EXHIBIT 1.1
$180,000,000
Chemed Corporation
1.875% Convertible Senior Notes due May 15, 2014
Purchase Agreement
May 8, 2007
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representatives of the
several Initial Purchasers
listed in Schedule 1 hereto
Ladies and Gentlemen:
Chemed Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell to the several initial purchasers listed in Schedule 1 hereto
(the "Initial Purchasers"), for whom you are acting as representatives (the
"Representatives"), $180,000,000 principal amount of its 1.875% Convertible
Senior Notes due 2014 (the "Firm Securities"). The Securities (as defined below)
will be issued pursuant to an Indenture to be dated as of May 14, 2007 (the
"Indenture") among the Company, the guarantors listed in Schedule 2 hereto (the
"Guarantors") and LaSalle Bank, N.A., as trustee (the "Trustee"), and will be
guaranteed on an unsecured senior basis by each of the Guarantors (the
"Guarantees"). The Company also proposes to issue and sell to the Initial
Purchasers not more than an additional $20,000,000 principal amount of its
1.875% Convertible Senior Notes due 2014 (the "Additional Securities") if and to
the extent that the Initial Purchasers shall have determined to exercise the
right to purchase such 1.875% Convertible Senior Notes due 2014 granted to the
Initial Purchasers in Section 1 hereof. The Firm Securities and the Additional
Securities are hereinafter collectively referred to as the "Securities". The
Securities will be convertible into shares (the "Underlying Securities") of
capital stock of the Company, par value $1.00 per share (the "Capital Stock").
The Securities will be sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance upon an exemption therefrom. The Company and the Guarantors have
prepared a preliminary offering memorandum dated May 7, 2007 (the "Preliminary
Offering Memorandum") and will prepare an offering memorandum dated the date
hereof (the "Offering Memorandum") setting forth information concerning the
Company and the Securities. Copies of the Preliminary Offering Memorandum have
been, and copies of the Offering Memorandum will be, delivered by the Company to
the Initial Purchasers pursuant to the terms of this Agreement. The Company
hereby confirms that it has authorized the use of the Preliminary Offering
Memorandum, the other Time of Sale Information (as defined below) and the
Offering Memorandum in connection with the offering and resale of the Securities
by the Initial Purchasers in the manner contemplated by this Agreement.
References herein to the Preliminary Offering Memorandum, the Time of Sale
Information and the Offering Memorandum shall be deemed to refer to and include
any document incorporated by reference therein.
At or prior to the time when sales of the Securities were first made (the
"Time of Sale"), the following information shall have been prepared
(collectively with the pricing information set forth on Annex A hereto, the
"Time of Sale Information"): the Preliminary Offering Memorandum, as
supplemented and amended by the written communications listed on Annex A hereto.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement, to be dated the Closing Date (as defined below)
and substantially in the form attached hereto as Exhibit A (the "Registration
Rights Agreement"), pursuant to which the Company and the Guarantors will agree
to file one or more registration statements with the Securities and Exchange
Commission (the "Commission") providing for the registration under the
Securities Act of the Securities, the Underlying Securities and the Guarantees.
The Company hereby confirms its agreement with the several Initial
Purchasers concerning the purchase and resale of the Securities, as follows:
1. Purchase and Resale of the Securities. (a) The Company agrees to issue
and sell the Securities to the several Initial Purchasers as provided in this
Agreement, and each Initial Purchaser, on the basis of the representations,
warranties and agreements set forth herein and subject to the conditions set
forth herein, agrees, severally and not jointly, to purchase from the Company
the respective principal amount of Securities set forth opposite such Initial
Purchaser's name in Schedule 1 hereto at a price equal to 97.25% of the
principal amount thereof (the "Purchase Price") plus accrued interest, if any,
from May 14, 2007 to the Closing Date.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Initial Purchasers the Additional Securities, and the Initial Purchasers
shall have the right to purchase in whole, or from time to time in part, up to
$20,000,000 principal amount of Additional Securities at the Purchase Price plus
accrued interest, if any, from the Closing Date (as defined below) to the date
of payment and delivery. If you, on behalf of the Initial Purchasers, exercise
such option, you shall so notify the Company in writing, which notice shall
specify the principal amount of Additional Securities to be purchased by the
Initial Purchasers and the date on which such Additional Securities are to be
purchased. Such date may be the same as the Closing Date but not earlier than
the Closing Date nor later than ten business days after the date of such notice,
and in no case later than the 13-day period commencing on and including the
Closing Date.
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(b) The Company understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Time of Sale Information.
Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:
(i) it is a qualified institutional buyer within the meaning of Rule
144A under the Securities Act (a "QIB") and an accredited investor within
the meaning of Rule 501(a) under the Securities Act;
(ii) it has not solicited offers for, or offered or sold, and will not
solicit offers for, or offer or sell, the Securities by means of any form
of general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D under the Securities Act ("Regulation D") or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act; and
(iii) it has not solicited offers for, or offered or sold, and will
not solicit offers for, or offer or sell, the Securities as part of their
initial offering except within the United States to persons whom it
reasonably believes to be QIBs in transactions pursuant to Rule 144A under
the Securities Act ("Rule 144A") and in connection with each such sale, it
has taken or will take reasonable steps to ensure that the purchaser of the
Securities is aware that such sale is being made in reliance on Rule 144A.
(c) Each Initial Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 6(f) and 6(g), counsel for the Company and counsel for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers, and compliance by the Initial Purchasers
with their agreements, contained in paragraph (b) above, and each Initial
Purchaser hereby consents to such reliance.
(d) The Company acknowledges and agrees that the Initial Purchasers may
offer and sell Securities to or through any affiliate of an Initial Purchaser
and that any such affiliate may offer and sell Securities purchased by it to or
through any Initial Purchaser.
(e) The Company and the Guarantors acknowledge and agree that the Initial
Purchasers are acting solely in the capacity of an arm's length contractual
counterparty to the Company and the Guarantors with respect to the offering of
Securities contemplated hereby (including in connection with determining the
terms of the offering) and not as financial advisors or fiduciaries to, or
agents of, the Company, the Guarantors or any other person. Additionally,
neither of the Representatives nor any of the other Initial Purchasers are
advising the Company, the Guarantors or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction. The Company
and the Guarantors shall consult with their own advisors concerning such matters
and shall be responsible for making their own independent investigation and
appraisal of the transactions contemplated hereby, and neither of the
Representatives nor any of the other Initial Purchasers shall have any
responsibility or liability to the Company or the Guarantors with respect
thereto. Any review by the Representatives or any Initial Purchaser of the
Company, the Guarantors and the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for the benefit
of the Representatives or such Initial Purchaser, as the case may be, and shall
not be on behalf of the Company, the Guarantors or any other person.
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2. Payment and Delivery. (a) Payment for and delivery of the Firm
Securities will be made at the offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 A.M., New York City time, on May 14,
2007, or at such other time or place on the same or such other date, not later
than the fifth business day thereafter, as the Representatives and the Company
may agree upon in writing. The time and date of such payment and delivery is
referred to herein as the "Closing Date".
Payment for and delivery of the Additional Securities will be made at the
offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
at 10:00 A.M., New York City time, on the date specified in the notice described
in Section 1 or at such other time or place on the same or such other date, not
later than the 13-day period commencing on and including the Closing Date, as
the Representatives and the Company may agree upon in writing. The time and date
of such payment and delivery is referred to herein as the "Optional Closing
Date".
(b) Payment for the Firm Securities and Additional Securities shall be made
by wire transfer in immediately available funds to the account(s) specified by
the Company to the Representatives against delivery to the nominee of The
Depository Trust Company, for the account of the Initial Purchasers, of one or
more global notes representing the Firm Securities and the Additional Securities
(collectively, the "Global Note"), with any transfer taxes payable in connection
with the sale of the Securities duly paid by the Company. The Global Note will
be made available for inspection by the Representatives not later than 1:00
P.M., New York City time, on the business day prior to the Closing Date or the
Optional Closing Date, as the case may be.
3. Representations and Warranties of the Company and the Guarantors. The
Company and the Guarantors jointly and severally represent and warrant to each
Initial Purchaser that:
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(a) Preliminary Offering Memorandum, Time of Sale Information and Offering
Memorandum. The Preliminary Offering Memorandum, as of its date, did not, the
Time of Sale Information, at the Time of Sale, did not, and at the Closing Date,
will not, and the Offering Memorandum, in the form first used by the Initial
Purchasers to confirm sales of the Securities and as of the Closing Date, will
not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company and the Guarantors make no representation or warranty with respect to
any statements or omissions made in reliance upon and in conformity with
information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representatives expressly for use
in the Preliminary Offering Memorandum, the Time of Sale Information or the
Offering Memorandum.
(b) Additional Written Communications. Other than the Preliminary Offering
Memorandum and the Offering Memorandum, the Company (including its agents and
representatives, other than the Initial Purchasers in their capacity as such)
has not made, used, prepared, authorized, approved or referred to and will not
prepare, make, use, authorize, approve or refer to any written communication
that constitutes an offer to sell or solicitation of an offer to buy the
Securities other than the documents listed on Annex A hereto, including a term
sheet substantially in the form of Annex B hereto, and other written
communications used in accordance with Section 4(c).
(c) Incorporated Documents. The documents incorporated by reference in each
of the Time of Sale Information and the Offering Memorandum, when filed with the
Commission, conformed or will conform, as the case may be, in all material
respects to the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder, and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(d) Financial Statements. The financial statements and the related notes
thereto included or incorporated by reference in each of the Time of Sale
Information and the Offering Memorandum present fairly the financial position of
the Company and its subsidiaries as of the dates indicated and the results of
their operations and the changes in their cash flows for the periods specified;
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered thereby; and the other financial information included or
incorporated by reference in each of the Time of Sale Information and the
Offering Memorandum has been derived from the accounting records of the Company
and its subsidiaries and presents fairly the information shown thereby.
(e) No Material Adverse Change. Since the date of the most recent financial
statements of the Company included or incorporated by reference in each of the
Time of Sale Information and the Offering Memorandum (i) there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries, or any dividend or distribution of any kind declared, set aside
for payment, paid or made by the Company on any class of capital stock, or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, properties, management, financial
position, results of operations or prospects of the Company and its subsidiaries
taken as a whole; (ii) neither the Company nor any of its subsidiaries has
entered into any transaction or agreement that is material to the Company and
its subsidiaries taken as a whole or incurred any liability or obligation,
direct or contingent, that is material to the Company and its subsidiaries taken
as a whole; and (iii) neither the Company nor any of its subsidiaries has
sustained any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor disturbance or dispute or any action, order or decree of any court or
arbitrator or governmental or regulatory authority, except in the case of
clauses (i) through (iii) as otherwise disclosed in the Time of Sale
Information.
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(f) Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified, in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the
business, properties, management, financial position, results of operations or
prospects of the Company and its subsidiaries taken as a whole or on the
performance by the Company and the Guarantors of their respective obligations
under the Securities and the Guarantees (a "Material Adverse Effect"). The
subsidiaries listed in Schedule 3 to this Agreement are the only significant
subsidiaries of the Company.
(g) Capitalization. The Company has an authorized capitalization as set
forth in each of the Time of Sale Information and the Offering Memorandum under
the heading "Capitalization"; such authorized capital stock of the Company
conforms as to legal matters in all material respects to the description thereof
contained in the Time of Sale Information and the Offering Memorandum; there are
no outstanding options to purchase, or any rights or warrants to subscribe for,
or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Capital Stock, any shares of capital
stock of any subsidiary, or any such warrants, convertible securities or
obligations, except as set forth in the Time of Sale Information and the
Offering Memorandum and except for options granted under, or contracts or
commitments pursuant to, the Company's previous or currently existing stock
option and other similar officer, director or employee benefit plans; except for
this Agreement and the Registration Rights Agreement or stock purchase plans,
there are no contracts, commitments, agreements, arrangements, understandings or
undertakings of any kind to which the Company is a party, or by which it is
bound, granting to any person the right to require either the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company or requiring the Company to include such securities with the
Securities registered pursuant to any registration statement; the shares of
Capital Stock outstanding on the date hereof have been duly authorized and are
validly issued, fully paid and non-assessable; and all the outstanding shares of
capital stock or other equity interests of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear of any lien,
charge, encumbrance, security interest, restriction on voting or transfer or any
other claim of any third party.
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(h) Due Authorization. The Company and each of the Guarantors have full
right, power and authority to execute and deliver this Agreement, the
Securities, the Indenture (including each Guarantee set forth therein) and the
Registration Rights Agreement (collectively, the "Transaction Documents") and to
perform its obligations hereunder and thereunder; and all action required to be
taken for the due and proper authorization, execution and delivery of each of
the Transaction Documents and the consummation of the transactions contemplated
thereby has been duly and validly taken.
(i) The Indenture. The Indenture has been duly authorized by the Company
and each of the Guarantors and, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company and each of the Guarantors enforceable
against the Company and each of the Guarantors in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity (collectively, the "Enforceability Exceptions"); and on the
Closing Date, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission applicable to
an indenture that is qualified thereunder.
(j) The Securities and the Guarantees. The Securities have been duly
authorized by the Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein, will be
duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company enforceable against the Company in accordance
with their terms, subject to the Enforceability Exceptions, and will be entitled
to the benefits of the Indenture and the Guarantees have been duly authorized by
each of the Guarantors and, when the Securities have been duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for as
provided herein, will be valid and legally binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in accordance with their
terms, subject to the Enforceability Exceptions, and will be entitled to the
benefits of the Indenture.
(k) The Underlying Securities. Upon issuance and delivery of the Securities
in accordance with the Agreement and the Indenture, the Securities will be
convertible at the option of the holder thereof into shares of the Underlying
Securities in accordance the terms of the Securities; the Underlying Securities
reserved for issuance upon conversion of the Securities have been duly
authorized and reserved and, when issued upon conversion of the Securities in
accordance with the terms of the Securities, will be validly issued, fully paid
and non-assessable, and the issuance of the Underlying Securities will not be
subject to any preemptive or similar rights.
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(l) Purchase and Registration Rights Agreements. This Agreement has been
duly authorized, executed and delivered by the Company and each of the
Guarantors; and the Registration Rights Agreement has been duly authorized by
the Company and each of the Guarantors on the Closing Date will be duly executed
and delivered by the Company and each of the Guarantors and, when duly executed
and delivered in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, subject to the Enforceability Exceptions, and except
that rights to indemnity and contribution thereunder may be limited by
applicable law and public policy.
(m) Descriptions of the Transaction Documents. Each Transaction Document
conforms in all material respects to the description thereof contained in each
of the Time of Sale Information and the Offering Memorandum.
(n) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject; or
(iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Material
Adverse Effect.
(o) No Conflicts. The execution, delivery and performance by the Company
and each of the Guarantors of each of the Transaction Documents to which each is
a party, the issuance and sale of the Securities (including the issuance of the
Guarantees and the Underlying Securities upon conversion of the Securities) and
compliance by the Company and each of the Guarantors with the terms thereof and
the consummation of the transactions contemplated by the Transaction Documents
will not (i) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any violation of
the provisions of the charter or by-laws or similar organizational documents of
the Company or any of its subsidiaries or (iii) result in the violation of any
law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of
clauses (i) and (iii) above, for any such conflict, breach, violation or default
that would not, individually or in the aggregate, have a Material Adverse
Effect.
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(p) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company of each of the Transaction Documents to which each is a party,
the issuance and sale of the Securities (including the issuance of the
Guarantees and the Underlying Securities upon conversion of the Securities) and
compliance by the Company and each of the Guarantors with the terms thereof and
the consummation of the transactions contemplated by the Transaction Documents,
except for such consents, approvals, authorizations, orders and registrations or
qualifications as may be required under applicable state securities laws in
connection with the purchase and resale of the Securities by the Initial
Purchasers and as may be required under applicable state securities laws and the
Securities Act in connection with the transactions contemplated by the
Registration Rights Agreement.
(q) Legal Proceedings. Except as described in each of the Time of Sale
Information and the Offering Memorandum, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to which the
Company or any of its subsidiaries is or may be a party or to which any property
of the Company or any of its subsidiaries is or may be the subject that,
individually or in the aggregate, if determined adversely to the Company or any
of its subsidiaries, could reasonably be expected to have a Material Adverse
Effect; and no such investigations, actions, suits or proceedings are threatened
or, to the knowledge of the Company and each of the Guarantors, contemplated by
any governmental or regulatory authority or by others.
(r) Independent Accountants. PricewaterhouseCoopers LLP, who have certified
certain financial statements of the Company and its subsidiaries are independent
public accountants with respect to the Company and its subsidiaries within the
applicable rules and regulations adopted by the Commission and the Public
Accounting Oversight Board (United States) and as required by the Securities
Act.
(s) Title to Real and Personal Property. The Company and its subsidiaries
have good and marketable title in fee simple to, or have valid rights to lease
or otherwise use, all items of real and personal property that are material to
the respective businesses of the Company and its subsidiaries, in each case free
and clear of all liens, encumbrances, claims and defects and imperfections of
title except those that (i) do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries or (ii)
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
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(t) Title to Intellectual Property. The Company and its subsidiaries own or
possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective businesses;
and the conduct of their respective businesses will not conflict in any material
respect with any such rights of others, and the Company and its subsidiaries
have not received any notice of any claim of infringement of or conflict with
any such rights of others.
(u) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on the one hand,
and the directors, officers, stockholders or other affiliates of the Company or
any of its subsidiaries, on the other, that would be required by the Securities
Act to be described in a registration statement to be filed with the Commission
and that is not so described in each of the Time of Sale Information and the
Offering Memorandum.
(v) Investment Company Act. Neither the Company nor any of its subsidiaries
is, and after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in each of the Time of Sale
Information and the Offering Memorandum none of them will be, an "investment
company" or an entity "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission thereunder (collectively, the "Investment Company Act").
(w) Taxes. The Company and its subsidiaries have paid all material federal,
state, local and foreign taxes and filed all tax returns required to be paid or
filed through the date hereof; and except as otherwise disclosed in each of the
Time of Sale Information and the Offering Memorandum, there is no material tax
deficiency that has been, or could reasonably be expected to be, asserted
against the Company or any of its subsidiaries or any of their respective
properties or assets.
(x) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in each of the Time of Sale Information and
the Offering Memorandum, except where the failure to possess or make the same
would not, individually or in the aggregate, have a Material Adverse Effect; and
except as described in each of the Time of Sale Information and the Offering
Memorandum, neither the Company nor any of its subsidiaries has received notice
of any revocation or modification of any such license, certificate, permit or
authorization or has any reason to believe that any such license, certificate,
permit or authorization will not be renewed in the ordinary course.
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(y) No Labor Disputes. No labor disturbance by or dispute with employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company and each of the Guarantors, is contemplated or threatened and neither
the Company nor any Guarantor is aware of any existing or imminent labor
disturbance by, or dispute with, the employees of any of the Company's or any of
the Company's subsidiaries' principal suppliers, contractors or customers,
except as would not have a Material Adverse Effect.
(z) Compliance With Environmental Laws. (i) The Company and its
subsidiaries (x) are, and at all prior times were, in compliance with any and
all applicable federal, state, local and foreign laws, rules, regulations,
requirements, decisions and orders relating to the protection of human health or
safety, the environment, natural resources, hazardous or toxic substances or
wastes, pollutants or contaminants (collectively, "Environmental Laws"), (y)
have received and are in compliance with all permits, licenses, certificates or
other authorizations or approvals required of them under applicable
Environmental Laws to conduct their respective businesses, and (z) have not
received notice of any actual or potential liability under or relating to any
Environmental Laws, including for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants, and have no knowledge of any event or condition that would
reasonably be expected to result in any such notice, and (ii) there are no costs
or liabilities associated with Environmental Laws of or relating to the Company
or its subsidiaries, except in the case of each of (i) and (ii) above, for any
such failure to comply, or failure to receive required permits, licenses or
approvals, or cost or liability, as would not, individually or in the aggregate,
have a Material Adverse Effect; and (iii) except as described in each of the
Time of Sale Information and the Offering Memorandum, (x) there are no
proceedings that are pending, or that are known to be contemplated, against the
Company or any of its subsidiaries under any Environmental Laws in which a
governmental entity is also a party, other than such proceedings regarding which
it is reasonably believed no monetary sanctions of $100,000 or more will be
imposed, (y) the Company and its subsidiaries are not aware of any issues
regarding compliance with Environmental Laws, or liabilities or other
obligations under Environmental Laws or concerning hazardous or toxic substances
or wastes, pollutants or contaminants, that could reasonably be expected to have
a material effect on the capital expenditures, earnings or competitive position
of the Company and its subsidiaries, and (z) none of the Company and its
subsidiaries anticipates material capital expenditures relating to any
Environmental Laws.
(aa) Compliance With ERISA. (i) Each employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), for which the Company or any member of its "Controlled
Group" (defined as any organization which is a member of a controlled group of
corporations within the meaning of Section 414 of the Internal Revenue Code of
1986, as amended (the "Code")) would have any liability (each, a "Plan") has
been maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Code; (ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any Plan excluding transactions effected pursuant to a statutory or
administrative exemption; (iii) for each Plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no "accumulated
funding deficiency" as defined in Section 412 of the Code, whether or not
waived, has occurred or is reasonably expected to occur; (iv) the fair market
value of the assets of each Plan exceeds the present value of all benefits
accrued under such Plan (determined based on those assumptions used to fund such
Plan); (v) no "reportable event" (within the meaning of Section 4043(c) of
ERISA) has occurred or is reasonably expected to occur; and (vi) neither the
Company nor any member of the Controlled Group has incurred, nor reasonably
expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC, in the ordinary course and
without default) in respect of a Plan (including a "multiemployer plan", within
the meaning of Section 4001(a)(3) of ERISA).
11
(bb) Disclosure Controls. The Company and its subsidiaries maintain an
effective system of "disclosure controls and procedures" (as defined in Rule
13a-15(e) of the Exchange Act) that is designed to ensure that information
required to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Commission's rules and forms, including
controls and procedures designed to ensure that such information is accumulated
and communicated to the Company's management as appropriate to allow timely
decisions regarding required disclosure. The Company and its subsidiaries have
carried out evaluations of the effectiveness of their disclosure controls and
procedures as required by Rule 13a-15 of the Exchange Act.
(cc) Accounting Controls. The Company and its subsidiaries maintain systems
of "internal control over financial reporting" (as defined in Rule 13a-15(f) of
the Exchange Act) that comply with the requirements of the Exchange Act and have
been designed by, or under the supervision of, their respective principal
executive and principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. The
Company and its subsidiaries maintain internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Except as disclosed in each of the Time of Sale Information and the Offering
Memorandum, to the knowledge of the Company, there are no material weaknesses or
significant deficiencies in the Company's internal controls.
12
(dd) No Unlawful Payments. Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company and each of the Guarantors, any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(ee) Insurance. The Company and its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are
adequate to protect the Company and its subsidiaries and their respective
businesses; and neither the Company nor any of its subsidiaries has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage at reasonable cost
from similar insurers as may be necessary to continue its business.
(ff) Compliance with Money Laundering Laws. The operations of the Company
and its subsidiaries are and have been conducted at all times in compliance in
all material respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws") and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened.
(gg) Compliance with OFAC. None of the Company, any of its subsidiaries or,
to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury ("OFAC"); and the Company will not directly or
indirectly use the proceeds of the offering of the Securities hereunder, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(hh) Solvency. On and immediately after the Closing Date, the Company
(after giving effect to the issuance of the Securities and the other
transactions related thereto as described in each of the Time of Sale
Information and the Offering Memorandum) will be Solvent. As used in this
paragraph, the term "Solvent" means, with respect to a particular date, that on
such date (i) the present fair market value (or present fair saleable value) of
the assets of the Company is not less than the total amount required to pay the
liabilities of the Company on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured; (ii) the
Company is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business; (iii) assuming consummation of the
issuance of the Securities as contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum, the Company is not incurring debts or
liabilities beyond its ability to pay as such debts and liabilities mature; (iv)
the Company is not engaged in any business or transaction, and does not propose
to engage in any business or transaction, for which its property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which the Company is engaged; and (v) the
Company is not a defendant in any civil action that would reasonably be expected
to result in a judgment that the Company is or would become unable to satisfy.
13
(ii) No Restrictions on Subsidiaries. No subsidiary of the Company is
currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary's properties or
assets to the Company or any other subsidiary of the Company.
(jj) No Broker's Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against any of them or any
Initial Purchaser for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Securities.
(kk) Rule 144A Eligibility. On the Closing Date, the Securities will not be
of the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in an automated
inter-dealer quotation system; and each of the Preliminary Offering Memorandum
and the Offering Memorandum, each as of its respective date, contains or will
contain all the information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act.
(ll) No Integration. Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D) has, directly or through any agent,
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(mm) No General Solicitation. None of the Company or any of its affiliates
or any other person acting on its or their behalf (other than the Initial
Purchasers, as to which no representation is made) has solicited offers for, or
offered or sold, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act.
14
(nn) Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained in Section
1(b) and their compliance with their agreements set forth therein, it is not
necessary, in connection with the issuance and sale of the Securities to the
Initial Purchasers and the offer, resale and delivery of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement, the Time of
Sale Information and the Offering Memorandum, to register the Securities under
the Securities Act or to qualify the Indenture under the Trust Indenture Act.
(oo) No Stabilization. Neither the Company nor any of the Guarantors have
taken, directly or indirectly, any action designed to or that could reasonably
be expected to cause or result in any stabilization or manipulation of the price
of the Securities.
(pp) Margin Rules. Neither the issuance, sale and delivery of the
Securities nor the application of the proceeds thereof by the Company as
described in each of the Time of Sale Information and the Offering Memorandum
will violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System or any other regulation of such Board of Governors.
(qq) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in any of the Time of Sale Information or the Offering Memorandum
has been made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.
(rr) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included or incorporated by reference in each of the Time of
Sale Information and the Offering Memorandum is not based on or derived from
sources that are reliable and accurate in all material respects.
(ss) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. There is and has been no failure on the part of
the Company or any of the Company's directors or officers, in their capacities
as such, to comply in all material respects with any provision of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated in
connection therewith (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act"), including Section 402 related
to loans and Sections 302 and 906 related to certifications.
4. Further Agreements of the Company and the Guarantors. The Company and
the Guarantors jointly and severally covenant and agree with each Initial
Purchaser that:
(a) Delivery of Copies. The Company will deliver to the Initial Purchasers
as many copies of the Preliminary Offering Memorandum, any other Time of Sale
Information and the Offering Memorandum (including all amendments and
supplements thereto) as the Representatives may reasonably request.
15
(b) Offering Memorandum, Amendments or Supplements. Before finalizing the
Offering Memorandum or making or distributing any amendment or supplement to any
of the Time of Sale Information or the Offering Memorandum or filing with the
Commission any document that will be incorporated by reference therein, the
Company will furnish to the Representatives and counsel for the Initial
Purchasers a copy of the proposed Offering Memorandum or such amendment or
supplement or document to be incorporated by reference therein for review, and
will not distribute any such proposed Offering Memorandum, amendment or
supplement or file any such document with the Commission to which the
Representatives reasonably object.
(c) Additional Written Communications. Before using, authorizing, approving
or referring to any written communication (as defined in the Securities Act)
that constitutes an offer to sell or a solicitation of an offer to buy the
Securities (an "Issuer Written Communication") (other than written
communications that are listed on Annex A hereto, the Preliminary Offering
Memorandum and the Offering Memorandum), the Company will furnish to the
Representatives and counsel for the Initial Purchasers a copy of such written
communication for review and will not use, authorize, approve or refer to any
such written communication to which the Representatives reasonably object.
(d) Notice to the Representatives. The Company will advise the
Representatives promptly, and confirm such advice in writing, (i) of the
issuance by any governmental or regulatory authority of any order preventing or
suspending the use of any of the Time of Sale Information or the Offering
Memorandum or the initiation or threatening of any proceeding for that purpose;
(ii) of the occurrence of any event at any time prior to the completion of the
initial offering of the Securities as a result of which any of the Time of Sale
Information or the Offering Memorandum as then amended or supplemented would
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing when such Time of Sale Information or the Offering
Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt
by the Company of any notice with respect to any suspension of the qualification
of the Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
commercially reasonable efforts to prevent the issuance of any such order
preventing or suspending the use of any of the Time of Sale Information or the
Offering Memorandum or suspending any such qualification of the Securities and,
if any such order is issued, will obtain as soon as possible the withdrawal
thereof.
(e) Ongoing Compliance of the Offering Memorandum and Time of Sale
Information. (1) If at any time prior to the completion of the initial offering
of the Securities (i) any event shall occur or condition shall exist as a result
of which the Offering Memorandum as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing when the Offering Memorandum is delivered to a purchaser,
not misleading or (ii) it is necessary to amend or supplement the Offering
Memorandum to comply with law, the Company will immediately notify the Initial
Purchasers thereof and forthwith prepare and, subject to paragraph (b) above,
furnish to the Initial Purchasers such amendments or supplements to the Offering
Memorandum (or any document to be filed with the Commission and incorporated by
reference therein) as may be necessary so that the statements in the Offering
Memorandum as so amended or supplemented (or including such document to be
incorporated by reference therein) will not, in the light of the circumstances
existing when the Offering Memorandum is delivered to a purchaser, be misleading
or so that the Offering Memorandum will comply with law and (2) if at any time
prior to the Closing Date (i) any event shall occur or condition shall exist as
a result of which any of the Time of Sale Information as then amended or
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
(ii) it is necessary to amend or supplement any of the Time of Sale Information
to comply with law, the Company will immediately notify the Initial Purchasers
thereof and forthwith prepare and, subject to paragraph (b) above, furnish to
the Initial Purchasers such amendments or supplements to any of the Time of Sale
Information (or any document to be filed with the Commission and incorporated by
reference therein) as may be necessary so that the statements in any of the Time
of Sale Information as so amended or supplemented will not, in light of the
circumstances under which they were made, be misleading.
16
(f) Blue Sky Compliance. The Company will qualify the Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and will continue such qualifications
in effect so long as required for the offering and resale of the Securities;
provided that the neither the Company nor any of the Guarantors shall be
required to (i) qualify as a foreign corporation or other entity or as a dealer
in securities in any such jurisdiction where it would not otherwise be required
to so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it
is not otherwise so subject.
(g) Clear Market. Without the prior written consent of the Representatives,
neither the Company nor any of the Guarantors will, during the period ending 90
days after the date of the Offering Memorandum, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Capital
Stock or any securities convertible into or exercisable or exchangeable for
Capital Stock, (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Capital Stock, (iii) file with the Commission a registration statement under
the Securities Act relating to any additional shares of its Capital Stock or
securities convertible into, or exchangeable for, any shares of its Capital
Stock, or publicly disclose the intention to effect any transaction described in
clause (i), (ii) or (iii), whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Capital Stock or such other
securities, in cash or otherwise; provided that the foregoing shall not apply to
(A) the sale of the Securities under this Agreement or the issuance of the
Underlying Securities, (B) the grant by the Company of employee or director
stock options in the ordinary course of business, the issuance by the Company of
any shares of Capital Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof, (C) the filing of any
registration statement in respect of the Securities and the Underlying
Securities and (D) the sale of up to 250,000 shares of Capital Stock by
individual officers and directors identified on Exhibit B-1 hereto; provided,
further, that the Company will notify the Representatives upon any issuance
pursuant to clause (C) above.
17
(h) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Securities as described in each of the Time of Sale Information and the
Offering Memorandum under the heading "Use of Proceeds".
(i) Underlying Securities. The Company will reserve and keep available at
all times, free of pre-emptive rights, shares of Capital Stock for the purpose
of enabling the Company to satisfy all obligations to issue the Underlying
Securities upon conversion of the Securities. The Company will use its
commercially reasonable efforts to cause the Underlying Securities to be listed
on the New York Stock Exchange (the "Exchange").
(j) Supplying Information. While the Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company and each of the Guarantors will, during any period
in which the Company is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, furnish to holders of the Securities, prospective
purchasers of the Securities designated by such holders and securities analysts,
in each case upon request, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.
(k) PORTAL and DTC. The Company will assist the Initial Purchasers in
arranging for the Securities to be designated Private Offerings, Resales and
Trading through Automated Linkages ("PORTAL") Market securities in accordance
with the rules and regulations adopted by the National Association of Securities
Dealers, Inc. (the "NASD") relating to trading in the PORTAL Market and for the
Securities to be eligible for clearance and settlement through The Depository
Trust Company ("DTC").
(l) Indenture Qualification. Prior to any registration of the Securities
pursuant to the Registration Rights Agreement, or at such earlier time as may be
so required, the Company will use its commercially reasonable efforts to qualify
the Indenture under the Trust Indenture Act, and to enter into any necessary
supplemental indentures in connection therewith.
(m) No Resales by the Company. During the period from the Closing Date
until two years after the Closing Date or the Option Closing Date, if
applicable, the Company will not, and will not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the Securities
that have been acquired by any of them, except for Securities purchased by the
Company or any of its affiliates and resold in a transaction registered under
the Securities Act.
18
(n) No Integration. Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D) will, directly or through any agent,
sell, offer for sale, solicit offers to buy or otherwise negotiate in respect
of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(o) No General Solicitation. None of the Company or any of its affiliates
or any other person acting on its or their behalf (other than the Initial
Purchasers, as to which no covenant is given) will solicit offers for, or offer
or sell, the Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act.
(p) No Stabilization. Neither the Company nor any of the Guarantors will
take, directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities and will not take any action prohibited by Regulation M under the
exchange Act in connection with the distribution of the Securities contemplated
hereby.
5. Certain Agreements of the Initial Purchasers. Each Initial Purchaser
hereby represents and agrees that it has not and will not use, authorize use of,
refer to, or participate in the planning for use of, any written communication
that constitutes an offer to sell or the solicitation of an offer to buy the
Securities other than (i) a written communication that contains no "issuer
information" (as defined in Rule 433(h)(2) under the Securities Act) that was
not included (including through incorporation by reference) in the Preliminary
Offering Memorandum, (ii) any written communication listed on Annex A or
prepared pursuant to Section 4(c) above, (iii) any written communication
prepared by such Initial Purchaser and approved by the Company in advance in
writing or (iv) any written communication relating to or that contains the terms
of the Securities and/or other information that was included (including through
incorporation by reference) in the Preliminary Offering Memorandum.
6. Conditions of Initial Purchasers' Obligations. The obligation of each
Initial Purchaser to purchase Securities on the Closing Date as provided herein
is subject to the performance by the Company and each of the Guarantors of their
respective covenants and other obligations hereunder and to the following
additional conditions:
(a) Representations and Warranties. The representations and warranties of
the Company and the Guarantors contained herein shall be true and correct on the
date hereof and on and as of the Closing Date; and the statements of the Company
and the Guarantors and their respective officers made in any certificates
delivered pursuant to this Agreement shall be true and correct on and as of the
Closing Date.
19
(b) No Downgrade. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded the
Securities or any other debt securities or preferred stock issued or guaranteed
by the Company or any of its subsidiaries by any "nationally recognized
statistical rating organization", as such term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act; and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, or has changed its outlook with respect to, its rating of the Securities
or of any other debt securities or preferred stock issued or guaranteed by the
Company or any of its subsidiaries (other than an announcement with positive
implications of a possible upgrading).
(c) No Material Adverse Change. No material change in the capital stock or
long-term debt of the Company and no event or condition of a type described in
Section 3(e) hereof shall have occurred or shall exist, which change, event or
condition is not described in each of the Time of Sale Information (excluding
any amendment or supplement thereto) and the Offering Memorandum (excluding any
amendment or supplement thereto) the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and the Offering
Memorandum.
(d) Officer's Certificate. The Representatives shall have received on and
as of the Closing Date a certificate of an executive officer of the Company and
each of the Guarantors who has specific knowledge of the Company's or such
Guarantor's financial matters and is satisfactory to the Representatives (i)
confirming that such officer has carefully reviewed the Time of Sale Information
and the Offering Memorandum and, to the knowledge of such officer, the
representations set forth in Sections 3(a) and 3(b) hereof are true and correct,
(ii) confirming that the other representations and warranties of the Company and
the Guarantors in this Agreement are true and correct and that the Company and
the Guarantors have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior to the Closing
Date and (iii) to the effect set forth in paragraphs (b) and (c) above.
(e) Comfort Letters. On the date of this Agreement and on the Closing Date,
PricewaterhouseCoopers LLP shall have furnished to the Representatives, at the
request of the Company, letters, dated the respective dates of delivery thereof
and addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Representatives, containing statements and information of
the type customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained or incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum; provided that the letter delivered on the Closing
Date shall use a "cut-off" date no more than three business days prior to the
Closing Date.
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(f) Opinion of Counsel for the Company. Cravath, Swaine & ▇▇▇▇▇ LLP,
counsel for the Company, the General Counsel of the Company and ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& Finger, P.A., special Delaware counsel to the Company, shall have furnished to
the Representatives, at the request of the Company, their written opinion, dated
the Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representatives, to the effect set forth in Annex
C hereto.
(g) Opinion of Counsel for the Initial Purchasers. The Representatives
shall have received on and as of the Closing Date an opinion of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Initial Purchasers, with respect to such matters as
the Representatives may reasonably request, and such counsel shall have received
such documents and information as they may reasonably request to enable them to
pass upon such matters.
(h) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date, prevent the issuance or sale of the Securities or the
issuance of the Guarantees; and no injunction or order of any federal, state or
foreign court shall have been issued that would, as of the Closing Date, prevent
the issuance or sale of the Securities or the issuance of the Guarantees.
(i) Good Standing. The Representatives shall have received on and as of the
Closing Date satisfactory evidence of the good standing of the Company and its
subsidiaries in their respective jurisdictions of organization and their good
standing in such other jurisdictions as the Representatives may reasonably
request, in each case in writing or any standard form of telecommunication, from
the appropriate governmental authorities of such jurisdictions.
(j) Registration Rights Agreement. The Initial Purchasers shall have
received a counterpart of the Registration Rights Agreement that shall have been
executed and delivered by a duly authorized officer of the Company and each of
the Guarantors.
(k) PORTAL and DTC. The Securities shall have been approved by the NASD for
trading in the PORTAL Market and shall be eligible for clearance and settlement
through DTC.
(l) Lock-up Agreements. The "lock-up" agreements, each substantially in the
form of Exhibit B hereto, of the shareholders, officers and directors of the
Company identified on Exhibit B-1 relating to sales and certain other
dispositions of shares of Capital Stock or certain other securities, shall have
been delivered to the Representatives on or before the date hereof and shall be
in full force and effect on the Closing Date.
(m) Listing. An application for the listing of the Underlying Securities
shall have been submitted to the Exchange.
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(n) Additional Documents. On or prior to the Closing Date, the Company and
the Guarantors shall have furnished to the Representatives such further
certificates and documents as the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
7. Indemnification and Contribution.
---------------------------------
(a) Indemnification of the Initial Purchasers. The Company and each of the
Guarantors jointly and severally agree to indemnify and hold harmless each
Initial Purchaser, its affiliates, directors and officers and each person, if
any, who controls such Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint
or several, that arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum, any of the other Time of Sale Information, any Issuer
Written Communication or the Offering Memorandum (or any amendment or supplement
thereto) or any omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case except
insofar as such losses, claims, damages or liabilities arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to any Initial Purchaser furnished to the Company in writing by such Initial
Purchaser through the Representatives expressly for use therein.
(b) Indemnification of the Company. Each Initial Purchaser agrees,
severally and not jointly, to indemnify and hold harmless the Company, each of
the Guarantors, each of their respective directors and officers and each person,
if any, who controls the Company or any of the Guarantors within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the indemnity set forth in paragraph (a) above, but only with respect
to any losses, claims, damages or liabilities that arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information relating to such
Initial Purchaser furnished to the Company in writing by such Initial Purchaser
through the Representatives expressly for use in the Preliminary Offering
Memorandum, any of the other Time of Sale Information or the Offering Memorandum
(or any amendment or supplement thereto), it being understood and agreed that
the only such information consists of the following: paragraphs 1, 3 (third and
fourth sentences only), 8, 9 (fifth and sixth sentences only), 11, 12 and 13 of
the section entitled "Plan of Distribution" in the Preliminary Offering
Memorandum and Offering Memorandum.
22
(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 7 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying
Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 7. If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person (who shall not,
without the consent of the Indemnified Person, be counsel to the Indemnifying
Person) to represent the Indemnified Person and any others entitled to
indemnification pursuant to this Section 7 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such
proceeding and shall pay the fees and expenses of such counsel related to such
proceeding, as incurred. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary; (ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person; (iii) the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those
available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for any Initial Purchaser, its affiliates, directors and officers
and any control persons of such Initial Purchaser shall be designated in writing
by the Representatives and any such separate firm for the Company, the
Guarantors, their respective directors and officers and any control persons of
the Company and the Guarantors shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. No Indemnifying Person shall, without the
written consent of the Indemnified Person, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.
23
(d) Contribution. If the indemnification provided for in paragraphs (a) and
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchasers on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and the
Guarantors on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Initial
Purchasers on the other shall be deemed to be in the same respective proportions
as the net proceeds (before deducting expenses) received by the Company from the
sale of the Securities and the total discounts and commissions received by the
Initial Purchasers in connection therewith, as provided in this Agreement, bear
to the aggregate offering price of the Securities. The relative fault of the
Company and the Guarantors on the one hand and the Initial Purchasers on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or any Guarantor or by the Initial Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) Limitation on Liability. The Company, the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Initial Purchaser be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by such Initial Purchaser with respect to the offering of the
Securities exceeds the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
purchase obligations hereunder and not joint.
24
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are
not exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.
8. Termination. This Agreement may be terminated in the absolute discretion
of the Representatives, by notice to the Company, if after the execution and
delivery of this Agreement and on or prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on the New York Stock
Exchange or the over-the-counter market; (ii) trading of any securities issued
or guaranteed by the Company or any of the Guarantors shall have been suspended
on any exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the
Representatives, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery, of the Securities on
the terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum.
9. Defaulting Initial Purchaser. (a) If, on the Closing Date, any Initial
Purchaser defaults on its obligation to purchase the Securities that it has
agreed to purchase hereunder, the non-defaulting Initial Purchasers may in their
discretion arrange for the purchase of such Securities by other persons
satisfactory to the Company on the terms contained in this Agreement. If, within
36 hours after any such default by any Initial Purchaser, the non-defaulting
Initial Purchasers do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Initial Purchasers to
purchase such Securities on such terms. If other persons become obligated or
agree to purchase the Securities of a defaulting Initial Purchaser, either the
non-defaulting Initial Purchasers or the Company may postpone the Closing Date
for up to five full business days in order to effect any changes that in the
opinion of counsel for the Company or counsel for the Initial Purchasers may be
necessary in the Time of Sale Information, the Offering Memorandum or in any
other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Time of Sale Information or the Offering
Memorandum that effects any such changes. As used in this Agreement, the term
"Initial Purchaser" includes, for all purposes of this Agreement unless the
context otherwise requires, any person not listed in Schedule 1 hereto that,
pursuant to this Section 9, purchases Securities that a defaulting Initial
Purchaser agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
all the Securities, then the Company shall have the right to require each
non-defaulting Initial Purchaser to purchase the principal amount of Securities
that such Initial Purchaser agreed to purchase hereunder plus such Initial
Purchaser's pro rata share (based on the principal amount of Securities that
such Initial Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Initial Purchaser or Initial Purchasers for which such arrangements
have not been made.
25
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate principal amount of such Securities that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the
Securities, or if the Company shall not exercise the right described in
paragraph (b) above, then this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers. Any termination of this
Agreement pursuant to this Section 9 shall be without liability on the part of
the Company or the Guarantors, except that the Company and each of the
Guarantors will continue to be liable for the payment of expenses as set forth
in Section 10 hereof and except that the provisions of Section 7 hereof shall
not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Initial Purchaser
of any liability it may have to the Company, the Guarantors or any
non-defaulting Initial Purchaser for damages caused by its default.
10. Payment of Expenses. (a) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
and each of the Guarantors jointly and severally agree to pay or cause to be
paid all costs and expenses incident to the performance of their respective
obligations hereunder, including without limitation, (i) the costs incident to
the authorization, issuance, sale, preparation and delivery of the Securities
and any taxes payable in that connection; (ii) the costs incident to the
preparation and printing of the Preliminary Offering Memorandum, any other Time
of Sale Information and the Offering Memorandum (including any amendment or
supplement thereto) and the distribution thereof; (iii) the costs of reproducing
and distributing each of the Transaction Documents; (iv) the fees and expenses
of the Company's and the Guarantors' counsel and independent accountants; (v)
the fees and expenses incurred in connection with the registration or
qualification and determination of eligibility for investment of the Securities
under the laws of such jurisdictions as the Representatives may designate and
the preparation, printing and distribution of a Blue Sky Memorandum (including
the related fees and expenses of counsel for the Initial Purchasers); (vi) any
fees charged by rating agencies for rating the Securities; (vii) the fees and
expenses of the Trustee and any paying agent (including related fees and
expenses of any counsel to such parties); (viii) all expenses and application
fees incurred in connection with the application for the inclusion of the
Securities on the PORTAL Market and the approval of the Securities for
book-entry transfer by DTC; (ix) any fees or costs incident to listing the
Underlying Securities on the Exchange; and (x) all expenses incurred by the
Company in connection with any "road show" presentation to potential investors.
26
(b) If (i) this Agreement is terminated pursuant to Section 8, (ii) the
Company for any reason fails to tender the Securities for delivery to the
Initial Purchasers or (iii) the Initial Purchasers decline to purchase the
Securities for any reason permitted under this Agreement, the Company and each
of the Guarantors jointly and severally agree to reimburse the Initial
Purchasers for all out-of-pocket costs and expenses (including the fees and
expenses of their counsel) reasonably incurred by the Initial Purchasers in
connection with this Agreement and the offering contemplated hereby.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and any controlling persons referred to herein, and the affiliates,
officers and directors of each Initial Purchaser referred to in Section 7
hereof. Nothing in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein. No purchaser of Securities
from any Initial Purchaser shall be deemed to be a successor merely by reason of
such purchase.
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Company or the Initial Purchasers pursuant to this Agreement or any
certificate delivered pursuant hereto shall survive the delivery of and payment
for the Securities and shall remain in full force and effect, regardless of any
termination of this Agreement or any investigation made by or on behalf of the
Company or the Initial Purchasers.
12. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term "affiliate" has the meaning set forth in
Rule 405 under the Securities Act; (b) the term "business day" means any day
other than a day on which banks are permitted or required to be closed in New
York City; (c) the term "Exchange Act" means the Securities Exchange Act of
1934, as amended; (d) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act; and (e) the term "written communication" has the
meaning set forth in Rule 40-5 under the Securities Act; and (f) the term
"significant subsidiary" has the meaning set forth in Rule 1-02 of Regulation
S-X under the Exchange Act.
13. Miscellaneous. (a) Authority of the Representatives. Any action by the
Initial Purchasers hereunder may be taken by each of ▇.▇. ▇▇▇▇▇▇ Securities Inc.
and Citigroup Global Markets Inc. on behalf of the Initial Purchasers, and any
such action taken shall be binding upon the Initial Purchasers.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Initial
Purchasers shall be given to the Representatives at ▇.▇. ▇▇▇▇▇▇ Securities Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ (fax: (▇▇▇)-▇▇▇-▇▇▇▇); Attention:
Syndicate Desk, and Citigroup Global Markets Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: General Counsel. Notices
to the Company and the Guarantors shall be given to them at Chemed Corporation,
2600 Chemed Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, (fax:
(▇▇▇)-▇▇▇-▇▇▇▇); Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
27
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
(f) Headings. The headings herein are included for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
28
If the foregoing is in accordance with your understanding, please indicate
your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
CHEMED CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer and Vice President
THE GUARANTORS
COMFORT CARE HOLDINGS, CO.
JET RESOURCE, INC.
ROTO-ROOTER CORPORATION
ROTO-ROOTER SERVICES COMPANY
NUROTOCO OF MASSACHUSETTS, INC.
CONSOLIDATED HVAC, INC.
ROTO-ROOTER GROUP, INC.
R.R. UK, INC.
ROTO-ROOTER DEVELOPMENT COMPANY
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 ATLANTIC
VITAS HEALTHCARE CORPORATION MIDWEST
VITAS HME SOLUTIONS, INC.
VITAS HOLDINGS CORPORATION
HOSPICE CARE INCORPORATED
VITAS HOSPICE SERVICES, L.L.C.
VITAS HEALTHCARE OF TEXAS, L.P.
VITAS HEALTHCARE CORPORATION OF ▇▇▇▇▇▇▇
▇▇▇▇▇ HEALTHCARE CORPORATION OF ARIZONA
VITAS CARE SOLUTIONS, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Accepted: May 8, 2007
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Authorized Signatory
CITIGROUP GLOBAL MARKETS INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Authorized Signatory
Schedule 1
Initial Purchaser Principal Amount
----------------- ----------------
▇.▇. ▇▇▇▇▇▇ Securities Inc. $90,000,000
Citigroup Global Markets Inc. $90,000,000
----------------
Total $180,000,000
Schedule 2
GUARANTORS
----------
COMFORT CARE HOLDINGS, CO.
JET RESOURCE, INC.
ROTO-ROOTER CORPORATION
ROTO-ROOTER SERVICES COMPANY
NUROTOCO OF MASSACHUSETTS, INC.
CONSOLIDATED HVAC, INC.
ROTO-ROOTER GROUP, INC.
R.R. UK, INC.
ROTO-ROOTER DEVELOPMENT COMPANY
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 ATLANTIC
VITAS HEALTHCARE CORPORATION MIDWEST
VITAS HME SOLUTIONS, INC.
VITAS HOLDINGS CORPORATION
HOSPICE CARE INCORPORATED
VITAS HOSPICE SERVICES, L.L.C.
VITAS HEALTHCARE OF TEXAS, L.P.
VITAS HEALTHCARE CORPORATION OF ▇▇▇▇▇▇▇
▇▇▇▇▇ HEALTHCARE CORPORATION OF ARIZONA
VITAS CARE SOLUTIONS, INC.
Schedule 3
SUBSIDIARIES
------------
CCR OF OHIO INC.
COMFORT CARE HOLDINGS CO.
COMPLETE PLUMBING SERVICES, INC.
CONSOLIDATED HVAC, INC.
JET RESOURCE, INC.
NUROTOCO OF MASSACHUSETTS, INC.
NUROTOCO OF NEW JERSEY, INC.
R.R. UK, INC.
ROTO-ROOTER CORPORATION
ROTO-ROOTER DEVELOPMENT COMPANY
ROTO-ROOTER GROUP, INC. (f/k/a ROTO-ROOTER MANAGEMENT COMPANY)
ROTO-ROOTER SERVICES COMPANY
RR PLUMBING SERVICES CORPORATION
VITAS HEALTHCARE CORPORATION
VITAS HEALTHCARE CORPORATION OF ARIZONA
VITAS HEALTHCARE CORPORATION OF CALIFORNIA
VITAS HEALTHCARE CORPORATION OF CENTRAL FLORIDA
VITAS HEALTHCARE CORPORATION OF FLORIDA
VITAS HEALTHCARE CORPORATION OF ▇▇▇▇▇▇▇
▇▇▇▇▇ HEALTHCARE CORPORATION OF ILLINOIS
VITAS HEALTHCARE CORPORATION OF OHIO
VITAS HEALTHCARE CORPORATION ATLANTIC
VITAS HEALTHCARE CORPORATION MIDWEST
VITAS HEALTHCARE OF TEXAS, L.P.
VITAS HME SOLUTIONS, INC.
VITAS HOLDINGS CORPORATION
VITAS HOSPICE SERVICES, L.L.C.
ROTO-ROOTER CANADA, LTD.
VITAS HEALTHCARE CORPORATION OF NORTH FLORIDA, INC.
HOSPICE CARE INCORPORATED
ANNEX A
a. Additional Time of Sale Information
----------------------------------------
1. Term sheet containing the terms of the securities, substantially in the form
of Annex B.
ANNEX B
Pricing Term Sheet
------------------
ANNEXES C1-C5
Exhibit A
Exhibit B
[FORM OF LOCK-UP LETTER]
____________, 2007
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Ladies and Gentlemen:
The undersigned understands that ▇.▇. ▇▇▇▇▇▇ Securities Inc. and Citigroup
Global Markets Inc. (the "Representatives") propose to enter into a Purchase
Agreement ("Purchase Agreement") with Chemed Corporation, a Delaware corporation
(the "Company"), providing for the offering (the "Offering") by the several
Initial Purchasers, including the Representatives (the "Initial Purchasers") of
% Convertible Senior Notes due 2014 (the "Securities"). The Securities will be
convertible into shares of capital stock of the company, par value $1.00 per
share (the "Capital Stock").
To induce the Initial Purchasers that may participate in the Offering to
continue their efforts in connection with the Offering, the undersigned hereby
agrees that, without the prior written consent of the Representatives on behalf
of the Initial Purchasers, it will not, during the period commencing on the date
hereof and ending 90 days after the date of the final offering memorandum
relating to the Offering (the "Offering Memorandum"), (1) offer, pledge, sell
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Capital
Stock or any securities convertible into or exercisable or exchangeable for
Capital Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Capital Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Capital Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Securities to the Initial Purchasers pursuant to the Purchase Agreement or (b)
transfers of Capital Stock by gift, will or intestacy, including without
limitation transfers by gift, will or intestacy to family members of the
undersigned or to a settlement or trust established under the laws of any
country or (c) transfers or sales of Capital Stock pursuant to any contract,
instruction or plan, including a contract, instruction or plan complying with
Rule 10b5-1 of the Regulations of the Securities Exchange Act of 1934, as
amended, that has been entered into by the undersigned prior to the date of this
Letter Agreement or (d) the sale of any Capital Stock up to 15,625 shares
expressly permitted by Section 4(g) of the Purchase Agreement, provided that in
the event of any transfer pursuant to clause (b), the transferee shall enter
into a lock-up agreement substantially in the form of this Letter Agreement
covering the remainder of the 90-day period referred to herein. In addition, the
undersigned agrees that, without the prior written consent of the
Representatives on behalf of the Initial Purchasers, it will not, during the
period commencing on the date hereof and ending 90 days after the date of the
Offering Memorandum, make any demand for, or exercise any right with respect to,
the registration of any shares of Capital Stock or any security convertible into
or exercisable or exchangeable for Capital Stock. The undersigned also agrees
and consents to the entry of stop transfer instructions with the Company's
transfer agent and registrar against the transfer of the undersigned's shares of
Capital Stock except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Initial Purchasers are
relying upon this Letter Agreement in proceeding toward consummation of the
Offering. The undersigned further understands that this Letter Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any offering will only be made pursuant to a
Purchase Agreement, the terms of which are subject to negotiation between the
Company and the Initial Purchasers.
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Delivery of an executed signature page to this letter by facsimile shall be
effective as delivery of a manually executed signature page of this letter.
Very truly yours,
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(Name)
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(Address)