time to time in effect in the State of New York.
8
1.2. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". The word
"will" shall be construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, (b) any reference
herein to any Person shall be construed to include such Person's successors
and assigns, (c) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Sections shall be construed to refer to Sections of this Agreement and (e) the
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
SECTION 2. THE COLLATERAL AGENT.
2.1. General Authority of the Collateral Agent over the Collateral.
(a) By acceptance of the benefits of this Agreement and the Security
Documents, each Secured Party shall be deemed irrevocably (i) to consent to
the appointment of the Collateral Agent as its agent hereunder and under the
Security Documents, (ii) to confirm that the Collateral Agent shall have the
authority to act as the exclusive agent of such Secured Party for executing
and delivering any amendments to the Security Documents and enforcement of any
provisions of this Agreement and the Security Documents against any Grantor or
the exercise of remedies hereunder or thereunder, in accordance with and to
the extent consistent with this Agreement and the Security Documents, (iii) to
agree, except as provided in this Agreement and the Security Documents, that
such Secured Party shall not take any action (other than through the
Collateral Agent) to enforce any provisions of this Agreement or any Security
Document against any Grantor or to exercise any remedy hereunder or thereunder
and (iv) to agree to be bound by the terms of this Agreement and the Security
Documents. Each Representative of the Other Secured Parties, for itself and on
behalf of such Other Secured Parties, hereby irrevocably constitutes and
appoints the Collateral Agent and any officer or agent of the Collateral
Agent, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Representative and Other Secured Parties, as applicable, or in
the Collateral Agent's own name, from time to time in the Collateral Agent's
discretion, for the purpose of carrying out the terms of this Section 2.1, to
take any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Section 2.1, including any termination statements, endorsements or other
instruments of transfer or release, in accordance with this Agreement and the
Security Documents.
(b) The Collateral Agent hereby agrees that it holds and will hold
all of its right, title and interest in, to and under the Security Documents
and the Collateral granted to the Collateral Agent thereunder whether now
existing or hereafter arising (all such right, title and interest being
hereinafter referred to as the "Collateral Estate") under and subject to the
9
conditions set forth in this Agreement and the Security Documents; and the
Collateral Agent further agrees that it will hold such Collateral Estate in
trust for the ratable benefit of the Secured Parties, for the enforcement of
the payment of all Secured Obligations secured by the Collateral (subject to
the limitations and priorities set forth herein and in the Security Documents)
and as security for the performance of and compliance with the covenants and
conditions of this Agreement and each of the Security Documents.
2.2. Information as to Secured Parties and Representatives. The
Company shall deliver to the Collateral Agent from time to time after the date
hereof upon request of the Collateral Agent a list setting forth as of a date
not more than thirty (30) days prior to the date of such delivery, (a) the
aggregate unpaid principal amount of the Senior Lender Claims outstanding, (b)
the aggregate unpaid principal amount of the Noteholder Claims outstanding,
and (c) to the extent known to the Company, the respective names and addresses
of each Secured Party. In addition, the Company will promptly notify the
Collateral Agent of each change in the identity of any Representative.
Promptly following the date hereof, the Trustee shall deliver to the
Collateral Agent the names of the officers of the Trustee authorized to give
directions hereunder on behalf of the Trustee. Each Representative of any
Other Secured Parties agrees to notify the Collateral Agent of any change of
its officers authorized to give directions hereunder on behalf of such
Representative prior to the date of any such change. If the Collateral Agent
does not receive the names of the officers of the Representative of any Other
Secured Parties authorized to give directions hereunder on behalf of such
Representative, the Collateral Agent may rely on any Person purporting to be
authorized to give directions hereunder on behalf of such Representative. If
the Collateral Agent is not informed of changes of the officers of the
applicable Representative of the Other Secured Parties authorized to give
directions hereunder on behalf of such Representative, the Collateral Agent
may rely on the information previously provided to the Collateral Agent.
2.3. The Collateral Agent.
(a) The bank serving as the Collateral Agent hereunder shall have
the same rights and powers in its capacity (if any) as a Senior Lender as any
other Senior Lender and may exercise the same as though it were not the
Collateral Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with the Company or
any Grantor or other Affiliate thereof as if it were not the Collateral Agent
hereunder subject to the terms of this Agreement.
(b) The Collateral Agent shall not have any duties or obligations
except those expressly set forth in this Agreement and the Security Documents.
The Collateral Agent shall make available for inspection by any Secured Party,
upon request of the Representative of such Secured Party, each certificate or
other paper furnished to the Collateral Agent by any Grantor under or in
respect of this Agreement, any Security Document or any portion of the
Collateral Estate. The Company hereby consents to the disclosure of such
requested documents by the Collateral Agent to the Secured Parties. Without
limiting the generality of the foregoing, (a) the Collateral Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
default under the Credit Agreement or the Indenture has occurred and is
continuing, (b) the Collateral Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the
10
Security Documents that the Collateral Agent is required to exercise in
writing by the Instructing Group pursuant to this Agreement, and (c) except as
expressly set forth in this Agreement and the Security Documents, the
Collateral Agent shall not have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Company or any
Grantor that is communicated to or obtained by the bank serving as Collateral
Agent or any of its Affiliates in any capacity. The Collateral Agent shall not
be liable for any action taken or not taken by it with the consent or at the
request of the Instructing Group pursuant to this Agreement absent the
Collateral Agent's bad faith, gross negligence, willful misconduct or breach
of this Agreement. The Collateral Agent shall be deemed not to have knowledge
of any default or event of default under the Senior Loan Documents or the
Noteholder Documents, unless and until written notice thereof is given to the
Collateral Agent by the Company or any Representative, as applicable, and the
Collateral Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with any Senior Loan Document or Noteholder Document, (ii) the
contents of any certificate, report or other document delivered thereunder or
in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Senior
Loan Documents or Noteholder Documents, (iv) the validity, enforceability,
effectiveness or genuineness of any Senior Loan Documents or Noteholder
Documents or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in the Existing Credit Agreement or in
any other Senior Loan Document or Noteholder Document, other than to confirm
receipt of items expressly required to be delivered to the Collateral Agent
under the Senior Loan Documents or the Noteholder Documents.
(c) Whenever in the performance of its duties under this Agreement,
the Collateral Agent shall deem it necessary or desirable that a matter be
proved or established with respect to any Grantor or any other Person in
connection with the taking, suffering or omitting of any action hereunder by
the Collateral Agent, such matter may be conclusively deemed to be proved or
established by a certificate purporting to be executed by an officer of such
Person. The Collateral Agent shall be entitled to rely upon, and shall not
incur any liability with respect to any action taken, suffered or omitted in
reliance upon any such certificate, or any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Collateral
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Collateral Agent may consult with legal
counsel (who may be counsel for the Company), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts and in accordance with the terms of this Agreement.
(d) The Collateral Agent may perform any and all its duties and
exercise its rights and powers under this Agreement and the Security Documents
by or through any one or more sub-agents appointed by the Collateral Agent.
The Collateral Agent and any such sub-agent may perform any and all its duties
and exercise its rights and powers through their respective Related Parties.
The exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of the Collateral Agent and any such
sub-agent.
11
(e) Subject to the appointment and acceptance of a successor
Collateral Agent as provided in this paragraph, the Collateral Agent may
resign at any time by notifying the Representative in respect of the Senior
Credit Agreement, the Trustee, the Representative of any Other Secured Party
and the Company, or may be removed at any time with or without cause by
written notice received by the Collateral Agent from the Instructing Group.
Upon any such resignation or removal and so long as the Discharge of Credit
Agreement Obligations has not occurred, the Required Lenders shall have the
right, in consultation with the Company, to appoint a successor, and if no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Collateral Agent gives notice of its resignation or removal, then the retiring
Collateral Agent may, on behalf of the Secured Parties, appoint a successor
Collateral Agent which shall be a bank with an office in New York, New York,
or an Affiliate of any such bank (unless otherwise agreed by the Company and
the Required Lenders). Upon any such resignation or removal of the Collateral
Agent after the Discharge of Credit Agreement Obligations has occurred, the
Majority Secured Parties shall have the right, in consultation with the
Company, to appoint a successor, and if no successor shall have been so
appointed and shall have accepted such appointment within fifteen (15) days
after the retiring Collateral Agent gives notice of its resignation or
removal, then the Trustee shall be appointed the successor Collateral Agent.
If the Trustee shall not have accepted such appointment, the Collateral Agent,
the Company or the Majority Secured Parties may apply to any court of
competent jurisdiction to appoint a successor Collateral Agent to act until
such time, if any, as a successor shall have been appointed and shall have
accepted such appointment as above provided.
(f) Upon its appointment as Collateral Agent hereunder, a successor
Collateral Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and obligations
hereunder. Any successor Collateral Agent shall execute and deliver an
appropriate supplement or amendment to this Agreement and other necessary
amendments or supplements to the Security Documents to effect such
appointment. Upon any replacement of the retiring Collateral Agent, the
retiring Collateral Agent shall have assigned to a successor Collateral Agent
all of the liens upon and security interests in all Collateral under the
Security Documents, and all right, title and interest of the retiring
Collateral Agent under all Security Documents, without recourse to the
retiring Collateral Agent or any Secured Party and at the expense of the
Company. In addition, the retiring Collateral Agent shall execute such
assignments and amendments of UCC financing statements and perform such other
acts as are necessary or appropriate to maintain the perfection of the
security interests in and liens on the Collateral. The fees payable by the
Company to a successor Collateral Agent shall be the same as those payable to
its predecessor unless otherwise agreed between the Company and such
successor. After the Collateral Agent's resignation hereunder, the provisions
of this Section 2.3 and Section 2.4 shall continue in effect for the benefit
of such retiring Collateral Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Collateral Agent.
2.4. Collateral Agent's Fees; Indemnification.
(a) Each Grantor jointly and severally agrees to pay upon demand to
the Collateral Agent the amount of any and all reasonable out-of-pocket
expenses, including the
12
reasonable fees, disbursements and other charges of its counsel and of any
experts or agents, which the Collateral Agent may incur in connection with
this Agreement.
(b) Without limitation of its indemnification obligations under the
Security Documents, the Senior Loan Documents or the Noteholder Documents,
each Grantor jointly and severally agrees to indemnify the Collateral Agent
and its Related Parties against, and hold each of them harmless from, (i) any
and all losses, claims, damages, liabilities and related out-of-pocket
expenses, including reasonable fees, disbursements and other charges of
counsel, incurred by or asserted against any of them arising out of, in any
way connected with, or as a result of, the execution, delivery or performance
of this Agreement or any claim, litigation, investigation or proceeding
relating hereto or to the Collateral, whether or not such Person is a party
thereto; provided that such indemnity shall not, as to the Collateral Agent
and its respective Related Parties, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Person and
(ii) any and all present or future claims or liability for any recording,
stamp, documentary, excise, transfer, sales, property or similar taxes,
charges or levies incurred in connection with this Agreement.
(c) Any such amounts payable as provided hereunder shall be
additional Secured Obligations secured by the Security Documents. The
provisions of this Section 2.4 shall remain operative and in full force and
effect regardless of the termination of this Agreement, any Security Document,
any Senior Loan Document or any Noteholder Document, the consummation of the
transactions contemplated hereby, the repayment of any of the Secured
Obligations, the invalidity or unenforceability of any term or provision of
this Agreement, any Security Document, any Senior Loan Document or any
Noteholder Document, or any investigation made by or on behalf of the
Collateral Agent or any other Secured Party. All amounts due under this
Section 2.4 shall be payable on written demand therefor and shall bear
interest at the Floating Rate (as defined in the Existing Credit Agreement).
(d) Notwithstanding anything to the contrary in this Agreement, as
security for the payment of the Collateral Agent Fees, the Collateral Agent
(i) is hereby granted a lien upon all Collateral and (ii) shall have the right
to use and apply any of the funds held by the Collateral Agent in the
Collateral Account to cover any unpaid Collateral Agent Fees in accordance
with Section 4.4 hereof.
SECTION 3. ENFORCEMENT; DETERMINATIONS RELATING TO COLLATERAL.
3.1. Exercise of Remedies.
(a) So long as the Discharge of Credit Agreement Obligations has not
occurred, and no Insolvency or Liquidation Proceeding commenced by or against
the Company or any other Grantor is continuing, (i) the Other Secured Parties
will not exercise or seek to exercise any rights or remedies with respect to
any Collateral, institute any action or proceeding with respect to such rights
or remedies (including any action of foreclosure), contest, protest or object
to (A) any foreclosure proceeding or action brought by the Collateral Agent
or, if the Discharge of Senior Credit Agreement Claims has not occurred, any
Senior Credit Agreement Lender, (B) the exercise of any right under any
lockbox agreement, landlord waiver or bailee's letter or similar
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agreement or arrangement to which any Other Secured Party is a party, or (C)
any other exercise by any such party of any rights and remedies relating to
the Collateral under the Security Documents or otherwise, or object to the
forbearance by the Collateral Agent or, if the Discharge of Senior Credit
Agreement Claims has not occurred, the Senior Credit Agreement Lenders, from
bringing or pursuing any foreclosure proceeding or action or any other
exercise of any rights or remedies relating to the Collateral, (ii) the
Collateral Agent shall have the exclusive right to enforce rights, exercise
remedies and make determinations regarding the release, disposition, or
restrictions with respect to the Collateral in accordance with the terms of
this Agreement and the Security Documents, without any consultation with or
the consent of any Other Secured Party, and (iii) the Instructing Group shall
have the exclusive right to direct the Collateral Agent's exercise of any and
all such rights, remedies and determinations (it being understood that the
foregoing shall not be construed to prevent the Collateral Agent from taking
actions permitted to be taken by it in the absence of receipt of any direction
from the Instructing Group); provided that the Representative of any Other
Secured Party may take any action (which is not adverse to the rights of the
Collateral Agent to exercise, or the Instructing Group to direct the exercise
of, remedies in respect of the Collateral) in order to preserve or protect its
Lien on the Collateral. In exercising rights and remedies with respect to the
Collateral, the Collateral Agent may (and shall upon the direction of the
Instructing Group) enforce the provisions of the Security Documents and
exercise remedies thereunder, all in such order and in such manner as it (or,
if the Instructing Group shall have directed, they) may determine in the
exercise of its (or, if the Instructing Group shall have directed, their) sole
discretion. Such exercise and enforcement shall include the rights of an agent
appointed by them to sell or otherwise dispose of Collateral upon foreclosure,
to incur expenses in connection with such sale or disposition, and to exercise
all the rights and remedies of a secured lender under the Uniform Commercial
Code of any applicable jurisdiction and of a secured creditor under Bankruptcy
Laws of any applicable jurisdiction.
(b) In the event that any Insolvency or Liquidation Proceeding has
been commenced by or against the Company or any other Grantor and is
continuing, (i) the Secured Parties will not exercise or seek to exercise any
rights or remedies with respect to any Collateral, institute any action or
proceeding with respect to such rights or remedies (including any action of
foreclosure), contest, protest or object to (A) any foreclosure proceeding or
action brought by the Collateral Agent, (B) the exercise of any right under
any lockbox agreement, landlord waiver or bailee's letter or similar agreement
or arrangement to which any Secured Party is a party, or (C) any other
exercise by any such party of any rights and remedies relating to the
Collateral under the Security Documents or otherwise, or object to the
forbearance by the Collateral Agent, from bringing or pursuing any foreclosure
proceeding or action or any other exercise of any rights or remedies relating
to the Collateral, (ii) the Collateral Agent shall have the exclusive right to
enforce rights, exercise remedies and make determinations regarding the
release, disposition, or restrictions with respect to the Collateral in
accordance with the terms of this Agreement and the Security Documents,
without any consultation with or the consent of any Secured Party, and (iii)
the Instructing Group shall have the exclusive right to direct the Collateral
Agent's exercise of any and all such rights, remedies and determinations (it
being understood that the foregoing shall not be construed to prevent the
Collateral Agent from taking actions permitted to be taken by it in the
absence of receipt of any direction from the Instructing Group); provided that
(A) the Representative of any Secured Party may file a claim or statement of
interest with respect to any Noteholder Claims or Senior Lender Claims with
respect to which it is a Representative, and (B)
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the Representative of any Secured Party may take any action (which is not
adverse to the rights of the Collateral Agent to exercise, or the Instructing
Group to direct the exercise of, remedies in respect of the Collateral) in
order to preserve or protect its Lien on the Collateral. In exercising rights
and remedies with respect to the Collateral, the Collateral Agent may (and
shall upon the direction of the Instructing Group) enforce the provisions of
the Security Documents and exercise remedies thereunder, all in such order and
in such manner as it (or, if the Instructing Group shall have directed, they)
may determine in the exercise of its (or, if the Instructing Group shall have
directed, their) sole discretion. Such exercise and enforcement shall include
the rights of an agent appointed by them to sell or otherwise dispose of
Collateral upon foreclosure, to incur expenses in connection with such sale or
disposition, and to exercise all the rights and remedies of a secured lender
under the Uniform Commercial Code of any applicable jurisdiction and of a
secured creditor under Bankruptcy Laws of any applicable jurisdiction.
3.2. Determinations relating to Collateral; Releases of Collateral.
(a) Subject to Sections 3.2(b), 5.2 and 5.3, so long as the
Discharge of Credit Agreement Obligations has not occurred, in the event (i)
the Collateral Agent shall receive any written request from any Grantor under
any Security Document for consent or approval with respect to any matter or
thing relating to any Security Document, any Collateral or any Grantor's
obligations with respect thereto or (ii) there shall be due to or from the
Collateral Agent under the provisions of any Security Document any material
performance or the delivery of any material instrument or (iii) the Collateral
Agent shall become aware of any nonperformance by any Grantor of any covenant
or any breach of any representation or warranty set forth in any Security
Document, then, in each such event, the Collateral Agent shall advise the
Administrative Agent and, after the Discharge of Credit Agreement Obligations
has occurred, the Representatives of the Other Secured Parties, of the matter
or thing as to which consent has been requested or the performance or
instrument required to be delivered or the nonperformance or breach of which
the Collateral Agent has become aware. Subject to Sections 3.2(b), 5.2 and
5.3, the Instructing Group shall have the exclusive authority to direct the
Collateral Agent's response to any of the events or circumstances contemplated
in clauses (i), (ii) and (iii) above.
(b) If in connection with:
(i) the exercise of the Collateral Agent's remedies in respect
of the Collateral provided for in Section 3.1, including any sale,
lease, exchange, transfer or other disposition of any such
Collateral;
(ii) any sale, lease, exchange, transfer or other disposition
of any Collateral; or
(iii) any other request by any Grantor that any Collateral be
released from the Liens thereon granted under any Security Document;
the Collateral Agent releases any Collateral from the Liens thereon granted
under any of the Security Documents, then such Liens shall be released with
respect to such Collateral and such release shall be binding upon all Secured
Parties, and the Collateral Agent shall not have any liability to any Secured
Party on account of such reliance; provided that, in the case of any
15
release made in connection with clause (ii) or (iii) above, such release shall
be permitted or not prohibited by the terms of the Senior Credit Agreement,
including by virtue of the consent of the Required Lenders, and the Indenture,
including by virtue of the consent of the Required Noteholders (and the
Collateral Agent shall be fully protected if it shall receive a certificate
signed by an officer of the Company to such effect). It is understood that the
foregoing proviso shall not apply to releases of Collateral expressly
contemplated and permitted by any Security Document to be effective without
the necessity of any consent, and the Collateral Agent may confirm any such
release at the request of any Grantor without liability to any Secured Party.
3.3. Cooperation. Subject to the proviso to the first sentence of
Section 3.1(a) above each Representative of any of the Other Secured Parties
agrees (on behalf of itself and such Other Secured Parties) that, unless and
until the Discharge of Senior Credit Agreement Claims has occurred and so long
as no Insolvency or Liquidation Proceeding is continuing, it will not
commence, or join with any Person (other than the Senior Credit Agreement
Lenders and the Collateral Agent upon the request thereof) in commencing, any
enforcement, collection, execution, levy or foreclosure action or proceeding
with respect to any Lien under any of the Security Documents or otherwise.
Subject to the proviso to the first sentence of Section 3.1(b) above, each
Representative of any Secured Party agrees (on behalf of itself and such
Secured Parties) that, during the continuance of any Insolvency or Liquidation
Proceeding, it will not commence, or join with any Person (other than the
Collateral Agent and the Instructing Group upon the request thereof) in
commencing any enforcement, collection, execution, levy or foreclosure action
or proceeding with respect to any Lien under any of the Security Documents or
otherwise.
3.4. Exercise of Powers. All of the powers, remedies and rights of
the Collateral Agent as set forth in this Agreement may be exercised by the
Collateral Agent in respect of any Security Document as though set forth in
full therein and all of the powers, remedies and rights of the Collateral
Agent as set forth in any Security Document may be exercised from time to time
as herein and therein provided.
3.5. Lien Priorities. The parties hereto expressly agree that the
security interests and liens granted to the Collateral Agent shall secure the
Obligations on a pari passu basis for the benefit of the Secured Parties and
that, notwithstanding the relative priority or the time of grant, creation,
attachment or perfection under applicable law of any security interests and
liens, if any, of any of the Collateral Agent or any Secured Party upon or in
any of the Collateral to secure any Obligations, whether such security
interests and liens are now existing or hereafter acquired or arising and
whether such security interests and liens are in or upon now existing or
hereafter arising Collateral, such security interests and liens shall be first
and prior security interests and liens in favor of the Collateral Agent to
secure the Obligations on a pari passu basis for the benefit of the Collateral
Agent and the Secured Parties.
3.6. No Other Security. Neither the Administrative Agent nor any
other Secured Party shall take or receive a security interest in or lien upon
any of the property or assets of the Company or any of its Subsidiaries as
security of the Secured Obligations other than pursuant to this Agreement and
the Security Documents unless all of the Secured Parties are granted a
security interest in, or lien upon, such property or assets, pursuant to
documents in form and substance satisfactory to the Administrative Agent and
the Trustee to secure the Secured
16
Obligations pro rata as provided herein. Neither the Administrative Agent nor
any other Secured Party shall take or receive any guaranty for the benefit of
any Secured Obligation other than the Guaranties, unless the payment of all of
the Secured Obligations owing to all the Secured Parties are substantially
contemporaneously, by the same or separate instrument, guaranteed (or, if such
guaranty guarantees only a portion of the Secured Obligations owing to such
Secured Party, such Secured Party will not accept such guarantee unless such
guarantor simultaneously guarantees the same proportion of Secured Obligations
owing to the other Secured Parties). Notwithstanding the foregoing, amounts
deposited into the Special Letter of Credit Cash Collateral Account defined in
Section 4.4(c) shall only be applied to satisfy LC Obligations owing under and
as defined in the Senior Credit Agreement until such time as all letters of
credit giving rise to such LC Obligations expire or are terminated and all
amounts owing as a result of draws under such letters of credit have been
satisfied.
SECTION 4. Collateral Account; Distributions.
4.1. The Collateral Account. At such time as the Collateral Agent
deems appropriate, the Collateral Agent shall establish and, at all times
thereafter until this Agreement shall have terminated, there shall be
maintained with the Collateral Agent an account which shall be entitled the
"Roto-Rooter Collateral Account" (the "Collateral Account"). All moneys which
are received by the Collateral Agent or any agent or nominee of the Collateral
Agent in respect of the Collateral upon the exercise of the remedies in
accordance with the terms of this Agreement or any Security Document or from
any Secured Party as required under Section 4.7 shall be deposited in the
Collateral Account and held by the Collateral Agent as part of the Collateral
Estate and applied and disbursed in accordance with the terms of this
Agreement. The Collateral Agent shall maintain such sub-accounts and records
with respect to the Collateral Account as will permit the segregation and
allocation of proceeds of Collateral in accordance with Section 4.4.
4.2. Control of Collateral Account. All right, title and interest in
and to the Collateral Account, and funds on deposit in the Collateral Account,
shall constitute part of the Collateral Estate. The Collateral Account shall
be subject to the exclusive dominion and control of the Collateral Agent.
4.3. Investment of Funds Deposited in Collateral Account. The
Collateral Agent may, at the request of the Company, invest and reinvest
moneys on deposit in the Collateral Account at any time in Permitted
Investments; provided that the Collateral Agent, in its sole discretion, may
(a) restrict such investments and reinvestments to Permitted Investments that
have a shorter duration and higher credit quality than other Permitted
Investments and (b) decline to invest or reinvest any amount that it expects
to distribute from the Collateral Account within one Business Day. All such
investments and the interest and income received thereon and the net proceeds
realized on the sale or redemption thereof shall be held in the Collateral
Account as part of the Collateral Estate. The Collateral Agent shall not be
responsible for any diminution in funds resulting from such investments or any
liquidation prior to maturity.
4.4. Application of Moneys.
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(a) The Collateral Agent shall have the right at any time to apply
moneys held by it in the Collateral Account to the payment of due and unpaid
Collateral Agent Fees.
(b) All remaining moneys held by the Collateral Agent in the
Collateral Account received by the Collateral Agent with respect to the
Collateral shall, to the extent available for distribution (it being
understood that the Collateral Agent may liquidate investments prior to
maturity in order to make a distribution pursuant to this Section 4.4), be
distributed (subject to the provisions of Sections 4.5 and 4.6) by the
Collateral Agent on each Distribution Date in the following order of priority:
FIRST: to the Collateral Agent for any unpaid Collateral Agent
Fees and then to any Secured Party which has theretofore advanced or
paid any Collateral Agent Fees constituting administrative expenses
allowable under Section 503(b) of Title 11 of the United States
Code, an amount equal to the amount thereof so advanced or paid by
such Secured Party and for which such Secured Party has not been
reimbursed prior to such Distribution Date, and, if such moneys
shall be insufficient to pay such amounts in full, then ratably
(without priority of any one over any other) to such Secured Parties
in proportion to the amounts of such Collateral Agent Fees advanced
by the respective Secured Parties and remaining unpaid on such
Distribution Date;
SECOND: to any Secured Party which has theretofore advanced or
paid any Collateral Agent Fees other than such administrative
expenses, an amount equal to the amount thereof so advanced or paid
by such Secured Party and for which such Secured Party has not been
reimbursed prior to such Distribution Date, and, if such moneys
shall be insufficient to pay such amounts in full, then ratably
(without priority of any one over any other) to such Secured Parties
in proportion to the amounts of such Collateral Agent Fees advanced
by the respective Secured Parties and remaining unpaid on such
Distribution Date;
THIRD: to the Secured Parties that hold Secured Obligations, in
an amount equal to all Secured Obligations then due and payable to
them (including, without limitation, amounts in respect of letter of
credit exposure), and, if such moneys shall be insufficient to pay
such amounts in full, then ratably (without priority of any one over
any other) to such Secured Parties in proportion to the unpaid
amounts thereof on such Distribution Date; and
FOURTH: any surplus then remaining shall be paid to the
Grantors or their successors or assigns or to whomsoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
18
(c) Any distribution pursuant to clause THIRD of subsection (b)
above with respect to the undrawn amount of any outstanding letter of credit
shall be paid to the Collateral Agent to be held in an account (the "Special
Letter of Credit Cash Collateral Account") as collateral for the Senior Credit
Agreement Lenders and disposed of as provided in this subsection (c). As of
the date hereof, the Facility LC Collateral Account (as defined in the
Existing Credit Agreement) shall be the Special Letter of Credit Cash
Collateral Account referred to herein. On each date after which a payment is
made to a beneficiary pursuant to a draw on a letter of credit, the Collateral
Agent shall distribute to the Administrative Agent from the amounts held
pursuant to this subsection (c) for application to the payment of the
reimbursement obligation due to the Senior Credit Agreement Lenders with
respect to such draw an amount equal to the product of (1) the total amount
then held in the Special Letter of Credit Cash Collateral Account pursuant to
this subsection (c), and (2) a fraction, the numerator of which is the amount
of such draw and the denominator of which is the aggregate undrawn amount of
all outstanding letters of credit immediately prior to such draw. On each date
after which a reduction in the undrawn amount of any outstanding letter of
credit occurs other than on account of a payment made to a beneficiary
pursuant to a draw on such letter of credit, the Collateral Agent shall
distribute to the Administrative Agent from the amounts held pursuant to this
subsection (c) an amount equal to the product of (1) the total amount then
held in the Special Letter of Credit Cash Collateral Account pursuant to this
subsection (c) and (2) a fraction, the numerator of which is the amount of
such reduction and the denominator of which is the aggregate undrawn amount of
all outstanding letters of credit immediately prior to such reduction, which
amount shall be distributed as provided in clause THIRD of subsection (b)
above. At such time as no letters of credit are outstanding, any remaining
amount held in the Special Letter of Credit Cash Collateral Account pursuant
to this subsection (c), after the distribution therefrom as provided above,
shall be distributed as provided in subsection (b) above.
(d) The term "unpaid" as used in Section 4.4(b) refers:
(i) in the absence of an Insolvency or Liquidation Proceeding
with respect to the relevant Grantor or Grantors, to all amounts of
the relevant Senior Lender Claims and Noteholder Claims (other than
contingent indemnification and other contingent obligations
outstanding as of a Distribution Date (and for the purpose of this
provision, the amount of the Senior Lender Claims then outstanding
shall include the undrawn face amount of, and any unreimbursed
drawings under, any letter of credit except to the extent cash
collateralized or otherwise secured by property not securing the
Notes in accordance with the terms of the Senior Loan Documents),
and
(ii) during the pendency of an Insolvency or Liquidation
Proceeding with respect to the relevant Grantor(s), to all amounts
allowed by the bankruptcy court in respect of the relevant Senior
Lender Claims and Noteholder Claims as a basis for distribution
(including estimated amounts, if any, allowed in respect of
contingent claims),
to the extent that prior distributions have not been made in respect thereof.
(e) Subject to Section 4.5, the Collateral Agent shall make all
payments and distributions under this Section 4.4 to the respective
Representatives of the Secured Parties, as
19
applicable. Each such Representative shall be responsible for insuring that
amounts distributed to it are distributed to the relevant Secured Parties in
the order of priority set forth herein.
4.5. Application of Moneys Distributable to Representatives. If at
any time any moneys collected or received by the Collateral Agent pursuant to
this Agreement are distributable pursuant to Section 4.4 to any Secured Party,
the Collateral Agent may distribute such moneys to the Representative of such
Secured Party (and shall not be responsible for the distribution of such
moneys by such Representative); provided that if any Representative shall
notify the Collateral Agent in writing that no provision is made under the
Applicable Secured Documents for the application by such Representative of
such moneys (whether because the relevant Noteholder Claims or Senior Lender
Claims have not become due and payable or otherwise) and that the Applicable
Secured Documents do not effectively provide for the receipt and the holding
by such Representative of such moneys pending the application thereof, then
the Collateral Agent, after receipt of such notification, may, at the request
of the Company, invest such amounts in Permitted Investments, and shall hold
all such amounts so distributable and all such investments and the net
proceeds thereof solely as security for the relevant Noteholder Claims or
Senior Lender Claims and for no other purpose until such time as such
Representative shall request in writing the delivery thereof by the Collateral
Agent for application pursuant to the Applicable Secured Documents; provided,
further, that the Collateral Agent, in its sole discretion, may (a) restrict
such investments to Permitted Investments that have a shorter duration and
higher credit quality than other Permitted Investments and (b) decline to
invest any amount that it expects to distribute within one Business Day.
Notwithstanding the foregoing, if, at any time, all the relevant Noteholder
Claims or Senior Lender Claims in respect of which any moneys and investments
(and proceeds thereof) are held by the Collateral Agent pursuant to this
Section 4.5 cease to be outstanding for any reason, then such moneys and any
moneys that constitute proceeds of such investments will be applied by the
Collateral Agent in accordance with Section 4.4(b). The Collateral Agent shall
not be responsible for any diminution in funds resulting from investments made
at the direction of the Company or from holding such moneys uninvested.
4.6. Collateral Agent's Calculations. In making the determinations
and allocations required by Section 4.4, the Collateral Agent may conclusively
rely upon, and shall have no liability to any of the Secured Parties for
actions taken in reliance upon, information supplied by any Secured Party (or
its Representative) as to the amounts of unpaid principal and interest and
other amounts outstanding with respect to any Senior Lender Claims or the
Noteholder Claims absent manifest error; provided that nothing in this
sentence shall prevent any Grantor from contesting any amounts claimed by any
Secured Party in any information so supplied. All distributions made by the
Collateral Agent pursuant to Section 4.4 shall be (subject to any decree of
any court of competent jurisdiction) final (absent manifest error), and the
Collateral Agent shall have no duty to inquire as to the application by any
Representative of any amounts distributed to it for distribution to any
Secured Parties.
4.7. Payments Over. Any payments, Collateral or proceeds thereof
(including, without limitation, any payment by any Guarantor under any
Guaranty or pursuant to any set-off or any cash held in the Special Letter of
Credit Cash Collateral Account; provided, however, that such cash held in the
Special Letter of Credit Cash Collateral Account shall be subject to the terms
of Section 4.4 and the requirement that such cash be applied first in
satisfaction of
20
reimbursement obligations owing in respect of letters of credit and then in
accordance with Section 4.4(b)) received by any Secured Party (or its
Representative) (i) with respect to any Obligation upon the occurrence and
during the continuance of any Event of Default under the Senior Loan Documents
or the Noteholder Documents, (ii) in connection with the exercise of any right
or remedy relating to the Collateral or (iii) in contravention of this
Agreement shall be segregated and held in trust and forthwith paid over to the
Collateral Agent in the same form as received, with any necessary endorsements
or as a court of competent jurisdiction may otherwise direct, to be deposited
in the Collateral Account and held by the Collateral Agent as part of the
Collateral Estate and applied and disbursed in accordance with the terms of
this Agreement. The Collateral Agent is hereby authorized to make any such
endorsements as agent for any Secured Party (or its Representative). This
authorization is coupled with an interest and is irrevocable.
SECTION 5. OTHER AGREEMENTS.
5.1. Insurance. Unless and until the Discharge of Credit Agreement
Obligations has occurred, the Collateral Agent and the Required Lenders shall
have the sole and exclusive right, subject to the rights of the Grantors under
the Credit Agreement and the Security Documents, to adjust settlement for any
insurance policy covering the Collateral in the event of any loss thereunder
and to approve any award granted in any condemnation or similar proceeding
affecting the Collateral. All proceeds of any such policy and any such award
if in respect to the Collateral shall be paid to the Collateral Agent for the
benefit of the Secured Parties to the extent required under the Credit
Agreement, the Security Documents and the Noteholder Documents and thereafter
to the owner of the subject property or as a court of competent jurisdiction
may otherwise direct. If any Secured Party (or its Representative) shall, at
any time, receive any proceeds of any such insurance policy or any such award
in contravention of this Agreement, it shall pay such proceeds over to the
Collateral Agent in accordance with the terms of Section 4.7.
5.2. When Discharge of Senior Credit Agreement Claims Deemed to Not
Have Occurred. If at any time after the Discharge of Senior Credit Agreement
Claims has occurred the Company designates any Future First-Lien Credit
Facility to be the "Senior Credit Agreement" hereunder, then such Discharge of
Senior Credit Agreement Claims shall automatically be deemed not to have
occurred for all purposes of this Agreement (other than with respect to any
actions taken prior to the date of such designation as a result of the
occurrence of such prior Discharge of Senior Credit Agreement Claims), and
such Future First-Lien Credit Facility shall automatically be treated as the
Senior Credit Agreement for all purposes of this Agreement. Upon receipt of
notice of such designation (including the identity of the new Collateral
Agent), the Trustee shall promptly (i) enter into such documents and
agreements (including amendments or supplements to this Agreement) as the
Company or such new Collateral Agent shall request in order to provide to the
new Collateral Agent the rights of the Collateral Agent contemplated hereby
and (ii) deliver to the Collateral Agent the Pledged Collateral together with
any necessary endorsements (or otherwise allow such Collateral Agent to obtain
control of such Pledged Collateral).
5.3. Amendments to Security Documents. So long as the Aggregate
Credit Agreement Exposure is (a) greater than or equal to $55,000,000 or (b)
greater than the aggregate amount of Notes outstanding, the Instructing Group
shall have the exclusive authority to direct
21
the Collateral Agent to (or consent to any action by the Collateral Agent to)
amend any provision of, or grant any waivers or consents in respect of, any
Security Document, without any consent or approval of, or prior notice to, any
other Secured Party; provided that no such amendment, waiver or consent shall,
without the consent of the Required Noteholders (and the Collateral Agent
shall be fully protected if it shall receive a certificate signed by an
officer of the Company certifying the delivery and effectiveness of such
consent), materially adversely affect the rights of the holders of the
Noteholder Claims unless such amendment, waiver or consent applies equally to
the Credit Agreement Obligations; provided, however, that no amendment,
waiver, or supplement pursuant to this Section 5.3 shall directly or
indirectly effect a release of Collateral that is not permitted under Section
11.03 of the Indenture without the consent of the Required Noteholders (and
the Collateral Agent shall be fully protected if it shall receive a
certificate signed by an officer of the Company certifying the delivery and
effectiveness of such consent). If the Aggregate Credit Agreement Exposure is
(a) less than $55,000,000 and (b) less than or equal to the aggregate amount
of Notes outstanding, then any such amendment, waiver or consent shall require
the consent of (x) the Required Lenders in accordance with the Senior Loan
Documents (and the Collateral Agent shall be fully protected if it shall
receive a certificate signed by an officer of the Company certifying the
delivery and effectiveness of such consent) and (y) the Required Noteholders
in accordance with the Noteholder Documents (and the Collateral Agent shall be
fully protected if it shall receive a certificate signed by an officer of the
Company certifying the delivery and effectiveness of such consent).
5.4. Right of Set-Off. Nothing in this Agreement shall prevent any
Secured Party from exercising any right of set-off or counterclaim that such
Secured Party may otherwise have.
SECTION 6. INSOLVENCY OR LIQUIDATION PROCEEDINGS.
6.1. Generally. Nothing contained herein shall limit or restrict the
independent right of the Collateral Agent or any other Secured Party to
initiate an action or actions in any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
similar proceeding in its individual capacity and to appear or to be heard on
any matter before the bankruptcy or other applicable court in any such
proceeding, including, without limitation, with respect to any questions
concerning the post-petition usage of collateral and any post-petition
financing arrangement; provided that neither the Collateral Agent nor any
other Secured Party shall contest the validity or enforceability of or seek to
avoid, have declared fraudulent or have set aside any of the Secured
Obligations, or any guaranties of any of the Secured Obligations, or contest
the validity, perfection, priority or enforceability of the security interests
and liens of any other Secured Party securing any of the Secured Obligations.
6.2. Preference Issues. If any Secured Party is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise
pay to the estate of the Company or any other Grantor any amount (a
"Recovery"), then the Secured Obligations shall be reinstated to the extent of
such Recovery. If this Agreement shall have been terminated prior to such
Recovery, this Agreement shall be reinstated in full force and effect, and
such prior termination shall not diminish, release, discharge, impair or
otherwise affect the obligations of the parties hereto from such date of
reinstatement.
22
SECTION 7. RELIANCE; WAIVERS; ETC.
7.1. Reliance. The consent by the Senior Lenders to the execution
and delivery of the Security Documents to provide that the Noteholder Claims
are secured by the Liens or the Collateral granted thereunder, and all loans
and other extensions of credit made or deemed made on and after the date
hereof by the Senior Lenders to the Company or any Grantor, shall be deemed to
have been given and made in reliance upon this Agreement. The Trustee, on
behalf of itself and the Noteholders, acknowledges that it and the Noteholders
have, independently and without reliance on the Collateral Agent or any Senior
Lender, and based on documents and information deemed by them appropriate,
made their own credit analysis and decision to enter into the Indenture, this
Agreement and the transactions contemplated hereby and thereby and they will
continue to make their own credit decision in taking or not taking any action
under the Indenture or this Agreement.
7.2. No Warranties or Liability. The Trustee, on behalf of itself
and the Noteholders, acknowledges and agrees that each of the Collateral Agent
and the Senior Lenders has made no express or implied representation or
warranty, including with respect to the execution, validity, legality,
completeness, collectibility or enforceability of any of the Security
Documents, the ownership of any Collateral or the perfection or priority of
any Liens thereon. The Senior Lenders will be entitled to manage and supervise
their respective loans and extensions of credit under the Senior Loan
Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate, and the Senior Lenders may manage their loans
and extensions of credit without regard to any rights or interests that the
Trustee or any of the Noteholders have in the Collateral or otherwise, except
as otherwise provided in this Agreement and the Security Documents. Neither
any Senior Lender nor any of their Representatives shall have any duty to the
Trustee or any of the Noteholders to act or refrain from acting in a manner
which allows, or results in, the occurrence or continuance of an event of
default or default under any agreements with the Company or any Subsidiary
thereof (including the Noteholder Documents), regardless of any knowledge
thereof which they may have or be charged with.
7.3. No Waiver.
(a) No right of the Senior Lenders, the Collateral Agent or any of
them to enforce any provision of this Agreement, any Senior Loan Document or
any Security Document shall at any time in any way be prejudiced or impaired
by any act or failure to act on the part of the Company or any other Grantor
or by any act or failure to act by any Senior Lender or the Collateral Agent,
or by any noncompliance by any Person with the terms, provisions and covenants
of this Agreement, any Senior Loan Document, any Noteholder Document or any
Security Document, regardless of any knowledge thereof which the Collateral
Agent or the Senior Lenders, or any of them, may have or be otherwise charged
with.
(b) The Trustee, on behalf of itself and the Noteholders, agrees
that the Senior Lenders and the Collateral Agent shall have no liability to
the Trustee or any Noteholder, and the Trustee, on behalf of itself and the
Noteholders, hereby waives any claim against any Senior Lender or the
Collateral Agent, arising out of any and all actions which the Senior Lenders
may take or permit or omit to take with respect to: (i) the Senior Loan
Documents or (ii) the
23
collection of the Senior Lender Claims. The Trustee, on behalf of itself and
the Noteholders, agrees that the Senior Lenders and the Collateral Agent have
no duty to them in respect of the maintenance or preservation of the
Collateral or otherwise.
7.4. Obligations Unconditional. All rights, interests, agreements
and obligations of the Collateral Agent and the Secured Parties hereunder
shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Security
Documents, any Senior Loan Documents or any Noteholder Documents;
(b) any change in the time, manner or place of payment of, or in any
other terms of, all or any of the Senior Lender Claims or Noteholder Claims,
or any amendment or waiver or other modification, including any increase in
the amount thereof, whether by course of conduct or otherwise, of the terms of
the Senior Credit Agreement or any other Senior Loan Document or of the terms
of the Indenture or any other Noteholder Document;
(c) any exchange of any security interest in any Collateral or any
other collateral, or any amendment, waiver or other modification, whether in
writing or by course of conduct or otherwise, of all or any of the Senior
Lender Claims or Noteholder Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in
respect of the Company or any other Grantor; or
(e) any other circumstances which otherwise might constitute a
defense available to, or a discharge of, the Company or any other Grantor in
respect of the Senior Lender Claims, or of the Trustee or any Noteholder in
respect of this Agreement.
SECTION 8. MISCELLANEOUS.
8.1. Conflicts. In the event of any conflict between the provisions
of this Agreement and the provisions of the Security Documents, the Senior
Loan Documents or the Noteholder Documents, the provisions of this Agreement
shall govern.
8.2. Continuing Nature of this Agreement; Severability. This
Agreement shall continue to be effective until the later of (a) the date on
which the Discharge of Credit Agreement Obligations shall have occurred and
(b) the indefeasible payment in full of the Noteholder Claims. The Senior
Lenders may continue, at any time and without notice to the Trustee or any
Noteholder, to extend credit and other financial accommodations and lend
moneys to or for the benefit of the Company or any Grantor constituting Senior
Lender Claims on reliance hereof. Each of the Collateral Agent, the Senior
Lenders and the Trustee, on behalf of itself and the Noteholders, hereby
waives any right it may have under applicable law to revoke this Agreement or
any of the provisions of this Agreement. The terms of this Agreement shall
survive, and shall continue in full force and effect, in any Insolvency or
Liquidation Proceeding. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining
provisions hereof, and any such prohibition or unenforceability in
24
any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
8.3. Amendments; Waivers. So long as the Aggregate Credit Agreement
Exposure is (a) greater than or equal to $55,000,000 or (b) greater than the
aggregate amount of Notes outstanding, the Collateral Agent and the Company,
with the consent of the Instructing Group, may from time to time amend,
supplement or waive any provision hereof; provided that no such amendment,
supplement or waiver shall, without the consent of the Required Noteholders
(and the Collateral Agent shall be fully protected if it shall receive a
certificate signed by an officer of the Company certifying the delivery and
effectiveness of such consent), materially adversely affect the rights of the
Noteholders unless such amendment, supplement or waiver applies equally to the
Credit Agreement Obligations; provided, however, that no amendment,
supplement, or waiver pursuant to this Section 8.3 shall directly or
indirectly effect a release of Collateral that is not permitted under Section
11.03 of the Indenture without the consent of the Required Noteholders (and
the Collateral Agent shall be fully protected if it shall receive a
certificate signed by an officer of the Company certifying the delivery and
effectiveness of such consent). If the Aggregate Credit Agreement Exposure is
(a) less than $55,000,000 and (b) less than or equal to the aggregate amount
of Notes outstanding, then any such amendment, waiver, or consent shall
require the consent of (x) the Required Lenders in accordance with the Senior
Loan Documents (and the Collateral Agent shall be fully protected if it shall
receive a certificate signed by an officer of the Company certifying the
delivery and effectiveness of such consent) and (y) the Required Noteholders
in accordance with the Noteholder Documents (and the Collateral Agent shall be
fully protected if it shall receive a certificate signed by an officer of the
Company certifying the delivery and effectiveness of such consent). The
Company and other Grantors shall not have any right to consent to or approve
any amendment, modification or waiver of any provision of this Agreement
except to the extent their rights are directly affected. The Company hereby
agrees to execute and deliver any supplement or amendment to this Agreement or
the Security Documents or any other document or instrument necessary to
evidence the appointment of a successor Collateral Agent pursuant to Section
2.3.
8.4. Information Concerning Financial Condition of the Company and
the Subsidiaries. The Senior Lenders and their Representatives, on the one
hand, and the Trustee and the Noteholders, on the other hand, shall each be
responsible for keeping themselves informed of (a) the financial condition of
the Company and the Subsidiaries and all endorsers and/or guarantors of the
Noteholder Claims or the Senior Lender Claims and (b) all other circumstances
bearing upon the risk of nonpayment of the Noteholder Claims or the Senior
Lender Claims. None of the Collateral Agent, the Senior Lenders, the Trustee
or any Noteholder shall have any duty to advise any other party of information
known to it or them regarding such condition or any such circumstances or
otherwise. In the event the Collateral Agent, any of the Senior Lenders, the
Trustee or any of the Noteholders, in its or their sole discretion, undertakes
at any time or from time to time to provide any such information to the any
other party, it or they shall be under no obligation (w) to make, and the
Collateral Agent, the Senior Lenders, the Trustee and the Noteholders shall
not make, any express or implied representation or warranty, including with
respect to the accuracy, completeness, truthfulness or validity of any such
information so provided, (x) to provide any additional information or to
provide any such information on any subsequent occasion, (y) to undertake any
investigation or (z) to disclose any
25
information which, pursuant to accepted or reasonable commercial finance
practices, such party wishes to maintain confidential or is otherwise required
to maintain confidential.
8.5. Consent to Jurisdiction; Waivers. The parties hereto consent to
the jurisdiction of any state or federal court located in New York, New York,
and consent that all service of process may be made by registered mail
directed to such party as provided in Section 8.6 below for such party.
Service so made shall be deemed to be completed three (3) days after the same
shall be posted as aforesaid. The parties hereto waive any objection to any
action instituted hereunder based on forum non conveniens, and any objection
to the venue of any action instituted hereunder.
8.6. Notices. All notices to the Noteholders and the Senior Lenders
permitted or required under this Agreement may be sent to their
Representatives. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in
writing and may be personally served, telecopied, electronically mailed or
sent by courier service or U.S. mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of a telecopy or
electronic mail or three (3) Business Days after deposit in the U.S. mail
(registered or certified, with postage prepaid and properly addressed). For
the purposes hereof, the addresses of the parties hereto shall be as set forth
below each party's name on the signature pages hereto, or, as to each party,
at such other address as may be designated by such party in a written notice
to all of the other parties.
8.7. Further Assurances. Each of the Administrative Agent, on behalf
of itself and the Senior Lenders, and the Trustee, on behalf of itself and the
Noteholders, agrees that each of them shall take such further action and shall
execute and deliver to the Collateral Agent such additional documents and
instruments (in recordable form, if requested) as the Collateral Agent may
reasonably request to effectuate the terms of and the Liens contemplated by
this Agreement.
8.8 GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING,
WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT
OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES OR PROVISIONS) OF THE
STATE OF NEW YORK. EACH OF THE COLLATERAL AGENT, THE TRUSTEE, THE
ADMINISTRATIVE AGENT, AND THE COMPANY HEREBY WAIVES TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER.
8.9. Binding on Successors and Assigns; No Third Party
Beneficiaries. This Agreement shall be binding upon the Secured Parties, the
Company and their respective permitted successors and assigns. This Agreement
and the rights and benefits hereof shall inure to the benefit of the Secured
Parties, the Company and their respective successors and assigns, and nothing
herein is intended or shall be construed to give any other Person any right,
remedy or claim under, to or in respect of this Agreement, the Collateral or
the Collateral Estate. No other Person shall have or be entitled to assert any
rights or benefits hereunder.
26
8.10. Section Titles. The section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of this Agreement.
8.11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
together constitute one and the same document.
8.12. Authorization. By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.
8.13. Effectiveness. This Agreement shall become effective when
executed and delivered by the parties hereto. This Agreement shall be
effective both before and after the commencement of any Insolvency or
Liquidation Proceeding. All references to the Company or any other Grantor
shall include the Company or Grantor as debtor and debtor-in-possession and
any receiver or trustee for the Company or any other Grantor (as the case may
be) in any Insolvency or Liquidation Proceeding.
8.14. Trustee. It is understood and agreed that Wells Fargo Bank,
National Association is entering in this Agreement in its capacity as Trustee
and the provisions of the Indenture applicable to the Trustee thereunder shall
also apply to the Trustee hereunder.
8.15. Designations; Future Representatives of Senior Lenders. For
purposes of the provisions hereof and the Indenture requiring the Company to
designate Indebtedness for the purposes of the term "Credit Agreement
Obligations" under the Indenture, "First-Lien Credit Facilities" or "Senior
Credit Agreement" or any other designations for any other purposes hereunder
or under the Indenture, any such designation shall be sufficient if the
relevant designation is set forth in writing, signed on behalf of the Company
by an officer thereof and delivered to the Trustee and the Collateral Agent.
For all purposes hereof and the Indenture, the Company hereby designates the
Credit Facilities provided pursuant to the Existing Credit Agreement as the
First-Lien Credit Facility and any Obligations in respect of the Existing
Credit Agreement as "Credit Agreement Obligations" under the Indenture.
The remainder of this page is intentionally blank.
27
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
BANK ONE, NA,
as Collateral Agent and as Administrative
Agent under the Existing Credit Agreement,
By: /s/ Thomas J. Reinhold
---------------------------
Name: Thomas J. Reinhold
Title: Vice President
Address:
8044 Montgomery Road
OH3-4017
Cincinnati, OH 45236
Attention: Thomas J. Reinhold
Telephone.: (513) 985-5118
Facsimile: (513) 985-5760
WELLS FARGO BANK, N.A.
as Trustee,
By: /s/ Jeffrey Rose
----------------------------
Name: Jeffrey Rose
Title: Corporate Trust Officer
Address:
Corporate Trust
Sixth Street and Marquette Avenue
MAC N303-120
Minneapolis, MN 55475
Attention: Jeffrey T. Rose
Facsimile: (612) 667-9875
ROTO-ROOTER, INC.,
By: /s/ Naomi C. Dallob
------------------------------
Name: Naomi C. Dallob
Title: Secretary
Address:
2600 Chemed Center
255 East Fifth Street
Cincinnati, OH 45202
Attention: Timothy S. O'Toole
Telephone: (513) 762-6702
Facsimile: (513) 287-6216
EXHIBIT 12
CHEMED CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
For the Years Ended December 31,
-------------------------------------------------------------- For the Three Months Ended
2003 March 31, 2004
------------------------ -------------------------
1999 2000 2001 2002 Historical Pro Forma (a) Historical Pro Forma (a)
---- ---- ---- ---- ---------- ------------- ---------- -------------
Earnings
Income/(loss) from continuing
operations
before income taxes $26,150 $29,986 $(15,727) $(2,403) $ 328 $ 2,139 $(3,502) $(2,631)
Fixed charges 10,603 10,869 8,463 5,619 4,799 27,999 3,523 7,400
Amortization of deferred financing - - - - - 2,980 218 461
costs
Capitalized interest (927) (500) - - - - - -
------- ------- ------- ------- ------- -------- ------- --------
Earnings $35,826 $40,355 $(7,264) $ 3,216 $5,127 $ 33,118 $ 239 $ 5,230
======= ======= ======= ======= ======= ======== ======= ========
Fixed Charges:
Interest expense $ 7,680 $ 8,408 $ 6,536 $ 4,007 $3,211 $ 26,317 $ 2,905 $ 6,307
Amortization of deferred financing - - - - - (2,980) (218) (461)
costs
Interest component of rent expense 1,996 1,961 1,927 1,612 1,588 4,662 836 1,554
Capitalized interest 927 500 - - - - - -
------- ------- ------- ------- ------- -------- ------- --------
Fixed charges $10,603 $10,869 $8,463 $ 5,619 $4,799 $ 27,999 $ 3,523 $ 7,400
======= ======= ======= ======= ======= ======== ======= ========
Ratio of Earnings to Fixed Charges 3.4x 3.7x -(b) 0.6x(b) 1.1x 1.2x 0.1x (b) 0.7x (b)
======= ======= ======= ======= ======= ======== ======= ========
___________
(a) Pro forma amounts assume the acquisition of Vitas and the related financing were completed on January 1 of the respective
periods.
(b) In the years ended December 13, 2001 and 2002, and the three months ended March 31, 2004 (historical and pro forma), our
earnings were insufficient to cover fixed charges by $15,727, $2,403, $3,284 and $2,170, respectively.
EXHIBIT 23.1
FORM OF CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Chemed Corporation of (i) our report dated March 5,
2004 relating to the financial statements, which appears in Chemed
Corporation's 2003 Annual Report to Shareholders, which is incorporated by
reference in its Annual Report on Form 10-K for the year ended December 31,
2003, and (ii) our report dated [ ], 2004, relating to the financial
statements of [ ], subsidiaries of the Company whose financial statements are
required to be filed pursuant to Rule 3-16 of Regulation S-X, which are
incorporated by reference to Chemed Corporation's Current Report on Form 8-K
filed [ ], 2004. We also consent to the incorporation by reference of our
report dated March 5, 2004, relating to the financial statement schedule,
which appears in such Annual Report on Form 10-K. We also consent to the
reference to us under the heading "Experts" in such Registration Statement.
PRICEWATERHOUSECOOPERS LLP
Cincinnati, Ohio
[ ], 2004
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement on Form S-4 and related prospectus of Chemed
Corporation for the registration of up to $110,000,000 principal amount of
Floating Rate Senior Secured Notes due 2010 of Chemed Corporation and to the
incorporation by reference therein of our report dated November 10, 2003, with
respect to the consolidated financial statements of Vitas Healthcare
Corporation as of September 30, 2003 and 2002 and for each of the three years
in the period ended September 30, 2003, included in the Current Report on Form
8-K/A of Chemed Corporation filed with the Securities and Exchange Commission
on February 23, 2004.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Miami, Florida
May 24, 2004
EXHIBIT 24
POWER OF ATTORNEY
Each of the undersigned directors and officers of Chemed Corporation
and/or its subsidiaries hereby severally constitutes and appoints Naomi C.
Dallob, as attorney-in-fact for the undersigned, in any and all capacities,
with full power of substitution, to sign one or more registration statements
on Form S-4 of Chemed Corporation and any amendments thereto (including any
post- effective amendments) and any subsequent registration statement filed by
Chemed Corporation with the Securities and Exchange Commission, granting unto
said attorney-in-fact full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact may
lawfully do or cause to be done by virtue hereof.
SIGNATURES DATE
--------------------------------- ----------------------------------
/s/ Rick L. Arquilla April 26, 2004
---------------------------------
(Rick L. Arquilla)
/s/ Joel F. Gemunder April 29, 2004
---------------------------------
(Joel F. Gemunder)
/s/ Matthew Gullo April 27, 2004
---------------------------------
(Matthew Gullo)
/s/ Edward L. Hutton April 20, 2004
---------------------------------
(Edward L. Hutton)
/s/ Thomas C. Hutton April 21, 2004
---------------------------------
(Thomas C. Hutton)
/s/ Sandra E. Laney April 21, 2004
---------------------------------
(Sandra E. Laney)
/s/ Spencer S. Lee April 20, 2004
---------------------------------
(Spencer S. Lee)
/s/ Kevin J. McNamara April 22, 2004
---------------------------------
(Kevin J. McNamara)
/s/ Timothy S. O'Toole April 23, 2004
---------------------------------
(Timothy S. O'Toole)
/s/ Thomas J. Reilly April 27, 2004
---------------------------------
(Thomas J. Reilly)
/s/ Donald E. Saunders April 23, 2004
---------------------------------
(Donald E. Saunders)
1
SIGNATURES DATE
--------------------------------- ----------------------------------
/s/ George J. Walsh III April 22, 2004
---------------------------------
(George J. Walsh III)
/s/ Stephen Ky Webb April 27, 2004
---------------------------------
(Stephen Ky Webb)
/s/ David P. Williams April 21, 2004
---------------------------------
(David P. Williams)
/s/ Marion M. Williams, Jr. April 28, 2004
---------------------------------
(Marion M. Williams, Jr.)
/s/ Frank E. Wood April 22, 2004
---------------------------------
(Frank E. Wood)
2
EXHIBIT 25
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
_____________________________
___ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b) (2)
WELLS FARGO BANK, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A NATIONAL BANKING ASSOCIATION 94-1347393
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national Identification No.)
bank)
101 NORTH PHILLIPS AVENUE
SIOUX FALLS, SOUTH DAKOTA 57104
(Address of principal executive offices) (Zip code)
WELLS FARGO & COMPANY
LAW DEPARTMENT, TRUST SECTION
MAC N9305-175
SIXTH STREET AND MARQUETTE AVENUE, 17TH FLOOR
MINNEAPOLIS, MINNESOTA 55479
(612) 667-4608
(Name, address and telephone number of agent for service)
_____________________________
CHEMED CORPORATION (FORMERLY ROTO-ROOTER, INC.)
(Exact name of obligor as specified in its charter)
DELAWARE 31-0791746
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2600 CHEMED CENTER
255 EAST FIFTH STREET
CINCINNATI, OHIO 45202-4726
(Address of principal executive offices) (Zip code)
_____________________________
FLOATING RATE SENIOR SECURED NOTES DUE 2010
(Title of the indenture securities)
===============================================================================
1
TABLE OF REGISTRANT GUARANTORS
EXACT NAME OF REGISTRANT AS SPECIFIED STATE OF INCORPORATION PRIMARY STANDARD INDUSTRIAL I.R.S. EMPLOYER
IN ITS CHARTER OR ORGANIZATION CLASSIFICATION CODE NUMBERS IDENTIFICATION NUMBER
CCR of Ohio Inc. Delaware 7699 31-1527335
Comfort Care Holdings Co. Nevada 8082 31-1078128
Complete Plumbing Services, Inc. New York 7699 31-1541716
Consolidated HVAC, Inc. Ohio 7623 31-1329854
Jet Resource, Inc. Delaware 7699 31-1331308
Nurotoco of Massachusetts, Inc. Massachusetts 7699 31-1102223
Nurotoco of New Jersey, Inc. Delaware 7699 31-1226376
R.R. UK, Inc. Delaware 7699 31-1269173
Roto-Rooter Corporation Iowa 7699 42-0499295
Roto-Rooter Development Company Delaware 7699 31-1258229
Roto-Rooter Management Company Delaware 7699 31-1119469
Roto-Rooter Services Company Iowa 7699 42-0499300
RR Plumbing Services Corporation New York 7699 31-1143999
Service America Network, Inc. Florida 7623 56-1486390
Hospice Care Incorporated Delaware 8082 65-0153175
Hospice, Inc. Delaware 8082 65-0160635
Vitas Healthcare Corporation Delaware 8082 59-2318357
Vitas Healthcare Corporation of Delaware 8082 33-0644510
California
Vitas Healthcare Corporation of Delaware 8082 65-0668678
Central Florida
Vitas Healthcare Corporation of Florida 8082 65-0160635
Florida
Vitas Healthcare Corporation of Delaware 8082 65-1094333
Illinois
Vitas Healthcare Corporation of Ohio Delaware 8082 65-0392352
Vitas Healthcare Corporation of Delaware 8082 65-0458856
Pennsylvania
Vitas Healthcare Corporation of Delaware 8082 65-1094336
Wisconsin
Vitas HME Solutions, Inc. Delaware 8082 65-0989593
Vitas Holdings Corporation Delaware 8082 65-0866301
Vitas Hospice Services, L.L.C. Delaware 8082 65-1094331
Vitas Healthcare of Texas, L.P. Texas 8082 65-0866305
The address, including zip code, and telephone number, including area code,
of the registrant guarantors listed above are the same as those of Chemed
Corporation.
2
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of the Currency
Treasury Department
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of San Francisco
San Francisco, California 94120
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
Item 2. Affiliations with Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
None with respect to the trustee.
No responses are included for Items 3-14 of this Form T-1 because the obligor
is not in default as provided under Item 13.
Item 15. Foreign Trustee.Not applicable.
Item 16. List of Exhibits.List below all exhibits filed as a part of this
Statement of Eligibility.
Exhibit 1. A copy of the Articles of Association of the trustee
now in effect.*
Exhibit 2. A copy of the Comptroller of the Currency Certificate
of Corporate Existence and Fiduciary Powers for Wells
Fargo Bank, National Association, dated February 4, 2004.**
Exhibit 3. See Exhibit 2
Exhibit 4. Copy of By-laws of the trustee as now in effect.***
Exhibit 5. Not applicable.
Exhibit 6. The consent of the trustee required by Section 321(b)
of the Act.
Exhibit 7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
Exhibit 8. Not applicable.
Exhibit 9. Not applicable.
3
* Incorporated by reference to the exhibit of the same number to the trustee's
Form T-1 filed as exhibit 25 to the Form T-3 dated March 3, 2004 of Trans-Lux
Corporation file number 022-28721.
** Incorporated by reference to the exhibit of the same number to the
trustee's Form T-1 filed as exhibit 25 to the Form T-3 dated March 3, 2004 of
Trans-Lux Corporation file number 022-28721.
*** Incorporated by reference to the exhibit of the same number to the
trustee's Form T-1 filed as exhibit 25 to the Form T-3 dated March 3, 2004 of
Trans-Lux Corporation file number 022-28721.
4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, Wells Fargo Bank, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Minneapolis and State of Minnesota on the 20th day of May 2004.
WELLS FARGO BANK, NATIONAL ASSOCIATION
/s/ Jeffrey T. Rose
----------------------------------
Jeffery T. Rose
Corporate Trust Officer
5
EXHIBIT 6
TO FORM T-1
May 20, 2004
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, the undersigned hereby consents that reports of examination of the
undersigned made by Federal, State, Territorial, or District authorities
authorized to make such examination may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
WELLS FARGO BANK, NATIONAL ASSOCIATION
/s/ Jeffrey T. Rose
---------------------------------
Jeffery T. Rose
Corporate Trust Officer
1
Consolidated Report of Condition of
Wells Fargo Bank National Association
of 101 North Phillips Avenue, Sioux Falls, SD 57104
And Foreign and Domestic Subsidiaries,
at the close of business March 31, 2004, filed in accordance with
12 U.S.C. Section 161 for National Banks.
Dollar Amounts
In Millions
---------------
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin $ 13,890
Interest-bearing balances 6,251
Securities:
Held-to-maturity securities 0
Available-for-sale securities 27,661
Federal funds sold and securities purchased under agreements to resell:
Federal Funds sold in domestic offices 1,436
Securities purchased under agreements to resell 170
Loans and lease financing receivables:
Loans and leases held for sale 29,359
Loans and leases, net of unearned income 233,785
LESS: Allowance for loan and lease losses 2,629
Loans and leases, net of unearned income and allowance 231,156
Trading Assets 8,314
Premises and fixed assets (including capitalized leases) 2,787
Other real estate owned 180
Investments in unconsolidated subsidiaries and associated companies 284
Customers' liability to this bank on acceptances outstanding 69
Intangible assets
Goodwill 7,915
Other intangible assets 6,871
Other assets 11,217
---------
Total assets $347,560
=========
LIABILITIES
Deposits:
In domestic offices $240,660
Noninterest-bearing 78,496
Interest-bearing 162,164
In foreign offices, Edge and Agreement subsidiaries, and IBFs 15,087
Noninterest-bearing 3
Interest-bearing 15,084
Federal funds purchased and securities sold under agreements to repurchase:
Federal funds purchased in domestic offices 18,617
Securities sold under agreements to repurchase 3,028
Trading liabilities 4,973
Other borrowed money
(includes mortgage indebtedness and obligations under capitalized leases) 18,180
Bank's liability on acceptances executed and outstanding 69
Subordinated notes and debentures 4,824
Other liabilities 9,494
--------
Total liabilities $314,932
Minority interest in consolidated subsidiaries 70
2
Dollar Amounts
In Millions
---------------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock 520
Surplus (exclude all surplus related to preferred stock) 23,424
Retained earnings 7,812
Accumulated other comprehensive income 802
Other equity capital components 0
Total equity capital 32,558
Total liabilities, minority interest, and equity capital $347,560
I, James E. Hanson, Vice President of the above-named bank do hereby declare
that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
James E. Hanson
Vice President
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
Howard Atkins
Dave Hoyt Directors
John Stumpf
3
EXHIBIT 99.1
LETTER OF TRANSMITTAL
CHEMED CORPORATION
(FORMERLY ROTO-ROOTER, INC.)
OFFER TO EXCHANGE
ALL OUTSTANDING FLOATING RATE SENIOR NOTES DUE 2010
($110,000,000 AGGREGATE PRINCIPAL AMOUNT)
FOR
FLOATING RATE SENIOR SECURED NOTES DUE 2010
($110,000,000 AGGREGATE PRINCIPAL AMOUNT)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
- -------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.
NEW YORK CITY TIME, ON [ ], 2004, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
To:
WELLS FARGO BANK, N.A.
(the "Exchange Agent")
By Registered or Certified Mail: By Overnight Courier: By Hand:
Wells Fargo Bank, N.A. Wells Fargo Bank, N.A. Wells Fargo Bank, N.A.
Corporate Trust Operations Corporate Trust Operations Corporate Trust Services
MAC N9303-121 MAC N9303-121 608 2nd Avenue South
P.O. Box 1517 Sixth Street & Marquette Avenue Northstar East Building, 12th Floor
Minneapolis, MN 55480 Minneapolis, MN 55479 Minneapolis, MN 55402
Attention: Reorganization Attention: Reorganization
By facsimile:
(612) 667-4927
For information call:
(800) 344-5128
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONES
LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned hereby acknowledges receipt of the Prospectus dated [ ],
2004 (the "Prospectus"), of Chemed Corporation ("Chemed") and this Letter of
Transmittal, which together constitute Chemed's offer (the "Exchange Offer")
to exchange each $1,000 principal amount of its Floating Rate Senior Secured
Notes due 2010, which have been registered under the Securities Act of 1933,
as amended (the "Securities Act"), pursuant to a Registration Statement of
which the Prospectus is a part (collectively, the "New Notes"), for each
$1,000 principal amount of its outstanding Floating Rate Senior Secured Notes
due 2010 (collectively, the "Original Notes"). The term "Expiration Date"
shall mean 5:00 p.m., New York City time, on [ ], 2004, unless Chemed, in its
sole discretion, extends the Exchange Offer, in which case the term shall mean
the latest date and time to which the Exchange Offer is extended.
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE
PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE
AGENT.
1
List below the securities to which this Letter of Transmittal relates. If
the space indicated below is inadequate, the Certificate or Registration
Numbers and Principal Amounts should be listed on a separately signed schedule
affixed hereto.
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF FLOATING RATE SENIOR SECURED NOTES DUE 2010 TENDERED HEREBY
- -----------------------------------------------------------------------------------------------------------------------------------
AGGREGATE
PRINCIPAL
CERTIFICATE OR AMOUNT PRINCIPAL
REGISTRATION REPRESENTED BY AMOUNT
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S) (PLEASE FILL IN) NUMBERS* ORIGINAL NOTES TENDERED**
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Total
- -----------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry Holders.
** Unless otherwise indicated, the Holder will be deemed to have tendered the full aggregate principal amount represented by such
Original Notes. All tenders must be in integral multiples of $1,000.
- -----------------------------------------------------------------------------------------------------------------------------------
This Letter of Transmittal is to be used if (i) certificates representing
Original Notes are to be forwarded herewith or (ii) tender of the Original
Notes is to be made according to the guaranteed delivery procedures described
in the Prospectus under the caption "The Exchange Offer - Guaranteed Delivery
Procedures." See Instruction 2. Delivery of documents to a book-entry transfer
facility does not constitute delivery to the Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Original Notes are registered on the books of Chemed or any other
person who has obtained a properly completed bond power from the registered
holder. The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with
respect to the Exchange Offer. Holders who wish to tender their Original Notes
must complete this letter in its entirety.
2
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") AND COMPLETE THE FOLLOWING:
NAME OF TENDERING INSTITUTION
------------------------------------
ACCOUNT NUMBER
---------------------------------------------------
TRANSACTION CODE NUMBER
------------------------------------------
Holders whose Original Notes are not immediately available or who cannot
deliver their Original Notes and all other documents required hereby to the
Exchange Agent on or prior to the Expiration Date must tender their Original
Notes according to the guaranteed delivery procedure set forth in the
Prospectus under the caption "The Exchange Offer - Guaranteed Delivery
Procedures". See Instruction 2.
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
NAME OF REGISTERED HOLDER(S)
----------------------------------------
NAME OF ELIGIBLE INSTITUTION THAT
GUARANTEED DELIVERY
-------------------------------------------------
IF DELIVERY BY BOOK-ENTRY TRANSFER:
ACCOUNT NUMBER
------------------------------------------------------
TRANSACTION CODE NUMBER
---------------------------------------------
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
NAME
----------------------------------------------------------------
ADDRESS
-------------------------------------------------------------
3
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Exchange Offer
described in the Prospectus, the undersigned hereby tenders to Chemed the
principal amount of the Original Notes indicated above. Subject to, and
effective upon, the acceptance for exchange of such Original Notes tendered
hereby, the undersigned hereby exchanges, assigns and transfers to, or upon
the order of, Chemed, all right, title and interest in and to such Original
Notes as are being tendered hereby, including all rights to accrued and unpaid
interest thereon as of the Expiration Date. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent the true and lawful agent and
attorney-in-fact of the undersigned (with full knowledge that said Exchange
Agent acts as the agent of Chemed in connection with the Exchange Offer) to
cause the Original Notes to be assigned, transferred and exchanged. The
undersigned represents and warrants that it has full power and authority to
tender, exchange, assign and transfer the Original Notes and to acquire New
Notes issuable upon the exchange of such tendered Original Notes, and that
when the same are accepted for exchange, Chemed will acquire good and
unencumbered title to the tendered Original Notes, free and clear of all
liens, restrictions, charges and encumbrances and not subject to any adverse
claim.
The undersigned represents to Chemed that (i) the undersigned is not an
affiliate (as defined under Rule 405 of the Securities Act) of Chemed, (ii)
the New Notes acquired pursuant to the Exchange Offer are being obtained in
the ordinary course of business of the person receiving such New Notes,
whether or not such person is the undersigned, and (iii) neither the
undersigned nor any such other person is engaged or intends to engage in, or
has an arrangement or understanding with any person to participate in, the
distribution of such New Notes. If the undersigned or the person receiving the
New Notes covered hereby is a broker-dealer that is receiving the New Notes
for its own account in exchange for Original Notes that were acquired as a
result of market-making activities or other trading activities, the
undersigned acknowledges that it or such other person will deliver a
prospectus in connection with any resale of such New Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. The undersigned and any such other person acknowledge that, if
they are participating in the Exchange Offer for the purpose of distributing
the New Notes, (i) they must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with resale
transactions and (ii) failure to comply with such requirements in such
instance could result in the undersigned or any such other person incurring
liability under the Securities Act for which such persons are not indemnified
by Chemed.
The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or Chemed to be
necessary or desirable to complete the exchange, assignment and transfer of
tendered Original Notes or transfer ownership of such Original Notes on the
account books maintained by a book-entry transfer facility.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer - Conditions to the Exchange
Offer". The undersigned recognizes that as a result of these conditions (which
may be waived, in whole or in part, by Chemed in its sole discretion), as more
particularly set forth in the Prospectus, Chemed may not be required to
exchange any of the Original Notes tendered hereby and, in such event, the
Original Notes not exchanged will be returned to the undersigned at the
address shown below the signature of the undersigned.
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Tendered Original
Notes may be withdrawn at any time prior to the Expiration Date.
4
Unless otherwise indicated in the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" in this
Letter of Transmittal, certificates for all New Notes delivered in exchange
for tendered Original Notes, and any Original Notes delivered herewith but not
exchanged, will be registered in the name of the undersigned and shall be
delivered to the undersigned at the address shown below the signature of the
undersigned. If a New Note is to be issued to a person other than the
person(s) signing this Letter of Transmittal, or if a New Note is to be mailed
to someone other than the person(s) signing this Letter of Transmittal or to
the person(s) signing this Letter of Transmittal at an address different than
the address shown on this Letter of Transmittal, the appropriate boxes of this
Letter of Transmittal should be completed. If Original Notes are surrendered
by Holder(s) that have completed either the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" in this
Letter of Transmittal, signature(s) on this Letter of Transmittal must be
guaranteed by an Eligible Institution (defined in Instruction 2).
5
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the New Notes are to be issued To be completed ONLY if the New Notes are to be sent
in the name of someone other than the undersigned. to someone other than the undersigned, or to the
undersigned at an address other than that shown under
Name: "Description of Floating Rate Secured Notes due 2010
---------------------------------------- Tendered Hereby".
Address: Name:
------------------------------------- -------------------------------------------
- --------------------------------------------- Address:
----------------------------------------
Book-Entry Transfer Facility Account: ------------------------------------------------
- --------------------------------------------- Employer Identification or Social Security Number:
Employer Identification or Social Security Number:
------------------------------------------------
- --------------------------------------------- (PLEASE PRINT OR TYPE)
(PLEASE PRINT OR TYPE)
REGISTERED HOLDER(S) OF ORIGINAL NOTES SIGN HERE
(IN ADDITION, COMPLETE SUBSTITUTE FORM W-9 BELOW)
X
--------------------------------------------------------------------------------------------------------------
X
--------------------------------------------------------------------------------------------------------------
Must be signed by registered holder(s) exactly as name(s) appear(s) on the Original Notes or on a security
position listing as the owner of the Original Notes or by person(s) authorized to become registered holder(s) by
properly completed bond powers transmitted herewith. If signature is by attorney-in-fact, trustee, executor,
administrator, guardian, officer of a corporation or other person acting in a fiduciary capacity, please provide
the following information (please print or type):
- --------------------------------------------------- SIGNATURE GUARANTEE
NAME AND CAPACITY (FULL TITLE) (IF REQUIRED-SEE INSTRUCTION 4)
- ---------------------------------------------------
----------------------------------------------------
- --------------------------------------------------- (SIGNATURE OF REPRESENTATIVE OF SIGNATURE GUARANTOR)
- --------------------------------------------------- ----------------------------------------------------
ADDRESS (INCLUDING ZIP CODE) (NAME AND TITLE)
- --------------------------------------------------- ----------------------------------------------------
(AREA CODE AND TELEPHONE NUMBER) (NAME OF PLAN)
- --------------------------------------------------- ----------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.) (AREA CODE AND TELEPHONE NUMBER)
Dated: , 2004 Dated: , 2004
-------------------------------- --------------------------------
6
PAYOR'S NAME: CHEMED CORPORATION
THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED. Please provide
your social security number or other taxpayer identification number on the
following Substitute Form W-9 and certify therein whether you are subject to
backup withholding.
- -----------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I - PLEASE PROVIDE YOUR TIN ------------------------------------
IN THE BOX AT THE RIGHT AND
CERTIFY BY SIGNING AND DATING Social Security Number
FORM W-9 BELOW. For all accounts, enter TIN in the
box at right. (For most individuals, this is your OR
social security number. If you do not have a
DEPARTMENT OF THE TREASURY number, see enclosed Guidelines for ------------------------------------
INTERNAL REVENUE SERVICE Certification of Taxpayer Identification Employer Identification Number
Number on Substitute Form W-9.) Certify by
signing and dating below. (If awaiting TIN, write
"Applied For")
PAYER'S REQUEST FOR TAXPAYER PART II - For Payees exempt from backup withholding, see the enclosed Guidelines for
IDENTIFICATION NUMBER (TIN) Certification of Taxpayer Identification Number on Substitute Form W-9 and complete as
instructed therein.
- -----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION - Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number or a Taxpayer Identification Number has not been
issued to me and either (a) I have mailed or delivered an application to receive a Taxpayer Identification Number to the
appropriate Internal Revenue Service ("IRS") Center or Social Security Administration Office or (b) I intend to mail or
deliver an application in the near future; and
(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, (b) I have not been notified
by the IRS that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding.
CERTIFICATE INSTRUCTIONS - You must cross out item (2) above if you have been notified by the IRS that you are subject to backup
withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines.)
- -----------------------------------------------------------------------------------------------------------------------------------
The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup
withholding.
- -----------------------------------------------------------------------------------------------------------------------------------
Signature Date , 2004
--------------------------------------------------------------------- ----------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE NEW
NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU WROTE "APPLIED FOR"
INSTEAD OF A TIN IN THE SUBSTITUTE FORM W-9.
- -----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have
mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center
or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 28% of all reportable payments made to me will be
withheld until I provide a number, but will be refunded if I provide a certified taxpayer identification number within 60 days.
----------------------------------------------- -----------------------------------------------
Signature Date:
- -----------------------------------------------------------------------------------------------------------------------------------
7
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES. All
physically delivered Original Notes or confirmation of any book-entry transfer
to the Exchange Agent's account at a book-entry transfer facility of Original
Notes tendered by book-entry transfer, as well as a properly completed and duly
executed copy of this Letter of Transmittal (or facsimile thereof or a message
from The Depository Trust Company (the "Depository") stating that the tendering
holder has expressly acknowledged receipt of, and agreement to be bound by and
held accountable under, the Letter of Transmittal), and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein on or prior to expiration of the Exchange Offer
(the "Expiration Date"). The method of delivery of this Letter of Transmittal,
the Original Notes and any other required documents is at the election and risk
of the Holder, and except as otherwise provided below, the delivery will be
deemed made only when actually received by the Exchange Agent. If such delivery
is by mail, it is suggested that registered mail with return receipt requested,
properly insured, be used.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering Holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance
of the Original Notes for exchange.
Delivery to an address other than as set forth herein, or instructions
via a facsimile number other than the ones set forth herein, will not
constitute a valid delivery.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their
Original Notes, but whose Original Notes are not immediately available and thus
cannot deliver their Original Notes, the Letter of Transmittal or any other
required documents to the Exchange Agent (or comply with the procedures for
book-entry transfer) prior to the Expiration Date, may effect a tender if:
(a) the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., a commercial bank or trust company having an office or correspondent
in the United States or an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution");
(b) prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder, the registration number(s)
of such Original Notes and the principal amount of Original Notes tendered,
stating that the tender is being made thereby and guaranteeing that, within
three New York Stock Exchange trading days after the Expiration Date, the
Letter of Transmittal (or facsimile thereof), together with the Original
Notes (or a confirmation of book entry transfer of such Original Notes into
the Exchange Agent's account at the Depository) and any other documents
required by the Letter of Transmittal, will be deposited by the Eligible
Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof) as well as all tendered Original Notes in proper form for
transfer (or a confirmation of book-entry transfer of such Original Notes
into the Exchange Agent's account at the Depository) and all other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within three New York Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will
be sent to Holders who wish to tender their Original Notes according to the
guaranteed delivery procedures set forth above. Any
8
Holder who wishes to tender Original Notes pursuant to the guaranteed delivery
procedures described above must ensure that the Exchange Agent receives the
Notice of Guaranteed Delivery relating to such Original Notes prior to the
Expiration Date. Failure to comply with the guaranteed delivery procedures
outlined above will not, of itself, affect the validity or effect a revocation
of any Letter of Transmittal form properly completed and executed by a Holder
who attempted to use the guaranteed delivery procedures.
3. PARTIAL TENDERS; WITHDRAWALS. If less than the entire principal amount
of Original Notes evidenced by a submitted certificate is tendered, the
tendering Holder should fill in the principal amount tendered in the column
entitled "Principal Amount Tendered" in the box entitled "Description of
Floating Rate Senior Secured Notes due 2010 Tendered Hereby". A newly issued
Original Note for the principal amount of Original Notes submitted but not
tendered will be sent to such Holder as soon as practicable after the
Expiration Date. All Original Notes delivered to the Exchange Agent will be
deemed to have been tendered in full unless otherwise indicated.
Original Notes tendered pursuant to the Exchange Offer may be withdrawn
at any time prior to the Expiration Date, after which tenders of Original Notes
are irrevocable. To be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Exchange
Agent. Any such notice of withdrawal must (i) specify the name of the person
having deposited the Original Notes to be withdrawn (the "Depositor"),
(ii) identify the Original Notes to be withdrawn (including the registration
number(s) and principal amount of such Original Notes, or, in the case of
Original Notes transferred by book-entry transfer, the name and number of the
account at the Depository to be credited), (iii) be signed by the Holder in the
same manner as the original signature on this Letter of Transmittal (including
any required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Original Notes register the
transfer of such Original Notes into the name of the person withdrawing the
tender and (iv) specify the name in which any such Original Notes are to be
registered, if different from that of the Depositor. All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by Chemed, whose determination shall be final and binding on all
parties. Any Original Notes so withdrawn will be deemed not to have been
validly tendered for purposes of the Exchange Offer and no New Notes will be
issued with respect thereto unless the Original Notes so withdrawn are validly
retendered. Any Original Notes which have been tendered but which are not
accepted for exchange will be returned to the Holder thereof without cost to
such Holder as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer.
4. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed
by the registered Holder(s) of the Original Notes tendered hereby, the
signature must correspond with the name(s) as written on the face of the
certificates representing the Original Notes without alteration or enlargement
or any change whatsoever. If this Letter of Transmittal is signed by a
participant in the Depository, the signature must correspond with the name as
it appears on the security position listing as the owner of the Original Notes.
If any of the Original Notes tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If a number of Original Notes registered in different names are tendered,
it will be necessary to complete, sign and submit as many separate copies of
this Letter of Transmittal as there are different registrations of Original
Notes.
Signatures of this Letter of Transmittal or a notice of withdrawal, as
the case may be, must be guaranteed by an Eligible Institution unless the
Original Notes tendered hereby are tendered (i) by a registered Holder who has
not completed the box entitled "Special Registration Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution.
9
If this Letter of Transmittal is signed by the registered Holder or
Holders of Original Notes (which term, for the purposes described herein, shall
include a participant in the Depository whose name appears on a security
listing as the owner of the Original Notes) listed and tendered hereby, no
endorsements of the tendered Original Notes or separate written instruments of
transfer or exchange are required. In any other case, the registered Holder (or
acting Holder) must either properly endorse the Original Notes or transmit
properly completed bond powers with this Letter of Transmittal (in either case,
executed exactly as the name(s) of the registered Holder(s) appear(s) on the
Original Notes, and, with respect to a participant in the Depository whose name
appears on a security position listing as the owner of Original Notes, exactly
as the name of the participant appears on such security position listing), with
the signature on the Original Notes or bond power guaranteed by an Eligible
Institution (except where the Original Notes are tendered for the account of an
Eligible Institution).
If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by Chemed, proper evidence
satisfactory to Chemed of their authority so to act must be submitted.
5. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS. Tendering Holders
should indicate, in the applicable box, the name and address (or account at the
Depository) in which the New Notes or substitute Original Notes for principal
amounts not tendered or not accepted for exchange are to be issued (or
deposited), if different from the names and addresses or accounts of the person
signing this Letter of Transmittal. In the case of issuance in a different
name, the employer identification number or social security number of the
person named must also be indicated and the tendering Holder should complete
the applicable box.
If no instructions are given, the New Notes (and any Original Notes not
tendered or not accepted) will be issued in the name of and sent to the acting
Holder of the Original Notes or deposited at such Holder's account at the
Depository.
6. TRANSFER TAXES. Chemed shall pay all transfer taxes, if any,
applicable to the transfer and exchange of Original Notes to it or its order
pursuant to the Exchange Offer. If a transfer tax is imposed for any reason
other than the transfer and exchange of Original Notes to Chemed or its order
pursuant to the Exchange Offer, the amount of any such transfer taxes (whether
imposed on the registered Holder or any other person) will be payable by the
tendering Holder. If satisfactory evidence of payment of such taxes or
exception therefrom is not submitted herewith, the amount of such transfer
taxes will be collected from the tendering Holder by the Exchange Agent.
Except as provided in this Instruction 6, it will not be necessary for
transfer stamps to be affixed to the Original Notes listed in this Letter of
Transmittal.
7. WAIVER OF CONDITIONS. Chemed reserves the right, in its sole
discretion, to waive, in whole or in part, any of the conditions to the
Exchange Offer set forth in the Prospectus.
8. MUTILATED, LOST, STOLEN OR DESTROYED ORIGINAL NOTES. Any Holder whose
Original Notes have been mutilated, lost, stolen or destroyed should contact
the Exchange Agent at the address indicated above for further instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to
the procedure for tendering, as well as requests for additional copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange
Agent at the address and telephone number(s) set forth above. In addition, all
questions relating to the Exchange Offer, as well as requests for assistance,
may be directed to the Exchange Agent at the address and telephone number(s)
set forth above.
10
10. VALIDITY AND FORM. All questions as to the validity, form,
eligibility (including time of receipt), acceptance of tendered Original Notes
and withdrawal of tendered Original Notes will be determined by Chemed in its
sole discretion, which determination will be final and binding. Chemed reserves
the absolute right to reject any and all Original Notes not properly tendered
or any Original Notes the acceptance of which would, in the opinion of counsel
for Chemed, be unlawful. Chemed also reserves the right, in its sole
discretion, to waive any defects, irregularities or conditions of tender as to
particular Original Notes. Chemed's interpretation of the terms and conditions
of the Exchange Offer (including the instructions in this Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Original Notes must be
cured within such time as Chemed shall determine. Although Chemed intends to
notify Holders of defects or irregularities with respect to tenders of Original
Notes, neither Chemed, the Exchange Agent nor any other person shall incur any
liability for failure to give such notification. Tenders of Original Notes will
not be deemed to have been made until such defects or irregularities have been
cured or waived. Any Original Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the tendering Holder
as soon as practicable following the Expiration Date.
IMPORTANT TAX INFORMATION
Under U.S. federal income tax law, a Holder tendering Original Notes is
required to provide the Exchange Agent with such Holder's correct TIN on
Substitute Form W-9 above. If such Holder is an individual, the TIN is the
Holder's social security number. The Certificate of Awaiting Taxpayer
Identification Number should be completed if the tendering Holder has not been
issued a TIN and has applied for a number or intends to apply for a number in
the near future. If the Exchange Agent is not provided with the correct TIN,
the Holder may be subject to a $50 penalty imposed by the IRS. In addition,
payments that are made to such Holder with respect to tendered Original Notes
may be subject to backup withholding.
Certain Holders (including, among others, all domestic corporations and
certain foreign individuals and foreign entities) are not subject to these
backup withholding and reporting requirements. Such a Holder who satisfies one
or more of the conditions set forth in Part 2 of the Substitute Form W-9 should
execute the certification following such Part 2. In order for a foreign Holder
to qualify as an exempt recipient, that Holder must submit to the Exchange
Agent a properly completed appropriate IRS Form W-8, signed under penalties of
perjury, attesting to that Holder's exempt status. Such forms can be obtained
from the Exchange Agent.
If backup withholding applies, the Exchange Agent is required to withhold
28% of any amounts otherwise payable to the Holder. Backup withholding is not
an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the IRS.
PURPOSE OF SUBSTITUTE FORM W-9. To prevent backup withholding on payments
that are made to a Holder with respect to Original Notes tendered for exchange,
the Holder is required to notify the Exchange Agent of his or her correct TIN
by completing the form herein certifying that the TIN provided on the
Substitute Form W-9 is correct (or that such Holder is awaiting a TIN) and that
(i) such Holder is exempt, (ii) such Holder has not been notified by the IRS
that he or she is subject to backup withholding as a result of failure to
report all interest or dividends or (iii) the IRS has notified such Holder that
he or she is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT. Each Holder is required to give
the Exchange Agent the social security number or employer identification number
of the record Holder(s) of the Original Notes. If Original Notes are in more
than one name or are not in the name of the actual Holder, consult the
instructions on IRS Form W-9, which may be obtained from the Exchange Agent,
for additional guidance on which number to report.
11
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER. If the tendering
Holder has not been issued a TIN and has applied for a number or intends to
apply for a number in the near future, write "Applied For" in the space for the
TIN on Substitute Form W-9, sign and date the form and the Certificate of
Awaiting Taxpayer Identification Number and return them to the Exchange Agent.
If such certificate is completed and the Exchange Agent is not provided with
the TIN within 60 days, the Exchange Agent will withhold 28% of all payments
made thereafter until a TIN is provided to the Exchange Agent.
IMPORTANT
THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH ORIGINAL
NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS)
OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR
PRIOR TO THE EXPIRATION DATE.
12
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
FLOATING RATE SENIOR SECURED NOTES DUE 2010
OF
CHEMED CORPORATION
(FORMERLY ROTO-ROOTER, INC.)
PURSUANT TO THE PROSPECTUS DATED [ ], 2004
This Notice of Guaranteed Delivery, or one substantially equivalent to
this form, must be used to tender Original Notes (as defined below) pursuant to
the Exchange Offer (as defined below) described in the prospectus dated [
], 2004 (as the same may be amended or supplemented from time to time, the
"Prospectus") of Chemed Corporation ("Chemed"), if (i) certificates for the
outstanding Floating Rate Senior Secured Notes due 2010 of Chemed (the
"Original Notes") are not immediately available, (ii) time will not permit the
Original Notes, the Letter of Transmittal and all other required documents to
be delivered to Wells Fargo Bank, N.A. (the "Exchange Agent") prior to
5:00 p.m., New York City time, on [ ], 2004 or such later date and
time to which the Exchange Offer may be extended (the "Expiration Date"), or
(iii) the procedures for delivery by book-entry transfer cannot be completed on
a timely basis. This Notice of Guaranteed Delivery, or one substantially
equivalent to this form, must be delivered by hand or sent by facsimile
transmission or mail to the Exchange Agent, and must be received by the
Exchange Agent prior to the Expiration Date. See "The Exchange Offer &
Procedures for Tendering" in the Prospectus. Capitalized terms used but not
defined herein shall have the same meaning given them in the Prospectus.
The Exchange Agent for the Exchange Offer is:
WELLS FARGO BANK, N.A.
By Registered or Certified Mail: By Overnight Courier: By Hand:
Wells Fargo Bank, N.A. Wells Fargo Bank, N.A. Wells Fargo Bank, N.A.
Corporate Trust Operations Corporate Trust Operations Corporate Trust Services
MAC N9303-121 MAC N9303-121 608 2nd Avenue South
P.O. Box 1517 Sixth Street & Marquette Avenue Northstar East Building, 12th Floor
Minneapolis, MN 55480 Minneapolis, MN 55479 Minneapolis, MN 55402
Attention: Reorganization Attention: Reorganization
By facsimile:
(612) 667-4927
For information call:
(800) 344-5128
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN
AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID
DELIVERY. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, IS
AT THE RISK OF THE HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. YOU SHOULD READ THE
INSTRUCTIONS ACCOMPANYING THE LETTER OF TRANSMITTAL CAREFULLY BEFORE YOU
COMPLETE THIS NOTICE OF GUARANTEED DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
1
Ladies and Gentlemen:
The undersigned acknowledges receipt of the Prospectus and the related
Letter of Transmittal (the "Letter of Transmittal") which describes the offer
by Chemed (the "Exchange Offer") to exchange $1,000 in principal amount of
registered Floating Rate Senior Secured Notes due 2010 of Chemed (the "Exchange
Notes") for each $1,000 in principal amount of Original Notes.
The undersigned hereby tenders to Chemed, upon the terms and subject to
the conditions set forth in the Prospectus and the Letter of Transmittal, the
aggregate principal amount of Original Notes indicated below pursuant to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer & Guaranteed Delivery Procedures."
The undersigned understands that no withdrawal of a tender of Original
Notes may be made on or after the Expiration Date. The undersigned understands
that for a withdrawal of a tender of Original Notes to be effective, a written
notice of withdrawal that complies with the requirements of the Exchange Offer
must be timely received by the Exchange Agent at one of its addresses specified
on the cover of this Notice of Guaranteed Delivery prior to the Expiration
Date.
The undersigned understands that the exchange of Original Notes for
Exchange Notes pursuant to the Exchange Offer will be made only after timely
receipt by the Exchange Agent of (1) such Original Notes (or book-entry
confirmation of the transfer of such Original Notes) into the Exchange Agent's
account at The Depository Trust Company ("DTC") and (2) a Letter of Transmittal
(or facsimile thereof) with respect to such Original Notes, properly completed
and duly executed, with any required signature guarantees, this Notice of
Guaranteed Delivery and any other documents required by the Letter of
Transmittal or, in lieu thereof, a message from DTC stating that the tendering
holder has expressly acknowledged receipt of, and agreement to be bound by and
held accountable under, the Letter of Transmittal.
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and every obligation of the undersigned under
this Notice of Guaranteed Delivery shall be binding on the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.
Name(s) of Registered Holder(s): __________________________________________
(Please Print or Type)
Signature(s): _____________________________________________________________
Address(es): _____________________________________________________________
Area Code(s) and Telephone Number(s): _____________________________________
If Original Notes will be delivered by book-entry transfer
at DTC, insert Depository Account Number: _______________________________
Date:______________________________________________________________________
Certificate Number(s)* Principal Amount of Original Notes Tendered**
__________________________________ _____________________________________________
__________________________________ _____________________________________________
__________________________________ _____________________________________________
* Need not be completed if the Original Notes being tendered are in book-
entry form.
** Must be in integral multiples of $1,000 principal amount.
2
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Original Notes exactly as its (their) name(s) appear(s) on
certificates for Original Notes or on a security position listing as the owner
of Original Notes, or by person(s) authorized to become registered holder(s) by
endorsements and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, officer or other person acting in a fiduciary or representative capacity,
such person must provide the following information.
Name(s):___________________________________________________________________
Signature(s) ______________________________________________________________
Address(es): ______________________________________________________________
DO NOT SEND ORIGINAL NOTES WITH THIS FORM. ORIGINAL NOTES SHOULD BE SENT
TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL.
3
GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or a correspondent in the
United States or an "eligible guarantor institution" within the meaning of
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), hereby (1) represents that each holder of Original Notes on
whose behalf this tender is being made "own(s)" the Original Notes covered
hereby within the meaning of Rule 13d-3 under the Exchange Act, (2) represents
that such tender of Original Notes complies with Rule 14e-4 of the Exchange Act
and (3) guarantees that the undersigned will deliver to the Exchange Agent the
certificates representing the Original Notes being tendered hereby for exchange
pursuant to the Exchange Offer in proper form for transfer (or a confirmation
of book-entry transfer of such Original Notes into the Exchange Agent's account
at the book-entry transfer facility of DTC) with delivery of a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or in lieu of a Letter of Transmittal a
message from DTC stating that the tendering holder has expressly acknowledged
receipt of, and agreement to be bound by and held accountable under, the letter
of transmittal, and any other required documents, all within five New York
Stock Exchange trading days after the date of execution of the Notice of
Guaranteed Delivery.
Name of Firm: __________________________ _____________________________
(Authorized Signature)
Address: _______________________________ Name: _______________________
(Please Print or Type)
________________________________________ Title: ______________________
Telephone No.___________________________ Dated: ______________________
The institution that completes the Notice of Guaranteed Delivery (a) must
deliver the same to the Exchange Agent at its address set forth above by hand,
or transmit the same by facsimile or mail, on or prior to the Expiration Date,
and (b) must deliver the certificates representing any Original Notes (or a
confirmation of book-entry transfer of such Original Notes into the Exchange
Agent's account at DTC), together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) or a message from DTC stating that
the tendering holder has expressly acknowledged receipt of, and agreement to be
bound by and held accountable under, the letter of transmittal in lieu
thereof), with any required signature guarantees and any other documents
required by the letter of transmittal to the Exchange Agent within the time
period shown herein. Failure to do so could result in a financial loss to such
institution.
4
EXHIBIT 99.3
CHEMED CORPORATION
(FORMERLY ROTO-ROOTER, INC.)
OFFER TO EXCHANGE
ALL OUTSTANDING FLOATING RATE SENIOR SECURED NOTES DUE 2010
($110,000,000 AGGREGATE PRINCIPAL AMOUNT)
FOR
FLOATING RATE SENIOR NOTES DUE 2010
($110,000,000 AGGREGATE PRINCIPAL AMOUNT)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
To Our Clients:
Enclosed for your consideration is a Prospectus dated [ ],
2004 (as the same may be amended or supplemented from time to time, the
"Prospectus") and a form of Letter of Transmittal (the "Letter of Transmittal")
relating to the offer (the "Exchange Offer") by Chemed Corporation ("Chemed")
to exchange up to $110,000,000 aggregate principal amount of its Floating Rate
Senior Secured Notes due 2010 which have been registered under the Securities
Act of 1933, as amended (the "New Notes"), for up to $110,000,000 aggregate
principal amount of its outstanding Floating Rate Senior Secured Notes due 2010
that were issued and sold in a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Original Notes").
The material is being forwarded to you as the beneficial owner of
Original Notes carried by us for your account or benefit but not registered in
your name. A tender of any Original Notes may be made only by us as the
registered holder and pursuant to your instructions. Therefore, Chemed urges
beneficial owners of Original Notes registered in the name of a broker, dealer,
commercial bank, trust company or other nominee to contact such registered
holder promptly if they wish to tender Original Notes in the Exchange Offer.
Accordingly, we request instructions as to whether you wish us to tender
any or all of the Original Notes held by us for your account, pursuant to the
terms and conditions set forth in the Prospectus and Letter of Transmittal. We
urge you to read carefully the Prospectus and the Letter of Transmittal before
instructing us to tender your Original Notes.
Your instructions to us should be forwarded as promptly as possible in
order to permit us to tender Original Notes on your behalf in accordance with
the provisions of the Exchange Offer. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON [ ], 2004, UNLESS EXTENDED (THE "EXPIRATION
DATE"). Original Notes tendered pursuant to the Exchange Offer may be
withdrawn, subject to the procedures described in the Prospectus and the Letter
of Transmittal, at any time prior to the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for the exchange of $1,000 principal amount
at maturity of the New Notes for each $1,000 principal amount at maturity
of the Original Notes. The terms of the New Notes are substantially
identical (including principal amount, interest rate, maturity, security
and ranking) to the terms of the applicable Original Notes, except that
the New Notes are freely transferable by holders thereof (except as
described in the Prospectus).
2. The Exchange Offer is subject to certain conditions. See the
section entitled "The Exchange Offer - Conditions to the Exchange Offer"
in the Prospectus.
1
3. The Exchange Offer and withdrawal rights will expire at 5:00
p.m., New York City time, on [ ], 2004, unless extended.
4. Chemed has agreed to pay the expenses of the Exchange Offer,
except as provided in the Prospectus and the Letter of Transmittal.
5. Any transfer taxes incident to the transfer of Original Notes
from the tendering Holder to Chemed will be paid by Chemed, except as
provided in the Prospectus and the Letter of Transmittal. The Exchange
Offer is not being made to nor will exchange be accepted from or on
behalf of holders of Original Notes in any jurisdiction in which the
making of the Exchange Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction.
If you wish to have us tender any or all of your Original Notes held by
us for your account or benefit, please so instruct us by completing, executing
and returning to us the instruction form that appears below. The accompanying
Letter of Transmittal is furnished to you for informational purposes only and
may not be used by you to tender Original Notes held by us and registered in
our name for your account or benefit.
2
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein in connection with the Exchange Offer of Chemed
relating to $110,000,000 aggregate principal amount of its Floating Rate Senior
Notes due 2010, including the Prospectus and the Letter of Transmittal.
This form will instruct you to exchange the aggregate principal amount of
Original Notes indicated below or, if no aggregate principal amount is
indicated below, all Original Notes held by you for the account or benefit of
the undersigned, pursuant to the terms and conditions set forth in the
Prospectus and Letter of Transmittal.
_______________________________________________________________
Aggregate Principal Amount of Original Notes to be exchanged
$_______________ Floating Rate Senior Secured Notes due 2010
__________________________________________________________________________
*I (we) understand that if I (we) sign these
instruction forms without indicating an
aggregate principal amount of Original
Notes in the space above, all Original ________________________________________
Notes, as applicable, held by you for my
(our) account will be exchanged. ________________________________________
Signature(s)*
________________________________________
Capacity (full title), if signing in a
fiduciary or representative capacity
________________________________________
________________________________________
________________________________________
Name(s) and address, including zip code
Date:___________________________________
________________________________________
Area Code and Telephone Number
________________________________________
Taxpayer identification or Social Security
Number
3
EXHIBIT 99.4
CHEMED CORPORATION
(FORMERLY ROTO-ROOTER, INC.)
OFFER TO EXCHANGE
ALL OUTSTANDING FLOATING RATE SENIOR SECURED NOTES DUE 2010
($110,000,000 AGGREGATE PRINCIPAL AMOUNT)
FOR
FLOATING RATE SENIOR SECURED NOTES DUE 2010
($110,000,000 AGGREGATE PRINCIPAL AMOUNT)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
To Securities Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Enclosed for your consideration is a Prospectus dated [ ],
2004 (as the same may be amended or supplemented from time to time, the
"Prospectus") and a form of Letter of Transmittal (the "Letter of Transmittal")
relating to the offer (the "Exchange Offer") by Chemed Corporation ("Chemed")
to exchange up to $110,000,000 aggregate principal amount of its Floating Rate
Senior Secured Notes due 2010 which have been registered under the Securities
Act of 1933, as amended (the "New Notes"), for up to $110,000,000 aggregate
principal amount of its outstanding Floating Rate Senior Secured Notes due 2010
that were issued and sold in a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Original Notes").
We are asking you to contact your clients for whom you hold Original
Notes registered in your name or in the name of your nominee. In addition, we
ask you to contact your clients who, to your knowledge, hold Original Notes
registered in their own name. Chemed will not pay any fees or commissions to
any broker, dealer or other person in connection with the solicitation of
tenders pursuant to the Exchange Offer. You will, however, be reimbursed by
Chemed for customary mailing and handling expenses incurred by you for
forwarding any of the enclosed materials to your clients. Chemed will pay all
transfer taxes, if any, applicable to the tender of Original Notes to it or its
order, except as otherwise provided in the Prospectus and the Letter of
Transmittal.
Enclosed are copies of the following documents:
1. the Prospectus;
2. a Letter of Transmittal for your use in connection with the
exchange of Original Notes and for the information of your clients
(facsimile copies of the Letter of Transmittal may be used to exchange
Original Notes);
3. a form of letter that may be sent to your clients for whose
accounts you hold Original Notes registered in your name or the name of
your nominee, with space provided for obtaining the clients' instructions
with regard to the Exchange Offer;
4. a Notice of Guaranteed Delivery;
5. guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
6. a return envelope addressed to Wells Fargo Bank, N.A. the
Exchange Agent.
1
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YOUR CITY TIME, ON [ ], 2004, UNLESS EXTENDED (THE
"EXPIRATION DATE"). ORIGINAL NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY
BE WITHDRAWN, SUBJECT TO THE PROCEDURES DESCRIBED IN THE PROSPECTUS AND THE
LETTER OF TRANSMITTAL, AT ANY TIME PRIOR TO THE EXPIRATION DATE.
To tender Original Notes, certificates for Original Notes or a book-entry
confirmation (see the section entitled "The Exchange Offer" in the Prospectus),
a duly executed and properly completed Letter of Transmittal or a facsimile
thereof, and any other required documents, must be received by the Exchange
Agent as provided in the Prospectus and the Letter of Transmittal.
Questions and requests for assistance with respect to the Exchange Offer
or requests for additional copies of the enclosed material may be directed to
the Exchange Agent at its address and telephone number set forth in the
Prospectus.
Very truly yours,
CHEMED CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY OTHER PERSON AS AN AGENT OF CHEMED CORPORATION OR THE EXCHANGE
AGENT, OR ANY AFFILIATE THEREOF, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE
ANY STATEMENTS OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM WITH RESPECT TO THE
EXCHANGE OFFER, EXCEPT FOR THE ENCLOSED DOCUMENTS AND THE STATEMENTS EXPRESSLY
MADE IN THE PROSPECTUS AND THE LETTER OF TRANSMITTAL.
2