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<SEC-DOCUMENT>0000950152-04-001868.txt : 20040312
<SEC-HEADER>0000950152-04-001868.hdr.sgml : 20040312
<ACCEPTANCE-DATETIME>20040312143601
ACCESSION NUMBER:		0000950152-04-001868
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		23
CONFORMED PERIOD OF REPORT:	20031231
FILED AS OF DATE:		20040312

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ROTO-ROOTER INC
		CENTRAL INDEX KEY:			0000019584
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MISCELLANEOUS REPAIR SERVICES [7600]
		IRS NUMBER:				310791746
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08351
		FILM NUMBER:		04665695

	BUSINESS ADDRESS:	
		STREET 1:		2600 CHEMED CTR
		STREET 2:		255 E FIFTH ST
		CITY:			CINCINNATI
		STATE:			OH
		ZIP:			45202
		BUSINESS PHONE:		5137626900

	MAIL ADDRESS:	
		STREET 1:		2600 CHEMED CTR
		STREET 2:		255 E FIFTH STREET
		CITY:			CINCINNATI
		STATE:			OH
		ZIP:			45202

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CHEMED CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>l05867ae10vk.txt
<DESCRIPTION>ROTO-ROOTER, INC.
<TEXT>
<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

        [X]          For the fiscal year ended December 31, 2003

                                       or

        [ ]   Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

        For the Transition period from _______________ to ______________

                         Commission File Number: 1-8351

                                ROTO-ROOTER, INC.

             (Exact name of registrant as specified in its charter)

          DELAWARE                                            31-0791746
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                         Identification Number)

2600 Chemed Center, 255 East Fifth Street, Cincinnati, Ohio        45202-4726
      (Address of principal executive offices)                     (Zip Code)

                                 (513) 762-6900
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

                                                        Name of each exchange
           Title of each class                           on which registered
           -------------------                          -----------------------
Capital Stock - Par Value $1 Per Share                  New York Stock Exchange

        Securities registered pursuant to Section 12(g) of the Act: None

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ].

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes [ ] No [X]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act). Yes [X] No [ ]

         The aggregate market value of the voting stock held by non-affiliates
of the registrant, based upon the average bid and asked price of said stock on
the New York Stock Exchange - Composite Transaction Listing on June 30, 2003
($38.03 per share), was $375,315,385.

                       DOCUMENTS INCORPORATED BY REFERENCE

<TABLE>
<CAPTION>
                       DOCUMENT                                                 WHERE INCORPORATED
                       --------                                                 ------------------
<S>                                                                             <C>
Proxy Statement for Annual Meeting to be held May 17, 2004                            Part III
Form 8K-A filed February 23, 2004                                                     Part II
</TABLE>

<PAGE>

                                ROTO-ROOTER, INC.

                          2003 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                    PAGE
<S>                                                                                                                 <C>
                                                     PART I

Item 1.     Business..............................................................................................    1
Item 2.     Properties............................................................................................   21
Item 3.     Legal Proceedings.....................................................................................   21
Item 4.     Submission of Matters to a Vote of Security Holders...................................................   22
 --         Executive Officers of the Registrant..................................................................   22

                                                     PART II

Item 5.     Market for the Registrant's Common Equity, Related
            Stockholder Matters and Issuer Purchases of Equity Securities.........................................   23
Item 6.     Selected Financial Data...............................................................................   24
Item 7.     Management's Discussion and Analysis of Financial
            Condition and Results of Operations...................................................................   25
Item 7A.    Quantitative and Qualitative Disclosures About Market Risk............................................   39
Item 8.     Financial Statements and Supplementary Data...........................................................   40
Item 9.     Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure...................................................................   40
Item 9A.    Controls & Procedures.................................................................................   40

                                                     PART III

Item 10.    Directors and Executive Officers of the Registrant....................................................   41
Item 11.    Executive Compensation................................................................................   41
Item 12.    Security Ownership of Certain Beneficial Owners and
            Management and Related Stockholder Matters............................................................   41
Item 13.    Certain Relationships and Related Transactions........................................................   41
Item 14.    Principal Accountant Fees and Services................................................................   41

                                                     PART IV

Item 15.    Exhibits, Financial Statement Schedules and Reports
            on Form 8-K...........................................................................................   43
</TABLE>

<PAGE>

ITEM 1.  BUSINESS

GENERAL

         Pursuant to a stockholder vote at the Company's Annual Meeting of
Stockholders held on May 19, 2003, the Company amended its Amended Certificate
of Incorporation and changed its name from Chemed Corporation to Roto-Rooter,
Inc. The Company was incorporated in Delaware in 1970 as a subsidiary of W. R.
Grace & Co. and succeeded to the business of W. R. Grace & Co.'s Specialty
Products Group as of April 30, 1971 and remained a subsidiary of W. R. Grace &
Co. until March 10, 1982. As used herein, "Company" refers to Roto-Rooter, Inc.,
and its subsidiaries and "Grace" refers to W. R. Grace & Co. and its
subsidiaries.

         On March 10, 1982, the Company transferred to Dearborn Chemical
Company, a wholly owned subsidiary of the Company, the business and assets of
the Company's Dearborn Group, including the stock of certain subsidiaries within
the Dearborn Group, plus $185 million in cash, and Dearborn Chemical Company
assumed the Dearborn Group's liabilities. Thereafter, on March 10, 1982 the
Company transferred all of the stock of Dearborn Chemical Company to Grace in
exchange for 16,740,802 shares of the capital stock of the Company owned by
Grace with the result that Grace no longer has any ownership interest in the
Company.

         On December 31, 1986, the Company completed the sale of substantially
all of the business and assets of Vestal Laboratories, Inc., a wholly owned
subsidiary. The Company received cash payments aggregating approximately $67.4
million over the four-year period following the closing, the substantial portion
of which was received on December 31, 1986.

         On April 2, 1991, the Company completed the sale of DuBois Chemicals,
Inc. ("DuBois"), a wholly owned subsidiary, to the Diversey Corporation
("Diversey"), then a subsidiary of The Molson Companies Ltd. Under the terms of
the sale, Diversey agreed to pay the Company net cash payments aggregating
$223,386,000, including deferred payments aggregating $32,432,000.

         On December 21, 1992, the Company acquired The Veratex Corporation and
related businesses ("Veratex Group") from Omnicare, Inc. The purchase price was
$62,120,000 in cash paid at closing, plus a post-closing payment of $1,514,000
(paid in April 1993) based on the net assets of Veratex.

         Effective January 1, 1994, the Company acquired all the capital stock
of Patient Care, Inc. ("Patient Care"), for cash payments aggregating
$20,582,000, plus 17,500 shares of the Company's Capital Stock. An additional
cash payment of $1,000,000 was made on March 31, 1996 and another payment of
$1,000,000 was made on March 31, 1997.

         In July 1995, the Company's Omnia Group (formerly Veratex Group)
completed the sale of the business and assets of its Veratex Retail division to
Henry Schein, Inc. ("HSI") for $10 million in cash plus a $4.1 million note for
which payment was received in December 1995.

         Effective September 17, 1996, the Company completed a merger of a
subsidiary of the Company, Chemed Acquisition Corp., and Roto-Rooter, Inc.
pursuant to a Tender Offer commenced on August 8, 1996 to acquire any and all of
the outstanding shares of Common Stock of Roto-Rooter, Inc. for $41.00 per share
in cash.

                                       1
<PAGE>

         On September 24, 1997, the Company completed the sale of its wholly
owned businesses comprising the Omnia Group to Banta Corporation for $50 million
in cash and $2.3 million in deferred payments.

         Effective September 30, 1997, the Company completed a merger between
its 81-percent-owned subsidiary, National Sanitary Supply Company, and a wholly
owned subsidiary of Unisource Worldwide, Inc. for $21.00 per share, with total
payments of $138.3 million.

         Effective October 11, 2002, the Company sold its Patient Care, Inc.
subsidiary ("Patient Care") to an investor group that included Schroder Ventures
Life Sciences Group, Oak Investment Partners, Prospect Partners and Salix
Ventures. Patient Care provides home-healthcare services primarily in the New
York-New Jersey-Connecticut area. The cash proceeds to the Company totaled
$57,500,000, of which $5,000,000 was placed in escrow pending settlement of
Patient Care's receivables with third-party payers. Of this amount, $2,500,000
was distributed as of October 2003 and $2,500,000 is expected to be distributed
as of October 2004. Based on the collection history of Patient Care, the Company
expects to collect the funds held in escrow in full. The Company may also be
entitled to additional funds based on the final value of the estimated balance
sheet valuation which is expected to be determined in 2004. In addition, the
Company received a senior subordinated note receivable ("Note") for $12,500,000
and a common stock purchase warrant ("Warrant") for 2% of the outstanding stock
of the purchasing company. The Note is due October 11, 2007, and bears interest
at the annual rate of 7.5% through September 30, 2004, 8.5% from October 1,
2004, through September 30, 2005, and 9.5% thereafter. The Warrant has an
estimated fair value of $1,445,000.

         During 2003 the Company conducted its business operations in two
segments: Plumbing and Drain Cleaning Group ("Plumbing and Drain Cleaning")
and Service America Systems, Inc. ("Service America").

         Effective February 24, 2004, The Company completed a merger of its
wholly owned indirect subsidiary, Marlin Merger Corp., and Vitas Healthcare
Corporation ("Vitas"). Under the terms of the merger agreement, Vitas
stockholders received cash of $30.00 per share. The transaction, including the
refinancing of existing Vitas debt and other payments made in connection with
the merger, totaled approximately $406 million in cash. In order to complete the
merger the Company sold two million shares of its Capital Stock in a private
placement at a price of $50.00 per share, issued $110 million principal amount
of floating rate senior secured notes due 2010 ("Floating Rate Notes"), issued
$150 million principal amount of 8.75% Senior Notes due 2011 ("Fixed Rate
Notes"), and entered into new $135 million senior secured credit facilities.
More information with respect to the Company's merger with Vitas is set forth in
Item 7 of this Report on page 25 and within Note 23 of the Notes to the
Financial Statements appearing on pages F-31 - F-33 of this Report on Form 10-K.

FORWARD LOOKING STATEMENTS

         This Annual Report contains or incorporates by reference certain
forward looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company intends such statements to be subject
to the safe harbors created by that legislation. Such statements involve risks
and uncertainties that could cause actual results of operations to differ
materially from these forward looking statements.

                                       2
<PAGE>

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

         The required segment and geographic data for the Company's continuing
operations (as described below) for the three years ended December 31, 2001,
2002 and 2003 are shown in Note 2 of the Notes to the Financial Statements on
pages F-11 to F-13 of this Report on Form 10-K.

DESCRIPTION OF BUSINESS BY SEGMENT

         The information called for by this item with respect to the Plumbing
and Drain Cleaning segment and Service America segment is included within Note 2
of the Notes to Financial Statements appearing on pages F-11 - F-13 of this
Report on Form 10-K.

                                      VITAS

General. Vitas is the nation's largest provider of hospice services for patients
with severe, life-limiting illnesses. This type of care is aimed at making the
terminally ill patient's final days as comfortable and pain free as possible.
Hospice care is typically available to patients who have been initially
certified as terminally ill (i.e. a prognosis of six months or less) by their
attending physician, if any, and the hospice physician.

         Vitas' hospice operations began in South Florida in 1978 and were
incorporated as a for-profit corporation in 1983. Today, Vitas provides a
comprehensive range of hospice services through 25 operating programs covering
many of the large population areas in the U.S. including Florida, California,
Texas and Illinois. Vitas has over 6,000 employees, including approximately
2,400 nurses and 1,500 home health aides.

         In general, Vitas offers all levels of hospice care in a given market.
In each of its markets, Vitas employs an active community relations effort that
involves relationship building and hospice education activities, the extensive
education of referral sources, and print and radio media initiatives. This
broad-based approach has helped Vitas increase market share and achieve
consistent historical revenue growth. As the largest provider of hospice care in
a highly fragmented industry, Vitas currently believes it has approximately 7%
of the market share in the U.S. hospice market.

                       Hospice Services Industry Overview

         Hospice care is primarily provided under the government's Medicare and
Medicaid programs. In 1982, Congress established the Medicare Hospice Benefit,
which is available to patients who have been certified as terminally ill, with a
prognosis of six months or less, by the patient's attending physician, if any,
and the hospice physician.

         Effective in 1997, the Medicare Hospice Benefit was amended to reflect
the following benefit periods: an initial 90-day period; a second 90-day period;
and an unlimited number of subsequent 60-day benefit periods, as long as the
patient is recertified as terminally ill by a physician at the beginning of each
benefit period. The Medicare Hospice Benefit covers care associated with a
patient's terminal illness, which would include prescription drugs for pain and
symptom relief, medical supplies and equipment, inpatient care and bereavement
services for the family for up to one year after death.

                                       3
<PAGE>

         The variety of services provided by hospice programs include:

         Nursing Care: Nurses coordinate care, provide direct patient care, and
check symptoms and medication. Because patient and family education is such an
important part of every care program, the nurse often becomes the link between
the patient and the family and the hospice services.

         Social Services: Social workers provide advice and counseling to the
patient and family members and may also act as an advocate for the patient and
the family in utilizing community resources.

         Physician Services: A hospice medical director and physician oversee
the plan of care as members of an interdisciplinary team.

         Spiritual Support and Counseling: Chaplains are available to visit and
provide spiritual support to the patient.

         Home and Health Aide Services: Home care includes personal care for the
patient, such as assistance with bathing, eating and general hygiene. Homemaking
services may also be available for the patient's living area.

         Continuous Care: If the patient's condition requires, hospice staff may
provide around the clock care.

         Volunteers: Volunteers are intended to be an integral part of any
hospice program. Hospice volunteers may provide compassionate support and
companionship, help with certain everyday tasks such as shopping or babysitting,
and deliver other helpful services.

         24-hour On-call Availability: A hospice team member is on-call 24-hours
a day, seven days a week, either for phone consultation or visitation.

         Hospice Inpatient Care: Although hospice care may be centered around
the home, it sometimes becomes necessary to move the patient to a hospice
inpatient bed. The hospice team will arrange this care as well as the return to
in-home care when appropriate.

         Respite Care: To provide relief for the family members, the hospice may
be able to arrange for a brief period of inpatient care for the patient at a
hospice inpatient bed, depending upon the circumstances of the patient and the
family.

         Bereavement Support: The hospice care team works with surviving family
members to help them through the grieving process for up to one year after the
patient's death. The hospice care provider may also suggest medical or
professional care for surviving family members as appropriate.

                                 Vitas' Services

         Vitas classifies its services based on the location and type of care
provided. The major classifications are Home Care, Continuous Care and Inpatient
Care.

         Home Care: Routine care provided to patients and their families
residing at home or in a nursing facility. The hospice is typically paid the
routine home care rate for each day the patient is under the care of the
hospice. In the year ended December 31,

                                       4
<PAGE>

2003, Home Care accounted for 68.3% of Vitas' net revenues and 90.5% of its days
of care. Vitas' average daily reimbursement rate for Home Care in such period
was $122.70.

         Inpatient Care: Short term care provided in a participating hospice
inpatient unit, hospital or skilled nursing facility that meets the special
hospice standards. Inpatient care may be required for procedures necessary for
pain control or acute symptom management which cannot be provided in other
settings. Medicare distinguishes two different levels of Inpatient Care: (i)
inpatient respite care and (ii) general inpatient care. The reimbursement rate
for inpatient respite care is paid for each day the patient is in an approved
inpatient facility and is receiving respite care. Payment for respite care may
be made for a maximum of five days. General inpatient care is reimbursed at a
different, higher rate. In the year ended December 31, 2003, Inpatient Care
accounted for 15.5% of Vitas' net revenues and 4.6% of its days of care. Vitas'
average daily reimbursement rate for Inpatient Care in such period was $544.98.

         Continuous Care: Care provided to patients while at home, during
periods of crisis when intensive monitoring and care, primarily nursing care, is
required in order to achieve palliation or management of acute medical symptoms.
Reimbursement is calculated by multiplying the applicable continuous care hourly
rate by the number of hours of care provided. A minimum of 8 hours of continuous
care in a 24 hour period is to be provided to receive the continuous home care
rate. In the year ended December 31, 2003, Continuous Care accounted for 16.2%
of Vitas' net revenues and 4.9% of its days of care. Vitas' average daily
reimbursement rate for Continuous Care was $541.88.

                          Service Delivery and Systems

         Vitas delivers its service through local hospice programs that operate
under a standardized organizational structure consisting of a senior management
team and multiple teams of caregivers assisted by volunteers. A senior
management team is typically comprised of a general manager, a patient care
administrator, a medical director and a director of admissions. Patient care
teams typically include a team manager, nurses, home health aides, a chaplain,
team physicians, a patient care secretary and a social worker.

         Vitas' standardized model for patient care is complemented by its
internal systems and controls. Vitas has developed an information technology
platform that is designed to enable management to monitor and evaluate various
operating, clinical and employee performance measures in a timely manner.

         Vitas' information systems infrastructure supports all its operations,
including clinical operations, billing and collections, accounts payable and
claims processing, financial reporting, human resources and compliance. The
system is built upon a proprietary business enterprise application. At the
corporate level, management uses this application to monitor and evaluate the
various operating, clinical and employee performance measures. At the program
level, it provides detailed information on referral sources, patients and
staffing for patient management, as well as staff scheduling and management.

                             Compliance and Training

         Vitas' compliance and training structure is designed to monitor
conformity to company standards as well as standards mandated by Medicare, state
agencies and private insurance providers. The Compliance Committee, consisting
of members of senior

                                       5
<PAGE>

management, oversees Vitas' compliance program, reviews patient surveys and
analyzes the company's performance measurements. Vitas' Department of Clinical
Research, Analysis and Audit performs periodic reviews of each local program,
which are similar to Medicare certification and state licensing surveys. Any
finding documented in the survey report prepared as a part of the periodic
reviews requires a formal written response and corrective action plan. Vitas'
Department of Hospice Education and Training administers compliance training to
each employee on an annual basis. In addition, every patient and family is asked
to complete a satisfaction survey regarding the quality of care delivered to the
patient and the family.

                                Hospice Programs

         Vitas currently operates 25 hospice programs in the following markets:

                  -        California - Inland Empire, Orange County, Coastal
                           Cities, San Gabriel, San Diego, San Francisco Bay
                           Area and San Fernando

                  -        Florida - Dade, Broward, Central Florida, Brevard and
                           Palm Beach

                  -        Texas - Dallas, Ft. Worth, Houston and San Antonio

                  -        Illinois - Chicago Northwest, Chicago Central and
                           Chicago South

                  -        New Jersey - North, West and Shore

                  -        Ohio - Cincinnati

                  -        Pennsylvania - Philadelphia

                  -        Wisconsin - Milwaukee

         Historically, Vitas has expanded its hospice operations through the
acquisition of hospice programs and the opening of new hospice programs in new
geographic locations. In the fiscal year ended September 30, 2003, Vitas
acquired a hospice program in Palm Beach, Florida. Vitas intends to continue to
expand its business by actively pursuing strategic acquisitions of hospices in
new and existing markets throughout the United States. Since 1978, Vitas has
opened 16 new hospice programs throughout the country. In the fiscal year ended
September 30, 2003, Vitas opened three new hospice programs in New Jersey and
Brevard County, Florida. In opening a new program, Vitas assesses, among other
things, the potential Average Daily Census for the area by evaluating factors
such as the region's demographic profile, current hospice providers, mortality
rates by type of disease, and the availability of health care workers. A key
part of Vitas' growth strategy is to open new hospice programs.

                            Reimbursement Environment

         Medicare rates of reimbursement for hospice care, as stipulated in
Section 1814(i)(1)(C)(ii) of the Social Security Act, continue to be adjusted
based on a market basket percentage increase, which for fiscal year 2004 has
already been established at an increase of 3.4%.

                                       6
<PAGE>

         As with most government programs, the Medicare and Medicaid programs
are subject to statutory and regulatory changes, possible retroactive and
prospective rate adjustments, administrative rulings, freezes and funding
reductions, all of which may adversely affect the level of program payments to
Vitas for its services. Reductions or changes in Medicare or Medicaid funding
could significantly affect Vitas' results of operations. It is not possible to
predict at this time whether any additional health care reform initiatives will
be implemented or whether there will be other changes in the administration of
governmental health care programs or interpretations of governmental policies or
other changes affecting the health care system.

PRODUCT AND MARKET DEVELOPMENT

         Each segment of the Company's business engages in a continuing program
for the development and marketing of new services and products. While new
products and services and new market development are important factors for the
growth of each active segment of the Company's business, the Company does not
expect that any new products and services or marketing effort, including those
in the development stage, will require the investment of a material amount of
the Company's assets.

RAW MATERIALS

         The principal raw materials needed for the Company's manufacturing
operations are purchased from United States sources. No segment of the Company
experienced any material raw material shortages during 2003, although such
shortages may occur in the future. Products manufactured and sold by the
Company's active business segments generally may be reformulated to avoid the
adverse impact of a specific raw material shortage.

PATENTS, SERVICE MARKS AND LICENSES

         The Roto-Rooter trademarks and service marks have been used and
advertised since 1935 by Roto-Rooter Corporation, an indirectly wholly owned
subsidiary of the Company. The Roto-Rooter marks are among the most highly
recognized trademarks and service marks in the United States. The Company
considers the Roto-Rooter marks to be a valuable asset and a significant factor
in the marketing of Roto-Rooter's franchises, products and services and the
products and services provided by its franchisees. "Vitas" is a trademark of
Vitas Healthcare Corporation. The Company and its subsidiaries also own certain
trade secrets including training manuals, pricing information, customer
information, and software source codes.

COMPETITION

                                   ROTO-ROOTER

         All aspects of the sewer, drain, and pipe cleaning, HVAC services and
plumbing repair businesses are highly competitive. Competition is, however,
fragmented in most markets with local and regional firms providing the primary
competition. The principal methods of competition are advertising, range of
services provided, name recognition, speed and quality of customer service,
service guarantees, and pricing.

                                       7
<PAGE>

         No individual customer or market group is critical to the total sales
of this segment.

                                 SERVICE AMERICA

         All aspects of the HVAC and appliance repair and maintenance service
industry are highly competitive. Competition is, however, fragmented in most
markets with local and regional firms providing the primary competition. The
principal methods of competition are advertising, range of services provided,
speed and quality of customer service, service guarantees, and pricing.

         No individual customer or market group is critical to the total sales
of this segment.

                                      VITAS

         Hospice care in the United States is competitive. Because payments for
hospice services are generally fixed, Vitas competes primarily on the basis of
its ability to deliver quality, responsive services. Vitas is the nation's
largest provider of hospice services in a market dominated by small, non-profit,
community-based hospices. More than 72% of all hospices are not-for-profit.
Because the hospice care market is highly fragmented, Vitas competes with a
large number of organizations.

         Vitas also competes with a number of national and regional hospice
providers, including Odyssey Healthcare, Inc. and VistaCare, Inc., hospitals,
nursing homes, home health agencies and other health care providers. Many
providers offer home care to patients who are terminally ill, and some actively
market palliative care and hospice-like programs. In addition, various health
care companies have diversified into the hospice market. Some of these health
care companies may have greater financial resources than Vitas.

         Relatively few barriers to entry exist in the markets served by Vitas.
Accordingly, other companies that are not currently providing hospice care may
enter these markets and expand the variety of services offered.

RESEARCH AND DEVELOPMENT

         The Company engages in a continuous program directed toward the
development of new products and processes, the improvement of existing products
and processes, and the development of new and different uses of existing
products. The research and development expenditures from continuing operations
have not been nor are they expected to be material.

GOVERNMENT REGULATIONS

                                   ROTO-ROOTER

       Roto-Rooter's franchising activities are subject to various federal and
state franchising laws and regulations, including the rules and regulations of
the Federal Trade Commission (the "FTC") regarding the offering or sale of
franchises. The rules and regulations of the FTC require that Roto-Rooter
provide all prospective franchisees with specific information regarding the
franchise program and Roto-Rooter in the form of a detailed franchise offering
circular. In addition, a number of states require Roto-Rooter to register its
franchise offering prior to offering or selling franchises in the state. Various
state laws also provide for certain rights in favor of franchisees, including
(i)

                                       8
<PAGE>

limitations on the franchisor's ability to terminate a franchise except for good
cause, (ii) restrictions on the franchisor's ability to deny renewal of a
franchise, (iii) circumstances under which the franchisor may be required to
purchase certain inventory of franchisees when a franchise is terminated or not
renewed in violation of such laws, and (iv) provisions relating to arbitration.
Roto-Rooter's ability to engage in the plumbing repair business is also subject
to certain limitations and restrictions imposed by state and local licensing
laws and regulations.

                                 SERVICE AMERICA

         Service America's home and service warranty operations are regulated by
the Florida and Arizona Departments of Insurance. In accordance with certain
Florida regulatory requirements, Service America maintains cash with the
Department of Insurance and is also required to maintain additional unencumbered
reserves. In addition, Service America's air conditioning and appliance repair
and maintenance business is also subject to certain limitations imposed by state
and local licensing laws and regulations.

                                      VITAS

         General. The health care industry and Vitas' hospice programs are
subject to extensive federal and state regulation. Vitas' hospices are licensed
as required under state law as either hospices or home health agencies, or both,
depending on the regulatory requirements of each particular state. In addition,
Vitas' hospices are required to meet certain conditions of participation to be
eligible to receive payments as hospices under the Medicare and Medicaid
programs. All of Vitas' hospices, other than those currently in development, are
certified for participation as hospices in the Medicare program, and are also
eligible to receive payments as hospices from the Medicaid program in each of
the states in which Vitas operates. Vitas' hospices are subject to periodic
survey by governmental authorities or private accrediting entities to assure
compliance with state licensing, certification and accreditation requirements,
as the case may be.

         Medicare Conditions of Participation. Federal regulations require that
a hospice program satisfy certain conditions of participation to be certified
and receive Medicare payment for the services it provides. Failure to comply
with the conditions of participation may result in sanctions, up to and
including decertification from the Medicare program. See "Surveys and Audits"
below.

         The Medicare conditions of participation for hospice programs include
the following:

                  Governing Body. Each hospice must have a governing body that
         assumes full responsibility for the policies and the overall operation
         of the hospice and for ensuring that all services are provided in a
         manner consistent with accepted standards of practice. The governing
         body must designate one individual who is responsible for the
         day-to-day management of the hospice.

                  Medical Director. Each hospice must have a medical director
         who is a physician and who assumes responsibility for overseeing the
         medical component of the hospice's patient care program.

                  Direct Provision of Core Services. Medicare limits those
         services for which the hospice may use individual independent
         contractors or contract agencies to provide care to patients.
         Specifically, substantially all nursing, social work, and

                                       9
<PAGE>

         counseling services must be provided directly by hospice employees
         meeting specific educational and professional standards. During periods
         of peak patient loads or under extraordinary circumstances, the hospice
         may be permitted to use contract workers, but the hospice must agree in
         writing to maintain professional, financial and administrative
         responsibility for the services provided by those individuals or
         entities.

                  Professional Management of Non-Core Services. A hospice may
         arrange to have non-core services such as therapy services, home health
         aide services, medical supplies or drugs provided by a non-employee or
         outside entity. If the hospice elects to use an independent contractor
         to provide non-core services, however, the hospice must retain
         professional management responsibility for the arranged services and
         ensure that the services are furnished in a safe and effective manner
         by qualified personnel, and in accordance with the patient's plan of
         care.

                  Plan of Care. The patient's attending physician, the medical
         director or designated hospice physician, and the interdisciplinary
         team must establish an individualized written plan of care prior to
         providing care to any hospice patient. The plan must assess the
         patient's needs and identify services to be provided to meet those
         needs and must be reviewed and updated at specified intervals.

                  Continuation of Care. A hospice may not discontinue or reduce
         care provided to a Medicare beneficiary if the individual becomes
         unable to pay for that care.

                  Informed Consent. The hospice must obtain the informed consent
         of the hospice patient, or the patient's representative, that specifies
         the type of care services that may be provided as hospice care.

                  Training. A hospice must provide ongoing training for its
         employees.

                  Quality Assurance. A hospice must conduct ongoing and
         comprehensive self-assessments of the quality and appropriateness of
         care it provides and that its contractors provide under arrangements to
         hospice patients.

                  Interdisciplinary Team. A hospice must designate an
         interdisciplinary team to provide or supervise hospice care services.
         The interdisciplinary team develops and updates plans of care, and
         establishes policies governing the day-to-day provision of hospice
         services. The team must include at least a physician, registered nurse,
         social worker and spiritual or other counselor. A registered nurse must
         be designated to coordinate the plan of care.

                  Volunteers. Hospice programs are required to recruit and train
         volunteers to provide patient care services or administrative services.
         Volunteer services must be provided in an amount equal to at least five
         percent of the total patient care hours provided by all paid hospice
         employees and contract staff.

                  Licensure. Each hospice and all hospice personnel must be
         licensed, certified or registered in accordance with applicable
         federal, state and local laws and regulations.

                  Central Clinical Records. Hospice programs must maintain
         clinical records for each hospice patient that are organized in such a
         way that they may be easily

                                       10
<PAGE>

         retrieved. The clinical records must be complete and accurate and
         protected against loss, destruction, and unauthorized use.

         Surveys and Audits. Hospice programs are subject to periodic survey by
federal and state regulatory authorities and private accrediting entities to
ensure compliance with applicable licensing and certification requirements and
accreditation standards. Regulators conduct periodic surveys of hospice programs
and provide reports containing statements of deficiencies for alleged failure to
comply with various regulatory requirements. Survey reports and statements of
deficiencies are common in the healthcare industry. In most cases, the hospice
program and regulatory authorities will agree upon any steps to be taken to
bring the hospice into compliance with applicable regulatory requirements. In
some cases, however, a state or federal regulatory authority may take a number
of adverse actions against a hospice program, including the imposition of fines,
temporary suspension of admission of new patients to the hospice's service or,
in extreme circumstances, de-certification from participation in the Medicare or
Medicaid programs or revocation of the hospice's license.

         From time to time Vitas receives survey reports containing statements
of deficiencies. Vitas reviews such reports and takes appropriate corrective
action. Vitas believes that its hospices are in material compliance with
applicable licensure and certification requirements. If a Vitas hospice were
found to be out of compliance and actions were taken against a Vitas hospice,
they could materially adversely affect the hospice's ability to continue to
operate, to provide certain services and to participate in the Medicare and
Medicaid programs, which could materially adversely affect Vitas.

         Billing Audits/ Claims Reviews. The Medicare program and its fiscal
intermediaries and other payors periodically conduct pre-payment or post-payment
reviews and other reviews and audits of health care claims, including hospice
claims. There is pressure from state and federal governments and other payors to
scrutinize health care claims to determine their validity and appropriateness.
In order to conduct these reviews, the payor requests documentation from Vitas
and then reviews that documentation to determine compliance with applicable
rules and regulations, including the eligibility of patients to receive hospice
benefits, the appropriateness of the care provided to those patients and the
documentation of that care. During the past several years, Vitas' claims have
been subject to review and audit.

         Certificate of Need Laws and Other Restrictions. Some states, including
Florida, have certificate of need or similar health planning laws that apply to
hospice care providers. These states may require some form of state agency
review or approval prior to opening a new hospice program, to adding or
expanding hospice services, to undertaking significant capital expenditures or
under other specified circumstances. Approval under these certificate of need
laws is generally conditioned on the showing of a demonstrable need for services
in the community. Vitas may seek to develop, acquire or expand hospice programs
in states having certificate of need laws. To the extent that state agencies
require Vitas to obtain a certificate of need or other similar approvals to
expand services at existing hospice programs or to make acquisitions or develop
hospice programs in new or existing geographic markets, Vitas' plans could be
adversely affected by a failure to obtain such certificate or approval. In
addition, competitors may seek administratively or judicially to challenge such
an approval or proposed approval by the state agency, and Vitas has been
defending against such a challenge in connection with the development of its
Palm Beach County, Florida hospice program. Such a challenge, whether or not
ultimately successful, could adversely affect Vitas.

                                       11
<PAGE>

         Limitations on For-Profit Ownership. A few states have laws that
restrict the development and expansion of for-profit hospice programs. For
example, Florida law does not permit the operation of a hospice by a for-profit
corporation unless it was operated in that capacity on or before July 1, 1978,
although under certain circumstances a for-profit corporation may be permitted
to purchase a grandfathered hospice program and continue to operate it. In New
York, a hospice generally cannot be owned by a corporation that has another
corporation as a stockholder. These types of restrictions could affect Vitas'
ability to expand in Florida or into New York, or in other jurisdictions with
similar restrictions.

         Limits on the Acquisition or Conversion of Non-Profit Health Care
Organizations. An increasing number of states have enacted laws that restrict
the ability of for-profit entities to acquire or otherwise assume the operations
of a non-profit health care provider. Some states may require government review,
public hearings, and/or government approval of transactions in which a
for-profit entity proposes to purchase certain non-profit healthcare
organizations. Heightened scrutiny of these transactions may significantly
increase the costs associated with future acquisitions of non-profit hospice
programs in some states, otherwise increase the difficulty in completing those
acquisitions or prevent them entirely. Vitas cannot assure that it will not
encounter regulatory or governmental obstacles in connection with any proposed
acquisition of non-profit hospice programs in the future.

         Professional Licensure and Participation Agreements. Many hospice
employees are subject to federal and state laws and regulations governing the
ethics and practice of their profession, including physicians, physical, speech
and occupational therapists, social workers, home health aides, pharmacists and
nurses. In addition, those professionals who are eligible to participate in the
Medicare, Medicaid or other federal health care programs as individuals must not
have been excluded from participation in those programs at any time.

         State Licensure of Hospice. Each of Vitas' hospices must be licensed in
the state in which it operates. State licensure rules and regulations require
that Vitas' hospices maintain certain standards and meet certain requirements,
which may vary from state to state. Vitas believes that its hospices are in
material compliance with applicable licensure requirements. If a Vitas hospice
were found to be out of compliance and actions were taken against a Vitas
hospice, they could materially adversely affect the hospice's ability to
continue to operate, to provide certain services and to participate in the
Medicare and Medicaid programs, which could materially adversely affect Vitas.

         Overview of Government Payments -- General. A substantial portion of
Vitas' revenues are derived from payments received from the Medicare and
Medicaid programs. 95.2%, 95.4% and 95.4% of Vitas' net patient service revenue
for the years ended September 30, 2001, 2002 and 2003, respectively, and 95.8%
of Vitas' net patient service revenue for the three months ended December 31,
2003, consisted of payments from the Medicare and Medicaid programs. Such
payments are made primarily on a "per diem" basis. Under the per diem
reimbursement methodology, Vitas is essentially at risk for the cost of eligible
services provided to hospice patients. Profitability is therefore largely
dependent upon Vitas' ability to manage the costs of providing hospice services
to patients. Increases in operating costs, such as labor and supply costs that
are subject to inflation and other increases, without a compensating increase in
Medicare and Medicaid rates, could have a material adverse effect on Vitas'
business in the future. The Medicare and Medicaid programs are increasing
pressure to control health care costs and to decrease or limit increases in
reimbursement rates for health care services. As with most government

                                       12
<PAGE>

programs, the Medicare and Medicaid programs are subject to statutory and
regulatory changes, possible retroactive and prospective rate and payment
adjustments, administrative rulings, freezes and funding reductions, all of
which may adversely affect the level of program payments and could have a
material adverse effect on Vitas' business. Vitas' levels of revenues and
profitability will be subject to the effect of legislative and regulatory
changes, including possible reductions in coverage or payment rates, or changes
in methods of payment, by the Medicare and Medicaid programs.

Overview of Government Payments -- Medicare

         Medicare Eligibility Criteria. To receive Medicare payment for hospice
services, the hospice medical director and, if the patient has one, the
patient's attending physician, must certify that the patient has a life
expectancy of six months or less if the illness runs its normal course. This
determination is made based on the physician's clinical judgment. Due to the
uncertainty of such prognoses, however, it is likely and expected that some
percentage of hospice patients will not die within six months of entering a
hospice program. The Medicare program (among other third-party payors)
recognizes that terminal illnesses often do not follow an entirely predictable
course, and therefore the hospice benefit remains available to beneficiaries so
long as the hospice physician or the patient's attending physician continues to
certify that the patient's life expectancy remains six months or less.
Specifically, the Medicare hospice benefit provides for two initial 90-day
benefit periods followed by an unlimited number of 60-day periods. In order to
qualify for hospice care, a Medicare beneficiary also must elect hospice care
and waive any right to other Medicare benefits related to his or her terminal
illness. A Medicare beneficiary may revoke his or her election of the Medicare
hospice benefit at any time and resume receiving regular Medicare benefits. The
patient may elect the hospice benefit again at a later date so long as he or she
remains eligible. Increased regulatory scrutiny of compliance with the Medicare
six-month eligibility rule has impacted the hospice industry. The Medicare
program, however, has recently reaffirmed that Medicare hospice beneficiaries
are not limited to six months of coverage and that there is no limit on how long
a Medicare beneficiary can continue to receive hospice benefits and services,
provided that the beneficiary continues to meet the eligibility criteria under
the Medicare hospice program. In addition, the Medicare, Medicaid and SCHIP
Benefits Improvement and Protection Act of 2000 requires HHS to conduct a study
to examine the appropriateness of the current physician certification
requirement required before a Medicare beneficiary is eligible to receive the
Medicare hospice benefit.

         Levels of Care. Medicare pays for hospice services on a prospective
payment system basis under which Vitas receives an established payment rate for
each day that it provides hospice services to a Medicare beneficiary. These
rates are subject to annual adjustments for inflation and may also be adjusted
based upon the geographic location where the services are provided. The rate
Vitas receives will vary depending on which of the following four levels of care
is being provided to the beneficiary:

         Routine Home Care. The routine home care rate is paid for each day that
         a patient is in a hospice program and is not receiving one of the other
         categories of hospice care. This rate is also paid when a patient is
         receiving hospital care for a condition that is not related to his or
         her terminal illness. The routine home care rate does not vary based
         upon the volume or intensity of services provided by the hospice
         program.

         General Inpatient Care. The general inpatient care rate is paid when a
         patient requires inpatient services for a short period for pain control
         or symptom management

                                       13
<PAGE>

         which cannot be managed in other settings. General inpatient care
         services must be provided in a Medicare or Medicaid certified hospital
         or long-term care facility or at a freestanding inpatient hospice
         facility with the required registered nurse staffing.

         Continuous Home Care. Continuous home care is provided to patients
         while at home, during periods of crisis when intensive monitoring and
         care, primarily nursing care, is required in order to achieve
         palliation or management of acute medical symptoms. Continuous home
         care requires a minimum of 8 hours of care within a 24-hour day, which
         begins and ends at midnight. The care must be predominantly nursing
         care provided by either a registered nurse or licensed practical nurse.
         While the published Medicare continuous home care rates are daily
         rates, Medicare actually pays for continuous home care services on an
         hourly basis. This hourly rate is calculated by dividing the daily rate
         by 24.

         Respite Care. Respite care permits a hospice patient to receive
         services on an inpatient basis for a short period of time in order to
         provide relief for the patient's family or other caregivers from the
         demands of caring for the patient. A hospice can receive payment for
         respite care for a given patient for up to five consecutive days at a
         time, after which respite care is reimbursed at the routine home care
         rate.

         Medicare Payment for Physician Services. Payment for direct patient
care physician services delivered by hospice physicians is billed separately by
the hospice to the Medicare intermediary and paid at the lesser of the actual
charge or the Medicare allowable charge for these services. This payment is in
addition to the daily rates Vitas receives for hospice care. Payment for hospice
physicians' administrative and general supervisory activities is included in the
daily rates discussed above. Payments for attending physician professional
services (other than services furnished by hospice physicians) are not paid to
the hospice, but rather are paid directly to the attending physician by the
Medicare carrier. For fiscal 2003, 1.9% of Vitas' net revenue was attributable
to physician services.

         Medicare Limits on Hospice Care Payments. Medicare payments for hospice
services are subject to two additional limits or "caps." Each of Vitas' hospice
programs is separately subject to both of these "caps." Both of these "caps" are
determined on an annual basis for the period running from November 1 through
October 31 of each year.

         First, under a Medicare rule known as the "80-20" rule applicable to
Medicare inpatient services, if the number of inpatient care days furnished by a
hospice to Medicare beneficiaries exceeds 20% of the total days of hospice care
furnished by such hospice to Medicare beneficiaries, Medicare payments to the
hospice for inpatient care days exceeding the inpatient cap are reduced to the
routine home care rate. During its history, Vitas has never exceeded the
inpatient cap.

         Second, overall Medicare payments to a hospice are also subject to a
separate cap based on overall average payments per admission. Any payments
exceeding this overall hospice cap must be refunded by the hospice. This cap was
set at $18,661.29 per admission through the twelve-month period ended on October
31, 2003, and is adjusted annually to account for inflation. While historically
Vitas' revenues per admission generally have not exceeded the applicable cap,
there can be no assurance that Vitas' hospices will not be subject to future
payment reductions or recoupments as the result of this cap.

                                       14
<PAGE>

         Medicare Managed Care Programs. The Medicare program has entered into
contracts with managed care companies to provide a managed care benefit to
Medicare beneficiaries who elect to participate in managed care programs. These
managed care programs are commonly referred to as Medicare HMOs, Medicare +
Choice or Medicare risk products. Vitas provides hospice care to Medicare
beneficiaries who participate in these managed care programs, and Vitas is paid
for services provided to these beneficiaries in the same way and at the same
rates as those of other Medicare beneficiaries who are not in a Medicare managed
care program. Under current Medicare policy, Medicare pays the hospice directly
for services provided to these managed care program participants and then
reduces the standard per-member, per-month payment that the managed care program
otherwise receives.

Overview of Government Payments --  Medicaid

         Medicaid Coverage and Reimbursement. State Medicaid programs are
another source of Vitas' net patient revenue. Medicaid is a state-administered
program financed by state funds and matching federal funds to provide medical
assistance to the indigent and certain other eligible persons. In 1986, hospice
services became an optional state Medicaid benefit. For those states that elect
to provide a hospice benefit, the Medicaid program is required to pay the
hospice at rates at least equal to the rates provided under Medicare and
calculated using the same methodology. States maintain flexibility to establish
their own hospice election procedures and to limit the number and duration of
benefit periods for which they will pay for hospice services.

         Nursing Home Residents. For Vitas' patients who receive nursing home
care under a state Medicaid program and who elect hospice care under Medicare or
Medicaid, Vitas generally contracts with nursing homes for the nursing homes'
provision to patients of room and board services. In addition to the applicable
Medicare or Medicaid hospice daily or hourly rate, the state generally must pay
Vitas an amount equal to at least 95% of the Medicaid daily nursing home rate
for room and board services furnished to the patient by the nursing home. Under
Vitas' standard nursing home contracts, Vitas pays the nursing home for these
room and board services at the Medicaid daily nursing home rate.

         Adjustments to Medicare and Medicaid Payment Rates. Payment rates under
the Medicare and Medicaid programs are generally indexed for inflation annually;
however, the increases have historically been less than actual inflation. On
October 1, 2001, the base Medicare payment rates for hospice care increased by
approximately 3.2% over the base rates previously in effect. On October 1, 2002
and on October 1, 2003, the base Medicare payment rates for hospice care
increased by approximately 3.4% each year over the base rates in effect in the
prior year. These rates were further adjusted by the hospice wage index. It is
possible that there will be further modifications to the rate structure under
which the Medicare or Medicaid programs pay for hospice care services. Any
future reductions in the rate of increase in Medicare and Medicaid payments may
have an adverse impact on Vitas' net patient service revenue and profitability.

                          OTHER HEALTHCARE REGULATIONS

         Federal and State Anti-Kickback Laws and Safe Harbor Provisions. The
federal Anti-Kickback Law makes it a felony to knowingly and willfully offer,
pay, solicit or receive any form of remuneration in exchange for referring,
recommending, arranging, purchasing, leasing or ordering items or services
covered by a federal health care program including Medicare or Medicaid. The
Anti-Kickback Law applies regardless of whether the remuneration is provided
directly or indirectly, in cash or in kind. Although the anti-kickback statute
does not prohibit all financial transactions or relationships that providers of
healthcare

                                       15
<PAGE>

items or services may have with each other, interpretations of the law have been
very broad. Under current law, courts and federal regulatory authorities have
stated that this law is violated if even one purpose (as opposed to the sole or
primary purpose) of the arrangement is to induce referrals.

         Violations of the Anti-Kickback Law carry potentially severe penalties
including imprisonment of up to five years, criminal fines of up to $25,000 per
act, civil money penalties of up to $50,000 per act, and additional damages of
up to three times the amounts claimed or remuneration offered or paid. Federal
law also authorizes exclusion from the Medicare and Medicaid programs for
violations of the Anti-Kickback Law.

         The Anti-Kickback Law contains several statutory exceptions to the
broad prohibition. In addition, Congress authorized the Office of Inspector
General ("OIG") to publish numerous "safe harbors" that exempt some practices
from enforcement action under the Anti-Kickback Law and related laws. These
statutory exceptions and regulatory safe harbors protect various bona fide
employment relationships, contracts for the rental of space or equipment,
personal service arrangements, and management contracts, among other things,
provided that certain conditions set forth in the statute or regulations are
satisfied. The safe harbor regulations, however, do not comprehensively describe
all lawful relationships between healthcare providers and referral sources, and
the failure of an arrangement to satisfy all of the requirements of a particular
safe harbor does not mean that the arrangement is unlawful. Failure to comply
with the safe harbor provisions, however, may mean that the arrangement will be
subject to scrutiny. It is possible for healthcare providers to request an
advisory opinion from the OIG regarding an existing or proposed business
arrangement and the possible anti-kickback concerns raised by that arrangement.

         Many states, including states where Vitas does business, have adopted
similar prohibitions against payments that are intended to induce referrals of
patients, regardless of the source of payment. Some of these state laws lack
explicit "safe harbors" that may be available under federal law. Sanctions under
these state anti-kickback laws may include civil money penalties, license
suspension or revocation, exclusion from Medicare or Medicaid, and criminal
fines or imprisonment. Little precedent exists regarding the interpretation or
enforcement of these statutes.

         Vitas is required under the Medicare conditions of participation and
some state licensing laws to contract with numerous healthcare providers and
practitioners, including physicians, hospitals and nursing homes, and to arrange
for these individuals or entities to provide services to Vitas' patients. In
addition, Vitas has contracts with other suppliers, including pharmacies,
ambulance services and medical equipment companies. Some of these individuals or
entities may refer, or be in a position to refer, patients to Vitas, and Vitas
may refer, or be in a position to refer, patients to these individuals or
entities. These arrangements may not qualify for a safe harbor. Vitas from time
to time seeks guidance from regulatory counsel as to the changing and evolving
interpretations and the potential applicability of these anti-kickback laws to
its programs, and in response thereto, takes such actions as it deems
appropriate. We generally believe that Vitas' contracts and arrangements with
providers, practitioners and suppliers do not violate applicable anti-kickback
laws. However, we cannot assure you that such laws will ultimately be
interpreted in a manner consistent with Vitas' practices.

         HIPAA Anti-Fraud Provisions. HIPAA includes several revisions to
existing health care fraud laws by permitting the imposition of civil monetary
penalties in cases involving violations of the anti-kickback statute or
contracting with excluded providers. In

                                       16
<PAGE>

addition, HIPAA created new statutes making it a federal felony to engage in
fraud, theft, embezzlement, or the making of false statements with respect to
healthcare benefit programs, which include private, as well as government
programs. In addition, for the first time, federal enforcement officials have
the ability to exclude from the Medicare and Medicaid programs any investors,
officers and managing employees associated with business entities that have
committed healthcare fraud, even if the investor, officer or employee had no
actual knowledge of the fraud.

         OIG Fraud Alerts, Advisory Opinions and Other Program Guidance. In
1976, Congress established the OIG to, among other things, identify and
eliminate fraud, abuse and waste in HHS programs. To identify and resolve such
problems, the OIG conducts audits, investigations and inspections across the
country and issues public pronouncements identifying practices that may be
subject to heightened scrutiny. In the last several years, there have been a
number of hospice related audits and reviews conducted. These reviews and
recommendations have included the following:

         -        better ensuring that Medicare hospice eligibility
                  determinations are made in accordance with the Medicare
                  regulations; and

         -        revising the annual cap on hospice benefits to better reflect
                  the cost of care provided.

         From time to time, various federal and state agencies, such as HHS and
the OIG, issue a variety of pronouncements, including fraud alerts, the OIG's
Annual Work Plan and other reports, identifying practices that may be subject to
heightened governmental scrutiny. For example, the OIG in 2002 specifically
called for a review of hospice plans of care to examine the variance among
hospice plans of care and the extent to which services are provided in
accordance with plans of care, and to determine whether there should be uniform
standards or minimum requirements for their completion. In addition, the OIG
called for a review of payments for the care of hospice patients residing in
nursing homes and the level of services they receive. We cannot predict what, if
any changes may be implemented in coverage, reimbursement, or enforcement
policies as a result of these OIG reviews and recommendations.

         Additionally, in March 1998, the OIG issued a special fraud alert
titled "Fraud and Abuse in Nursing Home Arrangements with Hospices." This
special fraud alert focused on payments received by nursing homes from hospices.

         Federal False Claims Acts. The federal law includes several criminal
and civil false claims provisions, which provide that knowingly submitting
claims for items or services that were not provided as represented may result in
the imposition of multiple damages, administrative civil money penalties,
criminal fines, imprisonment, and/or exclusion from participation in federally
funded healthcare programs, including Medicare and Medicaid. In addition, the
OIG may impose extensive and costly corporate integrity requirements upon a
healthcare provider that is the subject of a false claims judgment or
settlement. These requirements may include the creation of a formal compliance
program, the appointment of a government monitor, and the imposition of annual
reporting requirements and audits conducted by an independent review
organization to monitor compliance with the terms of the agreement and relevant
laws and regulations.

         The Civil False Claims Act prohibits the known filing of a false claim
or the known use of false statements to obtain payments. Penalties for
violations include fines ranging

                                       17
<PAGE>

from $5,500 to $11,000, plus treble damages, for each claim filed. Provisions in
the Civil False Claims Act also permit individuals to bring actions against
individuals or businesses in the name of the government as so called "qui tam"
relators. If a qui tam relator's claim is successful, he or she is entitled to
share in the government's recovery.

         Both direct enforcement activity by the government and qui tam actions
have increased significantly in recent years and have increased the risk that a
healthcare company may have to defend a false claims action, pay fines or be
excluded from the Medicare and/or Medicaid programs as a result of an
investigation arising out of this type of an action. Because of the complexity
of the government regulations applicable to the healthcare industry, we cannot
assure you that Vitas will not be the subject of an action under the False
Claims Act.

         State False Claims Laws. At least 10 states and the District of
Columbia, including states in which Vitas currently operates, have adopted state
false claims laws that mirror to some degree the federal false claims laws.
While these statutes vary in scope and effect, the penalties for violating these
false claims laws include administrative, civil and/or criminal fines and
penalties, imprisonment, and the imposition of multiple damages.

         The Stark Law and State Physician Self-Referral Laws. Section 1877 of
the Social Security Act, commonly known as the "Stark Law," prohibits physicians
from referring Medicare or Medicaid patients for "designated health services" to
entities in which they hold an ownership or investment interest or with whom
they have a compensation arrangement, subject to a number of statutory and
regulatory exceptions. Penalties for violating the Stark Law are severe and
include:

         -        denial of payment;

         -        civil monetary penalties of $15,000 per referral or $1,000,000
                  for "circumvention schemes;"

         -        assessments equal to 200% of the dollar value of each such
                  service provided; and

         -        exclusion from the Medicare and Medicaid programs.

         Hospice care itself is not specifically listed as a designated health
service; however, certain services that Vitas provides, or in the future may
provide, are among the services identified as designated health services for
purposes of the self-referral laws. We cannot assure you that future regulatory
changes will not result in hospice services becoming subject to the Stark Law's
ownership, investment or compensation prohibitions in the future.

         Many states where Vitas operates have laws similar to the Stark Law,
but with broader effect because they apply regardless of the source of payment
for care. Penalties similar to those listed above as well the loss of state
licensure may be imposed in the event of a violation of these state
self-referral laws. Little precedent exists regarding the interpretation or
enforcement of these statutes.

         Civil Monetary Penalties. The Civil Monetary Penalties Statute provides
that civil penalties ranging between $10,000 and $50,000 per claim or act may be
imposed on any person

                                       18
<PAGE>

or entity that knowingly submits improperly filed claims for federal health
benefits or that offers or makes payments to induce a beneficiary or provider to
reduce or limit the use of health care services or to use a particular provider
or supplier. Civil monetary penalties may be imposed for violations of the
anti-kickback statute and for the failure to return known overpayments, among
other things.

         Prohibition on Employing or Contracting with Excluded Providers. The
Social Security Act and federal regulations state that individuals or entities
that have been convicted of a criminal offense related to the delivery of an
item or service under the Medicare or Medicaid programs or that have been
convicted, under state or federal law, of a criminal offense relating to neglect
or abuse of residents in connection with the delivery of a healthcare item or
service cannot participate in any federal health care programs, including
Medicare and Medicaid. Additionally, individuals and entities convicted of
fraud, that have had their licenses revoked or suspended, or that have failed to
provide services of adequate quality also may be excluded from the Medicare and
Medicaid programs. Federal regulations prohibit Medicare providers, including
hospice programs, from submitting claims for items or services or their related
costs if an excluded provider furnished those items or services. The OIG
maintains a list of excluded persons and entities. Nonetheless, it is possible
that Vitas might unknowingly bill for services provided by an excluded person or
entity with whom it contracts. The penalty for contracting with an excluded
provider may range from civil monetary penalties of $50,000 and damages of up to
three times the amount of payment that was inappropriately received.

         Corporate Practice of Medicine and Fee Splitting. Most states have laws
that restrict or prohibit anyone other than a licensed physician, including
business entities such as corporations, from employing physicians and/or
prohibit payments or fee-splitting arrangements between physicians and
corporations or unlicensed individuals. Violations of corporate practice of
medicine and fee-splitting laws vary from state to state, but may include civil
or criminal penalties, the restructuring or termination of the business
arrangements between the physician and unlicensed individual or business entity,
or even the loss of the physician's license to practice medicine. These laws
vary widely from state to state both in scope and origin (e.g. statute,
regulation, Attorney General opinion, court ruling, agency policy) and in most
instances have been subject to only limited interpretation by the courts or
regulatory bodies.

         Vitas employs or contracts with physicians to provide medical direction
and patient care services to its patients. Vitas has made efforts in those
states where certain contracting or fee arrangements are restricted or
prohibited to structure those arrangements in compliance with the applicable
laws and regulations. Despite these efforts, however, we cannot assure you that
agency officials charged with enforcing these laws will not interpret Vitas'
contracts with employed or independent contractor physicians as violating the
relevant laws or regulations. Future determinations or interpretations by
individual states with corporate practice of medicine or fee splitting
restrictions may force Vitas to restructure its arrangements with physicians in
those locations.

         Health Information Practices. There currently are numerous legislative
and regulatory initiatives at both the state and federal levels that address
patient privacy concerns. In particular, federal regulations issued under the
HIPAA Act of 1996 ("HIPAA") require Vitas to protect the privacy and security of
patients' individual health information. HHS published final regulations
addressing patient privacy on December 28, 2000, which were modified on August
14, 2002 (the "Privacy Rule"). Vitas was required to comply with the Privacy
Rule by April 14, 2003, and Vitas believes that it is in material compliance.
Additionally, HIPAA does not automatically preempt applicable state laws and
regulations

                                       19
<PAGE>

concerning Vitas' use, disclosure and maintenance of patient health information,
which means that Vitas is subject to a complex regulatory scheme that, in many
instances, requires Vitas to comply both with federal and state laws and
regulations.

         In August of 2000, HHS published final regulations establishing health
care transaction standards and code sets for the electronic transmission of
health care information in connection with certain transactions, such as billing
or health plan eligibility (the "Transactions Standard"). The official deadline
for compliance with the Transactions Standard for covered entities such as Vitas
was October 16, 2003. The Centers for Medicare and Medicaid Services ("CMS") is
the division of HHS that is responsible for interpreting and enforcing the
Transactions Standard. Failure to comply with the Transactions Standard may
subject covered entities, including Vitas, to civil monetary penalties and
possibly to criminal penalties. Vitas believes that it has made significant and
appropriate good faith efforts to comply with the Transactions Standard and to
develop an appropriate contingency plan as encouraged by CMS. It is unclear,
however, how CMS will regulate providers in general or Vitas in particular with
respect to compliance with the Transactions Standard. Consequently, it also is
unclear whether Vitas would be found to be in material compliance with the
Transactions Standard if CMS were to review Vitas' electronic claims submissions
and assess Vitas' electronic transactions, or whether Vitas would be required to
expend substantial sums on acquiring and implementing new information systems,
or would otherwise be affected in a manner that would negatively impact its
profitability.

         On May 31, 2002, HHS published its final rule regarding the HIPAA
Unique Employer Identifier Standard, which establishes a standard for
identifying employers in healthcare transactions where information about the
employer is transmitted electronically, as well as requirements concerning its
use by HIPAA covered entities. The deadline for compliance with the Unique
Employer Identifier Standard rule is July 30, 2004. Additionally, HHS published
final regulations addressing the security of such health information on February
20, 2003 (the "Security Rule"), and Vitas will be required to comply with the
Security Rule by April 21, 2005. Also, HHS published its final rule adopting the
HIPAA Standard Unique Health Identifier for health care providers on January 23,
2004, and Vitas' compliance deadline for that rule is May 23, 2007. Because
compliance with the final rules regarding the HIPAA Unique Employer Identifier
Standard and the Standard Unique Health Identifier, and the Security Rule is not
yet required, we cannot predict the total financial or other impact of any of
these final regulations on Vitas' operations, including any need for Vitas to
expend financial resources on acquiring and implementing new information systems
or any other negative impact on Vitas' profitability.

         Additional Federal and State Regulation. Federal and state governments
also regulate various aspects of the hospice industry. In particular, Vitas'
operations are subject to federal and state health regulatory laws covering
professional services, the dispensing of drugs and certain types of hospice
activities. Some of Vitas' employees are subject to state laws and regulations
governing the ethics and professional practice of medicine, respiratory therapy,
pharmacy and nursing.

         Compliance with Health Regulatory Laws. Vitas maintains an internal
regulatory compliance review program and from time to time retains regulatory
counsel for guidance on compliance matters. We cannot assure you, however, that
Vitas' practices, if reviewed, would be found to be in compliance with
applicable health regulatory laws, as such laws ultimately may be interpreted,
or that any non-compliance with such laws would not have a material adverse
effect on Vitas.

                                       20
<PAGE>

ENVIRONMENTAL MATTERS

         Roto-Rooter's operations are subject to various federal, state, and
local laws and regulations regarding environmental matters and other aspects of
the operation of a sewer and drain cleaning, HVAC and plumbing services
business. For certain other activities, such as septic tank and grease trap
pumping, Roto-Rooter is subject to state and local environmental health and
sanitation regulations. Service America's operations are also subject to various
federal, state and local laws and regulations regarding environmental matters
and other aspects of the operation of a HVAC and appliance repair and
maintenance service industry.

         At December 31, 2003, the Company's accrual for its estimated liability
for potential environmental cleanup and related costs arising from the sale of
DuBois Chemcials Inc. ("Dubois") amounted to $2,070,000. Of this balance,
$870,000 is included in other liabilities and $1,200,000 is included in other
current liabilities. The Company is contingently liable for additional
DuBois-related environmental cleanup and related costs up to a maximum of
$18,036,000. On the basis of a continuing evaluation of the Company's potential
liability, management believes that it is not probable this additional liability
will be paid. Accordingly, no provision for this contingent liability has been
recorded. Although it is not presently possible to reliably project the timing
of payments related to the Company's potential liability for environmental
costs, management believes that any adjustments to its recorded liability will
not materially adversely affect its financial position or results of operations.

         The Company, to the best of its knowledge, is currently in compliance
in all material respects with the environmental laws and regulations affecting
its operations. Such environmental laws, regulations and enforcement proceedings
have not required the Company to make material increases in or modifications to
its capital expenditures and they have not had a material adverse effect on
sales or net income. Capital expenditures for the purposes of complying with
environmental laws and regulations during 2004 and 2005 with respect to
continuing operations are not expected to be material in amount; there can be no
assurance, however, that presently unforeseen legislative or enforcement actions
will not require additional expenditures.

SEASONALITY

         Advertising costs for Roto-Rooter inordinately impact the Company's
fourth-quarter results. Roto-Rooter recognizes telephone directory costs
immediately upon distribution of a directory by its publisher into the
community. Since a large number of directories are distributed in the fourth
quarter, this direct expense accounting policy results in fourth-quarter
earnings including a disproportionately large share of Roto-Rooter's full-year
telephone directory advertising expense. In the fourth quarter 2003, Roto-Rooter
expensed $7.1 million of total advertising costs that represented 42% of the
aggregate advertising costs for the full-year 2003.

EMPLOYEES

         On December 31, 2003, Roto-Rooter, Inc. had a total of 3,357 employees.

                                       21
<PAGE>

AVAILABLE INFORMATION

         The Company's internet address is www.rotorooterinc.com. The Company's
annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports
on Form 8-K, and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act are electronically available through
the Company's website as soon as reasonably practicable after such reports are
filed with, or furnished to, the SEC.

         Annual and quarterly reports, press releases, and other printed
materials may also be obtained from Roto-Rooter Investor Relations without
charge by writing or by calling 800-224-3633 or 513-762-6463.

ITEM 2. PROPERTIES

         The Company's corporate offices and the headquarters for the
Roto-Rooter Group are located in Cincinnati, Ohio. Roto-Rooter has manufacturing
and distribution center facilities in West Des Moines, Iowa and has 61 office
and service facilities in 26 states. The headquarters for Service America is
located in Ft. Lauderdale, Florida and Service America has 8 office and service
facilities in Florida and Arizona. Vitas operates 25 programs from 41 leased
facilities in 8 states, including Florida, California, Texas and Illinois.

         All "owned" property is held in fee and is subject to the security
interests of the Company's new senior secured credit facilities and of the
holders of the Floating Rate Notes issued in connection of the Company's merger
with Vitas. The leased property have lease terms ranging from one year to
fifteen years. Management does not foresee any difficulty in renewing or
replacing the remainder of its current leases. The Company considers all of its
major operating properties to be maintained in good operating condition and to
be generally adequate for present and anticipated needs.

ITEM 3. LEGAL PROCEEDINGS

         The Company is party to a class action lawsuit filed in the Third
Judicial Circuit Court of Madison County, Illinois in June of 2000 by Robert
Harris, alleging certain Roto-Rooter plumbing was performed by unlicensed
employees. The Company contests these allegations and believes them without
merit. Plaintiff moved for certification of a class of customers in 32 states
who allegedly paid for plumbing work performed by unlicensed employees.
Plaintiff also moved for partial summary judgment on grounds the licensed
apprentice plumber who installed his faucet did not work under the direct
personal supervision of a licensed master plumber. On June 19, 2002, the trial
judge certified an Illinois-only plaintiffs class and granted summary judgment
for the named party Plaintiff on the issue of liability, finding violation of
the Illinois Plumbing License Act and the Illinois Consumer Fraud Act, through
Roto-Rooter's representation of the licensed apprentice as a plumber. The court
has not yet ruled on certification of a class in the remaining 31 states. Due to
the complex legal and other issues involved, it is not presently possible to
estimate the amount of liability, if any, related to this matter.

         On April 5, 2002 Michael Linn, an attorney, filed a class action
complaint against the Company in the Court of Common Pleas, Cuyahoga County,
Ohio. He alleges Roto-Rooter Services Company's miscellaneous parts charge,
ranging from $4.95 to $12.95 per job, violates the Ohio Consumer Sales Practices
Act. The Company contends that the charge,

                                       22
<PAGE>

which is included within the estimate approved by its customers, is a fully
disclosed component of its pricing. On February 25, 2003 the trial court
certified a class of customers who paid the charge from October 1999 to July
2002. The Company is appealing this order and believes the ultimate disposition
of this lawsuit will not have a material effect on its financial position.
However, management cannot provide assurance the Company will ultimately prevail
in either of the above two cases. Regardless of outcome, such litigation can
adversely affect the Company through defense costs, diversion of management's
time, and related publicity.

         The District Attorney of Suffolk County, New York is contemplating
legal proceedings against Roto-Rooter Services Company, an indirect subsidiary
of the Company, arising out of the disposal of restaurant grease trap waste,
originating in adjacent Nassau County, in Suffolk County disposal sites. The
Company believes the disposition of this matter will not have a material effect
on its financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

EXECUTIVE OFFICERS OF THE COMPANY

<TABLE>
<CAPTION>
       Name           Age               Office                                        First Elected
- ------------------    ---    ------------------------------------                    ---------------
<S>                   <C>    <C>                                                     <C>
Edward L. Hutton      84     Chairman                                                November 3, 1993 (1)
Kevin J. McNamara     50     President and Chief Executive Officer                   August 2, 1994 (2)
Timothy S. O'Toole    48     Executive Vice President                                May 18, 1992 (3)
Spencer S. Lee        48     Executive Vice President                                May 15, 2000 (4)
David P. Williams     43     Vice President and Chief Financial                      March 5, 2004 (5)
                             Officer
Arthur V. Tucker,     54     Vice President and Controller                           May 20, 1991 (6)
Jr.
</TABLE>

(1)      Mr. E. L. Hutton is the Chairman of the Company and has held this
         position since November 1993. Previously, from April 1970 to May 2001,
         Mr. E. L. Hutton also served as Chief Executive Officer and from April
         1970 to November 1993, he held the position of President of the
         Company. Mr. E. L. Hutton is the father of Mr. T. C. Hutton, a director
         and a Vice President of the Company.

(2)      Mr. K. J. McNamara is President and Chief Executive Officer of the
         Company and has held these positions since August 1994 and May 2001,
         respectively. Previously, he served as an Executive Vice President,
         Secretary and General Counsel of the Company, since November 1993,
         August 1986 and August 1986, respectively. He previously held the
         position of Vice President of the Company, from August 1986 to May
         1992.

(3)      Mr. T. S. O'Toole is an Executive Vice President of the Company and has
         held this position since May 1992. He is also President and Chief
         Executive Officer of Vitas, a wholly owned subsidiary of the Company,
         and has held this position since February 24, 2004. Previously, from
         May 1992 to February 24, 2004, he also served the Company as Treasurer.

                                       23
<PAGE>

(4)      Mr. Lee is an Executive Vice President of the Company and has held this
         position since May 15, 2000. Mr. Lee is also Chairman and Chief
         Executive Officer of Roto-Rooter Management Company, a wholly owned
         subsidiary of the Company, and has held this position since January
         1999. Previously, he served as a Senior Vice President of Roto-Rooter
         Services Company from May 1997 to January 1999.

(5)      Mr. Williams is Vice President and Chief Financial Officer of the
         Company and has held these positions since March 5, 2004. Mr. Williams
         is also Senior Vice President and Chief Financial Officer of
         Roto-Rooter Management Company and has held these positions since
         January 1999.

(6)      Mr. A. V. Tucker, Jr. is a Vice President and Controller of the Company
         and has held these positions since February 1989. From May 1983 to
         February 1989, he held the position of Assistant Controller of the
         Company.

         Each executive officer holds office until the annual election at the
next annual organizational meeting of the Board of Directors of the Company
which is scheduled to be held on May 17, 2004.

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
        AND ISSUER PURCHASES OF EQUITY SECURITIES

         The Company's Capital Stock (par value $1 per share) is traded on the
New York Stock Exchange under the symbol RRR. The range of the high and low sale
prices on the New York Stock Exchange and dividends paid per share for each
quarter of 2002 and 2003 are set forth below.

<TABLE>
<CAPTION>
                                          Closing
                               -------------------------               Dividends Paid
                               High                  Low                 Per Share
- -------------------------------------------------------------------------------------
<S>                           <C>                   <C>                <C>
2003

First Quarter                 $36.51                $31.55                 $.12
Second Quarter                 40.20                 32.98                  .12
Third Quarter                  40.35                 34.42                  .12
Fourth Quarter                 51.78                 33.69                  .12

2002

First Quarter                 $38.30                $33.52                 $.11
Second Quarter                 39.35                 33.60                  .11
Third Quarter                  37.04                 29.85                  .11
Fourth Quarter                 37.84                 29.65                  .12
</TABLE>

         Future dividends are necessarily dependent upon the Company's earnings
and financial condition, compliance with certain debt covenants and other
factors not presently determinable.

                                       24
<PAGE>

         As of March 5, 2004, there were approximately 3,382 stockholders of
record of the Company's Capital Stock. This number only includes stockholders of
record and does not include stockholders with shares beneficially held in
nominee name or within clearinghouse positions of brokers, banks or other
institutions.

         Information with respect to securities authorized for issuance under
the Company's equity compensation plans is included within Note 18 of the Notes
to Financial Statements appearing on page F-29 of this Report on Form 10-K.

                                       25
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

         Selected financial data for Roto-Rooter, Inc. and subsidiary companies
("Company") as of and for each of the five years ended December 31, 1999 through
December 31, 2003 are presented below (in thousands, except per share and
footnote data, ratios and employee data):

<TABLE>
<CAPTION>
                                                            2003          2002         2001         2000        1999
                                                          --------     ---------    ---------    ---------   ---------
<S>                                                       <C>          <C>          <C>          <C>         <C>
SUMMARY OF OPERATIONS
  Continuing operations (a)
    Service revenues and sales                            $ 308,871    $ 314,176    $ 337,908    $ 355,307   $ 316,719
    Gross profit (excluding depreciation)                   126,061      127,891      132,292      146,329     127,042
    Depreciation                                             12,054       13,587       14,395       13,374      11,285
    Amortization of goodwill                                      -            -        4,102        4,090       3,770
    Income/ (loss) from operations (b)                       (7,720)      (2,678)     (11,561)      28,548      21,227
    Income/ (loss) from continuing operations (c)            (3,499)      (8,854)     (10,738)      18,030      16,195
    Net income/ (loss) (c)                                   (3,435)      (2,545)     (12,185)      19,971      19,481
  Earnings/ (loss) per share
    Income/ (loss) from continuing operations             $   (0.35)   $   (0.90)   $   (1.11)   $    1.83   $    1.55
    Net income/ (loss)                                        (0.35)       (0.26)       (1.25)        2.03        1.86
    Average number of shares outstanding                      9,924        9,858        9,714        9,833      10,470
  Diluted earnings/ (loss) per share
    Income/ (loss) from continuing operations             $   (0.35)   $   (0.90)   $   (1.11)   $    1.82   $    1.54
    Net income/ (loss)                                        (0.35)       (0.26)       (1.25)        2.01        1.85
    Average number of shares outstanding                      9,924        9,858        9,714        9,927      10,514
  Cash dividends per share                                $    0.48    $    0.45    $    0.44    $    0.40   $    2.12
  Net income/(loss) excluding goodwill amortization (e)
    Net income/(loss)                                     $  (3,435)   $  (2,545)   $  (7,564)   $  24,579   $  23,789
    Earnings/(loss) per share                                 (0.35)       (0.26)       (0.78)        2.50        2.27
    Diluted earnings/(loss) per share                         (0.35)       (0.26)       (0.78)        2.48        2.26
FINANCIAL POSITION--YEAR END
  Cash and cash equivalents                               $  50,587    $  37,731    $   8,725    $   9,978   $  17,043
  Working capital                                            42,993       29,269       19,200        6,911      21,478
  Current ratio                                                1.73         1.45         1.23         1.07        1.23
  Properties and equipment, at cost less
    accumulated depreciation                              $  41,004    $  48,361    $  54,549    $  60,343   $  56,913
  Total assets                                              329,069      338,144      401,457      419,932     422,674
  Long-term debt                                             25,931       25,603       61,037       58,391      78,580
  Mandatorily redeemable convertible preferred
    securities of the Chemed Capital Trust                $  14,126    $  14,186    $  14,239    $  14,641       $   -
  Stockholders' equity                                      192,693      198,422      204,160      211,451     210,344
OTHER STATISTICS--CONTINUING OPERATIONS
  Net cash provided by continuing operations              $  22,590    $  26,894    $  27,123    $  45,981   $  28,582
  Capital expenditures                                       11,178       11,855       14,457       17,586      16,696
  Number of employees (d)                                     3,357        3,335        3,764        3,784       3,949
  Number of service and sales representatives                 2,529        2,514        2,623        2,586       2,699
</TABLE>

- ------------------

(a)  Continuing operations exclude Patient Care, discontinued in 2002, and Cadre
     Computer, discontinued in 2001.

(b)  Income/(loss) from operations includes asset impairment charges of
     $15,828,000 and severance charges of $3,627,000 in 2003, a goodwill
     impairment charge of $20,342,000 in 2002 and restructuring and similar
     expenses and other charges of $27,211,000 in 2001.

(c)  Income/(loss) from continuing operations and net income/(loss) include
     aftertax asset impairment charges of $14,363,000 in 2003, an aftertax
     goodwill impairment charge of $20,342,000 in 2002 and aftertax
     restructuring and similar expenses and other charges of $16,943,000 and an
     aftertax loss on the early extinguishment of debt of $1,701,000 in 2001.
     Aftertax capital gains on the sales and redemption of investments for the
     years 2003 through 1999 amounted to $3,351,000, $775,000, $703,000,
     $2,261,000 and $2,960,000, respectively. In accordance with FASB Statement
     No. 142, amortization of goodwill ceased December 31, 2001. Aftertax
     amortization of goodwill for continuing operations for the years 2001
     through 1999 was $3,888,000, $3,875,000 and $3,580,000, respectively.

(d)  Employee numbers reflect full-time-equivalent employees.

(e)  In accordance with FASB Statement No. 142, amortization of goodwill ceased
     December 31, 2001. Aftertax amortization of goodwill for for all operations
     for the years 2001 through 1999 was $4,621,000, $4,608,000 and $4,308,000,
     respectively.

                                       26
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

         Significant factors affecting the Company's consolidated cash flows
during 2003 and financial position at December 31, 2003, include the following:

     -    Continuing operations generated cash of $22.6 million;

     -    Proceeds from the redemption of Vitas' redeemable preferred stock
          totaled $27.3 million;

     -    The Company invested $18.0 million in Vitas' common stock (37%
          ownership interest);

     -    Capital expenditures totaled $11.2 million; and,

     -    The Company placed $10.0 million in escrow to secure its offer to
          purchase the shares of Vitas it did not own.

         The ratio of total debt (excluding the Preferred Securities) to total
capital was 12.0% at December 31, 2003, as compared with 10.9% at December 31,
2002. The Company's current ratio at December 31, 2003, was 1.7 as compared with
1.5 at December 31, 2002.

         The Company had $51.4 million of unused lines of credit with various
banks at December 31, 2003.

CASH FLOW

         The Company's cash flows for 2003, 2002 and 2001 are summarized as
follows (in millions):

<TABLE>
<CAPTION>
                                                          For the Years Ended December 31,
                                                        -----------------------------------
                                                         2003          2002          2001
                                                        -------       -------       -------
<S>                                                     <C>           <C>           <C>
Net cash provided by operating activities               $  22.6       $  29.5       $  34.4
Capital expenditures                                      (11.2)        (11.9)        (14.5)
                                                        -------       -------       -------
     Operating cash excess after capital expenditures      11.4          17.6          19.9
Proceeds from redemption of Vitas' preferred stock         27.3             -             -
Investment in Vitas' common stock                         (18.0)            -             -
Deposit to secure Vitas merger offer                      (10.0)            -             -
Dividends paid                                             (4.8)         (4.4)         (4.4)
Proceeds from sales of available for sale securities        4.5           1.9           1.4
Net proceeds/(uses) from sale of
  discontinued operations                                   1.1          50.7          (6.3)
Net decrease in long-term debt                             (0.4)        (35.4)        (11.4)
Other--net                                                  1.8          (1.4)         (0.5)
                                                        -------       -------       -------
     Increase/(decrease) in cash and cash equivalents   $  12.9       $  29.0       $  (1.3)
                                                        =======       =======       =======
</TABLE>

         For 2003, the operating cash excess after capital expenditures was
$11.4 million as compared with $17.6 million in 2002 and $19.9 million in 2001.
This excess, along with the proceeds from the redemption of Vitas' preferred
stock, was used to purchase 37% of Vitas common stock, to place a deposit of
$10.0 million to secure the Company's merger offer for Vitas' remaining common
stock, to pay cash dividends and to increase the Company's available cash and
cash equivalents. For 2002, the operating excess after capital expenditures and
the proceeds from the sale of Patient Care were used to retire funded debt, to
pay cash dividends and to increase the Company's available cash and cash
equivalents. For 2001, the operating cash excess after capital expenditures was
used to fund debt repayment, pay costs related to discontinued operations and to
pay cash dividends.

COMMITMENTS AND CONTINGENCIES

         In connection with the sale of DuBois Chemicals, Inc. ("DuBois") in
1991, the Company provided allowances and accruals relating to several long-term
costs, including income tax matters, lease commitments and environmental costs.
Also, in conjunction with the sales of The Omnia Group ("Omnia") and National
Sanitary Supply Company in 1997 and the sale of Cadre Computer Resources, Inc.
("Cadre Computer") in 2001, the Company provided long-term allowances and
accruals relating to costs of severance arrangements,

                                       27
<PAGE>

lease commitments and income tax matters. In the aggregate, the Company believes
these allowances and accruals are adequate as of December 31, 2003.

         Based on reviews of its environmental-related liabilities under the
DuBois sale agreement, the Company has estimated its remaining liability to be
$2.1 million. As of December 31, 2003, the Company is contingently liable for
additional cleanup and related costs up to a maximum of $18.0 million, for which
no provision has been recorded.

         In connection with the sale of Patient Care in 2002, $5.0 million of
the cash purchase price was placed in escrow pending collection of third-party
payer receivables on Patient Care's balance sheet at the sale date. Of this
amount, $2.5 million was returned to the Company in October 2003. Based on
Patient Care's collection history, the Company believes that the specified
receivables will be collected and that the remaining balance of the escrow funds
will be paid to Roto-Rooter, Inc. The remaining $2.5 million of these escrow
funds will be evaluated and distributed as of October 2004.

         The Company's various loan agreements and guarantees of indebtedness as
of December 31, 2003, contained certain restrictive covenants. The Company was
in compliance with all of the covenants at that time. Effective with the
acquisition of Vitas on February 24, 2004, the Company's revolving credit
agreement with Bank One, N.A. ("Bank One") was cancelled. In addition, the
Company retired its $25 million senior notes due 2005 - 2009, incurring a
prepayment penalty of $3.3 million.

LIQUIDITY AND COMMITMENTS AFTER THE VITAS ACQUISITION

         In connection with the acquisition of Vitas on February 24, 2004, the
Company entered into a secured revolving credit/term loan facility ("New Credit
Facility") with Bank One. The revolving credit facility provides for borrowings
of up to $100 million, including up to $40 million in letters of credit.
Interest payments for the revolving line of credit are based on LIBOR plus
3.25%. The term loan facility provides for a $35 million term loan and requires
quarterly principal payments of $1,250,000 with interest based on LIBOR plus
3.50%. All unpaid borrowings under the New Credit Facility, along with accrued
interest, are due February 24, 2009. Initially, the Company drew down $40
million under the revolving credit portion of the New Credit Facility and $35
million under the term loan portion. The Company intends to draw down
approximately $26 million of letters of credit under the New Credit Facility in
March 2004.

         The Company also issued $110 million principal amount of floating rate
senior secured notes due 2010 ("Floating Rate Notes") and $150 million of 8.75%
senior notes due 2011 ("Fixed Rate Notes") in a private placement with various
institutional investors on February 24, 2004. Interest on the Floating Rate
Notes is computed at LIBOR plus 3.75% and is payable quarterly beginning May 15,
2004. Interest payments on the Fixed Rate notes are due quarterly beginning May
15, 2004. No principal payments are due on either the Floating Rate Notes or the
Fixed Rate Notes until their dates of maturity (February 24, 2010, and February
24, 2011, respectively).

         As of February 24, 2004, the Company had $60 million of available
borrowings under the New Credit Facility. After the anticipated draw down of
approximately $26 million of letters of credit in March 2004, the Company will
have $34 million in borrowings available under the New Credit Facility.

         The table below summarizes the Company's debt and contractual
obligations, giving effect to the transactions described above (in thousands):

<TABLE>
<CAPTION>
                      Long-Term                     Minimum
                        Debt        Preferred        Lease         Severance
                      Payments      Securities      Payments       Payments        Total
                      ---------     ----------      --------       ---------      --------
<S>                   <C>           <C>             <C>            <C>            <C>
2004                  $  4,198           $  -       $ 12,395       $  1,559       $ 18,152
2005                     5,190              -         11,237          1,356         17,783
2006                     5,200              -          7,552          1,356         14,108
2007                     5,210              -          4,740            265         10,215
2008                     5,162              -          5,771              -         10,933
After 2008             311,419         14,126            205              -        325,750
                      --------       --------       --------       --------       --------
  Total               $336,379       $ 14,126       $ 41,900       $  4,536       $396,941
                      ========       ========       ========       ========       ========
</TABLE>

                                       28
<PAGE>

         Collectively, the credit agreements provide that the Company will be
required to meet the following financial covenants, to be tested quarterly,
beginning with the quarter ending June 30, 2004:

     -    a minimum net worth requirement, which requires a net worth of at
          least (i) $232 million plus (ii) 50% of consolidated net income (if
          positive) beginning with the quarter ending June 30, 2004, plus (iii)
          the net cash proceeds from issuance of the Company's capital stock or
          the capital stock of the Company's subsidiaries;

     -    a maximum leverage ratio, calculated quarterly, based upon the ratio
          of consolidated funded debt to consolidated EBITDA which will require
          maintenance of a ratio of 5.5 to 1.00 through December 31, 2004, a
          ratio of 4.75 to 1.00 from January 1 through December 31, 2005, and
          4.25 to 1.00 thereafter;

     -    a maximum senior leverage ratio, calculated quarterly, based upon the
          ratio of senior consolidated funded debt to consolidated EBITDA (which
          ratio excludes indebtedness in respect of the Fixed Rate Notes), which
          will require maintenance of a ratio of 3.375 to 1.00 through December
          31, 2004, a ratio of 2.875 to 1.00 from January 1 through December 31,
          2005, and 2.625 to 1.00 thereafter; and

     -    a minimum fixed charge coverage ratio, based upon the ratio of
          consolidated EBITDA minus capital expenditures to consolidated
          interest expense plus consolidated current maturities (including
          capitalized lease obligations) plus cash dividends paid on equity
          securities plus expenses for taxes, which will require maintenance of
          a ratio of 1.15 to 1.00 through December 31, 2004, 1.375 to 1.00 from
          January 1 through December 31, 2005, and 1.50 to 1.00 thereafter.

         In addition, the New Credit Facility, the Floating Rate Notes and the
Fixed Rate Notes provide for affirmative and restrictive covenants including
without limitation, requirements or restrictions (subject to exceptions) related
to the following:

     -    use of proceeds of loans,

     -    restricted payments, including payments of dividends and retirement of
          stock (permitting $.48 per share dividends so long as the aggregate
          amount of dividends in any fiscal year does not exceed $7.0 million
          and providing for additional principal prepayments to the extent
          dividends exceed $5.0 million in any fiscal year), with exceptions for
          existing employee benefit plans and stock option plans,

     -    mergers and dissolutions,

     -    sales of assets,

     -    investments and acquisitions,

     -    liens,

     -    transactions with affiliates,

     -    hedging and other financial contracts,

     -    restrictions on subsidiaries,

     -    contingent obligations,

     -    operating leases,

     -    guarantors,

     -    collateral,

     -    sale and leaseback transactions,

     -    prepayments of indebtedness, and

     -    maximum annual capital expenditures of $20 million subject to one-year
          carry-forwards on amounts not used during the previous year.

         It is management's opinion that the Company has no long-range
commitments that would have a significant impact on its liquidity, financial
condition or the results of its operations. Due to the nature of the
environmental liabilities, it is not possible to forecast the timing of the cash
payments for these potential liabilities. Based on the Company's available
credit lines, sources of borrowing and cash and cash equivalents, management
believes its sources of capital and liquidity are satisfactory for the Company's
needs for the foreseeable future.

INTENTION TO CALL CONVERTIBLE SECURITIES

         On March 15, 2004, and thereafter, the outstanding mandatorily
redeemable convertible preferred securities ("Preferred Securities") of the
Chemed Capital Trust are callable without premium at a price of $27.00 per
Preferred Security. The Preferred Securities are convertible into the Company's
capital stock at the ratio of .73 share of capital stock per Preferred Security.
The Company intends to call all of the Preferred Securities as soon after March
15, 2004, as practicable. Management anticipates that most of the

                                       29
<PAGE>

securities will be redeemed for capital stock rather than cash. However, were
all the Preferred Securities redeemed for cash, the Company would be obligated
to pay approximately $14.1 million in cash.

RESULTS OF OPERATIONS

         Set forth below are the year-to-year changes in the components of the
statement of operations relating to continuing operations:

<TABLE>
<CAPTION>
                                                          Percent
                                                    Increase/(Decrease)
                                                   ---------------------
                                                   2003 vs.     2002 vs.
                                                     2002         2001
                                                   --------     --------
<S>                                                <C>          <C>
Service revenues and sales
   Plumbing and Drain Cleaning                          3%          (6)%
   Service America                                    (20)         (12)
      Total                                            (2)          (7)
Cost of services provided and goods
   sold (excluding depreciation)                       (2)          (9)
General and administrative expenses                    18          (10)
Selling and marketing expenses                          -           (5)
Depreciation                                          (11)          (6)
Impairment, restructuring and similar expenses        (22)         (18)
Loss from operations                                  188          (77)
Interest expense                                      (27)         (46)
Distributions on preferred securities                  (1)          (3)
Loss on extinguishment of debt                       n.a.          100
Other income--net                                     163          (14)
Income/(loss) before income taxes                    n.a.          (85)
Income taxes                                          (26)        (229)
Equity in earnings of affiliate                      n.a.         n.a.
Loss from continuing operations                        35          (18)
</TABLE>

2003 VERSUS 2002 - CONSOLIDATED RESULTS

         The Company's service revenues and sales for 2003 declined 2% versus
revenues for 2002. This $5.3 million decline was attributable to the $12.4
million, or 20%, decline in Service America's revenues, partially offset by a
$7.1 million, or 3%, increase in the Plumbing and Drain Cleaning segment's total
revenues. Within this segment, plumbing repair and maintenance revenues
increased $2.8 million, or 3%, drain cleaning revenues were even with the prior
year, contractor revenues increased $1.8 million, or 14%, and industrial and
municipal revenues increased $1.2 million, or 8%. Service America's revenues
from repair services under contracts declined $8.8 million, or 19%, and its
revenues from demand repair services declined $3.6 million, or 23%.

         Of the increase in plumbing revenues, 2.4 percentage points are
attributable to an increase in the number of jobs completed during the year. The
remainder is attributable to an increase in the average price per job. The drain
cleaning business experienced a 2.8% decline in the number of jobs completed
during 2003 and a 3% increase in the average price per job. The decline in
Plumbing and Drain Cleaning's HVAC repair and maintenance business was
attributable to the Company's decision in 2001 to exit this line of business.
Units divested in 2002 contributed $403,000 in revenues during 2002, prior to
their divestment. Of the 14% increase in contractor revenues, 5 percentage
points are attributable to locations acquired in 2003. The gross margin of the
Plumbing and Drain Cleaning segment declined from 44.4% in 2002 to 43.7% in
2003, primarily as a result of higher training wages in 2003. The increase in
training wages was directly attributable to hiring more service technicians in
2003.

         The decline in Service America's service contract revenues is
attributable to insufficient sales of new service contracts to replace service
contracts that were not renewed either by Service America or the customer.
During 2003, the average number of service contracts outstanding declined 23%
versus the average for 2002. The year-to-year decline in service contract
revenues is anticipated to continue during 2004 at approximately the same rate
as experienced in 2003.

         Consolidated cost of services provided and goods sold (excluding
depreciation) for 2003 declined 2% versus such costs in 2002, primarily due to
the decline in service revenues and sales.

         General and administrative ("G&A") expenses for 2003 increased $9.2
million, or 18%, versus 2002 within the following operations (in millions):

                                       30
<PAGE>

<TABLE>
<S>                                <C>
Plumbing and Drain Cleaning        $  9.0
Service America                        .2
                                   ------
         Total                     $  9.2
                                   ======
</TABLE>

The increase in Plumbing and Drain Cleaning G&A is largely due to incurring
severance charges of $3.6 million in the first quarter of 2003 for a corporate
officer and to unfavorable market-value adjustments to the deferred compensation
liability in 2003 (a $1.6 million charge to G&A) versus a favorable adjustment
in 2002 (a $1.4 million reduction in G&A). These market adjustments are offset
entirely by equal, but opposite, gains and losses on trading assets used to fund
the liabilities and included in other income. Higher employee recruiting costs
in 2003 (an increase of $542,000), related largely to recruiting and hiring
service technicians and higher legal fees (an increase of $485,000), due
primarily to increased costs of defending against class actions, also
contributed to the higher G&A costs in 2003.

         Depreciation expense for 2003 declined $1.5 million, or 11%, versus
2002. Of this decline, $905,000 was attributable to the decline in depreciation
expense in the Plumbing and Drain Cleaning segment, and the remaining $628,000
occurred at Service America. Both declines are attributable to reduced capital
expenditures over the past several years, largely related to service vans.

         Impairment charges for both 2003 and 2002 relate entirely to the
Service America segment. As of December 31, 2003, all of Service America's
intangibles have been written down to nil. In addition, Service America recorded
an impairment charge of approximately $4.0 million to reduce the value of its
internally developed software to its estimated fair value.

         The Company's loss from operations increased from $2.7 million in 2002
to $7.7 million in 2003. Operating expenses for 2003 included severance charges
of $3.6 million and asset impairment charges of $15.8 million for the write-down
of Service America's goodwill, identifiable intangible assets and computer
software. Operating expenses for 2002 included Service America's goodwill
impairment charges of $20.3 million. Also affecting this year-to-year comparison
was an unfavorable market-value adjustment to the deferred compensation
liability in 2003 (a $1.6 million charge to operating expenses) versus a
favorable adjustment in 2002 (a $1.4 million reduction in operating expenses).

         Interest expense, substantially all of which is classified as
unallocated investing and financing -- net, declined from $2.9 million in 2002
to $2.1 million in 2003. This decline is attributable to lower debt levels and
lower interest rates in 2003.

         Other income--net increased $6,977,000 from $4,282,000 in 2002 to
$11,259,000 in 2003, primarily as a result of the following (in thousands):

<TABLE>
<S>                                                                   <C>
Higher gains on the sales and redemption of investments in 2003       $ 4,249
Gains on trading assets held in employee benefit trusts in 2003
         versus losses recorded in 2002                                 3,001
All other--net                                                         (273)
                                                                      -------
         Total                                                        $ 6,977
                                                                      =======
</TABLE>

         Other income--net by segment by reporting category is summarized below
(in thousands):

<TABLE>
<CAPTION>
                                                      2003             2002
                                                     -------          -------
<S>                                                  <C>              <C>
Unallocated Investing and Financing--net             $ 8,240          $ 4,602
Plumbing and Drain Cleaning                            2,610             (655)
Service America                                          409              335
                                                     -------          -------
         Total                                       $11,259          $ 4,282
                                                     =======          =======
</TABLE>

The increase in other income classified as unallocated investing and
financing--net is attributable to the previously mentioned increase in gains on
sales and redemption of investments. The increase in the Plumbing and Drain
Cleaning segment's net other income for 2003 versus 2002 is attributable to
gains on trading assets held in employee benefit trusts in 2003 versus losses in
2002. The increase in Service America's net other income for 2003 versus 2002 is
attributable to the gain on the sale of a building in 2003.

         The Company's effective income tax rate for continuing operations was
1,447.9% in 2003 as compared with negative 268.5% in 2002. The unusually high
effective rate in 2003 and the negative effective rate in 2002 were caused by
the nondeductibility of Service America's intangibles impairment charges in both
years.

         For 2003, the Company recorded $922,000 of equity in the earnings of
Vitas, representing the Company's share of Vitas' earnings since acquiring a 37%
interest in the common stock of Vitas in October 2003.

         The loss from continuing operations was $3,499,000 ($.35 per share) in
2003 as compared with $8,854,000 ($.90 per share) for 2002. Significant items
affecting the loss from continuing operations for 2003 included Service
America's aftertax asset impairment charges of $14.4 million ($1.44 per share)
and aftertax capital gains on the sales and redemption of investments of $3.4
million ($.34 per share). Unusual items affecting the loss from continuing
operations for 2002 included Service America's aftertax goodwill impairment

                                       31
<PAGE>

charge of $20.3 million ($2.06 per share), an aftertax investment impairment
charge of $780,000 ($.08 per share) and aftertax capital gains on the sales of
investments of $775,000 ($.08 per share).

         Discontinued operations of $64,000 for 2003 represented the adjustment
of the allowance for uncollectible notes receivable for Cadre Computer. For
2002, discontinued operations included $3.4 million from the operations of and
gain on the sale of Patient Care (sold in 2002), a $2.9 million federal income
tax refund related to Omnia (sold in 1997), $744,000 additional expense ($1.1
million before income taxes) for the sublease related to the 1991 sale of DuBois
and other adjustments aggregating $797,000. The $1.1 million adjustments to the
sublease accrual were made to cover rental charges for vacant space previously
occupied by the Company's former DuBois subsidiary. Prior to December 31, 2002,
the sublease accrual was calculated under the assumption that all of the vacant
space would be subleased at various dates and at market rental rates. Although
the Company was able to sublease varying amounts of space during the past two
years, it has been unable to sublease one of the floors covered under its lease.
The adjustments made in 2002 decreased the amount of sublease rentals that were
assumed to be received to include rentals only from current sublessees. As a
result, the sublease accrual now covers the cost of all unoccupied space, plus
the shortfall between current subleased rentals and contract rental rates and
operating costs. No further charges for this liability are anticipated.

         The net loss increased from $2.5 million ($.26 per share) in 2002 to a
loss of $3.4 million ($.35 per share) in 2003. The net losses included income
from discontinued operations of $64,000 in 2003 and $6.3 million ($.64 per
share) in 2002. Significant items affecting the net loss for 2003 included
Service America's aftertax asset impairment charges of $14.4 million ($1.44 per
share) and aftertax capital gains on the sales and redemption of investments of
$3.4 million ($.34 per share). Significant items affecting the net loss for 2002
include Service America's aftertax goodwill impairment charge of $20.3 million
($2.06 per share), an aftertax investment impairment charge of $780,000 ($.08
per share) and aftertax capital gains on the sales of investments of $775,000
($.08 per share).

2003 VERSUS 2002 - SEGMENT RESULTS

         The aftertax earnings of the Plumbing and Drain Cleaning segment
declined $3.3 million from $9.8 million in 2002 to $6.5 million in 2003.
Earnings for 2003 included an aftertax severance charge of $2.4 million.

         The aftertax loss of the Service America segment declined $5.3 million
from $20.0 million in 2002 to $14.7 million, primarily due to lower impairment
charges in 2003 versus amounts for 2002. Aftertax asset impairment charges for
2003 comprised the following (in millions):

<TABLE>
<S>                                 <C>
Goodwill                            $  10.0

Property and equipment                  2.7

Identifiable intangible assets      $   1.7
                                    -------
    Total                              14.4
                                    =======
</TABLE>

The aftertax goodwill impairment charge for 2002 was $20.3 million. As a result
of these write-downs, the carrying values of all intangibles for the Service
America segment have been reduced to nil.

         The goodwill impairment charges are based on an appraisal firm's
valuation of Service America's business as of December 31, 2003 and 2002. The
fair value of Service America was calculated using an average of the enterprise
value determined under a capital markets valuation and discounted cash flows
using updated income and cash flow projections for Service America's business.
The capital markets method calculates an enterprise value based on valuations at
which comparable businesses sold in the capital markets and based on certain
financial ratios and statistics. The income and cash flow projections are
updated each year as a part of the Company's annual business plan process and
take into consideration the changing marketplace and changing operating
conditions. The declines in the overall valuation of Service America in 2003 and
2002 were a direct result of lower revenue, earnings and cash flow projections
due to the continuing decline in the contract base of the business (23% decline
in 2003; 19% decline in 2002). These projections were adjusted to reflect that
Service America missed achieving its budgeted revenues by $6.0 million, or 11%,
in 2003 ($8.7 million, or 13%, for 2002) and missed achieving its budgeted gross
margin by $2.8 million, or 19%, for 2003 ($4.5 million, or 26%, for 2002).

         The property and equipment and identifiable intangible asset impairment
charges for 2003 are based on an analysis of undiscounted cash flows that
indicated that the book value of the net assets of Service America exceeded the
projected cash flows of the business over the life of the noncurrent assets.
Accordingly, the carrying values of the noncurrent assets that exceeded their
fair values were written down to their fair values, based largely on a recent
appraisal of assets by a professional valuation firm. Substantially all of the
property and equipment impairment charge related to computer software costs. The
large majority of the identifiable intangible asset costs related to capitalized
customer contracts, acquired in 1991 and 1993, which, in the opinion of
management, have no future value.

                                       32
<PAGE>

         Unallocated investing and financing--net, which includes unallocated
financing costs and investment income, increased $3.4 million from $1.3 million
aftertax in 2002 to $4.7 million aftertax in 2003. The increase is attributable
to the following (in millions):

<TABLE>
<S>                                                                   <C>
Higher gains on the sales and redemption of investments in 2003       $ 2.6
Impairment charge on Medic One, Inc. investment in 2002                  .8
                                                                      -----
        Total                                                         $ 3.4
                                                                      =====
</TABLE>

2002 VERSUS 2001 - CONSOLIDATED RESULTS

         The Company's service revenues and sales for 2002 declined 7% versus
revenues for 2001. This $23.7 million decline was primarily attributable to
declines in the Plumbing and Drain Cleaning segment's plumbing revenues (7% or
$7.0 million), HVAC repair and maintenance revenues (62% or $6.1 million), and
drain cleaning revenues (3% or $3.1 million) and in Service America's revenues
from repair services under contracts (12% or $6.1 million).

         The decline in plumbing revenues is almost entirely attributable to a
reduction in the number of jobs performed during the year, while the decline in
the drain cleaning revenues was attributable to a 7% decline in the number of
jobs offset partially by an average price-per-job increase of 4%. The decline in
Plumbing and Drain Cleaning's HVAC repair and maintenance revenues was
attributable to the Company's decision in 2001 to exit this line of business.
During 2002, the Company decided to retain the largest and most profitable of
the HVAC and non-branded plumbing businesses because the Company believes this
business will generate more cash than could be obtained by selling it and
reinvesting the cash in passive investments. Despite a 7% decline in total job
count for 2002 versus 2001, Plumbing and Drain Cleaning was able to slightly
increase its overall gross profit as a percent of revenues in 2002 compared with
2001.

         The decline in Service America's service contract revenues is
attributable to insufficient sales of new service contracts to replace service
contracts that were not renewed either by Service America or the customer. The
year-to-year decline in service contract revenues is anticipated to continue
during 2003, as Service America in the fourth quarter of 2002 cancelled
approximately 5% of its outstanding service contracts that were too costly to
service, as measured by the number of service calls during the year. These
cancelled service contracts generated annual revenues of approximately $1.8
million.

         Consolidated cost of services provided and goods sold (excluding
depreciation) for 2002 declined 9% versus such costs in 2001. The primary
components of cost of services provided and goods sold (excluding depreciation)
are salaries, wages and benefits of service technicians and field personnel,
material costs, insurance costs and service vehicle costs. Prior to 2002,
amortization of goodwill was also included in the cost of services provided and
goods sold. Effective December 31, 2001, the adoption of SFAS No. 142 eliminated
the amortization of goodwill. This accounting change accounted for 2 percentage
points of the 9% decline in cost of services provided and goods sold in 2002
versus 2001. The remaining 7% decline in the cost of services provided and goods
sold is consistent with the decline in revenues for 2002 versus 2001.

         G&A expenses for 2002 declined $5.5 million, or 10%, versus 2001 within
the following operations (in millions):

<TABLE>
<S>                                                  <C>
Plumbing and Drain Cleaning                          $  5.1
Service America                                          .4
                                                     ------
         Total                                       $  5.5
                                                     ======
</TABLE>

The decline in Plumbing and Drain Cleaning G&A is largely attributable to
reductions in discretionary compensation and benefits, resulting from failure to
achieve profitability targets in 2002, as shown below (in millions):

<TABLE>
<S>                                                                   <C>
Elimination of restricted stock awards                                $ 1.8
Reduction in wages and discretionary benefits                           1.0
Reduction in discretionary thrift plan contribution                     1.0
Reduction in incentive compensation                                      .9
Reduction in deferred compensation expense component
   of G&A as the result of adjusting deferred liability
   accruals for market losses on invested assets held
    in benefit trusts                                                    .6
All other                                                               (.2)
                                                                      -----
         Total                                                        $ 5.1
                                                                      =====
</TABLE>

The $400,000 reduction in G&A expenses at Service America is attributable to
that segment's reduction in the number of administrative employees, necessitated
by the decline in the number of service contracts sold and serviced during the
year.

         Selling and marketing ("Selling") expenses for 2002 declined $2.6
million, or 5%, versus 2001. This decline is attributable to

                                       33
<PAGE>

Service America's $1.2 million reduction in Selling expenses in 2002 as a result
of decreases in the number of selling employees (primarily outbound
telemarketing) throughout 2002. Plumbing and Drain Cleaning Selling expenses for
2002 declined $1.4 million versus 2001. Approximately 30% of this reduction was
due to lower spending on non-yellow pages advertising and most of the remainder
to lower salaries and wages.

         Depreciation expense for 2002 declined $808,000, or 6%, versus 2002. Of
this decline, $500,000 was attributable to the decreased depreciation expense at
Service America, largely related to fewer purchases of vans for service
technicians in recent years. Depreciation expense for Plumbing and Drain
Cleaning in 2002 declined slightly versus 2001.

         Impairment, restructuring and similar expenses for 2002 included an
impairment charge of $20,342,000 for the write-down of Service America's
goodwill to its fair value at December 31, 2002. For 2001, these expenses
included the following charges (in thousands):

<TABLE>
<CAPTION>
                                                             Plumbing
                                                             and Drain          Service
                                                             Cleaning           America                  Total
                                                             ---------          --------                -------
<S>                                                          <C>                <C>                     <C>
Restructuring expenses:
   Cost of exiting HVAC and non-Roto-
      Rooter-branded plumbing businesses                      $11,205           $      -                $11,205
   Cost of closing Service America's
      Tucson branch                                                 -              1,171                  1,171
Expenses not expected to
   recur (similar expenses):
   Charges for accelerating the vesting of
      restricted stock awards in connection
      with the anticipated revision of the
      Company's long-term incentive plans
      in 2002                                                   5,294                146                  5,440
   Severance charges for 10 individuals
      incurred in connection with reducing
      administrative expenses, largely at the
      Plumbing and Drain Cleaning segment's
     corporate office                                           2,909                757                  3,666
   Resolution of overtime pay issues with
      the U.S. Department of Labor, relating
      primarily to Plumbing and Drain Cleaning's
      prior years' compensation expense                         2,749                  -                  2,749
   Property and equipment impairment charges                      337                166                    503
                                                              -------           --------                -------
         Total restructuring and similar expenses             $22,494           $  2,240                $24,734
                                                              =======           ========                =======
</TABLE>

                                       34
<PAGE>

         The Company's loss from operations declined from $11.6 million in 2001
to $2.7 million in 2002. Operating expenses for 2002 included an impairment
charge of $20.3 million for the write-down of Service America's goodwill.
Operating expenses for 2001 included pretax restructuring and similar expenses
of $24.7 million and the following other unusual charges (in thousands):

<TABLE>
<CAPTION>
                                                                                Plumbing
                                                                                and Drain     Service
                                                                                Cleaning      America        Total
                                                                                ---------     -------       ------
<S>                                                                             <C>           <C>           <C>
Amounts included in cost of services provided and goods sold:
      Additional casualty insurance expense recorded to reflect increase in
         valuation of insurance claims for prior years                            $1,411       $    -       $1,411
      Terminated lease obligations                                                     -           69           69
      All other                                                                        -          414          414
Amounts included in G&A expenses:
      Terminated lease obligations                                                   166            -          166
      All other                                                                      417            -          417
                                                                                  ------       ------       ------
            Total other unusual charges                                           $1,994       $  483       $2,477
                                                                                  ======       ======       ======
</TABLE>

During 2002, the HVAC and non-Roto-Rooter-branded businesses that were disposed
of generated $403,000 in service revenues and sales and operating losses of
$106,000. During 2001, these businesses generated service revenues and sales of
$6.3 million and operating losses of $754,000. Also in 2001, Service America's
Tucson branch generated $1.7 million of service revenues and sales and recorded
an operating loss of $430,000.

         The elimination of the restricted stock awards reduced G&A expenses by
approximately $1.9 million per year ($1.8 million in the Plumbing and Drain
Cleaning segment and $100,000 at Service America) beginning in 2002. The cost of
a replacement long-term incentive plan is not estimable at this time. The
employee severance charges for Plumbing and Drain Cleaning provided
approximately $600,000 in annual savings starting in 2002.

         Interest expense, substantially all of which is classified as
unallocated investing and financing -- net, declined from $5.4 million in 2001
to $2.9 million in 2002. This decline is attributable to lower debt levels and
lower interest rates in 2002.

         The pretax loss on extinguishment of debt of $2.6 million ($1.7 million
aftertax or $.18 per share) in 2001 arose from the Company's decision to retire
its higher interest rate debt in December 2001.

         Other income--net declined from $5.0 million in 2001 to $4.3 million in
2002, primarily as a result of an impairment charge of $1.2 million, partially
offset by a $441,000 increase in interest income in 2002. The impairment charge
arose from the decline in value of the Company's investment in the redeemable
preferred stock of Medic One, Inc. ("Medic One"), a privately held provider of
ambulance and wheelchair transportation services. During 2002, Medic One
violated certain of its debt covenants. As of December 31, 2002, Medic One had
not cured the violations or obtained a waiver for such violations. Despite the
fact that Medic One reported positive income from operations in 2002 and 2001,
it would apparently be unable to continue operations without the continued
forbearance of debt covenant violations. If Medic One's lender called its debt,
it is likely that Medic One would be forced into bankruptcy or forced
liquidation. In such circumstances, the possibility that the Company could
recover any significant portion of its investment is considered small. As a
result, the Company concluded that the decline in the value of its investment in
Medic One was other than temporary at December 31, 2002, and wrote down its
investment to its estimated net realizable value (nil).

         Other income--net by reporting category is summarized below (in
millions):

<TABLE>
<CAPTION>
                                                2002           2001
                                               -------        -------
<S>                                            <C>            <C>
Unallocated Investing and Financing--net       $   4.6        $   6.0
Plumbing and Drain Cleaning                        (.7)          (1.9)
Service America                                     .4             .9
                                               -------        -------
         Total                                 $   4.3        $   5.0
                                               =======        =======
</TABLE>

The decline in other income classified as unallocated investing and
financing--net is attributable to the previously mentioned investment impairment
charge. The decline in the Plumbing and Drain Cleaning segment's net other
expense for 2002 versus 2001 is attributable primarily to intercompany interest
income of $231,000 in 2002 versus expense of $414,000 in 2001. The decline in
Service America's net other income for 2002 versus 2001 is attributable to lower
interest income primarily as the result of lower interest rates in 2002.

         The Company's effective income tax rate for continuing operations was
negative 268.5% in 2002 as compared with positive

                                       35
<PAGE>

31.7% in 2001. The negative effective rate in 2002 is caused by the
nondeductibility of Service America's goodwill impairment charge in 2002.

         The loss from continuing operations was $8.9 million ($.90 per share)
in 2002 as compared with $10.8 million ($1.11 per share) for 2001. Significant
items affecting the loss from continuing operations for 2002 included Service
America's aftertax goodwill impairment charge of $20.3 million ($2.06 per
share), an aftertax investment impairment charge of $780,000 ($.08 per share)
and aftertax capital gains on the sales of investments of $775,000 ($.08 per
share). Significant items affecting the loss from continuing operations for 2001
included the aftertax loss from extinguishment of debt ($1.7 million or $.18 per
share) and aftertax restructuring and similar expenses and other unusual charges
totaling $16.9 million ($1.74 per share) as summarized below (in thousands):

<TABLE>
<CAPTION>
                                                     Plumbing
                                                     and Drain         Service
                                                     Cleaning          America      Total
                                                     ---------         --------    --------
<S>                                                  <C>               <C>         <C>
Restructuring expenses:
    Cost of exiting HVAC and non-Roto-
      Rooter-branded plumbing business               $   6,765         $      -    $  6,765
   Cost of closing Service America's
      Tucson branch                                          -              707         707
Expenses not expected to
   recur (similar expenses):
   Charges for accelerating the vesting of
      restricted stock awards in connection
      with the anticipated revision of the
      Company's long-term incentive plans
      in 2002                                            3,417               87       3,504
   Severance charges for 10 individuals
      incurred in connection with reducing
      administrative expenses                            2,033              489       2,522
   Resolution of overtime pay issues with
      the U.S. Department of Labor, relating
      primarily to prior years' compensation
      expense                                            1,656                -       1,656
   Property and equipment impairment                       206              100         306
                                                     ---------         --------    --------
         Total restructuring and
            similar expenses                            14,077            1,383      15,460
Other unusual charges:
   Additional casualty insurance expense
       recorded to reflect increase in valuation
       of insurance claims for prior years                 839                -         839
   Terminated lease obligations                            101               41         142
   Other                                                   254              248         502
                                                     ---------         --------    --------
         Total restructuring and similar
            expenses and other unusual
            charges                                  $  15,271         $  1,672    $ 16,943
                                                     =========         ========    ========
</TABLE>

Also affecting the results for 2001 are aftertax goodwill amortization of
$3,888,000 ($.40 per share) (amortization of goodwill ceased effective December
31, 2001) and aftertax gains on the sales of investments of $703,000 ($.07 per
share).

         Discontinued operations for 2002 included $3.4 million from the
operations of and gain on the sale of Patient Care (sold in 2002), a $2.9
million federal income tax refund related to Omnia (sold in 1997), $744,000
additional expense ($1.1 million pretax) for the sublease related to the 1991
sale of DuBois and other adjustments aggregating $797,000. The adjustments to
the sublease accrual of $1.1 million in 2002 and $1.8 million in 2001 were made
to cover rental charges for vacant space previously occupied by the Company's
former subsidiary, DuBois. Prior to December 31, 2002, the sublease accrual was
calculated under the assumption that all of the vacant space would be subleased
at various dates and at market rental rates. Although the Company was able to
sublease varying amounts of space during the past two years, it has been unable
to sublease one of the floors covered under its lease. The adjustments made in
2002 decreased the amount of sublease rentals that were assumed to be received
to include rentals only from current sublessees. As a result,

                                       36
<PAGE>

the sublease accrual now covers the cost of all unoccupied space, plus the
shortfall between current sublease rentals and contract rental rates and
operating costs. No further charges for this liability are anticipated.

         The net loss declined from $12.2 million ($1.25 per share) in 2001 to a
loss of $2.5 million ($.26 per share) in 2002. The net losses include income
from discontinued operations of $6.3 million ($.64 per share) in 2002 and a loss
from discontinued operations of $1.5 million ($.15 per share) in 2001. Unusual
items affecting the net loss for 2002 included Service America's aftertax
goodwill impairment charge of $20.3 million ($2.06 per share), an aftertax
investment impairment charge of $780,000 ($.08 per share) and aftertax capital
gains on the sales of investments of $775,000 ($.08 per share). Unusual items
affecting the net loss for 2001 included aftertax restructuring and similar
expenses and other unusual charges totaling $16.9 million ($1.74 per share) as
summarized above, aftertax goodwill amortization of $3.9 million ($.40 per share
- -- amortization of goodwill ceased effective December 31, 2001) and aftertax
gains on the sales of investments of $703,000 ($.07 per share).

2002 VERSUS 2001 - SEGMENT RESULTS

         The aftertax earnings of the Plumbing and Drain Cleaning segment
increased $18.5 million from a loss of $8.8 million in 2001 to income of $9.8
million in 2002. The loss for 2001 included the following aftertax restructuring
and similar expenses and other unusual charges (in thousands):

<TABLE>
<S>                                                                             <C>
Restructuring expenses:
         Cost of exiting HVAC and non-Roto-Rooter-
                 branded plumbing businesses                                    $    6,765
Expenses not expected to recur (similar expenses):
         Resolution of overtime pay issues with the U.S.
                 Department of Labor, relating primarily to
                 prior years' compensation expense                                   1,656
         Charges for accelerating the vesting of restricted
                 awards in connection with the anticipated
                 revision of the Company's long-term
                 incentive plans                                                     3,417
         Property and equipment impairment charges                                     206
         Severance charges for 9 individuals, incurred in
                 connection with reducing administrative
                 expenses                                                            2,033
                                                                                ----------
         Total restructuring and similar expenses                                   14,077
         Other unusual charges:
                 Additional casualty insurance expense recorded
                          to reflect increase in valuation of insurance
                          claims for prior years                                       839
                 Terminated lease obligations                                          101
                 Other                                                                 254
                                                                                ----------
                                   Total                                        $   15,271
                                                                                ==========
</TABLE>

In addition, aftertax amortization of goodwill, which ceased effective December
31, 2001, totaled $3.1 million for 2001 versus nil for 2002.

         The aftertax loss of the Service America segment increased from
$686,000 in 2001 to $20.0 million in 2002, primarily due to an aftertax
impairment charge of $20.3 million in 2002. The impairment charge is based on an
appraisal firm's valuation of Service America's business as of December 31,
2002. The fair value of Service America was calculated using an average of the
enterprise value determined under a capital markets valuation and discounted
cash flows using updated income and cash flow projections for Service America's
business. The capital markets method calculates an enterprise value based on
valuations at which comparable businesses sold in the capital markets and based
on certain financial ratios and statistics. The income and cash flow projections
are updated each year as part of the Company's annual business plan process and
take into consideration the changing marketplace and changing operating
conditions. The decline in the overall valuation of Service America was a direct
result of lower revenue, earnings and cash flow projections due to the continued
decline in the contract base of the business (19% decline in 2002). These
projections were adjusted to reflect that Service America missed achieving its
budgeted revenues for 2002 by $8.7 million, or 13%, and missed achieving its
budgeted gross margin by $4.5 million, or 26%.

                                       37
<PAGE>

         Amounts for Service America for 2001 include the following
restructuring and similar expenses and other unusual charges (in thousands):

<TABLE>
<S>                                                                            <C>
Restructuring expenses:
         Cost of closing Service America's Tucson branch                       $    707
Expenses not expected to recur (similar expenses):
         Severance charges for one individual, incurred in
                  connection with reducing administrative
                  expenses                                                          489
                  Property and equipment impairment charges                         100
                  Charges for accelerating the vesting of restricted stock
                          awards in connection with the anticipated
                          revision of the Company's long-term
                          incentive plans in 2002                                    87
                                                                               --------
                  Total restructuring and similar expenses                        1,383
                  Other unusual charges:
                  Terminated lease obligations                                       41
                  Other                                                             248
                                                                               --------
                                   Total                                       $  1,672
                                                                               ========
</TABLE>

In addition, aftertax amortization of goodwill, which ceased effective December
31, 2001, totaled $807,000 for 2001 versus nil for 2002.

         Unallocated investing and financing--net, which includes unallocated
financing costs and investment income, increased $897,000 from $414,000 aftertax
in 2001 to $1,311,000 aftertax in 2002. The increase is attributable to the
following (in thousands):

<TABLE>
<S>                                                                   <C>
Lower interest expense in 2002 due to lower debt levels               $ 1,742
Interest income on tax refund in 2002                                     530
Impairment charge on Medic One investment in 2002                        (780)
Lower intercompany interest income in 2002 (primarily Plumbing
         and Drain Cleaning segment)                                     (657)
Other                                                                      62
                                                                      -------
         Total                                                        $   897
                                                                      =======
</TABLE>

CRITICAL ACCOUNTING POLICIES

INSURANCE ACCRUALS

         As the Company self insures for casualty insurance claims (workers'
compensation, auto liability and general liability), management closely monitors
and frequently evaluates its historical claims experience to estimate the
appropriate level of accrual for insured claims. The Company's third-party
administrator ("TPA") processes claims on behalf of the Company and reviews
claims on a monthly basis. Currently, the Company's exposure on any single claim
is capped at $250,000. For most of the years prior to 1999, the caps for general
liability and workers compensation were $500,000 per claim.

         In developing its estimates, the Company accumulates historical claims
data for the previous 10 years to calculate loss development factors ("LDF") by
insurance coverage type. LDFs are applied to known claims to estimate the
ultimate potential liability for known and unknown claims for each open policy
year. Prior to 2003, the LDFs were updated every three years and reviewed by the
Company's outside professional actuaries for reasonableness in view of the
Company's claims experience and insurance industry trends. Beginning in 2004,
LDFs will be updated annually. The current LDFs were last updated as of March
2003 and will next be updated in March 2004. Because this methodology relies
heavily on historical claims data, the key risk is whether the historical claims
are an accurate predictor of future claims exposure. The risk also exists that
certain claims have been incurred and not reported on a timely basis. To
mitigate these risks, the Company, in conjunction with its TPA, closely monitors
claims to ensure timely accumulation of data and compares its claims trends with
the industry experience of its TPA. As an indication of the sensitivity of the
accrued liability to reported claims, the Company's analysis indicates that a 1%
across-the-board increase or decrease in the amount of reported claims would
increase or decrease the accrued insurance liability at December 31, 2003, by
4.4% or $697,000.

                                       38
<PAGE>

INVESTMENTS

         Equity investments with readily determinable fair values are recorded
at their fair values. Other equity investments are recorded at cost, subject to
write-down for impairment. The Company regularly reviews its investments for
impairment. As a result of this review, in the fourth quarter of 2002, the
Company reduced the carrying value of its investment in the redeemable preferred
stock of Medic One from its original cost of $1,200,000 to nil. Medic One, a
privately held provider of ambulance and wheelchair transportation services, is
in violation of certain covenants under a line of credit that expired in
November 2002. The lender has not waived such violations and has the right to
call the debt. If the debt were called, Medic One could be forced into
bankruptcy.

         The Company also has a Patient Care common stock purchase warrant ("PC
Warrant") for the purchase of up to 2% of privately held Patient Care. The PC
Warrant has a carrying value of $1,445,000, which was its estimated fair value
on the date of issuance in October 2002. Patient Care's operating results for
2003 have declined from 2002 levels, but Patient Care remains profitable and
paid down significant amounts of bank debt in 2003. The Company views this
investment as a long-term investment and believes any decline in the fair value
of the PC Warrant is not "other than temporary" as of December 31, 2003.
Nonetheless, market conditions could change in the coming year and cause the
Company to reassess its valuation of this investment.

EQUITY INVESTMENT (VITAS)

         The Company's 37% investment in Vitas common stock exceeds its share of
Vitas' net book value by approximately $18.3 million. On a preliminary basis,
the Company estimated that $3.7 million of this excess is attributable to the
excess value o f computer software with a five-year life and the remainder to
goodwill with an indefinite life. Amortization of this excess reduced the
Company's equity in the earnings of Vitas by $97,000 in 2003. In 2004, as a
result of completing the acquisition of the 63% of Vitas it did not own in 2003,
the Company will conduct a thorough review to value all assets and liabilities
of Vitas at their fair values. This, it is possible that the Company will
identify other intangible assets with different useful lives.

GOODWILL

         The Company annually tests the goodwill balances of its reporting units
for impairment using appraisals performed by a valuation firm. The valuation of
each reporting unit is dependent upon many factors, some of which are
market-driven and beyond the Company's control. The valuations of goodwill for
the Company's Roto-Rooter Services and Roto-Rooter Franchising and Products
reporting units indicate that the fair value of goodwill for each of these units
exceeds its respective book value by a significant amount. The valuations of
Service America in 2003 and 2002 reduced goodwill for this reporting unit to
nil.

CRITICAL ACCOUNTING POLICIES RELATED TO VITAS

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

         Vitas' net revenue is reported at the estimated net realizable amounts
due from third-party payors, primarily Medicare and Medicaid. Payors may deny
payment for services in whole or in part on the basis that such services are not
eligible for coverage and do not qualify for reimbursement. Vitas' management
estimates denials each period and makes adequate provision for them in its
financial statements. Due to the complexity of the laws and regulations
affecting the Medicare and Medicaid programs, estimates can and do change by
material amounts in future periods.

         Vitas receives biweekly payments for patient services from the Medicare
program under the Prospective Interim Payment ("PIP") System. These payments are
subsequently applied against specific Medicare accounts as claims are processed
by the fiscal intermediary. The unapplied portion of these biweekly PIP payments
is recorded as a reduction to patient accounts receivable.

         Vitas maintains a policy of providing an allowance for uncollectible
accounts based on a formula tied to the aging of accounts receivable by payor
class and historical write-off rates. Vitas provides allowances for specific
accounts determined to be uncollectible when such determinations are made.
Accounts are written off when all collection efforts are exhausted.

PURCHASE ACCOUNTING

         On a preliminary basis the Company has identified the following fair
value adjustments to the historical bases of Vitas' assets (in thousands):

<TABLE>
<S>                                                     <C>
Covenant Not to Compete with Former CEO                 $        18,000
Computer Software                                                10,000
Consulting Agreement with Former CEO                              7,000
                                                        ---------------
          Total                                         $        35,000
                                                        ===============
</TABLE>

                                       39
<PAGE>

These assets are assumed to have useful lives of 8 years, 5 years and 7 years,
respectively. The Company also anticipates that a significant portion of the
excess of the purchase price over the book value of Vitas' assets and
liabilities will be allocated to goodwill or other indefinite-lived intangible
assets. Upon completion of the Company's review to value all of the assets and
liabilities of Vitas at their fair values, it is possible that the Company will
identify other intangible assets with different lives, and that the amount of
indefinite-lived intangible assets will be significantly less than originally
estimated.

RECENT ACCOUNTING STATEMENTS

SFAS NO. 143

         In June 2001, the Financial Accounting Standards Board ("FASB")
approved the issuance of Statement of Financial Accounting Standards ("SFAS")
No. 143, Accounting for Asset Retirement Obligations. It is effective for fiscal
years beginning after June 15, 2002, and requires recognizing legal obligations
associated with the retirement of tangible long-lived assets that result from
the acquisition, construction or development or normal operation of a long-lived
asset. Since the Company has no material asset retirement obligations, the
adoption of SFAS No.143 in 2003 did not have a material impact on the Company's
financial statements.

SFAS NO. 145

         In April 2002, the FASB approved the issuance of SFAS No. 145,
Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No.
13 and Technical Corrections. It is generally effective for transactions
occurring after May 15, 2002. The Company's adoption of SFAS No.145 in 2003
resulted in reclassifying its 2001 loss on early extinguishment of debt from
extraordinary to a separate line within continuing operations, but did not
otherwise have a material impact on its financial statements.

SFAS NO. 146

         In July 2002, the FASB approved the issuance of SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities. Generally,
SFAS No. 146 stipulates that defined exit costs (including restructuring and
employee termination costs) are to be recorded on an incurred basis rather than
on a commitment basis, as was previously required. This statement is effective
for exit or disposal activities initiated after December 31, 2002. The Company's
adoption of SFAS No. 146 in 2003 did not have a material impact on its financial
statements.

FIN NO. 45

         In November 2002, the FASB approved the issuance of FASB Interpretation
("FIN") No. 45, Guarantor's Accounting and Disclosure for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. The initial recognition and
initial measurement provisions of this interpretation are applicable to
guarantees issued or modified after December 31, 2002. The Company's adoption of
FIN No. 45 in 2003 did not have a material impact on its financial statements.

SFAS NO. 148

         In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation--Transition and Disclosure. It is effective for annual
periods ending, and for interim periods beginning, after December 15, 2002.
Because the Company uses Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees, to account for stock-based compensation, this
statement did not have a material impact on the Company's financial statements.

FIN NO. 46 AND FIN NO. 46R

         In January 2003, the FASB issued FIN No. 46, Consolidation of Variable
Interest Entities - an interpretation of Accounting Research Bulletin No. 51.
This Interpretation is intended to clarify the application of the majority
voting interest requirement of ARB No. 51, Consolidated Financial Statements, to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. The controlling financial interest may be achieved
through arrangements that do not involve voting interests. FIN No. 46 may be
applied prospectively with a cumulative-effect adjustment as of the date on
which it is first applied or by restating previously issued financial statements
for one or more years with a cumulative-effect adjustment as of the beginning of
the first year restated. FIN No. 46 is effective immediately to variable
interests in a variable interest equity ("VIE") created or obtained after
January 31, 2003. As amended by FASB Staff Position ("FSP") FIN 46-6, FIN No. 46
became effective for variable interests in a VIE created before February 1, 2003
at the end of the first interim or annual period ending after December 15, 2003.

         Subsequent to issuing FIN No. 46 and FSP FIN 46-6, the FASB continued
to propose modifications and issue FSPs that changed and clarified FIN No. 46.
These modifications and FSPs were subsequently incorporated into FIN No. 46
(revised) ("FIN No. 46R"), which replaces FIN No. 46. Among other things,
relative to FIN No. 46, FIN No. 46R a) essentially excludes operating businesses
from its provisions subject to four conditions, b) states the provisions of FIN
No. 46R are not required to be applied if a company is unable,

                                       40
<PAGE>

subject to making an exhaustive effort, to obtain the necessary information, c)
includes new definitions and examples of what variable interests are, d)
clarifies and changes the definition of a variable interest entity, and e)
clarifies and changes the definition and treatment of de facto agents, as that
term is defined in FIN No. 46 and FIN No. 46R. FIN No. 46R was issued December
23, 2003. The Company, will apply FIN No. 46R to all variable interest entities
at the end of the first quarter of 2004.

         The Company has evaluated its contractual relationships with its
Roto-Rooter franchisees and has concluded that its interests in the franchisees
are not variable interests as defined in FIN No. 46 and FIN No. 46R. The Company
maintains contractual relationships with certain independent contractors to
provide plumbing and drain cleaning services in specified territories primarily
using the Roto-Rooter name. The Company has no equity interest in any of the
independent contractors, but in many cases, loans money to the contractor to
assist in financing equipment and working capital needs. The loans are generally
partially secured by the contractors' equipment and are guaranteed by the
business owner. The Company's contractor agreements do not require its
contractors to provide all the financial information necessary to apply the
provisions of FIN No. 46R to its contractors. Furthermore, the contractors
generally have not provided all the financial data they are required to provide
under the contractor agreements.

         The Company evaluated its contractual relationships with the four
independent contractors that commenced operations in 2003 ("2003 Contractors")
and determined they are potentially subject to consolidation under FIN No. 46 as
a result of loans made to the contractors. The Company has been unable to obtain
sufficient information necessary to determine whether the 2003 Contractors
should be consolidated. The Company is in the process of evaluating the new
provisions of FIN No. 46R relative to its 2003 Contractors and to its
pre-February 2003 contractor arrangements. At this time, the Company does not
believe that the consolidation of any of its contractors, if required under FIN
No. 46 or FIN No. 46R, would materially impact its operating results. Instead,
consolidation of some, if any, of these arrangements is more likely to result in
a "grossing up" of amounts, such as revenues and expenses, with little or no net
change to the Company's net income or cash flows. None of these entities has
been consolidated in the Company's financial statements.

         Under FIN No. 46, the Company is permitted to consolidate the accounts
of the Chemed Capital Trust ("CCT") in its financial statements due to the
existence of a call feature of the Preferred Securities whereby the Company can
call the Preferred Securities for prepayment. As disclosed above, the Company
currently intends to call the Preferred Securities after March 15, 2004, at
which time the Preferred Securities may be prepaid without premium.

         When FIN No. 46R becomes fully effective for the Company in the first
quarter of 2004, the Company will be required to de-consolidate the accounts of
the Chemed Capital Trust, because the call feature may no longer be considered
as a condition for consolidation. As a result, the current balance sheet caption
that reads "Mandatorily redeemable convertible preferred securities of the
Chemed Capital Trust" will be revised to read "Convertible junior subordinated
debentures" in the same dollar amount as the Preferred Securities. Within the
statement of operations, the "Distributions on preferred securities" will be
reclassified as interest expense.

SFAS NO. 150

         In May 2003, the FASB approved the issuance of SFAS No. 150, Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and
Equity. As a result of the issuance of this pronouncement, the Company now
reports the mandatorily redeemable convertible preferred securities of the
Chemed Capital Trust as a noncurrent liability rather than in the "mezzanine"
(i.e., between liabilities and equity) as reported prior to June 2003. This
reclassification does not affect the Company's compliance with its debt
covenants. The adoption of this statement did not impact the statement of
operations.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
REGARDING FORWARD-LOOKING INFORMATION

         In addition to historical information, this report contains
forward-looking statements and performance trends that are based upon
assumptions subject to certain known and unknown risks, uncertainties,
contingencies and other factors. Such forward-looking statements and trends
include, but are not limited to, those relating to the ability of Service
America to increase its gross profit margin, the impact of laws and regulations
on Company operations and the recoverability of deferred tax assets. Variances
in any or all of the risks, uncertainties, contingencies and other factors from
the Company's assumptions could cause actual results to differ materially from
these forward-looking statements and trends. The Company's ability to deal with
the unknown outcomes of these events, many of which are beyond the control of
the Company, may affect the reliability of its projections and other financial
matters.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company has an insignificant number of financial instruments held
for trading purposes and does not hedge any of its market risks with derivative
instruments at December 31, 2003. In connection with the Company's Vitas merger
on February 24, 2004, it borrowed $185 million at variable interest rates based
on LIBOR. If LIBOR fluctuates by 1/8%, the Company's interest expense on the
variable rate debt will increase or decrease approximately $231,000 per annum.

                                       41
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The consolidated financial statements, together with the report thereon
of PricewaterhouseCoopers LLP dated March 5, 2004, appearing on pages F-2
through F-33 of this Report on Form 10-K, along with the Supplementary Data
(Unaudited Summary of Quarterly Results) appearing on pages F-34 - F-35, are
incorporated herein by reference.

         The financial statements of Vitas Healthcare Corporation, a significant
investee of the Company, as of September 30, 2002 and 2003 and for the years
ended September 30, 2001 through 2003, included on pages F-1 through F-32 of the
Company's Report on Form 8-K/A, dated October 14, 2003 and filed on February 23,
2004 are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

         None.

ITEM 9A. CONTROLS & PROCEDURES

         The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the Company's
Exchange Act reports is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, and that such information
is accumulated and communicated to the Company's management to allow timely
decisions regarding required disclosure.

         The Company recently carried out an evaluation, under the supervision
of the Company's President and Chief Executive Officer, with the participation
of its Vice President and Chief Financial Officer and its Vice President and
Controller, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon this evaluation, the Company's President and Chief Executive Officer,
Executive Vice President and Vice President and Controller concluded the
Company's disclosure controls and procedures are effective in timely alerting
them to material information relating to the Company and its consolidated
subsidiaries required to be included in the Company's Exchange Act reports.
There have been no significant changes in internal control over financial
reporting during the year ended December 31, 2003.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The directors of the Company are:

Edward L. Hutton                                     Sandra E. Laney
Kevin J. McNamara                                    Timothy S. O'Toole
Charles H. Erhart, Jr.                               Donald E. Saunders
Joel F. Gemunder                                     George J. Walsh III
Patrick P. Grace                                     Frank E. Wood
Thomas C. Hutton

                                       42
<PAGE>

The additional information required under this Item with respect to the
directors and executive officers is set forth in the Company's 2004 Proxy
Statement and in Part I hereof under the caption "Executive Officers of the
Registrant" and is incorporated herein by reference.

         The Company has adopted a Code of Ethics that applies to the Company's
principal executive officer, principal financial officer, principal accounting
officer, directors and employees. A copy of this Code of Ethics is being filed
with this Report as Exhibit 14 and it is also posted on the Company's Web site,
www.rotorooterinc.com. Any amendment to, or waiver from, a provision of the
Company's Code of Ethics shall be posted on the Company's Web site.

ITEM 11. EXECUTIVE COMPENSATION

         Information required under this Item is set forth in the Company's 2004
Proxy Statement, which is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information required under this Item is set forth in the Company's 2004
Proxy Statement, which is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information required under this Item is set forth in the Company's 2004
Proxy Statement, which is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         AUDIT FEES

                  PricewaterhouseCoopers LLP billed the Company $536,600 and
$613,500, respectively, in aggregate fees and expenses for professional services
rendered for the audit of the Company's annual financial statements for the
years 2002 and 2003 and the reviews of the financial statements included in the
Company's Forms 10-Q for those years.

         AUDIT-RELATED FEES

                  PricewaterhouseCoopers LLP billed the Company $50,200 and
$122,400, respectively, in aggregate fees and expenses for audit-related
services rendered in 2002 and 2003 and for implementation assistance with
internal control provisions of the Sarbanes-Oxley Act of 2002.

         TAX FEES

                  The Company paid PricewaterhouseCoopers LLP $17,950 in fees
and expenses for tax services rendered during 2002. No such services were
rendered in 2003.

         ALL OTHER FEES

                                       43
<PAGE>

                  PricewaterhouseCoopers LLC billed the Company $2,152 and
$2,172, respectively, in aggregate fees for services rendered by
PricewaterhouseCoopers LLP, other than the services described above, for the
years 2002 and 2003.

         The Audit Committee has adopted a policy which requires the Committee's
pre-approval of audit and non-audit services performed by the independent
auditor to assure that the provision of such services does not impair the
auditor's independence. The Audit Committee pre-approved all of the audit and
non-audit services rendered by PricewaterhouseCoopers LLP as listed above.

                                       44
<PAGE>

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K

EXHIBITS

  3.1             Certificate of Incorporation of Roto-Rooter, Inc. (formerly
                  named Chemed Corporation).*

  3.2             Certificate of Amendment to Certificate of Incorporation.*

  3.3             By-Laws of Roto-Rooter, Inc.*

  4.1             Offer to Exchange Chemed Capital Trust Convertible Preferred
                  Securities for Shares of Capital Stock, dated as of December
                  23, 1999.*

  4.2             Chemed Capital Trust, dated as of December 23, 1999.*

  4.3             Amended and Restated Declaration of Trust of Chemed Capital
                  Trust, dated February 7, 2000.*

  4.4             Indenture, dated as of February 24, 2004, between Roto-Rooter,
                  Inc. and LaSalle Bank National Association.

  4.5             Indenture, dated as of February 24, 2004, among Roto-Rooter,
                  Inc., the subsidiary guarantors listed on Schedule I thereto
                  and Wells Fargo Bank, N.A.

 10.1             Agreement and Plan of Merger among Diversey U.S. Holdings,
                  Inc., D. C. Acquisition Inc., Chemed Corporation and DuBois
                  Chemicals, Inc., dated as of February 25, 1991.*

 10.2             Stock Purchase Agreement between Omnicare, Inc. and Chemed
                  Corporation, dated as of August 5, 1992.*

 10.3             Agreement and Plan of Merger among National Sanitary Supply
                  Company, Unisource Worldwide, Inc. and TFBD, Inc. dated as of
                  August 11, 1997.*

 10.4             Stock Purchase Agreement dated as of May 8, 2002 by and
                  between PCI Holding Corp. and Chemed Corporation. *

 10.5             Amendment No. 1 to Stock Purchase Agreement dated as of
                  October 11, 2002 by and among PCI Holding Corp., PCI-A Holding
                  Corp. and Chemed Corporation. *

 10.6             Senior Subordinated Promissory Note dated as of October 11,
                  2002 by and among PCI Holding Corp. and Chemed Corporation. *

 10.7             Common Stock Purchase Warrant dated as of October 11, 2002 by
                  and between PCI Holding Corp. and Chemed Corporation. *

 10.8             1986 Stock Incentive Plan, as amended through May 20,
                  1991.*,**

 10.9             1988 Stock Incentive Plan, as amended through May 20,
                  1991.*,**

                                       45
<PAGE>

10.10             1993 Stock Incentive Plan.*,**

10.11             1995 Stock Incentive Plan.*,**

10.12             1997 Stock Incentive Plan.*,**

10.13             1999 Stock Incentive Plan.*,**

10.14             1999 Long-Term Employee Incentive Plan as amended through May
                  20, 2002.*,**

10.15             2002 Stock Incentive Plan.*,**

10.16             2002 Executive Long-Term Incentive Plan.*,**

10.17             Employment Contracts with Executives.*,**

10.18             Amendment to Employment Agreements with Kevin J. McNamara,
                  Thomas C. Hutton and Sandra E. Laney dated August 7, 2002.*,**

10.19             Amendment to Employment Agreements with Timothy S. O'Toole and
                  Arthur V. Tucker dated August 7, 2002.*,**

10.20             Amendment to Employment Agreement with Spencer S. Lee dated
                  May 19, 2003.**

10.21             Amendment to Employment Agreements with Executives dated
                  January 1, 2002.*, **

10.22             Consulting Agreement between Timothy S. O'Toole and PCI
                  Holding Corp. effective October 11, 2002.*,**

10.23             Amendment No. 16 to Employment Agreement with Sandra E. Laney
                  dated March 1, 2003.*,**

10.24             Excess Benefits Plan, as restated and amended, effective June
                  1, 2001.**

10.25             Amendment No. 1 to Excess Benefits Plan, effective July 1,
                  2002.**

10.26             Amendment No. 2 to Excess Benefits Plan, effective November 7,
                  2003.**

10.27             Non-Employee Directors' Deferred Compensation Plan.*,**

10.28             Chemed/Roto-Rooter Savings & Retirement Plan, effective
                  January 1, 1999.*,**

10.29             First Amendment to Chemed/Roto-Rooter Savings & Retirement
                  Plan, effective September 6, 2000.*, **

10.30             Second Amendment to Chemed/Roto-Rooter Savings & Retirement
                  Plan, effective January 1, 2001.*, **

10.31             Third Amendment to Chemed/Roto-Rooter Savings & Retirement
                  Plan, effective December 12, 2001.*, **

                                       46
<PAGE>

10.32             Stock Purchase Agreement by and Among Banta Corporation,
                  Chemed Corporation and OCR Holding Company as of September 24,
                  1997.*

10.33             Directors Emeriti Plan.*,**

10.34             Second Amendment to Split Dollar Agreement with
                  Executives.*,**

10.35             Split Dollar Agreement with Sandra E. Laney.*,**

10.36             Split Dollar Agreement with Executives.*,**

10.37             Split Dollar Agreement with Edward L. Hutton.*,**

10.38             Split Dollar Agreement with Spencer S. Lee.*,**

10.39             Promissory Note under the Executive Stock Purchase Plan with
                  Edward L. Hutton.*,**

10.40             Promissory Note under the Executive Stock Purchase Plan with
                  Kevin J. McNamara.*,**

10.41             Schedule to Promissory Note under the Executive Stock Purchase
                  Plan with Edward L. Hutton.**

10.42             Schedule to Promissory Note under the Executive Stock Purchase
                  Plan with Kevin J. McNamara.**

10.43             Roto-Rooter Deferred Compensation Plan No. 1, as amended
                  January 1,1998.*,**

10.44             Roto-Rooter Deferred Compensation Plan No. 2.*,**

10.45             Agreement and Plan of Merger, dated as of December 18, 2003,
                  among Roto- Rooter, Inc., Marlin Merger Corp. and Vitas
                  Healthcare Corporation.*

10.46             Credit Agreement, dated as of February 24, 2004, among
                  Roto-Rooter, Inc., the lenders from time to time parties
                  thereto and Bank One, NA, as Administrative Agent.

10.47             Pledge and Security Agreement, dated as of February 24, 2004,
                  among Roto-Rooter, Inc., the subsidiaries of Roto-Rooter, Inc.
                  listed on the signature pages thereto and Bank One, NA, as
                  Collateral Agent.

10.48             Guaranty Agreement, dated as of February 24, 2004, among the
                  subsidiaries of Roto-Rooter, Inc. listed on the signature
                  pages thereto and Bank One, NA, as Administrative Agent.

13.               2003 Annual Report to Stockholders.

14.               Policies on Business Ethics of Roto-Rooter, Inc.

21.               Subsidiaries of Roto-Rooter, Inc.

23                Consent of Independent Accountants.

                                       47

<PAGE>

24                Powers of Attorney.

31.1              Certification by Kevin J. McNamara pursuant to Rule
                  13a-14(a)/15d-14(a) of the Exchange Act of 1934.

31.2              Certification by David P. Williams pursuant to Rule
                  13a-14(a)/15d-14(a) of the Exchange Act of 1934.

31.3              Certification by Arthur V. Tucker, Jr. pursuant to Rule
                  13a-14(a)/15d-14(a) of the Exchange Act of 1934.

32.1              Certification by Kevin J. McNamara pursuant to Section 906 of
                  the Sarbanes-Oxley Act of 2002.

32.2              Certification by David P. Williams pursuant to Section 906 of
                  the Sarbanes-Oxley Act of 2002.

32.3              Certification by Arthur V. Tucker, Jr. pursuant to Section 906
                  of the Sarbanes-Oxley Act of 2002.

*        This exhibit is being filed by means of incorporation by reference (see
         Index to Exhibits on page E-1). Each other exhibit is being filed with
         this Annual Report on Form 10-K.

**       Management contract or compensatory plan or arrangement.

FINANCIAL STATEMENT SCHEDULE

         See Index to Financial Statements and Financial Statement Schedule on
page F-1.

REPORTS ON FORM 8-K

         -  A Current Report on Form 8-K, dated October 16, 2003, was filed
            October 21, 2003. The report includes the Company's earnings
            announcement for the third quarter.

         -

         -  A Current Report on Form 8-K, dated October 14, 2003, was filed
            October 29, 2003. The report disclosed the Company's exercise of
            Warrants A and B to purchase 4,158,000 shares of Vitas for $18.0
            million in cash.

         -

         -  A Current Report on Form 8-K, dated October 31, 2003, was filed
            November 3, 2003. The report includes the Company's press release
            announcing its intent to restate earnings for the period January 1,
            1998 through September 30, 2003 to recognize Yellow Pages
            advertising expense when the directories are first placed in
            circulation.

         -

         -  A Current Report on Form 8-K, dated December 18, 2003, was filed
            December 19, 2003. The report disclosed that the Company had entered
            into a definitive agreement to acquire Vitas Healthcare Corporation.

         -

         -  A Current Report on Form 8-K/A, was filed on December 19, 2003 which
            amended the Current Report on Form 8-K, dated October 14, 2003.

                                       48
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                       ROTO-ROOTER, INC.

March 10, 2004                         By /s/ Kevin J. McNamara
                                           ---------------------------
                                           Kevin J. McNamara
                                           President and Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
      Signature                                        Title                                           Date
      ---------                                        -----                                           ----
<S>                                     <C>                                                       <C>
/s/Kevin J. McNamara                    President and Chief Executive Officer
- ----------------------                  and a Director (Principal Executive
Kevin J. McNamara                       Officer)


/s/David P. Williams                    Vice President and Chief
- ----------------------                  Financial Officer
David P. Williams                       (Principal Financial Officer)


/s/Arthur V. Tucker, Jr.                Vice President and Controller                             March 10, 2004
- ------------------------                (Principal Accounting
Arthur V. Tucker, Jr.                   Officer)


Edward L. Hutton*                       Sandra E. Laney*
Charles H. Erhart, Jr.*                 Timothy S. O'Toole*
Joel F. Gemunder*                       Donald E. Saunders*                       --Directors
Patrick P. Grace*                       George J. Walsh III*
Thomas C. Hutton*                       Frank E. Wood*
</TABLE>

- ------------------

*      Naomi C. Dallob by signing her name hereto signs this document on behalf
       of each of the persons indicated above pursuant to powers of attorney
       duly executed by such persons and filed with the Securities and Exchange
       Commission.

   March 10, 2004                                   /s/ Naomi C. Dallob
- -----------------------                             ----------------------------
         Date                                       Naomi C. Dallob
                                                    (Attorney-in-Fact)

                                       49
<PAGE>

                   ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES

         INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

                               2003, 2002 AND 2001

<TABLE>
<CAPTION>
                                                                                           PAGE(S)
<S>                                                                                     <C>
ROTO-ROOTER, INC. CONSOLIDATED FINANCIAL
  STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
    Report of Independent Auditors                                                      F-2
    Consolidated Statement of Operations                                                F-3
    Consolidated Balance Sheet                                                          F-4
    Consolidated Statement of Cash Flows                                                F-5
    Consolidated Statement of Changes in Stockholders' Equity                           F-6
    Consolidated Statement of Comprehensive Loss                               F-6
    Notes to Financial Statements                                                       F-7 - F-33
    Unaudited Summary of Quarterly Results                                              F-34 - F-35

    Schedule II -- Valuation and Qualifying Accounts                                    S-1
</TABLE>

         The Financial Statement Schedule should be read in conjunction with the
consolidated financial statements listed above. Schedules not included have been
omitted because they are not applicable or because required information is shown
in the financial statements or notes thereto as listed above.

                                      F-1

<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Stockholders and Board of Directors of Roto-Rooter, Inc.:

         In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, cash flows, changes in
stockholders' equity and comprehensive loss present fairly, in all
material respects, the financial position of Roto-Rooter, Inc. ("Company") and
its subsidiaries at December 31, 2003 and 2002, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2003 in conformity with accounting principles generally accepted in
the United States of America. In addition, in our opinion, the financial
statement Schedule II, Valuation and Qualifying Accounts, listed in the
accompanying index, presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated
financial statements. These financial statements and financial statement
schedule are the responsibility of the Company's management; our responsibility
is to express an opinion on these financial statements and financial statement
schedule based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

         As discussed in Notes 1 and 4, effective January 1, 2002, the Company
adopted the provisions of Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets.

/s/ PricewaterhouseCoopers LLP

Cincinnati, Ohio
March 5, 2004

                                      F-2

<PAGE>

                   ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                      (in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                                 FOR THE YEARS ENDED DECEMBER 31,
                                                                          ----------------------------------------------
                                                                               2003            2002             2001
                                                                          -------------   --------------   -------------
<S>                                                                       <C>             <C>              <C>
CONTINUING OPERATIONS
     Service revenues and sales                                           $     308,871   $      314,176   $     337,908
                                                                          -------------   --------------   -------------
     Cost of services provided and goods sold (excluding depreciation)          182,810          186,285         205,616
     General and administrative expenses                                         60,309           51,096          56,546
     Selling and marketing expenses                                              45,590           45,544          48,178
     Depreciation                                                                12,054           13,587          14,395
     Impairment, restructuring and similar expenses  (Notes 4 and 5)             15,828           20,342          24,734
                                                                          -------------   --------------   -------------
          Total costs and expenses                                              316,591          316,854         349,469
                                                                          -------------   --------------   -------------
          Loss from operations                                                   (7,720)          (2,678)        (11,561)
     Interest expense                                                            (2,140)          (2,928)         (5,423)
     Distributions on preferred securities  (Note 20)                            (1,071)          (1,079)         (1,113)
     Loss on extinguishment of debt  (Note 12)                                        -                -          (2,617)
     Other income--net  (Note 8)                                                 11,259            4,282           4,987
                                                                          -------------   --------------   -------------
          Income/(loss) before income taxes                                         328           (2,403)        (15,727)
     Income taxes  (Note 9)                                                      (4,749)          (6,451)          4,989
     Equity in earnings of affiliate  (Note 3)                                      922                -               -
                                                                          -------------   --------------   -------------
          Loss from continuing operations                                        (3,499)          (8,854)        (10,738)
DISCONTINUED OPERATIONS  (NOTE 6)                                                    64            6,309          (1,447)
                                                                          -------------   --------------   -------------
NET LOSS                                                                  $      (3,435)  $       (2,545)  $     (12,185)
                                                                          =============   ==============   =============
LOSS PER SHARE
     Loss from continuing operations                                      $       (0.35)  $        (0.90)   $      (1.11)
                                                                          =============   ==============   =============
     Net loss                                                             $       (0.35)  $        (0.26)   $      (1.25)
                                                                          =============   ==============   =============
DILUTED LOSS PER SHARE  (NOTE 17)
     Loss from continuing operations                                      $       (0.35)  $        (0.90)  $       (1.11)
                                                                          =============   ==============   =============
     Net loss                                                             $       (0.35)  $        (0.26)  $       (1.25)
                                                                          =============   ==============   =============

NET LOSS EXCLUDING GOODWILL AMORTIZATION
     Net loss                                                             $      (3,435)  $       (2,545)  $      (7,564)
                                                                          =============   ==============   =============
     Loss per share                                                       $       (0.35)  $        (0.26)  $       (0.78)
                                                                          =============   ==============   =============
     Diluted loss per share  (Note 17)                                    $       (0.35)  $        (0.26)  $       (0.78)
                                                                          =============   ==============   =============

AVERAGE NUMBER OF SHARES OUTSTANDING
     Loss per share                                                               9,924            9,858           9,714
                                                                          =============   ==============   =============
     Diluted loss per share  (Note 17)                                            9,924            9,858           9,714
                                                                          =============   ==============   =============
</TABLE>

The Notes to Financial Statements are integral parts of this statement.

                                      F-3
<PAGE>

                        ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES
                                 CONSOLIDATED BALANCE SHEET
                        (in thousands, except shares and par value)

<TABLE>
<CAPTION>
                                                                                                     DECEMBER 31,
                                                                                              ------------------------
                                                                                                 2003          2002
                                                                                              ---------      ---------
<S>                                                                                           <C>
ASSETS
     Current assets
          Cash and cash equivalents  (Note 10)                                                $  50,587      $  37,731
          Accounts receivable less allowances of  $2,919 (2002--$3,309)                          13,592         14,643
          Inventories                                                                             8,256          9,493
          Statutory deposits                                                                      9,358         12,323
          Current deferred income taxes  (Note 9)                                                10,056          9,894
          Prepaid expenses and other current assets                                              10,236          9,931
                                                                                              ---------      ---------
               Total current assets                                                             102,085         94,015
     Investments of deferred compensation plans held in trust  (Note 14)                         17,743         15,176
     Other investments  (Notes 3 and 16)                                                         25,081         37,326
     Note receivable  (Note 6)                                                                   12,500         12,500
     Properties and equipment, at cost, less accumulated depreciation  (Note 11)                 41,004         48,361
     Identifiable intangible assets less accumulated amortization of $1,704 (2002--$7,167)
       (Note 4)                                                                                     592          2,889
     Goodwill less accumulated amortization  (Note 4)                                           105,335        110,843
     Other assets                                                                                24,729         17,034
                                                                                              ---------      ---------
                    Total Assets                                                              $ 329,069      $ 338,144
                                                                                              =========      =========
LIABILITIES
     Current liabilities
          Accounts payable                                                                    $   7,120      $   5,686
          Current portion of long-term debt  (Note 12)                                              448            409
          Income taxes  (Note 9)                                                                     26            369
          Deferred contract revenue                                                              14,362         17,321
          Accrued insurance                                                                      16,013         17,448
          Other current liabilities  (Note 13)                                                   21,123         23,513
                                                                                              ---------      ---------
               Total current liabilities                                                         59,092         64,746
     Long-term debt  (Note 12)                                                                   25,931         25,603
     Mandatorily Redeemable Convertible Preferred Securities
       of the Chemed Capital Trust  (Note 20)                                                    14,126              -
     Deferred compensation liabilities  (Note 14)                                                17,733         15,196
     Other liabilities  (Note 13)                                                                19,494         19,991
     Commitments and Contingencies  (Notes 13, 15, 19, 22 and 23)
                                                                                              ---------      ---------
                    Total Liabilities                                                           136,376        125,536
                                                                                              ---------      ---------

MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED SECURITIES
     OF THE CHEMED CAPITAL TRUST  (NOTE 20)                                                           -         14,186
                                                                                              ---------      ---------

STOCKHOLDERS' EQUITY
     Capital stock--authorized 15,000,000 shares $1 par; issued 13,452,907 shares
       (2002--13,448,475 shares)                                                                 13,453         13,448
     Paid-in capital                                                                            170,501        168,299
     Retained earnings                                                                          119,746        127,938
     Treasury stock--3,508,663 shares (2002--3,630,689 shares), at cost                        (109,427)      (111,582)
     Unearned compensation  (Note 14)                                                            (2,954)        (4,694)
     Deferred compensation payable in Company stock  (Note 14)                                    2,308          2,280
     Notes receivable for shares sold  (Note 18)                                                   (934)          (952)
     Accumulated other comprehensive income                                                           -          3,685
                                                                                              ---------      ---------
                    Total Stockholders' Equity                                                  192,693        198,422
                                                                                              ---------      ---------
                    Total Liabilities and Stockholders' Equity                                $ 329,069      $ 338,144
                                                                                              =========      =========
</TABLE>

The Notes to Financial Statement are integral parts of this statement.

                                      F-4
<PAGE>

                 ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                        FOR THE YEARS ENDED DECEMBER 31,
                                                                                      ------------------------------------
                                                                                        2003          2002          2001
                                                                                      --------      --------      ---------
<S>                                                                                   <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                                         $ (3,435)     $ (2,545)     $(12,185)
     Adjustments to reconcile net loss to net cash provided by operations
          Depreciation and amortization                                                 12,809        14,356        21,273
          Noncash restructuring and impairment charges                                  15,828        21,542        15,150
          Gains on redemption and sales of available-for-sale investments               (5,390)       (1,141)         (993)
          Provision for uncollectible accounts receivable                                2,019         1,808         2,866
          Provision for deferred income taxes                                             (501)          459        (6,173)
          Discontinued operations  (Note 6)                                                (64)       (6,309)        1,447
          Changes in operating assets and liabilities, excluding
            amounts acquired in business combinations
                  Increase in accounts receivable                                         (968)       (2,351)         (411)
                  Decrease in statutory reserve requirements                             2,965         1,008           715
                  Decrease in inventories                                                1,237           931            79
                  Decrease/(increase) in prepaid expenses and other
                    current assets                                                        (746)         (666)          990
                  Increase/(decrease)  in accounts payable, deferred
                    contract revenue and other current liabilities                      (5,253)       (6,724)        7,059
                  Increase/(decrease) in income taxes                                    2,732         4,096        (5,535)
                  Decrease/(increase) in other assets                                   (2,243)       (1,253)          233
                  Increase/(decrease) in other liabilities                               2,937          (621)          (96)
          Noncash expense of internally financed ESOPs                                   1,740         2,742         4,109
          Equity in earnings of affiliate                                                 (922)            -             -
          Other sources/(uses)                                                            (155)        1,562        (1,405)
                                                                                      --------      --------      --------
          Net cash provided by continuing operations                                    22,590        26,894        27,123
          Net cash provided by discontinued operations  (Note 6)                             -         2,629         7,258
                                                                                      --------      --------      --------
               Net cash provided by operating activities                                22,590        29,523        34,381
                                                                                      --------      --------      --------
CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from redemption of available-for-sale investments  (Notes 3 and 16)       27,270             -             -
     Purchase of equity investment in affiliate  (Notes 3 and 16)                      (17,999)            -             -
     Capital expenditures                                                              (11,178)      (11,855)      (14,457)
     Deposit to secure merger offer  (Note 23)                                         (10,000)            -             -
     Proceeds from sales of available-for-sale investments  (Note 16)                    4,493         1,917         1,377
     Business combinations, net of cash acquired  (Note 7)                              (3,850)       (1,236)       (1,555)
     Proceeds from sales of property and equipment                                       2,747         2,479         3,676
     Net proceeds/(uses) from sale of discontinued operations  (Note 6)                  1,091        50,676        (6,332)
     Investing activities of discontinued operations  (Note 6)                               -          (469)         (900)
     Purchase of Roto-Rooter minority interest                                               -           (83)         (820)
     Other uses                                                                           (356)         (413)          (78)
                                                                                      --------      --------      --------
               Net cash provided /(used) by investing activities                        (7,782)       41,016       (19,089)
                                                                                      --------      --------      --------
CASH FLOWS FROM FINANCING ACTIVITIES
     Dividends paid                                                                     (4,761)       (4,438)       (4,384)
     Issuance of capital stock                                                           3,287         1,547           735
     Purchases of treasury stock                                                          (637)       (3,214)       (1,226)
     Repayment of long-term debt  (Note 12)                                               (409)      (40,378)      (46,377)
     Proceeds from issuance of long-term debt  (Note 12)                                     -         5,000        35,000
     Other sources/(uses)                                                                  568           (50)         (293)
                                                                                      --------      --------      --------
               Net cash used by financing activities                                    (1,952)      (41,533)      (16,545)
                                                                                      --------      --------      --------
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                                        12,856        29,006        (1,253)
Cash and cash equivalents at beginning of year                                          37,731         8,725         9,978
                                                                                      --------      --------      --------

Cash and cash equivalents at end of year                                              $ 50,587      $ 37,731      $  8,725
                                                                                      ========      ========      ========
</TABLE>

The Notes to Financial Statements are integral parts of this statement.

                                      F-5
<PAGE>

             ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES
      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                                        TREASURY
                                                            CAPITAL       PAID-IN        RETAINED        STOCK-        UNEARNED
                                                            STOCK         CAPITAL        EARNINGS       AT COST      COMPENSATION
                                                          ----------     ----------     ----------     ----------    ------------
<S>                                                       <C>            <C>            <C>            <C>           <C>
Balance at December 31, 2000                              $  13,318      $ 162,618      $ 151,596      $(105,249)     $ (16,683)
Net loss                                                          -              -        (12,185)             -              -
Dividends paid ($.44 per share)                                   -              -         (4,384)             -              -
Stock awards and exercise of stock
 options  (Note 18)                                             119          5,055              -         (3,654)         5,138
Decrease in unearned compensation ( Note 14)                      -              -              -              -          4,109
Transfer of deferred compensation payable
 to other liabilities                                             -             14              -            (14)             -
Other comprehensive income                                        -              -              -              -              -
Purchases of treasury stock                                       -              -              -           (219)             -
Payments on notes receivable  (Note 18)                           -              -              -         (1,288)             -
Other                                                             1           (145)            13              -              -
                                                          ---------      ---------      ---------      ---------      ---------
    Balance at December 31, 2001                             13,438        167,542        135,040       (110,424)        (7,436)
Net loss                                                          -              -         (2,545)             -              -
Dividends paid ($.45 per share)                                   -              -         (4,438)             -              -
Decrease in unearned compensation ( Note 14)                      -              -              -              -          2,742
Stock awards and exercise of stock options
 (Note 18)                                                       23            974              -         (2,114)             -
Other comprehensive loss                                          -              -              -              -              -
Payments on notes receivable  (Note 18)                           -              -              -           (338)             -
Purchases of treasury stock                                       -              -              -            (51)             -
Distribution of assets to settle deferred
 compensation liabilities                                         -              -              -          1,066              -
Other                                                           (13)          (217)          (119)           279              -
                                                          ---------      ---------      ---------      ---------      ---------
    Balance at December 31, 2002                             13,448        168,299        127,938       (111,582)        (4,694)
NET LOSS                                                          -              -         (3,435)             -              -
DIVIDENDS PAID ($.48 PER SHARE)                                   -              -         (4,761)             -              -
DECREASE IN UNEARNED COMPENSATION ( NOTE 14)                      -              -              -              -          1,740
STOCK AWARDS AND EXERCISE OF STOCK OPTIONS
 (NOTE 18)                                                        3          1,620              -          2,216              -
OTHER COMPREHENSIVE LOSS                                          -              -              -              -              -
PAYMENTS ON NOTES RECEIVABLE  (NOTE 18)                           -              -              -            (23)             -
PURCHASES OF TREASURY STOCK                                       -              -              -            (69)             -
DISTRIBUTION OF ASSETS TO SETTLE DEFERRED
 COMPENSATION LIABILITIES                                         -              -              -             31              -
OTHER                                                             2            582              4              -              -
                                                          ---------      ---------      ---------      ---------      ---------
    BALANCE AT DECEMBER 31, 2003                          $  13,453      $ 170,501      $ 119,746      $(109,427)     $  (2,954)
                                                          =========      =========      =========      =========      =========
</TABLE>

<TABLE>
<CAPTION>
                                                           DEFERRED
                                                         COMPENSATION    ACCUMULATED       NOTES
                                                          PAYABLE IN       OTHER        RECEIVABLE
                                                            CAPITAL    COMPREHENSIVE        FOR
                                                            STOCK          INCOME       SHARES SOLD       TOTAL
                                                         ------------  -------------    -----------    ----------
<S>                                                      <C>           <C>              <C>            <C>
Balance at December 31, 2000                              $   5,500      $   3,237      $  (2,886)     $ 211,451
Net loss                                                          -              -              -        (12,185)
Dividends paid ($.44 per share)                                   -              -              -         (4,384)
Stock awards and exercise of stock
 options  (Note 18)                                               -              -              -          6,658
Decrease in unearned compensation ( Note 14)                      -              -              -          4,109
Transfer of deferred compensation payable
 to other liabilities                                        (2,293)             -              -         (2,293)
Other comprehensive income                                        -            977              -            977
Purchases of treasury stock                                       -              -              -           (219)
Payments on notes receivable  (Note 18)                           -              -          1,484            196
Other                                                            81              -           (100)          (150)
                                                          ---------      ---------      ---------      ---------
    Balance at December 31, 2001                              3,288          4,214         (1,502)       204,160
Net loss                                                          -              -              -         (2,545)
Dividends paid ($.45 per share)                                   -              -              -         (4,438)
Decrease in unearned compensation ( Note 14)                      -              -              -          2,742
Stock awards and exercise of stock options
 (Note 18)                                                        -              -              -         (1,117)
Other comprehensive loss                                          -           (529)             -           (529)
Payments on notes receivable  (Note 18)                           -              -            576            238
Purchases of treasury stock                                       -              -              -            (51)
Distribution of assets to settle deferred
 compensation liabilities                                    (1,066)             -              -              -
Other                                                            58              -            (26)           (38)
                                                          ---------      ---------      ---------      ---------
    Balance at December 31, 2002                              2,280          3,685           (952)       198,422
NET LOSS                                                          -              -              -         (3,435)
DIVIDENDS PAID ($.48 PER SHARE)                                   -              -              -         (4,761)
DECREASE IN UNEARNED COMPENSATION ( NOTE 14)                      -              -              -          1,740
STOCK AWARDS AND EXERCISE OF STOCK OPTIONS
 (NOTE 18)                                                        -              -              -          3,839
OTHER COMPREHENSIVE LOSS                                          -         (3,685)             -         (3,685)
PAYMENTS ON NOTES RECEIVABLE  (NOTE 18)                           -              -             34             11
PURCHASES OF TREASURY STOCK                                       -              -              -            (69)
DISTRIBUTION OF ASSETS TO SETTLE DEFERRED
 COMPENSATION LIABILITIES                                       (31)             -              -              -
OTHER                                                            59              -            (16)           631
                                                          ---------      ---------      ---------      ---------
     BALANCE AT DECEMBER 31, 2003                         $   2,308      $       -      $    (934)     $ 192,693
                                                          =========      =========      =========      =========
</TABLE>

CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
(in thousands)

<TABLE>
<CAPTION>
                                                                              FOR THE YEARS ENDED DECEMBER 31,
                                                                           ------------------------------------
                                                                             2003          2002          2001
                                                                           --------      --------      --------
<S>                                                                        <C>           <C>           <C>

Net loss                                                                   $ (3,435)     $ (2,545)     $(12,185)
                                                                           --------      --------      --------
Other comprehensive income/(loss), net of income tax
   Unrealized holding gains/(losses) on available-for-sale investments
     arising during the period                                                 (334)          246         1,680
   Less: Reclassification adjustment for gains on available-for-sale
     investments arising during the period                                   (3,351)         (775)         (703)
                                                                           --------      --------      --------
       Total                                                                 (3,685)         (529)          977
                                                                           --------      --------      --------
Comprehensive loss                                                         $ (7,120)     $ (3,074)     $(11,208)
                                                                           ========      ========      ========
</TABLE>

The Notes to Financial Statements are integral parts of these statements.

                                      F-6
<PAGE>

ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of
Roto-Rooter, Inc., its wholly owned subsidiaries and the accounts of the Chemed
Capital Trust ("CCT"). All significant intercompany transactions have been
eliminated. Long-term investments in affiliated companies representing ownership
interests of 20% to 50% are accounted for using the equity method.

         Under current accounting rules, the accounts of the CCT are
consolidated and the Mandatorily Redeemable Preferred Securities ("Preferred
Securities") of the CCT are classified as a noncurrent liability on the
Company's consolidated balance sheet. Distributions on the Preferred Securities
are classified on a separate line as a nonoperating expense on the consolidated
statement of operations. Under accounting rules that become effective for the
quarter ending March 31, 2004, the CCT will be deconsolidated and the Company's
Junior Subordinated Debentures due 2030 ("JSD"), all of which are held by the
CCT, will be shown as a liability on the Company's balance sheet in the face
amount equal to the value of the Preferred Securities outstanding. Interest
expense of the JSD will be classified as interest expense on the consolidated
statement of operations.

CASH EQUIVALENTS

         Cash equivalents comprise short-term highly liquid investments that
have been purchased within three months of their dates of maturity.

ACCOUNTS AND LOANS RECEIVABLE

         Trade accounts receivables and loans are recorded at the principal
balance outstanding less estimated allowance for uncollectible accounts.
Generally, allowances for trade accounts receivable are provided for accounts
more than 90 days past due, although collection efforts continue beyond that
time. Due to the small number of loans receivable outstanding, allowances for
loan losses are determined on a case-by-case basis. Final write-off of overdue
accounts or loans receivable is made when all reasonable collection efforts
have been made and payment is not forthcoming. Management closely monitors its
receivables and periodically reviews procedures for the granting of credit to
ensure losses are held to a minimum.

INVENTORIES

         Inventories are stated at the lower of cost or market. For determining
the value of inventories, the first-in, first-out ("FIFO") method is used.

STATUTORY DEPOSITS

         Statutory deposits are funds held in a segregated account in the
Company's name as security for revenue collected for prepaid home service
warranty contracts by Service America. A minimum of 10% of the required balance
must be deposited directly with the State of Florida. The amount of the deposits
is calculated quarterly and equals 25% of total service contract revenue
represented by service contracts in force at the end of the quarter. As the
amount of the required deposit increases or decreases, cash is transferred to or
from unrestricted cash to the segregated statutory deposit accounts on the
consolidated balance sheet.

OTHER INVESTMENTS

         At December 31, 2003, other investments, all of which are classified as
available-for-sale, include a 37% equity ownership interest in the common stock
of privately held Vitas Healthcare Corporation ("Vitas"), one common stock
purchase warrant of Vitas, a common stock purchase warrant in privately held
Patient Care, Inc. ("Patient Care"), a former subsidiary of the Company, and the
redeemable preferred stock of privately held Medic One, Inc. ("Medic One").

         At December 31, 2002, other investments, all of which are classified as
available-for-sale, include the redeemable preferred stock of Vitas, three
common stock purchase warrant of Vitas, a common stock purchase warrant in
Patient Care, the redeemable preferred stock of Medic One and several publicly
traded common stocks.

         Equity investments that are publicly traded are recorded at their fair
value with unrealized gains and losses, net of taxes, included in other
comprehensive income on the balance sheet. The Company's equity investment in
the common stock of Vitas and other privately held investments are carried at
cost, subject to write-down for impairment. The Company's equity investment in
Vitas is accounted for using the equity method of accounting.

         All investments are reviewed periodically for impairment based on
available market and financial data. For its investment in Vitas, the Company
reviews Vitas' unaudited monthly operating data and audited annual financial
statements on a timely basis. In addition, the Company's treasurer sits on the
Vitas Board of Directors. If the market value or net realizable value of the
investment is less than the Company's cost and this decline is determined to be
other than temporary, a write-down to fair value is made, and a realized loss is
recorded in the statement of operations.

         In calculating realized gains and losses on the sales of investments,
the specific-identification method is used to determine the cost of investments
sold.

DEPRECIATION AND PROPERTIES AND EQUIPMENT

         Depreciation of properties and equipment is computed using the
straight-line method over the estimated useful lives of the assets. Expenditures
for maintenance, repairs, renewals and betterments that do not materially
prolong the useful lives of the assets are expensed as incurred. The cost of
property retired or sold and the related accumulated depreciation are removed
from the accounts, and the resulting gain or loss is reflected currently in
income.

                                      F-7
<PAGE>

         The weighted average lives of the Company's gross properties and
equipment at December 31, 2003, were:

<TABLE>
<CAPTION>
                                      LIFE
                                      ----
<S>                                  <C>
Computer equipment                    2.3 yrs.
Machinery and equipment               6.3
Furniture and fixtures                8.0
Transportation equipment              5.9
Computer software                     7.5
Buildings                            23.4
</TABLE>

INTANGIBLE ASSETS

         Identifiable intangible assets arise from purchase business
combinations and are amortized using the straight-line method over the estimated
useful lives of the assets. In accordance with Financial Accounting Standards
Board ("FASB") Statement No. 142, Goodwill and Other Intangible Assets,
amortization of goodwill ceased effective December 31, 2001. Beginning January
1, 2002, goodwill is tested at least annually for impairment. For 2001 and
earlier years, goodwill acquired prior to July 1, 2001, was amortized using the
straight-line method over the estimated useful life, but not in excess of 40
years. The weighted average lives of the Company's gross identifiable intangible
assets at December 31, 2003, were:
<TABLE>
<CAPTION>
                                   LIFE
                                -----------
<S>                             <C>
Covenants not to compete         5.0 yrs.
Customer lists                  12.7
</TABLE>

LONG-LIVED ASSETS

         The Company periodically makes an estimation and valuation of the
future benefits of its long-lived assets (other than goodwill) based on key
financial indicators. If the projected undiscounted cash flows of a major
business unit indicate that property and equipment or identifiable intangible
assets have been impaired, a write-down to fair value is made.

REVENUE RECOGNITION

         Revenues received under prepaid contractual service agreements are
recognized on a straight-line basis over the life of the contract. All other
service revenues and sales are recognized when the services are provided or the
products are delivered.

GUARANTEES

         In the normal course of business the Company enters into various
guarantees and indemnifications in its relationships with customers and others.
Examples of these arrangements include guarantees of service and product
performance. The Company's experience indicates guarantees and indemnifications
do not materially impact the Company's financial condition or results of
operations.

OPERATING EXPENSES

         Cost of services provided and goods sold (excluding depreciation)
includes salaries, wages and benefits of service technicians and field
personnel, material costs, insurance costs, service vehicle costs and other
expenses directly related to providing service revenues or generating sales.
General and administrative expenses include salaries, wages and benefits of
administrative employees, office rent and operating costs, legal, banking and
professional fees and other administrative costs. Selling and marketing expenses
include salaries, wages and benefits of selling and marketing employees,
advertising expenses, communications and branch telephone expenses and other
selling and customer-related expenses.

ADVERTISING

         The Company expenses the production costs of advertising the first time
the advertising takes place. Costs of yellow pages listings are expensed when
the directories are placed in circulation. Other advertising costs are expensed
as incurred. Advertising expense for the year ended December 31, 2003, was
$17,087,000 (2002 -- $17,520,000; 2001 -- $18,362,000).

DIVIDEND INCOME

         Dividends on redeemable preferred stock investments are cumulative and
are recorded during the quarter they are earned. All other dividends are
recognized when declared.

COMPUTATION OF EARNINGS PER SHARE

         Earnings per share are computed using the weighted average number of
shares of capital stock outstanding. Diluted earnings per share reflect the
dilutive impact of the Company's outstanding stock options and nonvested stock
awards. Diluted earnings per share also assume the conversion of the Preferred
Securities into capital stock only when the impact is dilutive on earnings per
share from continuing operations.

                                      F-8

<PAGE>

EMPLOYEE STOCK OWNERSHIP PLANS

         Contributions to the Company's Employee Stock Ownership Plans ("ESOP")
are based on established debt repayment schedules. Shares are allocated to
participants based on the principal and interest payments made during the
period. The Company's policy is to record its ESOP expense by applying the
transition rule under the level-principal amortization concept.

STOCK-BASED COMPENSATION PLANS

         The Company uses Accounting Principles Board Opinion No. 25 ("APB 25"),
Accounting for Stock Issued to Employees, to account for stock-based
compensation. Since the Company's stock options qualify as fixed options under
APB 25 and since the option price equals the market price on the date of grant,
there is no compensation cost recorded for stock options. Restricted stock was
recorded as compensation cost over the requisite vesting periods on a pro rata
basis, based on the market value on the date of grant.

         The following table illustrates the effect on net loss and loss per
share if the Company had applied the fair-value-recognition provisions of FASB
Statement No. 123, Accounting for Stock-Based Compensation (in thousands, except
per share data):

<TABLE>
<CAPTION>
                                                                         FOR THE YEARS ENDED DECEMBER 31,
                                                                 ------------------------------------------------
                                                                    2003               2002                2001
                                                                 ----------         ----------          ----------
<S>                                                              <C>                <C>                 <C>
Net loss                                                         $  (3,435)         $  (2,545)          $ (12,185)

Add: stock-based compensation expense included
     in net income as reported, net of income tax effects               95                120               4,113

Deduct: total stock-based employee compensation
        determined under a fair-value-based method for all
        stock options and awards, net of income tax effects           (952)              (767)             (4,444)
                                                                 ---------          ---------           ---------
Pro forma net loss                                               $  (4,292)         $  (3,192)          $ (12,516)
                                                                 =========          =========           =========
Loss per share
      As reported                                                $   (0.35)         $   (0.26)          $   (1.25)
                                                                 =========          =========           =========
      Pro forma                                                  $   (0.43)         $   (0.32)          $   (1.29)
                                                                 =========          =========           =========
Diluted loss per share
      As reported                                                $   (0.35)         $   (0.26)          $   (1.25)
                                                                 =========          =========           =========
      Pro forma                                                  $   (0.43)         $   (0.32)          $   (1.29)
                                                                 =========          =========           =========
</TABLE>

The above pro forma data were calculated using the Black-Scholes
option-valuation method to value the Company's stock options granted in 2003 and
prior years. Key assumptions include:

<TABLE>
<CAPTION>
                                                                          FOR THE YEARS ENDED
                                                                              DECEMBER 31,
                                                                           2003       2002
                                                                          ------     ------
<S>                                                                       <C>        <C>
Weighted average grant-date fair value of options granted                 $10.14     $11.18
Risk-free interest rate                                                      3.2%       4.8%
Expected volatility                                                         27.8       25.1
Expected life of options                                                   6 YRS.     6 yrs.
</TABLE>

         No options were granted in 2001; however, for 2002 and 2003, it was
assumed that the annual dividend would be increased $.01 per share per quarter
biannually in the fourth quarter. This assumption was based on the facts and
circumstances that existed at the time options were granted and should not be
construed to be an indication of future dividend amounts to be paid.

INSURANCE ACCRUALS

         The Company is self-insured for casualty insurance claims, subject to a
stop-loss policy with a maximum per-occurrence limit of $250,000. Management
consults with insurance professionals and closely monitors and evaluates its
historical claims experience to estimate the appropriate level of accrual for
incurred claims.

                                      F-9
<PAGE>

ESTIMATES

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

RECLASSIFICATIONS

         In April 2002, the FASB approved the issuance of Statement of Financial
Accounting Standards ("SFAS") No. 145, Rescission of FASB Statements No. 4, 44
and 64, Amendment of FASB Statement No. 13 and Technical Corrections. It is
generally effective for transactions occurring after May 15, 2002. The Company's
adoption of SFAS No.145 in 2003 resulted in reclassifying its 2001 loss on early
extinguishment of debt from extraordinary to a separate line within continuing
operations, but did not otherwise have a material impact on its financial
statements.

         In May 2003, the FASB approved the issuance of SFAS No. 150, Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and
Equity. As a result of the issuance of this pronouncement, the Company now
reports the mandatorily redeemable convertible preferred securities of the
Chemed Capital Trust as a noncurrent liability rather than in the "mezzanine"
(i.e., between liabilities and equity) as reported prior to June 2003. This
reclassification does not affect the Company's compliance with its debt
covenants. The adoption of this statement did not impact the statement of
operations.

         For 2003 and 2002, the Company reclassified its noncurrent income taxes
from income taxes payable (within current liabilities) to other liabilities
(within noncurrent liabilities). In addition, certain other amounts in prior
years' financial statements have been reclassified to conform to the 2003
presentation.

RECENT ACCOUNTING STATEMENTS

         In January 2003, the FASB issued FASB Interpretation ("FIN") No. 46,
Consolidation of Variable Interest Entities - an interpretation of Accounting
Research Bulletin No. 51. This Interpretation is intended to clarify the
application of the majority voting interest requirement of ARB No. 51,
Consolidated Financial Statements, to certain entities in which equity
investors do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. The
controlling financial interest may be achieved through arrangements that do not
involve voting interests. FIN No. 46 may be applied prospectively with a
cumulative-effect adjustment as of the date on which it is first applied or by
restating previously issued financial statements for one or more years with a
cumulative-effect adjustment as of the beginning of the first year restated. FIN
No. 46 is effective immediately to variable interests in a variable interest
equity ("VIE") created or obtained after January 31, 2003. As amended by FASB
Staff Position ("FSP") FIN 46-6, FIN No. 46 became effective for variable
interests in a VIE created before February 1, 2003, at the end of the first
interim or annual period ending after December 15, 2003.

         Subsequent to issuing FIN No. 46 and FSP FIN No. 46-6, the FASB
continued to propose modifications and issue FSPs that changed and clarified FIN
No. 46. These modifications and FSPs were subsequently incorporated into FIN No.
46 (revised) ("FIN No. 46R"), which replaces FIN No. 46. Among other things,
relative to FIN No. 46, FIN No. 46R a) essentially excludes operating businesses
from its provisions subject to four conditions, b) states the provisions of FIN
No. 46R are not required to be applied if a company is unable, subject to making
an exhaustive effort, to obtain the necessary information, c) includes new
definitions and examples of what variable interests are, d) clarifies and
changes the definition of a variable interest entity, and e) clarifies and
changes the definition and treatment of de facto agents, as that term is defined
in FIN No. 46 and FIN No. 46R. FIN No. 46R was issued December 23, 2003. The
Company will apply FIN No. 46R to all variable interest entities at the end of
the first quarter of 2004.

         The Company has evaluated its contractual relationships with its
Roto-Rooter franchisees and has concluded that its interests in the franchisees
are not variable interests as defined in FIN No. 46 and FIN No. 46R. The Company
maintains contractual relationships with certain independent contractors to
provide plumbing and drain cleaning services in specified territories primarily
using the Roto-Rooter name. The Company has no equity interest in any of the
independent contractors, but in many cases, loans money to the contractor to
assist in financing equipment and working capital needs. The loans are generally
partially secured by the contractors' equipment and are guaranteed by the
business owner. The Company's contractor agreements do not require its
contractors to provide all the financial information necessary to apply the
provisions of FIN No. 46R to its contractors. Furthermore, the contractors
generally have not provided all the financial data they are required to provide
under the contractor agreements.

         The Company has evaluated its contractual relationships with the four
independent contractors that commenced operations in 2003 ("2003 Contractors")
and determined they are potentially subject to consolidation under FIN No. 46 as
a result of loans made to them. The Company has been unable to obtain sufficient
information necessary to determine whether the 2003 Contractors should be
consolidated. The Company is in the process of evaluating the new provisions of
FIN No. 46R relative to its 2003 Contractors and to its pre-February 2003
contractor arrangements. At this time, the Company does not believe that the
consolidation of any of its contractors, if required under FIN No. 46 or FIN No.
46R, would materially impact its operating results. Instead, consolidation of
some, if any, of these arrangements is more likely to result in a "grossing up"
of amounts such as revenues and expenses with little or no net change to the
Company's net income or cash flows. None of these entities has been consolidated
in the Company's financial statements.

                                      F-10
<PAGE>

         Under FIN No. 46, the Company is permitted to consolidate the accounts
of the Chemed Capital Trust in its financial statements due to the existence of
a call feature of the Preferred Securities whereby the Company can call the
Preferred Securities for prepayment. As disclosed above, the Company currently
intends to call the Preferred Securities after March 15, 2004, at which time the
Preferred Securities may be prepaid without premium.

         When FIN No. 46R becomes fully effective for the Company in the first
quarter of 2004, the Company will be required to de-consolidate the accounts of
the Chemed Capital Trust, because the call feature may no longer be considered
as a condition for consolidation. As a result, the current balance sheet caption
that reads "Mandatorily redeemable convertible preferred securities of the
Chemed Capital Trust" will be revised to read "Convertible junior subordinated
debentures" in the same dollar amount as the Preferred Securities. Within the
statement of operations, the "Distributions on preferred securities" will be
reclassified as interest expense.

2. SEGMENTS AND NATURE OF THE BUSINESS

         During the second quarter of 2003, the corporate-office administrative
functions for employee benefits, retirement services, risk management, public
relations, cash management and taxation were combined with the Plumbing and
Drain Cleaning business to enable the Company to benefit from economies of
scale. In May 2003, the shareholders of the Company approved changing the
corporation's name from Chemed Corporation to Roto-Rooter, Inc. ("Roto-Rooter").
Due to these changes and the changing composition of businesses comprising the
Company over the past several years, management re-evaluated the Company's
segment reporting as it relates to corporate-office administrative expenses. The
discontinuance of businesses in 1997 [the Omnia Group ("Omnia") and National
Sanitary Supply Company ("National")], 2001 [Cadre Computer Resources, Inc.
("Cadre Computer")] and 2002 (Patient Care) results in more than 80% of the
Company's business being represented by Roto-Rooter's Plumbing and Drain
Cleaning business.

         To better reflect how executive management evaluates its operations,
the costs of the administrative functions of the corporate office were combined
with the operating results of the Plumbing and Drain Cleaning business (formerly
the Roto-Rooter Group) to form the Plumbing and Drain Cleaning segment,
effective in the second quarter of 2003. The Service America segment remains
essentially unchanged.

         The Plumbing and Drain Cleaning segment provides plumbing and draining
cleaning services, and Service America Network Inc. ("Service America") provides
major-appliance and heating/air-conditioning ("HVAC") repair, maintenance and
replacement services. Relative contributions of each segment to service revenues
and sales were 84% and 16%, respectively, in 2003.

        The reportable segments have been defined along service lines,
consistent with the way the businesses are managed. In determining reportable
segments, the Roto-Rooter Services, Roto-Rooter Franchising and Products and
Roto-Rooter HVAC and non-Roto-Rooter brand operating segments of the Plumbing
and Drain Cleaning segment have been aggregated on the basis of possessing
similar operating and financial characteristics. The characteristics of these
operating segments and the basis for aggregation are reviewed annually.
Accordingly, the reportable segments are defined as follows:

    -    The Plumbing and Drain Cleaning segment provides repair and maintenance
         services to residential and commercial accounts using the Roto-Rooter
         service mark. Such services include plumbing and sewer, drain and pipe
         cleaning. They are delivered through company-owned,
         independent-contractor-operated and franchised locations. This segment
         also manufactures and sells products and equipment used to provide such
         services.

    -    The Service America segment provides HVAC repair, maintenance and
         replacement services primarily to residential customers through service
         contracts and retail sales (demand services). In addition, Service
         America sells air conditioning equipment and duct cleaning services.

                                      F-11
<PAGE>

         Substantially all of the Company's service revenues and sales from
continuing operations are generated from business within the United States.
Management closely monitors accounts receivable balances and has established
policies regarding the extension of credit and compliance therewith.

         Segment data for the Company's continuing operations are set forth
below (in thousands, except footnote data):

<TABLE>
<CAPTION>
                                                               FOR THE YEARS ENDED DECEMBER 31,
                                                            ---------------------------------------
                                                               2003          2002            2001
                                                            ---------      ---------      ---------
<S>                                                         <C>            <C>            <C>
REVENUES BY TYPE OF SERVICE
   Plumbing and Drain Cleaning
      Sewer and drain cleaning                              $ 106,127      $ 106,125      $ 109,250
      Plumbing repair and maintenance                         101,590         98,812        105,803
      Industrial and municipal sewer and drain cleaning        15,876         14,660         14,526
      Contractors                                              14,125         12,350         11,873
      HVAC repair and maintenance                               3,044          3,746          9,859
      Other products and services                              20,013         17,994         18,042
                                                            ---------      ---------      ---------
         Total Plumbing and Drain Cleaning                    260,775        253,687        269,353
                                                            ---------      ---------      ---------
   Service America

      Repair services under contracts                          36,384         45,182         51,299
      Demand repair services                                   11,712         15,307         17,256
                                                            ---------      ---------      ---------
         Total Service America                                 48,096         60,489         68,555
                                                            ---------      ---------      ---------
           Total service revenues and sales                 $ 308,871      $ 314,176      $ 337,908
                                                            =========      =========      =========
AFTERTAX SEGMENT EARNINGS/(LOSS)

   Plumbing and Drain Cleaning (a)                          $   6,528      $   9,796      $  (8,765)
   Service America (b)                                        (14,687)       (19,961)          (686)
                                                            ---------      ---------      ---------
      Total segment loss                                       (8,159)       (10,165)        (9,451)
   Unallocated investing and financing--net (c)                 4,660          1,311            414
   Loss on extinguishment of debt                                   -              -         (1,701)
   Discontinued operations                                         64          6,309         (1,447)
                                                            ---------      ---------      ---------
      Net loss                                              $  (3,435)     $  (2,545)     $ (12,185)
                                                            =========      =========      =========
</TABLE>

                                      F-12
<PAGE>

<TABLE>
<CAPTION>
                                                       FOR THE YEARS ENDED DECEMBER 31,
                                                   ---------------------------------------
                                                      2003          2002            2001
                                                   ----------     ---------      ---------
<S>                                                <C>            <C>            <C>
INTEREST INCOME
   Plumbing and Drain Cleaning                     $     817      $     549      $     243
   Service America                                       294            413            799
                                                   ---------      ---------      ---------
      Subtotal                                         1,111            962          1,042
   Unallocated investing and financing--net            2,187          2,644          2,010
   Intercompany eliminations                            (581)          (298)          (180)
                                                   ---------      ---------      ---------
         Total interest income                     $   2,717      $   3,308      $   2,872
                                                   =========      =========      =========
INTEREST EXPENSE
   Plumbing and Drain Cleaning                     $     210      $     153      $     223
   Service America                                        34             59              -
                                                   ---------      ---------      ---------
      Subtotal                                           244            212            223
   Unallocated investing and financing--net            1,896          2,716          5,614
   Intercompany eliminations                               -              -           (414)
                                                   ---------      ---------      ---------
         Total interest expense                    $   2,140      $   2,928      $   5,423
                                                   =========      =========      =========
INCOME TAX PROVISION
   Plumbing and Drain Cleaning                     $   4,645      $   6,535      $  (3,380)
   Service America                                    (1,431)           418            437
                                                   ---------      ---------      ---------
      Subtotal                                         3,214          6,953         (2,943)
   Unallocated investing and financing--net            1,535           (502)        (2,046)
                                                   ---------      ---------      ---------
         Total income tax provision                $   4,749      $   6,451      $  (4,989)
                                                   =========      =========      =========
IDENTIFIABLE ASSETS
   Plumbing and Drain Cleaning                     $ 172,380      $ 166,308      $ 174,083
   Service America                                    25,655         49,729         71,399
                                                   ---------      ---------      ---------
      Total identifiable assets                      198,035        216,037        245,482
   Unallocated investing and financing--net(d)       131,034        122,107         74,665
   Discontinued operations                                 -              -         81,310
                                                   ---------      ---------      ---------
         Total assets                              $ 329,069      $ 338,144      $ 401,457
                                                   =========      =========      =========
ADDITIONS TO LONG-LIVED ASSETS (e)
   Plumbing and Drain Cleaning                     $  12,610      $   9,433      $  10,892
   Service America                                       797          3,414          4,696
                                                   ---------      ---------      ---------
      Subtotal                                        13,407         12,847         15,588
   Unallocated investing and financing--net(d)         1,621            184            424
                                                   ---------      ---------      ---------
         Total additions                           $  15,028      $  13,031      $  16,012
                                                   =========      =========      =========
DEPRECIATION AND AMORTIZATION (f)
   Plumbing and Drain Cleaning                     $   9,388      $  10,214      $  14,128
   Service America                                     2,965          3,633          4,951
                                                   ---------      ---------      ---------
      Subtotal                                        12,353         13,847         19,079
   Unallocated investing and financing--net(d)           456            509          2,194
                                                   ---------      ---------      ---------
         Total depreciation and amortization       $  12,809      $  14,356      $  21,273
                                                   =========      =========      =========
</TABLE>

- ------------------------
(a)      Amount for 2003 includes aftertax severance charges of $2,358,000.
         Amount for 2001 includes aftertax restructuring and similar expenses
         and other charges totaling $15,271,000.

(b)      Amounts for 2003 and 2002 include aftertax impairment charges
         aggregating $14,363,000 and $20,342,000, respectively. Amount for 2001
         includes aftertax restructuring and similar expenses and other charges
         of $1,672,000.

(c)      Amount for 2002 includes a $780,000 aftertax investment impairment
         charge. Amounts for 2003, 2002 and 2001 include aftertax capital gains
         on the sales and redemption of investments of $3,351,000, $775,000 and
         $703,000, respectively.

(d)      Corporate assets consist primarily of cash and cash equivalents,
         marketable securities, properties and equipment and other investments.

(e)      Long-lived assets include goodwill, identifiable intangible assets and
         property and equipment.

(f)      Depreciation and amortization include amortization of goodwill,
         identifiable intangible assets and other assets.

                                      F-13
<PAGE>

3. EQUITY INTEREST IN AFFILIATE (VITAS)

         At December 31, 2003, the Company held a 37% interest in privately held
Vitas, which provides palliative and medical care and related services to
terminally ill patients. On August 18, 2003, Vitas retired the Company's
investment in the 9% Redeemable Preferred Stock of Vitas. Cash proceeds to the
Company totaled $27.3 million, and the Company realized a pretax gain of
$1,846,000 ($1,200,000 aftertax or $.12 per share) on the redemption of
preferred stock in the third quarter of 2003. During 2003, the dividends and
amortization of preferred stock discount on this investment contributed
$1,585,000 to the aftertax earnings of the Company. Dividends ceased to accrue
on August 17, 2003. On October 14, 2003, the Company exercised two of its three
warrants (Warrants A and B) to purchase 4,158,000 common shares of Vitas, or
37%, for $18.0 million in cash. At December 31, 2003, the Company's common stock
ownership in Vitas has a carrying value of $21.0 million, and the Company's
investment exceeded its share of Vitas' net book value by approximately $16.6
million. On a preliminary basis, the Company estimates that $3.7 million of this
excess is attributable to the excess value of computer software with a 5-year
life and the remainder to goodwill with an indefinite life. Amortization of this
excess reduced the Company's equity in the earnings of Vitas by $97,000 in 2003.
In 2004, as a result of completing the acquisition of the 63% of Vitas it did
not own in 2003, the Company will conduct a thorough review to value all assets
and liabilities of Vitas at their fair values. Thus, it is possible that the
Company may identify other intangible assets with different useful lives.

         Summarized financial data for Vitas follow (in thousands):

<TABLE>
<CAPTION>
                                                   AS OF AND
                                                 FOR THE THREE               AS OF AND FOR THE
                                                  MONTHS ENDED           YEARS ENDED SEPTEMBER 30,
                                                  DECEMBER 31,    ---------------------------------------
                                                      2003          2003           2002            2001
                                                   ---------      ---------      ---------       --------
<S>                                              <C>              <C>            <C>             <C>
Income Statement
   Revenues                                         $ 121,062     $ 420,074      $ 359,200       $319,517
   Gross profit                                        27,515        88,254         77,841         69,973
   Income from operations                              10,727        32,022         28,019         23,814
   Net income                                           5,396        13,689         13,789         12,311
   Net income available for common stockholders         5,396         5,678          9,727          6,112
Financial Position
   Current assets                                   $  79,619     $  69,891      $  51,780
   Noncurrent assets                                   63,746        62,660         59,687
   Current liabilities                                 62,963        54,046         46,881
   Noncurrent liabilities                              68,553        90,053         59,006
   Redeemable preferred stock                               -             -         22,006
   Stockholders' equity/(deficit)                      11,849       (11,548)       (16,426)
</TABLE>

4. INTANGIBLE ASSETS

         Amortization of intangible assets from continuing operations was (in
thousands):

<TABLE>
<CAPTION>
                                        FOR THE YEARS ENDED
                                            DECEMBER 31,
                                   ----------------------------
                                    2003       2002       2001
                                   ------     ------     ------
<S>                                <C>        <C>        <C>
Identifiable intangible assets     $  560     $  621     $  680
Goodwill                                -          -      4,102
                                   ------     ------     ------
    Total                          $  560     $  621     $4,782
                                   ======     ======     ======
</TABLE>

         The following is a schedule by year of projected amortization expense
for intangible assets (in thousands):

<TABLE>
<S>           <C>
2004          $116
2005           88
2006           73
2007           54
2008           50
</TABLE>

                                      F-14
<PAGE>

         The changes in the carrying amount of goodwill for the years ended
December 31, 2002 and 2003, are as follows (in thousands):

<TABLE>
<CAPTION>
                                      PLUMBING
                                      AND DRAIN       SERVICE
                                      CLEANING        AMERICA          TOTAL
                                      --------       ----------     ----------
<S>                                   <C>            <C>            <C>
December 31, 2001                     $ 100,023      $  30,379      $ 130,402
Acquired in business combinations         1,110              -          1,110
Impairment losses                             -        (20,342)       (20,342)
Other adjustments                          (327)             -           (327)
                                      ---------      ---------      ---------
     DECEMBER 31, 2002                  100,806         10,037        110,843
ACQUIRED IN BUSINESS COMBINATIONS         4,246              -          4,246
IMPAIRMENT LOSSES                             -        (10,037)       (10,037)
OTHER ADJUSTMENTS                           283              -            283
                                      ---------      ---------      ---------
     DECEMBER 31, 2003                $ 105,335      $       -      $ 105,335
                                      =========      =========      =========
</TABLE>

         During the fourth quarter of 2003, the Company recognized a $10,037,000
impairment loss on the goodwill (fourth quarter of 2002 -- $20,342,000) included
in the Service America segment. The goodwill impairment charges are based on an
appraisal firm's valuation of Service America's business as of December 31, 2003
and 2002. The fair value of Service America was calculated using an average of
the enterprise value determined under a capital markets valuation and discounted
cash flows using updated income and cash flow projections for Service America's
business. The capital markets method calculates an enterprise value based on
valuations at which comparable businesses sold in the capital markets and based
on certain financial ratios and statistics. The income and cash flow projections
are updated each year as a part of the Company's annual business plan process
and take into consideration the changing marketplace and changing operating
conditions. The decline in the overall valuations of Service America in 2003 and
2002 were a direct result of lower revenue, earnings and cash flow projections
due to the continued decline in the contract base of the business (23% decline
in 2003; 19% decline in 2002). These projections were adjusted to reflect that
Service America missed achieving its budgeted revenues by $6.0 million, or 11%,
in 2003 ($8.7 million, or 13%, for 2002) and missed achieving its budgeted gross
margin by $2.8 million, or 19%, for 2003 ($4.5 million or 26% for 2002).

         As required by SFAS No. 142, the Company performed goodwill impairment
tests for all of its reporting units as of December 31, 2003 and 2002. These
tests indicated that none of the reporting units' goodwill, other than Service
America's, is impaired.

         In conjunction with the adoption of SFAS No. 142, the Company performed
its transition evaluation of goodwill as of January 1, 2002. For the purpose of
impairment testing, the Company determined its reporting components to be
Service America, Roto-Rooter Services (plumbing and drain cleaning services),
Roto-Rooter Franchising and Products (franchising and manufacturing and sale of
plumbing and drain cleaning products) and Roto-Rooter HVAC/non-Roto-Rooter
brands (heating, ventilating, and air-conditioning repair services and
non-Roto-Rooter-branded plumbing and drain cleaning services). The Company's
transition impairment tests, based on valuations by a professional valuation
firm, indicated that none of the goodwill for any of its reporting components
was impaired at January 1, 2002.

         During 2001, the Company recognized a $10,580,000 impairment loss under
FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of. Most of this amount ($9,793,000)
relates to goodwill included on the books of Plumbing and Drain Cleaning's HVAC
and non-Roto-Rooter-branded plumbing operations. As the Company had committed to
exit these underperforming businesses in November 2001, the amount of the
impairment was based on the estimated selling price of the operations to be sold
or dissolved. The remaining $787,000 impairment loss relates to the closing of
Service America's Tucson branch. These charges are included in the
restructuring-and-similar-expenses account in the statement of operations.

         The loss for 2001 excluding the amortization of goodwill is presented
below (in thousands):

<TABLE>
<S>                                          <C>
Reported loss from continuing operations     $(10,738)
 Aftertax amortization of goodwill              4,621
                                             --------
    Adjusted loss                            $ (6,117)
                                             ========
 Reported net loss                           $(12,185)
 Aftertax amortization of goodwill              4,621
                                             --------
    Adjusted net loss                        $ (7,564)
                                             ========
</TABLE>

5. IMPAIRMENT, RESTRUCTURING AND SIMILAR EXPENSES

         In addition to the goodwill impairment charges discussed above, the
Service America segment recognized asset impairment charges in 2003 under FASB
Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, comprising $4,052,000 for property and equipment (primarily capitalized
software) and $1,739,000 for identifiable intangible assets (primarily customer
contracts).

                                      F-15
<PAGE>

         The property and equipment and identifiable intangible asset impairment
charges for 2003 are based on an analysis of undiscounted cash flows that
indicated that the book value of the net assets of Service America exceeded the
projected cash flows of the business over the life of the noncurrent assets.
Accordingly, the carrying values of the noncurrent assets that exceeded their
fair values were written down to their fair values, based largely on a recent
appraisal of assets by a professional valuation firm. Substantially all of the
property and equipment impairment charge related to computer software costs. The
large majority of the identifiable intangible asset charge related to
capitalized customer contracts, acquired in 1991 and 1993, which, in the opinion
of management, have no future value.

         Total impairment charges recognized by Service America in the fourth
quarters of 2003 and 2002 are (in thousands):

<TABLE>
<CAPTION>
                                           2003         2002
                                          -------     -------
<S>                                       <C>         <C>
Goodwill                                  $10,037     $20,342
Identifiable intangible assets              1,739           -
Properties and equipment                                    -
  (primarily capitalized software)          4,052           -
                                          -------     -------
        Total                             $15,828     $20,342
                                          =======     =======
</TABLE>

The aftertax cost of these impairment charges was $14,363,000 in 2003 and
$20,342,000 in 2002.

         In the third quarter of 2001, the Company decided to close Service
America's Tucson branch, which was acquired in 1999, due to its operating
performance. The branch failed to achieve the level of profitability that had
been anticipated upon acquisition.

         In the fourth quarter of 2001, the Company decided to exit the HVAC and
non-Roto-Rooter-branded plumbing businesses by selling them or closing them or
transferring their operations to Roto-Rooter branches. The decision to dispose
of these operations was made because they failed to improve profitability in
recent years and were requiring the use of resources which management believed
could be better used elsewhere in the Plumbing and Drain Cleaning segment.

         In the third quarter of 2002, management decided to retain the largest
of the HVAC and non-Roto-Rooter-branded plumbing businesses, as it remained
profitable throughout the period and the majority of its revenue was from
plumbing operations. Additionally, management determined there was sufficient
synergism between this non-Roto-Rooter-branded operation and the nearby
Roto-Rooter branch to justify retaining it. The decision to retain this business
did not have a material impact on the results of operations for 2002 and would
not have materially changed the restructuring charges recorded in 2001 for the
cost of exiting HVAC and non-Roto-Rooter-branded businesses.

         The closing of Service America's Tucson branch was completed in 2001,
and the restructuring of Roto-Rooter's HVAC and non-branded plumbing businesses
was completed in the third quarter of 2002. Since most of the restructuring
expenses arose from noncash asset impairment charges, the restructuring plans
did not consume a significant amount of the Company's resources.

                                      F-16
<PAGE>

         During 2001, the Company's continuing operations recorded pretax
restructuring and similar expenses and other nonrecurring and unusual charges as
follows (in thousands, except footnote):

<TABLE>
<CAPTION>
                                                            Plumbing
                                                           and Drain       Service
                                                            Cleaning       America         Total
                                                           ---------       ------         -------
<S>                                                        <C>             <C>            <C>
Restructuring expenses:
   Cost of exiting HVAC and non-Roto-Rooter-
     branded plumbing businesses (a)                        $11,205        $     -        $11,205
   Cost of closing Service America's Tucson branch (b)            -          1,171          1,171
Expenses not expected to recur (similar expenses):
   Charges for accelerating the vesting of
     restricted stock awards in connection with the
     anticipated revision of the Company's long-term
     incentive plans in 2002 (c)                              5,294            146          5,440
   Severance charges for 10 individuals incurred in
     connection with reducing administrative
     expenses, largely at the corporate office (d)            2,909            757          3,666
   Resolution of overtime pay issues with the U.S.
     Department of Labor ("DOL") , relating
     primarily to prior years' compensation expense (e)       2,749              -          2,749
   Property and equipment impairment charges (f)                337            166            503
                                                            -------        -------        -------
        Total restructuring and similar expenses             22,494          2,240         24,734
Other unusual charges:
   Additional casualty insurance expense recorded
     to reflect increase in valuation of insurance
     claims for prior years                                   1,411(g)           -          1,411
   Terminated lease obligations                                 166(h)          69(g)         235
   All other                                                    417(h)         414(g)         831
                                                            -------        -------        -------
        Total restructuring and similar expenses
              and other unusual charges                     $24,488        $ 2,723        $27,211
                                                            =======        =======        =======
</TABLE>

- ---------------

(a)  Amount includes a charge of $9,793,000 for the reduction in the carrying
     value of goodwill and $477,000 for the reduction in the carrying value of
     identifiable intangible assets.

(b)  Amount includes a charge of $833,000 for the reduction in the carrying
     value of goodwill and $50,000 for the reduction in the carrying value of
     identifiable intangible assets.

(c)  In the fourth quarter of 2001, the Board of Directors of the Company
     approved accelerating the vesting of all outstanding restricted stock
     awards as a result of its decision to terminate this long-term incentive
     program. In May 2002, the shareholders of the Company approved the adoption
     of the 2002 Executive Long-Term Incentive Plan to replace the restricted
     stock award program (see Note 19). Stock award expense is typically
     classified as general and administrative expense in the statement of
     operations. This charge is included in the "restructuring and similar
     expense" category because this type of expense is not expected to recur in
     the foreseeable future. The accrual balance related to these charges was
     nil at December 31, 2002 ($ 1,177,000 at December 31, 2001).

(d)  These charges are included in the "restructuring and similar expense"
     category as the charges relate primarily to personnel who are not expected
     to be replaced. Severance expense is typically classified as general and
     administrative expense in the statement of operations. The accrual balance
     related to these charges totaled $3,489,000 at December 31, 2002
     ($3,666,000 at December 31, 2001).

(e)  This charge represents the cost of the nationwide settlement between
     Roto-Rooter and the DOL for wages and benefits of prior periods. The charge
     is included in the "restructuring and similar expense" category as it is
     not expected to recur in the foreseeable future. Wages and related benefits
     are typically classified as cost of services provided and goods sold in the
     statement of operations. The accrual balance related to this charge totaled
     nil at December 31, 2002 ($250,000 at December 31, 2001).

(f)  The fixed asset impairment charges are included in the "restructuring and
     similar expense" category because they are not expected to recur in the
     foreseeable future. The depreciation of property and equipment is typically
     included in a separate line (depreciation) in the statement of operations.

(g)  Amounts are included in cost of services provided and goods sold in the
     consolidated statement of operations.

(h)  Amounts are included in general and administrative expenses in the
     consolidated statement of operations.

These costs were charged to the following accounts in the consolidated statement
of operations in 2001 (in thousands):

<TABLE>
<S>                                               <C>
Cost of services provided and goods sold          $  2,027
General and administrative expenses                    450
Impairment, restructuring and similar
  expenses                                          24,734
                                                  --------
      Total                                       $ 27,211
                                                  ========
</TABLE>

         The combined aftertax impact of the restructuring and similar expenses
and other charges for 2001 was $16,943,000 ($1.74 per share).

                                      F-17

<PAGE>

         During 2002, the Company decided to retain several of Plumbing and
Drain Cleaning's non-branded plumbing and HVAC businesses. In the aggregate, the
retained operations generated $16,162,000 of net revenues and $241,000 of
operating profit in 2002. For 2003, these businesses have been assimilated into
the Plumbing and Drain Cleaning segment.

         The operating results for businesses divested within the Plumbing and
Drain Cleaning and Service America segments as a part of the restructuring in
2001 were (in thousands):

<TABLE>
<CAPTION>
                                       FOR THE YEARS ENDED
                                          DECEMBER 31,
                                      --------------------
                                        2002         2001
                                      -------      -------
<S>                                   <C>          <C>
Service revenues and sales:
   Non-Roto-Rooter-
     branded businesses               $   403      $ 6,275
   Service America's
     Tucson branch                          -        1,664
Operating loss:
   Non-Roto-Rooter-
     branded businesses                  (106)        (754)
   Service America's
     Tucson branch                          -         (430)
</TABLE>

         Accruals related to restructuring charges recorded in 2001 are
summarized below (in thousands):

<TABLE>
<S>                                                                                <C>
Cost of exiting HVAC and non-Roto-Rooter-
        branded plumbing businesses                                                $ 11,205
Cost of closing Service America's Tucson branch                                       1,171
                                                                                   --------
          Total restructuring expenses for 2001                                      12,376
Less:  noncash charge for reduction in carrying value of goodwill                   (10,626)
Less:  noncash charge for reduction in carrying value of identifiable
       intangible assets                                                               (527)
Less:  noncash charge for property and equipment impairment                            (380)
Less:  noncash charge for reduction in carrying value of other tangible assets         (288)
                                                                                   --------
       Accrual balance at December 31, 2001                                             555
Plus:  Proceeds from HVAC operation disposed of in 2002 in excess of
       adjusted book value                                                             (400)
Less:  Accrual of additional expenses and exposure on disposal of HVAC
       operation in 2002                                                                377
Less:  Cash payments during the year                                                   (255)
                                                                                   --------
          Accrual balance at December 31, 2002                                          277
Less:  Accrual adjustment for property and equipment impairment                        (117)
Less:  Noncash charge for property and equipment impairment                             (39)
Less:  Cash payments during the year                                                    (51)
                                                                                   --------
          Accrual balance at December 31, 2003                                     $     70
                                                                                   ========
</TABLE>

Management believes that these accrual balances are adequate and justifiable as
of December 31, 2003.

                                      F-18

<PAGE>

6. DISCONTINUED OPERATIONS

         Discontinued operations comprise (in thousands, except per share
amounts):

<TABLE>
<CAPTION>
                                                                             FOR THE YEARS ENDED
                                                                                 DECEMBER 31,
                                                                      ---------------------------------
                                                                       2003          2002        2001
                                                                      -------      -------      -------
<S>                                                                   <C>          <C>          <C>
Patient Care (2002):
   Income before income taxes                                         $     -        5,233          262
   Income taxes                                                             -       (2,142)         264
                                                                      -------      -------      -------
   Income from operations, net of income taxes                              -        3,091          526
   Gain on disposal, net of income taxes of $594                            -          304            -
                                                                      -------      -------      -------
     Total Patient Care                                                     -        3,395          526
                                                                      =======      =======      =======
Cadre Computer (2001):
   Loss before income taxes                                                 -            -         (734)
   Income tax benefit                                                       -            -          255
   Minority interest                                                        -            -           46
                                                                      -------      -------      -------
   Loss from operations, net of income taxes                                -            -         (433)
   Loss on disposal, net of income tax benefit of $829                      -            -       (1,540)
                                                                      -------      -------      -------
     Total Cadre Computer                                                   -            -       (1,973)
                                                                      -------      -------      -------
Adjustment to accruals of operations discontinued in prior years:
   Sublease accrual (1991)                                                  -       (1,145)      (1,700)
   Allowance for uncollectible notes receivable (2001)                     99          477            -
   Severance and other accruals (1997)                                      -          180         (170)
                                                                      -------      -------      -------
   Gain/(loss) before income taxes                                         99         (488)      (1,870)
   Income tax refund (1997)                                                 -        2,861            -
   State income tax accrual (1997)                                          -            -        1,700
   All other income taxes                                                 (35)         541          170
                                                                      -------      -------      -------
     Total adjustments                                                     64        2,914            -
                                                                      =======      =======      =======
        Total discontinued operations                                 $    64      $ 6,309      $(1,447)
                                                                      =======      =======      =======
Earnings/(loss) per share                                             $     -      $  0.64      $ (0.15)
                                                                      =======      =======      =======
Diluted earnings/(loss) per share                                     $     -      $  0.64      $ (0.15)
                                                                      =======      =======      =======
</TABLE>

         The $99,000 and $477,000 reductions to the allowance for uncollectible
 notes receivable from Cadre Computer (sold in 2001) are attributable to Cadre
 Computer's experiencing better than anticipated financial results and to the
 expiration and nonuse of $350,000 of Cadre Computer's line of credit with the
 Company. In anticipation that Cadre Computer would draw down the full $500,000
 line of credit to finance operating losses, this line of credit had been fully
 reserved in 2001 when Cadre Computer was sold to its employees. The remainder
 of the adjustment in 2002 ($127,000) and 2003 ($99,000) was recorded because
 Cadre Computer began making payments on its existing notes that previously were
 fully reserved.

         During 2002, the Company sold Patient Care to an investor group that
included Schroder Ventures Life Sciences Group, Oak Investment Partners,
Prospect Partners and Salix Ventures. Patient Care provides home-healthcare
services primarily in the New York-New Jersey-Connecticut area. The proceeds to
the Company from the sale of Patient Care comprised the following (in
thousands):

<TABLE>
<S>                               <C>
Cash                              $52,500
Note receivable                    12,500
Cash placed in escrow               5,000
Common stock purchase warrant       1,445
Purchase price adjustment
   due to seller                    1,251
                                  -------
Total                             $72,696
                                  =======
</TABLE>

         The note receivable is a senior subordinated note ("Note") due October
11, 2007, that bears interest at the annual rate of 7.5% through September 30,
2004, 8.5% from October 1, 2004 through September 30, 2005, and 9.5% thereafter.
The Note is presented on a separate line in the consolidated balance sheet. The
$5,000,000 cash placed in escrow is subject to the collection of Patient Care's
receivables with third party payers. Of this amount, $2,500,000 (included in
prepaid expenses and other current assets in 2002) was

                                      F-19

<PAGE>

distributed as of October 2003 and $2,500,000 (included in prepaid expenses and
other current assets in 2003 and in other assets in 2002) is expected to be
distributed as of October 2004. Based on the collection history of Patient Care,
the Company expects to collect the funds held in escrow in full. The common
stock purchase warrant permits the Company to purchase up to 2% of Patient Care.
The warrant is recorded at its estimated fair value on the date acquired and is
included in other investments in the consolidated balance sheet. The final value
of the estimated balance sheet valuation is expected to be determined in 2004,
based on Patient Care's closing balance sheet, and could impact the amount of
the gain recorded on the sale of Patient Care.

         The adjustments to the sublease accrual ($1,145,000 in 2002 and
$1,700,000 in 2001) were made to cover rental charges for vacant space
previously occupied by the Company's former subsidiary, DuBois Chemicals, Inc.
("DuBois"), sold in 1991. The adjustments made in 2001 moved the dates the floor
space was assumed to be sublet further into the future, but assumed all
unoccupied space would be sublet at market rental rates. Although the Company
was able to sublease varying amounts of space during the past two years, as of
December 31, 2003, the Company was unable to sublease one of the floors covered
under its lease. The adjustments made in 2002 decreased the amount of sublease
rentals that were assumed to be received to include rentals only from current
sublessees. As a result, the sublease accrual will now cover the cost of all
unoccupied space and the shortfall of current subleased rentals versus lease
rental rates and operating costs.

         The $2,861,000 federal income tax refund received in 2002 related to
the tax provision recorded as a part of the sale of Omnia in 1997. As a result
of a tax case settled in 2001, the Company filed an amended 1997 federal income
tax return in August 2001 and claimed a tax benefit on its loss on the sale of
Omnia -- a loss previously treated as nondeductible.

         During 2001, the Company discontinued its Cadre Computer segment and on
August 31, 2001, completed the sale of the business and assets of Cadre Computer
to a company owned by the former Cadre Computer employees for a note receivable
that was fully reserved on the date of sale. During 2002, Cadre Computer
borrowed an additional $150,000 from the Company and made principal payments of
$31,000 on the first note. During 2003, Cadre made principal payments of $96,000
on the first note. As of December 31, 2003, the Company's notes receivable from
Cadre Computer totaled $422,000, against which the Company has an allowance for
uncollectible notes totaling $323,000. The balances in the allowances for
uncollectible notes receivable from Cadre Computer are considered adequate at
December 31, 2003 and 2002.

         Revenues generated by discontinued operations comprise (in thousands):

<TABLE>
<CAPTION>
                          FOR THE YEARS ENDED
                              DECEMBER 31,
                          -------------------
                           2002         2001
                         --------     --------
<S>                      <C>          <C>
Patient Care             $116,191     $139,208
Cadre Computer                  -        5,089
                         --------     --------
   Total                 $116,191     $144,297
                         ========     ========
</TABLE>

         The $1,700,000 reduction of the state income tax accrual in 2001
relates to the tax provision recorded on the 1997 sale of National. During 2001,
the statutes of limitations on various Company 1997 state returns expired, with
the result being that the Company's state income tax accrual exceeded its
estimated exposures. The accrual was reduced and credited to the income tax
provision in 2001.

         At December 31, 2003, other current liabilities include accruals of
$3,731,000 and other liabilities include accruals of $3,142,000 for costs
related to discontinued operations. The estimated timing of payments of these
liabilities, relating primarily to sublease and environmental liabilities,
follows (in thousands):

<TABLE>
<S>                <C>
2004               $ 3,731
2005                 1,791
2006                   731
2007                   200
2008                   200
AFTER 2008             220
                   -------
   TOTAL           $ 6,873
                   =======
</TABLE>

         The Company's chairman, president and chief executive officer and the
former chief administrative officer (currently a director of the Company) are
directors of Cadre Computer. In addition, the former chief administrative
officer holds a 40% equity ownership interest in and is chairman and chief
executive officer of Cadre Computer.

7. BUSINESS COMBINATIONS

         During 2003, six purchase business combinations were completed within
the Plumbing and Drain Cleaning segment for a total of $3.9 million in cash.
During 2002, one purchase business combination was completed within the Plumbing
and Drain Cleaning segment for a purchase price of $1.2 million in cash. During
2001, two purchase business combinations were completed within the Plumbing and
Drain Cleaning segment for an aggregate purchase price of $1.6 million in cash.

                                      F-20

<PAGE>

         All of the aforementioned business combinations involved operations
primarily in the business of providing plumbing repair and drain cleaning
services. The unaudited pro forma results of operations, assuming purchase
business combinations completed in 2003, 2002 and 2001 were completed on January
1 of the preceding year, are presented below (in thousands, except per share
data):

<TABLE>
<CAPTION>
                                          FOR THE YEARS ENDED
                                              DECEMBER 31,
                                  -------------------------------------
                                    2003          2002           2001
                                  --------     ---------       --------
<S>                               <C>          <C>             <C>
Service revenues and sales        $310,669     $ 317,010       $338,714
Net loss                            (3,298)       (2,204)       (12,057)
Loss per share and
   loss per diluted share            (0.33)        (0.22)         (1.24)
</TABLE>

         The excess of the purchase price over the fair value of the net assets
acquired in purchase business combinations is classified as goodwill. A summary
of net assets acquired in purchase business combinations follows (in thousands):

<TABLE>
<CAPTION>
                                             FOR THE YEARS ENDED
                                                 DECEMBER 31,
                                      --------------------------------
                                        2003         2002       2001
                                      -------      -------     -------
<S>                                   <C>          <C>        <C>
Working capital                       $  (114)     $    60    $      -
Identifiable intangible assets              -           50          90
Goodwill                                4,246        1,110       1,428
Other assets and liabilities--net        (282)          16          37
                                      -------      -------     -------
   Total net assets                   $ 3,850      $ 1,236     $ 1,555
                                      =======      =======     =======
</TABLE>

         All of the goodwill related to business combinations completed in 2003,
2002 and 2001 is expected to be deductible for income tax purposes. Since these
transactions occurred after June 30, 2001, the related goodwill is not being
amortized. The weighted average lives of the identifiable intangible assets
acquired in 2002 and 2001 are 7.0 years and 6.1 years, respectively.

8. OTHER INCOME -- NET

         Other income -- net from continuing operations comprises the following
(in thousands):

<TABLE>
<CAPTION>
                                          FOR THE YEARS ENDED
                                             DECEMBER 31,
                                   --------------------------------
                                     2003        2002         2001
                                   -------     -------      -------
<S>                                <C>         <C>          <C>
Interest income                    $ 2,717     $ 3,308      $ 2,872
Dividend income                      1,540       2,461        2,548
Market value gains/(losses) on
trading investments of
 employee benefit trusts             1,600      (1,401)        (820)
Investment impairment charge             -      (1,200)           -
Gains on sales and redemption
     of investments                  5,390       1,141          993
Other--net                              12         (27)        (606)
                                   -------     -------      -------
   Total other income--net         $11,259     $ 4,282      $ 4,987
                                   =======     =======      =======
</TABLE>

9.  INCOME TAXES

         The provision for income taxes comprises the following (in thousands):

<TABLE>
<CAPTION>
                                          FOR THE YEARS ENDED
                                              DECEMBER 31,
                                    ---------------------------------
                                     2003         2002          2001
                                    -------      -------      -------
<S>                                 <C>          <C>          <C>
Continuing Operations:
   Current
     U.S. federal                   $ 3,818      $ 3,938      $ 1,196
     U.S. state and local             1,179        1,913           59
     Foreign                            253          141          (71)
   Deferred
     U.S. federal                      (485)         475       (6,139)
     Foreign                            (16)         (16)         (34)
                                    -------      -------      -------
        Total                       $ 4,749      $ 6,451      $(4,989)
                                    =======      =======      =======

Discontinued Operations:
   Current U.S. federal             $  (649)     $(2,954)     $(4,242)
   Current U.S. state and local           -          794       (1,454)
   Deferred U.S. federal                684        1,494        2,478
                                    -------      -------      -------
        Total                       $    35      $  (666)     $(3,218)
                                    =======      =======      =======
</TABLE>

                                      F-21

<PAGE>

         A summary of the significant temporary differences for continuing
operations that give rise to deferred income tax assets/(liabilities) follows
(in thousands):

<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                     ----------------------
                                                       2003          2002
                                                     --------      --------
<S>                                                  <C>           <C>
Deferred compensation                                $  7,015      $  6,117
Accrued insurance expense                               6,091         5,987
Accruals related to discontinued operations             2,872         3,556
Severance payments                                      1,779         1,380
Allowances for uncollectible accounts receivable        1,052         1,184
Accrued state taxes                                       974         1,047
Market valuation of investments                           475             -
Amortization of intangibles                                 -           314
Other                                                   2,463         2,527
                                                     --------      --------
   Gross deferred income tax assets                    22,721        22,112
                                                     --------      --------
Accelerated tax depreciation                           (2,631)       (4,388)
Investment basis difference                            (2,050)         (248)
Amortization of intangibles                              (619)            -
Market valuation of investments                             -          (960)
Other                                                  (1,776)       (2,096)
                                                     --------      --------
   Gross deferred income tax liabilities               (7,076)       (7,692)
                                                     --------      --------
     Net deferred income tax assets                  $ 15,645      $ 14,420
                                                     ========      ========
</TABLE>

         Included in other assets at December 31, 2003, are deferred income tax
assets of $5,589,000 (December 31, 2002 -- $4,526,000). Based on the Company's
history of prior operating earnings and its expectations for future growth,
management has determined that the operating income of the Company will, more
likely than not, be sufficient to ensure the full realization of the deferred
income tax assets. The difference between the actual income tax
provision/(benefit) for continuing operations and the income tax
provision/(benefit) calculated at the statutory U.S. federal tax rate is
explained as follows (in thousands):

<TABLE>
<CAPTION>
                                                       FOR THE YEARS ENDED
                                                            DECEMBER 31,
                                               -----------------------------------
                                                 2003          2002          2001
                                               --------      --------      -------
<S>                                            <C>           <C>           <C>
Income tax provision/(benefit) calculated
   using the statutory rate of 35%             $    115      $   (841)     $(5,504)
Nondeductible goodwill impairment charge          3,513         7,120            -
Nondeductible intangibles impairment charge         562             -            -
State and local income taxes, less federal
   income tax effect                                767         1,243           39
Domestic dividend exclusion                        (441)         (686)        (706)
Unfavorable/(favorable) federal adjustments         103          (314)         337
Foreign income taxes, less federal income
   tax effect                                        26           (85)        (277)
Nondeductible amortization of goodwill                -             -        1,203
Other--net                                          104            14          (81)
                                               --------      --------      -------
   Actual income tax provision/(benefit)       $  4,749      $  6,451      $(4,989)
                                               ========      ========      =======
   Effective tax rate                           1,447.9%       (268.5)%       31.7%
                                               ========      ========      =======
</TABLE>

         Income tax benefits attributable to the exercise of non-qualified
employee stock options were $960,000 during the year ended December 31, 2003
(2002 - $122,000; 2001 - $219,000) and were credited directly to additional
paid-in capital.

         Income taxes included in the components of other comprehensive loss are
as follows (in thousands):

<TABLE>
<CAPTION>
                                           FOR THE YEARS ENDED
                                                DECEMBER 31,
                                     ----------------------------------
                                       2003         2002          2001
                                     --------      ------       -------
<S>                                  <C>           <C>          <C>
Unrealized holding gains/(losses)    $   (180)     $  132       $   905
Reclassification adjustment            (2,039)       (366)         (290)
</TABLE>

                                      F-22

<PAGE>

         Summarized below are the total amounts of income taxes paid/(refunded)
during the years ended December 31 (in thousands):

<TABLE>
<S>     <C>
2003    $ 2,715
2002       (910)
2001      5,772
</TABLE>

10. CASH EQUIVALENTS

         Included in cash and cash equivalents at December 31, 2003, are cash
equivalents in the amount of $49,356,000 (2002 -- $37,075,000). The cash
equivalents at both dates consist of investments in various money market funds
and repurchase agreements yielding interest at a weighted average rate of 0.9%
in 2003 and 1.1% in 2002.

         From time to time throughout the year, the Company invests its excess
cash in repurchase agreements directly with major commercial banks. The Company
does not physically hold the collateral, but the term of such repurchase
agreements is less than 10 days. Investments of significant amounts are spread
among a number of banks, and the amounts invested in each bank are varied
constantly.

11. PROPERTIES AND EQUIPMENT

         A summary of properties and equipment follows (in thousands):

<TABLE>
<CAPTION>
                                             DECEMBER 31,
                                      ------------------------
                                         2003           2002
                                      ---------      ---------
<S>                                   <C>            <C>
Land                                  $   2,238      $   2,538
Buildings                                16,423         18,310
Transportation equipment                 22,061         26,185
Machinery and equipment                  36,281         34,440
Computer software                         6,947          4,327
Furniture and fixtures                   19,700         18,354
Projects under construction                   -          6,577
                                      ---------      ---------
   Total properties and equipment       103,650        110,731
Less accumulated depreciation           (62,646)       (62,370)
                                      ---------      ---------
     Net properties and equipment     $  41,004      $  48,361
                                      =========      =========
</TABLE>

12. LONG-TERM DEBT AND LINES OF CREDIT

         A summary of the Company's long-term debt follows (in thousands):

<TABLE>
<CAPTION>
                                      DECEMBER 31,
                                ----------------------
                                  2003           2002
                                --------      --------
<S>                             <C>           <C>
Senior notes, due 2005-2009     $ 25,000      $ 25,000
Other                              1,379         1,012
                                --------      --------
   Subtotal                       26,379        26,012
Less: current portion               (448)         (409)
                                --------      --------
     Long-term debt, less
        current portion         $ 25,931      $ 25,603
                                ========      ========
</TABLE>

LINES OF CREDIT

         The Company had approximately $51,357,000 of unused short-term lines of
credit with various banks at December 31, 2003.

SENIOR NOTES

         In March 1997, the Company borrowed $25,000,000 from several insurance
companies. Principal is repayable in five annual installments of $5,000,000
beginning on March 15, 2005, and bears interest at the rate of 7.31% per annum.
Interest is payable on March 15 and September 15 of each year.

                                      F-23

<PAGE>

         On December 31, 2001, the Company prepaid the outstanding balances of
its 8.15% senior notes due 2002 through 2004 and its 10.67% senior notes due in
2002 and 2003. The principal balances outstanding at the time of prepayment were
$30,000,000 and $2,000,000, respectively. Pretax penalties incurred on these
prepayments aggregated $2,617,000 ($1,701,000 aftertax or $.18 per share) and
are presented as a loss on extinguishment of debt in the statement of
operations.

OTHER

         Other long-term debt has arisen from loans in connection with
acquisitions of various businesses and properties. Interest rates range from
7.3% to 8.0%, and the obligations are due on various dates through December
2010.

         The following is a schedule by year of required long-term debt payments
as of December 31, 2003 (in thousands):

<TABLE>
<S>                          <C>
2004                         $    448
2005                            5,190
2006                            5,200
2007                            5,210
2008                            5,162
AFTER 2008                      5,169
                             --------
   TOTAL LONG-TERM DEBT      $ 26,379
                             ========
</TABLE>

         Summarized below are the total amounts of interest paid during the
years ended December 31 (in thousands):

<TABLE>
<S>             <C>
2003            $ 3,197
2002              3,979
2001              7,007
</TABLE>

         No interest was capitalized during the years ended December 31, 2003,
2002 and 2001.

NEW CREDIT AGREEMENTS
         On February 24, 2004, in conjunction with the Company's acquisition of
the Vitas shares not previously owned, the Company retired its senior notes due
2005 through 2009 and cancelled its revolving credit agreement with Bank One,
N.A. ("Bank One"). To fund this acquisition, the Company issued 2 million shares
of capital stock in a private placement and borrowed $335 million as follows:

                  -    $75 million drawn down under a $135 million secured
                       revolving credit/term loan facility ("New Credit
                       Facility") with Bank One. The facility comprises a $35
                       million term loan and $100 million revolving credit
                       facility, including up to $40 million in letters of
                       credit. For the term loan, principal payments of
                       $1,250,000 plus interest (LIBOR + 3.50%) are due
                       quarterly beginning in May 2004. For the revolving line
                       of credit, interest payments (LIBOR + 3.25%) are due
                       quarterly beginning in May 2004. Payment of unpaid
                       principal and interest is due February 2009.

                  -    $110 million from the issuance of privately placed
                       floating rate senior secured notes ("Floating Rate
                       Notes") due 2010. Interest payments (LIBOR + 3.75%) are
                       due quarterly beginning in May 2004, and payment of
                       unpaid principal and interest is due February 2010.

                  -    $150 million from the issuance of privately placed 8.75%
                       senior notes ("Fixed Rate Notes") due 2011. Quarterly
                       interest payments are due beginning in May 2004 and
                       payment of unpaid principal and interest is due February
                       2011.

         In addition, the Company anticipates drawing down approximately $26
million of letters of credit under the New Credit Facility in March 2004. After
these borrowings and letters of credit, the Company will have $34 million of
unused lines of credit under the New Credit Facility. Combined payments for the
New Credit Facility, the Floating Rate Notes and the Fixed Rate Notes are
summarized as follows (in thousands):

<TABLE>
<S>                         <C>
2004                        $   3,750
2005                            5,000
2006                            5,000
2007                            5,000
2008                            5,000
2009 AND LATER                311,250
                            ---------
   TOTAL                    $ 335,000
                            =========
</TABLE>

                                      F-24
<PAGE>

         Collectively, the New Credit Facility, the Floating Rate Notes and the
Fixed Rate Notes provide for affirmative and restrictive covenants including,
without limitation, requirements or restrictions (subject to exceptions) related
to the following:

     -   use of proceeds of loans,

     -   restricted payments, including payments of dividends and retirement of
         stock (permitting $.48 per share dividends so long as the aggregate
         amount of dividends in any fiscal year does not exceed $7.0 million and
         providing for additional principal prepayments to the extent dividends
         exceed $5.0 million in any fiscal year), with exceptions for existing
         employee benefit plans and stock option plans,

     -   mergers and dissolutions,

     -   sales of assets,

     -   investments and acquisitions,

     -   liens,

     -   transactions with affiliates,

     -   hedging and other financial contracts,

     -   restrictions on subsidiaries,

     -   contingent obligations,

     -   operating leases,

     -   guarantors,

     -   collateral,

     -   sale and leaseback transactions,

     -   prepayments of indebtedness, and

     -   maximum annual capital expenditures of $20 million subject to one-year
         carry-forwards on amounts not used during the previous year.

         In addition, the credit agreements provide that the Company will be
required to meet the following financial covenants, to be tested quarterly,
beginning with the quarter ending June 30, 2004:

     -   a minimum net worth requirement, which requires a net worth of at least
         (i) $232 million plus (ii) 50% of consolidated net income (if positive)
         beginning with the quarter ending June 30, 2004, plus (iii) the net
         cash proceeds from issuance of the Company's capital stock or the
         capital stock of the Company's subsidiaries;

     -   a maximum leverage ratio, calculated quarterly, based upon the ratio of
         consolidated funded debt to consolidated EBITDA, which will require
         maintenance of a ratio of 5.5 to 1.00 through December 31, 2004, a
         ratio of 4.75 to 1.00 from January 1 through December 31, 2005, and
         4.25 to 1.00 thereafter;

     -   a maximum senior leverage ratio, calculated quarterly, based upon the
         ratio of senior consolidated funded debt to consolidated EBITDA (which
         ratio excludes indebtedness in respect of the Fixed Rate Notes), which
         will require maintenance of a ratio of 3.375 to 1.00 through December
         31, 2004, a ratio of 2.875 to 1.00 from January 1 through December 31,
         2005, and 2.625 to 1.00 thereafter; and

     -   a minimum fixed charge coverage ratio, based upon the ratio of
         consolidated EBITDA minus capital expenditures to consolidated interest
         expense plus consolidated current maturities (including capitalized
         lease obligations) plus cash dividends paid on equity securities plus
         expenses for taxes, which will require maintenance of a ratio of 1.15
         to 1.00 through December 31, 2004, 1.375 to 1.00 from January 1 through
         December 31, 2005, and 1.50 to 1.00 thereafter.

13. OTHER LIABILITIES

         At December 31, 2003, other current liabilities comprised the following
(in thousands):

<TABLE>
<CAPTION>
                                             DECEMBER 31,
                                         -------------------
                                           2003         2002
                                         -------     -------
<S>                                      <C>         <C>
Accrued incentive compensation           $ 4,140     $ 3,738
Accrued divestiture expenses               3,731       3,661
Accrued savings and retirement
   contribution                            3,338       3,642
Accrued advertising                        1,103       3,195
Other                                      8,811       9,277
                                         -------     -------
     Total other current liabilities     $21,123     $23,513
                                         =======     =======
</TABLE>

                                      F-25

<PAGE>

Other liabilities at December 31, 2003, included income tax liabilities totaling
$10,215,000 (2002 -- $9,194,000).

         At December 31, 2003, the Company's accrual for its estimated liability
for potential environmental cleanup and related costs arising from the sale of
DuBois amounted to $2,070,000. Of this balance, $870,000 is included in other
liabilities and $1,200,000 is included in other current liabilities. The Company
is contingently liable for additional DuBois-related environmental cleanup and
related costs up to a maximum of $18,036,000. On the basis of a continuing
evaluation of the Company's potential liability, management believes it is not
probable this additional liability will be paid. Accordingly, no provision for
this contingent liability has been recorded. The potential liability is not
insured, and the recorded liability does not assume the recovery of insurance
proceeds. Also, the environmental liability has not been discounted because it
is not possible to reliably project the timing of payments. It is currently
expected that approximately $1,200,000 of the liability will be paid out in
2004; the timing of the remainder of the payments is not currently estimable.
Management believes that any adjustments to its recorded liability will not
materially adversely affect its financial position or results of operations.

         At December 31, 2003, the Company's accrual for losses on subleases of
office space formerly occupied by DuBois amounted to $2,847,000 (2002 --
$4,017,000), of which, $1,200,000 (2002 -- $1,200,000) is included in other
current liabilities. The accrual is based on the expectation that space
currently unoccupied will not be sublet during the remainder of the lease term,
which ends April 2006.

         Net proceeds/(uses) of cash from discontinued operations in the
statement of cash flows represent the net proceeds from the sale of Patient Care
in 2002 and the payment of severance, lease and other liabilities relating to
operations disposed of in 1991, 1997 and 2001.

14. PENSION AND RETIREMENT PLANS

         Retirement obligations under various plans cover substantially all
full-time employees who meet age and/or service eligibility requirements. The
major plans providing retirement benefits to the Company's employees are defined
contribution plans.

         The Company has established two ESOPs that purchased a total of
$56,000,000 of the Company's capital stock. In December 1997, the Company
restructured the ESOP loans and internally financed $16,201,000 of the
$21,766,000 ESOP loans outstanding at December 31, 1997.

         Substantially all eligible employees of the Plumbing and Drain Cleaning
segment participate in the ESOPs. Eligible employees of the Company are also
covered by other defined contribution plans.

         Expenses charged to continuing operations for the Company's pension and
profit-sharing plans, ESOPs, excess benefit plans and other similar plans
comprise the following (in thousands):

<TABLE>
<CAPTION>
                                   FOR THE YEARS ENDED
                                        DECEMBER 31,
                               ----------------------------
                                2003       2002       2001
                               ------     ------     ------
<S>                            <C>        <C>        <C>
Compensation cost of ESOPs     $1,138     $1,746     $2,144
Pension, profit-sharing
   and other similar plans      3,837      3,312      3,934
                               ------     ------     ------
     Total                     $4,975     $5,058     $6,078
                               ======     ======     ======
Dividends on ESOP shares
   used for debt service       $  138     $  197     $  280
                               ======     ======     ======
</TABLE>

         At December 31, 2003, there were 227,346 allocated shares (2002 --
212,712 shares) and 52,212 unallocated shares (2002 -- 83,653 shares) in the
ESOP trusts.

         The Company has excess benefit plans for key employees whose
participation in the qualified plans is limited by ERISA rules. Benefits are
determined based on theoretical participation in the qualified ESOPs. Prior to
September 1, 1998, the value of these benefits was invested in shares of the
Company's stock and in mutual funds, which were held by grantor trusts.
Currently, benefits are invested in only mutual funds, and participants are not
permitted to diversify accumulated benefits invested in shares of the Company's
stock. Trust assets invested in shares of the Company's capital stock are
included in treasury stock, and the corresponding liability is included in a
separate component of shareholders' equity. At December 31, 2003, these trusts
held 67,174 shares or $2,328,000 of the Company's stock (December 31, 2002 --
66,141 shares or $2,290,000). The diversified assets of the Company's excess
benefit and deferred compensation plans, all of which are invested in various
mutual funds, totaled $17,743,000 at December 31, 2003 (December 31, 2002 --
$15,176,000), and are included in other assets. The corresponding liabilities
are included in other liabilities.

15. LEASE ARRANGEMENTS

         The Company, as lessee, has operating leases that cover its corporate
office headquarters, various warehouse and office facilities, office equipment
and transportation equipment. The remaining terms of these leases range from one
year to 15 years, and in

                                      F-26

<PAGE>

most cases, management expects that these leases will be renewed or replaced by
other leases in the normal course of business. Substantially all equipment is
owned by the Company.

         The following is a summary of future minimum rental payments and
sublease rentals to be received under operating leases that have initial or
remaining noncancellable terms in excess of one year at December 31, 2003 (in
thousands):

<TABLE>
<S>                                      <C>
2004                                     $   6,064
2005                                         5,532
2006                                         2,570
2007                                           792
2008                                            21
AFTER 2008                                     205
                                         ---------
   TOTAL MINIMUM RENTAL PAYMENTS            15,184
LESS MINIMUM SUBLEASE RENTALS               (3,526)
                                         ---------
    NET MINIMUM RENTAL PAYMENTS          $  11,658
                                         =========
</TABLE>

         Total rental expense incurred under operating leases for continuing
operations follows (in thousands):

<TABLE>
<CAPTION>
                                   FOR THE YEARS ENDED
                                        DECEMBER 31,
                             --------------------------------
                                2003        2002        2001
                             ----------   ---------   -------
<S>                          <C>          <C>         <C>
Total rental payments        $    6,371   $   6,037   $ 6,716
Less:  sublease rentals          (1,602)     (1,196)     (929)
                             ----------   ---------   -------
   Net rental expense        $    4,769   $   4,841   $ 5,787
                             ==========   =========   =======
</TABLE>

16. FINANCIAL INSTRUMENTS

         The following methods and assumptions are used in estimating the fair
value of each class of the Company's financial instruments:

     -   For cash and cash equivalents, accounts receivable, statutory deposits
         and accounts payable, the carrying amount is a reasonable estimate of
         fair value because of the liquidity and short-term nature of these
         instruments.

     -   For other investments and other assets, fair value is based upon quoted
         market prices for these or similar securities, if available. Included
         in other investments, below, is the Company's investment in privately
         held Vitas, which provides palliative and medical care and related
         services to terminally ill patients. In connection with Vitas'
         refinancing its debt obligations in April 2001, the Company and Vitas
         agreed to extend the maturity of the Vitas 9% Cumulative Preferred
         Stock ("Preferred") to April 1, 2007. In addition, Vitas issued a
         Common Stock Purchase Warrant ("Warrant C") to the Company for
         approximately 1,636,000 common shares and extended the expiration dates
         of the Company's other Vitas Common Stock Purchase Warrants ("Other
         Warrants") to December 31, 2007. Warrant C was recorded at its
         estimated fair value of $2,601,000, and at the same time, a discount of
         $2,601,000 to the Preferred was recorded. The appraised value of the
         Other Warrants was estimated to be $4,048,000 in 2001 (versus a
         carrying value of $1,500,000). The value of the Preferred for 2002 was
         based on the present value of the mandatory redemption payments, using
         an interest rate of 9.0%, a rate which management believes is
         reasonable in view of risk factors attendant to the investment.

         On August 18, 2003, Vitas retired the Company's investment in the 9%
         Redeemable Preferred Stock of Vitas. Cash proceeds to the Company
         totaled $27,270,000, and the Company realized a pretax gain of
         $1,846,000 ($1,200,000 aftertax or $.12 per share) on the redemption.
         On October 14, 2003, the Company exercised two of its three warrants
         (Warrants A and B) to purchase 4,158,000 common shares of Vitas for
         $18.0 million in cash. At December 31, 2003, the Company's common stock
         ownership in Vitas had a carrying value of $21.0 million. The estimated
         fair value of the Company's common stock ownership and Warrant C at
         December 31, 2003, assumes a $30 share price based on the Company's
         offer to purchase Vitas common stock.

     -   The fair value of the Company's long-term debt is estimated by
         discounting the future cash outlays associated with each debt
         instrument using interest rates currently available to the Company for
         debt issues with similar terms and remaining maturities.

     -   The fair value of the Mandatorily Redeemable Convertible Preferred
         Securities of the Chemed Capital Trust ("Preferred Securities") is
         based on the quoted market value at the end of the period.

                                      F-27

<PAGE>

         The estimated fair values of the Company's financial instruments are as
follows (in thousands, except footnote):

<TABLE>
<CAPTION>
                                                   DECEMBER 31,
                                  -----------------------------------------------
                                           2003                     2002
                                  ---------------------     ---------------------
                                  CARRYING       FAIR        CARRYIN       FAIR
                                   AMOUNT        VALUE       AMOUNT        VALUE
                                  --------     --------     --------     --------
<S>                               <C>          <C>          <C>          <C>
OTHER INVESTMENTS:
   EQUITY INVESTMENT IN VITAS     $ 21,035     $124,747     $      -     $      -
   OTHER (a)                         4,046       41,536       37,326       39,874
                                  --------     --------     --------     --------
     TOTAL                        $ 25,081     $166,283     $ 37,326     $ 39,874
                                  ========     ========     ========     ========
LONG-TERM DEBT                    $ 26,379     $ 28,307     $ 26,012     $ 28,622
PREFERRED SECURITIES                14,126       17,657       14,186       14,112
</TABLE>

(a) Amounts for 2002 include $27,243,000 invested in the Preferred.

         Disclosures regarding the Company's equity investments in Vitas and
equity securities classified as available-for-sale, are summarized below (in
thousands):

<TABLE>
<CAPTION>
                                         DECEMBER 31,
                                  -----------------------
                                     2003          2002
                                  ----------     --------
<S>                               <C>            <C>
Aggregate fair value:
   Equity investment in Vitas     $  124,747     $      -
   Other                              41,536       39,874
                                  ----------     --------
     Total                        $  166,283     $ 39,874
                                  ==========     ========
Gross unrealized holding gains    $        -     $  8,239
Gross unrealized holding losses            -       (1,223)
Amortized cost:
   Equity investment in Vitas     $   21,035     $      -
   Other                               4,046       32,858
                                  ----------     --------
     Total                        $   25,081     $ 32,858
                                  ==========     ========
</TABLE>

         The chart below summarizes information with respect to
available-for-sale securities sold during the period (in thousands):

<TABLE>
<CAPTION>
                                               FOR THE YEARS ENDED
                                                   DECEMBER 31,
                                          ----------------------------
                                            2003      2002       2001
                                          --------  --------   -------
<S>                                       <C>       <C>        <C>
Proceeds from redemption and sales        $ 31,763  $  1,917   $ 1,377
Gross realized gains                         7,157     1,223     1,112
Gross realized losses                        1,767        82       119
</TABLE>

17. DILUTED LOSS PER SHARE

         Due to the Company's losses from continuing operations in 2003, 2002
and 2001, all potentially dilutive securities were antidilutive for these years.
Therefore, the diluted losses per share were the same as the losses per share in
2003, 2002 and 2001.

         During 2003, 2002 and 2001, all options were excluded from the
computation of diluted loss per share since their impact on the loss per share
was antidilutive. Those options comprise the following:

<TABLE>
<CAPTION>
                                       NUMBER OF OPTIONS OUTSTANDING
                                              AT DECEMBER 31,
                    EXERCISE    -------------------------------------------
 GRANT DATE           PRICE        2003            2002              2001
 ----------         --------    ---------       ---------         ---------
<S>                 <C>         <C>             <C>               <C>
May 2002            $  36.90      256,800         265,600                 -
May 2003               35.85      236,138               -                 -
May 1999               32.19      234,577         371,625           429,250
March 1998             39.13      130,700         153,250           155,550
May 1997               35.94      123,650         152,600           159,413
May 1996               38.75      117,625         159,275           159,425
February 1995          33.63       44,750          67,250            68,000
May 1995               32.19       13,950          35,300            39,950
April 1998             40.53       12,000          12,000            12,000
March 1994             32.13        2,675          24,825            24,825
February 1992          25.38            -               -             3,050
February 1993          28.56            -           1,875             6,875
May 1998               37.78            -               -               750
                                ---------       ---------         ---------
Total                           1,172,865       1,243,600         1,059,088
                                =========       =========         =========
</TABLE>

                                      F-28

<PAGE>

         Due to the Company's loss from continuing operations in 2003, 2002 and
2001, the dilution from the potential conversion of the Preferred Securities was
excluded from the computation of diluted earnings per share. During these
periods, the Preferred Securities were convertible into an average of 383,035
shares, 383,686 shares and 392,704 shares of capital stock, respectively.

18. STOCK INCENTIVE PLANS

         The Company has eight Stock Incentive Plans under which 3,150,000
shares of Roto-Rooter Capital Stock are issued to key employees pursuant to the
grant of stock awards and/or options to purchase such shares. All options
granted under these plans provide for a purchase price equal to the market value
of the stock at the date of grant. The latest plan, covering a total of 450,000
shares, was adopted in May 2002.

         Under the plan adopted in 1983, both nonstatutory and incentive stock
options have been granted. Incentive stock options granted under the 1983 plan
become exercisable in full six months following the date of grant; nonstatutory
options granted under the 1983 plan become exercisable in four annual
installments commencing six months after the date of grant. Under the Long-Term
Incentive Plan, adopted in 1999, up to 250,000 shares may be issued to employees
who are not officers or directors of the Company or its subsidiaries.

         The other plans are not qualified, restricted or incentive stock option
plans under the Internal Revenue Code. Options generally become exercisable six
months following the date of grant in four equal annual installments.

         Data relating to the Company's stock issued to employees follow:

<TABLE>
<CAPTION>
                                         2003                     2002                     2001
                                ---------------------    ---------------------    ---------------------
                                  NUMBER     WEIGHTED     NUMBER      WEIGHTED     NUMBER      WEIGHTED
                                    OF       AVERAGE        OF         AVERAGE       OF         AVERAGE
                                  SHARES      PRICE       SHARES        PRICE      SHARES        PRICE
                                ---------    --------    ---------    --------    ---------    --------
<S>                             <C>          <C>         <C>          <C>         <C>          <C>
Stock options:
   Outstanding at January 1     1,243,600    $  35.50    1,059,088    $  34.91    1,194,756    $  34.62
   Granted                        241,100       35.85      268,600       36.90            -           -
   Exercised                     (245,184)      33.10      (66,738)      31.87     (103,538)      31.74
   Forfeited                         (300)      28.56      (17,350)      34.76      (25,725)      34.43
   Expired                        (66,351)      38.23            -           -       (6,405)      34.60
                                ---------                ---------                ---------
   Outstanding at December 31   1,172,865       35.92    1,243,600       35.50    1,059,088       34.91
                                =========                =========                =========
   Exercisable at December 31     860,187       35.79    1,037,771       35.23      941,149       35.25
                                =========                =========                =========
Stock awards issued                 4,606       34.72        9,034       37.51       17,073       37.73
                                =========                =========                =========
</TABLE>

         Options outstanding at December 31, 2003, comprise the following:

<TABLE>
<CAPTION>
                                       Range of Exercise Prices
                                ---------------------------------------
                                $32.13 to $35.94       $36.90 to $40.53
                                ----------------       ----------------
<S>                             <C>                    <C>
Options outstanding                  419,602                753,263
Average exercise price
   of options outstanding       $      33.45           $      37.30
Average contractual life             4.2 yrs.               7.0 yrs.
Options exercisable                  419,602                440,585
Average exercise price
   of options exercisable       $      33.45           $      33.50
</TABLE>

There were 142,311 shares available for granting of stock options and awards at
December 31, 2003.

         Total compensation cost recognized for stock awards for continuing
operations was $147,000 in 2003 (2002 -- $184,000; 2001 -- $6,328,000). The
expense for 2001 included $4,263,000 resulting from the acceleration of vesting
of restricted stock awards in connection with the restructuring of the Company's
long-term incentive plans, effective December 31, 2001. The shares of capital
stock were issued to key employees and directors at no cost and generally were
previously restricted as to the transfer of ownership.

         During 1999, the Company purchased 101,500 shares of its capital stock
in open-market transactions and sold these shares to certain employees at fair
market value in exchange for interest-bearing notes secured by the shares.
Interest rates on these notes are set at the beginning of each year based on
rates used by the Internal Revenue Service for demand loans (1.80% for 2003;
2.73% for 2002; 5.88% for 2001).

         The notes receivable have no maturity date but become immediately due
and payable at the option of the Company upon the occurrence of any of the
following: (a) the Company, as note holder, deems itself insecure, (b) the
death, insolvency, assignment for the benefit of creditors, or the commencement
of any bankruptcy or insolvency proceedings of, or against, the employee, (c)
any attempted transfer by the employee of the shares of capital stock purchased
by the employee with the notes, or (d) termination of employment. The terms of
the notes receivable place restrictions upon the sale of the underlying shares
of stock, but the shares of stock are not physically restricted from sale.
Should the Company demand payment of the notes and the value of the underlying

                                      F-29

<PAGE>

shares be insufficient to satisfy the remaining note liability, the employee
would be required to pay the Company the difference in cash.

         Activity in the notes receivable accounts, which are presented as a
reduction of stockholders' equity in the consolidated balance sheet, is
summarized below (in thousands):

<TABLE>
<S>                                 <C>
Balance at December 31, 2000        $ 2,886
Accrual of interest                     100
Cash payments                          (196)
Value of shares surrendered          (1,288)
                                    -------
   Balance at December 31, 2001       1,502
Accrual of interest                      26
Cash payments                          (239)
Value of shares surrendered            (337)
                                    -------
   BALANCE AT DECEMBER 31, 2002         952
ACCRUAL OF INTEREST                      16
CASH PAYMENTS                           (11)
VALUE OF SHARES SURRENDERED             (23)
                                    -------
   BALANCE AT DECEMBER 31, 2003     $   934
                                    =======
</TABLE>

Shares surrendered in payment of notes receivable are valued at their fair
market value on the date of surrender.

19. EXECUTIVE LONG-TERM INCENTIVE PLAN

         In May 2002, the shareholders of the Company approved the adoption of
the 2002 Executive Long-Term Incentive Plan ("LTIP") covering officers and key
employees of the Company. The LTIP is administered by the Compensation/Incentive
Committee ("CIC") of the Board of Directors and was adopted to replace the
restricted stock program, which was terminated at the end of 2001. Based on
guidelines established by the CIC, the LTIP covers the granting of cash awards
based on two independent elements: 1) a totally discretionary award based on
operating performance of the Company covering a period greater than one year and
less than four years and 2) an award based on the attainment of a target stock
price of $50 per share during 10 consecutive trading days prior to the fourth
anniversary of the plan.

         As of December 31, 2003, no accrual for awards under the LTIP was made
since it was not possible to estimate the amount of such awards, if any, which
was earned.

         During January 2004, the price of the Company's stock exceeded $50 per
share for more than 10 consecutive trading days. In February 2004, the CIC
approved a payout under the LTIP in the aggregate amount of $7.8 million ($2.8
million in cash and 84,633 shares of capital stock). The pretax expense of this
award, including payroll taxes and benefit costs, totaled $9.1 million ($5.9
million aftertax) and will be recorded in the operating results for the first
quarter of 2004.

20. PREFERRED SECURITIES

         Effective February 1, 2000, the Company completed an Exchange Offer
whereby stockholders exchanged 575,503 shares of capital stock for shares of
Preferred Securities of the wholly owned Chemed Capital Trust ("CCT") on a
one-for-one basis. The Preferred Securities, which carry a redemption value of
$27.00 per security, pay an annual cash distribution of $2.00 per security
(payable at the quarterly rate of $.50 per security commencing March 2000) and
are convertible into capital stock at a price of $37.00 per security. The
Preferred Securities mature 30 years from date of issuance and are callable
beginning March 15, 2003, at a price of $27.27 for each $27.00 principal amount.
On March 15, 2004, and later, the Preferred Securities are callable without
premium. At December 31, 2003, there were 523,172 shares of the Preferred
Securities outstanding (December 31, 2002 -- 525,401 shares). The number of
Preferred Securities purchased and converted and shares of capital stock issued
upon conversion are summarized below:

<TABLE>
<CAPTION>
                                                 FOR THE YEARS ENDED
                                                      DECEMBER 31,
                                              ---------------------------
                                               2003       2002      2001
                                              -----      -----     ------
<S>                                           <C>        <C>       <C>
Number of Preferred Securities purchased          -      1,533     13,720
Number of Preferred Securities converted      2,229        432      1,200
Shares of capital stock
   issued upon conversion
   of Preferred Securities                    1,626        315        876
</TABLE>

         The sole assets of the CCT are Junior Subordinated Debentures ("JSD")
of the Company in the principal amount of $14,126,000. The JSD mature March 15,
2030, and the interest rate of the JSD is $2.00 per annum per $27.00 principal
amount. In February 2000, the Company executed an Indenture relating to the JSD,
an Amended and Restated Declaration of Trust relating to the Preferred
Securities and a Guarantee Agreement for the benefit of the holders of the
Preferred Securities (collectively "Back-up Undertakings"). Considered together,
the Back-up Undertakings constitute a full and unconditional guarantee by the
Company of the CCT's obligations under the Preferred Securities.

                                      F-30

<PAGE>

         The Company intends to call all of the Preferred Securities as soon
after March 15, 2004 as practicable. Management anticipates that most of the
securities will be redeemed for capital stock rather than cash. However, were
all the Preferred Securities redeemed for cash, the Company would be obligated
to pay approximately $14.1 million.

21. LOANS RECEIVABLE FROM INDEPENDENT CONTRACTORS

         The Plumbing and Drain Cleaning segment subcontracts with independent
contractors to operate plumbing repair and drain cleaning businesses in
lesser-populated areas of the country. At December 31, 2003, the Company has
notes receivable from 37 of its 60 independent contractors totaling $2,599,000
(December 31, 2002 -- $2,127,000). In most cases these loans are partially
secured by equipment owned by the contractor. The interest rates on the loans
range from 5% to 8% per annum and the remaining terms of the loans range from
one month to 7.7 years at December 31, 2003. During 2003, the Company recorded
revenues of $14,125,000 (2002 -- $12,350,000; 2001 -- $11,873,000) and pretax
profits of $4,356,000 (2002 -- $4,866,000; 2001 -- $3,980,000) from all of its
independent contractors.

         The arrangements give the contractors the right to conduct a plumbing
and drain cleaning business using the Roto-Rooter name in a specified territory
in exchange for a royalty based on a percentage of cash labor sales, generally
approximately 40%. The Company also pays for yellow pages advertising in these
areas and provides operating manuals to be used as guidelines for operating a
plumbing and drain cleaning business. The contracts are generally cancellable
upon 90 days' written notice (without cause) or upon a few days' notice (with
cause). The independent contractors are responsible for running the businesses
as they believe best.

         The Company has four contractors that entered into independent
contractor agreements with the Company during 2003, subsequent to January 31
("2003 Contractors"). The Company has loans totaling $238,000 receivable from
the 2003 Contractors that are secured by equipment with an estimated value of
$99,000. Information to determine whether the Company's contractual interests,
including the loans receivable, are variable interests that are required to be
consolidated under FIN No. 46, Consolidation of Variable Interest Entities and
Interpretation of ARB No. 51, is not available. Based on an analysis of
Roto-Rooter's operating results relative to these operations, management
believes that consolidation of these four businesses would not yield materially
different results for the Company. During 2003, the Company recorded $528,000 of
service revenues and a combined operating loss of $3,000 related to the 2003
Contractors.

22. LITIGATION

         The Company is party to a class action lawsuit filed in the Third
Judicial Circuit Court of Madison County, Illinois in June of 2000 by Robert
Harris, alleging certain Roto-Rooter plumbing was performed by unlicensed
employees. The Company contests these allegations and believes them without
merit. Plaintiff moved for certification of a class of customers in 32 states
who allegedly paid for plumbing work performed by unlicensed employees.
Plaintiff also moved for a partial summary judgment on grounds the licensed
apprentice plumber who installed his faucet did not work under the direct
personal supervision of a licensed master plumber. On June 19, 2002, the trial
judge certified an Illinois-only plaintiffs class and granted summary judgment
for the named party Plaintiff on the issue of liability, finding violation of
the Illinois Plumbing License Act and the Illinois Consumer Fraud Act, through
Roto-Rooter's representation of the licensed apprentice as a plumber. The court
has not yet ruled on certification of a class in the remaining 31 states. Due to
complex legal and other issues involved, it is not presently possible to
estimate the amount of liability, if any, related to this matter.

         On April 5, 2002 Michael Linn, an attorney, filed a class action
complaint against the Company in the Court of Common Pleas, Cuyahoga County,
Ohio. He alleges Roto-Rooter Services Company's miscellaneous parts charge,
ranging from $4.95 to $12.95 per job, violates the Ohio Consumer Sales Practices
Act. The Company contends that this charge, which is included within the
estimate approved by its customers, is a fully disclosed component of its
pricing. On February 25, 2003, the trial court certified a class of customers
who paid the charge from October 1999 to July 2002. The Company is appealing
this order and believes the ultimate disposition of this lawsuit will not have a
material affect on its financial position.

         However, management cannot provide assurance the Company will
ultimately prevail in either of the above two cases. Regardless of outcome, such
litigation can adversely affect the Company through defense costs, diversion of
management's time, and related publicity.

23. ACQUISITION OF VITAS

         On December 18, 2003, the Company and Marlin Merger Corp., a wholly
owned indirect subsidiary ("Marlin"), entered into a merger agreement with
Vitas. The merger agreement provided for the merger of Marlin into Vitas, with
Vitas surviving the merger as an indirect wholly owned subsidiary of the Company
(the "Acquisition"). To secure its interest in the merger, the Company placed a
$10 million deposit in escrow (included in other assets at December 31, 2003).

                                      F-31

<PAGE>
         In connection with the completion of the Acquisition on February 24,
2004, the Company paid to the holders of the 63% of Vitas common stock the
Company did not own consideration of approximately $313.9 million. In addition,
the Company paid the former chairman and chief executive officer of Vitas $25.0
million pursuant to a noncompetition and consulting agreement and made severance
payments totaling $2.3 million to two other officers of Vitas. The total
purchase price, including $5.5 million of estimated expenses and the Company's
$23.6 million previous investment in Vitas, was $370.3 million. Based on Vitas'
balance sheet at December 31, 2003, the preliminary allocation of the purchase
price to Vitas' assets and liabilities is estimated to be (in thousands):

<TABLE>
<S>                                          <C>
Cash and cash equivalents                    $  25,115
Other current assets                            62,557
Property and equipment                          22,613
Consulting agreement                             7,000
Covenant not to compete                         18,000
Goodwill                                       361,228
Other assets                                     6,074
Current liabilities                            (60,191)
Long-term debt                                 (67,625)
Other liabilities                               (4,428)
                                             ---------
Net assets acquired                            370,343
Less: cash and cash equivalents acquired       (25,115)
                                             ---------
   Net outlay                                $ 345,228
                                             =========
</TABLE>

As of February 24, 2004, the Company will consolidate Vitas' assets and
liabilities and begin consolidating Vitas' operating results.

         To fund the Acquisition and retire Vitas' and the Company's long-term
debt, the Company completed the following transactions ("Financing") on February
24, 2004:

     -   The Company borrowed $75.0 million under a new $135 million revolving
         credit/term loan agreement at an initial weighted average interest rate
         of 4.50%. Principal payments of $1.25 million are due quarterly under
         the term loan. The term loan/revolving credit agreement matures in five
         years.

     -   The Company sold 2,000,000 shares of its capital stock in a private
         placement at price of $50 per share, before expenses.

     -   The Company issued $110 million principal amount of floating rate
         senior secured notes due 2010 at an initial interest rate of 4.88%.

     -   The Company issued $150 million principal amount of 8.75% senior notes
         due 2011.

     -   The Company incurred estimated financing transaction fees and expenses
         of approximately $14.5 million.

         The unaudited pro forma operating data of the Company for the year
ended December 31, 2003, giving effect to the Acquisition and Financing as if
they had occurred on January 1, 2003, follow (in thousands):

<TABLE>
<S>                            <C>
Service revenues and sales     $ 749,888
                               =========
Net loss                       $  (4,070)
                               =========
Net loss per share             $   (0.34)
                               =========
Average shares outstanding        11,924
                               =========
</TABLE>

         The Acquisition is being accounted for using the purchase method of
accounting. The fair values of Vitas' assets and related liabilities are based
on preliminary estimates. Additional analysis will be required to determine the
fair values of Vitas' assets and liabilities, including the identification and
valuation of intangible assets acquired. Additional intangible assets acquired
may include customer contracts and related customer relationships and other
contract-based intangibles such as lease agreements and service contracts.
Should the Company identify and value additional intangible assets, everything
else being equal, goodwill will be reduced. In addition, such additional
intangible assets may have finite lives and be subject to amortization. The
final allocation of the Acquisition consideration may result in significant
differences from the preliminary amounts reflected in the above financial
information.

         The unaudited pro forma operating data are for informational purposes
only and do not purport to represent what the Company's results of operations
would actually have been had the Acquisition and the Financing occurred as of
the date indicated, nor does the unaudited pro forma operating data purport to
project the Company's results for any future date or any future period.

                                      F-32

<PAGE>

The unaudited pro forma operating data reflect pro forma adjustments that are
based on available information and certain assumptions management believes are
reasonable, but are subject to change. Such adjustments include an increase in
the average shares of capital stock outstanding and in interest expense from the
Financing, elimination of interest expense on existing debt, elimination of
dividend income from Vitas and reduction of interest income on cash used for the
Acquisition. Management has made, in its opinion, all adjustments that are
necessary to present fairly the pro forma information.

                                      F-33

<PAGE>

                   ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES
                     UNAUDITED SUMMARY OF QUARTERLY RESULTS
                      FOR THE YEAR ENDED DECEMBER 31, 2003
               (IN THOUSANDS, EXCEPT PER SHARE AND FOOTNOTE DATA)

<TABLE>
<CAPTION>
                                                            FIRST         SECOND          THIRD         FOURTH          TOTAL
                                                           QUARTER        QUARTER        QUARTER        QUARTER          YEAR
                                                          ---------      ---------      ---------      ---------      ---------
<S>                                                       <C>            <C>            <C>            <C>            <C>
Continuing Operations
   Total service revenues and sales                       $  77,645      $  77,271      $  75,172      $  78,783      $ 308,871
                                                          =========      =========      =========      =========      =========
   Gross profit                                           $  31,493      $  31,660      $  30,957      $  31,951      $ 126,061
                                                          =========      =========      =========      =========      =========
   Income/(loss) from operations (a,d)                    $   2,384      $   3,580      $   2,367      $ (16,051)     $  (7,720)
   Interest expense                                            (539)          (599)          (487)          (515)        (2,140)
   Distributions on preferred securities                       (268)          (268)          (268)          (267)        (1,071)
   Other income--net (b,c)                                    4,262          2,455          3,049          1,493         11,259
                                                          ---------      ---------      ---------      ---------      ---------
     Income before income taxes (a,b,c,d)                     5,839          5,168          4,661        (15,340)           328
   Income taxes                                              (2,282)        (1,868)        (1,748)         1,149         (4,749)
   Equity in earnings of affiliate (e)                            -              -              -            922            922
                                                          ---------      ---------      ---------      ---------      ---------
   Income/(loss) from continuing operations (a,b,c,d)         3,557          3,300          2,913        (13,269)        (3,499)
Discontinued Operations                                           -              -              -             64             64
                                                          ---------      ---------      ---------      ---------      ---------
Net Income/(Loss) (a,b,c,d)                               $   3,557      $   3,300      $   2,913      $ (13,205)     $  (3,435)
                                                          =========      =========      =========      =========      =========

Earnings Per Share (a,b,c,d)
   Income/(loss) from continuing operations               $    0.36      $    0.33      $    0.29      $   (1.33)     $   (0.35)
                                                          =========      =========      =========      =========      =========
   Net income/(loss)                                      $    0.36      $    0.33      $    0.29      $   (1.33)     $   (0.35)
                                                          =========      =========      =========      =========      =========

Diluted Earnings Per Share (a,b,c,d)
   Income/(loss) from continuing operations               $    0.36      $    0.33      $    0.29      $   (1.33)     $   (0.35)
                                                          =========      =========      =========      =========      =========
   Net income/(loss)                                      $    0.36      $    0.33      $    0.29      $   (1.33)     $   (0.35)
                                                          =========      =========      =========      =========      =========

Average number of shares outstanding
   Earnings/(loss) per share                                  9,890          9,908          9,941          9,954          9,924
                                                          =========      =========      =========      =========      =========
   Diluted earnings/(loss) per share                          9,903          9,942          9,988          9,954          9,924
                                                          =========      =========      =========      =========      =========
</TABLE>

- ------------------
(a)  Amounts include a pretax charge of $3,627,000 ($2,358,000 aftertax or $.24
     per share) from severance charges in the first quarter and for the year.

(b)  Amounts include a pretax gain of $1,846,000 ($1,200,000 aftertax or $.12
     per share) from the redemption of Vitas preferred stock in the third
     quarter and for the year.

(c)  Amounts include a pretax capital gain of $3,544,000 ($2,151,000 aftertax or
     $.22 per share) from the sales of investments in the first quarter and for
     the year.

(d)  Amounts include pretax asset impairment charges of $15,828,000 ($14,363,000
     aftertax or $1.44 per share) in the fourth quarter and for the year.

(e)  Amount represents equity in earnings of Vitas.

                                      F-34

<PAGE>

                   ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES
                     UNAUDITED SUMMARY OF QUARTERLY RESULTS
                      FOR THE YEAR ENDED DECEMBER 31, 2002
               (IN THOUSANDS, EXCEPT PER SHARE AND FOOTNOTE DATA)

<TABLE>
<CAPTION>
                                                        FIRST          SECOND         THIRD         FOURTH         TOTAL
                                                       QUARTER        QUARTER        QUARTER        QUARTER         YEAR
                                                      ---------      ---------      ---------      ---------      ---------
<S>                                                   <C>            <C>            <C>            <C>            <C>
Continuing Operations
   Total service revenues and sales                   $  80,853      $  79,082      $  75,322      $  78,919      $ 314,176
                                                      =========      =========      =========      =========      =========
   Gross profit                                       $  32,345      $  32,458      $  31,008      $  32,080      $ 127,891
                                                      =========      =========      =========      =========      =========
   Income/(loss) from operations (a)                  $   5,593      $   6,306      $   5,370      $ (19,947)     $  (2,678)
   Interest expense                                        (773)          (763)          (709)          (683)        (2,928)
   Distributions on preferred securities                   (270)          (271)          (268)          (270)        (1,079)
   Other income--net (b)                                  2,589            953            268            472          4,282
                                                      ---------      ---------      ---------      ---------      ---------
     Income before income taxes (a,b)                     7,139          6,225          4,661        (20,428)        (2,403)
   Income taxes                                          (2,432)        (2,370)        (1,725)            76         (6,451)
                                                      ---------      ---------      ---------      ---------      ---------
   Income/(loss) from continuing operations (a,b)         4,707          3,855          2,936        (20,352)        (8,854)
Discontinued Operations                                     867          1,124          3,929            389          6,309
                                                      ---------      ---------      ---------      ---------      ---------
Net Income/(Loss) (a,b)                               $   5,574      $   4,979      $   6,865      $ (19,963)     $  (2,545)
                                                      =========      =========      =========      =========      =========

Earnings Per Share (a,b)
   Income/(loss) from continuing operations           $    0.48      $    0.39      $    0.30      $   (2.06)     $   (0.90)
                                                      =========      =========      =========      =========      =========
   Net income/(loss)                                  $    0.57      $    0.51      $    0.70      $   (2.02)     $   (0.26)
                                                      =========      =========      =========      =========      =========

Diluted Earnings Per Share (a,b)
   Income/(loss) from continuing operations           $    0.48      $    0.39      $    0.30      $   (2.06)     $   (0.90)
                                                      =========      =========      =========      =========      =========
   Net income/(loss)                                  $    0.56      $    0.50      $    0.70      $   (2.02)     $   (0.26)
                                                      =========      =========      =========      =========      =========

Average number of shares outstanding
   Earnings/(loss) per share                              9,843          9,857          9,861          9,872          9,858
                                                      =========      =========      =========      =========      =========
   Diluted earnings/(loss) per share                     10,267          9,898          9,867          9,872          9,858
                                                      =========      =========      =========      =========      =========
</TABLE>

- ------------------
(a)  Amounts for the fourth quarter and for the year include a pretax and
     aftertax noncash goodwill impairment charge of $20,342,000 ($2.06 per
     share).

(b)  Amounts for the first quarter and for the year include pretax gains from
     the sales of investments of $1,141,000 ($ 775,000 aftertax or $.08 per
     share). Amounts for the fourth quarter and year include pretax investment
     impairment charges of $1,200,000 ($780,000 after-tax or $.08 per share).

                                      F-35

<PAGE>

                                                                     SCHEDULE II

                   ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)
                                     DR/(CR)

<TABLE>
<CAPTION>
                                                                ADDITIONS
                                                        ------------------------
                                                        (CHARGED)                    APPLICABLE
                                                        CREDITED        (CHARGED)       TO
                                        BALANCE AT      TO COSTS        CREDITED     COMPANIES                        BALANCE
                                        BEGINNING         AND           TO OTHER     ACQUIRED       DEDUCTIONS        AT END
          DESCRIPTION                   OF PERIOD       EXPENSES        ACCOUNTS     IN PERIOD          (a)          OF PERIOD
- ---------------------------------       ----------      --------        --------     ----------     ----------       ---------
<S>                                     <C>             <C>             <C>          <C>            <C>              <C>
Allowances for doubtful
accounts (b)

   For the year 2003                     $(3,309)       $ (2,019)       $      -     $       -       $  2,409         $(2,919)
                                         =======        ========        ========     =========       ========         =======

   For the year 2002                     $(4,091)       $ (1,808)       $      -     $       -       $  2,590         $(3,309)
                                         =======        ========        ========     =========       ========         =======

   For the year 2001                     $(3,637)       $ (2,866)       $      -     $       -       $  2,412         $(4,091)
                                         =======        ========        ========     =========       ========         =======

Allowances for doubtful
accounts - notes
receivable (c)

   For the year 2003                     $  (422)       $     99        $      -     $       -       $      -         $  (323)
                                         =======        ========        ========     =========       ========         =======

   For the year 2002                     $  (900)       $    478        $      -     $       -       $      -         $  (422)
                                         =======        ========        ========     =========       ========         =======

   For the year 2001                     $   (23)       $   (900)       $      -     $       -       $     23         $  (900)
                                         =======        ========        ========     =========       ========         =======

Valuation allowance for
available-for-sale securities (d)

   For the year 2003                     $ 5,668        $      -        $   (278)    $       -       $ (5,390)        $     -
                                         =======        ========        ========     =========       ========         =======

   For the year 2002                     $ 6,483        $      -        $    326     $       -       $ (1,141)        $ 5,668
                                         =======        ========        ========     =========       ========         =======

   For the year 2001                     $ 4,980        $      -        $  2,496     $       -       $   (993)        $ 6,483
                                         =======        ========        ========     =========       ========         =======
</TABLE>

- ------------------
(a)  With respect to allowances for doubtful accounts, deductions include
     accounts considered uncollectible or written off, payments, companies
     divested, etc. With respect to valuation allowance for available-for-sale
     securities, deductions comprise net realized gains on sales of investments.

(b)  Classified in consolidated balance sheet as a reduction of accounts
     receivable.

(c)  Classified in consolidated balance sheet as a reduction of other assets.

(d)  With respect to the valuation allowance for available-for-sale securities,
     amounts charged or credited to other accounts comprise net unrealized
     holding gains arising during the period.

                                      S-1
<PAGE>

                                INDEX TO EXHIBITS
<TABLE>
<CAPTION>
                                                          Page Number
                                                              or
                                                  Incorporation by Reference
                                              ----------------------------------
Exhibit                                          File No. and         Previous
Number                                           Filing Date         Exhibit No.
- -------                                       -------------------    -----------
<S>      <C>                                  <C>                    <C>
 3.1     Certificate of Incorporation of      Form S-3               4.1
         Chemed Corporation                   Reg. No. 33-44177
                                              11/26/91

 3.2     Certificate of Amendment to          Form S-8               E-1
         Certificate of Incorporation         Reg. No. 333-109104
                                              9/25/03

 3.3     By-Laws of Chemed Corporation        Form 10-K              2
                                              3/28/89

 4.1     Offer to Exchange Chemed Capital     Form T-3               T3E.1
         Trust Convertible Trust Preferred    12/23/99
         Securities for Shares of Capital
         Stock, dated as of 12/23/99

 4.2     Chemed Capital Trust, dated          Schedule 13E-4         (b)(1)
         as of 12/23/99                       12/23/99

 4.3     Amended and Restated                 Schedule 13E-4A        (b)(2)
         Declaration of Trust of Chemed       2/7/00, Amendment
         Capital Trust, dated February        No. 2
         7, 2000

 4.4     Indenture, dated as of February              *
         24, 2004, between Roto-Rooter, Inc.
         and LaSalle Bank National
         Association

 4.5     Indenture, dated as of February              *
         24, 2004, among Roto-Rooter, Inc.,
         the subsidiary guarantors listed
         on Schedule I thereto and
         Wells Fargo Bank, N.A.

10.1     Agreement and Plan of Merger         Form 8-K               1
         among Diversey U.S. Holdings,        3/11/91
         Inc., D.C. Acquisition Inc.,
         Chemed Corporation and DuBois
         Chemicals, Inc., dated as of
         February 25, 1991
</TABLE>

                                        1

<PAGE>

<TABLE>
<CAPTION>
                                                         Page Number
                                                             or
                                                 Incorporation by Reference
                                              ----------------------------------
Exhibit                                       File No. and            Previous
Number                                        Filing Date            Exhibit No.
- -------                                       ------------           -----------
<S>      <C>                                  <C>                    <C>
10.2     Stock Purchase Agreement between     Form 10-K                 5
         Omnicare, Inc. and Chemed            3/25/93
         Corporation dated as of August 5,
         1992

10.3     Agreement and Plan of Merger         Form 8-K                  1
         among National Sanitary              10/13/97
         Supply Company, Unisource
         Worldwide, Inc. and TFBD, Inc.

10.4     Stock Purchase Agreement dated       Form 8-K                  2.1
         as of May 8, 2002 by and between     10/11/02
         PCI Holding Corp. and Chemed
         Corporation

10.5     Amendment No. 1 to Stock Purchase    Form 8-K                  2.2
         Agreement dated as of October 11,    10/11/02
         2002 by and among PCI Holding
         Corp., PCI-A Holding Corp. and
         Chemed Corporation

10.6     Senior Subordinated Promissory       Form 8-K                  2.3
         Note dated as of October 11, 2002    10/11/02
         by and among PCI Holding Corp.
         and Chemed Corporation

10.7     Common Stock Purchase Warrant        Form 8-K                  2.4
         dated as of October 11, 2002 by      10/11/02
         and between PCI Holding Corp.
         and Chemed Corporation

10.8     1986 Stock Incentive Plan, as        Form 10-K                 9
         amended through May 20, 1991         3/27/92, **

10.9     1988 Stock Incentive Plan, as        Form 10-K                 10
         amended through May 20, 1991         3/27/92, **

10.10    1993 Stock Incentive Plan            Form 10-K                 10.8
                                              3/29/94, **

10.11    1995 Stock Incentive Plan            Form 10-K                 10.14
                                              3/28/96, **

10.12    1997 Stock Incentive Plan            Form 10-K                 10.10
                                              3/27/98, **
</TABLE>

                                       2

<PAGE>

<TABLE>
<CAPTION>
                                                          Page Number
                                                              or
                                                  Incorporation by Reference
                                              ----------------------------------
Exhibit                                       File No. and           Previous
Number                                        Filing Date            Exhibit No.
- -------                                       ------------           -----------
<S>      <C>                                  <C>                    <C>
10.13    1999 Stock Incentive Plan            Form 10-K              10.11
                                              3/29/00, **

10.14    1999 Long-Term Employee              Form 10-K              10.16
         Incentive Plan as amended            3/28/03, **
         through May 20, 2002

10.15    2002 Stock Incentive Plan            Form 10-K              10.17
                                              3/28/03, **

10.16    2002 Executive Long-Term             Form 10-K              10.18
         Incentive Plan                       3/28/03, **

10.17    Employment Contracts with            Form 10-K              10.12
         Executives                           3/28/89, **

10.18    Amendment to Employment              Form 10-K              10.20
         Agreements with Kevin J.             3/28/03, **
         McNamara, Thomas C. Hutton
         and Sandra E. Laney
         dated August 7, 2002

10.19    Amendment to Employment              Form 10-K              10.21
         Agreements with Timothy              3/28/03, **
         S. O'Toole and Arthur V.
         Tucker dated August 7, 2002

10.20    Amendment to Employment                 *, **
         Agreement with Spencer S. Lee
         dated May 19, 2003

10.21    Amendment to Employment              Form 10-K              10.16
         Agreement with Executives dated      3/28/02, **
         January 1, 2002

10.22    Consulting Agreement between         Form 10-K              10.26
         Timothy S. O'Toole and PCI           3/28/03, **
         Holding Corp effective October
         11, 2002.
</TABLE>

                                       3


<PAGE>

<TABLE>
<CAPTION>
                                                       Page Number
                                                            or
                                                Incorporation by Reference
                                              ------------------------------
Exhibit                                       File No. and        Previous
Number                                        Filing Date        Exhibit No.
- -------                                       -------------      -----------
<S>      <C>                                  <C>                <C>
10.23    Amendment No. 16 to Employment       Form 10-K          10.27
         Agreement with Sandra E. Laney       3/28/03, **
         dated March 1, 2003

10.24    Excess Benefits Plan, as restated        *,**
         and amended, effective June 1,
         2001

10.25    Amendment No. 1 to Excess Benefits       *,**
         Plan, effective July 1, 2002

10.26    Amendment No. 2 to Excess Beneifts       *,**
         Plan, effective November 7, 2003

10.27    Non-Employee Directors' Deferred     Form 10-K          10.10
         Compensation Plan                    3/24/88, **

10.28    Chemed/Roto-Rooter Savings &         Form 10-K          10.25
         Retirement Plan, effective           3/25/99, **
         January 1, 1999

10.29    First Amendment to Chemed/           Form 10-K          10.22
         Roto-Rooter Savings & Retirement     3/28/02, **
         Plan effective September 6, 2000

10.30    Second Amendment to Chemed/          Form 10-K          10.23
         Roto-Rooter Savings & Retirement     3/28/02, **
         Plan effective January 1, 2001

10.31    Third Amendment to Chemed/           Form 10-K          10.24
         Roto-Rooter Savings & Retirement     3/28/02, **
         Plan effective December 12, 2001

10.32    Stock Purchase Plan by and           Form 8-K           10.21
         among Banta Corporation, Chemed      10/13/97
         Corporation and OCR Holding
         Company

10.33    Directors Emeriti Plan               Form 10-Q          10.11
                                              5/12/88, **

10.34    Second Amendment to Split Dollar     Form 10-K          10.26
         Agreement with Executives            3/29/00, **
</TABLE>

                                       4

<PAGE>

<TABLE>
<CAPTION>
                                                       Page Number
                                                           or
                                                Incorporation by Reference
                                              ------------------------------
Exhibit                                       File No. and        Previous
Number                                        Filing Date        Exhibit No.
- -------                                       --------------     -----------
<S>      <C>                                  <C>                <C>
10.35    Split Dollar Agreement with          Form 10-K          10.27
         Sandra E. Laney                      3/25/99, **

10.36    Split Dollar Agreements              Form 10-K          10.15
         with Executives                      3/28/96, **

10.37    Split Dollar Agreement with          Form 10-K          10.16
         Edward L. Hutton                     3/28/96, **

10.38    Split Dollar Agreement with          Form 10-K          10.33
         Spencer S. Lee                       3/29/00, **

10.39    Promissory Note under the            Form 10-K          10.40
         Executive Stock Purchase Plan        3/28/01, **
         with Edward L. Hutton

10.40    Promissory Note under the            Form 10-K          10.41
         Executive Stock Purchase Plan        3/28/01, **
         with Kevin J. McNamara

10.41    Schedule to Promissory Note under       *,**
         the Executive Stock Purchase Plan
         with Edward L. Hutton

10.42    Schedule to Promissory Note under       *,**
         the Executive Stock Purchase Plan
         with Kevin J. McNamara

10.43    Roto-Rooter Deferred Compensation    Form 10-K          10.37
         Plan No. 1, as amended January 1,    3/28/01, **
         1998

10.44    Roto-Rooter Deferred Compensation    Form 10-K          10.38
         Plan No. 2                           3/28/01, **

10.45    Agreement and Plan of Merger,        Form 8-K           99.2
         dated as of December 18, 2003,       12/19/03
         among Roto-Rooter, Inc., Marlin
         Merger Corp. and Vitas Healthcare
         Corporation
</TABLE>

                                       5

<PAGE>

<TABLE>
<CAPTION>
                                                         Page Number
                                                            or
                                                   Incorporation by Reference

Exhibit                                            File No. and       Previous
Number                                             Filing Date       Exhibit No.
- -------                                            ------------      -----------
<S>      <C>                                       <C>               <C>
10.46    Credit Agreement, dated as of                  *
         February 24, 2004, among
         Roto-Rooter, Inc., the lenders from
         time to time parties thereto and
         Bank One, NA, as Administrative Agent.


10.47    Pledge and Security Agreement, dated           *
         as of February 24, 2004, among
         Roto-Rooter, Inc., the subsidiaries
         of Roto-Rooter, Inc. listed on the
         signature pages thereto and Bank One,
         NA, as Collateral Agent.

10.48    Guaranty Agreement, dated as of                *
         February 24, 2004, among the
         subsidiaries of Roto-Rooter, Inc.
         listed on the signature pages
         thereto and Bank One, NA, as
         Administrative Agent.

13.      2003 Annual Report to Stockholders             *

14.      Policies on Business Ethics of                 *
         Roto-Rooter, Inc.

21       Subsidiaries of Roto-Rooter, Inc.              *

23       Consent of Independent Accountants             *

24       Powers of Attorney                             *

31.1     Certification by Kevin J. McNamara             *
         Pursuant to Rule 13a-14(a)/15d-14(a)
         of the Exchange Act of 1934.

31.2     Certification by David P. Williams             *
         Pursuant to Rule 13a-14(a)/15d-14(a)
         of the Exchange Act of 1934.

31.3     Certification by Arthur V. Tucker, Jr.         *
         Pursuant to Rule 13a-14(a)/15d-14(a)
         of the Exchange Act of 1934.
</TABLE>

                                       6

<PAGE>

<TABLE>
<CAPTION>
                                                        Page Number
                                                            or
                                                Incorporation by Reference
                                                ---------------------------
Exhibit                                         File No. and     Previous
Number                                          Filing Date     Exhibit No.
- -------                                         ------------    -----------
<S>       <C>                                   <C>             <C>
32.1      Certification by Kevin J. McNamara        *
          pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002

32.2      Certification by David P. Williams        *
          pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002

32.3      Certification by Arthur V. Tucker,        *
          Jr. pursuant to Section 906 of
          the Sarbanes-Oxley Act of 2002
</TABLE>

- ---------------
* Filed herewith.

**Management contract or compensatory plan or arrangement.

                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>3
<FILENAME>l05867aexv4w4.txt
<DESCRIPTION>EX-4.4
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.4

                                                                  EXECUTION COPY

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------

                                ROTO-ROOTER, INC.

                          8-3/4% Senior Notes Due 2011

                             -----------------------

                                    INDENTURE

                          Dated as of February 24, 2004

                             -----------------------

                       LaSalle Bank National Association,
                                   as Trustee

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------

<PAGE>

                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
        TIA                                                  Indenture
      Section                                                Section
      -------                                                -------
<S>                                                          <C>
310(a)(1)                  ............................       7.10
     (a)(2)                ............................       7.10
     (a)(3)                ............................       N.A.
     (a)(4)                ............................       N.A.
     (b)                   ............................       7.08; 7.10
     (c)                   ............................       N.A.
311(a)                     ............................       7.11
     (b)                   ............................       7.11
     (c)                   ............................       N.A.
312(a)                     ............................       2.05
     (b)                   ............................       10.03
     (c)                   ............................       10.03
313(a)                     ............................       7.06
     (b)(1)                ............................       7.06
     (b)(2)                ............................       7.06
     (c)                   ............................       10.02
     (d)                   ............................       7.06
314(a)                     ............................       4.02; 4.10; 10.02
     (b)                   ............................       N.A.
     (c)(1)                ............................       10.04
     (c)(2)                ............................       10.04
     (c)(3)                ............................       N.A.
     (d)                   ............................       N.A.
     (e)                   ............................       10.05
     (f)                   ............................       4.10
315(a)                     ............................       7.01
     (b)                   ............................       7.05; 10.02
     (c)                   ............................       7.01
     (d)                   ............................       7.01
     (e)                   ............................       6.11
316(a)(last sentence)                ..................       10.06
   (a)(1)(A)               ............................       6.05
     (a)(1)(B)             ............................       6.04
     (a)(2)                ............................       N.A.
     (b)                   ............................       6.07
317(a)(1)                  ............................       6.08
     (a)(2)                ............................       6.09
     (b)                   ............................       2.04
318(a)                     ............................       10.01
                          N.A. means Not Applicable.
</TABLE>

- -----------------------
Note:  This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                 Page
<S>                                                                              <C>
                                   ARTICLE 1

                  Definitions and Incorporation by Reference

SECTION 1.01.   Definitions...................................................     1
SECTION 1.02.   Other Definitions.............................................    37
SECTION 1.03.   Incorporation by Reference of Trust Indenture Act.............    38
SECTION 1.04.   Rules of Construction.........................................    38

                                   ARTICLE 2

                                The Securities

SECTION 2.01.   Form and Dating...............................................    39
SECTION 2.02.   Execution and Authentication..................................    40
SECTION 2.03.   Registrar and Paying Agent....................................    41
SECTION 2.04.   Paying Agent To Hold Money in Trust...........................    41
SECTION 2.05.   Securityholder Lists..........................................    42
SECTION 2.06.   Transfer and Exchange.........................................    42
SECTION 2.07.   Replacement Securities........................................    43
SECTION 2.08.   Outstanding Securities........................................    43
SECTION 2.09.   Temporary Securities..........................................    44
SECTION 2.10.   Cancellation..................................................    44
SECTION 2.11.   Defaulted Interest............................................    44
SECTION 2.12.   CUSIP Numbers.................................................    45
SECTION 2.13.   Issuance of Additional Securities.............................    45

                                   ARTICLE 3

                                  Redemption

SECTION 3.01.   Notices to Trustee............................................    46
SECTION 3.02.   Selection of Securities to Be Redeemed........................    46
SECTION 3.03.   Notice of Redemption..........................................    46
SECTION 3.04.   Effect of Notice of Redemption................................    47
SECTION 3.05.   Deposit of Redemption Price...................................    48
SECTION 3.06.   Securities Redeemed in Part...................................    48

                                   ARTICLE 4

                                   Covenants

SECTION 4.01.   Payment of Securities.........................................    48
</TABLE>

                                        i
<PAGE>

<TABLE>
<S>                                                                               <C>
SECTION 4.02.   SEC Reports...................................................    48
SECTION 4.03.   Limitation on Indebtedness....................................    50
SECTION 4.04.   Limitation on Restricted Payments.............................    53
SECTION 4.05.   Limitation on Restrictions on Distributions from Restricted
                Subsidiaries..................................................    60
SECTION 4.06.   Limitation on Sales of Assets and Subsidiary Stock............    62
SECTION 4.07.   Limitation on Affiliate Transactions..........................    67
SECTION 4.08.   Limitation on Lines of Business...............................    69
SECTION 4.09.   Limitation on the Sale or Issuance of Capital Stock of
                Restricted Subsidiaries.......................................    69
SECTION 4.10.   Change of Control.............................................    70
SECTION 4.11.   Limitation on Liens...........................................    72
SECTION 4.12.   Limitation on Sale/Leaseback Transactions.....................    72
SECTION 4.13.   Limitation on Designation of Subsidiaries as Unrestricted
                Subsidiaries..................................................    73
SECTION 4.14.   Ratings.......................................................    76
SECTION 4.15.   Compliance Certificate........................................    76
SECTION 4.16.   Further Instruments and Acts..................................    77

                                    ARTICLE 5

                                Successor Company

SECTION 5.01.   When Company May Merge or Transfer Assets.....................    77

                                    ARTICLE 6

                              Defaults and Remedies

SECTION 6.01.   Events of Default.............................................    78
SECTION 6.02.   Acceleration..................................................    81
SECTION 6.03.   Other Remedies................................................    81
SECTION 6.04.   Waiver of Past Defaults.......................................    82
SECTION 6.05.   Control by Majority...........................................    82
SECTION 6.06.   Limitation on Suits...........................................    82
SECTION 6.07.   Rights of Holders to Receive Payment..........................    83
SECTION 6.08.   Collection Suit by Trustee....................................    83
SECTION 6.09.   Trustee May File Proofs of Claim..............................    83
SECTION 6.10.   Priorities....................................................    84
SECTION 6.11.   Undertaking for Costs.........................................    84
SECTION 6.12.   Waiver of Stay or Extension Laws..............................    85
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                              <C>
                                    ARTICLE 7

                                     Trustee

SECTION 7.01.   Duties of Trustee.............................................    85
SECTION 7.02.   Rights of Trustee.............................................    86
SECTION 7.03.   Individual Rights of Trustee..................................    87
SECTION 7.04.   Trustee's Disclaimer..........................................    87
SECTION 7.05.   Notice of Defaults............................................    88
SECTION 7.06.   Reports by Trustee to Holders.................................    88
SECTION 7.07.   Compensation and Indemnity....................................    88
SECTION 7.08.   Replacement of Trustee........................................    89
SECTION 7.09.   Successor Trustee by Merger...................................    90
SECTION 7.10.   Eligibility; Disqualification.................................    91
SECTION 7.11.   Preferential Collection of Claims Against Company.............    91

                                    ARTICLE 8

                       Discharge of Indenture; Defeasance

SECTION 8.01.   Discharge of Liability on Securities; Defeasance..............    91
SECTION 8.02.   Conditions to Defeasance......................................    92
SECTION 8.03.   Application of Trust Money....................................    94
SECTION 8.04.   Repayment to Company..........................................    94
SECTION 8.05.   Indemnity for Government Obligations..........................    94
SECTION 8.06.   Reinstatement.................................................    94

                                    ARTICLE 9

                                   Amendments

SECTION 9.01.   Without Consent of Holders....................................    95
SECTION 9.02.   With Consent of Holders.......................................    96
SECTION 9.03.   Compliance with Trust Indenture Act...........................    97
SECTION 9.04.   Revocation and Effect of Consents and Waivers.................    97
SECTION 9.05.   Notation on or Exchange of Securities.........................    98
SECTION 9.06.   Trustee To Sign Amendments....................................    98

                                   ARTICLE 10

                                  Miscellaneous

SECTION 10.01.  Trust Indenture Act Controls..................................    98
SECTION 10.02.  Notices.......................................................    99
</TABLE>

                                       iii
<PAGE>

<TABLE>
<S>                                                                              <C>
SECTION 10.03.  Communication by Holders with Other Holders...................    99
SECTION 10.04.  Certificate and Opinion as to Conditions Precedent............    99
SECTION 10.05.  Statements Required in Certificate or Opinion.................   100
SECTION 10.06.  When Securities Disregarded...................................   100
SECTION 10.07.  Rules by Trustee, Paying Agent and Registrar..................   101
SECTION 10.08.  Legal Holidays................................................   101
SECTION 10.09.  Governing Law.................................................   101
SECTION 10.10.  No Recourse Against Others....................................   101
SECTION 10.11.  Successors....................................................   101
SECTION 10.12.  Multiple Originals............................................   101
SECTION 10.13.  Table of Contents; Headings...................................   101

Exhibit 1 -     Form of Initial Security

Exhibit A -     Form of Exchange Security
</TABLE>

                                       iv
<PAGE>

                    INDENTURE dated as of February 24, 2004 between
               Roto-Rooter, Inc., a Delaware corporation (the "Company"), and
               LaSalle Bank National Association, a national banking
               association (the "Trustee").

          Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of (a) the Company's 8-3/4%
Senior Notes Due 2011 issued on the date hereof (the "Original Securities"), (b)
any Additional Securities (as defined herein) that may be issued (all such
Securities in clauses (a) and (b) being referred to collectively as the "Initial
Securities") and (c) if and when issued pursuant to a registered exchange for
Initial Securities, the Company's 8-3/4% Senior Notes Due 2011 (the "Exchange
Securities", and together with the Initial Securities, the "Securities"):

                                    ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

          SECTION 1.01. DEFINITIONS.

          "Additional Assets" means:

          (1) any property or assets (other than Indebtedness and Capital Stock)
     to be used by the Company or a Restricted Subsidiary in a Permitted
     Business;

          (2) the Capital Stock of a Person that becomes a Restricted Subsidiary
     as a result of the acquisition of such Capital Stock by the Company or
     another Restricted Subsidiary; or

          (3) Capital Stock constituting a minority interest in any Person that
     at such time is a Restricted Subsidiary;

provided, however, that any such Restricted Subsidiary described in clauses (2)
or (3) above is primarily engaged in a Permitted Business.

<PAGE>
                                                                               2

          "Additional Securities" means, subject to the Company's compliance
with Section 4.03, 8-3/4% Senior Notes Due 2011 issued from time to time after
the Issue Date under the terms of this Indenture (other than pursuant to Section
2.06, 2.07, 2.09 or 3.06 of this Indenture and other than Exchange Securities
issued pursuant to an exchange offer for other Securities outstanding under this
Indenture).

          "Adjusted Consolidated Leverage Ratio" as of any date of determination
means the Consolidated Leverage Ratio, calculated on a pro forma basis after
giving effect to the designation of the Specified Subsidiary Group as
Unrestricted Subsidiaries (including for purposes of calculating Consolidated
Indebtedness and EBITDA) and to any sales of Capital Stock, refinancings of
Indebtedness or other transactions consummated concurrently with such
designation.

          "Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 5% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Voting Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.

          "Applicable Premium" means, with respect to any Security on any
redemption date, the excess (but not less than zero) of (i) the present value at
such redemption date of all remaining scheduled payments of interest (excluding
accrued interest) and principal on such Security (discounted at the equivalent
of the Treasury Rate plus 50 basis points over (ii) the then outstanding
principal amount of such Security.

<PAGE>
                                                                               3

          "Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:

          (1) any shares of Capital Stock of a Restricted Subsidiary (other than
     directors' qualifying shares or shares required by applicable law to be
     held by a Person other than the Company or a Restricted Subsidiary)

          (2) all or substantially all the assets of any division or line of
     business of the Company or any Restricted Subsidiary or

          (3) any other assets of the Company or any Restricted Subsidiary
     (other than Capital Stock of Unrestricted Subsidiaries) outside of the
     ordinary course of business of the Company or such Restricted Subsidiary

other than, in the case of (1), (2) and (3) above,

          (A) disposition by a Restricted Subsidiary to the Company or by the
     Company or a Restricted Subsidiary to a Restricted Subsidiary,

          (B) a disposition of directors' qualifying shares or shares required
     by applicable law to be held by a Person other than the Company or a
     Restricted Subsidiary,

          (C) a disposition of capital stock of the Specified Subsidiary
     pursuant to a Qualifying Subsidiary Stock Sale or Qualifying Subsidiary
     Stock Distribution if (x) the Net Cash Proceeds thereof are used to redeem
     Securities pursuant to the third paragraph of paragraph 5 of the Securities
     or (y) the Specified Subsidiary Group is then or has been designated as
     Unrestricted Subsidiaries in accordance with Section 4.13(b); provided
     that, notwithstanding the foregoing, if VHC is the Specified Subsidiary,
     any sale of Capital Stock of VHC following an initial Qualifying Subsidiary
     Stock Sale shall constitute an Asset Disposition to the extent that the
     aggregate Net

<PAGE>
                                                                               4

     Cash Proceeds of all such sales of Capital Stock of VHC (following such
     initial sale) exceed $25.0 million, unless at such time (x) the Company
     owns less than 50% of the Voting Stock of VHC or (y) the Company would own
     less than 50% of the Voting Stock as a result of such sale and the
     provisions set forth in Section 4.10 are complied with,

          (D) for purposes of Section 4.06 only, a disposition subject to
     Section 4.04, and

          (E) a disposition of assets with a Fair Market Value of less than
     $100,000.

          "Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Securities, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).

          "Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing:

          (1) the sum of the products of the numbers of years from the date of
     determination to the dates of each successive scheduled principal payment
     of such Indebtedness or scheduled redemption or similar payment with
     respect to such Preferred Stock multiplied by the amount of such payment by

          (2) the sum of all such payments.

          "Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of the Board of Directors
of the Company.

          "Business Day" means each day which is not a Legal Holiday.

          "Capital Expenditures" means, without duplication, any expenditures
for any purchase or other acquisition of any asset which would be classified as
a fixed or capital asset on a consolidated balance sheet of

<PAGE>

                                                                               5

the Company and its Consolidated Restricted Subsidiaries prepared in accordance
with GAAP.

          "Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.

          "Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be prepaid by the lessee
without payment of a penalty.

          "Change of Control" means the occurrence of any of the following
events:

          (1) any "person" or "group" (as such terms are used in Sections 13(d)
     and 14(d) of the Exchange Act), is or becomes the beneficial owner (as
     defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that, for
     purposes of this clause, such person or group shall be deemed to have
     "beneficial ownership" of all shares that any such person or group has the
     right to acquire, whether such right is exercisable immediately or only
     after the passage of time), directly or indirectly, of more than 50% of the
     total voting power of the Voting Stock of the Company;

          (2) the Company ceasing to be the beneficial owner (as defined in
     Rules 13(d)(3) and 13(d)(5) under the Exchange Act), directly or
     indirectly, of more than 50% of (i) the total voting power of the Voting
     Stock of Vitas or (ii) the total number of outstanding shares of Capital
     Stock of Vitas; or

          (3) during any period of two consecutive years, individuals who at the
     beginning of such period constituted the Board of Directors of the Company
     (together with any new directors whose election by the Board of Directors
     or whose nomination for election by

<PAGE>

                                                                               6

     the shareholders of the Company was approved by a vote of 66 2/3% of the
     directors of the Company then still in office who were either directors at
     the beginning of such period or whose election or nomination for election
     was previously so approved) cease for any reason to constitute a majority
     of the applicable board of directors then in office;

          (4) the adoption of a plan relating to the liquidation or dissolution
     of the Company; or

          (5) the merger or consolidation of the Company with or into another
     Person or the merger of another Person with or into the Company, or the
     sale, lease, transfer, conveyance or other disposition of all or
     substantially all the assets of the Company, to another Person and, in the
     case of any such merger or consolidation, other than a transaction
     following which holders of securities that represented 100% of the Voting
     Stock of the Company outstanding immediately prior to such transaction (or
     other securities into which such securities are converted as part of such
     merger or consolidation transaction) own directly or indirectly at least a
     majority of the voting power of the Voting Stock of the surviving Person in
     such merger or consolidation transaction immediately after such transaction
     and in substantially the same proportion as before the transaction.

          "Chemed Capital Trust" means Chemed Capital Trust, a Delaware
statutory business trust.

          "Chemed Preferred Securities" means the convertible trust preferred
securities of Chemed Capital Trust issued in exchange for shares of Company
capital stock pursuant to an exchange offer completed on February 1, 2000. As of
January 31, 2004, 522,149 Chemed Preferred Securities were outstanding.

          "Closing Date" means the date of this Indenture.

          "Closing Date Stock Award Plan" means the Company's employee stock
award plan in existence on the Closing Date.

          "Code" means the Internal Revenue Code of 1986, as amended.

<PAGE>

                                                                               7

          "Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.

          "Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Company and its Consolidated Restricted
Subsidiaries calculated on a consolidated basis for such period.

          "Consolidated Current Maturities" means, with reference to any period,
all payments of principal due within twelve (12) calendar months on and after
the last day of such period with respect to all Consolidated Indebtedness of the
Company.

          "Consolidated Fixed Charge Coverage Ratio" for any period shall mean
the ratio of (i) EBITDA minus Consolidated Capital Expenditures to (ii)
Consolidated Interest Expense plus Consolidated Current Maturities during such
period plus cash dividends paid on the equity interests of the Company during
such period plus expenses for taxes paid or taxes accrued during such period,
all calculated for the Company and its Consolidated Restricted Subsidiaries on
a consolidated basis.

          "Consolidated Indebtedness" means, as of any date of determination,
the total Indebtedness of the Company and its Consolidated Restricted
Subsidiaries, without duplication, other than, at any time prior to January 1,
2005, the Trust Securities.

          "Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Consolidated Restricted Subsidiaries,
plus, to the extent Incurred by the Company and its Consolidated Restricted
Subsidiaries in such period but not included in such interest expense, without
duplication:

          (1) interest expense attributable to Capitalized Lease Obligations and
     the interest expense attributable to leases constituting part of a
     Sale/Leaseback Transaction,

          (2) amortization of debt discount and debt issuance costs, provided
     that the fees paid by the Company to the lenders under the Credit Agreement
     and

<PAGE>

                                                                               8

     to the placement agent in connection with the offering and sale, on the
     Issue Date, of the Original Securities and the Floating Rate Notes shall
     not be included,

          (3) capitalized interest,

          (4) noncash interest expense,

          (5) commissions, discounts and other fees and charges attributable to
     letters of credit and bankers' acceptance financing,

          (6) interest accruing on any Indebtedness of any other Person to the
     extent such Indebtedness is Guaranteed by the Company or any Restricted
     Subsidiary,

          (7) net costs associated with Hedging Obligations (including
     amortization of fees),

          (8) dividends in respect of all Disqualified Stock of the Company and
     all Preferred Stock of any of the Subsidiaries of the Company, to the
     extent held by Persons other than the Company or a Wholly Owned Subsidiary;
     provided that regular, scheduled dividends on the Trust Securities declared
     or paid prior to January 1, 2005, shall not be included, and

          (9) the cash contributions to any employee stock ownership plan or
     similar trust to the extent such contributions are used by such plan or
     trust to pay interest or fees to any Person (other than the Company) in
     connection with Indebtedness Incurred by such plan or trust.

          Notwithstanding anything to the contrary herein, any premium paid in
connection with the repayment of Indebtedness of the Company in connection with
the Transactions and interest on the Trust Securities paid on or prior to
January 1, 2005 shall not be included in Consolidated Interest Expense.

          "Consolidated Leverage Ratio" as of any date of determination means
the ratio of:

          (1) Consolidated Indebtedness at such time to

<PAGE>

                                                                               9

          (2) the aggregate amount of EBITDA for the period of the most recent
     four consecutive fiscal quarters ending at least 45 days prior to the date
     of such determination;

provided, however, that:

               (A) if the Company or any Restricted Subsidiary has Incurred any
          Indebtedness since the beginning of such period that remains
          outstanding on such date of determination or if the transaction giving
          rise to the need to calculate the Consolidated Leverage Ratio is an
          Incurrence of Indebtedness, EBITDA for such period shall be calculated
          after giving effect on a pro forma basis to such Indebtedness as if
          such Indebtedness had been Incurred on the first day of such period
          and the discharge of any other Indebtedness repaid, repurchased,
          defeased or otherwise discharged with the proceeds of such new
          Indebtedness as if such discharge had occurred on the first day of
          such period,

               (B) if the Company or any Restricted Subsidiary has repaid,
          repurchased, defeased or otherwise discharged any Indebtedness since
          the beginning of such period or if any Indebtedness is to be repaid,
          repurchased, defeased or otherwise discharged (in each case other than
          Indebtedness Incurred under any revolving credit facility unless such
          Indebtedness has been permanently repaid and has not been replaced) on
          the date of the transaction giving rise to the need to calculate the
          Consolidated Leverage Ratio, EBITDA for such period shall be
          calculated on a pro forma basis as if such discharge had occurred on
          the first day of such period and as if the Company or such Restricted
          Subsidiary has not earned the interest income actually earned during
          such period in respect of cash or Temporary Cash Investments used to
          repay, repurchase, defease or otherwise discharge such Indebtedness,

               (C) if since the beginning of such period the Company or any
          Restricted Subsidiary shall have made any Asset Disposition, the
          EBITDA for such period shall be reduced by an amount equal

<PAGE>

                                                                              10

          to the EBITDA (if positive) directly attributable to the assets that
          are the subject of such Asset Disposition for such period or
          increased by an amount equal to the EBITDA (if negative) directly
          attributable thereto for such period,

               (D) if since the beginning of such period the Company or any
          Restricted Subsidiary (by merger or otherwise) shall have made an
          Investment in any Restricted Subsidiary (or any Person that becomes a
          Restricted Subsidiary) or an acquisition of assets, including any
          acquisition of assets occurring in connection with a transaction
          causing a calculation to be made hereunder, which constitutes all or
          substantially all of an operating unit of a business, EBITDA for such
          period shall be calculated after giving pro forma effect thereto
          (including the Incurrence of any Indebtedness) as if such Investment
          or acquisition occurred on the first day of such period,

               (E) if since the beginning of such period any Person (that
          subsequently became a Restricted Subsidiary or was merged with or into
          the Company or any Restricted Subsidiary since the beginning of such
          period) shall have Incurred any Indebtedness or discharged any
          Indebtedness or made any Asset Disposition or any Investment or
          acquisition of assets that would have required an adjustment pursuant
          to clause (C) or (D) above if made by the Company or a Restricted
          Subsidiary during such period, EBITDA for such period shall be
          calculated after giving pro forma effect thereto as if such
          Incurrence, discharge, Asset Disposition, Investment or acquisition of
          assets occurred on the first day of such period, and

               (F) if since the beginning of such period, the Specified
          Subsidiary Group has been designated as Unrestricted Subsidiaries,
          EBITDA for such period shall be calculated after giving pro forma
          effect thereto as if such designation occurred on the first day of
          such period.

          For purposes of this definition, whenever pro forma effect is to be
given to any calculation under this definition, the pro forma calculations shall
be determined

<PAGE>

                                                                              11

in good faith by a responsible financial or accounting Officer of the Company
and (i) shall comply, to the extent not inconsistent with the provisions of
this Indenture, with the requirements of Rule 11-02 of Regulation S-X of the
SEC and (ii) may include adjustments for operating expense reductions that
would be permitted by such Rule.

          If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate
Agreement applicable to such Indebtedness if such Interest Rate Agreement has a
remaining term as at the date of determination in excess of 12 months).

          "Consolidated Net Income" means, for any period, the net income (loss)
of the Company and its Consolidated Subsidiaries for such period; provided,
however, that there shall not be included in such Consolidated Net Income:

          (1) any net income of any Person (other than the Company) if such
     Person is not a Restricted Subsidiary, except that:

               (A) subject to the limitations contained in clause (4) below, the
          Company's equity in the net income of any such Person for such period
          shall be included in such Consolidated Net Income up to the aggregate
          amount of cash actually distributed by such Person during such period
          to the Company or a Restricted Subsidiary as a dividend or other
          distribution (subject, in the case of a dividend or other distribution
          made to a Restricted Subsidiary, to the limitations contained in
          clause (3) below) and

               (B) the Company's equity in a net loss of any such Person for
          such period shall be included in determining such Consolidated Net
          Income;

          (2) any net income (or loss) of any Person acquired by the Company or
     a Subsidiary of the Company in a pooling of interests transaction for any
     period prior to the date of such acquisition;

          (3) any net income (or loss) of any Restricted Subsidiary if such
     Restricted Subsidiary is subject to

<PAGE>

     restrictions, directly or indirectly, on the payment of dividends or the
     making of distributions by such Restricted Subsidiary, directly or
     indirectly, to the Company, except that:

               (A) subject to the limitations contained in clause (4) below, the
          Company's equity in the net income of any such Restricted Subsidiary
          for such period shall be included in such Consolidated Net Income up
          to the aggregate amount of cash permitted to be distributed by such
          Restricted Subsidiary during such period to the Company or another
          Restricted Subsidiary as a dividend or other distribution (subject, in
          the case of a dividend or other distribution made to another
          Restricted Subsidiary, to the limitation contained in this clause) and

               (B) the Company's equity in a net loss of any such Restricted
          Subsidiary for such period shall be included in determining such
          Consolidated Net Income;

          (4) any gain (but not loss) realized upon the sale or other
     disposition of any asset of the Company or its Consolidated Subsidiaries
     (including pursuant to any Sale/Leaseback Transaction) that is not sold or
     otherwise disposed of in the ordinary course of business and any gain (but
     not loss) realized upon the sale or other disposition of any Capital Stock
     of any Person;

          (5) the net after tax effect of any extraordinary gain or loss
     (including all fees and expenses related to such extraordinary gain or
     loss) or of any impairment loss on or writedown of goodwill; and

          (6) the cumulative effect of a change in accounting principles.

          Notwithstanding the foregoing, for the purpose of Sections 4.04 and
4.13 only, there shall be excluded from Consolidated Net Income any dividends,
repayments of loans or advances or other transfers of assets from Unrestricted
Subsidiaries to the Company or a Restricted Subsidiary to the extent such
dividends, repayments or transfers increase

<PAGE>

                                                                              13

the amount of Restricted Payments permitted under Section 4.04(a)(4)(C)(iv).

          "Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its Restricted Subsidiaries, determined on a
Consolidated basis, as of the end of the most recent fiscal quarter of the
Company ending at least 45 days prior to the taking of any action for the
purpose of which the determination is being made, as

          (1) the par or stated value of all outstanding Capital Stock of the
     Company plus,

          (2) paid-in capital or capital surplus relating to such Capital Stock
     plus,

          (3) any retained earnings or earned surplus less,

               (A) any accumulated deficit, and

               (B) any amounts attributable to Disqualified Stock.

          "Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company in accordance with GAAP
consistently applied; provided, however, that "Consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary will
be accounted for as an investment. The term "Consolidated" has a correlative
meaning.

          "Credit Agreement" means the credit agreement dated as of February 24,
2004, among the Company, Bank One, NA and others, together with any guarantees,
collateral documents, instruments and agreements executed in connection
therewith, in each case, as amended, restated, supplemented, waived, replaced
(whether or not upon termination, and whether with the original lenders or
otherwise), refinanced, restructured or otherwise modified from time to time
(except to the extent that any such amendment, restatement, supplement, waiver,
replacement, refinancing, restructuring or other modification thereto would be
prohibited by the terms of this Indenture, unless otherwise agreed to by the
Holders of at least a majority

<PAGE>

                                                                              14

in aggregate principal amount of Securities at the time outstanding).

          "Currency Agreement" means with respect to any Person any foreign
exchange contract, currency swap agreements or other similar agreement or
arrangement to which such Person is a party or of which it is a beneficiary.

          "Customary Transition Agreement" means any agreement to which both (x)
the Company or any of its Restricted Subsidiaries and (y) any Person that is
part of the Specified Subsidiary Group (or any director or officer of any such
Person) is a party, which is entered into in connection with the carve out, spin
off or split off of the Specified Subsidiary Group from the Company, including
any agreement that provides for the sale, transfer, disposition or allocation of
assets and liabilities (including contingent and tax liabilities and including
indemnification arrangements in connection therewith), the sale or disposition
of capital stock of the Specified Subsidiary Group (including underwriting
agreements), the provision of transition services (including administrative,
tax, accounting and insurance services) or the licensing or leasing of property
(such as intellectual property or real property); provided that:

          (1) the Specified Subsidiary Group is (or has been) designated as
     Unrestricted Subsidiaries as permitted by Section 4.13;

          (2) such agreements are customary in carve out, spin off or split off
     transactions; and

          (3) the terms of such agreements, taken as a whole, are fair to the
     Company and its Restricted Subsidiaries.

          "Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.

          "Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event:

<PAGE>

                                                                              15

          (1) matures or is mandatorily redeemable pursuant to a sinking fund
     obligation or otherwise,

          (2) is convertible or exchangeable for Indebtedness or Disqualified
     Stock (excluding Capital Stock convertible or exchangeable solely at the
     option of the Company or a Restricted Subsidiary; provided, however, that
     any such conversion or exchange shall be deemed an Incurrence of
     Indebtedness or Disqualified Stock, as applicable) or

          (3) is redeemable at the option of the holder thereof, in whole or in
     part,

in the case of each of clauses (1), (2) and (3), on or prior to the first
anniversary of the Stated Maturity of the Securities; provided, however, that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the first anniversary of the Stated
Maturity of the Securities shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital
Stock are not more favorable to the holders of such Capital Stock than the
provisions applicable to the Securities in Sections 4.06 and 4.10.

          "EBITDA" for any period means the Consolidated Net Income for such
period, plus, without duplication, the following to the extent deducted in
calculating such Consolidated Net Income:

          (1) income tax expense of the Company and its Consolidated Restricted
     Subsidiaries,

          (2) Consolidated Interest Expense,

          (3) depreciation expense of the Company and its Consolidated
     Restricted Subsidiaries,

          (4) amortization expense of the Company and its Consolidated
     Restricted Subsidiaries (including amortization recorded in connection with
     the application of Financial Accounting Standard No. 142 (Goodwill and
     Other Intangibles)),

<PAGE>

                                                                              16

          (5) payments made in connection with the Non-Competition and
     Consulting Agreement dated as of December 18, 2003, between the Company and
     Hugh Westbrook (the "Westbrook Agreement") in the amount of $25.0 million
     and transaction fees and expenses paid in connection with the Transactions,

          (6) any severance payments related to the acquisition of Vitas, as
     contemplated by the Private Placement Memorandum and not to exceed $14.5
     million, plus any related employment taxes and employee benefit charges,

          (7) dividends, distributions and payments not in excess of $2.8
     million under the Closing Date Stock Award Plan, and

          (8) all other noncash charges of the Company and its Consolidated
     Restricted Subsidiaries (excluding any such noncash charge to the extent it
     represents an accrual of or reserve for cash expenditures in any future
     period) less all non-cash items of income of the Company and its
     Consolidated Restricted Subsidiaries,

in each case for such period.

          Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and noncash charges
of, a Restricted Subsidiary of the Company shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that
the net income (loss) of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.

          "Equity Offering" means a public or private offering of Capital Stock
of the Company pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption to the registration requirements
under the Securities Act.

<PAGE>

                                                                              17

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Exchange Securities" means the debt securities of the Company issued
pursuant to this Indenture in exchange for, and in an aggregate principal amount
equal to, the Initial Securities, in compliance with the terms of the
Registration Rights Agreement.

          "Fair Market Value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. For all purposes
of this Indenture, the Fair Market Value of property or assets which involve an
aggregate amount in excess of $25.0 million shall be set forth in a resolution
approved by the Board of Directors in good faith; provided that for property or
assets, other than cash, Indebtedness or readily marketable securities, in an
aggregate amount in excess of $50.0 million, Fair Market Value shall be
determined in writing by a nationally recognized appraisal or investment banking
firm.

          "Floating Rate Notes" means the Floating Rate Senior Secured Notes due
2010 issued by the Company under the Indenture dated as of February 24, 2004,
between the Company, certain of its subsidiaries and Wells Fargo Bank, N.A., as
trustee, and any exchange notes issued under such indenture.

          "GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including those set forth
in:

          (1) the opinions and pronouncements of the Accounting Principles Board
     of the American Institute of Certified Public Accountants,

          (2) statements and pronouncements of the Financial Accounting
     Standards Board,

          (3) such other statements by such other entities as approved by a
     significant segment of the accounting profession, and

          (4) the rules and regulations of the SEC governing the inclusion of
     financial statements

<PAGE>

                                                                              18

     (including pro forma financial statements) in periodic reports required
     to be filed pursuant to Section 13 of the Exchange Act, including opinions
     and pronouncements in staff accounting bulletins and similar written
     statements from the accounting staff of the SEC.

          All ratios and computations based on GAAP contained in this Indenture
shall be computed in conformity with GAAP.

          "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person:

          (1) to purchase or pay (or advance or supply funds for the purchase or
     payment of) such Indebtedness or other obligation of such other Person
     (whether arising by virtue of partnership arrangements, or by agreements to
     keep-well, to purchase assets, goods, securities or services, to
     take-or-pay, or to maintain financial statement conditions or otherwise) or

          (2) entered into for purposes of assuring in any other manner the
     obligee of such Indebtedness or other obligation of the payment thereof or
     to protect such obligee against loss in respect thereof (in whole or in
     part);

provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.

          "Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.

          "Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.

          "Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any

<PAGE>

                                                                              19

Indebtedness or Capital Stock of a Person existing at the time such Person
becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Person at the time it
becomes a Subsidiary. The term "Incurrence" when used as a noun shall have a
correlative meaning. Solely for purposes of determining compliance with
Section 4.03:

          (1) amortization of debt discount or the accretion of principal with
     respect to a non-interest bearing or other discount security;

          (2) the payment of regularly scheduled interest in the form of
     additional Indebtedness of the same instrument or the payment of regularly
     scheduled dividends on Capital Stock (other than Disqualified Stock) in the
     form of additional Capital Stock of the same class and with the same terms;
     and

          (3) the obligation to pay a premium in respect of Indebtedness arising
     in connection with the issuance of a notice of redemption or the making of
     a mandatory offer to purchase such Indebtedness

will not be deemed to be the Incurrence of Indebtedness.

          "Indebtedness" means, with respect to any Person on any date of
determination, without duplication:

          (1) the principal of and premium (if any) in respect of indebtedness
     of such Person for borrowed money;

          (2) the principal of and premium (if any) in respect of obligations of
     such Person evidenced by bonds, debentures, notes or other similar
     instruments;

          (3) all obligations of such Person in respect of letters of credit or
     other similar instruments (including reimbursement obligations with respect
     thereto but excluding obligations in respect of letters of credit securing
     obligations (other than obligations in clauses (1), (2), (4) or (5) hereof)
     entered into in the ordinary course of business of such Person to the
     extent such letters of credit are not drawn upon or, if and to the extent
     drawn upon, such drawing is reimbursed no later than the tenth

<PAGE>

                                                                              20

     Business Day following payment on the letter of credit);

          (4) all obligations of such Person to pay the deferred and unpaid
     purchase price of property or services (except Trade Payables or other
     obligations arising in the ordinary course of business), which purchase
     price is due more than six months after the date of placing such property
     in service or taking delivery and title thereto or the completion of such
     services;

          (5) all Capitalized Lease Obligations and all Attributable Debt of
     such Person;

          (6) the amount of all obligations of such Person with respect to the
     redemption, repayment or other repurchase of any Disqualified Stock or,
     with respect to any Subsidiary of such Person, any Preferred Stock (but
     excluding, in each case, any accrued dividends);

          (7) all Indebtedness of other Persons secured by a Lien on any asset
     of such Person, whether or not such Indebtedness is assumed by such Person;
     provided, however, that the amount of Indebtedness of such Person shall be
     the lesser of:

               (A) the Fair Market Value of such asset at such date of
          determination and

               (B) the amount of such Indebtedness of such other Persons;

          (8) all net obligations of such person in respect of Interest Rate
     Agreements or Currency Agreements; and

          (9) all obligations of the type referred to in clauses (i) through
     (viii) of other Persons and all dividends of other Persons for the payment
     of which, in either case, such Person is responsible or liable, directly or
     indirectly, as obligor, guarantor or otherwise, including by means of any
     Guarantee.

          The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency

<PAGE>

                                                                              21

giving rise to the obligation, of any contingent obligations at such date.

          "Interest Period" means, for any interest payment date, a period from
and including the preceding interest payment date to but excluding such interest
payment date, provided, however, that the initial Interest Period will be the
period from and including the series issuance date to but excluding the August
15, 2004 interest payment date.

          "Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement to which such Person is party or of which
it is a beneficiary.

          "Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. Except as otherwise provided for
herein, the amount of an Investment shall be its fair value at the time the
Investment is made and without giving effect to subsequent changes in value. For
purposes of the definition of "Unrestricted Subsidiary" and Section 4.04:

          (1) "Investment" shall include the portion (proportionate to the
     Company's equity interest in such Subsidiary) of the Fair Market Value of
     the net assets of any Subsidiary of the Company at the time that such
     Subsidiary is designated an Unrestricted Subsidiary; provided, however,
     that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
     the Company shall be deemed to continue to have a permanent "Investment" in
     an Unrestricted Subsidiary in an amount (if positive) equal to:

               (A) the Company's "Investment" in such Subsidiary at the time of
          such redesignation less

<PAGE>

                                                                              22

               (B) the portion (proportionate to the Company's equity interest
          in such Subsidiary) of the Fair Market Value of the net assets of such
          Subsidiary at the time of such redesignation; and

          (2) any property transferred to or from an Unrestricted Subsidiary
     shall be valued at its Fair Market Value at the time of such transfer.

          "Issue Date" means February 24, 2004.

          "Legal Holiday" means a Saturday, Sunday or other day on which banking
institutions are not required by law or regulation to be open in the State of
Illinois.

          "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).

          "Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and proceeds
from the sale or other disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such
Asset Disposition or received in any other noncash form) therefrom, in each case
net of:

          (1) all legal, accounting, investment, banking, title and recording
     tax expenses, commissions and other fees and expenses incurred, and all
     Federal, state, provincial, foreign and local taxes required to be paid or
     accrued as a liability under GAAP, as a consequence of such Asset
     Disposition,

          (2) all payments made on any Indebtedness other than Indebtedness
     under the indenture for the Floating Rate Notes and the Credit Agreement
     which is secured by any assets subject to such Asset Disposition, in
     accordance with the terms of any Lien upon or other security agreement of
     any kind with respect to such assets, or which must by its terms, or in
     order to obtain a consent to such Asset Disposition, or by

<PAGE>

                                                                              23

     applicable law be repaid out of the proceeds from such Asset Disposition,

          (3) all distributions and other payments required to be made to
     minority interest holders in Subsidiaries or joint ventures as a result of
     such Asset Disposition and

          (4) appropriate amounts to be provided by the seller as a reserve, in
     accordance with GAAP, against any liabilities associated with the property
     or other assets disposed of in such Asset Disposition and retained by the
     Company or any Restricted Subsidiary after such Asset Disposition or
     liabilities under indemnification obligations associated with such Asset
     Disposition or any purchase price adjustments.

          "Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.

          "Non-Recourse Debt" means Indebtedness as to which neither the Company
nor any Restricted Subsidiary (a) provides any Guarantee or credit support of
any kind (including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or (b) is directly or indirectly
liable (as guarantor or otherwise); and (c) as to which there is no recourse
against any of the assets of the Company or its Restricted Subsidiaries (other
than assets or Capital Stock of Unrestricted Subsidiaries, provided however,
that Indebtedness of an Unrestricted Subsidiary which consists of a Guarantee of
Indebtedness of the Company or a Restricted Subsidiary to a Person other than an
Unrestricted Subsidiary, or a lien on property or stock of an Unrestricted
Subsidiary that secures Indebtedness of the Company or a Restricted Subsidiary
to a Person other than an Unrestricted Subsidiary, shall be deemed to constitute
Non-Recourse Debt as long as the Unrestricted Subsidiary does not have recourse
against the Company or a Restricted Subsidiary under such Indebtedness.

          "Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the

<PAGE>

                                                                              24

President, any Vice President, the Treasurer or the Secretary of the Company.

          "Officers' Certificate" means a certificate signed by two Officers.

          "Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.

          "Permitted Business" means any business engaged in by the Company or
any Restricted Subsidiary on the Closing Date and any related, ancillary or
complementary business.

          "Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:

          (1) the Company, a Restricted Subsidiary or a Person that will, upon
     the making of such Investment, become a Restricted Subsidiary; provided,
     however, that the primary business of such Restricted Subsidiary is a
     Permitted Business;

          (2) another Person if as a result of such Investment such other Person
     is merged or consolidated with or into, or transfers or conveys all or
     substantially all its assets to, the Company or a Restricted Subsidiary;
     provided, however, that such Person's primary business is a Permitted
     Business;

          (3) Temporary Cash Investments;

          (4) receivables owing to the Company or any Restricted Subsidiary if
     created or acquired in the ordinary course of business and payable or
     dischargeable in accordance with customary trade terms; provided, however,
     that such trade terms may include such concessionary trade terms as the
     Company or any such Restricted Subsidiary deems reasonable under the
     circumstances;

          (5) payroll, travel and similar advances to cover matters that are
     expected at the time of such advances ultimately to be treated as expenses
     for accounting purposes and that are made in the ordinary course of
     business;

<PAGE>

                                                                              25

<PAGE>

          (6) loans or advances to employees made in the ordinary course of
     business consistent with prudent practices and applicable law and not
     exceeding $2 million at any time outstanding;

          (7) stock, obligations or securities received in settlement of debts
     created in the ordinary course of business and owing to the Company or any
     Restricted Subsidiary or in satisfaction of judgments;

          (8) any Person to the extent such Investment represents the noncash
     portion of the consideration received for an Asset Disposition that was
     made pursuant to and in compliance with Section 4.06;

          (9) the Specified Subsidiary Group following any designation of the
     Specified Subsidiary Group as Unrestricted Subsidiaries pursuant to Section
     4.13;

          (10) any Person; provided, that the payment for such Investments
     consists solely of Capital Stock of the Company (other than Disqualified
     Stock);

          (11) any Person consisting of the licensing of intellectual property
     pursuant to joint ventures, strategic alliances or joint marketing
     arrangements with such Person, in each case made in the ordinary course of
     business;

          (12) a vendor or supplier consisting of loans or advances to such
     vendor or supplier in connection with any guarantees to the Company or any
     Restricted Subsidiary of supply by, or to fund the supply capacity of, such
     vendor or supplier, in any case not to exceed $2.0 million at any one time
     outstanding;

          (13) loans and other Investments in independent contractors and
     subcontractors of the Company or its Restricted Subsidiaries, not to exceed
     $4.0 million at any one time outstanding; or

          (14) any other Investments to the extent such Investments, when taken
     together with all other Investments made pursuant to this clause (14)
     outstanding on the date such Investment is made, do not exceed $5.0
     million.

<PAGE>

                                                                              26

          "Permitted Liens" means, with respect to any Person:

          (1) pledges or deposits by such Person under worker's compensation
     laws, unemployment insurance laws or similar legislation, or good faith
     deposits in connection with bids, tenders, contracts (other than for the
     payment of Indebtedness) or leases to which such Person is a party, or
     deposits to secure public or statutory obligations of such Person or
     deposits of cash or United States government bonds to secure surety or
     appeal bonds to which such Person is a party, or deposits as security for
     contested taxes or import duties or for the payment of rent, in each case
     Incurred in the ordinary course of business;

          (2) Liens imposed by law, such as landlords', carriers',
     warehousemen's and mechanics' Liens, in each case for sums not yet due or
     being contested in good faith by appropriate proceedings or other Liens
     arising out of judgments or awards against such Person with respect to
     which such Person shall then be proceeding with an appeal or other
     proceedings for review;

          (3) Liens for taxes, assessments or governmental charges or levies
     either not yet due or payable or subject to penalties for non-payment or
     which are being contested in good faith by appropriate proceedings;

          (4) Liens in favor of issuers of surety bonds or letters of credit
     issued pursuant to the request of and for the account of such Person in the
     ordinary course of its business; provided, however, that such letters of
     credit do not constitute Indebtedness;

          (5) minor survey exceptions, minor encumbrances, easements or
     reservations of, or rights of others for, licenses, rights-of-way, sewers,
     electric lines, telegraph and telephone lines and other similar purposes,
     or zoning or other restrictions as to the use of real property or Liens
     incidental to the conduct of the business of such Person or to the
     ownership of its properties which were not Incurred in connection with
     Indebtedness and which do not in the aggregate materially adversely affect
     the value of

<PAGE>

                                                                              27

said properties or materially impair their use in the operation of the business
of such Person;

          (6) Liens securing Indebtedness permitted to be Incurred pursuant to
     Section 4.03(b)(8); provided, however, that the Lien may not extend to any
     other property owned by such Person or any of its Subsidiaries at the time
     the Lien is Incurred;

          (7) Liens to secure Indebtedness permitted pursuant to paragraph (a)
     or clauses (1), (3)(B), (9) or (13) of Section 4.03(b) and other Credit
     Agreement Obligations;

          (8) Liens existing on the Closing Date;

          (9) Liens on property or shares of stock of another Person at the time
     such other Person becomes a Subsidiary of such Person; provided, however,
     that such Liens are not created, Incurred or assumed in connection with, or
     in contemplation of, such other Person becoming such a Subsidiary; provided
     further, however, that such Liens do not extend to any other property owned
     by such Person or any of its Subsidiaries;

          (10) Liens on property at the time such Person or any of its
     Subsidiaries acquires the property, including any acquisition by means of a
     merger or consolidation with or into such Person or any Subsidiary of such
     Person; provided, however, that such Liens are not created, Incurred or
     assumed in connection with, or in contemplation of, such acquisition;
     provided further, however, that the Liens do not extend to any other
     property owned by such Person or any of its Subsidiaries;

          (11) Liens securing obligations under Hedging Obligations so long as
     such obligations relate to Indebtedness permitted to be Incurred pursuant
     to Section 4.03 that is, and is permitted under this Indenture to be,
     secured by a Lien on the same property securing such obligations;

          (12) Liens to secure any Refinancing (or successive Refinancings) as a
     whole, or in part, of any Indebtedness secured by any Lien referred to in

<PAGE>

                                                                              28

the foregoing clauses (6), (7), (8), (9) or (10); provided, however, that:

               (A) such new Lien shall be limited to all or part of the same
          property that secured the original Lien (plus improvements to or on
          such property) and

               (B) the Indebtedness secured by such Lien at such time is not
          increased to any amount greater than the sum of:

                    (x) the outstanding principal amount or, if greater,
               committed amount of the Indebtedness secured by Liens described
               under clauses (6), (7), (8), (9) or (10) at the time the original
               Lien became a Permitted Lien under this Indenture and

                    (y) an amount necessary to pay any fees and expenses,
               including premiums, related to such Refinancings; and

          (13) Liens to secure Indebtedness permitted to be Incurred pursuant to
     Section 4.03 or other obligations in an aggregate principal amount which,
     when taken together with all other Indebtedness and obligations secured by
     Liens pursuant to this clause (13) and remaining outstanding, does not
     exceed $10.0 million at any time.

          "Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

          "Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.

          "principal" of a Security means the principal of the Security plus the
premium, if any, payable on the

<PAGE>

                                                                              29

Security which is due or overdue or is to become due at the relevant time.

          "Private Placement Memorandum" means the Private Placement Memorandum
dated February 24, 2004, relating to the issuance by Roto-Rooter, Inc. of (i)
2,000,000 shares of Capital Stock, par value $1.00 per share, (ii) $110.0
million of Floating Rate Notes and (iii) $150.0 million of Securities.

          "Purchase Money Indebtedness" means Indebtedness:

          (1) consisting of the deferred purchase price of property, conditional
     sale obligations, obligations under any title retention agreement, other
     purchase money obligations and obligations in respect of industrial revenue
     bonds, in each case where the maturity of such Indebtedness does not exceed
     the anticipated useful life of the property being financed, and

          (2) Incurred to finance the acquisition, construction or lease by the
     Company or a Restricted Subsidiary of the property, including additions and
     improvements thereto;

     provided, however, that the Indebtedness is Incurred within 180 days
     after the acquisition, construction or lease of the property by the
     Company or Restricted Subsidiary.

          "Qualifying Subsidiary Stock Distribution" means a distribution by the
Company to its shareholders of the Capital Stock of RRM (if RRM is the Specified
Subsidiary) if after giving effect thereto (and to any transactions consummated
in connection therewith) (x) at least 10% of such Capital Stock (calculated on a
fully diluted basis) would be held by persons other than the Company, any
Subsidiary of the Company, any director or officer of any of the foregoing or
any employee stock ownership plan or other trust established by the Company or
any of its Subsidiaries; and (y) the Company has designated, or would then be
permitted to designate, the Specified Subsidiary Group as Unrestricted
Subsidiaries pursuant to the conditions set forth in Section 4.13.

          "Qualifying Subsidiary Stock Sale" means a sale of Capital Stock of
the Specified Subsidiary pursuant to an underwritten public offering or private
sale, whether by

<PAGE>

                                                                              30

means of a primary offering or a sale by the Company or any subsidiary
thereof, after which at least 10% of such Capital Stock (calculated on a fully
diluted basis) is held by persons other than the Company, a subsidiary of the
Company, a director or officer of any of the foregoing or any employee stock
ownership plan or other trust established by the Company or any of its
Subsidiaries. The exercise of an underwriter's overallotment option shall be
construed as part of the same Qualifying Subsidiary Stock Sale with respect to
which such option was granted.

          "Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness exchange or replacement for, such Indebtedness. "Refinanced"
and "Refinancing" shall have correlative meanings.

          "Refinancing Indebtedness" means Indebtedness that is Incurred to
Refinance any Indebtedness of the Company or any Restricted Subsidiary existing
on the Closing Date or Incurred in compliance with this Indenture (including
Indebtedness of the Company that Refinances Refinancing Indebtedness); provided,
however, that:

          (1) the Refinancing Indebtedness has a Stated Maturity no earlier than
     the Stated Maturity of the Indebtedness being Refinanced;

          (2) the Refinancing Indebtedness has an Average Life at the time such
     Refinancing Indebtedness is Incurred that is equal to or greater than the
     Average Life of the Indebtedness being Refinanced;

          (3) such Refinancing Indebtedness is Incurred in an aggregate
     principal amount (or if issued with original issue discount, an aggregate
     issue price) that is equal to or less than the aggregate principal amount
     (or if issued with original issue discount, the aggregate accreted value)
     then outstanding of the Indebtedness being Refinanced; and

          (4) if the Indebtedness being Refinanced is contractually subordinated
     in right of payment to the Securities, such Refinancing Indebtedness is
     contractually subordinated in right of payment to the Securities at least
     to the same extent as the Indebtedness being Refinanced;

<PAGE>

                                                                              31

     provided further, however, that Refinancing Indebtedness shall not include:

          (A) Indebtedness of a Restricted Subsidiary that Refinances
     Indebtedness of the Company or

          (B) Indebtedness of the Company or a Restricted Subsidiary that
     Refinances Indebtedness of an Unrestricted Subsidiary.

          "Registration Rights Agreement" means the Registration Rights
Agreement dated as of February 24, 2004, among the Company, the initial Holders,
the initial holders of the Floating Rate Notes and certain other Persons.

          "Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.

          "RRM" means Roto-Rooter Management Company or any successor thereto by
any merger or consolidation which is permitted under this Indenture ("RR
Management") or, at the election of the Company (which shall be specified in
writing to the Trustee) for purposes of the designation of the Specified
Subsidiary, RRM shall mean any Subsidiary of the Company of which RR Management
is a Wholly Owned Subsidiary and which owns no other assets other than assets
incidental to the ownership of RR Management.

          "Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or a Restricted Subsidiary transfers such property to a
Person and the Company or such Restricted Subsidiary leases it from such Person,
other than leases between the Company and a Wholly Owned Subsidiary or between
Wholly Owned Subsidiaries.

          "SEC" means the Securities and Exchange Commission.

          "Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.

          "Senior Indebtedness" of the Company or any Subsidiary means the
principal of, premium (if any) and accrued and unpaid interest on (including
interest accruing on or after the filing of any petition in bankruptcy or for

<PAGE>

                                                                              32

reorganization of the Company or any Subsidiary, regardless of whether or not
a claim for post-filing interest is allowed in such proceedings), and fees and
other amounts owing in respect of, Indebtedness of the Company or any
Subsidiary, as applicable, whether outstanding on the Closing Date or
thereafter Incurred, unless in the instrument creating or evidencing the same
or pursuant to which the same is outstanding it is provided that such
obligations are subordinated in right of payment to the Securities; provided,
however, that Senior Indebtedness of the Company or any Subsidiary shall not
include:

          (1) any obligation of the Company to any Subsidiary of the Company or
     of such Subsidiary to the Company or any other Subsidiary of the Company;

          (2) any liability for Federal, state, local or other taxes owed or
     owing by the Company or such Subsidiary, as applicable;

          (3) any accounts payable or other liability to trade creditors arising
     in the ordinary course of business (including Guarantees thereof or
     instruments evidencing such liabilities);

          (4) any Indebtedness or obligation of the Company (and any accrued and
     unpaid interest in respect thereof) that by its terms is subordinate or
     junior in any respect to any other Indebtedness or obligation of the
     Company or such Subsidiary, as applicable, including any Senior
     Subordinated Indebtedness and any Subordinated Obligations of the Company
     or such Subsidiary, as applicable;

          (5) any obligations with respect to any Capital Stock; or

          (6) any Indebtedness Incurred in violation of this Indenture.

          "Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.

          "Specified Subsidiary" shall mean the Subsidiary of the Company that
is designated as the Specified Subsidiary pursuant to Section 4.13.

<PAGE>

                                                                              33

          "Specified Subsidiary Group" shall mean the Subsidiary of the Company
that is designated as the Specified Subsidiary pursuant to the covenant
described under Section 4.13, together with all Subsidiaries of such Person.

          "Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).

          "Subordinated Chemed Debentures" means the Convertible Junior
Subordinated Debentures due 2030, issued by the Company pursuant to the
indenture dated as of February 7, 2000, between the Company and Firstar Bank,
National Association, as trustee.

          "Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Closing Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.

          "Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by:

          (1) such Person,

          (2) such Person and one or more Subsidiaries of such Person or

          (3) one or more Subsidiaries of such Person.

          "Temporary Cash Investments" means any of the following:

<PAGE>
                                                                              34

          (1) any investment in direct obligations of the United States of
     America or any agency thereof or obligations Guaranteed by the United
     States of America or any agency thereof;

          (2) investments in time deposit accounts, certificates of deposit and
     money market deposits maturing within 180 days of the date of acquisition
     thereof issued by a bank or trust company that is organized under the laws
     of the United States of America, any state thereof or any foreign country
     recognized by the United States of America having capital, surplus and
     undivided profits aggregating in excess of $250,000,000 (or the foreign
     currency equivalent thereof) and whose long-term debt is rated "A" (or such
     similar equivalent rating) or higher by at least one nationally recognized
     statistical rating organization (as defined in Rule 436 under the
     Securities Act);

          (3) repurchase obligations with a term of not more than 30 days for
     underlying securities of the types described in clause (1) above entered
     into with a bank meeting the qualifications described in clause (2) above;

          (4) investments in commercial paper, maturing not more than 90 days
     after the date of acquisition, issued by a corporation (other than an
     Affiliate of the Company) organized and in existence under the laws of the
     United States of America or any foreign country recognized by the United
     States of America with a rating at the time as of which any investment
     therein is made of "P-1" (or higher) according to Moody's Investors
     Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings
     Service, a division of The McGraw-Hill Companies, Inc. ("S & P"); and

          (5) investments in securities with maturities of six months or less
     from the date of acquisition issued or fully guaranteed by any state,
     commonwealth or territory of the United States of America, or by any
     political subdivision or taxing authority thereof, and rated at least "A"
     by S&P or "A" by Moody's Investors Service, Inc.

<PAGE>

                                                                              35

          "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture.

          "Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.

          "Transactions" means, collectively, the following transactions, which
shall be consummated on or about the date of the closing of the offering of the
Original Securities: (i) the consummation of the merger of Vitas with and into
an indirect Wholly Owned Subsidiary of the Company pursuant to a merger
agreement dated as of December 18, 2003, among the Company, Vitas and Marlin
Merger Corp., (ii) the repayment of approximately $74.4 million of existing
indebtedness of Vitas, plus accrued interest thereon, (iii) the repayment of
approximately $29.4 million of existing indebtedness of the Company (including a
$3.0 million make whole premium), plus accrued interest thereon, (iv) the
assignment of the Westbrook Agreement by the Company to Vitas, the payment of
$25.0 million by Vitas to Hugh A. Westbrook pursuant to the Westbrook Agreement
and the performance of the other obligations under the Westbrook Agreement, (v)
the consummation of the offering and sale of Floating Rate Notes, the Original
Securities and Capital Stock of the Company and the execution and delivery of
notes, indentures and other agreements in connection therewith, (vi) the Company
and certain of its Subsidiaries entering into the Credit Agreement and the
borrowing on the Closing Date of $75.0 million thereunder (vii) the issuance or
deemed issuance of letters of credit under the Credit Agreement to replace or
backstop, or the cash collateralization of, letters of credit issued for the
account of the Company or any of its Subsidiaries or Vitas or any of its
Subsidiaries, (viii) the cancelation of a warrant held by the Company for shares
of Vitas stock and (ix) the payment of fees and expenses in connection with the
foregoing.

          "Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at

<PAGE>

                                                                              36

least two Business Days prior to the date fixed for redemption (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the then remaining average life to
February 24, 2007, provided, however, that if the average life to February 24,
2007 of the Securities is not equal to the constant maturity of a United States
Treasury security for which a weekly average yield is given, the Treasury Rate
shall be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the weekly average yields of United States Treasury securities
for which such yields are given, except that if the average life to February 24,
2007, of the Securities is less than one year, the weekly average yield on
actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.

          "Trustee" means the party named as such in the Indenture until a
successor replaces it and, thereafter, means the successor.

          "Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

          "Trust Securities" means the Chemed Preferred Securities, the
Subordinated Chemed Debentures and the guarantee by the Company to the holders
of the Chemed Preferred Securities of amounts payable thereunder.

          "Unrestricted Subsidiary" means:

          (1) any Subsidiary of the Company that at the time of determination
     shall be designated an Unrestricted Subsidiary by the Board of Directors in
     the manner provided in Section 4.13 and

          (2) any Subsidiary of an Unrestricted Subsidiary.

          "U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.

<PAGE>
                                                                              37

          "Vitas" means Vitas Healthcare Corporation or any successor thereto by
any merger, consolidation or other transaction which is permitted hereunder.

          "VHC" means Vitas or, at the election of the Company (which shall be
specified in writing to the Trustee) for purposes of the designation of the
Specified Subsidiary, VHC means any Wholly Owned Subsidiary of the Company of
which Vitas is a Subsidiary and which owns no other assets other than assets
incidental to the ownership of Vitas.

          "VNF" means Vitas of North Florida, Inc., a Florida not-for-profit
corporation and a Wholly Owned Subsidiary of Vitas.

          "Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.

          "Westbrook Agreement" has the meaning assigned to such term in the
definition of "EBITDA".

          "Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company
all the Capital Stock of which (other than directors' qualifying shares or
shares issued to third parties to the extent necessary to satisfy any licensing
requirements under applicable law with respect to the Company's or any of its
Subsidiaries' business) is owned by the Company or another Wholly Owned
Subsidiary.

          SECTION 1.02. OTHER DEFINITIONS.

<TABLE>
<CAPTION>
                                                                     Defined in
                                        Term                          Section
                                        ----                        -----------
<S>                                                                 <C>
"Affiliate Transaction".......................................      4.07(a)
"Bankruptcy Law"..............................................      6.01
"Change of Control Offer".....................................      4.09(b)
"covenant defeasance option"..................................      8.01(b)
"Custodian"...................................................      6.01
"Event of Default"............................................      6.01
"Initial Lien"................................................      4.11
"legal defeasance option".....................................      8.01(b)
"Offer".......................................................      4.06(b)
"Offer Amount"................................................      4.06(c)(2)
</TABLE>

<PAGE>

                                                                              38

<TABLE>
<S>                                                                 <C>
"Offer Period"................................................      4.06(c)(2)
"Paying Agent"................................................      2.03
"Purchase Date"...............................................      4.06(c)(1)
"Registrar"...................................................      2.03
"Successor Company"...........................................      5.01(a)(1)
</TABLE>

          SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:

          "Commission" means the SEC;

          "indenture securities" means the Securities;

          "indenture security holder" means a Securityholder;

          "indenture to be qualified" means this Indenture;

          "indenture trustee" or "institutional trustee" means the Trustee; and

          "obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.

          All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.

          SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:

          (1) a term has the meaning assigned to it;

          (2) an accounting term not otherwise defined has the meaning assigned
     to it in accordance with GAAP;

          (3) "or" is not exclusive;

          (4) "including" means including without limitation;

          (5) words in the singular include the plural and words in the plural
     include the singular;

<PAGE>
                                                                              39

          (6) unsecured Indebtedness shall not be deemed to be subordinate or
     junior to secured Indebtedness merely by virtue of its nature as unsecured
     Indebtedness;

          (7) secured Indebtedness shall not be deemed to be subordinate or
     junior to any other secured Indebtedness merely because it has a junior
     priority with respect to the same collateral;

          (8) the principal amount of any noninterest bearing or other discount
     security at any date shall be the principal amount thereof that would be
     shown on a balance sheet of the issuer dated such date prepared in
     accordance with GAAP;

          (9) the principal amount of any Preferred Stock shall be (A) the
     maximum liquidation value of such Preferred Stock or (B) the maximum
     mandatory redemption or mandatory repurchase price with respect to such
     Preferred Stock, whichever is greater;

          (10) all references to the date the Securities were originally issued
     shall refer to the Issue Date; and

          (11) references to "interest" with respect to the Securities in this
     Indenture shall include any additional interest payable pursuant to the
     Registration Rights Agreement.

                                    ARTICLE 2

                                 THE SECURITIES

          SECTION 2.01. FORM AND DATING. Provisions relating to the Initial
Securities and the Exchange Securities are set forth in the Appendix attached
hereto (the "Appendix") which is hereby incorporated in, and expressly made part
of, this Indenture. The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit 1 to the
Appendix which is hereby incorporated in, and expressly made a part of, this
Indenture. The Exchange Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or

<PAGE>
                                                                              40

endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Company). Each Security shall be
dated the date of its authentication. The terms of the Securities set forth in
the Appendix and Exhibit A are part of the terms of this Indenture.

          SECTION 2.02. EXECUTION AND AUTHENTICATION. An Officer shall sign the
Securities for the Company by manual or facsimile signature.

          If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.

          A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.

          On the Issue Date, the Trustee shall authenticate and deliver $150.0
million of the Securities and, at any time and from time to time thereafter, the
Trustee shall authenticate and deliver Securities for original issue in an
aggregate principal amount specified in such order, in each case, upon a written
order of the Company signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company. Such order shall
specify the amount of the Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated and, in the case of an
issuance of Additional Securities pursuant to Section 2.13 after the Issue Date,
shall certify that such issuance is in compliance with Section 4.03. The
aggregate principal amount of Securities outstanding at any time may not exceed
$300.0 million except as provided in Section 2.07.

          The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has

<PAGE>

                                                                              41

the same rights as any Registrar, Paying Agent or agent for service of notices
and demands.

          SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.

          The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.

          The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.

          SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal and interest when
so becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the

<PAGE>
                                                                              42

Paying Agent. Upon complying with this Section, the Paying Agent shall have no
further liability for the money delivered to the Trustee.

          SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.

          SECTION 2.06. TRANSFER AND EXCHANGE. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of this Indenture and Section
8-401(1) of the Uniform Commercial Code are met. When Securities are presented
to the Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section (other than any such transfer taxes,
assessments or similar governmental charge payable upon exchange or transfer
pursuant to Sections 3.06, 4.10 and 9.05). The Company shall not be required to
make and the Registrar need not register transfers or exchanges of Securities
selected for redemption (except, in the case of Securities to be redeemed in
part, the portion thereof not to be redeemed) or any Securities for a period of
15 days before a selection of Securities to be redeemed or 15 days before an
interest payment date.

          Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem

<PAGE>

                                                                              43

and treat the person in whose name a Security is registered as the absolute
owner of such Security for the purpose of receiving payment of principal of
and interest on such Security and for all other purposes whatsoever, whether
or not such Security is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.

          All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled to
the same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.

          SECTION 2.07. REPLACEMENT SECURITIES. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.

          Every replacement Security is an additional Obligation of the Company.

          SECTION 2.08. OUTSTANDING SECURITIES. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.

          If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.

<PAGE>

                                                                              44

          If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.

          SECTION 2.09. TEMPORARY SECURITIES. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.

          SECTION 2.10. CANCELLATION. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.

          SECTION 2.11. DEFAULTED INTEREST. If the Company defaults in a payment
of interest on the Securities, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.

<PAGE>
                                                                              45

          SECTION 2.12. CUSIP NUMBERS. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.

          SECTION 2.13. ISSUANCE OF ADDITIONAL SECURITIES. The Company shall be
entitled, subject to its compliance with Section 4.03, to issue Additional
Securities (in an aggregate principal amount not to exceed $150,000,000) under
this Indenture which shall have identical terms as the Initial Securities issued
on the Issue Date, other than with respect to the date of issuance and issue
price. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities issued in exchange therefor shall be
treated as a single class for all purposes under this Indenture.

          With respect to any Additional Securities, the Company shall set forth
in a resolution of the Board of Directors and an Officers' Certificate, a copy
of each which shall be delivered to the Trustee, the following information:

          (1) the aggregate principal amount of such Additional Securities to be
     authenticated and delivered pursuant to this Indenture;

          (2) the issue price, the issue date and the CUSIP number of such
     Additional Securities; provided, however, that no Additional Securities may
     be issued at a price that would cause such Additional Securities to have
     "original issue discount" within the meaning of Section 1273 of the Code;
     and

          (3) whether such Additional Securities shall be Transfer Restricted
     Securities and issued in the form of Initial Securities as set forth in the
     Appendix to this Indenture or shall be issued in the form of Exchange
     Securities as set forth in Exhibit A.

<PAGE>

                                    ARTICLE 3

                                   REDEMPTION

          SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.

          The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.

          Any notice of redemption may provide that the redemption will be
subject to specified conditions, provided that such conditions are not solely
within the Company's control.

          SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee in its
sole discretion shall deem to be fair and appropriate and in accordance with
methods generally used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000. Securities and portions of them the Trustee selects shall be in
principal amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.

          SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than
60 days before a date for redemption of Securities, the Company shall mail a
notice

<PAGE>
                                                                              47

of redemption by first-class mail to each Holder of Securities
to be redeemed at such Holder's registered address.

          The notice shall identify the Securities to be redeemed and shall
state:

          (1) the redemption date;

          (2) the redemption price;

          (3) the name and address of the Paying Agent;

          (4) that Securities called for redemption must be surrendered to the
     Paying Agent to collect the redemption price;

          (5) if fewer than all the outstanding Securities are to be redeemed,
     the identification and principal amounts of the particular Securities to be
     redeemed;

          (6) that, unless the Company defaults in making such redemption
     payment, interest on Securities (or portion thereof) called for redemption
     ceases to accrue on and after the redemption date;

          (7) that no representation is made as to the correctness or accuracy
     of the CUSIP number, if any, listed in such notice or printed on the
     Securities; and

          (8) any condition to such redemption permitted under Section 3.01.

          At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.

          SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice; provided
that if there is any condition to the Company's obligation to redeem such
Securities which is permitted by Section 3.01 and stated in the notice of
redemption, such Securities shall not be deemed due and payable unless and

<PAGE>
                                                                              48

until such condition is satisfied or waived. Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price stated in the
notice, plus accrued interest to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
related interest payment date). Failure to give notice or any defect in the
notice to any Holder shall not affect the validity of the notice to any other
Holder.

          SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all Securities
to be redeemed on that date other than Securities or portions of Securities
called for redemption which have been delivered by the Company to the Trustee
for cancellation.

          SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.

                                    ARTICLE 4

                                    COVENANTS

          SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.

          The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

          SECTION 4.02. SEC REPORTS. Whether or not required by the SEC's rules
and regulations, so long as any Securities are outstanding, the Company will
furnish to the

<PAGE>

                                                                              49

Holders, within the time periods specified in the SEC's rules and regulations:

          (1) all quarterly and annual reports that would be required to be
     filed with the SEC on Forms 10-Q and 10-K if the Company was required to
     file such reports; and

          (2) all current reports that would be required to be filed with the
     SEC on Form 8-K if the Company was required to file such reports.

          All such reports will be prepared in all material respects in
accordance with all of the SEC's rules and regulations applicable to such
reports, and each annual report on Form 10-K will include a report on the
Company's consolidated financial statements by the Company's certified
independent accountants. The Company's reporting obligations with respect to
clauses (1) and (2) above shall be deemed satisfied in the event the Company
files these reports with the SEC on EDGAR.

          If, at any time, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company will
nevertheless be required to continue to file the reports specified in the
preceding paragraph with the SEC within the time periods specified above unless
the SEC will not accept such a filing. The Company agrees that it will not take
any action for the sole purpose of causing the SEC not to accept any such
filings (it being understood and agreed that, if the Company is entitled to
suspend its reporting obligations under the Exchange Act, the Company shall not
be prevented from making any filings necessary to suspend such obligations). If,
notwithstanding the foregoing, the SEC will not accept the Company's filings for
any reason, the Company will post the reports referred to in the preceding
paragraph on its website within the time periods that would apply if the Company
was required to file those reports with the SEC.

          In addition, the Company agrees that, for so long as any Securities
remain outstanding, at any time they are not required to file the reports
required by the preceding paragraphs with the SEC, they will furnish to the
Holders and to securities analysts and prospective investors, upon their written
request, the information required to be

<PAGE>

                                                                              50

delivered pursuant to Rule 144A(d)(4) under the Securities Act.

          SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company and its
Restricted Subsidiaries may Incur Indebtedness if on the date of such Incurrence
and after giving effect thereto the Consolidated Leverage Ratio would be no
greater than (i) prior to any designation of the Specified Subsidiary Group as
Unrestricted Subsidiaries, (x) 5.75 to 1 if such Incurrence occurs on or prior
to December 31, 2004 and (y) 5.5 to 1, if such Incurrence occurs after December
31, 2004 and (ii) on or following any designation of the Specified Subsidiary
Group as Unrestricted Subsidiaries, (x) 5.0 to 1, if the Specified Subsidiary is
VHC and (y) 4.0 to 1, if the Specified Subsidiary is RRM.

          (b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness:

          (1) Indebtedness Incurred pursuant to the Credit Agreement in an
     aggregate principal amount not to exceed $135.0 million less the aggregate
     amount of all Net Available Cash applied by the Company or any of its
     Restricted Subsidiaries to repay Indebtedness under the Credit Agreement
     pursuant to Section 4.06(a)(3)(A) solely to the extent the corresponding
     commitments relating to such Indebtedness are permanently reduced;

          (2) Indebtedness of the Company owed to and held by any Restricted
     Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by
     the Company or any Restricted Subsidiary; provided, however, that (A) any
     subsequent issuance or transfer of any Capital Stock or any other event
     that results in any such Restricted Subsidiary ceasing to be a Restricted
     Subsidiary or any subsequent transfer of any such Indebtedness (except to
     the Company or a Restricted Subsidiary) shall be deemed, in each case, to
     constitute the Incurrence of such Indebtedness by the issuer thereof and
     (B) if the Company is the obligor on such Indebtedness, such Indebtedness
     is expressly subordinated to the prior payment in full in cash of all
     obligations with respect to the Securities;

<PAGE>
                                                                              51

          (3) Indebtedness represented by (A) the Securities (not including any
     Additional Securities) and any Exchange Notes and (B) the Floating Rate
     Notes and the Guarantees of the Floating Rate Notes by Subsidiaries of the
     Company (but not including any additional Floating Rate Notes but including
     any exchange notes under the indenture for the Floating Rate Notes);

          (4) Indebtedness outstanding on the Closing Date (other than the
     Indebtedness described in clauses (1), (2) or (3) above);

          (5) Indebtedness of a Restricted Subsidiary Incurred and outstanding
     on or prior to the date on which such Restricted Subsidiary was acquired by
     the Company (other than Indebtedness Incurred in contemplation of, in
     connection with, as consideration in, or to provide all or any portion of
     the funds or credit support utilized to consummate, the transaction or
     series of related transactions pursuant to which such Restricted Subsidiary
     became a Subsidiary of or was otherwise acquired by the Company); provided,
     however, that on the date that such Restricted Subsidiary is acquired by
     the Company, either (x) the Company would have been able to incur $1.00 of
     additional indebtedness pursuant to Section 4.03(a) after giving effect to
     such acquisition or (y) the Consolidated Leverage Ratio after giving effect
     to such acquisition and any related transactions would be no greater than
     the Consolidated Leverage Ratio as of such date without giving effect to
     such acquisition and any related transactions;

          (6) Refinancing Indebtedness in respect of any Indebtedness Incurred
     pursuant to Section 4.03(a) or clause (3), (4), this clause (6) or clause
     (9) of this paragraph (b);

          (7) Indebtedness (A) in respect of performance bonds, bankers'
     acceptances, letters of credit and surety or appeal bonds provided by the
     Company and the Restricted Subsidiaries in the ordinary course of their
     business, and (B) under Interest Rate Agreements entered into for bona fide
     hedging purposes of the Company in the ordinary course of business;
     provided, however, that such Interest Rate Agreements do not increase the
     Indebtedness of the Company outstanding

<PAGE>
                                                                              52

     at any time other than as a result of fluctuations in interest rates or by
     reason of fees, indemnities and compensation payable thereunder;

          (8) Purchase Money Indebtedness, mortgage financings and Capitalized
     Lease Obligations in an aggregate principal amount not in excess of $3.0
     million at any time outstanding;

          (9) Indebtedness Incurred at a Restricted Subsidiary, to the extent
     the proceeds of such Indebtedness are used to repay Indebtedness under the
     Credit Agreement and/or the Floating Rate Notes;

          (10) Indebtedness arising from the honoring by a bank or other
     financial institution of a check, draft or similar instrument drawn against
     insufficient funds in the ordinary course of business, provided that such
     Indebtedness is extinguished within five Business Days of its Incurrence;

          (11) the Incurrence by the Company or any of its Restricted
     Subsidiaries of Indebtedness constituting reimbursement obligations with
     respect to letters of credit issued in the ordinary course of business;
     provided, however, that upon the drawing of such letters of credit, such
     obligations are reimbursed within 30 days following such drawing;

          (12) obligations arising from or representing deferred compensation to
     employees of the Company or its Subsidiaries that constitute or are deemed
     to be Indebtedness under GAAP and that are Incurred in the ordinary course
     of business; or

          (13) Indebtedness (other than Indebtedness permitted to be Incurred
     pursuant to the foregoing paragraph (a) or any other clause of this
     paragraph (b)) in an aggregate principal amount on the date of Incurrence
     that, when added to all other Indebtedness Incurred pursuant to this clause
     (13) and then outstanding, will not exceed $5.0 million.

          (c) Notwithstanding the foregoing, the Company may not Incur any
Indebtedness pursuant to paragraph (b) above if the proceeds thereof are used,
directly or indirectly, to repay, prepay, redeem, defease, retire, refund or
refinance any Subordinated Obligations unless

<PAGE>
                                                                              53

such Indebtedness will be subordinated to the Securities to at least the same
extent as such Subordinated Obligations.

          (d) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded solely as
a result of fluctuations in the exchange rates of currencies. For purposes of
determining the outstanding principal amount of any particular Indebtedness
Incurred pursuant to this Section 4.03:

          (1) Indebtedness Incurred pursuant to the Credit Agreement prior to or
     on the Closing Date shall be treated as Incurred pursuant to clause (1) of
     paragraph (b) above,

          (2) Indebtedness permitted by this Section 4.03 need not be permitted
     solely by reference to one provision permitting such Indebtedness but may
     be permitted in part by one such provision and in part by one or more other
     provisions of this Section 4.03 permitting such Indebtedness, and

          (3) in the event that Indebtedness meets the criteria of more than one
     of the types of Indebtedness described in this Section 4.03, the Company,
     in its sole discretion, shall classify such Indebtedness and only be
     required to include the amount of such Indebtedness in one of such clauses.

          (e) In addition, the Company will not permit any of its Unrestricted
Subsidiaries to incur any Indebtedness other than Non-Recourse Debt (or issue
any shares of Disqualified Stock that is either mandatorily redeemable by the
Company or convertible or exchangeable for Indebtedness other than Non-Recourse
Debt). If at any time an Unrestricted Subsidiary becomes a Restricted
Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred
by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be Incurred as of such date under this clause
(e), the Company shall be in Default of this Section 4.03).

          SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company shall
not, and shall not permit any Restricted Subsidiary, directly or indirectly, to:

<PAGE>

                                                                             54

          (1) declare or pay any dividend, make any distribution on or in
     respect of its Capital Stock or make any similar payment (including any
     payment in connection with any merger or consolidation involving the
     Company or any Subsidiary of the Company) to the direct or indirect holders
     of its Capital Stock, except (x) dividends or distributions payable solely
     in its Capital Stock (other than Disqualified Stock or Preferred Stock) and
     (y) dividends or distributions payable to the Company or a Restricted
     Subsidiary (and, if such Restricted Subsidiary has shareholders other than
     the Company or other Restricted Subsidiaries, to its other shareholders on
     a pro rata basis),

          (2) purchase, repurchase, redeem, retire or otherwise acquire for
     value any Capital Stock of the Company or any Restricted Subsidiary held by
     Persons other than the Company or a Restricted Subsidiary,

          (3) purchase, repurchase, redeem, retire, defease or otherwise acquire
     for value, prior to scheduled maturity, scheduled repayment or scheduled
     sinking fund payment any Subordinated Obligations (other than the purchase,
     repurchase, redemption, retirement, defeasance or other acquisition for
     value of Subordinated Obligations acquired in anticipation of satisfying a
     sinking fund obligation, principal installment or final maturity, in each
     case due within one year of the date of acquisition), or

          (4) make any Investment (other than a Permitted Investment) in any
     Person;

(any such dividend, distribution, payment, purchase, redemption, repurchase,
defeasance, retirement, or other acquisition or Investment described in
clauses (1) through (4) above being herein referred to as a "Restricted
Payment") if at the time the Company or such Restricted Subsidiary makes such
Restricted Payment:

               (A) a Default shall have occurred and be continuing (or would
          result therefrom);

               (B) after giving effect, on a pro forma basis, to such Restricted
          Payment, the Company could not Incur at least $1.00 of additional
          Indebtedness under Section 4.03(a); or
<PAGE>

                                                                              55

               (C) the aggregate amount of such Restricted Payment and all other
          Restricted Payments (the amount so expended, if other than in cash,
          shall be the Fair Market Value of the property or other non-cash
          assets that constitute such Restricted Payment) declared or made
          subsequent to the Closing Date would exceed the sum, without
          duplication, of:

               (i) 50% of the Consolidated Net Income accrued during the period
          (treated as one accounting period) from the beginning of the fiscal
          quarter immediately following the fiscal quarter during which the
          Closing Date occurs to the end of the most recent fiscal quarter
          ending at least 45 days prior to the date of such Restricted Payment
          (or, in case such Consolidated Net Income shall be a deficit, minus
          100% of such deficit);

               (ii) the aggregate Net Cash Proceeds received by the Company from
          the issuance or sale of its Capital Stock (other than Disqualified
          Stock) subsequent to the Closing Date (other than an issuance or sale
          to (x) a Subsidiary of the Company or (y) an employee stock ownership
          plan or other trust established by the Company or any of its
          Subsidiaries);

               (iii) the amount by which Indebtedness of the Company or its
          Restricted Subsidiaries is reduced on the Company's balance sheet upon
          the conversion or exchange (other than by a Subsidiary of the Company)
          subsequent to the Closing Date of any Indebtedness of the Company or
          its Restricted Subsidiaries issued after the Closing Date which is
          convertible or exchangeable for Capital Stock (other than Disqualified
          Stock) of the Company (less the amount of any cash or the Fair Market
          Value of other property distributed by the Company or any Restricted
          Subsidiary upon such conversion or exchange); and

               (iv) an amount equal to the sum of (x) the net reduction in any
          Investments (excluding Permitted Investments, except as provided in
          the next sentence) made by the Company or any Restricted Subsidiary in
          any Person resulting

<PAGE>
                                                                              56

          from repurchases, repayments or redemptions of such Investments by
          such Person, net cash proceeds realized on the sale of such
          Investment and net cash proceeds representing the return of capital
          (excluding dividends and distributions), in each case received by
          the Company or any Restricted Subsidiary, and (y) to the extent such
          Person is an Unrestricted Subsidiary, the portion (proportionate to
          the Company's equity interest in such Subsidiary) of the Fair Market
          Value of the net assets of such Unrestricted Subsidiary if such
          Unrestricted Subsidiary is designated a Restricted Subsidiary, with
          such Fair Market Value measured at the time of any such designation;
          provided, however, that the foregoing sum shall not exceed, in the
          case of any such Person or Unrestricted Subsidiary, the amount of
          Investments (excluding Permitted Investments, except as provided in
          the next sentence) previously made by the Company or any Restricted
          Subsidiary in such Person or Unrestricted Subsidiary and included in
          the calculation of the amount of Restricted Payments.

After any designation of the Specified Subsidiary Group as Unrestricted
Subsidiaries in accordance with Section 4.13, the remaining Investment of the
Company and its Restricted Subsidiaries in the Specified Subsidiary Group
shall be included in the calculation of the amount available for Restricted
Payments as provided in clause (C) above as if it were not a Permitted
Investment; provided, that, if RRM is the Specified Subsidiary, such inclusion
shall only be made if at the time of such designation the amount available for
Restricted Payments under clause (C) above is greater than zero, in which case
the amount otherwise available for Restricted Payments shall be reduced by the
amount of such Investment but not below zero. For the avoidance of doubt, the
inclusion of the Investment in the Specified Subsidiary Group after
designation of the Specified Subsidiary Group as Unrestricted Subsidiaries
shall not be taken into account in determining whether the Company is
permitted to designate such Subsidiaries as Unrestricted Subsidiaries under
Section 4.13.

          (b) The provisions of the foregoing paragraph (a) shall not prohibit:

<PAGE>

                                                                              57

          (1) any purchase, repurchase, redemption, retirement or other
     acquisition for value of Capital Stock of the Company made by exchange for,
     or out of the proceeds of the substantially concurrent sale of, Capital
     Stock of the Company (other than Disqualified Stock and other than Capital
     Stock issued or sold to a Subsidiary of the Company or an employee stock
     ownership plan or other trust established by the Company or any of its
     Subsidiaries); provided, however, that:

               (A) such purchase, repurchase, redemption, retirement or other
          acquisition for value will be excluded in the calculation of the
          amount of Restricted Payments, and

               (B) the Net Cash Proceeds from such sale applied in the manner
          set forth in this clause (1) will be excluded from the calculation of
          amounts under clause (4)(C)(ii) of paragraph (a) above;

          (2) any prepayment, repayment, purchase, repurchase, redemption,
     retirement, defeasance or other acquisition for value of Subordinated
     Obligations of the Company made by exchange for, or out of the proceeds of
     the substantially concurrent sale of, Indebtedness of the Company that is
     permitted to be Incurred pursuant to Section 4.03(b); provided, however,
     that such prepayment, repayment, purchase, repurchase, redemption,
     retirement, defeasance or other acquisition for value will be excluded in
     the calculation of the amount of Restricted Payments;

          (3) any prepayment, repayment, purchase, repurchase, redemption,
     retirement, defeasance or other acquisition for value of Subordinated
     Obligations from Net Available Cash to the extent permitted by Section
     4.06; provided, however, that such prepayment, repayment, purchase,
     repurchase, redemption, retirement, defeasance or other acquisition for
     value will be excluded in the calculation of the amount of Restricted
     Payments;

          (4) dividends paid within 60 days after the date of declaration
     thereof if at such date of declaration such dividends would have complied
     with this Section 4.04; provided, however, that such dividends will be

<PAGE>
                                                                              58

     included in the calculation of the amount of Restricted Payments;

          (5) any purchase, repurchase, redemption, retirement or other
     acquisition for value of shares of, or options to purchase shares of,
     Capital Stock of the Company or any of its Subsidiaries from employees,
     former employees, directors or former directors of the Company or any of
     its Subsidiaries (or permitted transferees of such employees, former
     employees, directors or former directors), pursuant to the terms of
     agreements (including employment agreements) or plans (or amendments
     thereto) approved by the Board of Directors under which such individuals
     purchase or sell or are granted the option to purchase or sell, shares of
     such Capital Stock; provided, however, that the aggregate amount of such
     purchases, repurchases, redemptions, retirements and other acquisitions for
     value will not exceed $2.0 million in any calendar year; provided further,
     however, that such purchases, repurchases, redemptions, retirements and
     other acquisitions for value shall be excluded in the calculation of the
     amount of Restricted Payments;

          (6) repurchases of Capital Stock deemed to occur upon exercise of
     stock options if such Capital Stock represents a portion of the exercise
     price of such options, and repurchases of Capital Stock of Subsidiaries
     consisting of directors' qualifying shares or shares issued to third
     parties in the ordinary course to the extent necessary to satisfy any
     licensing requirements under applicable law with respect to the Company's
     or any of its Subsidiary's business; provided, however, that such
     Restricted Payments shall be excluded in the calculation of the amount of
     Restricted Payments;

          (7) cash payments in lieu of the issuance of fractional shares in
     connection with the exercise of warrants, options or other securities
     convertible into or exchangeable for Capital Stock of the Company;
     provided, however, that any such cash payment shall not be for the purpose
     of evading the limitation of this Section 4.04 (as determined in good faith
     by the Board of Directors); provided further, however, that such payments
     shall be included in the calculation of the amount of Restricted Payments;

<PAGE>
                                                                              59

          (8) payments of intercompany subordinated Indebtedness, the Incurrence
     of which was permitted under Section 4.03(b)(2); provided, however, that no
     Default has occurred and is continuing or would otherwise result therefrom;
     provided further, however, that such payments shall be excluded in the
     calculation of the amount of Restricted Payment;

          (9) a Qualifying Subsidiary Stock Distribution to the extent permitted
     by Section 4.13; provided, however, that the amount of such distribution
     shall not be included in the calculation of the amount of Restricted
     Payments;

          (10) the payment of cash dividends on the Capital Stock of the Company
     in an amount not to exceed (x) $0.48 per share per fiscal year and (y) $7.0
     million in the aggregate for such dividends in any fiscal year; provided
     that, after a designation of the Specified Subsidiary Group as Unrestricted
     Subsidiaries, no such dividend shall be declared or paid unless, for the
     most recently ended four full fiscal quarters for which internal financial
     statements are available preceding the date of declaration of any such
     dividend or distribution after giving effect to such dividend or
     distribution as a fixed charge on a pro forma basis, the Company and its
     Restricted Subsidiaries would have had a Consolidated Fixed Charge Coverage
     Ratio of at least 1.35 to 1; provided further that if (x) the Specified
     Subsidiary is VHC, (y) the Specified Subsidiary Group has been designated
     as Unrestricted Subsidiaries and (z) the Company may not otherwise pay such
     dividends because of a failure to satisfy the Consolidated Fixed Charge
     Coverage Ratio described in the preceding proviso, the Company may pay cash
     dividends from cash proceeds of a Qualifying Subsidiary Stock Sale, in an
     amount not to exceed $7.0 million; and provided further that dividends paid
     under this clause (10) shall be included in the amount of Restricted
     Payments;

          (11) the payment of scheduled, quarterly cash dividends on the Chemed
     Preferred Securities declared on or prior to December 31, 2004 in an amount
     not to exceed $2.00 per share per year, and the redemption of the Chemed
     Preferred Securities and the Subordinated Chemed Debentures at the
     applicable scheduled redemption prices on or prior to December 31, 2004;

<PAGE>
                                                                              60

     provided that such dividends and redemption amounts shall not be
     included in the amount of Restricted Payments;

          (12) dividends or distributions of Capital Stock subject to the
     Closing Date Stock Award Plan, so long as the aggregate amount of such
     dividends or distributions made pursuant to this clause 12 does not exceed
     $2.8 million; provided, that such dividends or distributions shall be
     excluded in the amount of Restricted Payments; and

          (13) other Restricted Payments in an aggregate amount not to exceed
     $5.0 million; provided, however, that such Restricted Payments shall be
     included in the calculation of the amount of Restricted Payments.

          SECTION 4.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:

          (1) pay dividends or make any other distributions on its Capital Stock
     or pay any Indebtedness or other obligations owed to the Company;

          (2) make any loans or advances to the Company; or

          (3) transfer any of its property or assets to the Company, except:

          (A) with respect to clauses (1), (2) or (3):

               (i) any encumbrance or restriction pursuant to applicable law or
          an agreement in effect at or entered into on the Closing Date;

               (ii) any encumbrance or restriction with respect to a Restricted
          Subsidiary pursuant to an agreement relating to any Indebtedness
          Incurred by such Restricted Subsidiary prior to the date on which such
          Restricted Subsidiary was acquired by the Company (other than
          Indebtedness Incurred as consideration in, in contemplation of, or to
<PAGE>

                                                                              61

          provide all or any portion of the funds or credit support utilized to
          consummate the transaction or series of related transactions pursuant
          to which such Restricted Subsidiary became a Restricted Subsidiary or
          was otherwise acquired by the Company) and outstanding on such date;

               (iii) any encumbrance or restriction pursuant to an agreement
          effecting a Refinancing of Indebtedness Incurred pursuant to an
          agreement referred to in clause (i) or (ii) of this Section 4.05(3)(A)
          or this clause (iii) or contained in any amendment to an agreement
          referred to in clause (i) or (ii) of this Section 4.05(3)(A) or this
          clause (iii); provided, however, that the encumbrances and
          restrictions contained in any such Refinancing agreement or amendment,
          taken as a whole, are not materially more disadvantageous to the
          Holders than the encumbrances and restrictions contained in such
          predecessor agreements (as determined by the Company in good faith);

               (iv) any encumbrance or restriction contained in the terms of any
          Indebtedness Incurred pursuant to Section 4.03(b)(9) or any agreement
          pursuant to which such Indebtedness was Incurred; provided, however
          that the encumbrances and restrictions contained in such Indebtedness,
          taken as a whole, are not materially more disadvantageous to the
          holders of the Securities than the encumbrances and restrictions
          contained in the agreements for the Indebtedness being repaid (as
          determined by the Company in good faith);

               (v) with respect to a Restricted Subsidiary, any encumbrance or
          restriction imposed pursuant to an agreement entered into in
          connection with the sale or disposition of all or substantially all
          the Capital Stock or assets of such Restricted Subsidiary or in
          addition, in the case of the Specified Subsidiary Group, any
          encumbrance or restriction imposed pursuant to a purchase and sale,
          underwriting or other disposition agreement in connection with a
          Qualifying Subsidiary Stock Sale or Qualifying Subsidiary Stock
          Distribution; provided that in

<PAGE>
                                                                              62

          any such case such encumbrance or restriction is in effect only for
          the period pending the closing of such sale, disposition or
          distribution; and

               (B) in the case of clause (3), any encumbrance or restriction

               (i) that restricts in a customary manner the subletting,
          assignment or transfer of any property or asset that is subject to a
          lease, license or similar contract, or

               (ii) contained in security agreements securing Indebtedness of a
          Restricted Subsidiary to the extent such encumbrance or restriction
          restricts the transfer of the property subject to such security
          agreements.

          SECTION 4.06. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. (a)
The Company will not, and will not permit any Restricted Subsidiary to, make any
Asset Disposition unless:

               (1) the Company or such Restricted Subsidiary receives
          consideration (including by way of relief from, or by any other Person
          assuming sole responsibility for, any liabilities, contingent or
          otherwise) at the time of such Asset Disposition at least equal to the
          Fair Market Value of the shares and assets subject to such Asset
          Disposition,

               (2) at least 75% of the consideration thereof received by the
          Company or such Restricted Subsidiary is in the form of cash or cash
          equivalents, and

               (3) an amount equal to 100% of the Net Available Cash from such
          Asset Disposition is applied by the Company (or such Restricted
          Subsidiary, as the case may be)

                    (A) first, to the extent the Company elects (or is required
               by the terms of any Indebtedness), to prepay, repay, purchase,
               repurchase, redeem, retire, defease or otherwise acquire for
               value Senior Indebtedness of the Company or Indebtedness (other
               than obligations in respect of Preferred Stock) of a Restricted
               Subsidiary (in each case other than Indebtedness

<PAGE>
                                                                              63

               owed to the Company or an Affiliate of the Company
               and other than obligations in respect of Disqualified Stock)
               within one year from the later of the date of such Asset
               Disposition or the receipt of such Net Available Cash;

                    (B) second, to the extent of the balance of Net Available
               Cash after application in accordance with clause (A), to the
               extent the Company or such Restricted Subsidiary elects, to
               reinvest in Additional Assets (including by means of an
               Investment in Additional Assets by a Restricted Subsidiary with
               Net Available Cash received by the Company or another Restricted
               Subsidiary) within one year from the later of such Asset
               Disposition or the receipt of such Net Available Cash;

                    (C) third, to the extent of the balance of such Net
               Available Cash after application in accordance with clauses (A)
               and (B), to make an Offer (as defined in Section 4.06(b)) to
               purchase Securities pursuant to and subject to the conditions set
               forth in Section 4.06(b); provided, however, that if the Company
               so elects (or is required by the terms of any other Senior
               Indebtedness), such Offer may be made ratably to purchase the
               Securities and other Senior Indebtedness of the Company; and

                    (D) fourth, to the extent of the balance of such Net
               Available Cash after application in accordance with clauses (A),
               (B) and (C), for any general corporate purpose permitted by the
               terms of the Indenture;

               provided, however that in connection with any prepayment,
               repayment, purchase, repurchase, redemption, retirement,
               defeasance or other acquisition for value of Indebtedness
               pursuant to clause (A) or (C) above, the Company or such
               Restricted Subsidiary will retire such Indebtedness and will
               cause the related loan commitment (if any) to be permanently
               reduced in an amount equal to the principal amount so prepaid,
               repaid, purchased, repurchased, redeemed, retired, defeased or
               otherwise acquired for value.

<PAGE>
                                                                              64

          Notwithstanding the foregoing provisions of this Section 4.06, the
Company and the Restricted Subsidiaries will not be required to apply any Net
Available Cash in accordance with this Section 4.06(a) except to the extent that
the aggregate Net Available Cash from all Asset Dispositions that is not
otherwise applied in accordance with this Section 4.06(a) exceeds (i) $25.0
million, in the case of Net Available Cash that constitutes Net Cash Proceeds
from Qualifying Subsidiary Stock Sales (not including the initial Qualifying
Subsidiary Stock Sale) or (ii) $5.0 million, in the case of Net Available Cash
from all other Asset Dispositions.

          For the purposes of this Section 4.06, the following are deemed to be
cash or cash equivalents:

                    (x) the assumption of Indebtedness of the Company (other
               than obligations in respect of Disqualified Stock of the Company)
               or any Restricted Subsidiary and the release of the Company or
               such Restricted Subsidiary from all liability on such
               Indebtedness in connection with such Asset Disposition and

                    (y) securities received by the Company or any Restricted
               Subsidiary from the transferee that within 90 days are converted
               by the Company or such Restricted Subsidiary into cash.

          (b) In the event of an Asset Disposition that requires the purchase of
     Securities pursuant to Section 4.06(a)(3)(C), the Company shall be required
     (i) to purchase Securities tendered pursuant to an offer by the Company for
     the Securities (the "Offer") at a purchase price of 100% of their principal
     amount plus accrued and unpaid interest to the date of purchase (subject to
     the right of Holders of record on the relevant date to receive interest due
     on the relevant Interest Payment Date) in accordance with the procedures
     (including prorating in the event of oversubscription), set forth in
     Section 4.06(c) and (ii) to purchase other Senior Indebtedness of the
     Company on the terms and to the extent contemplated thereby (provided that
     in no event shall the Company offer to purchase such other Senior
     Indebtedness of the Company at a purchase price in excess of 100% of its
     principal amount (without premium), plus accrued and unpaid interest
     thereon). If the aggregate purchase price of Securities (and other Senior
     Indebtedness) tendered pursuant to the

<PAGE>
                                                                              65

Offer is less than the Net Available Cash allotted to the purchase of the
Securities (and other Senior Indebtedness), the Company will apply the
remaining Net Available Cash in accordance with Section 4.06(a)(3)(D). The
Company will not be required to make an Offer for Securities (and other Senior
Indebtedness) pursuant to this Section 4.06 if the Net Available Cash
available therefor (after application of the proceeds as provided in clauses
(A) and (B) of Section 4.06(a)(3)) is less than $5.0 million for any
particular Asset Disposition or related series of Asset Dispositions (which
lesser amount will be carried forward for purposes of determining whether an
Offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition). Upon completion of such an offer to purchase, Net
Available Cash will be deemed to be reduced by the aggregate amount of such
offer.

          (c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall deliver to the Trustee and
send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in whole
or in part (subject to prorating as described in Section 4.06(b) in the event
the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date") and shall contain such information concerning the business
of the Company which the Company in good faith believes will enable such Holders
to make an informed decision (which at a minimum will include (A) the most
recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Company, the most recent subsequently filed
Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the Company
filed subsequent to such Quarterly Report, other than Current Reports describing
Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports), (B) a description of material developments in
the Company's business subsequent to the date of the latest of such Reports, and
(C) if material, appropriate pro forma financial information) and all
instructions and materials necessary to tender Securities pursuant to the Offer,
together with the information contained in clause (3) of this Section 4.06(c).

<PAGE>

          (2) Not later than the date upon which written notice of an Offer is
     delivered to the Trustee as provided below, the Company shall deliver to
     the Trustee an Officers' Certificate as to (A) the amount of the Offer (the
     "Offer Amount"), including information as to any other Senior Indebtedness
     included in the Offer, (B) the allocation of the Net Available Cash from
     the Asset Dispositions pursuant to which such Offer is being made and (C)
     the compliance of such allocation with the provisions of Section 4.06(a)
     and (b). On such date, the Company shall also irrevocably deposit with the
     Trustee or with a Paying Agent (or, if the Company is acting as its own
     Paying Agent, segregate and hold in trust) in Temporary Cash Investments,
     maturing on the last day prior to the Purchase Date or on the Purchase Date
     if funds are immediately available by open of business, an amount equal to
     the Offer Amount to be held for payment in accordance with the provisions
     of this Section. If the Offer includes other Senior Indebtedness, the
     deposit described in the preceding sentence may be made with any other
     paying agent pursuant to arrangements satisfactory to the Trustee. Upon the
     expiration of the period for which the Offer remains open (the "Offer
     Period"), the Company shall deliver to the Trustee for cancellation the
     Securities or portions thereof which have been properly tendered to and are
     to be accepted by the Company. The Trustee shall, on the Purchase Date,
     mail or deliver payment (or cause the delivery of payment) to each
     tendering Holder in the amount of the purchase price. In the event that the
     aggregate purchase price of the Securities delivered by the Company to the
     Trustee is less than the Offer Amount applicable to the Securities, the
     Trustee shall deliver the excess to the Company immediately after the
     expiration of the Offer Period for application in accordance with this
     Section 4.06.

          (3) Holders electing to have a Security purchased shall be required to
     surrender the Security, with an appropriate form duly completed, to the
     Company at the address specified in the notice at least three Business Days
     prior to the Purchase Date. Holders shall be entitled to withdraw their
     election if the Trustee or the Company receives not later than one Business
     Day prior to the Purchase Date, a telex,

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                                                                              67

     facsimile transmission or letter setting forth the name of the Holder, the
     principal amount of the Security which was delivered for purchase by the
     Holder and a statement that such Holder is withdrawing his election to have
     such Security purchased. Holders whose Securities are purchased only in
     part shall be issued new Securities equal in principal amount to the
     unpurchased portion of the Securities surrendered.

          (4) At the time the Company delivers Securities to the Trustee which
     are to be accepted for purchase, the Company shall also deliver an
     Officers' Certificate stating that such Securities are to be accepted by
     the Company pursuant to and in accordance with the terms of this Section. A
     Security shall be deemed to have been accepted for purchase at the time the
     Trustee, directly or through an agent, mails or delivers payment therefor
     to the surrendering Holder.

          (d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue of its compliance with
such securities laws or regulations.

          SECTION 4.07. LIMITATION ON AFFILIATE TRANSACTIONS. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless such transaction is on terms that:

          (1) are no less favorable to the Company or such Restricted
     Subsidiary, as the case may be, than those that could be obtained at the
     time of such transaction in arm's-length dealings with a Person who is not
     such an Affiliate;

          (2) in the event such Affiliate Transaction involves an aggregate
     amount in excess of $5.0 million,

<PAGE>

                                                                              68

               (A) are set forth in writing, and

               (B) have been approved by a majority of the members of the Board
          of Directors and by a majority of the members of such Board of
          Directors having no personal stake in such transaction, if any (and
          such majority or majorities, as the case may be, determines that such
          Affiliate Transaction satisfies the criteria in clause (1) above); and

          (3) in the event such Affiliate Transaction involves an amount in
     excess of $20.0 million, have been determined by a nationally recognized
     appraisal or investment banking firm to be fair, from a financial
     standpoint, to the Company and its Restricted Subsidiaries or is not less
     favorable to the Company and its Restricted Subsidiaries than could
     reasonably be expected to be obtained at the time in an arms length
     transaction with a Person who is not an Affiliate.

          (b) The provisions of the foregoing paragraph (a) will not prohibit:

          (1) any Investment or other Restricted Payment permitted to be made
     pursuant to Section 4.04,

          (2) any issuance of securities, or other payments, awards or grants in
     cash, securities or otherwise pursuant to, or the funding of, employment
     arrangements, stock options and stock ownership plans approved by the Board
     of Directors,

          (3) the grant of stock options or similar rights to employees and
     directors of the Company pursuant to plans approved by the Board of
     Directors,

          (4) loans or advances to employees in the ordinary course of business
     of the Company or its Restricted Subsidiaries and consistent with prudent
     practices and applicable law, not to exceed $2.0 million outstanding at any
     one time,

          (5) the payment of reasonable and customary fees, compensation or
     employee benefit arrangements to and any indemnity provided for the benefit
     of

<PAGE>
                                                                              69

     directors, officers or employees of the Company and its Subsidiaries in the
     ordinary course of business,

          (6) any transaction with a Restricted Subsidiary which would
     constitute an Affiliate Transaction solely because the Company or a
     Restricted Subsidiary owns an equity interest in, or otherwise controls,
     such Restricted Subsidiary,

          (7) transactions reasonably contemplated by any Customary Transition
     Agreement,

          (8) the Transactions, or

          (9) the making of severance payments to directors, officers or
     employees of Vitas that are required pursuant to arrangements in effect
     prior to the date that the Company acquired Vitas, in an aggregate amount
     not to exceed $14.5 million (which arrangements may be modified so long as
     such aggregate amount is not exceeded).

          SECTION 4.08. LIMITATION ON LINES OF BUSINESS. The Company shall not,
and shall not permit any Restricted Subsidiary to, engage in any business other
than a Permitted Business.

          SECTION 4.09. LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company will not sell or otherwise dispose of any
shares of Capital Stock of a Restricted Subsidiary to any Person (other than the
Company or a Wholly Owned Subsidiary), and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell or otherwise dispose of any
shares of its Capital Stock (other than directors' qualifying shares or shares
issued to third parties in the ordinary course to the extent necessary to
satisfy any licensing requirements under applicable law with respect to the
Company's or any of its Subsidiary's business) to any Person (other than the
Company or a Wholly Owned Subsidiary), except, in each case, with respect to
dispositions in connection with a Qualifying Subsidiary Stock Sale or Qualifying
Subsidiary Stock Distribution; provided, however, that the foregoing shall not
prohibit any such issuance, sale or disposition if:

          (1) immediately after giving effect to such issuance, sale or other
     disposition, neither the

<PAGE>

                                                                              70

     Company nor any of its Restricted Subsidiaries owns any Capital Stock of
     such Restricted Subsidiary; or

          (2) immediately after giving effect to such issuance or sale, such
     Restricted Subsidiary would no longer constitute a Restricted Subsidiary
     and any Investment in such Person remaining after giving effect thereto
     would have been permitted to be made under Section 4.04 if made on the date
     of such issuance, sale or other disposition (and such Investment shall be
     deemed to be an Investment for the purposes of Section 4.04 as of the
     effective date of the applicable transaction).

          The proceeds of any sale of such Capital Stock permitted under clause
(1) or (2) above will be treated as Net Available Cash from an Asset Disposition
and must be applied in accordance with the terms of Section 4.06.

          For avoidance of doubt, the Company will not be permitted to issue,
directly or indirectly, any of its Capital Stock that is exchangeable or
convertible, with or without conditions, into any Capital Stock of any
Restricted Subsidiary without complying with this Section 4.09.

          SECTION 4.10. CHANGE OF CONTROL. (a) Upon the occurrence of a Change
of Control, each Holder shall have the right to require that the Company
purchase all or any part of such Holder's Securities at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to, but excluding, the date of purchase (subject to the right of holders
of record on the relevant record date to receive interest on the relevant
interest payment date), in accordance with the terms contemplated in Section
4.10(b); provided, however, that notwithstanding the occurrence of a Change of
Control, the Company shall not be obligated to purchase the Securities pursuant
to this section in the event that it has exercised its right to redeem all the
Securities under the terms of paragraph 5 of the Securities.

          (b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee (the "Change of Control
Offer") stating:

<PAGE>

                                                                              71

          (1) that a Change of Control has occurred and that such Holder has the
     right to require the Company to purchase all or any part of such Holder's
     Securities at a purchase price in cash equal to 101% of the principal
     amount thereof on the date of purchase, plus accrued and unpaid interest,
     if any, to the date of purchase (subject to the right of Holders of record
     on the relevant record date to receive interest on the relevant interest
     payment date);

          (2) the circumstances and relevant facts and financial information
     regarding such Change of Control;

          (3) the purchase date (which shall be no earlier than 30 days nor
     later than 60 days from the date such notice is mailed); and

          (4) the instructions, as determined by the Company, consistent with
     this Section, that a Holder must follow in order to have its Securities
     purchased.

          (c) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.

          (d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.

          (e) Notwithstanding the foregoing provisions of this Section, the
Company shall not be required to make a Change of Control Offer following a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section applicable to a

<PAGE>
                                                                              72

Change of Control Offer made by the Company and purchases all Securities
validly tendered and not withdrawn under such Change of Control Offer.

          (f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue of its compliance with
such securities laws or regulations.

          SECTION 4.11. LIMITATION ON LIENS. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit
to exist any Lien (the "Initial Lien") of any nature whatsoever on any of its
property or assets (including Capital Stock of a Restricted Subsidiary, but
excluding Capital Stock of an Unrestricted Subsidiary), whether owned at the
Closing Date or thereafter acquired, other than Permitted Liens, without
effectively providing that the Securities shall be secured equally and ratably
with (or prior to) the obligations so secured for so long as such obligations
are so secured. Any Lien created for the benefit of the Holders of the
Securities pursuant to the foregoing sentence shall provide by its terms that
such Lien shall be automatically and unconditionally released and discharged
upon the release and discharge of the Initial Lien.

          SECTION 4.12. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless:

          (1) the Company or such Restricted Subsidiary would be entitled to:

               (A) Incur Indebtedness in an amount equal to the Attributable
          Debt with respect to such Sale/Leaseback Transaction pursuant to
          Section 4.03; and

               (B) create a Lien on such property securing such Attributable
          Debt without equally and

<PAGE>
                                                                              73

ratably securing the Securities pursuant to Section 4.11,

          (2) the net proceeds received by the Company or such Restricted
     Subsidiary in connection with such Sale/Leaseback Transaction are at least
     equal to the Fair Market Value of such property and

          (3) the transfer of such property is permitted by, and the Company
     applies the proceeds of such transaction in compliance with Section 4.06.

          SECTION 4.13. LIMITATION ON DESIGNATION OF SUBSIDIARIES AS
UNRESTRICTED SUBSIDIARIES. (a) Except as set forth below, the Company shall not
designate any Subsidiary as an Unrestricted Subsidiary at any time; provided,
however, that the Company may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary of the Company) to be an
Unrestricted Subsidiary if:

          (1) such Subsidiary and its Subsidiaries do not own any Capital Stock
     or Indebtedness of, and do not own or hold any Lien on any property of, the
     Company or any other Subsidiary of the Company that is not a Subsidiary of
     the Subsidiary to be so designated, and either:

          (2) (A) with respect to the Specified Subsidiary Group, such
     designation is permitted under clause (b) below; or

               (B) with respect to any other Subsidiary, the Subsidiary to be so
          designated has total Consolidated assets of $1,000 or less, or if such
          Subsidiary has Consolidated assets greater than $1,000, then such
          designation would be permitted under Section 4.04, with the aggregate
          Fair Market Value of all outstanding Investments owned by the Company
          and its Restricted Subsidiaries in the Subsidiary so designated will
          be deemed to be an Investment made as of the time of such designation
          and either reducing the amount available for Restricted Payments under
          Section 4.04(a)(4)(C)(iv) or reducing the amount available for future
          Investments under one or more clauses of the definition of Permitted
          Investments, as the Company shall determine.

<PAGE>

                                                                              74

          (b) (1) The Company may designate all Subsidiaries that constitute
part of the Specified Subsidiary Group as Unrestricted Subsidiaries for all
purposes under the Indenture except as set forth below in clause (b)(2) below at
any time after or in connection with a Qualifying Subsidiary Stock Sale or a
Qualifying Subsidiary Stock Distribution if at such time, after giving effect
thereto and to any transactions (including any refinancings of Indebtedness)
occurring concurrently with such designation, the criteria in clause (a)(1)
above is satisfied and the following additional conditions are met:

               (A) the Adjusted Consolidated Leverage Ratio shall be not more
          than (x) 5.0 to 1 if the Specified Subsidiary is VHC and (y) 4.0 to 1
          if the Specified Subsidiary is RRM;

               (B) no Default has occurred and is continuing;

               (C) all the Indebtedness of such Subsidiary and its Subsidiaries
          shall, at the date of designation, and will at all times thereafter,
          consist of Non-Recourse Debt;

               (D) such Subsidiary, either alone or in the aggregate with all
          other Unrestricted Subsidiaries, does not operate, directly or
          indirectly, all or substantially all of the business of the Company
          and its Subsidiaries;

               (E) such Subsidiary is a Person with respect to which neither the
          Company nor any of its Restricted Subsidiaries has any direct or
          indirect obligation:

               (i) to subscribe for additional Capital Stock of such Person; or

               (ii) to maintain or preserve such Person's financial condition or
          to cause such Person to achieve any specified levels of operating
          results; and

               (F) on the date such Subsidiary is designated an Unrestricted
          Subsidiary any agreement or transaction between such Subsidiary

<PAGE>

                                                                              75

          and the Company or any Restricted Subsidiary is permitted under
          Section 4.07.

          For the avoidance of doubt, the designation of the Specified
Subsidiary Group as Unrestricted Subsidiaries shall not require compliance with
Section 4.04 with respect to the Investment of the Company and its Restricted
Subsidiaries in the Specified Subsidiary Group at the time of designation, but
such Investment shall be included in the calculation of the amount available for
Restricted Payments thereafter as provided in Section 4.04.

          (2) The Company shall not be entitled to revoke the designation of the
     Specified Subsidiary Group as Unrestricted Subsidiaries after its
     effectiveness. Immediately upon the effectiveness of such designation and
     for all purposes thereafter under the Indenture, the covenants, events of
     defaults and other terms of the Indenture applicable to the Restricted
     Subsidiaries of the Company will not apply to the Specified Subsidiary
     Group except as follows:

               (A) Section 4.04 will continue to apply to the making by the
          Company or any Restricted Subsidiary of any dividend, distribution or
          any similar payment to the holders of its Capital Stock that is
          payable in the Capital Stock of VHC, and

               (B) Section 4.06 will continue to apply, to the extent provided
          therein, to any Asset Disposition by the Company or any Restricted
          Subsidiary of any Capital Stock of VHC or its Subsidiaries.

          (c) The Company shall have the right, on one occasion at any time, to
designate either (but not both) of VHC or RRM as the "Specified Subsidiary".
Such designation shall be made by action of the Board of Directors and shall be
effective upon notification in writing to the Trustee. The designation of VHC or
RRM as the Specified Subsidiary may be made at any time prior to designating the
Specified Subsidiary Group as Unrestricted Subsidiaries, and it shall not
obligate the Company thereafter to designate the Specified Subsidiary Group as
Unrestricted Subsidiaries; provided that the designation of the Specified
Subsidiary shall be irrevocable and must be

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                                                                              76

made prior to or concurrently with the designation of the Specified Subsidiary
Group as Unrestricted Subsidiaries.

          (d) The Board of Directors may designate any Unrestricted Subsidiary
(other than a member of the Specified Subsidiary Group that has been designated
an Unrestricted Subsidiary) to be a Restricted Subsidiary; provided, however,
that:

               (x) such designation shall be deemed to be an incurrence of
          Indebtedness by a Restricted Subsidiary of the Company of any
          outstanding Indebtedness of such Unrestricted Subsidiary and such
          designation shall only be permitted if such Indebtedness is permitted
          under Section 4.03, calculated on a pro forma basis as if such
          designation had occurred at the beginning of the four-quarter
          reference period; and

               (y) immediately after giving effect to such designation, no
          Default shall have occurred and be continuing.

          (e) Any designation of a Subsidiary as a Restricted Subsidiary or
Unrestricted Subsidiary, any designation of the Specified Subsidiary, and any
designation of the Specified Subsidiary Group as Unrestricted Subsidiaries shall
be made by the Board of Directors, shall be evidenced to the Trustee by promptly
filing with the Trustee a copy of the resolution of the Board of Directors
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions, and shall be effective
upon such filing.

          SECTION 4.14. RATINGS. As promptly as reasonably practicable after the
Closing Date, the Company will use its reasonable efforts to obtain a rating of
the Securities from either Standard & Poor's Ratings Group, Inc. or Moody's
Investors Service, Inc.

          SECTION 4.15. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate

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                                                                              77

shall describe the Default, its status and what action the Company is taking
or proposes to take with respect thereto. The Company also shall comply with
TIA ss. 314(a)(4).

          SECTION 4.16. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

                                    ARTICLE 5

                                SUCCESSOR COMPANY

          SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. (a) The
Company shall not consolidate with or merge with or into, or convey, transfer or
lease, all or substantially all its assets to, any Person, unless:

          (1) the resulting, surviving or transferee Person (the "Successor
     Company") shall be a Person organized and existing under the laws of the
     United States of America, any State thereof or the District of Columbia and
     the Successor Company (if not the Company) shall expressly assume, by an
     indenture supplemental hereto, executed and delivered to the Trustee, in
     form satisfactory to the Trustee, all the obligations of the Company under
     the Securities and this Indenture;

          (2) immediately after giving pro forma effect to such transaction (and
     treating any Indebtedness which becomes an obligation of the Successor
     Company or any Subsidiary as a result of such transaction as having been
     Incurred by the Successor Company or such Subsidiary at the time of such
     transaction), no Default shall have occurred and be continuing;

          (3) immediately after giving pro forma effect to such transaction, the
     Successor Company would be able to Incur an additional $1.00 of
     Indebtedness pursuant to Section 4.03(a);

          (4) immediately after giving pro forma effect to such transaction, the
     Successor Company shall have Consolidated Net Worth in an amount that is
     not less than the Consolidated Net Worth of the Company immediately prior
     to such transaction; (or, in the

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                                                                              78

     event that, concurrently with such merger or consolidation, the Specified
     Subsidiary Group is designated as Unrestricted Subsidiaries in accordance
     with and subject to Section 4.13, the Successor Company will have
     Consolidated Net Worth in an amount which is not less than the Consolidated
     Net Worth of the Company, excluding the Specified Subsidiary Group,
     immediately prior to such transaction); and

          (5) the Company shall have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, each stating that such
     consolidation, merger or transfer and such supplemental indenture (if any)
     comply with this Indenture.

          The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, and the
predecessor Company, except in the case of a lease, shall be released from the
obligation to pay the principal of and interest on the Securities.

          Notwithstanding the foregoing:

               (A) any Restricted Subsidiary may consolidate with, merge into or
          transfer all or part of its properties and assets to the Company; and

               (B) the Company may merge with an Affiliate incorporated solely
          for the purpose of reincorporating the Company in another jurisdiction
          to realize tax or other benefits; and

               (C) nothing herein shall limit any conveyance, transfer or lease
          of assets between or among any of the Company and its Restricted
          Subsidiaries.

                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

          SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:

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          (1) the Company defaults in any payment of interest on any Security
     when the same becomes due and payable, and such default continues for a
     period of 30 days;

          (2) the Company (A) defaults in the payment of principal of any
     Security when the same becomes due and payable at its Stated Maturity, upon
     optional redemption, upon declaration of acceleration or otherwise, or (B)
     fails to purchase Securities when required pursuant to this Indenture or
     the Securities;

          (3) the Company fails to comply with Section 5.01;

          (4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
     4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 or 4.14 (other than a
     failure to purchase Securities when required under Section 4.06 or 4.10)
     and such failure continues for 60 days after the notice specified below;

          (5) the Company fails to comply with any covenant set forth in the
     Securities or this Indenture (other than those referred to in clause (1),
     (2), (3) or (4) above) and such failure continues for 90 days after the
     notice specified below;

          (6) Indebtedness of the Company or any Significant Subsidiary is not
     paid within any applicable grace period after final maturity or is
     accelerated by the holders thereof because of a default and the total
     amount of such Indebtedness unpaid or accelerated exceeds $5.0 million or
     its foreign currency equivalent at the time;

          (7) the Company or any Significant Subsidiary pursuant to or within
     the meaning of any Bankruptcy Law:

               (A) commences a voluntary case;

               (B) consents to the entry of an order for relief against it in an
          involuntary case;

               (C) consents to the appointment of a Custodian of it or for any
          substantial part of its property; or

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                                                                              80

               (D) makes a general assignment for the benefit of its creditors;

          or takes any comparable action under any foreign laws relating to
          insolvency;

          (8) a court of competent jurisdiction enters an order or decree under
     any Bankruptcy Law that:

               (A) is for relief against the Company or any Significant
          Subsidiary in an involuntary case;

               (B) appoints a Custodian of the Company or any Significant
          Subsidiary or for any substantial part of its property; or

               (C) orders the winding up or liquidation of the Company or any
          Significant Subsidiary;

     or any similar relief is granted under any foreign laws and the order or
     decree remains unstayed and in effect for 60 days; or

          (9) any judgment or decree for the payment of money in excess of $5.0
     million or its foreign currency equivalent at the time is entered against
     the Company or any Significant Subsidiary if:

               (A) an enforcement proceeding thereon is commenced by any
          creditor or

               (B) such judgment or decree remains outstanding for a period of
          60 days following such judgment or decree and is not discharged,
          waived or stayed (the "judgment default provision").

          The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.

          The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any

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                                                                              81

receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.

          A Default under clause (4), (5) or (6) is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified in clause (4), (5) or (6) after
receipt of such notice. Such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default".

          The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice or the lapse of time would become an
Event of Default under clause (4), (5) or (6), its status and what action the
Company is taking or proposes to take with respect thereto.

          SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the outstanding Securities by
notice to the Company and the Trustee, may declare the principal of and accrued
but unpaid interest on all the Securities to be due and payable. Upon such a
declaration, such principal and interest and any premium on the Securities shall
be due and payable immediately. If an Event of Default specified in Section
6.01(7) or (8) with respect to the Company occurs, the principal of and interest
on all the Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Securityholders. The Holders of a majority in principal amount of the
outstanding Securities by notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.

          SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of

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                                                                              82

or interest or premium on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.

          The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.

          SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (a) a Default in the payment of the
principal of or interest on a Security, (b) a Default arising from the failure
to redeem or purchase any Security when required pursuant to this Indenture or
(c) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.

          SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.

          SECTION 6.06. LIMITATION ON SUITS. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue

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                                                                              83

any remedy with respect to this Indenture or the Securities unless:

          (1) the Holder gives to the Trustee written notice stating that an
     Event of Default is continuing;

          (2) the Holders of at least 25% in principal amount of the outstanding
     Securities make a written request to the Trustee to pursue the remedy;

          (3) such Holders offer to the Trustee reasonable security or indemnity
     against any loss, liability or expense;

          (4) the Trustee does not comply with the request within 60 days after
     receipt of the request and the offer of security or indemnity; and

          (5) the Holders of a majority in principal amount of the Securities do
     not give the Trustee a direction inconsistent with the request during such
     60-day period.

          A Securityholder may not use this Indenture to prejudice the rights of
     another Securityholder or to obtain a preference or priority over another
     Securityholder.

          SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.

          SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.

          SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders

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                                                                              84

allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee
under Section 7.07.

          SECTION 6.10. PRIORITIES. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:

          FIRST: to the Trustee for amounts due under Section 7.07;

          SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and

          THIRD: to the Company.

          The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.

          SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party

<PAGE>

                                                                              85

litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Securities.

          SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.

                                    ARTICLE 7

                                     TRUSTEE

          SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.

          (b) Except during the continuance of an Event of Default:

          (1) the Trustee undertakes to perform such duties and only such duties
     as are specifically set forth in this Indenture and no implied covenants or
     obligations shall be read into this Indenture against the Trustee; and

          (2) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon certificates or opinions furnished to
     the Trustee and conforming to the requirements of this Indenture. However,
     the Trustee shall examine the certificates and opinions to

<PAGE>
                                                                              86

     determine whether or not they conform to the requirements of this
     Indenture.

          (c) The Trustee may not be relieved from liability for its own
     negligent action, its own negligent failure to act or its own wilful
     misconduct, except that:

               (1) this paragraph does not limit the effect of paragraph (b) of
          this Section;

               (2) the Trustee shall not be liable for any error of judgment
          made in good faith by a Trust Officer unless it is proved that the
          Trustee was negligent in ascertaining the pertinent facts; and

               (3) the Trustee shall not be liable with respect to any action it
          takes or omits to take in good faith in accordance with a direction
          received by it pursuant to Section 6.05.

          (d) Every provision of this Indenture that in any way relates to the
     Trustee is subject to paragraphs (a), (b) and (c) of this Section.

          (e) The Trustee shall not be liable for interest on any money received
     by it except as the Trustee may agree in writing with the Company.

          (f) Money held in trust by the Trustee need not be segregated from
     other funds except to the extent required by law.

          (g) No provision of this Indenture shall require the Trustee to expend
     or risk its own funds or otherwise incur financial liability in the
     performance of any of its duties hereunder or in the exercise of any of its
     rights or powers, if it shall have reasonable grounds to believe that
     repayment of such funds or adequate indemnity against such risk or
     liability is not reasonably assured to it.

          (h) Every provision of this Indenture relating to the conduct or
     affecting the liability of or affording protection to the Trustee shall be
     subject to the provisions of this Section and to the provisions of the TIA.

          SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may rely on any
document believed by it to be

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                                                                              87

genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.

          (b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.

          (c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.

          (d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.

          (e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.

          SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.

          SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.

<PAGE>

                                                                              88

          SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within the earlier of 90 days after it
occurs or 30 days after it is known to a Trust Officer or written notice of it
is received by the Trustee. Except in the case of a Default in payment of
principal of or interest on any Security (including payments pursuant to the
redemption provisions of such Security, if any), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders.

          SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each February 15 beginning with the February 15 following the
date of this Indenture, and in any event prior to May 15 in each year, the
Trustee shall mail to each Securityholder a brief report dated as of February 15
that complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss.
313(b).

          A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.

          SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company

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                                                                              89

shall pay the fees and expenses of such counsel. The Company need not reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own wilful misconduct, negligence or bad faith.

          To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.

          The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.

          SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:

          (1) the Trustee fails to comply with Section 7.10;

          (2) the Trustee is adjudged bankrupt or insolvent;

          (3) a receiver or other public officer takes charge of the Trustee or
     its property; or

          (4) the Trustee otherwise becomes incapable of acting.

          If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.

          A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and

<PAGE>

to the Company. Thereupon the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. The successor Trustee
shall mail a notice of its succession to Securityholders. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided for in Section 7.07.

          If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

          If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

          Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.

          SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

          In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force

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                                                                              91

which it is anywhere in the Securities or in this Indenture provided that the
certificate of the Trustee shall have.

          SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.

          SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.

                                    ARTICLE 8

                       DISCHARGE OF INDENTURE; DEFEASANCE

          SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE. (a)
When (1) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or (2) all
outstanding Securities have become due and payable, whether at maturity or on a
redemption date as a result of the mailing of a notice of redemption pursuant to
Article 3 hereof and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 8.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Company.

          (b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (1) all its obligations

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                                                                              92

under the Securities and this Indenture ("legal defeasance option") or (2) its
obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13 and 4.14 and the operation of Sections 6.01(3),
6.01(4), 6.01(5), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Significant Subsidiaries) and
the limitations contained in Sections 5.01(a)(3) and (4) ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.

          If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Section 6.01(3), 6.01(4), 6.01(5), 6.01(6), 6.01(7), 6.01(8) or 6.01(9) (but, in
the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries) or because of the failure of the Company to comply with Section
5.01(a)(3) or (4).

          Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.

          (c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.

          SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:

          (1) the Company irrevocably deposits in trust with the Trustee money
     or U.S. Government Obligations, the principal of and interest on which will
     be sufficient, or a combination thereof sufficient, to pay the principal of
     and premium (if any) and interest on the Securities to maturity or
     redemption, as the case may be;

<PAGE>
                                                                              93

          (2) the Company delivers to the Trustee a certificate from a
     nationally recognized firm of independent accountants expressing their
     opinion that the payments of principal and interest when due and without
     reinvestment on the deposited U.S. Government Obligations plus any
     deposited money without investment will provide cash at such times and in
     such amounts as will be sufficient to pay principal and interest when due
     on all the Securities to maturity or redemption, as the case may be;

          (3) 123 days pass after the deposit is made and during the 123-day
     period no Default specified in Sections 6.01(7) or (8) with respect to the
     Company occurs which is continuing at the end of the period;

          (4) the deposit does not constitute a default under any other
     agreement binding on the Company;

          (5) the Company delivers to the Trustee an Opinion of Counsel to the
     effect that the trust resulting from the deposit does not constitute, or is
     qualified as, a regulated investment company under the Investment Company
     Act of 1940;

          (6) in the case of the legal defeasance option, the Company shall have
     delivered to the Trustee an Opinion of Counsel stating that (A) the Company
     has received from, or there has been published by, the Internal Revenue
     Service a ruling, or (B) since the date of this Indenture there has been a
     change in the applicable Federal income tax law, in either case to the
     effect that, and based thereon such Opinion of Counsel shall confirm that,
     the Securityholders will not recognize income, gain or loss for Federal
     income tax purposes as a result of such defeasance and will be subject to
     Federal income tax on the same amounts, in the same manner and at the same
     times as would have been the case if such defeasance had not occurred;

          (7) in the case of the covenant defeasance option, the Company shall
     have delivered to the Trustee an Opinion of Counsel to the effect that the
     Securityholders will not recognize income, gain or loss for Federal income
     tax purposes as a result of such covenant defeasance and will be subject to
     Federal income tax on the same amounts, in the same

<PAGE>
                                                                              94

     manner and at the same times as would have been the case if such covenant
     defeasance had not occurred; and

          (8) the Company delivers to the Trustee an Officers' Certificate and
     an Opinion of Counsel, each stating that all conditions precedent to the
     defeasance and discharge of the Securities as contemplated by this Article
     8 have been complied with.

          Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.

          SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities.

          SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.

          Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.

          SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.

          SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the

<PAGE>
                                                                              95

Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to this Article 8
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article 8;
provided, however, that, if the Company has made any payment of interest on or
principal of any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.

                                    ARTICLE 9

                                   AMENDMENTS

          SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee
may amend this Indenture or the Securities without notice to or consent of any
Securityholder:

          (1) to cure any ambiguity, omission, defect or inconsistency;

          (2) to comply with Article 5 and to provide for the assumption by a
     successor corporation of the obligations of the Company under this
     Indenture;

          (3) to provide for uncertificated Securities in addition to or in
     place of certificated Securities; provided, however, that the
     uncertificated Securities are issued in registered form for purposes of
     Section 163(f) of the Code or in a manner such that the uncertificated
     Securities are described in Section 163(f)(2)(B) of the Code;

          (4) to add Guarantees with respect to the Securities or to secure the
     Securities;

          (5) to add to the covenants of the Company for the benefit of the
     Holders or to surrender any right or power herein conferred upon the
     Company;

          (6) to comply with any requirements of the SEC in connection with
     qualifying, or maintaining the qualification of, this Indenture under the
     TIA;

<PAGE>
                                                                              96

          (7) to make any change that does not adversely affect the rights of
     any Securityholder; or

          (8) to provide for the issuance of the Exchange Securities or
     Additional Securities, which shall have terms substantially identical in
     all material respects to the Initial Securities (except that the transfer
     restrictions contained in the Initial Securities shall be modified or
     eliminated , as appropriate), and which shall be treated, together with any
     outstanding Initial Securities, as a single issue of securities.

          After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.

          SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture or the Securities without notice to any Securityholder but
with the written consent of the Holders of at least a majority in principal
amount of the Securities then outstanding (including consents obtained in
connection with a tender offer or exchange for the Securities). However, without
the consent of each Securityholder affected thereby, an amendment or waiver may
not:

          (1) reduce the amount of Securities whose Holders must consent to an
     amendment;

          (2) reduce the rate of or extend the time for payment of interest on
     any Security;

          (3) reduce the principal of or extend the Stated Maturity of any
     Security;

          (4) reduce the premium payable upon the redemption of any Security or
     change the time at which any Security may be redeemed pursuant to paragraph
     5 of the Securities;

          (5) make any Security payable in money other than that stated in the
     Security;

          (6) impair the right of any Holder to receive payment of principal of
     and interest or any premium on

<PAGE>
                                                                              97

     such Holder's Securities on or after the due dates therefor or to institute
     suit for the enforcement of any payment on or with respect to such Holder's
     Securities;

          (7) make any change in Section 6.04 or 6.07 or the second sentence of
     this Section; or

          (8) waive (A) any Default or Event of Default in the payment of the
     principal or interest on a Security or (B) a Default arising from the
     failure to redeem or purchase any Security when required pursuant to this
     Indenture.

          It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.

          After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.

          SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.

          SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Securityholder. An amendment or
waiver becomes effective upon the execution of such amendment or waiver by the
Trustee.

          The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the

<PAGE>
                                                                              98

Securityholders entitled to give their consent or take any other action
described above or required or permitted to be taken pursuant to this Indenture.
If a record date is fixed, then notwithstanding the immediately preceding
paragraph, those Persons who were Securityholders at such record date (or their
duly designated proxies), and only those Persons, shall be entitled to give such
consent or to revoke any consent previously given or to take any such action,
whether or not such Persons continue to be Holders after such record date. No
such consent shall be valid or effective for more than 120 days after such
record date.

          SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.

          SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.

                                   ARTICLE 10

                                  MISCELLANEOUS

          SECTION 10.01. TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.

<PAGE>
                                                                              99

          SECTION 10.02. NOTICES. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:

               if to the Company:

               Roto-Rooter, Inc.
               255 East Fifth Street
               Cincinnati, Ohio 45202
               Facsimile: (513) 287-6216
               Attention: General Counsel

               if to the Trustee:

               LaSalle Bank National Association
               135 S. LaSalle Street
               Suite 1960
               Chicago, IL 60603
               Facsimile: (312) 904-2236
               Attention: Erik Benson

          The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

          Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.

          Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.

          SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).

          SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take or refrain
from taking

<PAGE>
                                                                             100

any action under this Indenture, the Company shall furnish to the Trustee:

          (1) an Officers' Certificate in form and substance reasonably
     satisfactory to the Trustee stating that, in the opinion of the signers,
     all conditions precedent, if any, provided for in this Indenture relating
     to the proposed action have been complied with; and

          (2) an Opinion of Counsel in form and substance reasonably
     satisfactory to the Trustee stating that, in the opinion of such counsel,
     all such conditions precedent have been complied with.

          SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:

          (1) a statement that the individual making such certificate or opinion
     has read such covenant or condition;

          (2) a brief statement as to the nature and scope of the examination or
     investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (3) a statement that, in the opinion of such individual, he has made
     such examination or investigation as is necessary to enable him to express
     an informed opinion as to whether or not such covenant or condition has
     been complied with; and

          (4) a statement as to whether or not, in the opinion of such
     individual, such covenant or condition has been complied with.

          SECTION 10.06. WHEN SECURITIES DISREGARDED. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any

<PAGE>
                                                                             101

such direction, waiver or consent, only Securities which the Trustee knows are
so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.

          SECTION 10.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.

          SECTION 10.08. LEGAL HOLIDAYS. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.

          SECTION 10.09. GOVERNING LAW. This Indenture and the Securities shall
be governed by, and construed in accordance with, the laws of the State of New
York but without giving effect to applicable principles of conflicts of law to
the extent that the application of the laws of another jurisdiction would be
required thereby.

          SECTION 10.10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.

          SECTION 10.11. SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.

          SECTION 10.12. MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.

          SECTION 10.13. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of

<PAGE>
                                                                             102

the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.

          IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.

                              ROTO-ROOTER, INC.,

                                By

                                  /s/ Kevin J. McNamara
                                  -------------------------------
                                  Name: Kevin J. McNamara
                                  Title: President and Chief Executive Officer

                              LASALLE BANK NATIONAL ASSOCIATION

                                By

                                  /s/ Erik R. Benson
                                  -------------------------------
                                  Name:  Erik R. Benson
                                  Title: Vice President

<PAGE>

                                                                        APPENDIX

                    CERTAIN PROVISIONS RELATING TO SECURITIES

     1. Definitions

     1.1 DEFINITIONS

     For the purposes of this Appendix the following terms shall have the
meanings indicated below:

          "Accredited Investor" has the meaning assigned to such term in
Regulation D.

          "Depository" means The Depository Trust Company, its nominees and
their respective successors.

          "Exchange Securities" means (1) the 8 3/4% Senior Notes Due 2011
issued pursuant to the Indenture in connection with a Registered Exchange Offer
pursuant to a Registration Rights Agreement and (2) Additional Securities, if
any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.

          "Initial Holders" means (1) with respect to the Initial Securities
issued on the Issue Date, the purchasers thereof, as set forth in the Purchase
Agreements, and (2) with respect to each issuance of Additional Securities, the
Persons purchasing such Additional Securities under the related Purchase
Agreements.

          "Initial Securities" means (1) $150.0 million aggregate principal
amount of 8 3/4% Senior Notes Due 2011 issued on the Issue Date and (2)
Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.

          "Purchase Agreement" means (1) with respect to the Initial Securities
issued on the Issue Date, each Purchase Agreement dated February 24, 2004, among
the Company, the Subsidiary Guarantors and an Initial Holder, and (2) with
respect to each issuance of Additional Securities, each purchase agreement or
underwriting agreement among the Company and the Persons purchasing such
Additional Securities.

          "Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Rights Agreement,

<PAGE>
                                                                               2

to certain Holders of Initial Securities, to issue and deliver to such Holders,
in exchange for the Initial Securities, a like aggregate principal amount of
Exchange Securities registered under the Securities Act.

          "Registration Rights Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Registration Rights Agreement dated
February 24, 2004, among the Company and the Initial Holders and (2) with
respect to each issuance of Additional Securities issued in a transaction exempt
from the registration requirements of the Securities Act, the registration
rights agreement, if any, among the Company and the Persons purchasing such
Additional Securities under the related Purchase Agreement.

          "Securities" means the Initial Securities and the Exchange Securities,
treated as a single class.

          "Securities Act" means the Securities Act of 1933.

          "Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto and
shall initially be the Trustee.

          "Shelf Registration Statement" means the registration statement issued
by the Company in connection with the offer and sale of Initial Securities
pursuant to the Registration Rights Agreement.

          "Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b) hereto.

     1.2 OTHER DEFINITIONS

<TABLE>
<CAPTION>
                                                                   Defined in
                  Term                                               Section:
                  ----                                             ----------
<S>                                                                <C>
"Agent Members"..................................................... 2.1(b)
"Global Security"................................................... 2.1(a)
"Regulation D"...................................................... 2.1(a)
"Restricted Global Security"........................................ 2.1(a)
</TABLE>

     2. THE SECURITIES.

     2.1. (a) FORM AND DATING. Initial Securities offered and sold to an
accredited investor in reliance on

<PAGE>
                                                                               3

Section 4(2) of the Securities Act ("Section 4(2)") and/or Regulation D under
the Securities Act ("Regulation D"), in each case as provided in a Purchase
Agreement, shall be issued initially in the form of one or more permanent global
Securities in definitive, fully registered form without interest coupons with
the global securities legend and restricted securities legend set forth in
Exhibit 1 hereto (each, a "Restricted Global Security"), which shall be
deposited on behalf of the purchasers of the Initial Securities represented
thereby with the Trustee, at its principal corporate trust office, as custodian
for the Depository (or with such other custodian as the Depository may direct),
and registered in the name of the Depository or a nominee of the Depository,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee as hereinafter provided. Exchange
Securities shall be issued in global form (with the global securities legend set
forth in Exhibit 1 hereto) or in certificated form at the option of the Holders
thereof from time to time. Exchange Securities issued in global form and
Restricted Global Securities are sometimes referred to in this Appendix as
"Global Securities".

          (b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.

          The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.

          Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Company, the Trustee and any
agent of the Company or the Trustee shall be entitled to treat the Depository as
the absolute owner of such Global Security for all purposes whatsoever.

<PAGE>
                                                                               4

Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.

          (c) CERTIFICATED SECURITIES. Except as provided in this Section 2.1 or
Section 2.3 or 2.4, owners of beneficial interests in Restricted Global
Securities shall not be entitled to receive physical delivery of certificated
Securities.

          2.2. AUTHENTICATION. The Trustee shall authenticate and deliver: (1)
on the Issue Date, an aggregate principal amount of $150.0 million 8 3/4% Senior
Notes Due 2011, (2) any Additional Securities for an original issue in an
aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Securities for issue
only in a Registered Exchange Offer, pursuant to the Registration Rights
Agreement, for a like principal amount of Initial Securities, in each case, upon
a written order of the Company signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary of the Company. Such
order shall specify the amount of the Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated and, in
the case of any issuance of Additional Securities pursuant to Section 2.13 of
the Indenture, shall certify that such issuance is in compliance with Section
4.03 of the Indenture. The aggregate principal amount of Securities outstanding
at any time shall not exceed $300.0 million except as provided in Section 2.07
of the Indenture.

          2.3 TRANSFER AND EXCHANGE.

                 (a) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.

                 (1) The transfer and exchange of Global Securities or
          beneficial interests therein shall be effected through the Depository,
          in accordance with the Indenture (including applicable restrictions on
          transfer set forth herein, if any) and the procedures of the
          Depository therefor. A transferor of a beneficial interest in a Global
          Security shall deliver

<PAGE>
                                                                               5

to the Registrar a written order given in accordance with the Depository's
procedures containing information regarding the participant account of the
Depository to be credited with a beneficial interest in the Global Security. The
Registrar shall, in accordance with such instructions instruct the Depository to
credit to the account of the Person specified in such instructions a beneficial
interest in the Global Security and to debit the account of the Person making
the transfer the beneficial interest in the Global Security being transferred.

          (2) Notwithstanding any other provisions of this Appendix (other than
     the provisions set forth in Section 2.4), a Global Security may not be
     transferred as a whole except by the Depository to a nominee of the
     Depository or by a nominee of the Depository to the Depository or another
     nominee of the Depository or by the Depository or any such nominee to a
     successor Depository or a nominee of such successor Depository.

          (3) In the event that a Restricted Global Security is exchanged for
     Securities in certificated registered form pursuant to Section 2.4 of this
     Appendix, prior to the consummation of a Registered Exchange Offer or the
     effectiveness of a Shelf Registration Statement with respect to such
     Securities, such Securities may be exchanged only in accordance with such
     procedures as are substantially consistent with the provisions of this
     Section 2.3 (including the certification requirements set forth on the
     reverse of the Initial Securities intended to ensure that such transfers
     comply with Rule 144A or Regulation S, as the case may be) and such other
     procedures as may from time to time be adopted by the Company.

          (b) LEGEND.

          (1) Except as permitted by the following paragraphs (2), (3) and (4),
     each Security certificate evidencing the Restricted Global Securities (and
     all Securities issued in exchange therefor or in substitution thereof)
     shall bear a legend in substantially the following form:

               THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
               TRANSACTION EXEMPT

<PAGE>
                                                                               6

               FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
               (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
               OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
               APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS
               HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON
               THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
               ACT PROVIDED BY RULE l44A THEREUNDER.

               THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY
               THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
               TRANSFERRED, ONLY (I) TO THE ISSUER THEREOF, (II) IN THE UNITED
               STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
               QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
               SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
               144A, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
               SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE),
               (IV) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
               EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
               OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
               SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE
               WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER
               JURISDICTIONS OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
               EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
               THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
               ABOVE.

          (2) Upon any sale or transfer of a Transfer Restricted Security
     (including any Transfer Restricted Security represented by a Restricted
     Global Security) pursuant to Rule 144 under the Securities Act, the
     Registrar shall permit the transferee thereof to exchange such Transfer
     Restricted Security for a certificated Security that does not bear the
     legend set forth above and rescind any restriction on the transfer of such
     Transfer Restricted Security, if the

<PAGE>
                                                                               7

     transferor thereof certifies in writing to the Registrar that such sale or
     transfer was made in reliance on Rule 144 (such certification to be in the
     form set forth on the reverse of the Security).

          (3) After a transfer of any Initial Securities pursuant to and during
     the period of the effectiveness of a Shelf Registration Statement with
     respect to such Initial Securities, all requirements pertaining to legends
     on such Initial Security will cease to apply, the requirements requiring
     any such Initial Security issued to certain Holders be issued in global
     form will cease to apply, and a certificated Initial Security or an Initial
     Security in global form, in each case without restrictive transfer legends,
     will be available to the transferee of the Holder of such Initial
     Securities upon exchange of such transferring Holder's certificated Initial
     Security or directions to transfer such Holder's interest in the Global
     Security, as applicable.

          (4) Upon the consummation of a Registered Exchange Offer with respect
     to the Initial Securities, all requirements pertaining to such Initial
     Securities that Initial Securities issued to certain Holders be issued in
     global form will still apply with respect to Holders of such Initial
     Securities that do not exchange their Initial Securities, and Exchange
     Securities in certificated or global form will be available to Holders that
     exchange such Initial Securities in such Registered Exchange Offer.

          (c) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as all
beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for certificated Securities, redeemed,
purchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.

<PAGE>
                                                                               8

          (d) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF SECURITIES.

          (1) To permit registrations of transfers and exchanges, the Company
     shall execute and the Trustee shall authenticate certificated Securities
     and Global Securities at the Registrar's or co-registrar's request.

          (2) No service charge shall be made for any registration of transfer
     or exchange, but the Company may require payment of a sum sufficient to
     cover any transfer tax, assessments, or similar governmental charge payable
     in connection therewith (other than any such transfer taxes, assessments or
     similar governmental charge payable upon exchange or transfer pursuant to
     Sections 3.06, 4.10 and 9.05 of the Indenture).

          (3) The Registrar or co-registrar shall not be required to register
     the transfer of or exchange of any Security for a period beginning 15
     Business Days before the mailing of a notice of an offer to repurchase or
     redeem Securities or 15 Business Days before an interest payment date.

          (4) Prior to the due presentation for registration of transfer of any
     Security, the Company, the Trustee, the Paying Agent, the Registrar or any
     co-registrar may deem and treat the person in whose name a Security is
     registered as the absolute owner of such Security for the purpose of
     receiving payment of principal of and interest on such Security and for all
     other purposes whatsoever, whether or not such Security is overdue, and
     none of the Company, the Trustee, the Paying Agent, the Registrar or any
     co-registrar shall be affected by notice to the contrary.

          (5) All Securities issued upon any transfer or exchange pursuant to
     the terms of the Indenture shall evidence the same debt and shall be
     entitled to the same benefits under this Indenture as the Securities
     surrendered upon such transfer or exchange.

          (e) OBLIGATION OF THE TRUSTEE.

<PAGE>
                                                                               9

          (1) The Trustee shall have no responsibility or obligation to any
     beneficial owner of a Global Security, a member of, or a participant in the
     Depository or other Person with respect to the accuracy of the records of
     the Depository or its nominee or of any participant or member thereof, with
     respect to any ownership interest in the Securities or with respect to the
     delivery to any participant, member, beneficial owner or other Person
     (other than the Depository) of any notice (including any notice of
     redemption) or the payment of any amount, under or with respect to such
     Securities. All notices and communications to be given to the Holders and
     all payments to be made to Holders under the Securities shall be given or
     made only to or upon the order of the registered Holders (which shall be
     the Depository or its nominee in the case of a Global Security). The rights
     of beneficial owners in any Global Security shall be exercised only through
     the Depository subject to the applicable rules and procedures of the
     Depository. The Trustee may rely and shall be fully protected in relying
     upon information furnished by the Depository with respect to its members,
     participants and any beneficial owners.

          (2) The Trustee shall have no obligation or duty to monitor, determine
     or inquire as to compliance with any restrictions on transfer imposed under
     this Indenture or under applicable law with respect to any transfer of any
     interest in any Security (including any transfers between or among
     Depository participants, members or beneficial owners in any Global
     Security) other than to require delivery of such certificates and other
     documentation or evidence as are expressly required by, and to do so if and
     when expressly required by, the terms of this Indenture, and to examine the
     same to determine substantial compliance as to form with the express
     requirements hereof.

     2.4 CERTIFICATED SECURITIES.

          (a) A Restricted Global Security deposited with the Depository or with
the Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for

<PAGE>

                                                                              10

such Global Security, only if such transfer complies with Section 2.3 and (1)
the Depository notifies the Company that it is unwilling or unable to continue
as Depository for such Restricted Global Security or if at any time such
Depository ceases to be a "clearing agency" registered under the Exchange Act
and a successor depositary is not appointed by the Company within 90 days of
such notice, or (2) an Event of Default has occurred and is continuing or (3)
the Company, in its sole discretion, notifies the Trustee in writing that it
elects to cause the issuance of certificated Securities under this Indenture.

          (b) Any Restricted Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Restricted Global
Security, an equal aggregate principal amount of certificated Initial Securities
of authorized denominations. Any portion of a Restricted Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any certificated Initial Security delivered in exchange for an interest in the
Restricted Global Security shall, except as otherwise provided by Section
2.3(b), bear the restricted securities legend set forth in Exhibit 1 hereto.

          (c) Subject to the provisions of Section 2.4(b), the registered Holder
of a Global Security shall be entitled to grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.

          (d) In the event of the occurrence of either of the events specified
in Section 2.4(a), the Company shall promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.

<PAGE>

                                                                       EXHIBIT 1
                                                                 to the Appendix

                       [FORM OF FACE OF INITIAL SECURITY]

                           [Global Securities Legend]

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

                         [Restricted Securities Legend]

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE l44A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE ISSUER
THEREOF, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)

<PAGE>
                                                                               2

PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (IV) TO AN INSTITUTIONAL ACCREDITED INVESTOR
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF THE STATES AND OTHER JURISDICTIONS OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

<PAGE>
                                                                               3

No.____________                                                     $ _______

                          8 3/4% Senior Notes Due 2011

          Roto-Rooter, Inc., a Delaware corporation, promises to pay to
________________, or registered assigns, the principal sum of _____________
____________Dollars on February 24, 2011.

          Interest Payment Dates: February 15 and August 15.

          Record Dates: February 1 and August 1.

          Additional provisions of this Security are set forth on the other side
of this Security.

Dated:

                              ROTO-ROOTER, INC.

                                By

                                  --------------------------------------------
                                  Name:
                                  Title:

TRUSTEE'S CERTIFICATE OF
     AUTHENTICATION

LASALLE BANK NATIONAL ASSOCIATION
     as Trustee, certifies
           that this is one of
           the Securities referred
           to in the Indenture.
     By

       ----------------------------------------
        Authorized Signatory

<PAGE>
                                                                               4

                   [FORM OF REVERSE SIDE OF INITIAL SECURITY]

                           8 3/4% Senior Note Due 2011

1. INTEREST

          Roto-Rooter, Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.25% per annum
for the first 90 days following a Registration Default, at a per annum rate of
0.50% for the second 90 days following a Registration Default, at a per annum
rate of 0.75% for the third 90 days following a Registration Default and at a
per annum rate of 1.0% thereafter from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured. The Company will pay interest
semiannually on February 15 and August 15 of each year, commencing August 15,
2004. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from February 24, 2004.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal at the rate borne by
this Security plus 1.0% per annum, and it will pay interest on overdue
installments of interest at the same rate to the extent lawful.

2. METHOD OF PAYMENT

          The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the February 1 or August 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before
the interest payment date. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal,

<PAGE>
                                                                               5

premium and interest) will be made by wire transfer of immediately available
funds to the accounts specified by The Depository Trust Company. The Company
will make all payments in respect of a certificated Security (including
principal, premium and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Security
will be made by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).

3. PAYING AGENT AND REGISTRAR

          Initially, LaSalle Bank National Association, a [ ] banking
corporation (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4. INDENTURE

          The Company issued the Securities under an Indenture dated as of
February 24, 2004 ("Indenture"), between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.

          The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture

<PAGE>
                                                                               6

contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay dividends or distributions on, or redeem or
repurchase capital stock; make investments; issue or sell capital stock of
subsidiaries; engage in transactions with affiliates; create liens on assets;
transfer or sell assets; restrict dividends or other payments of subsidiaries;
consolidate, merge or transfer all or substantially all of its assets and the
assets of its subsidiaries; and engage in sale/leaseback transactions. These
covenants are subject to important exceptions and qualifications.

5. OPTIONAL REDEMPTION

          Except as set forth below, the Company shall not be entitled to redeem
the Securities.

          On and after February 24, 2007, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' prior notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued and unpaid
interest to, but excluding, the redemption date (subject to the right of Holders
of record on the relevant record date to receive interest, if any, due on the
relevant interest payment date), if redeemed during the 12-month period
commencing on February 24 of the years set forth below:

<TABLE>
<CAPTION>
                                 Redemption
Year                               Price
- ----                             ----------
<S>                              <C>
2007                              104.375%
2008                              102.917%
2009                              101.458%
2010 and thereafter               100.000%
</TABLE>

          In addition, prior to February 24, 2007, the Company shall be entitled
at its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount not to exceed
35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued on not less than 30 nor more
than 60 days' prior notice, at a redemption price (expressed as a percentage of
principal amount) of 108.750%, plus accrued and unpaid interest to, but
excluding, the redemption date

<PAGE>
                                                                               7

(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), with the Net Cash
Proceeds from one or more Equity Offerings by the Company or Qualifying
Subsidiary Stock Sales; provided, however, that (1) at least 65% of such
aggregate principal amount of Securities (which includes Additional Securities,
if any) remains outstanding immediately after the occurrence of each such
redemption (other than Securities held, directly or indirectly, by the Company
or its Affiliates); and (2) each such redemption occurs within 60 days after the
date of the related Equity Offering or Qualifying Subsidiary Stock Sale, as the
case may be.

          Prior to February 24, 2007, the Company shall be entitled at its
option to redeem all, but not less than all, of the Securities at a redemption
price equal to 100% of the principal amount of the Securities plus the
Applicable Premium as of, and accrued and unpaid interest to, the redemption
date (subject to the right of Holders on the relevant record date to receive
interest due on the relevant interest payment date). The Company shall cause
notice of such redemption to be mailed by first-class mail to each Holder's
registered address, not less than 30 nor more than 60 days prior to the
redemption date. Any notice to Holders of such a redemption must include the
appropriate calculation of the redemption price, but does not need to include
the redemption price itself. The actual redemption price must be set forth in an
Officers' Certificate delivered to the Trustee no later than two Business Days
prior to the redemption date.

          "Applicable Premium" means, with respect to any Security on any
redemption date, the excess (but not less than zero) of (i) the present value at
such redemption date of all remaining scheduled payments of interest (excluding
accrued interest) and principal on such Security (discounted at the equivalent
of the on Treasury Rate plus 50 basis points over (ii) the then outstanding
principal amount of such Security.

          "Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the date fixed
for redemption (or, if such Statistical Release is no longer

<PAGE>
                                                                               8

published, any publicly available source of similar market data)) most nearly
equal to the then remaining average life to February 24, 2007, provided,
however, that if the average life to February 24, 2007 of the Securities is not
equal to the constant maturity of a United States Treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the average life to February 24, 2007, of the Securities
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.

6. NOTICE OF REDEMPTION

          Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.

          Any notice of redemption may provide that the redemption will be
subject to specified conditions, provided that such conditions are not solely
within the Company's control.

7. PUT PROVISIONS

          Upon a Change of Control, any Holder of Securities will have the right
to cause the Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued and unpaid interest to, but excluding,
the date of repurchase (subject to the right of holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.

<PAGE>
                                                                               9

8. DENOMINATIONS; TRANSFER; EXCHANGE

          The Securities are in registered form without coupons in denominations
of $1,000 principal amount and whole multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.

9. PERSONS DEEMED OWNERS

          The registered Holder of this Security may be treated as the owner of
it for all purposes.

10. UNCLAIMED MONEY

          If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

11. DISCHARGE AND DEFEASANCE

          Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations, the principal of and interest on which will be sufficient, or a
combination thereof sufficient, to pay the principal of and premium (if any) and
interest on the Securities to maturity or redemption, as the case may be.

12. AMENDMENT; WAIVER

          Subject to certain exceptions set forth in the Indenture, (1) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least

<PAGE>
                                                                              10

a majority in principal amount outstanding of the Securities and (2) any default
or noncompliance with any provision may be waived with the written consent of
the Holders of a majority in principal amount outstanding of the Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee shall be entitled to amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to add guarantees with respect to the Securities or to secure the Securities,
or to add additional covenants or surrender rights and powers conferred on the
Company, or to comply with any request of the SEC in connection with qualifying
the Indenture under the Act, or to make any change that does not adversely
affect the rights of any Securityholder.

13. DEFAULTS AND REMEDIES

          Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Securities; (b) default in payment of principal on
the Securities at maturity, upon optional redemption, upon declaration of
acceleration or otherwise, or failure by the Company to purchase Securities when
required; (c) failure by the Company to comply with certain other agreements in
the Indenture or the Securities, in certain cases subject to notice and lapse of
time; (d) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company or the
Significant Subsidiaries if the amount accelerated (or so unpaid) exceeds $5.0
million; (e) certain events of bankruptcy or insolvency with respect to the
Company and the Significant Subsidiaries; and (f) certain judgments or decrees
for the payment of money in excess of $5.0 million. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.

          Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the

<PAGE>
                                                                              11

Securities unless it receives indemnity or security satisfactory to it. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.

14. TRUSTEE DEALINGS WITH THE COMPANY

          Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

15. NO RECOURSE AGAINST OTHERS

          A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.

16. AUTHENTICATION

          This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

17. ABBREVIATIONS

          Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

<PAGE>
                                                                              12

18. CUSIP NUMBERS

          Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

19. GOVERNING LAW

          THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

          The Company will furnish to any Securityholder upon written request
and without charge to the Security holder a copy of the Indenture which has in
it the text of this Security in larger type. Requests may be made to:

          Roto-Rooter, Inc.
          255 East Fifth Street
          Cincinnati, Ohio 45202
          Facsimile: (513) 287-6216

          Attention: General Counsel

<PAGE>
                                                                            13

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

     (Print or type assignee's name, address and zip code)

     (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint ___________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.

Date:_____________________   Your Signature:________________________

Sign exactly as your name appears on the other side of this Security.

In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such
Securities were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Securities are being transferred in accordance
with its terms:

CHECK ONE BOX BELOW

     (1) [ ]   to the Company; or

     (2) [ ]   pursuant to an effective registration statement under the
               Securities Act of 1933; or

     (3) [ ]   inside the United States to a "qualified institutional buyer" (as
               defined in Rule 144A under the Securities Act of 1933)

<PAGE>
                                                                              14

               that purchases for its own account or for the account of a
               qualified institutional buyer to whom notice is given that such
               transfer is being made in reliance on Rule 144A, in each case
               pursuant to and in compliance with Rule 144A under the Securities
               Act of 1933; or

     (4) [ ]   to an institutional accredited investor in a transaction
               exempt from the registration requirements of the Securities Act;
               or

     (5) [ ]   pursuant to the exemption from registration provided by Rule 144
               under the Securities Act of 1933.

     Unless one of the boxes is checked, the Trustee will refuse to register any
     of the Securities evidenced by this certificate in the name of any person
     other than the registered holder thereof; provided, however, that if box
     (4) or (5) is checked, the Trustee shall be entitled to require, prior to
     registering any such transfer of the Securities, such legal opinions,
     certifications and other information as the Company has reasonably
     requested to confirm that such transfer is being made pursuant to an
     exemption from, or in a transaction not subject to, the registration
     requirements of the Securities Act of 1933, such as the exemption provided
     by Rule 144 under such Act.

                                       ____________________________________
                                       Signature

Signature Guarantee:

______________________________________ ____________________________________
Signature must be guaranteed           Signature

     Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee

<PAGE>
                                                                              15

program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.


<PAGE>
                                                                              16

              TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

     The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.

Dated:________________________         _______________________________
                                       Notice: To be executed by
                                               an executive officer

<PAGE>

                                                                              17

                      [TO BE ATTACHED TO GLOBAL SECURITIES]

              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

               The following increases or decreases in this Global
                            Security have been made:

<TABLE>
<CAPTION>
                                                   Principal amount of  Signature of
          Amount of decrease  Amount of increase   this Global          authorized officer
          in Principal        in Principal amount  Security following   of Trustee or
Date of   amount of this      of this Global       such decrease or     Securities
Exchange  Global Security     Security             increase)            Custodian
- --------  ------------------  -------------------  -------------------  ------------------
<S>       <C>                 <C>                  <C>                  <C>
</TABLE>

<PAGE>
                                                                              18

                       OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.10 of the Indenture, check the box:

                                      [ ]

          If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.10 of the Indenture, state the
principal amount: $

Dated:____________________  Your Signature:_____________________________
                                           (Sign exactly as your
                                           name appears on the
                                           other side of this
                                           Security.)

Signature Guarantee:___________________________________
                       (Signature must be guaranteed)

          Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

<PAGE>

                                                                       EXHIBIT A

                      [FORM OF FACE OF EXCHANGE SECURITY*]

*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]

<PAGE>
                                                                               2

No.____________                                                     $ _______

                          8 3/4% Senior Notes Due 2011

          Roto-Rooter, Inc., a Delaware corporation, promises to pay to
________, or registered assigns, the principal sum of _______________ Dollars on
February 24, 2011.

          Interest Payment Dates: February 15 and August 15.

          Record Dates: February 1 and August 1.

          Additional provisions of this Security are set forth on the other side
of this Security.

Dated:

                              ROTO-ROOTER, INC.

                                By

                                  -------------------------------------------
                                   Name:
                                   Title:

TRUSTEE'S CERTIFICATE OF
     AUTHENTICATION

LASALLE BANK NATIONAL ASSOCIATION
   as Trustee, certifies
      that this is one of
      the Securities referred
      to in the Indenture.
   By

     --------------------------------
      Authorized Signatory

<PAGE>
                                                                               3

                   [FORM OF REVERSE SIDE OF EXCHANGE SECURITY]

                           8 3/4% Senior Note Due 2011

1. INTEREST

     Roto-Rooter, Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.25% per annum
for the first 90 days following a Registration Default, at a per annum rate of
0.50% for the second 90 days following a Registration Default, at a per annum
rate of 0.75% for the third 90 days following a Registration Default and at a
per annum rate of 1.0% thereafter from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured. The Company will pay interest
semiannually on February 15 and August 15 of each year, commencing August 15,
2004. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from February 24, 2004.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal at the rate borne by
this Security plus 1.0% per annum, and it will pay interest on overdue
installments of interest at the same rate to the extent lawful.

2. METHOD OF PAYMENT

     The Company will pay interest on the Securities (except defaulted interest)
to the Persons who are registered holders of Securities at the close of business
on the February 1 or August 1 next preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of the Securities represented by a Global
Security (including principal, premium and interest) will be made by wire
transfer of

<PAGE>
                                                                               4

immediately available funds to the accounts specified by The Depository Trust
Company. The Company will make all payments in respect of a certificated
Security (including principal, premium and interest) by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on
a certificated Security will be made by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days
immediately preceding the relevant due date for payment (or such other date as
the Trustee may accept in its discretion).

3. PAYING AGENT AND REGISTRAR

     Initially, LaSalle Bank National Association, a national banking
association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4. INDENTURE

     The Company issued the Securities under an Indenture dated as of February
24, 2004 ("Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.

     The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay

<PAGE>
                                                                               5

dividends or distributions on, or redeem or repurchase capital stock; make
investments; issue or sell capital stock of subsidiaries; engage in
transactions with affiliates; create liens on assets; transfer or sell assets;
restrict dividends or other payments of subsidiaries; consolidate, merge or
transfer all or substantially all of its assets and the assets of its
subsidiaries; and engage in sale/leaseback transactions. These covenants are
subject to important exceptions and qualifications.

5. OPTIONAL REDEMPTION

     Except as set forth below, the Company shall not be entitled to redeem the
Securities.

     On and after February 24, 2007, the Company shall be entitled at its option
to redeem all or a portion of the Securities upon not less than 30 nor more than
60 days' prior notice, at the redemption prices (expressed in percentages of
principal amount on the redemption date), plus accrued and unpaid interest to,
but excluding, the redemption date (subject to the right of Holders of record on
the relevant record date to receive interest, if any, due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
February 24 of the years set forth below:

<TABLE>
<CAPTION>
                                 Redemption
Year                               Price
- ----                             ----------
<S>                              <C>
2007                              104.375%
2008                              102.917%
2009                              101.458%
2010 and thereafter               100.000%
</TABLE>

     In addition, prior to February 24, 2007, the Company shall be entitled at
its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount not to exceed
35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued on not less than 30 nor more
than 60 days' prior notice, at a redemption price (expressed as a percentage of
principal amount) of 108.750%, plus accrued and unpaid interest to, but
excluding, the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant

<PAGE>
                                                                               6

interest payment date), with the Net Cash Proceeds from one or more Equity
Offerings by the Company or Qualifying Subsidiary Stock Sales; provided,
however, that (1) at least 65% of such aggregate principal amount of Securities
(which includes Additional Securities, if any) remains outstanding immediately
after the occurrence of each such redemption (other than Securities held,
directly or indirectly, by the Company or its Affiliates); and (2) each such
redemption occurs within 60 days after the date of the related Equity Offering
or Qualifying Subsidiary Stock Sale, as the case may be.

     Prior to February 24, 2007, the Company shall be entitled at its option to
redeem all, but not less than all, of the Securities at a redemption price equal
to 100% of the principal amount of the Securities plus the Applicable Premium as
of, and accrued and unpaid interest to, the redemption date (subject to the
right of Holders on the relevant record date to receive interest due on the
relevant interest payment date). The Company shall cause notice of such
redemption to be mailed by first-class mail to each Holder's registered address,
not less than 30 nor more than 60 days prior to the redemption date. Any notice
to Holders of such a redemption must include the appropriate calculation of the
redemption price, but does not need to include the redemption price itself. The
actual redemption price must be set forth in an Officers' Certificate delivered
to the Trustee no later than two Business Days prior to the redemption date.

     "Applicable Premium" means, with respect to any Security on any redemption
date, the excess (but not less than zero) of (i) the present value at such
redemption date of all remaining scheduled payments of interest (excluding
accrued interest) and principal on such Security (discounted at the equivalent
of the on Treasury Rate plus 50 basis points over (ii) the then outstanding
principal amount of such Security.

     "Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the date fixed
for redemption (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the then
remaining average life

<PAGE>
                                                                               7

to February 24, 2007, provided, however, that if the average life to February
24, 2007 of the Securities is not equal to the constant maturity of a United
States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the
average life to February 24, 2007, of the Securities is less than one year,
the weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.

6. NOTICE OF REDEMPTION

     Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 principal
amount may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.

     Any notice of redemption may provide that the redemption will be subject to
specified conditions, provided that such conditions are not solely within the
Company's control.

7. PUT PROVISIONS

     Upon a Change of Control, any Holder of Securities will have the right to
cause the Company to repurchase all or any part of the Securities of such Holder
at a repurchase price equal to 101% of the principal amount of the Securities to
be repurchased plus accrued and unpaid interest to, but excluding, the date of
repurchase (subject to the right of holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.

<PAGE>
                                                                               8

8. DENOMINATIONS; TRANSFER; EXCHANGE

     The Securities are in registered form without coupons in denominations of
$1,000 principal amount and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.

9. PERSONS DEEMED OWNERS

     The registered Holder of this Security may be treated as the owner of it
for all purposes.

10. UNCLAIMED MONEY

     If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company at
its request unless an abandoned property law designates another Person. After
any such payment, Holders entitled to the money must look only to the Company
and not to the Trustee for payment.

11. DISCHARGE AND DEFEASANCE

     Subject to certain conditions, the Company at any time shall be entitled to
terminate some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations,
the principal of and interest on which will be sufficient, or a combination
thereof sufficient, to pay the principal of and premium (if any) and interest on
the Securities to maturity or redemption, as the case may be.

12. AMENDMENT; WAIVER

     Subject to certain exceptions set forth in the Indenture, (1) the Indenture
and the Securities may be amended with the written consent of the Holders of at
least

<PAGE>
                                                                               9

a majority in principal amount outstanding of the Securities and (2) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee shall be
entitled to amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act,
or to make any change that does not adversely affect the rights of any
Securityholder.

13. DEFAULTS AND REMEDIES

     Under the Indenture, Events of Default include (a) default for 30 days in
payment of interest on the Securities; (b) default in payment of principal on
the Securities at maturity, upon optional redemption, upon declaration of
acceleration or otherwise, or failure by the Company to redeem or purchase
Securities when required; (c) failure by the Company to comply with certain
other agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (d) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company or the Significant Subsidiaries if the amount accelerated (or so unpaid)
exceeds $5.0 million; (e) certain events of bankruptcy or insolvency with
respect to the Company and the Significant Subsidiaries; and (f) certain
judgments or decrees for the payment of money in excess of $5.0 million. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable immediately. Certain events of bankruptcy or insolvency
are Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.

     Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the

<PAGE>
                                                                              10

Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Holders of a majority in principal amount of
the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.

14. TRUSTEE DEALINGS WITH THE COMPANY

     Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

15. NO RECOURSE AGAINST OTHERS

     A director, officer, employee or stockholder, as such, of the Company or
the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.

16. AUTHENTICATION

     This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

17. ABBREVIATIONS

     Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

<PAGE>
                                                                              11

18. CUSIP NUMBERS

     Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

19. GOVERNING LAW

     THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

     The Company will furnish to any Securityholder upon written request and
without charge to the Security holder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:

                  Roto-Rooter, Inc.
                  255 East Fifth Street
                  Cincinnati, Ohio  45202
                  Facsimile:  (513) 287-6216

                  Attention:  General Counsel

<PAGE>

                                                                              12

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

     (Print or type assignee's name, address and zip code)

     (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint ___________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.

Date:_______________  Your Signature:________________________________

Sign exactly as your name appears on the other side of this Security.

<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.10 of the Indenture, check the box:

                                      [ ]

          If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.10 of the Indenture, state the
principal amount: $

Dated:_____________  Your Signature:__________________________________
                                    (Sign exactly as your
                                    name appears on the
                                    other side of this Security.)

Signature Guarantee:_______________________________________________
                            (Signature must be guaranteed)

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.5
<SEQUENCE>4
<FILENAME>l05867aexv4w5.txt
<DESCRIPTION>EX-4.5
<TEXT>
<PAGE>

                                                                     EXHIBIT 4.5

                                                                  EXECUTION COPY

                               ROTO-ROOTER, INC.

                  Floating Rate Senior Secured Notes Due 2010

                                   INDENTURE

                         Dated as of February 24, 2004

                            WELLS FARGO BANK, N.A.,
                                  as Trustee

<PAGE>

                             CROSS-REFERENCE TABLE*\

<TABLE>
<CAPTION>
           TIA                                                      Indenture
         Section                                                     Section
<S>                                                                 <C>
310(a)(1)             ...........................................   7.10
     (a)(2)           ...........................................   7.10
     (a)(3)           ...........................................   N.A.
     (a)(4)           ...........................................   N.A.
     (b)              ...........................................   7.08; 7.10
     (c)              ...........................................   N.A.
311(a)                ...........................................   7.11
     (b)              ...........................................   7.11
     (c)              ...........................................   N.A.
312(a)                ...........................................   2.05
     (b)              ...........................................   12.03
     (c)              ...........................................   12.03
313(a)                ...........................................   7.06
     (b)(1)           ...........................................   7.06
     (b)(2)           ...........................................   7.06
     (c)              ...........................................   12.02
     (d)              ...........................................   7.06
314(a)                ...........................................   4.02; 4.10;
                                                                    12.02
     (b)              ...........................................   N.A.
     (c)(1)           ...........................................   12.04
     (c)(2)           ...........................................   12.04
     (c)(3)           ...........................................   N.A.
     (d)              ...........................................   N.A.
     (e)              ...........................................   12.05
     (f)              ...........................................   4.10
315(a)                ...........................................   7.01
     (b)              ...........................................   7.05; 12.02
     (c)              ...........................................   7.01
     (d)              ...........................................   7.01
     (e)              ...........................................   6.11
316(a)(last sentence) ...........................................   12.06
     (a)(1)(A)        ...........................................   6.05
     (a)(1)(B)        ...........................................   6.04
     (a)(2)           ...........................................   N.A.
     (b)              ...........................................   6.07
317(a)(1)             ...........................................   6.08
     (a)(2)           ...........................................   6.09
     (b)              ...........................................   2.04
318(a)                ...........................................  12.01
</TABLE>
                           N.A. means Not Applicable.

Note:  This Cross-Reference Table shall not, for any purpose, be deemed to
be part of the Indenture.

<PAGE>

i

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                     Page
<S>                 <C>                                                                              <C>
                                               ARTICLE 1

                               Definitions and Incorporation by Reference

SECTION 1.01.       Definitions..................................................................      1
SECTION 1.02.       Other Definitions............................................................     38
SECTION 1.03.       Incorporation by Reference of Trust Indenture Act............................     38
SECTION 1.04.       Rules of Construction........................................................     39

                                               ARTICLE 2

                                             The Securities

SECTION 2.01.       Form and Dating..............................................................     40
SECTION 2.02.       Execution and Authentication.................................................     40
SECTION 2.03.       Registrar and Paying Agent...................................................     41
SECTION 2.04.       Paying Agent To Hold Money in Trust..........................................     42
SECTION 2.05.       Securityholder Lists.........................................................     42
SECTION 2.06.       Transfer and Exchange........................................................     42
SECTION 2.07.       Replacement Securities.......................................................     43
SECTION 2.08.       Outstanding Securities.......................................................     44
SECTION 2.09.       Temporary Securities.........................................................     44
SECTION 2.10.       Cancellation.................................................................     44
SECTION 2.11.       Defaulted Interest...........................................................     45
SECTION 2.12.       CUSIP Numbers................................................................     45
SECTION 2.13.       Issuance of Additional Securities............................................     45

                                               ARTICLE 3

                                               Redemption

SECTION 3.01.       Notices to Trustee...........................................................     46
SECTION 3.02.       Selection of Securities to Be Redeemed.......................................     46
SECTION 3.03.       Notice of Redemption.........................................................     47
SECTION 3.04.       Effect of Notice of Redemption...............................................     48
SECTION 3.05.       Deposit of Redemption Price..................................................     48
SECTION 3.06.       Securities Redeemed in Part..................................................     48

                                               ARTICLE 4

                                               Covenants

SECTION 4.01.       Payment of Securities........................................................     49
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<S>                 <C>                                                                               <C>
SECTION 4.02.       SEC Reports..................................................................     49
SECTION 4.03.       Limitation on Indebtedness...................................................     50
SECTION 4.04.       Limitation on Restricted Payments............................................     54
SECTION 4.05.       Limitation on Restrictions on Distributions from Restricted Subsidiaries.....     59
SECTION 4.06.       Limitation on Sales of Assets and Subsidiary Stock...........................     62
SECTION 4.07.       Limitation on Affiliate Transactions.........................................     67
SECTION 4.08.       Limitation on Lines of Business..............................................     69
SECTION 4.09.       Limitation on the Sale or Issuance of Capital Stock of
                        Restricted Subsidiaries..................................................     69
SECTION 4.10.       Change of Control............................................................     70
SECTION 4.11.       Limitation on Liens..........................................................     72
SECTION 4.12.       Limitation on Sale/Leaseback Transactions....................................     72
SECTION 4.13.       Future Subsidiary Guarantors; Additional Security............................     73
SECTION 4.14.       Ratings......................................................................     73
SECTION 4.15.       Impairment of Security Interest..............................................     74
SECTION 4.16.       Compliance Certificate.......................................................     74
SECTION 4.17.       Further Instruments and Acts.................................................     74

                                               ARTICLE 5

                                           Successor Company

SECTION 5.01.       When Company May Merge or Transfer Assets....................................     75

                                               ARTICLE 6

                                         Defaults and Remedies

SECTION 6.01.       Events of Default............................................................     77
SECTION 6.02.       Acceleration.................................................................     80
SECTION 6.03.       Other Remedies...............................................................     80
SECTION 6.04.       Waiver of Past Defaults......................................................     81
SECTION 6.05.       Control by Majority..........................................................     81
SECTION 6.06.       Limitation on Suits..........................................................     81
SECTION 6.07.       Rights of Holders to Receive Payment.........................................     82
SECTION 6.08.       Collection Suit by Trustee...................................................     82
SECTION 6.09.       Trustee May File Proofs of Claim.............................................
SECTION 6.10.       Priorities...................................................................     83
SECTION 6.11.       Undertaking for Costs........................................................     83
SECTION 6.12.       Waiver of Stay or Extension Laws.............................................     84
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<S>                 <C>                                                                              <C>
                                               ARTICLE 7

                                                Trustee

SECTION 7.01.       Duties of Trustee............................................................     84
SECTION 7.02.       Rights of Trustee............................................................     85
SECTION 7.03.       Individual Rights of Trustee.................................................     86
SECTION 7.04.       Trustee's Disclaimer.........................................................     87
SECTION 7.05.       Notice of Defaults...........................................................     87
SECTION 7.06.       Reports by Trustee to Holders................................................     87
SECTION 7.07.       Compensation and Indemnity...................................................     87
SECTION 7.08.       Replacement of Trustee.......................................................     88
SECTION 7.09.       Successor Trustee by Merger..................................................     89
SECTION 7.10.       Eligibility; Disqualification................................................     90
SECTION 7.11.       Preferential Collection of Claims Against Company............................     90

                                               ARTICLE 8

                                   Discharge of Indenture; Defeasance

SECTION 8.01.       Discharge of Liability on Securities; Defeasance.............................     90
SECTION 8.02.       Conditions to Defeasance.....................................................     92
SECTION 8.03.       Application of Trust Money...................................................     93
SECTION 8.04.       Repayment to Company.........................................................     93
SECTION 8.05.       Indemnity for Government Obligations.........................................     94
SECTION 8.06.       Reinstatement................................................................     94

                                               ARTICLE 9

                                               Amendments

SECTION 9.01.       Without Consent of Holders...................................................     94
SECTION 9.02.       With Consent of Holders......................................................     96
SECTION 9.03.       Compliance with Trust Indenture Act..........................................     97
SECTION 9.04.       Revocation and Effect of Consents and Waivers................................     97
SECTION 9.05.       Notation on or Exchange of Securities........................................     97
SECTION 9.06.       Trustee To Sign Amendments...................................................     98

                                               ARTICLE 10

                                         Subsidiary Guarantees

SECTION 10.01.      Guarantees...................................................................     98
SECTION 10.02.      Limitation on Liability.....................................................     101
SECTION 10.03.      Successors and Assigns......................................................     101
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<S>                 <C>                                                                              <C>
SECTION 10.04.      No Waiver...................................................................     102
SECTION 10.05.      Modification................................................................     102
SECTION 10.06.      Release of Subsidiary Guarantor.............................................     102
SECTION 10.07.      Contribution................................................................     103

                                               ARTICLE 11

                                        Collateral and Security

SECTION 11.01.      Security Documents..........................................................     104
SECTION 11.02.      Recording and Opinions......................................................     105
SECTION 11.03.      Release of Collateral.......................................................     105
SECTION 11.04.      [Reserved]..................................................................     108
SECTION 11.05.      Authorization of Actions to Be Taken by the Trustee Under
                        the Security Documents and the Collateral Sharing Agreement.............     108
SECTION 11.06.      Authorization of Receipt and Distribution of Funds by the
                        Trustee Under the Security Documents and the Collateral
                        Sharing Agreement.......................................................     109
SECTION 11.07.      Termination of Security Interest............................................     109
SECTION 11.08.      Trustee Serving as Collateral Agent; Amendments or Supplements
                        to, or Replacements of, the Security Documents and
                        the Collateral Agency Agreement.........................................     109
SECTION 11.09.      Designations................................................................     110

                                               ARTICLE 12

                                             Miscellaneous

SECTION 12.01.      Trust Indenture Act Controls................................................     111
SECTION 12.02.      Notices.....................................................................     111
SECTION 12.03.      Communication by Holders with Other Holders.................................     112
SECTION 12.04.      Certificate and Opinion as to Conditions Precedent..........................     112
SECTION 12.05.      Statements Required in Certificate or Opinion...............................     112
SECTION 12.06.      When Securities Disregarded.................................................     113
SECTION 12.07.      Rules by Trustee, Paying Agent and Registrar................................     113
SECTION 12.08.      Legal Holidays..............................................................     113
SECTION 12.09.      Governing Law...............................................................     113
SECTION 12.10.      No Recourse Against Others..................................................     114
SECTION 12.11.      Successors..................................................................     114
SECTION 12.12.      Multiple Originals..........................................................     114
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<S>                 <C>                                                                              <C>
SECTION 12.13.      Table of Contents; Headings.................................................     114

Appendix

Exhibit 1 -         Form of Initial Security

Exhibit A -         Form of Exchange Security
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<PAGE>

                         INDENTURE dated as of February 24, 2004 between
                    ROTO-ROOTER, INC., a Delaware corporation (the "Company"),
                    the subsidiary guarantors listed on Schedule I (the
                    "Subsidiary Guarantors") and WELLS FARGO BANK, N.A, a
                    national banking association (the "Trustee").

          Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of (a) the Company's
Floating Rate Senior Secured Notes Due 2010 issued on the date hereof (the
"Original Securities"), (b) any Additional Securities (as defined herein) that
may be issued (all such Securities in clauses (a) and (b) being referred to
collectively as the "Initial Securities") and (c) if and when issued pursuant
to a registered exchange for Initial Securities, the Company's Floating Rate
Senior Secured Notes Due 2010 (the "Exchange Securities", and together with
the Initial Securities, the "Securities"):

                                    ARTICLE 1

                    Definitions and Incorporation by Reference

          SECTION 1.01. Definitions.

          "Additional Assets" means:

          (1) any property or assets (other than Indebtedness and Capital
     Stock) to be used by the Company or a Restricted Subsidiary in a
     Permitted Business;

          (2) the Capital Stock of a Person that becomes a Restricted
     Subsidiary as a result of the acquisition of such Capital Stock by the
     Company or another Restricted Subsidiary; or

          (3) Capital Stock constituting a minority interest in any Person
     that at such time is a Restricted Subsidiary;

<PAGE>

provided, however, that any such Restricted Subsidiary described in clauses
(2) or (3) above is primarily engaged in a Permitted Business.

          "Additional Securities" means, subject to the Company's compliance
with Section 4.03, Floating Rate Senior Secured Notes Due 2010 issued from time
to time after the Issue Date under the terms of this Indenture (other than
pursuant to Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than
Exchange Securities issued pursuant to an exchange offer for other Securities
outstanding under this Indenture).

          "Administrative Agent" means Bank One, NA, in its capacity as
administrative agent under the Credit Agreement and any successor
Administrative Agent appointed pursuant to the Credit Agreement.

          "Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of Sections 4.06 and 4.07 only, "Affiliate" shall also
mean any beneficial owner of Capital Stock representing 5% or more of the
total voting power of the Voting Stock (on a fully diluted basis) of the
Company or of rights or warrants to purchase such Voting Stock (whether or not
currently exercisable) and any Person who would be an Affiliate of any such
beneficial owner pursuant to the first sentence hereof.

          "Aggregate Credit Agreement Exposure" means at any time, without
duplication, the aggregate amount of Credit Agreement Obligations outstanding
plus the amount of all commitments of the lenders thereunder to extend credit
(whether by making loans or providing or participating in letters of credit or
otherwise), but excluding any letters of credit or obligations owing in
respect of letters of credit to the extent the same are secured in accordance
with the Credit Agreement by property that does not secure the Securities.

                                      2

<PAGE>

          "Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means
of a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of property or assets
including any shares of Capital Stock of a Restricted Subsidiary other than:

          (1) a disposition by a Restricted Subsidiary to the Company or by
     the Company or a Restricted Subsidiary to a Restricted Subsidiary;

          (2) with respect to Capital Stock of a Restricted Subsidiary, a
     disposition of directors' qualifying shares or shares required by
     applicable law to be held by a Person other than the Company or a
     Restricted Subsidiary;

          (3) a disposition that constitutes a Restricted Payment that is not
     prohibited by Section 4.04 or a Permitted Investment or a disposition of
     all or substantially all the assets of the Company or a Subsidiary
     Guarantor in accordance with Section 5.01;

          (4) a disposition of inventory in the ordinary course of business;

          (5) a disposition of any obsolete, excess, damaged, surplus or
     worn-out equipment, property or assets or of property or assets no longer
     used or useful in the business of the Company and its Restricted
     Subsidiaries;

          (6) a disposition of cash or of Temporary Cash Investments;

          (7) leases or licenses of assets in the ordinary course of business;

          (8) the creation of Permitted Liens; or

          (9) a disposition of assets with a Fair Market Value of less than
     $100,000.

          "Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the

                                      3

<PAGE>

interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).

          "Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing:

          (1) the sum of the products of the numbers of years from the date of
     determination to the dates of each successive scheduled principal payment
     of such Indebtedness or scheduled redemption or similar payment with
     respect to such Preferred Stock multiplied by the amount of such payment by

          (2) the sum of all such payments.

          "Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of the Board of Directors
of the Company.

          "Business Day" means each day which is not a Legal Holiday.

          "Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.

          "Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be prepaid by the lessee
without payment of a penalty.

          "Change of Control" means the occurrence of any of the following
events:

                                      4

<PAGE>

               (1) any "person" or "group" (as such terms are used in Sections
          13(d) and 14(d) of the Exchange Act), is or becomes the beneficial
          owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
          except that, for purposes of this clause, such person or group shall
          be deemed to have "beneficial ownership" of all shares that any such
          person or group has the right to acquire, whether such right is
          exercisable immediately or only after the passage of time), directly
          or indirectly, of more than 50% of the total voting power of the
          Voting Stock of the Company;

               (2) during any period of two consecutive years, individuals who
          at the beginning of such period constituted the Board of Directors of
          the Company (together with any new directors whose election by the
          Board of Directors or whose nomination for election by the
          shareholders of the Company was approved by a vote of 66 2/3% of the
          directors of the Company then still in office who were either
          directors at the beginning of such period or whose election or
          nomination for election was previously so approved) cease for any
          reason to constitute a majority of the applicable board of directors
          then in office;

               (3) the adoption of a plan relating to the liquidation or
          dissolution of the Company; or

               (4) the merger or consolidation of the Company with or into
          another Person or the merger of another Person with or into the
          Company, or the sale, lease, transfer, conveyance or other disposition
          of all or substantially all the assets of the Company, to another
          Person and, in the case of any such merger or consolidation, other
          than a transaction following which holders of securities that
          represented 100% of the Voting Stock of the Company outstanding
          immediately prior to such transaction (or other securities into which
          such securities are converted as part of such merger or consolidation
          transaction) own directly or indirectly at least a majority of the
          voting power of the Voting Stock of the surviving Person in such
          merger or consolidation transaction immediately after such transaction
          and in substantially the same proportion as before the transaction.

                                      5

<PAGE>

          "Chemed Capital Trust" means Chemed Capital Trust, a Delaware
statutory business trust.

          "Chemed Preferred Securities" means the convertible trust preferred
securities of Chemed Capital Trust issued in exchange for shares of Company
capital stock pursuant to an exchange offer completed on February 1, 2000. As of
January 31, 2004, 522,149 Chemed Preferred Securities were outstanding.

          "Closing Date" means the date of this Indenture.

          "Closing Date Stock Award Plan" means the Company's employee stock
award plan in existence on the Closing Date.

          "Code" means the Internal Revenue Code of 1986, as amended.

          "Collateral" means all the collateral provided for under and described
in the Security Documents.

          "Collateral Agent" means Bank One, NA, in its capacity as collateral
agent under the Security Documents, together with its successors and permitted
assigns.

          "Collateral Sharing Agreement" means the Collateral Sharing Agreement
dated as of February 24, 2004, among the Collateral Agent, the Trustee, the
Administrative Agent and the Company, as such agreement may be amended,
supplemented or replaced pursuant to the terms of the Indenture.

               "Company" means the party named as such in this Indenture until a
          successor replaces it and, thereafter, means the successor and, for
          purposes of any provision contained herein and required by the TIA,
          each other obligor on the indenture securities.

               "Consolidated Indebtedness" means, as of any date of
          determination, the total Indebtedness of the Company and its
          Consolidated Restricted Subsidiaries, without duplication, other than,
          at any time prior to January 1, 2005, the Trust Securities.

               "Consolidated Interest Expense" means, for any period, the total
          interest expense of the Company and its Consolidated Restricted
          Subsidiaries, plus, to the extent

                                      6

<PAGE>

          Incurred by the Company and its Consolidated Restricted Subsidiaries
          in such period but not included in such interest expense, without
          duplication:

               (1) interest expense attributable to Capitalized Lease
          Obligations and the interest expense attributable to leases
          constituting part of a Sale/Leaseback Transaction,

               (2) amortization of debt discount and debt issuance costs,
          provided that the fees paid by the Company to the lenders under the
          Credit Agreement and to the placement agent in connection with the
          offering and sale on the Issue Date of the Fixed Rate Notes and the
          Original Securities shall not be included,

               (3) capitalized interest,

               (4) noncash interest expense,

               (5) commissions, discounts and other fees and charges
          attributable to letters of credit and bankers' acceptance financing,

               (6) interest accruing on any Indebtedness of any other Person to
          the extent such Indebtedness is Guaranteed by the Company or any
          Restricted Subsidiary,

               (7) net costs associated with Hedging Obligations (including
          amortization of fees),

               (8) dividends in respect of all Disqualified Stock of the Company
          and all Preferred Stock of any of the Subsidiaries of the Company, to
          the extent held by Persons other than the Company or a Wholly Owned
          Subsidiary; provided that regular, scheduled dividends on the Trust
          Securities declared or paid prior to January 1, 2005, shall not be
          included, and

               (9) the cash contributions to any employee stock ownership plan
          or similar trust to the extent such contributions are used by such
          plan or trust to pay interest or fees to any Person (other than the
          Company) in connection with Indebtedness Incurred by such plan or
          trust.

                                      7

<PAGE>

          Notwithstanding anything to the contrary herein, any premium paid in
          connection with the repayment of Indebtedness of the Company in
          connection with the Transactions and interest on the Trust Securities
          paid on or prior to January 1, 2005 shall not be included in
          Consolidated Interest Expense.

          "Consolidated Leverage Ratio" as of any date of determination means
the ratio of:

               (1) Consolidated Indebtedness at such time to

               (2) the aggregate amount of EBITDA for the period of the most
          recent four consecutive fiscal quarters ending at least 45 days prior
          to the date of such determination;

provided, however, that:

                    (A) if the Company or any Restricted Subsidiary has Incurred
               any Indebtedness since the beginning of such period that remains
               outstanding on such date of determination or if the transaction
               giving rise to the need to calculate the Consolidated Leverage
               Ratio is an Incurrence of Indebtedness, EBITDA for such period
               shall be calculated after giving effect on a pro forma basis to
               such Indebtedness as if such Indebtedness had been Incurred on
               the first day of such period and the discharge of any other
               Indebtedness repaid, repurchased, defeased or otherwise
               discharged with the proceeds of such new Indebtedness as if such
               discharge had occurred on the first day of such period,

                    (B) if the Company or any Restricted Subsidiary has repaid,
               repurchased, defeased or otherwise discharged any Indebtedness
               since the beginning of such period or if any Indebtedness is to
               be repaid, repurchased, defeased or otherwise discharged (in each
               case other than Indebtedness Incurred under any revolving credit
               facility unless such Indebtedness has been permanently repaid and
               has not been replaced) on the date of the transaction giving rise
               to the need to calculate the Consolidated Leverage Ratio, EBITDA
               for such period shall be calculated on a pro forma basis as if
               such discharge had

                                      8

<PAGE>

               occurred on the first day of such period and as if the Company or
               such Restricted Subsidiary has not earned the interest income
               actually earned during such period in respect of cash or
               Temporary Cash Investments used to repay, repurchase, defease or
               otherwise discharge such Indebtedness,

                    (C) if since the beginning of such period the Company or any
               Restricted Subsidiary shall have made any Asset Disposition, the
               EBITDA for such period shall be reduced by an amount equal to the
               EBITDA (if positive) directly attributable to the assets that are
               the subject of such Asset Disposition for such period or
               increased by an amount equal to the EBITDA (if negative) directly
               attributable thereto for such period,

                    (D) if since the beginning of such period the Company or any
               Restricted Subsidiary (by merger or otherwise) shall have made an
               Investment in any Restricted Subsidiary (or any Person that
               becomes a Restricted Subsidiary) or an acquisition of assets,
               including any acquisition of assets occurring in connection with
               a transaction causing a calculation to be made hereunder, which
               constitutes all or substantially all of an operating unit of a
               business, EBITDA for such period shall be calculated after giving
               pro forma effect thereto (including the Incurrence of any
               Indebtedness) as if such Investment or acquisition occurred on
               the first day of such period, and

                    (E) if since the beginning of such period any Person (that
               subsequently became a Restricted Subsidiary or was merged with or
               into the Company or any Restricted Subsidiary since the beginning
               of such period) shall have Incurred any Indebtedness or
               discharged any Indebtedness or made any Asset Disposition or any
               Investment or acquisition of assets that would have required an
               adjustment pursuant to clause (C) or (D) above if made by the
               Company or a Restricted Subsidiary during such period, EBITDA for
               such period shall be calculated after giving pro forma effect
               thereto as if such Incurrence, discharge, Asset

                                      9

<PAGE>

               Disposition, Investment or acquisition of assets occurred on the
               first day of such period.

          For purposes of this definition, whenever pro forma effect is to be
given to any calculation under this definition, the pro forma calculations shall
be determined in good faith by a responsible financial or accounting Officer of
the Company and (i) shall comply, to the extent not inconsistent with the
provisions of the Indenture, with the requirements of Rule 11-02 of Regulation
S-X of the SEC and (ii) may include adjustments for operating expense reductions
that would be permitted by such Rule.

          If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate
Agreement applicable to such Indebtedness if such Interest Rate Agreement has a
remaining term as at the date of determination in excess of 12 months).

          "Consolidated Net Income" means, for any period, the net income (loss)
of the Company and its Consolidated Subsidiaries for such period; provided,
however, that there shall not be included in such Consolidated Net Income:

          (1) any net income of any Person (other than the Company) if such
     Person is not a Restricted Subsidiary, except that:

                    (A) subject to the limitations contained in clause (4)
               below, the Company's equity in the net income of any such Person
               for such period shall be included in such Consolidated Net Income
               up to the aggregate amount of cash actually distributed by such
               Person during such period to the Company or a Restricted
               Subsidiary as a dividend or other distribution (subject, in the
               case of a dividend or other distribution made to a Restricted
               Subsidiary, to the limitations contained in clause (3) below) and

                    (B) the Company's equity in a net loss of any such Person
               for such period shall be included in determining such
               Consolidated Net Income;

                                      10

<PAGE>

               (2) any net income (or loss) of any Person acquired by the
          Company or a Subsidiary of the Company in a pooling of interests
          transaction for any period prior to the date of such acquisition;

               (3) any net income (or loss) of any Restricted Subsidiary if such
          Restricted Subsidiary is subject to restrictions, directly or
          indirectly, on the payment of dividends or the making of distributions
          by such Restricted Subsidiary, directly or indirectly, to the Company,
          except that:

                    (A) subject to the limitations contained in clause (4)
               below, the Company's equity in the net income of any such
               Restricted Subsidiary for such period shall be included in such
               Consolidated Net Income up to the aggregate amount of cash
               permitted to be distributed by such Restricted Subsidiary during
               such period to the Company or another Restricted Subsidiary as a
               dividend or other distribution (subject, in the case of a
               dividend or other distribution made to another Restricted
               Subsidiary, to the limitation contained in this clause) and

                    (B) the Company's equity in a net loss of any such
               Restricted Subsidiary for such period shall be included in
               determining such Consolidated Net Income;

               (4) any gain (but not loss) realized upon the sale or other
          disposition of any asset of the Company or its Consolidated
          Subsidiaries (including pursuant to any Sale/Leaseback Transaction)
          that is not sold or otherwise disposed of in the ordinary course of
          business and any gain (but not loss) realized upon the sale or other
          disposition of any Capital Stock of any Person;

               (5) the net after tax effect of any extraordinary gain or loss
          (including all fees and expenses related to such extraordinary gain or
          loss) or of any impairment loss on or writedown of goodwill; and

               (6) the cumulative effect of a change in accounting principles.

                                      11

<PAGE>

          Notwithstanding the foregoing, for the purpose of Section 4.04 only,
there shall be excluded from Consolidated Net Income any dividends, repayments
of loans or advances or other transfers of assets from Unrestricted Subsidiaries
to the Company or a Restricted Subsidiary to the extent such dividends,
repayments or transfers increase the amount of Restricted Payments permitted
under Section 4.04(a)(4)(C)(iv).

          "Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its Restricted Subsidiaries, determined on a
Consolidated basis, as of the end of the most recent fiscal quarter of the
Company ending at least 45 days prior to the taking of any action for the
purpose of which the determination is being made, as

               (1) the par or stated value of all outstanding Capital Stock of
          the Company plus

               (2) paid-in capital or capital surplus relating to such Capital
          Stock plus

               (3) any retained earnings or earned surplus less

                    (A) any accumulated deficit and

                    (B) any amounts attributable to Disqualified Stock.

          "Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company in accordance with GAAP
consistently applied; provided, however, that "Consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary will
be accounted for as an investment. The term "Consolidated" has a correlative
meaning.

          "Credit Agreement" means the credit agreement dated as of February 24,
2004, among the Company, Bank One, NA and others, together with any guarantees,
collateral documents, instruments and agreements executed in connection
therewith, in each case, as amended, restated, supplemented, waived, replaced
(whether or not upon termination, and whether with the original lenders or
otherwise), refinanced, restructured or otherwise modified

                                      12

<PAGE>

from time to time (except to the extent that any such amendment, restatement,
supplement, waiver, replacement, refinancing, restructuring or other
modification thereto would be prohibited by the terms of this Indenture, unless
otherwise agreed to by the Holders of at least a majority in aggregate principal
amount of Securities at the time outstanding).

          "Credit Agreement Obligations" means (i) all Indebtedness outstanding
under the Credit Agreement and (ii) all other obligations (not constituting
Indebtedness) of the Company or a Subsidiary Guarantor under the Credit
Agreement and (iii) all other obligations of the Company or any Subsidiary
Guarantor owing in connection with Hedging Obligations to any lender under the
Credit Agreement or any affiliate of any such lender, unless the Company and
such lender mutually agree that such Hedging Obligation does not constitute a
"Secured Obligation" as defined in the Credit Agreement.

          "Currency Agreement" means with respect to any Person any foreign
exchange contract, currency swap agreements or other similar agreement or
arrangement to which such Person is a party or of which it is a beneficiary.

          "Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.

          "Designated Percentage" means a majority unless (i) the Floating Rate
Exchange Offer (as defined in the Registration Rights Agreement) has not
occurred, (ii) a Notes Registration Statement (as defined in the Registration
Rights Agreement) is not then effective and (iii) there are less than 15
Holders, in which case "Designated Percentage" means 67%.

          "Discharge of Credit Agreement Obligations" means payment in full in
cash of the principal of and interest and premium, if any, on all Indebtedness
outstanding under the Credit Agreement or with respect to Hedging Obligations
that are Credit Agreement Obligations or with respect to letters of credit
outstanding thereunder, delivery of cash collateral or backstop letters of
credit in respect thereof in compliance with such Credit Agreement, in each case
after or concurrently with termination of all commitments to extend credit
thereunder and payments in full of any

                                      13

<PAGE>

other Credit Agreement Obligations that are due and payable or otherwise accrued
and owing at or prior to the time such principal, interest and premium, if any,
are paid.

          "Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event:

          (1) matures or is mandatorily redeemable pursuant to a sinking fund
     obligation or otherwise,

          (2) is convertible or exchangeable for Indebtedness or Disqualified
     Stock (excluding Capital Stock convertible or exchangeable solely at the
     option of the Company or a Restricted Subsidiary; provided, however, that
     any such conversion or exchange shall be deemed an Incurrence of
     Indebtedness or Disqualified Stock, as applicable) or

          (3) is redeemable at the option of the holder thereof, in whole or in
     part,

in the case of each of clauses (1), (2) and (3), on or prior to the first
anniversary of the Stated Maturity of the Securities; provided, however, that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the first anniversary of the Stated
Maturity of the Securities shall not constitute Disqualified Stock if the "asset
sale" or "change of control" provisions applicable to such Capital Stock are not
more favorable to the holders of such Capital Stock than the provisions
applicable to the Securities in Sections 4.06 and 4.10.

          "Domestic Subsidiary" means any Restricted Subsidiary of the Company
other than a Foreign Subsidiary.

          "EBITDA" for any period means the Consolidated Net Income for such
period, plus, without duplication, the following to the extent deducted in
calculating such Consolidated Net Income:

                                      14

<PAGE>

               (1) income tax expense of the Company and its Consolidated
          Restricted Subsidiaries,

               (2) Consolidated Interest Expense,

               (3) depreciation expense of the Company and its Consolidated
          Restricted Subsidiaries,

               (4) amortization expense of the Company and its Consolidated
          Restricted Subsidiaries (including amortization recorded in connection
          with the application of Financial Accounting Standard No. 142
          (Goodwill and Other Intangibles)),

               (5) payments made in connection with the Non-Competition and
          Consulting Agreement dated as of December 18, 2003, between the
          Company and Hugh Westbrook (the "Westbrook Agreement") in the amount
          of $25.0 million and transaction fees and expenses paid in connection
          with the Transactions,

               (6) any severance payments related to the acquisition of Vitas,
          as contemplated by the Private Placement Memorandum and not to exceed
          $14.5 million, plus any related employment taxes and employee benefit
          charges,

               (7) dividends, distributions and payments not in excess of $2.8
          million under the Closing Date Stock Award Plan, and

               (8) all other noncash charges of the Company and its Consolidated
          Restricted Subsidiaries (excluding any such noncash charge to the
          extent it represents an accrual of or reserve for cash expenditures in
          any future period) less all non-cash items of income of the Company
          and its Consolidated Restricted Subsidiaries,

in each case for such period.

          Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and noncash charges
of, a Restricted Subsidiary of the Company shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that
the net income (loss) of such Restricted Subsidiary was included in

                                      15

<PAGE>

calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.

          "Eligible Indebtedness" has the meaning assigned to it under clause
3(A) of Section 4.06(a).

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Exchange Securities" means the debt securities of the Company issued
pursuant to this Indenture in exchange for, and in an aggregate principal amount
equal to, the Initial Securities, in compliance with the terms of the
Registration Rights Agreement.

          "Fair Market Value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. For all purposes
of this Indenture, the Fair Market Value of property or assets which involve an
aggregate amount in excess of $25.0 million shall be set forth in a resolution
approved by the Board of Directors in good faith; provided that for property or
assets, other than cash, Indebtedness or readily marketable securities, in an
aggregate amount in excess of $50.0 million, Fair Market Value shall be
determined in writing by a nationally recognized appraisal or investment banking
firm.

          "Fixed Rate Notes" means the 8 3/4% Fixed Rate Notes due 2011 issued
by the Company under the Indenture dated as of February 24, 2004, between the
Company and LaSalle Bank National Association, as trustee, and any exchange
notes issued under such indenture.

          "Foreign Subsidiary" means any Restricted Subsidiary of the Company
that is not organized under the laws of the United States of America or any
State thereof or the District of Columbia.

                                      16

<PAGE>

          "GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including those set forth
in:

          (1) the opinions and pronouncements of the Accounting Principles Board
     of the American Institute of Certified Public Accountants,

          (2) statements and pronouncements of the Financial Accounting
     Standards Board,

          (3) such other statements by such other entities as approved by a
     significant segment of the accounting profession, and

          (4) the rules and regulations of the SEC governing the inclusion of
     financial statements (including pro forma financial statements) in periodic
     reports required to be filed pursuant to Section 13 of the Exchange Act,
     including opinions and pronouncements in staff accounting bulletins and
     similar written statements from the accounting staff of the SEC.

          All ratios and computations based on GAAP contained in this Indenture
shall be computed in conformity with GAAP.

          "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person:

          (1) to purchase or pay (or advance or supply funds for the purchase or
     payment of) such Indebtedness or other obligation of such other Person
     (whether arising by virtue of partnership arrangements, or by agreements to
     keep-well, to purchase assets, goods, securities or services, to
     take-or-pay, or to maintain financial statement conditions or otherwise) or

          (2) entered into for purposes of assuring in any other manner the
     obligee of such Indebtedness or other obligation of the payment thereof or
     to protect such obligee against loss in respect thereof (in whole or in
     part);

                                      17

<PAGE>

provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.

          "Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.

          "Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.

          "Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Person at the time it becomes a Subsidiary. The term "Incurrence" when used as a
noun shall have a correlative meaning. Solely for purposes of determining
compliance with Section 4.03:

          (1) amortization of debt discount or the accretion of principal with
     respect to a non-interest bearing or other discount security;

          (2) the payment of regularly scheduled interest in the form of
     additional Indebtedness of the same instrument or the payment of regularly
     scheduled dividends on Capital Stock (other than Disqualified Stock) in the
     form of additional Capital Stock of the same class and with the same terms;
     and

          (3) the obligation to pay a premium in respect of Indebtedness arising
     in connection with the issuance of a notice of redemption or the making of
     a mandatory offer to purchase such Indebtedness

will not be deemed to be the Incurrence of Indebtedness.

          "Indebtedness" means, with respect to any Person on any date of
determination, without duplication:

          (1) the principal of and premium (if any) in respect of indebtedness
     of such Person for borrowed money;

                                      18

<PAGE>

          (2) the principal of and premium (if any) in respect of obligations of
     such Person evidenced by bonds, debentures, notes or other similar
     instruments;

          (3) all obligations of such Person in respect of letters of credit or
     other similar instruments (including reimbursement obligations with respect
     thereto but excluding obligations in respect of letters of credit securing
     obligations (other than obligations in clauses (1), (2), (4) or (5) hereof)
     entered into in the ordinary course of business of such Person to the
     extent such letters of credit are not drawn upon or, if and to the extent
     drawn upon, such drawing is reimbursed no later than the tenth Business Day
     following payment on the letter of credit);

          (4) all obligations of such Person to pay the deferred and unpaid
     purchase price of property or services (except Trade Payables or other
     obligations arising in the ordinary course of business), which purchase
     price is due more than six months after the date of placing such property
     in service or taking delivery and title thereto or the completion of such
     services;

          (5) all Capitalized Lease Obligations and all Attributable Debt of
     such Person;

          (6) the amount of all obligations of such Person with respect to the
     redemption, repayment or other repurchase of any Disqualified Stock or,
     with respect to any Subsidiary of such Person, any Preferred Stock (but
     excluding, in each case, any accrued dividends);

          (7) all Indebtedness of other Persons secured by a Lien on any asset
     of such Person, whether or not such Indebtedness is assumed by such Person;
     provided, however, that the amount of Indebtedness of such Person shall be
     the lesser of:

               (A) the Fair Market Value of such asset at such date of
          determination and

               (B) the amount of such Indebtedness of such other Persons;

                                      19

<PAGE>

          (8) all net obligations of such person in respect of Interest Rate
     Agreements or Currency Agreements; and

          (9) all obligations of the type referred to in clauses (i) through
     (viii) of other Persons and all dividends of other Persons for the payment
     of which, in either case, such Person is responsible or liable, directly or
     indirectly, as obligor, guarantor or otherwise, including by means of any
     Guarantee.

          The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.

          "Indenture Documents" means (a) this Indenture, the Securities and the
Security Documents and (b) any other related document or instrument executed and
delivered pursuant to any Indenture Document described in clause (a) of this
definition evidencing or governing Obligations.

          "Intellectual Property Security Agreements" means the intellectual
property security agreements as the Company or any Subsidiary Guarantor may from
time to time make in favor of the Collateral Agent for the benefit of the
Holders and the other creditors of the Company subject to the Collateral Sharing
Agreement, in each case as the same may be amended, restated, supplemented or
otherwise modified from time to time.

          "Interest Period" means, for any interest payment date, a period from
and including the preceding interest payment date to but excluding such interest
payment date, provided, however, that the initial Interest Period will be the
period from and including the series issuance date to but excluding the May 15,
2004 interest payment date.

          "Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement to which such Person is party or of which
it is a beneficiary.

                                      20

<PAGE>

          "Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. Except as otherwise provided for
herein, the amount of an Investment shall be its fair value at the time the
Investment is made and without giving effect to subsequent changes in value. For
purposes of the definition of "Unrestricted Subsidiary" and Section 4.04:

          (1) "Investment" shall include the portion (proportionate to the
     Company's equity interest in such Subsidiary) of the Fair Market Value of
     the net assets of any Subsidiary of the Company at the time that such
     Subsidiary is designated an Unrestricted Subsidiary; provided, however,
     that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
     the Company shall be deemed to continue to have a permanent "Investment" in
     an Unrestricted Subsidiary in an amount (if positive) equal to:

               (A) the Company's "Investment" in such Subsidiary at the time of
          such redesignation less

               (B) the portion (proportionate to the Company's equity interest
          in such Subsidiary) of the Fair Market Value of the net assets of such
          Subsidiary at the time of such redesignation; and

          (2) any property transferred to or from an Unrestricted Subsidiary
     shall be valued at its Fair Market Value at the time of such transfer.

          "Issue Date" means February 24, 2004.

          "Legal Holiday" means a Saturday, Sunday or other day on which banking
institutions are not required by law or regulation to be open in the State of
New York.

          "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind

                                      21

<PAGE>

(including any conditional sale or other title retention agreement or lease in
the nature thereof).

          "Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and proceeds
from the sale or other disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such
Asset Disposition or received in any other noncash form) therefrom, in each case
net of:

          (1) all legal, accounting, investment, banking, title and recording
     tax expenses, commissions and other fees and expenses incurred, and all
     Federal, state, provincial, foreign and local taxes required to be paid or
     accrued as a liability under GAAP, as a consequence of such Asset
     Disposition,

          (2) all payments made on any Indebtedness other than Indebtedness
     under this Indenture and the Credit Agreement which is secured by any
     assets subject to such Asset Disposition, in accordance with the terms of
     any Lien upon or other security agreement of any kind with respect to such
     assets, or which must by its terms, or in order to obtain a consent to such
     Asset Disposition, or by applicable law be repaid out of the proceeds from
     such Asset Disposition,

          (3) all distributions and other payments required to be made to
     minority interest holders in Subsidiaries or joint ventures as a result of
     such Asset Disposition and

          (4) appropriate amounts to be provided by the seller as a reserve, in
     accordance with GAAP, against any liabilities associated with the property
     or other assets disposed of in such Asset Disposition and retained by the
     Company or any Restricted Subsidiary after such Asset Disposition or
     liabilities under indemnification obligations associated with such Asset
     Disposition or any purchase price adjustments.

                                      22

<PAGE>

     "Net Cash Proceeds", with respect to any issuance or sale of Capital Stock,
     means the cash proceeds of such issuance or sale net of attorneys' fees,
     accountants' fees, underwriters' or placement agents' fees, discounts or
     commissions and brokerage, consultant and other fees actually incurred in
     connection with such issuance or sale and net of taxes paid or payable as a
     result thereof.

          "Non-Recourse Debt" means Indebtedness as to which neither the Company
nor any Restricted Subsidiary (a) provides any Guarantee or credit support of
any kind (including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or (b) is directly or indirectly
liable (as guarantor or otherwise); and (c) as to which there is no recourse
against any of the assets of the Company or its Restricted Subsidiaries (other
than assets or Capital Stock of Unrestricted Subsidiaries, provided however,
that Indebtedness of an Unrestricted Subsidiary which consists of a Guarantee of
Indebtedness of the Company or a Restricted Subsidiary to a Person other than an
Unrestricted Subsidiary, or a lien on property or stock of an Unrestricted
Subsidiary that secures Indebtedness of the Company or a Restricted Subsidiary
to a Person other than an Unrestricted Subsidiary, shall be deemed to constitute
Non-Recourse Debt as long as the Unrestricted Subsidiary does not have recourse
against the Company or a Restricted Subsidiary under such Indebtedness.

          "Obligations" means all obligations of the Company and the Subsidiary
Guarantors under this Indenture, the Securities and the other Indenture
Documents, including obligations to the Trustee and the Collateral Agent whether
for payment of principal of, interest, including Additional Interest, if any, on
the Securities and all other monetary obligations of the Company and the
Guarantors under this Indenture, the Securities and the other Indenture
Documents, whether for fees, expenses, indemnification or otherwise.

          "Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary of the Company. "Officer" of a Subsidiary Guarantor
has a correlative meaning.

          "Officers' Certificate" means a certificate signed by two Officers.

                                      23

<PAGE>

          "Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company, a Subsidiary Guarantor or the Trustee.

          "Permitted Business" means any business engaged in by the Company or
any Restricted Subsidiary on the Closing Date and any related, ancillary or
complementary business.

          "Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:

          (1) the Company, a Restricted Subsidiary or a Person that will, upon
     the making of such Investment, become a Restricted Subsidiary; provided,
     however, that the primary business of such Restricted Subsidiary is a
     Permitted Business;

          (2) another Person if as a result of such Investment such other Person
     is merged or consolidated with or into, or transfers or conveys all or
     substantially all its assets to, the Company or a Restricted Subsidiary;
     provided, however, that such Person's primary business is a Permitted
     Business;

          (3) Temporary Cash Investments;

          (4) receivables owing to the Company or any Restricted Subsidiary if
     created or acquired in the ordinary course of business and payable or
     dischargeable in accordance with customary trade terms; provided, however,
     that such trade terms may include such concessionary trade terms as the
     Company or any such Restricted Subsidiary deems reasonable under the
     circumstances;

          (5) payroll, travel and similar advances to cover matters that are
     expected at the time of such advances ultimately to be treated as expenses
     for accounting purposes and that are made in the ordinary course of
     business;

          (6) loans or advances to employees made in the ordinary course of
     business consistent with prudent practices and applicable law and not
     exceeding $2 million at any time outstanding;

                                      24

<PAGE>

          (7) stock, obligations or securities received in settlement of debts
     created in the ordinary course of business and owing to the Company or any
     Restricted Subsidiary or in satisfaction of judgments;

          (8) any Person to the extent such Investment represents the noncash
     portion of the consideration received for an Asset Disposition that was
     made pursuant to and in compliance with Section 4.06;

          (9) any Person; provided, that the payment for such Investments
     consists solely of Capital Stock of the Company (other than Disqualified
     Stock);

          (10) any Person consisting of the licensing of intellectual property
     pursuant to joint ventures, strategic alliances or joint marketing
     arrangements with such Person, in each case made in the ordinary course of
     business;

          (11) a vendor or supplier consisting of loans or advances to such
     vendor or supplier in connection with any guarantees to the Company or any
     Restricted Subsidiary of supply by, or to fund the supply capacity of, such
     vendor or supplier, in any case not to exceed $2.0 million at any one time
     outstanding;

          (12) loans to and other Investments in independent contractors and
     subcontractors of the Company or its Restricted Subsidiaries, not to exceed
     $4.0 million at any one time outstanding; or

          (13) any other Investments to the extent such Investments, when taken
     together with all other Investments made pursuant to this clause (13)
     outstanding on the date such Investment is made, do not exceed $5.0
     million.

          "Permitted Liens" means, with respect to any Person:

          (1) pledges or deposits by such Person under worker's compensation
     laws, unemployment insurance laws or similar legislation, or good faith
     deposits in connection with bids, tenders, contracts (other than for the
     payment of Indebtedness) or leases to which such Person is a party, or
     deposits to secure public or statutory obligations of such Person or
     deposits of

                                      25

<PAGE>

     cash or United States government bonds to secure surety or appeal bonds to
     which such Person is a party, or deposits as security for contested taxes
     or import duties or for the payment of rent, in each case Incurred in the
     ordinary course of business;

          (2) Liens imposed by law, such as landlords', carriers',
     warehousemen's and mechanics' Liens, in each case for sums not yet due or
     being contested in good faith by appropriate proceedings or other Liens
     arising out of judgments or awards against such Person with respect to
     which such Person shall then be proceeding with an appeal or other
     proceedings for review;

          (3) Liens for taxes, assessments or governmental charges or levies
     either not yet due or payable or subject to penalties for non-payment or
     which are being contested in good faith by appropriate proceedings;

          (4) Liens in favor of issuers of surety bonds or letters of credit
     issued pursuant to the request of and for the account of such Person in the
     ordinary course of its business; provided, however, that such letters of
     credit do not constitute Indebtedness;

          (5) minor survey exceptions, minor encumbrances, easements or
     reservations of, or rights of others for, licenses, rights-of-way, sewers,
     electric lines, telegraph and telephone lines and other similar purposes,
     or zoning or other restrictions as to the use of real property or Liens
     incidental to the conduct of the business of such Person or to the
     ownership of its properties which were not Incurred in connection with
     Indebtedness and which do not in the aggregate materially adversely affect
     the value of said properties or materially impair their use in the
     operation of the business of such Person;

          (6) Liens securing Indebtedness permitted to be Incurred pursuant to
     Section 4.03(b)(8); provided, however, that the Lien may not extend to any
     other property owned by such Person or any of its Subsidiaries at the time
     the Lien is Incurred;

          (7) Liens to secure Indebtedness permitted pursuant to paragraph (a)
     or clauses (1), (3)(A), (9)

                                      26

<PAGE>

     or (13) of Section 4.03(b)and other Credit Agreement Obligations;

          (8) Liens existing on the Closing Date;

          (9) Liens on property or shares of stock of another Person at the time
     such other Person becomes a Subsidiary of such Person; provided, however,
     that such Liens are not created, Incurred or assumed in connection with, or
     in contemplation of, such other Person becoming such a Subsidiary; provided
     further, however, that such Liens do not extend to any other property owned
     by such Person or any of its Subsidiaries;

          (10) Liens on property at the time such Person or any of its
     Subsidiaries acquires the property, including any acquisition by means of a
     merger or consolidation with or into such Person or any Subsidiary of such
     Person; provided, however, that such Liens are not created, Incurred or
     assumed in connection with, or in contemplation of, such acquisition;
     provided further, however, that the Liens do not extend to any other
     property owned by such Person or any of its Subsidiaries;

          (11) Liens securing obligations under Hedging Obligations so long as
     such obligations relate to Indebtedness permitted to be Incurred pursuant
     to Section 4.03 that is, and is permitted under this Indenture to be,
     secured by a Lien on the same property securing such obligations;

          (12) Liens to secure any Refinancing (or successive Refinancings) as a
     whole, or in part, of any Indebtedness secured by any Lien referred to in
     the foregoing clauses (6), (7), (8), (9) or (10); provided, however, that:

               (A) such new Lien shall be limited to all or part of the same
          property that secured the original Lien (plus improvements to or on
          such property) and

               (B) the Indebtedness secured by such Lien at such time is not
          increased to any amount greater than the sum of:

                                      27

<PAGE>

                         (i) the outstanding principal amount or, if greater,
                    committed amount of the Indebtedness secured by Liens
                    described under clauses (6), (7), (8), (9) or (10) at the
                    time the original Lien became a Permitted Lien under this
                    Indenture and

                         (ii) an amount necessary to pay any fees and expenses,
                    including premiums, related to such Refinancings; and

               (13) Liens to secure Indebtedness permitted to be Incurred
          pursuant to Section 4.03 or other obligations in an aggregate
          principal amount which, when taken together with all other
          Indebtedness and obligations secured by Liens pursuant to this clause
          (13) and remaining outstanding, does not exceed $10.0 million at any
          time.

          "Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

          "Pledge and Security Agreement" means the Pledge and Security
Agreement dated as of February 24, 2004, among the Company, the Subsidiaries
of the Company set forth on a schedule thereto and the Collateral Agent, as
amended, restated, supplemented or otherwise modified from time to time.

          "Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.

          "principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.

          "Private Placement Memorandum" means the Private Placement Memorandum
dated February 24, 2004, relating to the issuance by Roto-Rooter, Inc. of (i)
2,000,000 shares

                                      28

<PAGE>

of Capital Stock, par value $1.00 per share, (ii) $110.0 million of Securities
and (iii) $150.0 million of Fixed Rate Notes.

          "Purchase Money Indebtedness" means Indebtedness:

          (1) consisting of the deferred purchase price of property, conditional
     sale obligations, obligations under any title retention agreement, other
     purchase money obligations and obligations in respect of industrial revenue
     bonds, in each case where the maturity of such Indebtedness does not exceed
     the anticipated useful life of the property being financed, and

          (2) Incurred to finance the acquisition, construction or lease by the
     Company or a Restricted Subsidiary of the property, including additions and
     improvements thereto;

          provided, however, that the Indebtedness is Incurred within 180 days
after the acquisition, construction or lease of the property by the Company or
Restricted Subsidiary.

          "Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness exchange or replacement for, such Indebtedness. "Refinanced"
and "Refinancing" shall have correlative meanings.

          "Refinancing Indebtedness" means Indebtedness that is Incurred to
Refinance any Indebtedness of the Company or any Restricted Subsidiary existing
on the Closing Date or Incurred in compliance with this Indenture (including
Indebtedness of the Company that Refinances Refinancing Indebtedness); provided,
however, that:

          (1) the Refinancing Indebtedness has a Stated Maturity no earlier than
     the Stated Maturity of the Indebtedness being Refinanced;

          (2) the Refinancing Indebtedness has an Average Life at the time such
     Refinancing Indebtedness is Incurred that is equal to or greater than the
     Average Life of the Indebtedness being Refinanced;

                                      29

<PAGE>

          (3) such Refinancing Indebtedness is Incurred in an aggregate
     principal amount (or if issued with original issue discount, an aggregate
     issue price) that is equal to or less than the aggregate principal amount
     (or if issued with original issue discount, the aggregate accreted value)
     then outstanding of the Indebtedness being Refinanced; and

          (4) if the Indebtedness being Refinanced is contractually subordinated
     in right of payment to the Securities, such Refinancing Indebtedness is
     contractually subordinated in right of payment to the Securities at least
     to the same extent as the Indebtedness being Refinanced;

provided further, however, that Refinancing Indebtedness shall not include:

               (A) Indebtedness of a Restricted Subsidiary that Refinances
          Indebtedness of the Company or

               (B) Indebtedness of the Company or a Restricted Subsidiary that
          Refinances Indebtedness of an Unrestricted Subsidiary.

          "Registration Rights Agreement" means the Registration Rights
Agreement dated as of February 24, 2004, among the Company, the initial Holders,
the initial holders of the Fixed Rate Notes and certain other Persons.

          "Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.

          "Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or a Restricted Subsidiary transfers such property to a
Person and the Company or such Restricted Subsidiary leases it from such Person,
other than leases between the Company and a Wholly Owned Subsidiary or between
Wholly Owned Subsidiaries.

          "SEC" means the Securities and Exchange Commission.

          "Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien. "Secured Indebtedness" of a Subsidiary Guarantor has a correlative
meaning.

                                      30

<PAGE>

          "Security Documents" means (a) the Pledge and Security Agreement, any
Intellectual Property Security Agreement and any other document or instrument
pursuant to which a Lien is granted by the Company or any Guarantor to secure
any Obligations or under which rights or remedies with respect to such Lien are
governed, as such agreements may be amended, modified or supplemented from time
to time and (b) substantially identical agreements hereafter entered into
pursuant to Section 10.09(c). Prior to the Discharge of Credit Agreement
Obligations, the "Security Documents" will mean the Security Documents among the
Company, the Subsidiary Guarantors and the Collateral Agent, as such agreements
may be amended, modified or supplemented from time to time in accordance with
their terms, this Indenture and the Collateral Sharing Agreement.

          "Senior Indebtedness" of the Company or any Subsidiary means the
principal of, premium (if any) and accrued and unpaid interest on (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization of the Company or any Subsidiary, regardless of whether or not a
claim for post-filing interest is allowed in such proceedings), and fees and
other amounts owing in respect of, Indebtedness of the Company or any
Subsidiary, as applicable, whether outstanding on the Closing Date or thereafter
Incurred, unless in the instrument creating or evidencing the same or pursuant
to which the same is outstanding it is provided that such obligations are
subordinated in right of payment to the Securities or such Subsidiary's
Subsidiary Guarantee, as applicable; provided, however, that Senior Indebtedness
of the Company or any Subsidiary shall not include:

          (1) any obligation of the Company to any Subsidiary of the Company or
     of such Subsidiary to the Company or any other Subsidiary of the Company;

          (2) any liability for Federal, state, local or other taxes owed or
     owing by the Company or such Subsidiary, as applicable;

          (3) any accounts payable or other liability to trade creditors arising
     in the ordinary course of business (including Guarantees thereof or
     instruments evidencing such liabilities);

          (4) any Indebtedness or obligation of the Company (and any accrued and
     unpaid interest in

                                      31

<PAGE>

     respect thereof) that by its terms is subordinate or junior in any respect
     to any other Indebtedness or obligation of the Company or such Subsidiary,
     as applicable, including any Subordinated Obligations of the Company or
     such Subsidiary, as applicable;

          (5) any obligations with respect to any Capital Stock; or

          (6) any Indebtedness Incurred in violation of this Indenture.

          "Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.

          "Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).

          "Subordinated Chemed Debentures" means the Convertible Junior
Subordinated Debentures due 2030, issued by the Company pursuant to the
indenture dated as of February 7, 2000, between the Company and Firstar Bank,
National Association, as trustee.

          "Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Closing Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement. "Subordinated Obligation" of a Subsidiary Guarantor has a
correlative meaning, except that the reference to "Securities" in the preceding
sentence shall be deemed to refer to such Subsidiary's Subsidiary Guarantee.

          "Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of

                                      32

<PAGE>

any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by:

          (1) such Person,

          (2) such Person and one or more Subsidiaries of such Person or

          (3) one or more Subsidiaries of such Person.

          "Subsidiary Guarantee" means each Guarantee of the obligations with
respect to the Securities issued by a Subsidiary of the Company pursuant to the
terms of this Indenture.

          "Subsidiary Guarantor" means any Subsidiary that has issued a
Subsidiary Guarantee.

          "Temporary Cash Investments" means any of the following:

          (1) any investment in direct obligations of the United States of
     America or any agency thereof or obligations Guaranteed by the United
     States of America or any agency thereof;

          (2) investments in time deposit accounts, certificates of deposit and
     money market deposits maturing within 180 days of the date of acquisition
     thereof issued by a bank or trust company that is organized under the laws
     of the United States of America, any state thereof or any foreign country
     recognized by the United States of America having capital, surplus and
     undivided profits aggregating in excess of $250,000,000 (or the foreign
     currency equivalent thereof) and whose long-term debt is rated "A" (or such
     similar equivalent rating) or higher by at least one nationally recognized
     statistical rating organization (as defined in Rule 436 under the
     Securities Act);

          (3) repurchase obligations with a term of not more than 30 days for
     underlying securities of the types described in clause (1) above entered
     into with a bank meeting the qualifications described in clause (2) above;

                                      33

<PAGE>

          (4) investments in commercial paper, maturing not more than 90 days
     after the date of acquisition, issued by a corporation (other than an
     Affiliate of the Company) organized and in existence under the laws of the
     United States of America or any foreign country recognized by the United
     States of America with a rating at the time as of which any investment
     therein is made of "P-1" (or higher) according to Moody's Investors
     Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings
     Service, a division of The McGraw-Hill Companies, Inc. ("S and P"); and

          (5) investments in securities with maturities of six months or less
     from the date of acquisition issued or fully guaranteed by any state,
     commonwealth or territory of the United States of America, or by any
     political subdivision or taxing authority thereof, and rated at least "A"
     by S&P or "A" by Moody's Investors Service, Inc.

          "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture.

          "Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.

          "Transactions" means, collectively, the following transactions, which
shall be consummated on or about the date of the closing of the offering of the
Original Securities: (i) the consummation of the merger of Vitas with and into
an indirect Wholly Owned Subsidiary of the Company pursuant to a merger
agreement dated as of December 18, 2003, among the Company, Vitas and Marlin
Merger Corp., (ii) the repayment of approximately $74.4 million of existing
indebtedness of Vitas, plus accrued interest thereon, (iii) the repayment of
approximately $29.4 million of existing indebtedness of the Company (including a
$3.0 million make whole premium), plus accrued interest thereon, (iv) the
assignment of the Westbrook Agreement by the Company to Vitas, the payment of
$25.0 million by Vitas to Hugh A. Westbrook pursuant to the Westbrook Agreement
and the performance of the other obligations under the Westbrook Agreement, (v)
the consummation of the offering

                                      34

<PAGE>

and sale of the Original Securities, Fixed Rate Notes and Capital Stock of the
Company and the execution and delivery of notes, indentures and other agreements
in connection therewith, (vi) the Company and certain of its Subsidiaries
entering into the Credit Agreement and the borrowing on the Closing Date of
$75.0 million thereunder (vii) the issuance or deemed issuance of letters of
credit under the Credit Agreement to replace or backstop, or the cash
collateralization of, letters of credit issued for the account of the Company or
any of its Subsidiaries or Vitas or any of its Subsidiaries, (viii) the
cancelation of a warrant held by the Company for shares of Vitas stock and (ix)
the payment of fees and expenses in connection with the foregoing.

          "Trustee" means the party named as such in the Indenture until a
successor replaces it and, thereafter, means the successor.

          "Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

          "Trust Securities" means the Chemed Preferred Securities, the
Subordinated Chemed Debentures and the guarantee by the Company to the holders
of the Chemed Preferred Securities of amounts payable thereunder.

          "Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.

          "Unrestricted Subsidiary" means:

          (1) any Subsidiary of the Company that at the time of determination
     shall be designated an Unrestricted Subsidiary by the Board of Directors in
     the manner provided below and

          (2) any Subsidiary of an Unrestricted Subsidiary.

          The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary of the Company) to be
an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any
property of, the Company

                                      35

<PAGE>

or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided, however, that either:

               (A) the Subsidiary to be so designated has total Consolidated
          assets of $1,000 or less, or

               (B) if such Subsidiary has Consolidated assets greater than
          $1,000, then such designation would be permitted under Section 4.04.

The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation:

               (C) the Company could Incur $1.00 of additional Indebtedness
          under Section 4.03(a) and

               (D) no Default shall have occurred and be continuing.

          Any such designation of a Subsidiary as a Restricted Subsidiary or
Unrestricted Subsidiary by the Board of Directors shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.

          "U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.

          "Vitas" means Vitas Healthcare Corporation or any successor thereto by
any merger, consolidation or other transaction which is permitted hereunder.

          "VNF" means Vitas of North Florida, Inc., a Florida not-for-profit
corporation and a Wholly Owned Subsidiary of Vitas.

          "Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership

                                      36

<PAGE>

interests) of such Person then outstanding and normally entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof.

          "Westbrook Agreement" has the meaning assigned to such term in the
definition of "EBITDA".

          "Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company
all the Capital Stock of which (other than directors' qualifying shares or
shares issued to third parties to the extent necessary to satisfy any licensing
requirements under applicable law with respect to the Company's or any of its
Subsidiaries' business) is owned by the Company or another Wholly Owned
Subsidiary.

                                      37

<PAGE>

SECTION 1.02.  Other Definitions.

<TABLE>
<CAPTION>
                                                                     Defined in
                                        Term                          Section
                                        ----                        ------------
<S>                                                                 <C>
"Affiliate Transaction"..........................................   4.07(a)
"Bankruptcy Law".................................................   6.01
"Change of Control Offer"........................................   4.09(b)
"covenant defeasance option".....................................   8.01(b)
"Custodian"......................................................   6.01
"Event of Default"...............................................   6.01
"Initial Lien"...................................................   4.11
"legal defeasance option"........................................   8.01(b)
"Offer"..........................................................   4.06(b)
"Offer Amount"...................................................   4.06(c)(2)
"Offer Period"...................................................   4.06(c)(2)
"Paying Agent"...................................................   2.03
"Purchase Date"..................................................   4.06(c)(1)
"Registrar"......................................................   2.03
"Successor Company"..............................................   5.01(a)(1)
</TABLE>

          SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:

          "Commission" means the SEC;

          "indenture securities" means the Securities and the Subsidiary
Guarantees;

          "indenture security holder" means a Securityholder;

          "indenture to be qualified" means this Indenture;

          "indenture trustee" or "institutional trustee" means the Trustee; and

          "obligor" on the indenture securities means the Company, each
Subsidiary Guarantor and any other obligor on the indenture securities.

          All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.

                                      38

<PAGE>

          SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:

          (1) a term has the meaning assigned to it;

          (2) an accounting term not otherwise defined has the meaning assigned
     to it in accordance with GAAP;

          (3) "or" is not exclusive;

          (4) "including" means including without limitation;

          (5) words in the singular include the plural and words in the plural
     include the singular;

          (6) unsecured Indebtedness shall not be deemed to be subordinate or
     junior to secured Indebtedness merely by virtue of its nature as unsecured
     Indebtedness;

          (7) secured Indebtedness shall not be deemed to be subordinate or
     junior to any other secured Indebtedness merely because it has a junior
     priority with respect to the same collateral;

          (8) the principal amount of any noninterest bearing or other discount
     security at any date shall be the principal amount thereof that would be
     shown on a balance sheet of the issuer dated such date prepared in
     accordance with GAAP;

          (9) the principal amount of any Preferred Stock shall be (A) the
     maximum liquidation value of such Preferred Stock or (B) the maximum
     mandatory redemption or mandatory repurchase price with respect to such
     Preferred Stock, whichever is greater;

          (10) all references to the date the Securities were originally issued
     shall refer to the Issue Date; and

          (11) references to "interest" with respect to Securities in this
     Indenture shall include any additional interest payable pursuant to the
     Registration Rights Agreement.

                                      39

<PAGE>

                                   ARTICLE 2

                                The Securities

          SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities and the Exchange Securities are set forth in the Appendix attached
hereto (the "Appendix") which is hereby incorporated in, and expressly made part
of, this Indenture. The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit 1 to the
Appendix which is hereby incorporated in, and expressly made a part of, this
Indenture. The Exchange Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Security shall be dated the date of its authentication.
The terms of the Securities set forth in the Appendix and Exhibit A are part of
the terms of this Indenture.

          SECTION 2.02. Execution and Authentication. An Officer shall sign the
Securities for the Company by manual or facsimile signature.

          If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.

          A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.

          On the Issue Date, the Trustee shall authenticate and deliver $110.0
million of the Securities and, at any time and from time to time thereafter, the
Trustee shall authenticate and deliver Securities for original issue in an
aggregate principal amount specified in such order, in each case, upon a written
order of the Company signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company. Such

                                      40

<PAGE>

order shall specify the amount of the Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated and, in
the case of an issuance of Additional Securities pursuant to Section 2.13 after
the Issue Date, shall certify that such issuance is in compliance with Section
4.03. The aggregate principal amount of Securities outstanding at any time may
not exceed $220.0 million except as provided in Section 2.07.

          The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by
the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or
agent for service of notices and demands.

          SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.

          The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.

          The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.

                                      41

<PAGE>

          SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal and interest when
so becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.

          SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.

          SECTION 2.06. Transfer and Exchange. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of this Indenture and Section
8-401(1) of the Uniform Commercial Code are met. When Securities are presented
to the Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Company may require payment of a

                                      42

<PAGE>

sum sufficient to pay all taxes, assessments or other governmental charges in
connection with any transfer or exchange pursuant to this Section (other than
any such transfer taxes, assessments or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.06, 4.10 and 9.05). The Company
shall not be required to make and the Registrar need not register transfers or
exchanges of Securities selected for redemption (except, in the case of
Securities to be redeemed in part, the portion thereof not to be redeemed) or
any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.

          Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.

          All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled to
the same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.

          SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.

                                      43

<PAGE>

          Every replacement Security is an additional Obligation of the Company.

          SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.

          If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.

          If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.

          SECTION 2.09. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.

          SECTION 2.10. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the

                                       44

<PAGE>

Company. The Company may not issue new Securities to replace Securities it has
redeemed, paid or delivered to the Trustee for cancellation.

          SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.

          SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.

          SECTION 2.13. Issuance of Additional Securities. The Company shall be
entitled, subject to its compliance with Section 4.03, to issue Additional
Securities (in an aggregate principal amount not to exceed $110,000,000) under
this Indenture which shall have identical terms as the Initial Securities issued
on the Issue Date, other than with respect to the date of issuance and issue
price. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities issued in exchange therefor shall be
treated as a single class for all purposes under this Indenture.

          With respect to any Additional Securities, the Company shall set forth
in a resolution of the Board of Directors and an Officers' Certificate, a copy
of each which shall be delivered to the Trustee, the following information:

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<PAGE>

          (1) the aggregate principal amount of such Additional Securities to be
     authenticated and delivered pursuant to this Indenture;

          (2) the issue price, the issue date and the CUSIP number of such
     Additional Securities; provided, however, that no Additional Securities may
     be issued at a price that would cause such Additional Securities to have
     "original issue discount" within the meaning of Section 1273 of the Code;
     and

          (3) whether such Additional Securities shall be Transfer Restricted
     Securities and issued in the form of Initial Securities as set forth in the
     Appendix to this Indenture or shall be issued in the form of Exchange
     Securities as set forth in Exhibit A.

                                    ARTICLE 3

                                   Redemption

          SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.

          The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.

          Any notice of redemption may provide that the redemption will be
subject to specified conditions, provided that such conditions are not solely
within the Company's control.

          SECTION 3.02. Selection of Securities to Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee in its
sole discretion shall deem to be fair and appropriate and in accordance with

                                      46

<PAGE>

methods generally used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000. Securities and portions of them the Trustee selects shall be in
principal amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.

          SECTION 3.03. Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Securities, the Company shall mail a
notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's registered address.

          The notice shall identify the Securities to be redeemed and shall
state:

          (1) the redemption date;

          (2) the redemption price;

          (3) the name and address of the Paying Agent;

          (4) that Securities called for redemption must be surrendered to the
     Paying Agent to collect the redemption price;

          (5) if fewer than all the outstanding Securities are to be redeemed,
     the identification and principal amounts of the particular Securities to be
     redeemed;

          (6) that, unless the Company defaults in making such redemption
     payment, interest on Securities (or portion thereof) called for redemption
     ceases to accrue on and after the redemption date;

          (7) that no representation is made as to the correctness or accuracy
     of the CUSIP number, if any, listed in such notice or printed on the
     Securities; and

                                      47

<PAGE>

          (8) any condition to such redemption permitted under Section 3.01.

          At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.

          SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice; provided
that if there is any condition to the Company's obligation to redeem such
Securities which is permitted by Section 3.01 and stated in the notice of
redemption, such Securities shall not be deemed due and payable unless and until
such condition is satisfied or waived. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price stated in the notice, plus
accrued interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the related
interest payment date). Failure to give notice or any defect in the notice to
any Holder shall not affect the validity of the notice to any other Holder.

          SECTION 3.05. Deposit of Redemption Price. Prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all Securities
to be redeemed on that date other than Securities or portions of Securities
called for redemption which have been delivered by the Company to the Trustee
for cancellation.

          SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.

                                      48

<PAGE>

                                    ARTICLE 4

                                    Covenants

          SECTION 4.01. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.

          The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

          SECTION 4.02. SEC Reports. Whether or not required by the SEC's rules
and regulations, so long as any Securities are outstanding, the Company will
furnish to the Holders, within the time periods specified in the SEC's rules and
regulations:

          (1) all quarterly and annual reports that would be required to be
     filed with the SEC on Forms 10-Q and 10-K if the Company was required to
     file such reports; and

          (2) all current reports that would be required to be filed with the
     SEC on Form 8-K if the Company was required to file such reports.

All such reports will be prepared in all material respects in accordance with
all of the SEC's rules and regulations applicable to such reports, and each
annual report on Form 10-K will include a report on the Company's consolidated
financial statements by the Company's certified independent accountants. The
Company's reporting obligations with respect to clauses (1) and (2) above shall
be deemed satisfied in the event the Company files these reports with the SEC on
EDGAR.

          If, at any time, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company will
nevertheless be required to continue to file the reports specified in the
preceding paragraph with the SEC within the time periods specified

                                      49

<PAGE>

above unless the SEC will not accept such a filing. The Company agrees that it
will not take any action for the sole purpose of causing the SEC not to accept
any such filings (it being understood and agreed that, if the Company is
entitled to suspend its reporting obligations under the Exchange Act, the
Company shall not be prevented from making any filings necessary to suspend such
obligations). If, notwithstanding the foregoing, the SEC will not accept the
Company's filings for any reason, the Company will post the reports referred to
in the preceding paragraph on its website within the time periods that would
apply if the Company was required to file those reports with the SEC.

          In addition, the Company agrees that, for so long as any Securities
remain outstanding, at any time they are not required to file the reports
required by the preceding paragraphs with the SEC, they will furnish to the
Holders and to securities analysts and prospective investors, upon their written
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.

          SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company and its
Restricted Subsidiaries may Incur Indebtedness if on the date of such Incurrence
and after giving effect thereto the Consolidated Leverage Ratio would be no
greater than (i) 5.75 to 1, if such Incurrence occurs on or prior to December
31, 2004 and (ii) 5.5 to 1, if such Incurrence occurs after December 31, 2004.

          (b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness:

          (1) Indebtedness Incurred pursuant to the Credit Agreement in an
     aggregate principal amount not to exceed $135.0 million less the aggregate
     amount of all Net Available Cash applied by the Company or any of its
     Restricted Subsidiaries to repay Indebtedness under the Credit Agreement
     pursuant to Section 4.06(a)(3)(A) solely to the extent the corresponding
     commitments relating to such Indebtedness are permanently reduced;

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<PAGE>

          (2) Indebtedness of the Company owed to and held by any Restricted
     Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by
     the Company or any Restricted Subsidiary; provided, however, that (A) any
     subsequent issuance or transfer of any Capital Stock or any other event
     that results in any such Restricted Subsidiary ceasing to be a Restricted
     Subsidiary or any subsequent transfer of any such Indebtedness (except to
     the Company or a Restricted Subsidiary) shall be deemed, in each case, to
     constitute the Incurrence of such Indebtedness by the issuer thereof and
     (B) if the Company or a Subsidiary Guarantor is the obligor on such
     Indebtedness, such Indebtedness is expressly subordinated to the prior
     payment in full in cash of all obligations with respect to the Securities
     or the Subsidiary Guarantees, as applicable;

          (3) Indebtedness represented by (A) the Securities (not including any
     Additional Securities), the Subsidiary Guarantees and any Exchange Notes
     and (B) the Fixed Rate Notes (but not including any additional Fixed Rate
     Notes but including any exchange notes under the indenture for the Fixed
     Rate Notes);

          (4) Indebtedness outstanding on the Closing Date (other than the
     Indebtedness described in clauses (1), (2) or (3) above);

          (5) Indebtedness of a Restricted Subsidiary Incurred and outstanding
     on or prior to the date on which such Restricted Subsidiary was acquired by
     the Company (other than Indebtedness Incurred in contemplation of, in
     connection with, as consideration in, or to provide all or any portion of
     the funds or credit support utilized to consummate, the transaction or
     series of related transactions pursuant to which such Restricted Subsidiary
     became a Subsidiary of or was otherwise acquired by the Company); provided,
     however, that on the date that such Restricted Subsidiary is acquired by
     the Company, either (x) the Company would have been able to incur $1.00 of
     additional indebtedness pursuant to Section 4.03(a) after giving effect to
     such acquisition or (y) the Consolidated Leverage Ratio after giving effect
     to such acquisition and any related transactions would be no greater than
     the Consolidated Leverage Ratio as of

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<PAGE>

such date without giving effect to such acquisition and any related
transactions;

          (6) Refinancing Indebtedness in respect of any Indebtedness Incurred
     pursuant to Section 4.03(a) or clause (3), (4), this clause (6) or clause
     (9) of this paragraph (b);

          (7) Indebtedness (A) in respect of performance bonds, bankers'
     acceptances, letters of credit and surety or appeal bonds provided by the
     Company and the Restricted Subsidiaries in the ordinary course of their
     business, and (B) under Interest Rate Agreements entered into for bona fide
     hedging purposes of the Company in the ordinary course of business;
     provided, however, that such Interest Rate Agreements do not increase the
     Indebtedness of the Company outstanding at any time other than as a result
     of fluctuations in interest rates or by reason of fees, indemnities and
     compensation payable thereunder;

          (8) Purchase Money Indebtedness, mortgage financings and Capitalized
     Lease Obligations in an aggregate principal amount not in excess of $3.0
     million at any time outstanding;

          (9) Indebtedness Incurred at a Restricted Subsidiary, to the extent
     the proceeds of such Indebtedness are used to repay Indebtedness under the
     Credit Agreement and/or the Securities;

          (10) Indebtedness arising from the honoring by a bank or other
     financial institution of a check, draft or similar instrument drawn against
     insufficient funds in the ordinary course of business, provided that such
     Indebtedness is extinguished within five Business Days of its Incurrence;

          (11) the Incurrence by the Company or any of its Restricted
     Subsidiaries of Indebtedness constituting reimbursement obligations with
     respect to letters of credit issued in the ordinary course of business;
     provided, however, that upon the drawing of such letters of credit, such
     obligations are reimbursed within 30 days following such drawing;

          (12) obligations arising from or representing deferred compensation to
     employees of the Company or

                                      52

<PAGE>

     its Subsidiaries that constitute or are deemed to be Indebtedness under
     GAAP and that are Incurred in the ordinary course of business; or

          (13) Indebtedness (other than Indebtedness permitted to be Incurred
     pursuant to the foregoing paragraph (a) or any other clause of this
     paragraph (b)) in an aggregate principal amount on the date of Incurrence
     that, when added to all other Indebtedness Incurred pursuant to this clause
     (13) and then outstanding, will not exceed $5.0 million.

          (c) Notwithstanding the foregoing, neither the Company nor any
Restricted Subsidiary may Incur any Indebtedness pursuant to paragraph (b) above
if the proceeds thereof are used, directly or indirectly, to repay, prepay,
redeem, defease, retire, refund or refinance any Subordinated Obligations unless
such Indebtedness will be subordinated to the Securities to at least the same
extent as such Subordinated Obligations.

          (d) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded solely as
a result of fluctuations in the exchange rates of currencies. For purposes of
determining the outstanding principal amount of any particular Indebtedness
Incurred pursuant to this Section 4.03:

          (1) Indebtedness Incurred pursuant to the Credit Agreement prior to or
     on the Closing Date shall be treated as Incurred pursuant to clause (1) of
     paragraph (b) above,

          (2) Indebtedness permitted by this Section 4.03 need not be permitted
     solely by reference to one provision permitting such Indebtedness but may
     be permitted in part by one such provision and in part by one or more other
     provisions of this Section 4.03 permitting such Indebtedness, and

          (3) in the event that Indebtedness meets the criteria of more than one
     of the types of Indebtedness described in this Section 4.03, the Company,
     in its sole discretion, shall classify such Indebtedness and only be
     required to include the amount of such Indebtedness in one of such clauses.

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<PAGE>

          (e) In addition, the Company will not permit any of its Unrestricted
Subsidiaries to incur any Indebtedness other than Non-Recourse Debt (or issue
any shares of Disqualified Stock that is either mandatorily redeemable by the
Company or convertible or exchangeable for Indebtedness other than Non-Recourse
Debt). If at any time an Unrestricted Subsidiary becomes a Restricted
Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred
by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be Incurred as of such date under this clause
(e), the Company shall be in Default of this Section 4.03).

          SECTION 4.04. Limitation on Restricted Payments. (a) The Company shall
not, and shall not permit any Restricted Subsidiary, directly or indirectly, to:

          (1) declare or pay any dividend, make any distribution on or in
     respect of its Capital Stock or make any similar payment (including any
     payment in connection with any merger or consolidation involving the
     Company or any Subsidiary of the Company) to the direct or indirect holders
     of its Capital Stock, except (x) dividends or distributions payable solely
     in its Capital Stock (other than Disqualified Stock or Preferred Stock) and
     (y) dividends or distributions payable to the Company or a Restricted
     Subsidiary (and, if such Restricted Subsidiary has shareholders other than
     the Company or other Restricted Subsidiaries, to its other shareholders on
     a pro rata basis),

          (2) purchase, repurchase, redeem, retire or otherwise acquire for
     value any Capital Stock of the Company or any Restricted Subsidiary held by
     Persons other than the Company or a Restricted Subsidiary,

          (3) purchase, repurchase, redeem, retire, defease or otherwise acquire
     for value, prior to scheduled maturity, scheduled repayment or scheduled
     sinking fund payment any Subordinated Obligations (other than the purchase,
     repurchase, redemption, retirement, defeasance or other acquisition for
     value of Subordinated Obligations acquired in anticipation of satisfying a
     sinking fund obligation, principal installment or final maturity, in each
     case due within one year of the date of acquisition), or

                                       54

<PAGE>

          (4) make any Investment (other than a Permitted Investment) in any
     Person;

(any such dividend, distribution, payment, purchase, redemption, repurchase,
defeasance, retirement, or other acquisition or Investment described in clauses
(1) through (4) above being herein referred to as a "Restricted Payment") if at
the time the Company or such Restricted Subsidiary makes such Restricted
Payment:

               (A) a Default shall have occurred and be continuing (or would
          result therefrom);

               (B) after giving effect, on a pro forma basis, to such Restricted
          Payment, the Company could not Incur at least $1.00 of additional
          Indebtedness under Section 4.03(a); or

               (C) the aggregate amount of such Restricted Payment and all other
          Restricted Payments (the amount so expended, if other than in cash,
          shall be the Fair Market Value of the property or other non-cash
          assets that constitute such Restricted Payment) declared or made
          subsequent to the Closing Date would exceed the sum, without
          duplication, of:

                    (i) 50% of the Consolidated Net Income accrued during the
               period (treated as one accounting period) from the beginning of
               the fiscal quarter immediately following the fiscal quarter
               during which the Closing Date occurs to the end of the most
               recent fiscal quarter ending at least 45 days prior to the date
               of such Restricted Payment (or, in case such Consolidated Net
               Income shall be a deficit, minus 100% of such deficit);

                    (ii) the aggregate Net Cash Proceeds received by the Company
               from the issuance or sale of its Capital Stock (other than
               Disqualified Stock) subsequent to the Closing Date (other than an
               issuance or sale to (x) a Subsidiary of the Company or (y) an
               employee stock ownership plan or other trust established by the
               Company or any of its Subsidiaries);

                                      55

<PAGE>

                    (iii) the amount by which Indebtedness of the Company or its
               Restricted Subsidiaries is reduced on the Company's balance sheet
               upon the conversion or exchange (other than by a Subsidiary of
               the Company) subsequent to the Closing Date of any Indebtedness
               of the Company or its Restricted Subsidiaries issued after the
               Closing Date which is convertible or exchangeable for Capital
               Stock (other than Disqualified Stock) of the Company (less the
               amount of any cash or the Fair Market Value of other property
               distributed by the Company or any Restricted Subsidiary upon such
               conversion or exchange); and

                    (iv) an amount equal to the sum of (x) the net reduction in
               any Investments (excluding Permitted Investments) made by the
               Company or any Restricted Subsidiary in any Person resulting from
               repurchases, repayments or redemptions of such Investments by
               such Person, net cash proceeds realized on the sale of such
               Investment and net cash proceeds representing the return of
               capital (excluding dividends and distributions), in each case
               received by the Company or any Restricted Subsidiary, and (y) to
               the extent such Person is an Unrestricted Subsidiary, the portion
               (proportionate to the Company's equity interest in such
               Subsidiary) of the Fair Market Value of the net assets of such
               Unrestricted Subsidiary if such Unrestricted Subsidiary is
               designated a Restricted Subsidiary, with such Fair Market Value
               measured at the time of any such designation; provided, however,
               that the foregoing sum shall not exceed, in the case of any such
               Person or Unrestricted Subsidiary, the amount of Investments
               (excluding Permitted Investments) previously made by the Company
               or any Restricted Subsidiary in such Person or Unrestricted
               Subsidiary and included in the calculation of the amount of
               Restricted Payments.

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<PAGE>

          (b) The provisions of the foregoing paragraph (a) shall not prohibit:

          (1) any purchase, repurchase, redemption, retirement or other
     acquisition for value of Capital Stock of the Company made by exchange for,
     or out of the proceeds of the substantially concurrent sale of, Capital
     Stock of the Company (other than Disqualified Stock and other than Capital
     Stock issued or sold to a Subsidiary of the Company or an employee stock
     ownership plan or other trust established by the Company or any of its
     Subsidiaries); provided, however, that:

               (A) such purchase, repurchase, redemption, retirement or other
          acquisition for value will be excluded in the calculation of the
          amount of Restricted Payments, and

               (B) the Net Cash Proceeds from such sale applied in the manner
          set forth in this clause (1) will be excluded from the calculation of
          amounts under clause (4)(C)(ii) of paragraph (a) above;

          (2) any prepayment, repayment, purchase, repurchase, redemption,
     retirement, defeasance or other acquisition for value of Subordinated
     Obligations of the Company made by exchange for, or out of the proceeds of
     the substantially concurrent sale of, Indebtedness of the Company that is
     permitted to be Incurred pursuant to Section 4.03(b); provided, however,
     that such prepayment, repayment, purchase, repurchase, redemption,
     retirement, defeasance or other acquisition for value will be excluded in
     the calculation of the amount of Restricted Payments;

          (3) any prepayment, repayment, purchase, repurchase, redemption,
     retirement, defeasance or other acquisition for value of Subordinated
     Obligations from Net Available Cash to the extent permitted by Section
     4.06; provided, however, that such prepayment, repayment, purchase,
     repurchase, redemption, retirement, defeasance or other acquisition for
     value will be excluded in the calculation of the amount of Restricted
     Payments;

                                      57

<PAGE>

          (4) dividends paid within 60 days after the date of declaration
     thereof if at such date of declaration such dividends would have complied
     with this Section 4.04; provided, however, that such dividends will be
     included in the calculation of the amount of Restricted Payments;

          (5) any purchase, repurchase, redemption, retirement or other
     acquisition for value of shares of, or options to purchase shares of,
     Capital Stock of the Company or any of its Subsidiaries from employees,
     former employees, directors or former directors of the Company or any of
     its Subsidiaries (or permitted transferees of such employees, former
     employees, directors or former directors), pursuant to the terms of
     agreements (including employment agreements) or plans (or amendments
     thereto) approved by the Board of Directors under which such individuals
     purchase or sell or are granted the option to purchase or sell, shares of
     such Capital Stock; provided, however, that the aggregate amount of such
     purchases, repurchases, redemptions, retirements and other acquisitions for
     value will not exceed $2.0 million in any calendar year; provided further,
     however, that such purchases, repurchases, redemptions, retirements and
     other acquisitions for value shall be excluded in the calculation of the
     amount of Restricted Payments;

          (6) repurchases of Capital Stock deemed to occur upon exercise of
     stock options if such Capital Stock represents a portion of the exercise
     price of such options, and repurchases of Capital Stock of Subsidiaries
     consisting of directors' qualifying shares or shares issued to third
     parties in the ordinary course to the extent necessary to satisfy any
     licensing requirements under applicable law with respect to the Company's
     or any of its Subsidiary's business; provided, however, that such
     Restricted Payments shall be excluded in the calculation of the amount of
     Restricted Payments;

          (7) cash payments in lieu of the issuance of fractional shares in
     connection with the exercise of warrants, options or other securities
     convertible into or exchangeable for Capital Stock of the Company;
     provided, however, that any such cash payment shall not be for the purpose
     of evading the limitation of this Section 4.04 (as determined in good faith
     by the

                                       58

<PAGE>

     Board of Directors); provided further, however, that such payments shall be
     included in the calculation of the amount of Restricted Payments;

          (8) payments of intercompany subordinated Indebtedness, the Incurrence
     of which was permitted under Section 4.03(b)(2); provided, however, that no
     Default has occurred and is continuing or would otherwise result therefrom;
     provided further, however, that such payments shall be excluded in the
     calculation of the amount of Restricted Payment;

          (9) the payment of cash dividends on the Capital Stock of the Company
     in an amount not to exceed (x) $0.48 per share per fiscal year and (y) $7.0
     million in the aggregate for such dividends in any fiscal year; provided,
     however, that such dividends shall be included in the amount of Restricted
     Payments;

          (10) the payment of scheduled, quarterly cash dividends on the Chemed
     Preferred Securities declared on or prior to December 31, 2004 in an amount
     not to exceed $2.00 per share per year, and the redemption of the Chemed
     Preferred Securities and the Subordinated Chemed Debentures at the
     applicable scheduled redemption prices on or prior to December 31, 2004;
     provided that such dividends and redemption amounts shall not be included
     in the amount of Restricted Payments;

          (11) dividends or distributions of Capital Stock subject to the
     Closing Date Stock Award Plan so long as the aggregate amount of such
     dividends or distributions made pursuant to this clause (11) does not
     exceed $2.8 million; provided, that such dividends or distributions shall
     be excluded in the amount of Restricted Payments; and

          (12) other Restricted Payments in an aggregate amount not to exceed
     $5.0 million; provided, however, that such Restricted Payments shall be
     included in the calculation of the amount of Restricted Payments.

          SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become

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effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:

          (1) pay dividends or make any other distributions on its Capital Stock
     or pay any Indebtedness or other obligations owed to the Company;

          (2) make any loans or advances to the Company; or

          (3) transfer any of its property or assets to the Company, except:

               (A) with respect to clauses (1), (2) or (3):

                    (i) any encumbrance or restriction pursuant to applicable
               law or an agreement in effect at or entered into on the Closing
               Date;

                    (ii) any encumbrance or restriction with respect to a
               Restricted Subsidiary pursuant to an agreement relating to any
               Indebtedness Incurred by such Restricted Subsidiary prior to the
               date on which such Restricted Subsidiary was acquired by the
               Company (other than Indebtedness Incurred as consideration in, in
               contemplation of, or to provide all or any portion of the funds
               or credit support utilized to consummate the transaction or
               series of related transactions pursuant to which such Restricted
               Subsidiary became a Restricted Subsidiary or was otherwise
               acquired by the Company) and outstanding on such date;

                    (iii) any encumbrance or restriction pursuant to an
               agreement effecting a Refinancing of Indebtedness Incurred
               pursuant to an agreement referred to in clause (i) or (ii) of
               this Section 4.05(3)(A) or this clause (iii) or contained in any
               amendment to an agreement referred to in clause (i) or (ii) of
               this Section 4.05(3)(A) or this

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               clause (iii); provided, however, that the encumbrances and
               restrictions contained in any such Refinancing agreement or
               amendment, taken as a whole, are not materially more
               disadvantageous to the Holders than the encumbrances and
               restrictions contained in such predecessor agreements (as
               determined by the Company in good faith);

                    (iv) any encumbrance or restriction contained in the terms
               of any Indebtedness Incurred pursuant to Section 4.03(b)(9) or
               any agreement pursuant to which such Indebtedness was Incurred;
               provided, however that the encumbrances and restrictions
               contained in such Indebtedness, taken as a whole, are not
               materially more disadvantageous to the holders of the Securities
               than the encumbrances and restrictions contained in the
               agreements for the Indebtedness being repaid (as determined by
               the Company in good faith);

                    (v) with respect to a Restricted Subsidiary, any encumbrance
               or restriction imposed pursuant to an agreement entered into in
               connection with the sale or disposition of all or substantially
               all the Capital Stock or assets of such Restricted Subsidiary;
               provided that in any such case such encumbrance or restriction is
               in effect only for the period pending the closing of such sale,
               disposition or distribution; and

               (B) in the case of clause (3), any encumbrance or restriction

                    (i) that restricts in a customary manner the subletting,
               assignment or transfer of any property or asset that is subject
               to a lease, license or similar contract, or

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                    (ii) contained in security agreements securing Indebtedness
               of a Restricted Subsidiary to the extent such encumbrance or
               restriction restricts the transfer of the property subject to
               such security agreements.

          SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock. (a)
The Company will not, and will not permit any Restricted Subsidiary to, make any
Asset Disposition unless:

               (1) the Company or such Restricted Subsidiary receives
          consideration (including by way of relief from, or by any other
          Person assuming sole responsibility for, any liabilities, contingent
          or otherwise) at the time of such Asset Disposition at least equal
          to the Fair Market Value of the shares and assets subject to such
          Asset Disposition,

               (2) at least 75% of the consideration thereof received by the
          Company or such Restricted Subsidiary is in the form of cash or cash
          equivalents and

               (3) an amount equal to 100% of the Net Available Cash from such
          Asset Disposition is applied by the Company (or such Restricted
          Subsidiary, as the case may be)

                    (A) first, to the extent the Company elects (or is required
               by the terms of any Indebtedness), to prepay, repay, purchase,
               repurchase, redeem, retire, defease or otherwise acquire for
               value Senior Indebtedness of the Company or Senior Indebtedness
               (other than obligations in respect of Preferred Stock) of a
               Restricted Subsidiary (in each case other than Indebtedness owed
               to the Company or an Affiliate of the Company and other than
               obligations in respect of Disqualified Stock) (collectively
               "Eligible Indebtedness") within one year from the later of the
               date of such Asset Disposition or the receipt of such Net
               Available Cash;

                    (B) second, to the extent of the balance of Net Available
               Cash after application in accordance with clause (A), to the
               extent the Company or such Restricted Subsidiary elects, to

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<PAGE>

               reinvest in Additional Assets (including by means of an
               Investment in Additional Assets by a Restricted Subsidiary with
               Net Available Cash received by the Company or another Restricted
               Subsidiary) within one year from the later of such Asset
               Disposition or the receipt of such Net Available Cash;

                    (C) third, to the extent of the balance of such Net
               Available Cash after application in accordance with clauses (A)
               and (B), to make an Offer (as defined in Section 4.06(b)) to
               purchase Securities pursuant to and subject to the conditions set
               forth in Section 4.06(b); provided, however, that if the Company
               so elects (or is required by the terms of any other Senior
               Indebtedness), such Offer may be made ratably to purchase the
               Securities and other Senior Indebtedness of the Company; and

                    (D) fourth, to the extent of the balance of such Net
               Available Cash after application in accordance with clauses (A),
               (B) and (C) or the proviso to this Section 4.06(a)(3), for any
               general corporate purpose permitted by the terms of this
               Indenture;

     provided, however, that for purposes of (x) the proviso to Section 11.03(a)
     or (y) Section 11.03(b) with respect to the release of Collateral, an Asset
     Disposition shall constitute a "Ratable Paydown Disposition" if the Company
     shall apply all Net Available Cash, to the extent not applied at the option
     of the Company to reinvest in Additional Assets as provided in clause (B)
     above, to make an Offer in accordance with Section 4.06(b) and to repay
     Indebtedness under the Credit Agreement (or, at the election of the
     Company, to pay or offer to purchase any other Eligible Indebtedness in
     lieu of Indebtedness under the Credit Agreement), in such respective
     amounts as are in proportion to the respective aggregate outstanding amount
     of Securities and outstanding Indebtedness under the Credit Agreement; and
     provided, further, that in connection with any prepayment, repayment,
     purchase, repurchase, redemption, retirement, defeasance or other
     acquisition for value of Indebtedness pursuant to clause (A) or (C) above,
     the Company or such

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<PAGE>

     Restricted Subsidiary will retire such Indebtedness and will cause the
     related loan commitment (if any) to be permanently reduced in an amount
     equal to the principal amount so prepaid, repaid, purchased, repurchased,
     redeemed, retired, defeased or otherwise acquired for value.

          Notwithstanding the foregoing provisions of this Section 4.06, the
Company and the Restricted Subsidiaries will not be required to apply any Net
Available Cash in accordance with this Section 4.06(a) except to the extent that
the aggregate Net Available Cash from all Asset Dispositions that is not
otherwise applied in accordance with this Section 4.06(a) exceeds $5.0 million.

          For the purposes of this Section 4.06, the following are deemed to be
cash or cash equivalents:

               (x) the assumption of Indebtedness of the Company (other than
          obligations in respect of Disqualified Stock of the Company) or any
          Restricted Subsidiary and the release of the Company or such
          Restricted Subsidiary from all liability on such Indebtedness in
          connection with such Asset Disposition and

               (y) securities received by the Company or any Restricted
          Subsidiary from the transferee that within 90 days are converted by
          the Company or such Restricted Subsidiary into cash.

          (b) In the event of an Asset Disposition that requires the purchase of
Securities pursuant to Section 4.06(a)(3)(C) or in respect of which the Company
elects to make an offer pursuant to the proviso to Section 4.06(a)(3), the
Company shall be required (i) to purchase Securities tendered pursuant to an
offer by the Company for the Securities (the "Offer") at a purchase price of
100% of their principal amount plus accrued and unpaid interest to the date of
purchase (subject to the right of Holders of record on the relevant date to
receive interest due on the relevant Interest Payment Date) in accordance with
the procedures (including prorating in the event of oversubscription), set forth
in Section 4.06(c) and (ii) to purchase other Senior Indebtedness of the Company
on the terms and to the extent contemplated thereby (provided that in no event
shall the Company offer to purchase such other Senior Indebtedness of the
Company at a purchase price in

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<PAGE>

excess of 100% of its principal amount (without premium), plus accrued and
unpaid interest thereon). If the aggregate purchase price of Securities (and
other Senior Indebtedness) tendered pursuant to the Offer is less than the Net
Available Cash allotted to the purchase of the Securities (and other Senior
Indebtedness), the Company will apply the remaining Net Available Cash in
accordance with Section 4.06(a)(3)(D). The Company will not be required to make
an Offer for Securities (and other Senior Indebtedness) pursuant to this Section
4.06 if the Net Available Cash available therefor (after application of the
proceeds as provided in clauses (A) and (B) of Section 4.06(a)(3)) is less than
$5.0 million for any particular Asset Disposition or related series of Asset
Dispositions (which lesser amount will be carried forward for purposes of
determining whether an Offer is required with respect to the Net Available Cash
from any subsequent Asset Disposition). Upon completion of such an offer to
purchase, Net Available Cash will be deemed to be reduced by the aggregate
amount of such offer.

          (c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall deliver to the Trustee and
send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in whole
or in part (subject to prorating as described in Section 4.06(b) in the event
the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date") and shall contain such information concerning the business
of the Company which the Company in good faith believes will enable such Holders
to make an informed decision (which at a minimum will include (A) the most
recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Company, the most recent subsequently filed
Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the Company
filed subsequent to such Quarterly Report, other than Current Reports describing
Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports), (B) a description of material developments in
the Company's business subsequent to the date of the latest of such Reports, and
(C) if material, appropriate pro forma financial information) and

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<PAGE>

all instructions and materials necessary to tender Securities pursuant to the
Offer, together with the information contained in clause (3) of this Section
4.06(c).

          (2) Not later than the date upon which written notice of an Offer is
     delivered to the Trustee as provided below, the Company shall deliver to
     the Trustee an Officers' Certificate as to (A) the amount of the Offer (the
     "Offer Amount"), including information as to any other Senior Indebtedness
     included in the Offer, (B) the allocation of the Net Available Cash from
     the Asset Dispositions pursuant to which such Offer is being made and (C)
     the compliance of such allocation with the provisions of Section 4.06(a)
     and (b). On such date, the Company shall also irrevocably deposit with the
     Trustee or with a Paying Agent (or, if the Company is acting as its own
     Paying Agent, segregate and hold in trust) in Temporary Cash Investments,
     maturing on the last day prior to the Purchase Date or on the Purchase Date
     if funds are immediately available by open of business, an amount equal to
     the Offer Amount to be held for payment in accordance with the provisions
     of this Section. If the Offer includes other Senior Indebtedness, the
     deposit described in the preceding sentence may be made with any other
     paying agent pursuant to arrangements satisfactory to the Trustee. Upon the
     expiration of the period for which the Offer remains open (the "Offer
     Period"), the Company shall deliver to the Trustee for cancellation the
     Securities or portions thereof which have been properly tendered to and are
     to be accepted by the Company. The Trustee shall, on the Purchase Date,
     mail or deliver payment (or cause the delivery of payment) to each
     tendering Holder in the amount of the purchase price. In the event that the
     aggregate purchase price of the Securities delivered by the Company to the
     Trustee is less than the Offer Amount applicable to the Securities, the
     Trustee shall deliver the excess to the Company immediately after the
     expiration of the Offer Period for application in accordance with this
     Section 4.06.

          (3) Holders electing to have a Security purchased shall be required to
     surrender the Security, with an appropriate form duly completed, to the

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<PAGE>

     Company at the address specified in the notice at least three Business Days
     prior to the Purchase Date. Holders shall be entitled to withdraw their
     election if the Trustee or the Company receives not later than one Business
     Day prior to the Purchase Date, a telex, facsimile transmission or letter
     setting forth the name of the Holder, the principal amount of the Security
     which was delivered for purchase by the Holder and a statement that such
     Holder is withdrawing his election to have such Security purchased. Holders
     whose Securities are purchased only in part shall be issued new Securities
     equal in principal amount to the unpurchased portion of the Securities
     surrendered.

          (4) At the time the Company delivers Securities to the Trustee which
     are to be accepted for purchase, the Company shall also deliver an
     Officers' Certificate stating that such Securities are to be accepted by
     the Company pursuant to and in accordance with the terms of this Section. A
     Security shall be deemed to have been accepted for purchase at the time the
     Trustee, directly or through an agent, mails or delivers payment therefor
     to the surrendering Holder.

          (d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue of its compliance with
such securities laws or regulations.

          SECTION 4.07. Limitation on Affiliate Transactions. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless such transaction is on terms that:

               (1) are no less favorable to the Company or such Restricted
          Subsidiary, as the case may be, than those that could be obtained at
          the time of such transaction

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<PAGE>

          in arm's-length dealings with a Person who is not such an Affiliate;

               (2) in the event such Affiliate Transaction involves an
          aggregate amount in excess of $5.0 million,

                    (A) are set forth in writing, and

                    (B) have been approved by a majority of the members of the
               Board of Directors and by a majority of the members of such
               Board of Directors having no personal stake in such
               transaction, if any (and such majority or majorities, as the
               case may be, determines that such Affiliate Transaction
               satisfies the criteria in clause (1) above); and

               (3) in the event such Affiliate Transaction involves an amount in
          excess of $20.0 million, have been determined by a nationally
          recognized appraisal or investment banking firm to be fair, from a
          financial standpoint, to the Company and its Restricted Subsidiaries
          or is not less favorable to the Company and its Restricted
          Subsidiaries than could reasonably be expected to be obtained at the
          time in an arms length transaction with a Person who is not an
          Affiliate.

          (b) The provisions of the foregoing paragraph (a) will not prohibit:

          (1) any Investment or other Restricted Payment permitted to be made
     pursuant to Section 4.04,

          (2) any issuance of securities, or other payments, awards or grants
     in cash, securities or otherwise pursuant to, or the funding of,
     employment arrangements, stock options and stock ownership plans approved
     by the Board of Directors,

          (3) the grant of stock options or similar rights to employees and
     directors of the Company pursuant to plans approved by the Board of
     Directors,

          (4) loans or advances to employees in the ordinary course of
     business of the Company or its Restricted Subsidiaries and consistent
     with prudent

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<PAGE>

     practices and applicable law, not to exceed $2.0 million outstanding at any
     one time,

          (5) the payment of reasonable and customary fees, compensation or
     employee benefit arrangements to and any indemnity provided for the benefit
     of directors, officers or employees of the Company and its Subsidiaries in
     the ordinary course of business,

          (6) any transaction with a Restricted Subsidiary which would
     constitute an Affiliate Transaction solely because the Company or a
     Restricted Subsidiary owns an equity interest in, or otherwise controls,
     such Restricted Subsidiary,

          (7) the Transactions, or

          (8) the making of severance payments to directors, officers or
     employees of Vitas that are required pursuant to arrangements in effect
     prior to the date that the Company acquired Vitas, in an aggregate amount
     not to exceed $14.5 million (which arrangements may be modified so long as
     such aggregate amount is not exceeded).

          SECTION 4.08. Limitation on Lines of Business. The Company shall
not, and shall not permit any Restricted Subsidiary to, engage in any business
other than a Permitted Business.

          SECTION 4.09. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries. The Company will not sell or otherwise dispose of any
shares of Capital Stock of a Restricted Subsidiary to any Person (other than
the Company or a Wholly Owned Subsidiary), and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell or otherwise dispose of
any shares of its Capital Stock (other than directors' qualifying shares or
shares issued to third parties in the ordinary course to the extent necessary
to satisfy any licensing requirements under applicable law with respect to the
Company's or any of its Subsidiary's business) to any Person (other than the
Company or a Wholly Owned Subsidiary), unless:

          (1) immediately after giving effect to such issuance, sale or other
     disposition, neither the Company nor any of its Restricted Subsidiaries
     owns any Capital Stock of such Restricted Subsidiary; or

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<PAGE>

          (2) immediately after giving effect to such issuance or sale, such
     Restricted Subsidiary would no longer constitute a Restricted Subsidiary
     and any Investment in such Person remaining after giving effect thereto
     would have been permitted to be made under Section 4.04 if made on the
     date of such issuance, sale or other disposition (and such Investment
     shall be deemed to be an Investment for the purposes of Section 4.04 as
     of the effective date of the applicable transaction).

          The proceeds of any sale of such Capital Stock permitted under
clause (1) or (2) above will be treated as Net Available Cash from an Asset
Disposition and must be applied in accordance with the terms of Section 4.06.

          For avoidance of doubt, the Company will not be permitted to issue,
directly or indirectly, any of its Capital Stock that is exchangeable or
convertible, with or without conditions, into any Capital Stock of any
Restricted Subsidiary without complying with this Section 4.09.

          SECTION 4.10. Change of Control. (a) Upon the occurrence of a Change
of Control, each Holder shall have the right to require that the Company
purchase all or any part of such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to, but excluding, the date of purchase (subject to the
right of holders of record on the relevant record date to receive interest on
the relevant interest payment date), in accordance with the terms contemplated
in Section 4.10(b); provided, however, that notwithstanding the occurrence of
a Change of Control, the Company shall not be obligated to purchase the
Securities pursuant to this section in the event that it has exercised its
right to redeem all the Securities under the terms of paragraph 5 of the
Securities.

          (b) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder with a copy to the Trustee (the "Change of
Control Offer") stating:

          (1) that a Change of Control has occurred and that such Holder has
     the right to require the Company to purchase all or any part of such
     Holder's Securities at a purchase price in cash equal to 101%

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<PAGE>

     of the principal amount thereof on the date of purchase, plus accrued and
     unpaid interest, if any, to the date of purchase (subject to the right of
     Holders of record on the relevant record date to receive interest on the
     relevant interest payment date);

          (2) the circumstances and relevant facts and financial information
     regarding such Change of Control;

          (3) the purchase date (which shall be no earlier than 30 days nor
     later than 60 days from the date such notice is mailed); and

          (4) the instructions, as determined by the Company, consistent with
     this Section, that a Holder must follow in order to have its Securities
     purchased.

          (c) Holders electing to have a Security purchased will be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business
Day prior to the purchase date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Security which was delivered for purchase by the Holder and a statement that
such Holder is withdrawing his election to have such Security purchased.

          (d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.

          (e) Notwithstanding the foregoing provisions of this Section, the
Company shall not be required to make a Change of Control Offer following a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in this Section applicable to a Change of Control Offer made by the
Company and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.

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<PAGE>

          (f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant
to this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue of its compliance
with such securities laws or regulations.

          SECTION 4.11. Limitation on Liens. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, Incur or
permit to exist any Lien of any nature whatsoever on any of its property or
assets(including Capital Stock of a Restricted Subsidiary, but excluding
Capital Stock of an Unrestricted Subsidiary), whether owned at the Closing
Date or thereafter acquired, other than Permitted Liens.

          SECTION 4.12. Limitation on Sale/Leaseback Transactions. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless:

               (1) the Company or such Restricted Subsidiary would be entitled
          to:

                    (A) Incur Indebtedness in an amount equal to the
               Attributable Debt with respect to such Sale/Leaseback
               Transaction pursuant to Section 4.03; and

                    (B) create a Lien on such property securing such
               Attributable Debt without equally and ratably securing the
               Securities pursuant to Section 4.11,

               (2) the net proceeds received by the Company or such Restricted
          Subsidiary in connection with such Sale/Leaseback Transaction are at
          least equal to the Fair Market Value of such property and

               (3) the transfer of such property is permitted by, and the
          Company applies the proceeds of such transaction in compliance with
          Section 4.06.

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<PAGE>

          SECTION 4.13. Future Subsidiary Guarantors; Additional Security. (a)
The Company will cause each Subsidiary that enters into a Guarantee of any of
the Credit Agreement Obligations, to become a Subsidiary Guarantor, and if
applicable, execute and deliver to the Trustee a supplemental indenture in the
form set forth in the Indenture pursuant to which such Subsidiary will
Guarantee the payment and performance of all obligations under the Securities
to the same extent as such Subsidiary Guarantees such Credit Agreement
Obligations. Each Subsidiary Guarantee will be limited to an amount not to
exceed the maximum amount that can be Guaranteed by that Subsidiary Guarantor,
without rendering the Subsidiary Guarantee, as it relates to such Subsidiary
Guarantor voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors
generally.

          (b) If the Company or any Subsidiary Guarantor creates any initial
or additional Lien on any property to secure any Credit Agreement Obligations
(other than Liens on cash and cash equivalents to secure obligations in
respect of letters of credit), it shall concurrently grant a Lien that is
equal and ratable with such Lien upon such property as security for the
Securities, in accordance with the Security Documents and the Collateral
Sharing Agreement. In connection therewith, the Company shall execute any and
all further Security Documents, financing statements, agreements and
instruments, upon substantially all the same terms as the Security Documents
and in a form reasonably satisfactory to the Collateral Agent, and take all
such actions (including the filing and recording of financing statements,
fixture filings, mortgages and other documents) that may be required under any
applicable law, or which the Collateral Agent may reasonably request to create
such Lien, all at the expense of the Company, including all reasonable fees
and expenses of counsel incurred by the Collateral Agent or the Trustee in
connection therewith and deliver to the Trustee an Opinion of Counsel,
reasonably satisfactory to the Trustee, that such Security Documents are
valid, binding and enforceable obligations of the Company subject to customary
exceptions for bankruptcy, fraudulent conveyance and equitable principles.

          SECTION 4.14. Ratings. As promptly as reasonably practicable after
the Closing Date, the Company

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<PAGE>

will use its reasonable efforts to obtain a rating of the Securities from
either Standard & Poor's Ratings Group, Inc. or Moody's Investors Service,
Inc.

          SECTION 4.15. Impairment of Security Interest. The Company will not,
and will not permit any of its Restricted Subsidiaries to, take or omit to
take, any action which action or omission would have the result of materially
impairing the security interest with respect to the Collateral for the benefit
of the Holders; provided, however, that the taking of any action with respect
to the Collateral that is not prohibited by the terms of the Security
Documents or the Collateral Sharing Agreement, or the failure to take any
action with respect to the Collateral that is not specifically required
pursuant to the terms of the Security Documents or the Collateral Sharing
Agreement, will not be deemed to impair such security interest. The Company
will not, and will not permit any of its Restricted Subsidiaries to, grant to
any Person (other than the Collateral Agent, for the benefit of the Holders
and holders of any pari passu debt), any interest whatsoever in any of the
Collateral other than Permitted Liens and as contemplated by the Security
Documents.

          SECTION 4.16. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company
an Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe
the Default, its status and what action the Company is taking or proposes to
take with respect thereto. The Company also shall comply with TIA ss.
314(a)(4).

          SECTION 4.17. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

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<PAGE>

                                    ARTICLE 5

                                Successor Company

          SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
Company shall not consolidate with or merge with or into, or convey, transfer
or lease, all or substantially all its assets to, any Person, unless:

          (1) the resulting, surviving or transferee Person (the "Successor
     Company") shall be a Person organized and existing under the laws of the
     United States of America, any State thereof or the District of Columbia
     and the Successor Company (if not the Company) shall expressly assume, by
     an indenture supplemental hereto, executed and delivered to the Trustee,
     in form satisfactory to the Trustee, all the obligations of the Company
     under the Securities and this Indenture;

          (2) immediately after giving pro forma effect to such transaction
     (and treating any Indebtedness which becomes an obligation of the
     Successor Company or any Subsidiary as a result of such transaction as
     having been Incurred by the Successor Company or such Subsidiary at the
     time of such transaction), no Default shall have occurred and be
     continuing;

          (3) immediately after giving pro forma effect to such transaction,
     the Successor Company would be able to Incur an additional $1.00 of
     Indebtedness pursuant to Section 4.03(a);

          (4) immediately after giving pro forma effect to such transaction,
     the Successor Company shall have Consolidated Net Worth in an amount that
     is not less than the Consolidated Net Worth of the Company immediately
     prior to such transaction; and

          (5) the Company shall have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, each stating that such
     consolidation, merger or transfer and such supplemental indenture (if
     any) comply with this Indenture.

          The Successor Company will succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture, and
the predecessor

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<PAGE>

Company, except in the case of a lease, shall be released from the obligation
to pay the principal of and interest on the Securities.

          (b) In addition, the Company will not permit any Subsidiary
Guarantor to, and the Subsidiary Guarantors will not, consolidate with or
merge with or into, or convey, transfer or lease all or substantially all of
its assets to any Person unless:

          (1) the resulting, surviving or transferee Person (the "Successor
     Guarantor") will be a corporation organized and existing under the laws
     of the United States of America, any State thereof or the District of
     Columbia, and such Person (if not such Subsidiary Guarantor) will
     expressly assume, by a supplemental indenture, executed and delivered to
     the Trustee, in form satisfactory to the Trustee, all the obligations of
     such Subsidiary Guarantor under its Subsidiary Guarantee;

          (2) immediately after giving effect to such transaction on a pro
     forma basis (and treating any Indebtedness which becomes an obligation of
     the Successor Guarantor or any Restricted Subsidiary as a result of such
     transaction as having been Incurred by the Successor Guarantor or such
     Restricted Subsidiary at the time of such transaction), no Default shall
     have occurred and be continuing; and

          (3) the Company will have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, each stating that such
     consolidation, merger or transfer and such supplemental indenture (if
     any) comply with this Indenture.

          Notwithstanding the foregoing:

               (A) any Restricted Subsidiary may consolidate with, merge into
          or transfer all or part of its properties and assets to the Company
          or to any Subsidiary Guarantor;

               (B) the Company may merge with an Affiliate incorporated solely
          for the purpose of reincorporating the Company in another
          jurisdiction to realize tax or other benefits; and

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               (C) nothing herein shall limit any conveyance, transfer or
          lease of assets between or among any of the Company and the
          Subsidiary Guarantors.

                                    ARTICLE 6

                              Defaults and Remedies

          SECTION 6.01. Events of Default. An "Event of Default" occurs if:

               (1) the Company defaults in any payment of interest on any
          Security when the same becomes due and payable, and such default
          continues for a period of 30 days;

               (2) the Company (A) defaults in the payment of principal of any
          Security when the same becomes due and payable at its Stated
          Maturity, upon optional redemption, upon declaration of acceleration
          or otherwise, or (B) fails to purchase Securities when required
          pursuant to this Indenture or the Securities;

               (3) the Company or any Restricted Subsidiary fails to comply
          with Section 5.01;

               (4) the Company fails to comply with Section 4.02, 4.03, 4.04,
          4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 or 4.14 (other
          than a failure to purchase Securities when required under Section
          4.06 or 4.10) and such failure continues for 60 days after the
          notice specified below;

               (5) the Company fails to comply with any covenant set forth in
          the Securities or this Indenture (other than those referred to in
          clause (1), (2), (3) or (4) above) and such failure continues for 90
          days after the notice specified below;

               (6) Indebtedness of the Company or any Significant Subsidiary
          is not paid within any applicable grace period after final maturity
          or is accelerated by the holders thereof because of a default and
          the total amount of such Indebtedness unpaid or accelerated exceeds
          $5.0 million or its foreign currency equivalent at the time;

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               (7) the Company or any Significant Subsidiary pursuant to or
          within the meaning of any Bankruptcy Law:

                    (A) commences a voluntary case;

                    (B) consents to the entry of an order for relief against
               it in an involuntary case;

                    (C) consents to the appointment of a Custodian of it or
               for any substantial part of its property; or

                    (D) makes a general assignment for the benefit of its
               creditors;

          or takes any comparable action under any foreign laws relating to
          insolvency;

               (8) a court of competent jurisdiction enters an order or decree
          under any Bankruptcy Law that:

                    (A) is for relief against the Company or any Significant
               Subsidiary in an involuntary case;

                    (B) appoints a Custodian of the Company or any Significant
               Subsidiary or for any substantial part of its property; or

                    (C) orders the winding up or liquidation of the Company or
               any Significant Subsidiary;

          or any similar relief is granted under any foreign laws and the
          order or decree remains unstayed and in effect for 60 days;

               (9) any judgment or decree for the payment of money in excess
          of $5.0 million or its foreign currency equivalent at the time is
          entered against the Company or any Significant Subsidiary if:

                    (A) an enforcement proceeding thereon is commenced by any
               creditor or

                    (B) such judgment or decree remains outstanding for a
               period of 60 days following such judgment or decree and is not
               discharged,

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          waived or stayed (the "judgment default provision");

          (10) a Subsidiary Guarantee ceases to be in full force and effect
     (other than in accordance with the terms of such Subsidiary Guarantee) or
     a Subsidiary Guarantor denies or disaffirms its obligations under its
     Subsidiary Guarantee and such Default continues for 10 days after receipt
     of the notice specified below; or

          (11) the material impairment of the security interests granted to
     the Collateral Agent for the benefit of the Holders and the Trustee under
     the Security Documents (other than in accordance with the terms of the
     Security Documents, the Collateral Sharing Agreement and this Indenture,
     as each may be amended from time to time) for any reason other than the
     satisfaction in full of all obligations under this Indenture and
     discharge of the Security Documents and the Indenture or any security
     interest granted to the Collateral Agent for the benefit of the Holders
     and the Trustee thereunder shall be declared invalid or unenforceable or
     the Company or any of its Restricted Subsidiaries asserting, in any
     pleading in any court of competent jurisdiction, that any such security
     interest is invalid or unenforceable.

          The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body.

          The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.

          A Default under clause (4), (5) or (6) is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified in clause (4), (5) or (6)
after receipt of such notice. Such notice must

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specify the Default, demand that it be remedied and state that such notice is
a "Notice of Default".

          The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (9), (10) or (11) and any event which with
the giving of notice or the lapse of time would become an Event of Default
under clause (4), (5) or (6), its status and what action the Company is taking
or proposes to take with respect thereto.

          SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or
the Holders of at least 25% in principal amount of the outstanding Securities
by notice to the Company and the Trustee, may declare the principal of and
accrued but unpaid interest on all the Securities to be due and payable. Upon
such a declaration, such principal and interest and any premium on the
Securities shall be due and payable immediately. If an Event of Default
specified in Section 6.01(7) or (8) with respect to the Company occurs, the
principal of and interest on all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part
of the Trustee or any Securityholders. The Holders of a majority in principal
amount of the outstanding Securities by notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with
any judgment or decree and if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due
solely because of acceleration. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.

          SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture, subject to the terms of the
Collateral Sharing Agreement.

          The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in exercising any right
or

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remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are
cumulative.

          SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (a) a Default in the payment of
the principal of or interest on a Security, (b) a Default arising from the
failure to redeem or purchase any Security when required pursuant to this
Indenture or (c) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Securityholder affected. When a
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.

          SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law, this
Indenture or the Collateral Sharing Agreement or, subject to Section 7.01,
that the Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses
caused by taking or not taking such action.

          SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:

          (1) the Holder gives to the Trustee written notice stating that an
     Event of Default is continuing;

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          (2) the Holders of at least 25% in principal amount of the
     outstanding Securities make a written request to the Trustee to pursue
     the remedy;

          (3) such Holders offer to the Trustee reasonable security or
     indemnity against any loss, liability or expense;

          (4) the Trustee does not comply with the request within 60 days
     after receipt of the request and the offer of security or indemnity; and

          (5) the Holders of a majority in principal amount of the Securities
     do not give the Trustee a direction inconsistent with the request during
     such 60-day period.

          A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.

          SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring
suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.

          SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount then due and owing (together with interest on
any unpaid interest to the extent lawful) and the amounts provided for in
Section 7.07.

          SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby

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authorized by each Holder to make payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.

          SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:

          FIRST: to the Trustee for amounts due under Section 7.07;

          SECOND: to Securityholders for amounts due and unpaid on the
     Securities for principal and interest, ratably, without preference or
     priority of any kind, according to the amounts due and payable on the
     Securities for principal and interest, respectively; and

          THIRD: to the Company.

          The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.

          SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to
a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in principal amount of the Securities.

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<PAGE>

          SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.

                                    ARTICLE 7

                                     Trustee

          SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.

          (b) Except during the continuance of an Event of Default:

          (1) the Trustee undertakes to perform such duties and only such
     duties as are specifically set forth in this Indenture and no implied
     covenants or obligations shall be read into this Indenture against the
     Trustee; and

          (2) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness
     of the opinions expressed therein, upon certificates or opinions
     furnished to the Trustee and conforming to the requirements of this
     Indenture. However, the Trustee shall examine the certificates and
     opinions to determine whether or not they conform to the requirements of
     this Indenture.

          (c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:

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          (1) this paragraph does not limit the effect of paragraph (b) of
     this Section;

          (2) the Trustee shall not be liable for any error of judgment made
     in good faith by a Trust Officer unless it is proved that the Trustee was
     negligent in ascertaining the pertinent facts; and

          (3) the Trustee shall not be liable with respect to any action it
     takes or omits to take in good faith in accordance with a direction
     received by it pursuant to Section 6.05.

          (d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.

          (e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.

          (f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.

          (g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.

          (h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.

          SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated
in the document.

          (b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for

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<PAGE>

any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.

          (c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care,
including the Collateral Agent.

          (d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights
or powers; provided, however, that the Trustee's conduct does not constitute
wilful misconduct or negligence.

          (e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.

          (f) Except with respect to Section 4.01, the Trustee shall have no
duty to inquire as to the performance of the Company with respect to the
covenants contained in Article 4. In addition, the Trustee shall not be deemed
to have knowledge of an Event of Default except (i) any Default or Event of
Default occurring pursuant to Section 4.01, 6.01(1) or (2) or (ii) any Default
or Event of Default of which the Trustee shall have received written
notification or otherwise obtained actual knowledge.

          (g) Delivery of reports, information and documents to the Trustee
under Section 4.02 is for informational purposes only and the Trustee's
receipt of the foregoing shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of the covenants
hereunder.

          SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same

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<PAGE>

with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.

          SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in the Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.

          SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within the earlier of 90 days after it
occurs or 30 days after it is known to a Trust Officer or written notice of it
is received by the Trustee. Except in the case of a Default in payment of
principal of or interest on any Security (including payments pursuant to the
redemption provisions of such Security, if any), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders.

          SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each February 15 beginning with the February 15 following
the date of this Indenture, and in any event prior to May 15 in each year, the
Trustee shall mail to each Securityholder a brief report dated as of February
15 that complies with TIA ss. 313(a). The Trustee also shall comply with TIA
ss. 313(b).

          A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any
delisting thereof.

          SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including

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<PAGE>

costs of collection, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee's agents, counsel, accountants and experts. The
Company shall indemnify the Trustee against any and all loss, liability or
expense (including attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. The Company shall defend the claim
and the Trustee may have separate counsel and the Company shall pay the fees
and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee
through the Trustee's own wilful misconduct, negligence or bad faith.

          To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.

          The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(7) or (8) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.

          SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee
and may appoint a successor Trustee. The Company shall remove the Trustee if:

          (1) the Trustee fails to comply with Section 7.10;

          (2) the Trustee is adjudged bankrupt or insolvent;

          (3) a receiver or other public officer takes charge of the Trustee
     or its property; or

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<PAGE>

          (4) the Trustee otherwise becomes incapable of acting.

          If the Trustee resigns, is removed by the Company or by the Holders
of a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.

          A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.

          If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

          If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

          Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.

          SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

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<PAGE>

          In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.

          SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.

          SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.

                                    ARTICLE 8

                       Discharge of Indenture; Defeasance

          SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
When (1) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or (2) all
outstanding Securities have become due and payable, whether at maturity or on a
redemption date as a result of the mailing of a notice of redemption pursuant to
Article 3 hereof and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities,

                                       90
<PAGE>

including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 8.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Company.

          (b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (1) all its obligations under the Securities and this Indenture
("legal defeasance option") or (2) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 and 4.14 and the
operation of Sections 6.01(3), 6.01(4), 6.01(5), 6.01(6), 6.01(7), 6.01(8),
6.01(9), 6.01(10) and 6.01(11) (but, in the case of Sections 6.01(7) and (8),
with respect only to Significant Subsidiaries) and the limitations contained in
Sections 5.01(a)(3) and (4) ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.

          If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of
the Securities may not be accelerated because of an Event of Default specified
in Section 6.01(3), 6.01(4), 6.01(5), 6.01(6), 6.01(7), 6.01(8), 6.01(9),
6.01(10) or 6.01(11) (but, in the case of Sections 6.01(7) and (8), with
respect only to Significant Subsidiaries) or because of the failure of the
Company to comply with Section 5.01(a)(3) or (4). If the Company exercises its
legal defeasance option or its covenant defeasance option, each Subsidiary
Guarantor, if any, shall be released from all its obligations with respect to
its Subsidiary Guarantee and the Security Documents.

          Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.

          (c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall

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survive until the Securities have been paid in full. Thereafter, the Company's
obligations in Sections 7.07, 8.04 and 8.05 shall survive.

          SECTION 8.02. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:

          (1) the Company irrevocably deposits in trust with the Trustee money
     or U.S. Government Obligations, the principal of and interest on which will
     be sufficient, or a combination thereof sufficient, to pay the principal of
     and premium (if any) and interest on the Securities to maturity or
     redemption, as the case may be;

          (2) the Company delivers to the Trustee a certificate from a
     nationally recognized firm of independent accountants expressing their
     opinion that the payments of principal and interest when due and without
     reinvestment on the deposited U.S. Government Obligations plus any
     deposited money without investment will provide cash at such times and in
     such amounts as will be sufficient to pay principal and interest when due
     on all the Securities to maturity or redemption, as the case may be;

          (3) 123 days pass after the deposit is made and during the 123-day
     period no Default specified in Sections 6.01(7) or (8) with respect to the
     Company occurs which is continuing at the end of the period;

          (4) the deposit does not constitute a default under any other
     agreement binding on the Company;

          (5) the Company delivers to the Trustee an Opinion of Counsel to the
     effect that the trust resulting from the deposit does not constitute, or is
     qualified as, a regulated investment company under the Investment Company
     Act of 1940;

          (6) in the case of the legal defeasance option, the Company shall have
     delivered to the Trustee an Opinion of Counsel stating that (A) the Company
     has received from, or there has been published by, the Internal Revenue
     Service a ruling, or (B) since the date of this Indenture there has been a
     change in the applicable Federal income tax law, in either case to

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     the effect that, and based thereon such Opinion of Counsel shall confirm
     that, the Securityholders will not recognize income, gain or loss for
     Federal income tax purposes as a result of such defeasance and will be
     subject to Federal income tax on the same amounts, in the same manner and
     at the same times as would have been the case if such defeasance had not
     occurred;

          (7) in the case of the covenant defeasance option, the Company shall
     have delivered to the Trustee an Opinion of Counsel to the effect that the
     Securityholders will not recognize income, gain or loss for Federal income
     tax purposes as a result of such covenant defeasance and will be subject to
     Federal income tax on the same amounts, in the same manner and at the same
     times as would have been the case if such covenant defeasance had not
     occurred; and

          (8) the Company delivers to the Trustee an Officers' Certificate and
     an Opinion of Counsel, each stating that all conditions precedent to the
     defeasance and discharge of the Securities as contemplated by this Article
     8 have been complied with.

          Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.

          SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities.

          SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.

          Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years,

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and, thereafter, Securityholders entitled to the money must look to the Company
for payment as general creditors.

          SECTION 8.05. Indemnity for Government Obligations. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.

          SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.

                                    ARTICLE 9

                                   Amendments

          SECTION 9.01. Without Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture, the Security Documents, the
Collateral Sharing Agreement or the Securities without notice to or consent of
any Securityholder:

          (1) to cure any ambiguity, omission, defect or inconsistency;

          (2) to comply with Article 5 and to provide for the assumption by a
     successor corporation of the obligations of the Company under this
     Indenture;

          (3) to provide for uncertificated Securities in addition to or in
     place of certificated Securities;

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<PAGE>

     provided, however, that the uncertificated Securities are issued in
     registered form for purposes of Section 163(f) of the Code or in a manner
     such that the uncertificated Securities are described in Section
     163(f)(2)(B) of the Code;

          (4) to add Guarantees with respect to the Securities or to secure the
Securities;

          (5) to add to the covenants of the Company or any Subsidiary
Guarantor for the benefit of the Holders or to surrender any right or power
herein conferred upon the Company or any Subsidiary Guarantor;

          (6) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the TIA;

          (7) to make any change that does not adversely affect the rights of
any Securityholder;

          (8) to provide for the issuance of the Exchange Securities or
Additional Securities;

          (9) if necessary, in connection with any addition or release of
Collateral permitted under the terms of the Indenture, the Security Documents
or the Collateral Sharing Agreement; or

          (10) at any time when the Aggregate Credit Agreement Exposure is
more than $55 million or more than the aggregate principal amount of
outstanding Notes, to make any amendment or modification to any Security
Document or the Collateral Sharing Agreement that applies equally to the
lenders under the Credit Agreement and the Holders or that does not materially
adversely affect the rights of the Holders; provided, however, that no
amendment under this clause (10) shall directly or indirectly effect a release
of collateral that is not permitted under Section 11.03 without the consent of
Holders representing the Designated Percentage of the aggregate principal
amount of Securities outstanding.

          After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to

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<PAGE>

give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.

          SECTION 9.02. With Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture, the Security Documents,
the Collateral Sharing Agreement or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities then outstanding (including
consents obtained in connection with a tender offer or exchange for the
Securities). However, without the consent of each Securityholder affected
thereby, an amendment or waiver may not:

          (1) reduce the amount of Securities whose Holders must consent to an
     amendment;

          (2) reduce the rate of or extend the time for payment of interest on
     any Security;

          (3) reduce the principal of or extend the Stated Maturity of any
     Security;

          (4) reduce the premium payable upon the redemption of any Security
     or change the time at which any Security may be redeemed pursuant to
     paragraph 5 of the Securities;

          (5) make any Security payable in money other than that stated in the
     Security;

          (6) impair the right of any Holder to receive payment of principal
     of and interest or any premium on such Holder's Securities on or after
     the due dates therefore or to institute suit for the enforcement of any
     payment on or with respect to such Holder's Securities;

          (7) make any change in Section 6.04 or 6.07 or the second sentence
     of this Section; or

          (8) waive (A) any Default or Event of Default in the payment of the
     principal or interest on a Security or (B) a Default arising from the
     failure to redeem or purchase any Security when required pursuant to this
     Indenture.

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<PAGE>

          It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.

          After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein,
shall not impair or affect the validity of an amendment under this Section.

          SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in
effect.

          SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes
effective. After an amendment or waiver becomes effective, it shall bind every
Securityholder. An amendment or waiver becomes effective upon the execution of
such amendment or waiver by the Trustee.

          The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to
be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent shall
be valid or effective for more than 120 days after such record date.

          SECTION 9.05. Notation on or Exchange of Securities. If an amendment
changes the terms of a

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<PAGE>

Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security
regarding the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects
the changed terms. Failure to make the appropriate notation or to issue a new
Security shall not affect the validity of such amendment.

          SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment
the Trustee shall be entitled to receive indemnity reasonably satisfactory to
it and to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.

                                   ARTICLE 10

                              Subsidiary Guarantees

          SECTION 10.01. Guarantees. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all
other monetary obligations of the Company under this Indenture, the Security
Documents, the Collateral Sharing Agreement and the Securities and (b) the
full and punctual performance within applicable grace periods of all other
obligations of the Company under this Indenture and the Securities (all the
foregoing being hereinafter collectively called the "Obligations"). Each
Subsidiary Guarantor further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from such
Subsidiary Guarantor and that such Subsidiary Guarantor will remain bound
under this Article 10 notwithstanding any extension or renewal of any
Obligation.

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<PAGE>

          Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company or any other Subsidiary Guarantor of any of
the Obligations and also waives notice of protest for nonpayment. Each
Subsidiary Guarantor waives notice of any default or Event of Default under
the Securities or the Obligations. The obligations of each Subsidiary
Guarantor hereunder shall be unconditional and absolute and shall not be
affected by (1) the failure of any Holder or the Trustee to assert any claim
or demand or to enforce any right or remedy against the Company or any other
Person (including any Subsidiary Guarantor) under this Indenture, the
Securities or any other agreement or otherwise; (2) any extension or renewal
of any Obligation; (3) any rescission, waiver, amendment, modification or
supplement of any of the terms or provisions of this Indenture, the
Securities, any Security Document or any other agreement; (4) the release of
any security held by any Holder or the Trustee for the Obligations or any of
them; (5) the failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of any Obligations or the failure of any
other Subsidiary Guarantor to sign or become party to the Indenture or any
amendment, change, or reaffirmation of this Indenture; (6) the election by, or
on behalf of, any one or more of the Holders, in any proceeding instituted
under Chapter 11 of Title 11 of the United States Code (11 U.S.C. 101 et seq.)
(the "Bankruptcy Code"), of the application of Section 1111(b)(2) of the
Bankruptcy Code; (7) any borrowing or grant of a security interest by the
Company, as debtor-in-possession, under Section 364 of the Bankruptcy Code;
(8) the disallowance, under Section 502 of the Bankruptcy Code, of all or any
portion of the claims of any of the holders of secured Obligations for
repayment of all or any part of the guaranteed Obligations; or (9) except as
set forth in Section 10.06, any change in the organizational structure or
ownership of the Company or any Subsidiary Guarantor.

          Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06,
the obligations of each Subsidiary Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall
not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without

                                       99
<PAGE>

limiting the generality of the foregoing, the obligations of each Subsidiary
Guarantor herein shall not be discharged or impaired or otherwise affected by
the failure of any Holder or the Trustee or the Collateral Agent to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities,
the Security Documents or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of such Subsidiary Guarantor or would otherwise operate
as a discharge of such Subsidiary Guarantor as a matter of law or equity.

          Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.

          In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or premium or interest on any Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Obligation, each Subsidiary
Guarantor hereby promises to and shall, upon receipt of written demand by the
Trustee, forthwith pay, or cause to be paid, in cash, to the Collateral Agent
for the benefit of the Holders an amount equal to the sum of (A) the unpaid
amount of such Obligations, (B) accrued and unpaid interest on such
Obligations (but only to the extent not prohibited by law) and (C) all other
monetary Obligations of the Company to the Holders and the Trustee.

          Each Subsidiary Guarantor agrees that it shall not be entitled to
exercise any right of subrogation in relation to the Holders in respect of any
Obligations guaranteed hereby until payment in full of all Obligations. Each
Subsidiary Guarantor agrees that any and all claims of such Subsidiary
Guarantor against the Company or any other Subsidiary Guarantor hereunder
(each an "Obligor") with respect to any "Intercompany Indebtedness" (as

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<PAGE>

hereinafter defined), shall be subordinate and subject in right of payment to
the prior payment, in full and in cash, of all Obligations; provided that, and
not in contravention of the foregoing, unless an Event of Default has occurred
and is continuing and such Subsidiary Guarantor receives from the Trustee a
payment blockage notice hereunder that has not been withdrawn such Subsidiary
Guarantor may make loans to and receive payments with respect to such
Intercompany Indebtedness from each such Obligor to the extent not prohibited
by the terms of this Indenture. "Intercompany Indebtedness", for purposes of
this paragraph, means any payment or distribution of any kind or character,
either in cash, securities or other property, which shall be payable or
deliverable upon or with respect to any indebtedness of any Obligor to any
Subsidiary Guarantor. Each Subsidiary Guarantor further agrees that, as
between it, on the one hand, and the Holders and the Trustee, on the other
hand, (i) the maturity of the Obligations Guaranteed hereby may be accelerated
as provided in Article 6 for the purposes of such Subsidiary Guarantor's
Subsidiary Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration of
such Obligations as provided in Article 6, such Obligations (whether or not
due and payable) shall forthwith become due and payable by such Subsidiary
Guarantor for the purposes of this Section.

          Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.

          SECTION 10.02. Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum aggregate amount
of the Obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.

          SECTION 10.03. Successors and Assigns. This Article 10 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and
shall inure to the

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<PAGE>

benefit of the successors and assigns of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges conferred upon that party in this Indenture
and in the Securities shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this
Indenture.

          SECTION 10.04. No Waiver. Neither a failure nor a delay on the part
of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 10 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders expressly specified herein and in the Collateral
Sharing Agreement and the Security Documents are cumulative and not exclusive
of any other rights, remedies or benefits which either may have under this
Article 10 at law, in equity, by statute or otherwise.

          SECTION 10.05. Modification. No modification, amendment or waiver of
any provision of this Article 10, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given. No notice to or demand on any Subsidiary Guarantor in any
case shall entitle such Subsidiary Guarantor to any other or further notice or
demand in the same, similar or other circumstances.

          SECTION 10.06. Release of Subsidiary Guarantor. Upon any release of
a Subsidiary Guarantor by the Collateral Agent that is permitted under the
Indenture and the Collateral Sharing Agreement, such Subsidiary Guarantor
shall be deemed released from all obligations under this Article 10 without
any further action required on the part of the Trustee or any Holder. At the
request of the Company, the Trustee shall execute and deliver an appropriate
instrument evidencing such release.

          In addition, a Subsidiary Guarantee of the Securities provided by a
Subsidiary Guarantor will be released without any actions required on the part
of the Trustee or any Holder:

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<PAGE>

          (1) if (a) all of the Capital Stock of, or other equity interests
     in, or all or substantially all of the assets of such Subsidiary
     Guarantor is sold or otherwise disposed of (including by way of merger or
     consolidation) to a person other than the Company or any of the Company's
     Domestic Subsidiaries or (b) such Subsidiary Guarantor ceases to be a
     Restricted Subsidiary, and in each case the Company otherwise complies,
     to the extent applicable, with Sections 4.06, 4.09 and 11.03;

          (2) if the Company designates such Subsidiary Guarantor as an
     Unrestricted Subsidiary;

          (3) upon the Company's request if the fair market value of the
     assets of the applicable Subsidiary Guarantor (as determined in good
     faith by the Board of Directors), together with the fair market value of
     the assets of other Subsidiary Guarantors whose Subsidiary Guarantee was
     released in the same calendar year, pursuant to this clause and any other
     assets released pursuant to Section 11.03(a)(6) in the same calendar year
     do not exceed $1.0 million (subject to cumulative carryover for amounts
     not used in any prior calendar year); or

          (4) if the guarantee by such Subsidiary Guarantor of the Credit
     Agreement Obligations is released; provided that any release of the liens
     of the Security Documents on the assets or stock of such Subsidiary in
     connection with such release is permitted under Section 11.03 of this
     Indenture.

          SECTION 10.07. Contribution. Each Subsidiary Guarantor that makes a
payment under its Subsidiary Guarantee shall be entitled upon payment in full
of all guarantied obligations under this Indenture to a contribution from each
other Subsidiary Guarantor in an amount equal to such other Subsidiary
Guarantor's pro rata portion of such payment based on the respective net
assets of all the Subsidiary Guarantors at the time of such payment determined
in accordance with GAAP.

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<PAGE>

                                   ARTICLE 11

                             Collateral and Security

          SECTION 11.01. Security Documents. The due and punctual payment of
the principal of and accrued and unpaid interest, if any, on the Securities
when and as the same shall be due and payable, whether on an interest payment
date, at maturity, by acceleration, repurchase, redemption or otherwise, and
interest on the overdue principal of and interest and premium, if any, on the
Securities and performance of all other Obligations of the Company and the
Subsidiary Guarantors to the Holders or the Trustee under this Indenture and
the Securities, according to the terms hereunder or thereunder, are secured as
provided in the Security Documents which define the terms of the Liens that
secure the Obligations and provide that the Liens granted thereunder secure
the Obligations on a first-priority basis equally and ratably with all Credit
Agreement Obligations, subject to the terms of the Collateral Sharing
Agreement. Each Holder, by its acceptance of a Security, consents and agrees
to all of the terms of the Security Documents and the Collateral Sharing
Agreement (including the provisions providing for the exercise of remedies and
release of Collateral) as the same may be in effect or may be amended from
time to time in accordance with their terms and the terms of this Indenture,
and authorizes and directs the Trustee to enter into the Security Documents
and the Collateral Sharing Agreement and to perform its obligations and
exercise its rights thereunder in accordance therewith. The Company shall
deliver to the Trustee (if it is not itself then the Collateral Agent) copies
of all documents delivered to the Collateral Agent pursuant to the Security
Documents and the Collateral Sharing Agreement, and will do or cause to be
done all such acts and things as may be required by the next sentence of this
Section 11.01, to assure and confirm to the Trustee the Liens upon the
Collateral contemplated hereby, by the Security Documents or any part thereof,
as from time to time constituted, so as to render the same available for the
security and benefit of this Indenture and of the Obligations secured hereby,
according to the intent and purposes herein expressed. To the extent required
pursuant to the Security Documents, the Company shall take, and shall cause
its Restricted Subsidiaries to take, any and all actions reasonably required
to cause the Security Documents to create and maintain, as security for the
Obligations of the

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Company and the Subsidiary Guarantors hereunder, a valid and enforceable
perfected Lien on all the Collateral, in favor of the Collateral Agent for the
ratable benefit of the Secured Parties (as defined in the Collateral Sharing
Agreement), equal in priority (subject to Permitted Liens) to any and all
Liens at any time granted upon the Collateral to secure Credit Agreement
Obligations or any other first-priority Liens. Each of the Trustee and the
Company hereby acknowledge and agree that the Collateral Agent holds the
Collateral for the ratable benefit of the Holders, the Trustee and the other
Secured Parties (as defined in the Collateral Sharing Agreement) pursuant to
the terms of the Security Documents and subject to the terms of the Collateral
Sharing Agreement.

          SECTION 11.02. Recording and Opinions. (a)The Company shall deliver
to the Trustee:

          (1) Promptly after the issuance of the Exchange Securities, an
     Opinion of Counsel either stating that in the opinion of such counsel
     this Indenture and the Security Documents (or including financing
     statements or other instruments, as applicable) have been properly
     recorded and filed so as to make effective the Lien intended to be
     created for the benefit of the Holders, and reciting the details of such
     action, or stating that in the opinion of such counsel no such action is
     necessary to make such Lien effective; and

          (2) On or before February 15 of each year, an Opinion of Counsel
     either stating that in the opinion of such counsel such action has been
     taken with respect to the recording, filing, re-recording and re-filing
     of the Indenture and the Security Documents (or financing statements or
     other instruments, as applicable) as is necessary to maintain the Lien
     intended to be created thereby for the benefit of the Holders, and
     reciting the details of such action, or stating that in the opinion of
     such counsel no such action is necessary to maintain such Lien.

          (b) The Company shall otherwise comply with the provisions of TIA
Section 314(b).

          SECTION 11.03. Release of Collateral. (a) Subject to subsection (b)
and (c) of this Section 11.03, without the consent of the Trustee or any
Holder, the Company and the Subsidiary Guarantors will be entitled

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<PAGE>

to releases of assets included in the Collateral from the Liens securing the
Securities under any one or more of the following circumstances:

          (1) if all other Liens on that asset securing Credit Agreement
     Obligations (including commitments thereunder) then secured by that asset
     are released;

          (2) if such asset is sold, transferred, leased or otherwise disposed
     of in a transaction that constitutes an Asset Disposition;

          (3) if such asset is sold, transferred, leased or otherwise disposed
     of in a transaction that does not constitute an Asset Disposition as
     provided in clause (1) through (9) of the definition thereof;

          (4) if the Company provides substitute collateral with at least an
     equivalent fair value as determined in good faith by the Board of
     Directors;

          (5) if any Subsidiary Guarantor is released from its Subsidiary
     Guarantee in accordance with the terms of this Indenture, the Security
     Documents and the Collateral Sharing Agreement, then such Subsidiary's
     assets and the stock of such Subsidiary that is pledged to the Collateral
     Agent shall be released;

          (6) in respect of assets included in the Collateral with a fair
     value, as determined in good faith by the Board of Directors, of up to $1
     million in any calendar year, subject to a cumulative carryover for any
     amount not used in any prior calendar year; or

          (7) upon satisfaction by the Company of the conditions set forth in
     Article 8 to its legal defeasance option, its covenant defeasance option
     or the discharge of this Indenture, all Liens on the Collateral of this
     Indenture and the Security Documents shall be released;

          provided, however, that the consent of Holders representing the
     Designated Percentage of the aggregate principal amount of Securities
     outstanding shall be required for any such release pursuant to clause
     (1), (2) or (5) if the sum of the aggregate fair value (as determined in
     good faith by the Board

                                       106
<PAGE>

     of Directors) of Collateral released pursuant to clauses (1), (2) and (5)
     since the Issue Date exceeds $50 million (including for purposes of such
     calculation the instant release, but excluding all releases since the
     Issue Date that are or were in connection with Asset Dispositions and
     that constitute or constituted Ratable Paydown Dispositions under Section
     4.06).

          (b) Except as provided in subsection (c) below, at any time when an
Event of Default has occurred and is continuing, the consent of Holders
representing the Designated Percentage of the aggregate principal amount of
Securities outstanding shall be required for any release of Collateral
pursuant to clauses (1), (2) and (5) of subsection (a) above, unless such
release is in connection with a Ratable Paydown Disposition or unless such
release is in connection with a disposition of Collateral in which the
proceeds thereof are to be held or applied in accordance with Article IV of
the Collateral Sharing Agreement.

          (c) Nothing herein shall be deemed to limit or restrict the release
of Collateral or dispositions of assets in connection with the exercise of
remedies by the Collateral Agent pursuant to and in accordance with the terms
of the Collateral Sharing Agreement and the Security Documents.

          (d) The release of any Collateral from the terms of this Indenture
and the Security Documents shall not be deemed to impair the security under
this Indenture in contravention of the provisions hereof if and to the extent
the Collateral is released pursuant to the terms of the Security Documents,
the Collateral Sharing Agreement and this Indenture. To the extent applicable,
the Company will cause TIA ss. 313(b), relating to reports, and TIA ss.
314(d), relating to the release of property or securities from the Lien and
security interest of the Security Documents and relating to the substitution
therefor of any property or securities to be subjected to the Lien and
security interest of the Security Documents, to be complied with. Any
certificate or opinion required by TIA ss. 314(d) may be made by an Officer of
the Company except in cases where TIA ss. 314(d) requires that such
certificate or opinion be made by an independent Person, which Person will be
an independent engineer, appraiser or other expert selected or

                                       107
<PAGE>

approved by the Trustee and the Collateral Agent in the exercise of reasonable
care.

          (e) Certificates. To the extent applicable, the Company shall
furnish to the Trustee and the Collateral Agent all documents required by TIA
ss. 314(d) (as the same may be modified by any exemptive relief granted to the
Company by the SEC).

          The Trustee may, to the extent permitted by Sections 7.01 and 7.02
hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents. The Company
shall furnish to the Trustee photocopies of all certificates of officers of
the Company delivered to the Collateral Agent pursuant to the Security
Documents or the Collateral Sharing Agreement in connection with a release of
property or securities from the Lien and security interest of the Security
Documents.

          SECTION 11.04. [Reserved]

          SECTION 11.05. Authorization of Actions to Be Taken by the Trustee
Under the Security Documents and the Collateral Sharing Agreement. Subject to
the provisions of Section 7.01 and 7.02 hereof and the Collateral Sharing
Agreement, the Trustee may, in its sole discretion and without the consent of
the Holders, take, on behalf of the Holders, or direct, on behalf of the
Holders, the Collateral Agent to take, all actions it deems necessary or
appropriate in order to:

          (a) enforce any of the terms of the Security Documents and the
Collateral Sharing Agreement; and

          (b) collect and receive any and all amounts payable in respect of
the Obligations of the Company and the Subsidiary Guarantors hereunder.

          Subject to the Collateral Sharing Agreement, the Trustee will have
power to institute and maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of the Security Documents or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders in the Collateral (including
power to institute and maintain suits or proceedings to

                                       108
<PAGE>

restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial
to the interests of the Holders or of the Trustee).

          SECTION 11.06. Authorization of Receipt and Distribution of Funds by
the Trustee Under the Security Documents and the Collateral Sharing Agreement.
The Trustee is authorized to receive any funds for the benefit of the Holders
distributed under the Security Documents and the Collateral Sharing Agreement,
and to make further distributions of such funds to the Holders according to
the provisions of this Indenture.

          SECTION 11.07. Termination of Security Interest. The Trustee will,
at the request of the Company, deliver a certificate to the Collateral Agent
stating that the Obligations have been paid in full, and instruct the
Collateral Agent to release the Liens securing the Obligations pursuant to
this Indenture and the Security Documents upon (1) payment in full of the
principal of, and accrued and unpaid interest, if any, on, the Securities and
all other Obligations under this Indenture, the Subsidiary Guarantees and the
Security Documents that are due and payable at or prior to the time such
principal, accrued and unpaid interest, if any, are paid, (2) a satisfaction
and discharge of this Indenture as described in Article 8 or (3) a legal
defeasance or covenant defeasance as described in Article 8. Upon receipt of
such instruction, the Trustee, if it is the Collateral Agent, shall, or, if it
is not the Collateral Agent, shall request the Collateral Agent to, execute,
deliver or acknowledge any necessary or proper instruments of termination,
satisfaction or release to evidence the release of all such Liens.

          SECTION 11.08. Trustee Serving as Collateral Agent; Amendments or
Supplements to, or Replacements of, the Security Documents and the Collateral
Agency Agreement. (a) If the Trustee shall become the Collateral Agent, it
shall be authorized to appoint co-Collateral Agents as necessary in its sole
discretion. Except as otherwise explicitly provided herein or in the Security
Documents or the Collateral Sharing Agreement, neither the Trustee nor any of
its respective officers, directors, employees or agents shall be liable for
failure to demand, collect or

                                       109
<PAGE>

realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any other Person or to take any other action whatsoever with regard
to the Collateral or any part thereof. The Trustee shall be accountable only
for amounts that it actually receives as a result of the exercise of such
powers, and neither the Trustee nor any of its officers, directors, employees
or agents shall be responsible for any act or failure to act hereunder, except
for its own willful misconduct, negligence or bad faith.

          (b) The Trustee is authorized and directed to (i) if the Trustee
shall become the Collateral Agent, enter into the Security Documents, (ii)
enter into the Collateral Sharing Agreement, (iii) bind the Holders on the
terms as set forth in the Security Documents and the Collateral Sharing
Agreement and (iv) perform and observe its obligations under the Security
Documents and the Collateral Sharing Agreement.

          (c) If at any time following the Discharge of Credit Agreement
Obligations the Company or any Subsidiary Guarantor (i) incurs Indebtedness
under any bank credit facility pursuant to Section 4.03, the Company shall
deliver to the Trustee an Officers' Certificate so stating and requesting the
Trustee to enter into one or more amendments or supplements to, or
replacements of, the Security Documents, as applicable, and the Collateral
Sharing Agreement establishing and setting forth the respective rights of the
holders of such bank credit facility Obligations and the Holders in respect of
their shared first priority Lien on the Collateral. Any such amendment,
supplement or replacement of the Collateral Sharing Agreement shall include
substantially the same terms as are set forth in the Collateral Sharing
Agreement. The Trustee shall (and is hereby authorized and directed to) enter
into such amendments or supplements to, or replacements of, the Security
Documents, as applicable, and the Collateral Sharing Agreement, bind the
Holders on the terms set forth therein, and perform and observe its
obligations thereunder.

          SECTION 11.09. Designations. For purposes of the provisions hereof
and the Collateral Sharing Agreement requiring the Company to designate
Indebtedness for the purposes of the term "Credit Agreement Obligations",
"First Lien Credit Facilities" or any other such designations

                                       110
<PAGE>

hereunder or any such similar designations under the Collateral Sharing
Agreement, any such designation shall be sufficient if the relevant
designation is set forth in writing, signed on behalf of the Company by an
Officer and delivered to the Trustee and the Collateral Agent. For all
purposes hereof and the Collateral Sharing Agreement, the Company hereby
designates the Credit Facilities provided pursuant to the Credit Agreement as
a "First Lien Credit Facility" and any obligations in respect of the Credit
Agreement as "Credit Agreement Obligations".

                                   ARTICLE 12

                                  Miscellaneous

          SECTION 12.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.

          SECTION 12.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:

         if to the Company or any Subsidiary Guarantor:

                  Roto-Rooter, Inc.
                  255 East Fifth Street
                  Cincinnati, Ohio  45202
                  Facsimile:  (513) 287-6216

                  Attention:  General Counsel

         if to the Trustee:

                  Wells Fargo Bank, N.A.
                  Corporate Trust
                  Sixth Street and Marquette Avenue
                  MAC N303-120
                  Minneapolis, MN  55475
                  Facsimile:  (612) 667-9875

                  Attention:  Jeffrey T. Rose

          The Company, any Subsidiary Guarantor or the Trustee by notice to the
other may designate additional or

                                       111
<PAGE>

different addresses for subsequent notices or communications.

          Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.

          Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.

          SECTION 12.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, any Subsidiary Guarantor, the Trustee, the Registrar
and anyone else shall have the protection of TIA ss. 312(c).

          SECTION 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall furnish
to the Trustee:

          (1) an Officers' Certificate in form and substance reasonably
     satisfactory to the Trustee stating that, in the opinion of the signers,
     all conditions precedent, if any, provided for in this Indenture relating
     to the proposed action have been complied with; and

          (2) an Opinion of Counsel in form and substance reasonably
     satisfactory to the Trustee stating that, in the opinion of such counsel,
     all such conditions precedent have been complied with.

          SECTION 12.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:

                                       112
<PAGE>

               (1) a statement that the individual making such certificate or
          opinion has read such covenant or condition;

               (2) a brief statement as to the nature and scope of the
          examination or investigation upon which the statements or opinions
          contained in such certificate or opinion are based;

               (3) a statement that, in the opinion of such individual, he has
          made such examination or investigation as is necessary to enable him
          to express an informed opinion as to whether or not such covenant or
          condition has been complied with; and

               (4) a statement as to whether or not, in the opinion of such
          individual, such covenant or condition has been complied with.

          SECTION 12.06. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in
any direction, waiver or consent, Securities owned by the Company or by any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company shall be disregarded and deemed not
to be outstanding, except that, for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, waiver or
consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at
the time shall be considered in any such determination.

          SECTION 12.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.

          SECTION 12.08. Legal Holidays. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.

          SECTION 12.09. Governing Law. This Indenture and the Securities
shall be governed by, and construed in

                                       113
<PAGE>

accordance with, the laws of the State of New York but without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.

          SECTION 12.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or of such Subsidiary Guarantor under its
Subsidiary Guarantee or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.

          SECTION 12.11. Successors. All agreements of the Company and the
Subsidiary Guarantors in this Indenture and the Securities shall bind their
respective successors. All agreements of the Trustee in this Indenture shall
bind its successors.

          SECTION 12.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.

          SECTION 12.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.

                                       114
<PAGE>

          IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.

                            ROTO-ROOTER, INC.

                            By:    /s/ Kevin J. McNamara
                                   ----------------------------------
                                   Name: Kevin J. McNamara
                                   Title: President and
                                   Chief Executive Officer

                            JET RESOURCE, INC.

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Secretary

                            NUROTOCO OF NEW JERSEY, INC.

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Secretary

                            CCR OF OHIO INC.

                            By:    /s/ Kevin J. McNamara
                                   ----------------------------------
                                   Name: Kevin J. McNamara
                                   Title: Vice Chairman

                                       115
<PAGE>

                            ROTO-ROOTER DEVELOPMENT COMPANY

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Secretary

                            ROTO-ROOTER MANAGEMENT COMPANY

                            By:    /s/ Kevin J. McNamara
                                   ----------------------------------
                                   Name: Kevin J. McNamara
                                   Title: Vice Chairman

                            R.R. UK, INC.

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Secretary

                            SERVICE AMERICA NETWORK, INC.

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Secretary

                            ROTO-ROOTER CORPORATION

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Secretary

                                       116
<PAGE>

                            ROTO-ROOTER SERVICES COMPANY

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Secretary

                            NUROTOCO OF MASSACHUSETTS, INC.

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Assistant Clerk

                            COMFORT CARE HOLDINGS CO.

                            By:    /s/ Kevin J. McNamara
                                   ----------------------------------
                                   Name: Kevin J. McNamara
                                   Title: Vice President

                            R.R. PLUMBING SERVICES CORPORATION

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Secretary

                            COMPLETE PLUMBING SERVICES, INC.

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Secretary

                                       117
<PAGE>

                            CONSOLIDATED HVAC, INC.

                            By:    /s/ Naomi C. Dallob
                                   ----------------------------------
                                   Name: Naomi C. Dallob
                                   Title: Secretary

                            VITAS HEALTHCARE CORPORATION

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                            VITAS HOSPICE SERVICES, L.L.C.

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                            VITAS HEALTHCARE CORPORATION OF CALIFORNIA

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                            VITAS HEALTHCARE CORPORATION OF ILLINOIS

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                                       118
<PAGE>

                            VITAS HEALTHCARE CORPORATION OF OHIO

                            By:     /s/ Timothy S. O'Toole
                                    ----------------------------------
                                    Name: Timothy S. O'Toole
                                    Title: President

                            VITAS HEALTHCARE CORPORATION OF PENNSYLVANIA

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                            VITAS HEALTHCARE CORPORATION OF WISCONSIN

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                            VITAS HME SOLUTIONS, INC.

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                            VITAS HOLDINGS CORPORATION

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                                       119
<PAGE>

                            HOSPICE CARE INCORPORATED

                            By:      /s/ Timothy S. O'Toole
                                     Name: Timothy S. O'Toole
                                     Title: President

                            HOSPICE, INC.

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                            VITAS HEALTHCARE CORPORATION OF FLORIDA

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                            VITAS HEALTHCARE CORPORATION OF CENTRAL FLORIDA

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                                       120
<PAGE>

                            VITAS HEALTHCARE OF TEXAS, L.P.

                            By:    Vitas Hospice Services, L.L.C., its
                                   General Partner

                            By:    /s/ Timothy S. O'Toole
                                   ----------------------------------
                                   Name: Timothy S. O'Toole
                                   Title: President

                           Wells Fargo Bank, N.A.

                              By

                                 /s/ Jeffrey Rose
                                 ----------------------------------
                                 Name:  Jeffrey Rose
                                 Title: Corporate Trust Officer

                                       121
<PAGE>

                                                                      SCHEDULE I

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 Management Company
Roto-Rooter Services Company
R.R. Plumbing Services Corporation
Service America Network, Inc.
Hospice Care Incorporated
Hospice, Inc.
Vitas Healthcare Corporation
Vitas Healthcare Corporation of California
Vitas Healthcare Corporation of Central Florida
Vitas Healthcare Corporation of Florida
Vitas Healthcare Corporation of Illinois
Vitas Healthcare Corporation of Ohio
Vitas Healthcare Corporation of Pennsylvania
Vitas Healthcare Corporation of Wisconsin
Vitas HME Solutions, Inc.
Vitas Holdings Corporation
Vitas Hospice Services, L.L.C.
Vitas Healthcare of Texas, L.P.

<PAGE>

                                                                        APPENDIX

                    CERTAIN PROVISIONS RELATING TO SECURITIES
                   -----------------------------------------

       1.   Definitions

       1.1   Definitions

     For the purposes of this Appendix the following terms shall have the
meanings indicated below:

          "Accredited Investor" has the meaning assigned to such term in
Regulation D.

          "Depository" means The Depository Trust Company, its nominees and
their respective successors.

          "Exchange Securities" means (1) the Floating Rate Senior Secured Notes
Due 2010 issued pursuant to the Indenture in connection with a Registered
Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional
Securities, if any, issued pursuant to a registration statement filed with the
SEC under the Securities Act.

          "Initial Holders" means (1) with respect to the Initial Securities
issued on the Issue Date, the purchasers thereof, as set forth in the Purchase
Agreements and (2) with respect to each issuance of Additional Securities, the
Persons purchasing such Additional Securities under the related Purchase
Agreements.

          "Initial Securities" means (1) $110.0 million aggregate principal
amount of Floating Rate Senior Secured Notes Due 2010 issued on the Issue Date
and (2) Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.

          "Purchase Agreement" means (1) with respect to the Initial Securities
issued on the Issue Date, each Purchase Agreement dated February 24, 2004, among
the Company, the Subsidiary Guarantors and an Initial Holder, and (2) with
respect to each issuance of Additional Securities, each purchase agreement or
underwriting agreement among the Company and the Persons purchasing such
Additional Securities.

<PAGE>

                                                                               2

          "Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Rights Agreement, to certain Holders of Initial Securities,
to issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.

          "Registration Rights Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Registration Rights Agreement dated
February 24, 2004 among the Company and the Initial Holders and (2) with respect
to each issuance of Additional Securities issued in a transaction exempt from
the registration requirements of the Securities Act, the registration rights
agreement, if any, among the Company and the Persons purchasing such Additional
Securities under the related Purchase Agreement.

          "Securities" means the Initial Securities and the Exchange Securities,
treated as a single class.

          "Securities Act" means the Securities Act of 1933.

          "Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto and
shall initially be the Trustee.

          "Shelf Registration Statement" means the registration statement
issued by the Company in connection with the offer and sale of Initial
Securities pursuant to the Registration Rights Agreement.

          "Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b) hereto.

     1.2  OTHER DEFINITIONS

<TABLE>
<CAPTION>
                                                               DEFINED IN
          TERM                                                  SECTION:
<S>                                                            <C>
"Agent Members"............................................      2.1(b)
"Global Security"..........................................      2.1(a)
"Regulation D".............................................      2.1(a)
"Restricted Global Security"...............................      2.1(a)
</TABLE>

     2.   THE SECURITIES.

<PAGE>

                                                                               3

     2.1  (a) FORM AND DATING. Initial Securities offered and sold to an
accredited investor in reliance on Section 4(2) of the Securities Act
("Section 4(2)") and/or Regulation D under the Securities Act ("Regulation
D"), in each case as provided in a Purchase Agreement, shall be issued
initially in the form of one or more permanent global Securities in
definitive, fully registered form without interest coupons with the global
securities legend and restricted securities legend set forth in Exhibit 1
hereto (each, a "Restricted Global Security"), which shall be deposited on
behalf of the purchasers of the Initial Securities represented thereby with
the Trustee, at its principal corporate trust office, as custodian for the
Depository (or with such other custodian as the Depository may direct), and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Securities may from
time to time be increased or decreased by adjustments made on the records of
the Trustee and the Depository or its nominee as hereinafter provided.
Exchange Securities shall be issued in global form (with the global securities
legend set forth in Exhibit 1 hereto) or in certificated form at the option of
the Holders thereof from time to time. Exchange Securities issued in global
form and Restricted Global Securities are sometimes referred to in this
Appendix as "Global Securities".

          (b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.

          The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.

          Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Company, the Trustee and any
agent of the Company or the Trustee

<PAGE>

                                                                               4

shall be entitled to treat the Depository as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices of such Depository
governing the exercise of the rights of a holder of a beneficial interest in any
Global Security.

               (c) CERTIFICATED SECURITIES. Except as provided in this Section
2.1 or Section 2.3 or 2.4, owners of beneficial interests in Restricted Global
Securities shall not be entitled to receive physical delivery of certificated
Securities.

     2.2  AUTHENTICATION. The Trustee shall authenticate and deliver: (1) on the
Issue Date, an aggregate principal amount of $110.0 million Floating Rate Senior
Secured Notes Due 2010, (2) any Additional Securities for an original issue in
an aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Securities for issue
only in a Registered Exchange Offer pursuant to the Registration Rights
Agreement, for a like principal amount of Initial Securities, in each case upon
a written order of the Company signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary of the Company. Such
order shall specify the amount of the Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated and, in
the case of any issuance of Additional Securities pursuant to Section 2.13 of
the Indenture, shall certify that such issuance is in compliance with Section
4.03 of the Indenture. The aggregate principal amount of Securities outstanding
at any time shall not exceed $220.0 million except as provided in Section 2.07
of the Indenture.

     2.3  TRANSFER AND EXCHANGE.

          (a) Transfer and Exchange of Global Securities.

          (1) The transfer and exchange of Global Securities or beneficial
     interests therein shall be effected through the Depository, in accordance
     with the Indenture (including applicable restrictions on

<PAGE>

                                                                               5

     transfer set forth herein, if any) and the procedures of the Depository
     therefor. A transferor of a beneficial interest in a Global Security shall
     deliver to the Registrar a written order given in accordance with the
     Depository's procedures containing information regarding the participant
     account of the Depository to be credited with a beneficial interest in the
     Global Security. The Registrar shall, in accordance with such instructions
     instruct the Depository to credit to the account of the Person specified in
     such instructions a beneficial interest in the Global Security and to debit
     the account of the Person making the transfer the beneficial interest in
     the Global Security being transferred.

          (2) Notwithstanding any other provisions of this Appendix (other than
     the provisions set forth in Section 2.4), a Global Security may not be
     transferred as a whole except by the Depository to a nominee of the
     Depository or by a nominee of the Depository to the Depository or another
     nominee of the Depository or by the Depository or any such nominee to a
     successor Depository or a nominee of such successor Depository.

          (3) In the event that a Restricted Global Security is exchanged for
     Securities in certificated registered form pursuant to Section 2.4 of this
     Appendix, prior to the consummation of a Registered Exchange Offer or the
     effectiveness of a Shelf Registration Statement with respect to such
     Securities, such Securities may be exchanged only in accordance with such
     procedures as are substantially consistent with the provisions of this
     Section 2.3 (including the certification requirements set forth on the
     reverse of the Initial Securities intended to ensure that such transfers
     comply with Rule 144A or Regulation S, as the case may be) and such other
     procedures as may from time to time be adopted by the Company.

          (b) LEGEND.

          (1) Except as permitted by the following paragraphs (2), (3) and (4),
     each Security certificate evidencing the Restricted Global Securities (and
     all Securities issued in exchange therefor or in substitution thereof)
     shall bear a legend in substantially the following form:

<PAGE>

                                                                               6

          THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
          EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
          (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
          OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
          APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
          NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
          FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
          RULE l44A THEREUNDER.

          THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
          THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
          ONLY (I) TO THE ISSUER THEREOF, (II) IN THE UNITED STATES TO A PERSON
          WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
          (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
          MEETING THE REQUIREMENTS OF RULE 144A, (III) PURSUANT TO AN EXEMPTION
          FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
          THEREUNDER (IF AVAILABLE), (IV) TO AN INSTITUTIONAL ACCREDITED
          INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
          THE SECURITIES ACT OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION
          STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V)
          IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND
          OTHER JURISDICTIONS OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
          EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
          NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

          (2) Upon any sale or transfer of a Transfer Restricted Security
     (including any Transfer Restricted Security represented by a Restricted
     Global Security) pursuant to Rule 144 under the Securities Act, the
     Registrar shall permit the transferee thereof to exchange such Transfer
     Restricted Security for a certificated Security that does not bear the
     legend

<PAGE>

                                                                               7

     set forth above and rescind any restriction on the transfer of such
     Transfer Restricted Security, if the transferor thereof certifies in
     writing to the Registrar that such sale or transfer was made in reliance on
     Rule 144 (such certification to be in the form set forth on the reverse of
     the Security).

          (3) After a transfer of any Initial Securities pursuant to and during
     the period of the effectiveness of a Shelf Registration Statement with
     respect to such Initial Securities, all requirements pertaining to legends
     on such Initial Security will cease to apply, the requirements requiring
     any such Initial Security issued to certain Holders be issued in global
     form will cease to apply, and a certificated Initial Security or an Initial
     Security in global form, in each case without restrictive transfer legends,
     will be available to the transferee of the Holder of such Initial
     Securities upon exchange of such transferring Holder's certificated Initial
     Security or directions to transfer such Holder's interest in the Global
     Security, as applicable.

          (4) Upon the consummation of a Registered Exchange Offer with respect
     to the Initial Securities, all requirements pertaining to such Initial
     Securities that Initial Securities issued to certain Holders be issued in
     global form will still apply with respect to Holders of such Initial
     Securities that do not exchange their Initial Securities, and Exchange
     Securities in certificated or global form will be available to Holders that
     exchange such Initial Securities in such Registered Exchange Offer.

          (c) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as all
beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for certificated Securities, redeemed,
purchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect

<PAGE>

                                                                               8

to such Global Security, by the Trustee or the Securities Custodian, to reflect
such reduction.

          (d) Obligations with Respect to Transfers and Exchanges of Securities.

          (1) To permit registrations of transfers and exchanges, the Company
     shall execute and the Trustee shall authenticate certificated Securities
     and Global Securities at the Registrar's or co-registrar's request.

          (2) No service charge shall be made for any registration of transfer
     or exchange, but the Company may require payment of a sum sufficient to
     cover any transfer tax, assessments, or similar governmental charge payable
     in connection therewith (other than any such transfer taxes, assessments or
     similar governmental charge payable upon exchange or transfer pursuant to
     Sections 3.06, 4.10 and 9.05 of the Indenture).

          (3) The Registrar or co-registrar shall not be required to register
     the transfer of or exchange of any Security for a period beginning 15
     Business Days before the mailing of a notice of an offer to repurchase or
     redeem Securities or 15 Business Days before an interest payment date.

          (4) Prior to the due presentation for registration of transfer of any
     Security, the Company, the Trustee, the Paying Agent, the Registrar or any
     co-registrar may deem and treat the person in whose name a Security is
     registered as the absolute owner of such Security for the purpose of
     receiving payment of principal of and interest on such Security and for all
     other purposes whatsoever, whether or not such Security is overdue, and
     none of the Company, the Trustee, the Paying Agent, the Registrar or any
     co-registrar shall be affected by notice to the contrary.

          (5) All Securities issued upon any transfer or exchange pursuant to
     the terms of the Indenture shall evidence the same debt and shall be
     entitled to the same benefits under this Indenture as the Securities
     surrendered upon such transfer or exchange.

<PAGE>

                                                                               9

          (e) Obligation of the Trustee.

          (1) The Trustee shall have no responsibility or obligation to any
     beneficial owner of a Global Security, a member of, or a participant in the
     Depository or other Person with respect to the accuracy of the records of
     the Depository or its nominee or of any participant or member thereof, with
     respect to any ownership interest in the Securities or with respect to the
     delivery to any participant, member, beneficial owner or other Person
     (other than the Depository) of any notice (including any notice of
     redemption) or the payment of any amount, under or with respect to such
     Securities. All notices and communications to be given to the Holders and
     all payments to be made to Holders under the Securities shall be given or
     made only to or upon the order of the registered Holders (which shall be
     the Depository or its nominee in the case of a Global Security). The rights
     of beneficial owners in any Global Security shall be exercised only through
     the Depository subject to the applicable rules and procedures of the
     Depository. The Trustee may rely and shall be fully protected in relying
     upon information furnished by the Depository with respect to its members,
     participants and any beneficial owners.

          (2) The Trustee shall have no obligation or duty to monitor, determine
     or inquire as to compliance with any restrictions on transfer imposed under
     this Indenture or under applicable law with respect to any transfer of any
     interest in any Security (including any transfers between or among
     Depository participants, members or beneficial owners in any Global
     Security) other than to require delivery of such certificates and other
     documentation or evidence as are expressly required by, and to do so if and
     when expressly required by, the terms of this Indenture, and to examine the
     same to determine substantial compliance as to form with the express
     requirements hereof.

     2.4 Certificated Securities.

          (a) A Restricted Global Security deposited with the Depository or with
the Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated

<PAGE>

                                                                              10

Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (1) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Restricted
Global Security or if at any time such Depository ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days of such notice, or (2) an Event of
Default has occurred and is continuing or (3) the Company, in its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of certificated Securities under this Indenture.

          (b) Any Restricted Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Restricted Global
Security, an equal aggregate principal amount of certificated Initial Securities
of authorized denominations. Any portion of a Restricted Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any certificated Initial Security delivered in exchange for an interest in the
Restricted Global Security shall, except as otherwise provided by Section
2.3(b), bear the restricted securities legend set forth in Exhibit 1 hereto.

          (c) Subject to the provisions of Section 2.4(b), the registered Holder
of a Global Security shall be entitled to grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.

          (d) In the event of the occurrence of either of the events specified
in Section 2.4(a), the Company shall promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.

<PAGE>

                                                                       EXHIBIT 1
                                                                              to
                                                                        APPENDIX

                       [FORM OF FACE OF INITIAL SECURITY]

                           [Global Securities Legend]

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

                         [Restricted Securities Legend]

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE l44A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE ISSUER
THEREOF, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)

<PAGE>

                                                                               2

PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (IV) TO AN INSTITUTIONAL ACCREDITED INVESTOR
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF THE STATES AND OTHER JURISDICTIONS OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

<PAGE>

                                                                               3

No. ______________                                                  $___________

          Floating Rate Senior Secured Notes Due 2010

          Roto-Rooter, Inc., a Delaware corporation, promises to pay to
_____________________________, or registered assigns, the principal sum of
______________________ _________ Dollars on February 24, 2010.

          Interest Payment Dates: February 15, May 15, August 15 and November
15.

          Record Dates: February 1, August 1, May 1 and November 1.

          Additional provisions of this Security are set forth on the other
side of this Security.

Dated:

                                        ROTO-ROOTER, INC.

                                           By
                                             -----------------------------------
                                              Name:
                                              Title:

TRUSTEE'S CERTIFICATE OF
    AUTHENTICATION

WELLS FARGO BANK, N.A.
  as Trustee, certifies
    that this is one of
    the Securities referred
    to in the Indenture.
  By
    ----------------------------------
     Authorized Signatory

<PAGE>

                                                                               4

                   [FORM OF REVERSE SIDE OF INITIAL SECURITY]

                   Floating Rate Senior Secured Note Due 2010

1.   INTEREST

          Roto-Rooter, Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at a rate equal to LIBOR for the applicable Interest Period plus 3.75%
per annum; provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional interest will accrue on this
Security at a rate of 0.25% per annum for the first 90 days following a
Registration Default, at a per annum rate of 0.50% for the second 90 days
following a Registration Default, at a per annum rate of 0.75% for the third 90
days following a Registration Default and at a per annum rate of 1.0% thereafter
from and including the date on which any such Registration Default shall occur
to but excluding the date on which all Registration Defaults have been cured.
The Company will pay interest quarterly on February 15, May 15, August 15 and
November 15 of each year, commencing May 15, 2004. Interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from February 24, 2004. Interest will be computed on the
basis of actual days outstanding of a 360-day year. The Company will pay
interest on overdue principal at the rate borne by this Security plus 1.0% per
annum, and it will pay interest on overdue installments of interest at the same
rate to the extent lawful.

          LIBOR for the initial Interest Period will be 1.13% per annum. The
Trustee will determine LIBOR for each Interest Period following the initial
Interest Period, on the second London Business Day prior to the first day of
such Interest Period (each a "LIBOR Determination Date"). For purposes of
calculating LIBOR, a London Business Day is any day on which dealings in
deposits in United States dollars are transacted in the London interbank market.
LIBOR shall be determined by the Trustee in accordance with the following
provisions:

          (i) "LIBOR" means, as of any LIBOR Determination Date, the rate for
deposits in the United States dollars

<PAGE>

                                                                               5

for a three-month period which appears on Telerate Page 3750 (as defined in the
1987 Interest Rate and Currency Exchange Definitions published by the
International Swap Dealers Association, Inc., or such other page as may replace
such Telerate Page 3750) as of 11:00 a.m., London time, on such date, and

          (ii) If, on any LIBOR Determination Date, such rate does not appear on
Telerate Page 3750 (or such other page as may replace such Telerate Page 3750),
the rate for that LIBOR Determination Date will be determined on the basis of
the rates at which deposits in the United States dollars are offered by four
reference banks selected by the Trustee at approximately 11:00 a.m., London
time, on that day to prime banks in the London interbank market for a three-
month period. The Trustee will request the principal London office of each such
bank to provide a quotation of its rate. If at least two such quotations are
provided as requested, the rate for that day will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate for
that day will be the arithmetic mean of the rates quoted by major banks in New
York City, selected by the Trustee, at approximately 11:00 a.m., New York City
time, on that day for loans in United States dollars to leading European banks
for a three-month period. All percentages resulting from a calculation in this
clause (ii) shall be rounded, if necessary, to the nearest one thirty-second of
a percentage point.

2.   METHOD OF PAYMENT

          The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the February 1, May 1, August 1 or November 1 next preceding the
interest payment date even if Securities are canceled after the record date and
on or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company. The Company will make all
payments in respect of a certificated

<PAGE>

                                                                               6

Security (including principal, premium and interest) by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on a
certificated Security will be made by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).

3.   PAYING AGENT AND REGISTRAR

               Initially, Wells Fargo Bank, N.A., a national banking associatio
(the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.

4.   INDENTURE

          The Company issued the Securities under an Indenture dated as of
February 24, 2004 ("Indenture"), among the Company, the Subsidiary Guarantors
and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. {section}{section} 77aaa-77bbbb) as in effect
on the date of the Indenture (the "Act"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.

          The Securities are general secured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay dividends or distributions on, or redeem or
repurchase

<PAGE>

                                                                               7

capital stock; make investments; issue or sell capital stock of subsidiaries;
engage in transactions with affiliates; create liens on assets; transfer or sell
assets; restrict dividends or other payments of subsidiaries; consolidate, merge
or transfer all or substantially all of its assets and the assets of its
subsidiaries; engage in sale/leaseback transactions; and impair the Collateral.
These covenants are subject to important exceptions and qualifications.

5.   OPTIONAL REDEMPTION

          At any time, the Company shall be entitled to redeem all or a portion
of the Securities on one or more occasions, on not less than 30 nor more than 60
days' prior notice, at the following redemption prices (expressed as percentages
of principal amount on the redemption date), plus accrued and unpaid interest
to, but excluding, the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest, if any, due on the
relevant interest payment date), if redeemed during the 12-month period
commencing on February 24 of the years set forth below:

<TABLE>
<CAPTION>
                        REDEMPTION
YEAR                      PRICE
- ----                   -----------
<S>                    <C>
2004                     101.000%
2005 and thereafter      102.000%
</TABLE>

6.   NOTICE OF REDEMPTION

          Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.

          Any notice of redemption may provide that the redemption will be
subject to specified conditions,

<PAGE>

                                                                               8

provided that such conditions are not solely within the Company's control.

7.   PUT PROVISIONS

          Upon a Change of Control, any Holder of Securities will have the right
to cause the Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued and unpaid interest to, but excluding,
the date of repurchase (subject to the right of holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.

8.   GUARANTEE

          The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior secured basis by each of the Subsidiary Guarantors to the
extent set forth in the Indenture.

9.   SECURITY

          The payment by the Company of the principal of, and premium and
interest on, the Securities will be secured by the collateral that secures the
Credit Agreement Obligations, on a first-priority basis equally and ratably with
all Credit Agreement Obligations, subject to the terms of the Collateral Sharing
Agreement.

10.  DENOMINATIONS; TRANSFER; EXCHANGE

          The Securities are in registered form without coupons in denominations
of $1,000 principal amount and whole multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before

<PAGE>

                                                                               9

a selection of Securities to be redeemed or 15 days before an interest payment
date.

11.  PERSONS DEEMED OWNERS

          The registered Holder of this Security may be treated as the owner of
it for all purposes.

12.  UNCLAIMED MONEY

          If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

13.  DISCHARGE AND DEFEASANCE

          Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations, the principal of and interest on which will be sufficient, or a
combination thereof sufficient, to pay the principal of and premium (if any) and
interest on the Securities to maturity or redemption, as the case may be. If the
Company exercises its legal defeasance option or its covenant defeasance option,
each Subsidiary Guarantor, if any, shall be released from all its obligations
with respect to its Subsidiary Guarantee and the Security Documents.

14.  AMENDMENT; WAIVER

          Subject to certain exceptions set forth in the Indenture, (1) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (2) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee shall be entitled to amend the Indenture, the
Security Documents, the Collateral Sharing Agreement or the

<PAGE>

                                                                              10

Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder.

15.  DEFAULTS AND REMEDIES

          Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Securities; (b) default in payment of principal on
the Securities at maturity, upon optional redemption, upon declaration of
acceleration or otherwise, or failure by the Company to purchase Securities when
required; (c) failure by the Company to comply with certain other agreements in
the Indenture or the Securities, in certain cases subject to notice and lapse of
time; (d) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company or the
Significant Subsidiaries if the amount accelerated (or so unpaid) exceeds $5.0
million; (e) certain events of bankruptcy or insolvency with respect to the
Company and the Significant Subsidiaries; (f) certain judgments or decrees for
the payment of money in excess of $5.0 million; (g) certain defaults with
respect to Subsidiary Guarantees; and (h) certain defaults relating to the
Collateral under the Security Documents. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable immediately.
Certain events of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately upon the occurrence
of such Events of Default.

          Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in

<PAGE>

                                                                              11

payment of principal or interest) if it determines that withholding notice is in
the interest of the Holders.

16.  TRUSTEE DEALINGS WITH THE COMPANY

          Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

17.  NO RECOURSE AGAINST OTHERS

          A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.

18.  AUTHENTICATION

          This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

19.  ABBREVIATIONS

          Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

20.  CUSIP NUMBERS

          Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to

<PAGE>

                                                                              12

Securityholders. No representation is made as to the accuracy of such numbers
either as printed on the Securities or as contained in any notice of redemption
and reliance may be placed only on the other identification numbers placed
thereon.

21.  GOVERNING LAW

          THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

          The Company will furnish to any Securityholder upon written request
and without charge to the Security holder a copy of the Indenture which has in
it the text of this Security in larger type. Requests may be made to:

             Roto-Rooter, Inc.
             255 East Fifth Street
             Cincinnati, Ohio  45202
             Facsimile:  (513) 287-6216

             Attention:  General Counsel

<PAGE>

                                                                              13

- --------------------------------------------------------------------------------

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

     (Print or type assignee's name, address and zip code)

     (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                  agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.

- --------------------------------------------------------------------------------

________________________________________________________________________________

Sign exactly as your name appears on the other side of this Security.

In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

          (1)  | | to the Company; or

          (2)  | | pursuant to an effective registration statement under the
                   Securities Act of 1933; or

          (3)  | | inside the United States to a "qualified institutional buyer"
                   (as defined in Rule 144A under the Securities Act of 1933)

<PAGE>

                                                                              14

                   that purchases for its own account or for the account of a
                   qualified institutional buyer to whom notice is given that
                   such transfer is being made in reliance on Rule 144A, in
                   each case pursuant to and in compliance with Rule 144A under
                   the Securities Act of 1933; or

          (4)  | | to an institutional accredited investor in a transaction
                   exempt from the registration requirements of the Securities
                   Act; or

          (5)  | | pursuant to the exemption from registration provided by Rule
                   144 under the Securities Act of 1933.

          Unless one of the boxes is checked, the Trustee will refuse to
          register any of the Securities evidenced by this certificate in the
          name of any person other than the registered holder thereof; provided,
          however, that if box (4) or (5) is checked, the Trustee shall be
          entitled to require, prior to registering any such transfer of the
          Securities, such legal opinions, certifications and other information
          as the Company has reasonably requested to confirm that such transfer
          is being made pursuant to an exemption from, or in a transaction not
          subject to, the registration requirements of the Securities Act of
          1933, such as the exemption provided by Rule 144 under such Act.

                                                --------------------------------
                                                Signature

Signature Guarantee:

- -------------------------------------   --------------------------------
Signature must be guaranteed            Signature

          Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee

<PAGE>

                                                                              15

program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

- --------------------------------------------------------------------------------

<PAGE>

                                                                              16

              TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED

          The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.

Dated:__________________________________    ____________________________________
                                            Notice: To be executed by
                                                    an executive officer

<PAGE>

                                                                              17

                      [TO BE ATTACHED TO GLOBAL SECURITIES]

              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made:

<TABLE>
<CAPTION>
                                                                Principal amount of     Signature of
                Amount of decrease      Amount of increase      this Global             authorized officer
                in Principal            in Principal amount     Security following      of Trustee or
Date of         amount of this          of this Global          such decrease or        Securities
Exchange        Global Security         Security                increase)               Custodian
- --------------  --------------------- ----------------------  ----------------------  -------------------
<S>             <C>                        <C>                       <C>                 <C>
</TABLE>

<PAGE>

                                                                              18

                       OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.10 of the Indenture, check the box:

                                       [ ]

          If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.10 of the Indenture, state the
principal amount: $

Date: __________________         Your Signature:________________________________
                                                (Sign exactly as your
                                                 name appears on the
                                                 other side of this
                                                 Security.)

Signature Guarantee: ___________________________________________________________
                               (Signature must be guaranteed)

     Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

<PAGE>

                                                                       EXHIBIT A

                      [FORM OF FACE OF EXCHANGE SECURITY*]

________________________

*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]

<PAGE>

                                                                             2


No.____________________                                           $___________

                  Floating Rate Senior Secured Notes Due 2010

     Roto-Rooter, Inc., a Delaware corporation, promises to pay to
____________________, or registered assigns, the principal sum of _____________
Dollars on February 24, 2010.

     Interest Payment Dates: February 15, May 15, August 15 and November 15.

     Record Dates: February 1, May 1, August 1 and November 1.

     Additional provisions of this Security are set forth on the other side of
this Security.

Dated:

                                              Roto-Rooter, Inc.

                                              By:
                                                 -----------------------------
                                                  Name:
                                                  Title:

TRUSTEE'S CERTIFICATE OF
     AUTHENTICATION

WELLS FARGO BANK, N.A.
  as Trustee, certifies
    that this is one of
    the Securities referred
    to in the Indenture.
  By
     -------------------------------
     Authorized Signatory

<PAGE>

                                                                               3

                  [FORM OF REVERSE SIDE OF EXCHANGE SECURITY]

                  Floating Rate Senior Secured Note Due 2010

1.   INTEREST

         Roto-Rooter, Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at a rate equal to LIBOR for the applicable Interest Period plus 3.75%
per annum; provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional interest will accrue on this
Security at a rate of 0.25% per annum for the first 90 days following a
Registration Default, at a per annum rate of 0.50% for the second 90 days
following a Registration Default, at a per annum rate of 0.75% for the third 90
days following a Registration Default and at a per annum rate of 1.0% thereafter
from and including the date on which any such Registration Default shall occur
to but excluding the date on which all Registration Defaults have been cured.
The Company will pay interest quarterly on February 15, May 15, August 15 and
November 15 of each year, commencing on May 15, 2004. Interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from February 24, 2004. Interest will be computed on the
basis of actual days outstanding of a 360-day year. The Company will pay
interest on overdue principal at the rate borne by this Security plus 1.0% per
annum, and it will pay interest on overdue installments of interest at the same
rate to the extent lawful.

         LIBOR for the initial Interest Period will be 1.13% per annum. The
Trustee will determine LIBOR for each Interest Period following the initial
Interest Period, on the second London Business Day prior to the first day of
such Interest Period (each a "LIBOR Determination Date"). For purposes of
calculating LIBOR, a London Business Day is any day on which dealings in
deposits in United States dollars are transacted in the London interbank market.
LIBOR shall be determined by the Trustee in accordance with the following
provisions:

<PAGE>

                                                                               4

     (i) "LIBOR" means, as of any LIBOR Determination Date, the rate for
deposits in the United States dollars for a three-month period which appears on
Telerate Page 3750 (as defined in the 1987 Interest Rate and Currency Exchange
Definitions published by the International Swap Dealers Association, Inc., or
such other page as may replace such Telerate Page 3750) as of 11:00 a.m., London
time, on such date, and

     (ii) If, on any LIBOR Determination Date, such rate does not appear on
Telerate Page 3750 (or such other page as may replace such Telerate Page 3750),
the rate for that LIBOR Determination Date will be determined on the basis of
the rates at which deposits in the United States dollars are offered by four
reference banks selected by the Trustee at approximately 11:00 a.m., London
time, on that day to prime banks in the London interbank market for a three-
month period. The Trustee will request the principal London office of each such
bank to provide a quotation of its rate. If at least two such quotations are
provided as requested, the rate for that day will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate for
that day will be the arithmetic mean of the rates quoted by major banks in New
York City, selected by the Trustee, at approximately 11:00 a.m., New York City
time, on that day for loans in United States dollars to leading European banks
for a three-month period. All percentages resulting from a calculation in this
clause (ii) shall be rounded, if necessary, to the nearest one thirty-second of
a percentage point.

2.  METHOD OF PAYMENT

     The Company will pay interest on the Securities (except defaulted interest)
to the Persons who are registered holders of Securities at the close of business
on the February 1, May 1, August 1 or November 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company. The

<PAGE>

                                                                               5

Company will make all payments in respect of a certificated Security (including
principal, premium and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Security
will be made by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).

3.   PAYING AGENT AND REGISTRAR

          Initially, Wells Fargo Bank, N.A., a national banking association (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Company
or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.

4.   INDENTURE

          The Company issued the Securities under an Indenture dated as of
February 24, 2004 ("Indenture"), among the Company, the Subsidiary Guarantors
and the Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. {section}{section} 77aaa-77bbbb) as in effect
on the date of the Indenture (the "Act"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.

          The Securities are general secured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit the ability of the Company and its subsidiaries
to incur additional indebtedness; pay

<PAGE>

                                                                               6

dividends or distributions on, or redeem or repurchase capital stock; make
investments; issue or sell capital stock of subsidiaries; engage in transactions
with affiliates; create liens on assets; transfer or sell assets; restrict
dividends or other payments of subsidiaries; consolidate, merge or transfer all
or substantially all of its assets and the assets of its subsidiaries; engage in
sale/leaseback transactions; and impair the Collateral. These covenants are
subject to important exceptions and qualifications.

5.   OPTIONAL REDEMPTION

          At any time, the Company shall be entitled to redeem all or a portion
of the Securities on one or more occasions, on not less than 30 nor more than 60
days' prior notice, at the following redemption prices (expressed as percentages
of principal amount on the redemption date), plus accrued and unpaid interest
to, but excluding, the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest, if any, due on the
relevant interest payment date), if redeemed during the 12-month period
commencing on February 24 of the years set forth below:

<TABLE>
<CAPTION>
              REDEMPTION
   YEAR         PRICE
- ----------    ----------
<S>           <C>
2004           101.000%
2005 and       102.000%
thereafter
</TABLE>

6.   NOTICE OF REDEMPTION

          Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.

<PAGE>

                                                                               7

          Any notice of redemption may provide that the redemption will be
subject to specified conditions, provided, that such conditions are not solely
within the Company's control.

7.   PUT PROVISIONS

          Upon a Change of Control, any Holder of Securities will have the right
to cause the Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued and unpaid interest to, but excluding,
the date of repurchase (subject to the right of holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.

8.   GUARANTEE

          The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior secured basis by each of the Subsidiary Guarantors to the
extent set forth in the Indenture.

9.   SECURITY

          The payment by the Company of the principal of, and premium and
interest on, the Securities will be secured by the collateral that secures the
Credit Agreement Obligations, on a first-priority basis equally and ratably with
all Credit Agreement Obligations, subject to the terms of the Collateral Sharing
Agreement.

10.  DENOMINATIONS; TRANSFER; EXCHANGE

          The Securities are in registered form without coupons in denominations
of $1,000 principal amount and whole multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be

<PAGE>

                                                                               8

redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.

11.  PERSONS DEEMED OWNERS

          The registered Holder of this Security may be treated as the owner of
it for all purposes.

12.  UNCLAIMED MONEY

          If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

13.  DISCHARGE AND DEFEASANCE

          Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations, the principal of and interest on which will be sufficient, or a
combination thereof sufficient, to pay the principal of and premium (if any) and
interest on the Securities to maturity or redemption, as the case may be. If the
Company exercises its legal defeasance option or its covenant defeasance option,
each Subsidiary Guarantor, if any, shall be released from all its obligations
with respect to its Subsidiary Guarantee and the Security Documents.

14.  AMENDMENT; WAIVER

          Subject to certain exceptions set forth in the Indenture, (1) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (2) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee shall be entitled to amend the Indenture, the
Security

<PAGE>

                                                                               9

Documents, the Collateral Sharing Agreement or the Securities to cure any
ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act, or
to make any change that does not adversely affect the rights of any
Securityholder.

15.  DEFAULTS AND REMEDIES

          Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Securities; (b) default in payment of principal on
the Securities at maturity, upon optional redemption, upon declaration of
acceleration or otherwise, or failure by the Company to purchase Securities when
required; (c) failure by the Company to comply with certain other agreements in
the Indenture or the Securities, in certain cases subject to notice and lapse of
time; (d) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company or the
Significant Subsidiaries if the amount accelerated (or so unpaid) exceeds $5.0
million; (e) certain events of bankruptcy or insolvency with respect to the
Company and the Significant Subsidiaries; (f) certain judgments or decrees for
the payment of money in excess of $5.0 million; (g) certain defaults with
respect to Subsidiary Guaranties; and (h) certain defaults relating to the
Collateral under the Security Documents. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable immediately.
Certain events of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately upon the occurrence
of such Events of Default.

          Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders


<PAGE>

                                                                              10

notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in the interest of the
Holders.

16.  Trustee Dealings with the Company

          Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

17.  NO RECOURSE AGAINST OTHERS

          A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.

18.  AUTHENTICATION

          This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

19.  ABBREVIATIONS

          Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

20.  CUSIP NUMBERS

          Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP

<PAGE>

                                                                              11

numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.

21.  GOVERNING LAW

          THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

          The Company will furnish to any Securityholder upon written request
and without charge to the Security holder a copy of the Indenture which has in
it the text of this Security in larger type. Requests may be made to:

          Roto-Rooter, Inc.
          255 East Fifth Street
          Cincinnati, Ohio  45202
          Facsimile:  (513) 287-6216

          Attention:  General Counsel

<PAGE>

                                                                              12

- --------------------------------------------------------------------------------

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

         (Print or type assignee's name, address and zip code)

         (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                   agent to transfer this Security on
the books of the Company.  The agent may substitute another to act for him.

________________________________________________________________________________

Date:____________________ Your Signature:_______________________________________

________________________________________________________________________________

Sign exactly as your name appears on the other side of this Security.

<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.10 of the Indenture, check the box:

                                      [ ]

          If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.10 of the Indenture, state the
principal amount: $

Date: __________________         Your Signature:_______________________________S
                                                (Sign exactly as your
                                                 name appears on the
                                                 other side of this
                                                 Security.)

Signature Guarantee: ________________________________________________________
                               (Signature must be guaranteed)

Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.20
<SEQUENCE>5
<FILENAME>l05867aexv10w20.txt
<DESCRIPTION>EX-10.20
<TEXT>
<PAGE>

                                  EXHIBIT 10.20

                                 AMENDMENT NO. 7
                             TO EMPLOYMENT AGREEMENT

         AGREEMENT dated as of May 19, 2003 between Spencer S. Lee ("Employee")
and Chemed Corporation (the "Company").

         WHEREAS, Employee and the Company have entered into an Employment
Agreement dated as of May 19, 1997 and amended May 18, 1998, May 17, 1999, May
15, 2000, May 21, 2001, January 2, 2002 and August 7, 2002 ("Employment
Agreement"); and

         WHEREAS, Employee and the Company desire to amend the Employment
Agreement in certain respects.

         NOW, THEREFORE, Employee and the Company mutually agree that the
Employment Agreement shall be amended, effective as of May 19, 2003, as follows:

         A.       The date, amended as of August 7, 2002, set forth in Section
                  1.2 of the Employment Agreement, is hereby deleted and the
                  date of May 21, 2006 is hereby substituted therefore.

         B.       The base salary amount set forth in the first sentence of
                  Section 2.1 of the Employment Agreement is hereby deleted and
                  the base salary amount of $238,921 per annum is hereby
                  substituted.

         C.       The amount of unrestricted stock award recognized in lieu of
                  incentive compensation in 2002 is $47,390.

         Except as specifically amended in this Amendment No. 7 to

<PAGE>

                  Employment Agreement, the Employment Agreement, as amended,
                  shall continue in full force and effect in accordance with its
                  terms, conditions and provisions.

                           IN WITNESS WHEREOF, the parties have duly executed
                  this amendatory agreement as of the date first above written.

                                             EMPLOYEE

                                             /s/ Spencer S. Lee
                                             -----------------------------------
                                             Spencer S. Lee

                                             CHEMED CORPORATION

                                             /s/ Kevin J. McNamara
                                             -----------------------------------
                                             Kevin J. McNamara
                                             President & Chief Executive Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.24
<SEQUENCE>6
<FILENAME>l05867aexv10w24.txt
<DESCRIPTION>EX-10.24
<TEXT>
<PAGE>

                                  EXHIBIT 10.24

                               CHEMED CORPORATION

                            EXCESS BENEFIT PLAN NO. 1

<PAGE>
                                                                               .
                                                                               .
                                                                               .

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                                                                                                      <C>
INTRODUCTION...................................................................................          1
   1.       Purpose of the Plan................................................................          1
   2.       Definitions........................................................................          1
   3.       Administration.....................................................................          3
   4.       Participation......................................................................          4
   5.       Contributions......................................................................          4
   6.       Reserve Fund; Participant Accounts.................................................          5
   7.       Benefit Amounts....................................................................          5
   8.       Vesting............................................................................          7
   9.       In-Service Withdrawals.............................................................          7
   10.      Distribution of Benefits; Beneficiary..............................................          8
   11.      General Provisions.................................................................          9
</TABLE>

<PAGE>

                               CHEMED CORPORATION
                            EXCESS BENEFIT PLAN NO. 1

                             As Amended and Restated
                             Effective June 1, 2001

INTRODUCTION

         The Chemed Corporation Excess Benefit Plan No.1 (f/k/a The Chemed
Corporation Excess Benefit Plan) is hereby amended and restated in its entirety
effective June 1, 2001. This amendment and restatement shall not decrease or
otherwise adversely affect any Participant's Benefit Amounts accrued as of June
1, 2001.

1.       Purpose of the Plan

         To induce the employment or continued employment of key employees and
to enable the Company and its Subsidiaries to compete with other corporations
offering comparable benefits in obtaining and retaining the services of
competent executives, in order that the interests of the Company and its
Subsidiaries may be advanced.

2.       Definitions

         Unless otherwise required by the context, the following terms when used
in this Plan shall have the meanings set forth in this section.

                  (a)      "Base Plans" - The Savings & Retirement Plan and the
                           Employee Stock Ownership Plans I and II.

                  (b)      "Beneficiary" - As defined in Section 10.3.

                  (c)      "Benefit Amounts" - As described in Section 7.

                  (d)      "Board of Directors" - The Board of Directors of the
                           Company.

                  (e)      "Code" - The Internal Revenue Code of 1986, as
                           amended.

                  (f)      "Committee" - The Committee designated to administer
                           the Plan pursuant to the provisions of Section 3.

                  (g)      "Company" - Chemed Corporation, a Delaware
                           corporation.

                  (h)      "Earnings (Loss) Factor" - As described in Section
                           7.2.

                  (i)      "Eligible Employee" - A management or highly
                  compensated Employee other than a Union Employee who (i)
                  participates in or who, but for the section 415 limitations of
                  the Code, would participate in, any one or more of the Base
                  Plans, and (ii) is designated by the Committee from time

                                      -1-

<PAGE>

                  to time as eligible to participate in the Plan. Such
                  designation may be revoked at any time if the Committee
                  determines that the Employee ceases to be a management or
                  highly compensated Employee.

                  (j)      "Employee" - Any person who is employed by the
                  Company or a Subsidiary.

                  (k)      "Employee Stock Ownership Plans I and II" - The
                  Chemed Employee Stock Ownership Plan I, adopted effective
                  November 1, 1987, as amended, and the Chemed Employee Stock
                  Ownership Plan II, adopted effective August 1, 1988, as
                  amended.

                  (l)      "Excess Benefit Plan" or "Plan" - The Excess Benefit
                  Plan of the Company herein set forth as the same may from time
                  to time be amended.

                  (m)      "Excess Benefit Plan Statement" - The quarterly
                  statement provided to a Participant pursuant to Section 6.3.

                  (n)      "General Pension Plan" - The Chemed General Pension
                  Plan, as amended. The General Pension Plan was terminated
                  effective October 31, 1985.

                  (o)      "General Retirement Plan" - The Chemed General
                  Retirement Plan adopted effective January 1, 1984, as amended.
                  The General Retirement Plan was merged into the Savings &
                  Retirement Plan effective January 1, 1999.

                  (p)      "Participant" - Each Eligible Employee who joins and
                  participates in the Plan.

                  (q)      "Permanent Disability" - Disability retirement from
                  employment by the Company due to a physical or mental
                  disability which permanently disables the Employee from
                  performing the customary duties of his regular job with the
                  Company.

                  (r)      "Plan Year" - The calendar year.

                  (s)      "Retirement" - Any of (a) normal retirement from
                  employment by the Company or a Subsidiary at age 65; (b) early
                  retirement from employment by the Company or a Subsidiary from
                  age 55 to age 65 with not less than 10 Years of Service; (c)
                  postponed retirement from employment by the Company after age
                  65.

                  (t)      "Roto-Rooter Deferred Compensation Plan No. 1" - The
                  Roto-Rooter Deferred Compensation Plan No 1, as amended.

                                      -2-

<PAGE>

                  (u)      "Roto-Rooter Retirement and Savings Plan" - The
                  Roto-Rooter Retirement and Savings Plan, as amended. The
                  Roto-Rooter Retirement and Savings Plan was merged into the
                  Savings and Retirement Plan effective January 1, 1999.

                  (v)      "Savings & Retirement Plan" - The Chemed/Roto-Rooter
                  Savings & Retirement Plan, adopted effective July 1, 1971, as
                  amended.

                  (w)      "Severance" - Termination of employment with the
                  Company or a Subsidiary under any circumstances other than
                  death, Retirement or Permanent Disability.

                  (x)      "Subsidiary" - A corporation or other form of
                  business association of which shares (or other ownership
                  interests) having 50% or more of the voting power are owned or
                  controlled, directly or indirectly, by the Company.

                  (y)      "Union Employee" - An Employee with respect to whom
                  compensation, hours of work, or conditions of employment are
                  determined through collective bargaining with a recognized
                  bargaining agent.

                  (z)      "Valuation Date" - The last business day of each
                  month or more frequently as determined by the Committee.

                  (aa)     "Value of Account" - The value of the amounts
                  credited to an account of a Participant as of a Valuation
                  Date.

3.       Administration

                  (a)      The Plan shall be administered by the Company's
                  Benefit Plan Committee. Each member of the Committee who is
                  also a Participant in the Plan shall abstain from voting or
                  participating in any decision with respect to such
                  Participant's Accounts under the Plan, including but not
                  limited to, approval of the Participant's directed investments
                  under section 7.2(c).

                  (b)      The Committee may establish such rules and
                  regulations, not inconsistent with the provisions of the Plan,
                  as it deems necessary for the proper administration of the
                  Plan, and may amend or revoke any rule or regulation so
                  established. The Committee may make such determinations and
                  interpretations under or in connection with the Plan as it
                  deems necessary or advisable. All such rules, regulations,
                  determinations and interpretations, subject to the provisions
                  of the By-Laws of the Company, shall be binding and conclusive
                  upon the Company, each Subsidiary, its shareholders,
                  Employees, Participants, and upon their respective legal
                  representatives, beneficiaries, successors and assigns and
                  upon all other persons claiming under or through any of them.

                                      -3-

<PAGE>

                  (c)      Any action required or permitted to be taken by the
                  Committee under this Plan may be taken in accordance with the
                  By-Laws of the Company even though, because of a vacancy or
                  vacancies as a result of resignations or otherwise, the total
                  number of directors who are then members of the Committee
                  shall be less than three.

                  (d)      Members of the Board of Directors and members of the
                  Committee acting under the Plan shall be fully protected in
                  relying in good faith upon the advice of counsel and shall
                  incur no liability except for gross negligence or willful
                  misconduct in the performance of their duties.

4.       Participation

         4.1      General. Each Eligible Employee who was a Participant in the
         Plan as of June 1, 2001 shall remain a Participant under the terms of
         the Plan. In addition, each Eligible Employee for whom or in respect of
         whom benefits payable from or contributions by the Company or a
         Subsidiary to any of the Base Plans shall have been limited, restricted
         or otherwise less than the benefits payable from or contributions by
         the Company or a Subsidiary pursuant to the general terms and
         provisions of such plans by reason of the application of benefit and/or
         contribution limitations imposed by the Code and/or the regulations
         issued thereunder, or any comparable law which may hereafter be enacted
         including any regulations issued thereunder, shall be a Participant in
         the Plan. The personnel, payroll and other records of the Company or
         any Subsidiary shall be conclusive evidence for the purpose of
         determining all matters relating to benefits under this Plan.

         4.2      Participation Date. Each Participant shall be deemed to have
         commenced his participation in the Plan effective on the first day of
         the Plan Year during which he became a Participant.

         4.3      Continuance of Participation. Each Participant's participation
         in the Plan shall continue until the first to occur of the following
         events:

                  (a)      his death;

                  (b)      his Severance;

                  (c)      his Retirement;

                  (d)      his Permanent Disability; or,

                  (e)      termination of the Plan.

5.       Contributions

         5.1      Participants' Contributions. Each Participant shall be
         entitled to make salary reduction contributions to the Plan. As of each
         Valuation Date, there will be credited to the account of each such
         Participant the amount elected by the Participant pursuant to a salary
         reduction agreement executed by the Participant. Such salary reduction
         contributions shall commence with the first payment of

                                      -4-

<PAGE>

         compensation made after the date on which such salary reduction
         election is effective.

         5.2      Company Contributions. No contributions to a separate trust
         shall be required to be made by the Company or any Subsidiary for the
         purpose of establishing a fund for the payment of benefits to any
         Participant or Beneficiary under this Plan. Instead, all such accrued
         benefits, whether or not currently payable, shall be paid when due from
         the general funds of the Company or from a grantor trust or series of
         grantor trusts established for this purpose.

6.       Reserve Fund; Participant Accounts

         6.1      General Fund. The Company shall establish on its books of
         account a reserve fund equal to the present value of all benefits
         currently accrued in favor of Participants pursuant to the Plan. The
         amount of such reserve fund shall, at all times, be considered as a
         general obligation of the Company in favor of all Participants
         generally.

         6.2      Participant Accounts. The Company shall establish for each
         Participant a separate account or accounts to which shall be credited
         monthly all Benefit Amounts pursuant to Section 7.1 plus or minus the
         Earnings (Loss) Factor as to each such account pursuant to Section 7.2.

         6.3      Statements of Participant's Accounts. The Committee shall, as
         soon as practicable after the end of each calendar quarter, cause to be
         delivered or mailed to each Participant having an account balance a
         statement (the "Excess Benefit Plan Statement") setting forth the
         status of the account of such Participant as of the end of such
         quarter. Such statement shall be deemed to have been accepted as
         correct unless written notice to the contrary is received by the
         Committee within 30 days after the mailing thereof.

7.       Benefit Amounts

         7.1      Benefit Amounts. The Benefit Amounts credited to the account
         of each Participant shall consist of the following amounts:

                  (a)      As to the General Pension Plan for Plan Years
                  thereunder prior to 1984 - An amount necessary to fund the
                  present value of the additional accrued benefit of the
                  Participant (including his beneficiaries) under such plan as
                  at December 31, 1983 which, but for the annual benefit
                  limitations as set forth in Section 415 of the Code, would
                  have been provided to the Participant or his beneficiaries
                  pursuant to the stated terms and provisions of such plan. In
                  determining the amount, as above, all actuarial assumptions
                  applicable to such plan on December 31, 1983 shall be
                  utilized.

                                      -5-

<PAGE>

                  (b)      As to each of the Base Plans - the amount by which
                  all Company contributions to the account (or accounts) of the
                  Participant for each month of each Plan Year under each such
                  plan is less than the amount which would have been so
                  contributed by the Company or a Subsidiary without regard to
                  (i) the annual contribution limitations as set forth in
                  Section 415 of the Code, (ii) the actual deferral percentage
                  limitation imposed upon "highly compensated employees' (as
                  defined and applied in Section 401(k)(3)(a)(ii) of the Code),
                  (iii) the limitation on compensation as set forth in Section
                  401(a)(17) of the Code, (iv) the contribution percentage
                  requirement as set forth in Section 401(m) of the Code and (v)
                  any amounts contributed to the Chemed Corporation Deferred
                  Compensation Plan; provided, however, that all or any portion
                  of the amount to be credited under (b)(i) above may instead be
                  credited to the Participant under the Roto-Rooter Deferred
                  Compensation Plan No. 1, as determined in the sole discretion
                  of the Company.

                  (c)      The amount of the salary reduction contributions made
                  by the Participant pursuant to Section 5.1.

         7.2      Earnings (Loss) Factor. In addition to the Benefit Amount(s)
         which may be credited to each Participant's account under this Plan,
         there shall be credited or debited monthly an Earnings (Loss) Factor
         amount computed as follows:

                  (a)      As to each Participant's account in respect of the
                  Savings & Retirement Plan - an amount determined by
                  application of the percentage of investment earnings (or
                  investment loss) experienced by the Chemed Stock Fund of such
                  plan during the preceding month to the aggregate amount then
                  credited to the Participant's account hereunder pursuant to
                  subsection (b) of Section 7.1.

                  (b)      As to each Participant's account in respect of the
                  Employee Stock Ownership Plans I and II - an amount equal to
                  the actual investment earnings (or investment loss)
                  experienced by assets credited to the Participant's account
                  hereunder including Chemed stock and investments allocated
                  pursuant to subsection (d) of this Section 7.2.

                  (c)      As to each Participant's account in respect of the
                  General Retirement Plan - an amount equal to the actual
                  investment earnings (or investment loss) experienced by assets
                  credited to the Participant's Employee Contribution Account
                  under the Savings & Retirement Plan.

                  (d)      As to each Participant's account in respect of the
                  Participant's salary reduction contributions pursuant to
                  Section 5.1 an amount equal to the actual investment earnings
                  (or investment loss) experienced by assets credited to the
                  Participant's account hereunder including the investments
                  allocated pursuant to subsection (e) of this Section 7.2.

                                      -6-

<PAGE>

                  (e)      Notwithstanding any provision herein to the contrary,
         a Participant may direct the investment of the Participant's account in
         respect of the Employee Stock Ownership Plans I and II, and in respect
         of the Participant's salary reduction contributions, provided such
         directed investments shall be subject to (i) restrictions and
         procedures established by the Committee and limited to the investment
         funds then offered under the Savings & Retirement Plan and/or such
         other fund(s) as may be selected by the Committee, and (ii) the
         approval of the Committee.

8.       Vesting

         8.1      Full Vesting. Participants will have a fully vested interest
         in amounts credited to their accounts hereunder upon Retirement,
         Severance while eligible for Retirement, Permanent Disability or upon
         death prior to Retirement or Permanent Disability.

         8.2      Partial Vesting. Participants hereunder who are not fully
         vested pursuant to Section 8.1 will have their vested interest in
         amounts credited to their accounts determined to the same extent as if
         such amounts had been contributed to their accounts under each of the
         Base Plans.

         8.3      Forfeitures. If a Participant's employment by the Company
         shall terminate for any reason other than death, Permanent Disability,
         Retirement or Severance while eligible for Retirement, he shall forfeit
         the unvested portion of his accounts in the Plan. All amounts so
         forfeited shall revert to the credit of the Company.

9.       In-Service Withdrawals

         A Participant who has attained age 65 and who is concurrently effecting
         a withdrawal of his entire account balance under any or all of the Base
         Plans may request to withdraw all or such portion of his accounts
         established under this Plan in respect of the Base Plan(s) under which
         he is effecting a concurrent withdrawal as the Participant shall so
         request, but the amount of any such withdrawal shall be limited and
         restricted to the same extent and to the same circumstances as would
         otherwise be permitted under the terms and provisions of the applicable
         Base Plan(s); provided, however, that (a) such request shall be subject
         to the consent of the Committee in its sole and absolute discretion and
         (b) the consent of the Participant's spouse or any other person shall
         not be required as to any withdrawal under this Plan.

                                      -7-

<PAGE>

10.      Distribution of Benefits; Beneficiary

         10.1     Time of Payment.

                  (a)      The Benefit Amounts shall become payable upon the
                  later of (i) the Participant's termination of employment with
                  the Company or Subsidiary or (ii) the date selected by the
                  Participant ("Payment Date"). The vested portion of the
                  Benefit Amounts shall be valued and paid to the Participant or
                  his Beneficiary commencing as of the Valuation Date coinciding
                  with or next following the Payment Date. The Payment Date
                  shall not be subject to modification unless one of the
                  following events occurs:

                           (1)      The Participant makes an election to change
                           the Payment Date which is then in effect ("Modified
                           Payment Date") provided that any such subsequent
                           election must occur (i) no earlier than 1 year after
                           the date on which the election then in effect was
                           made and (ii) no less than 2 years prior to the
                           Payment Date then in effect.

                           (2)      The Committee, in its sole and absolute
                           discretion, consents to the Participant's election of
                           a Modified Payment Date.

                           (3)      The Participant elects a Modified Payment
                           Date and the election does not satisfy (1) or (2)
                           above. In such event, the Participant's accounts
                           under the Plan shall be reduced by an amount equal to
                           10% of the value of such accounts as of the Valuation
                           Date coincident with or next following the Modified
                           Payment Date.

                  (b)      All elections available to the Participant hereunder
                  shall also be available to the Participant's Beneficiary upon
                  the Participant's death.

         10.2     Form of Payment. All Benefit Amounts shall be paid in one lump
         sum in cash except as provided below. Any vested amounts payable from
         the Participant's account in respect of the Savings & Retirement Plan
         shall be paid in whole shares of Chemed stock credited to the
         Participant's account(s) plus cash in lieu of any fractional shares of
         Chemed stock. Any vested amounts payable from the Participant's account
         in respect of the Employee Stock Ownership Plans I and II shall be paid
         in whole shares of Chemed stock credited to the Participant's
         account(s) with the remaining amount to be paid in cash, including cash
         in lieu of any fractional shares of Chemed stock.

         10.3     Beneficiary. As used herein the term "Beneficiary" of a
         Participant shall mean the person or persons (which may include,
         without limitation, the Participant's estate or one or more trusts or
         other entities) designated by such Participant in a "Designation of
         Beneficiary" form filed with the Company pursuant to this Plan or, if
         no such form has been so filed, then the term

                                      -8-

<PAGE>

         "Beneficiary" of a Participant shall mean the person or persons (which
         may include, without limitation, the Participant's estate or one or
         more trusts or other entities) designated by such Participant as his
         Beneficiary pursuant to the provisions of each of the Base Plan. In the
         event the Participant has designated a different Beneficiary(ies) under
         each of said plans, then the Beneficiary under this Plan with respect
         to amounts contributed to this Plan in respect of each of the Base
         Plans shall be the Participant's Beneficiary(ies) designated under each
         of the Base Plans, as the case may be. For this purpose, amounts
         contributed by the Participant pursuant to Section 5.1 shall be
         considered to be in respect of the Savings & Retirement Plan. Such
         "Designation of Beneficiary" form pursuant to this Plan shall be in
         such form as the Committee may from time to time prescribe or accept. A
         Participant may at any time change any such Designation of Beneficiary
         by filing a new form with the Company. If a Participant has not made
         any such designation, or if any such Beneficiary shall not have
         survived the Participant, or if any such designation shall not be
         effective, "Beneficiary" shall mean the Participant's estate. In the
         event the Company has any doubt as to the proper person or persons
         entitled to receive payments due hereunder, the Company shall have the
         right to withhold such payments until the matter is decided by a court
         of competent jurisdiction.

11.      General Provisions

         (a)      Nothing in the Plan nor in any instrument executed pursuant
         hereto shall confer upon any employee any right to continue in the
         employ of the Company or a Subsidiary or shall affect the rights of the
         Company or a Subsidiary to terminate the employment of any employee
         with or without cause.

         (b)      The Company or a Subsidiary may make such provisions as it may
         deem appropriate for the withholding of any taxes which the Company or
         a Subsidiary determines it is required to withhold in connection with
         any payment hereunder.

         (c)      Nothing in the Plan is intended to be a substitute for, or
         shall preclude or limit the establishment or continuation of, any other
         plan, practice or arrangement for the payment of compensation or fringe
         benefits to employees generally, or to any class or group of employees,
         which the Company or any Subsidiary now has or may hereafter lawfully
         put into effect, including, without limitation, any retirement,
         pension, thrift, group insurance, stock purchase, stock bonus or stock
         option plan.

         (d)      The Plan may be amended or terminated by the Board of
         Directors at any time in whole or in part provided, however, that no
         such amendment or termination shall adversely affect that portion of a
         Participant's account(s) hereunder which is fully vested. Upon
         termination of the Plan, all fully vested amounts credited to the
         Participant's account(s) as at the date of such termination shall be
         promptly paid to the Participant.

                                      -9-

<PAGE>

         (e)      In the event any dispute pertaining to the Plan shall arise
         between the Company and an Employee (including a Participant) which
         shall not be resolved after good faith negotiation, either the Employee
         or the Company, or both, may submit the disputed issue to the Committee
         for resolution. All such submissions shall be in writing, addressed to
         the Secretary of the Committee and shall set forth the issue and all
         relevant facts known to the submitting party. The Committee may
         determine the issue in such manner as it shall determine and may (but
         need not) request the Employee and one or more representatives of the
         Company to appear before the Committee for the purpose of presenting
         such matters of fact as the Committee shall specify. The decision of
         the Committee as to any issue presented to it involving this Plan shall
         be conclusive and final and binding on all concerned parties, unless,
         within thirty days after receipt of the Committee's decision, the
         Employee files a written notice with the Secretary of the Committee
         requesting that the issue be presented to the Board of Directors for
         final resolution. As promptly thereafter as is reasonably practicable,
         the issue shall be presented to and resolved finally and conclusively
         by the Board of Directors based upon all facts presented to it by the
         Committee, the Company and the Employee.

         (f)      The Company, in its sole discretion, may direct that the
         account(s) of a Participant be directly transferred to any other
         non-qualified deferred compensation plan and/or trust maintained by the
         Company. The Company, in its sole discretion, may also accept the
         direct transfer from another non-qualified deferred compensation plan
         and/or trust maintained by the Company of any cash or other assets held
         in such plan and/or trust for the benefit of a Participant. In the
         event of the acceptance of any such direct transfer, such cash and/or
         other assets shall be held in an account(s) for the benefit of the
         Participant.

                                   CERTIFICATE

         The undersigned, Secretary of Chemed Corporation, hereby certifies that
the foregoing is a true and correct copy of Excess Benefit Plan No. 1 as amended
in its entirety.

         Signed at Cincinnati, Ohio, as of this first day of June, 2001.

                                            /s/ Naomi C. Dallob
                                            ------------------------------------
                                            Naomi Dallob, Secretary

                                      -10-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.25
<SEQUENCE>7
<FILENAME>l05867aexv10w25.txt
<DESCRIPTION>EX-10.25
<TEXT>
<PAGE>

                                  EXHIBIT 10.25


                  CHEMED CORPORATION EXCESS BENEFIT PLAN NO. 1
                                 AMENDMENT NO. 1


         The Chemed Corporation Excess Benefit Plan No. 1 (the "Plan") is hereby
amended effective July 1, 2002 as follows:

         1.       Section 2(k) shall be rewritten in its entirety to read as
                  follows:

                  (k) "Employee Stock Ownership Plans I and II" - The Chemed
                  Employee Stock Ownership Plan I, adopted effective November 1,
                  1987, as amended, and the Chemed Employee Stock Ownership Plan
                  II, adopted effective August 1, 1998, as amended, and as
                  merged into the Savings & Retirement Plan effective July 1,
                  2002.

         2.       In all other respects, the Plan shall remain in full force and
                  effect.

                                   CERTIFICATE

         The undersigned, Secretary of Chemed Corporation, hereby certifies that
the foregoing is a true and correct copy of Amendment No. 1 to its Excess
Benefit Plan No. 1.

         Signed in Cincinnati, Ohio as of this 1st day of July, 2002.

                                              /s/ Naomi C. Dallob
                                              ----------------------------------
                                              Naomi C. Dallob, Secretary

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>8
<FILENAME>l05867aexv10w26.txt
<DESCRIPTION>EX-10.26
<TEXT>
<PAGE>

                                  EXHIBIT 10.26

                  CHEMED CORPORATION EXCESS BENEFIT PLAN NO. 1
                                 AMENDMENT NO. 2

         The Chemed Corporation Excess Benefit Plan No. 1 (the "Plan") is hereby
amended effective November 7, 2003 as follows:

         1.       The Name of Plan shall be changed to Roto-Rooter, Inc. Excess
                  Benefit Plan No. 1.

         2.       Section 1 of the Plan shall be rewritten in its entirety to
                  read as follows:

                  1.       Purpose of the Plan

                           To induce the employment or continued employment of
                           key employees of the company and it Subsidiaries and
                           the service of Directors to compete with other
                           corporations offering comparable benefits in order
                           that the interests of the Company and its
                           Subsidiaries may be advanced.

         3.       Sections 2 (g), (i) and (j) shall be rewritten in their
                  entirety to read as follows:

                  (g)      "Company" - Roto-Rooter, Inc., a Delaware
                           Corporation.

                  (i)      "Eligible Employee" - A (i) Director or (ii) a
                           management or highly compensated Employee other than
                           a Union Employee who participates in or who, but for
                           the section 415 limitations of the Code, would
                           participate in, any one or more of the Base Plans,
                           and is designated by the Committee from time to time
                           as eligible to participate in the Plan. Such
                           designation may be revoked at any time if the
                           Committee determines that the Employee ceases to be a
                           management or highly compensated Employee.

                  (j)      "Employee" - Any person who is employed by the
                           Company or a Subsidiary or is a Director of the
                           Company.

         4.       Section 8.1 of the Plan shall be rewritten in its entirety as
                  follows:

                  8.1      Full Vesting. Participants will have a fully vested
                           interest in amounts credited to their accounts
                           hereunder upon Retirement, Severance while eligible
                           for Retirement, Permanent Disability or upon death
                           prior to Retirement or Permanent Disability. All
                           salary reduction contributions are fully vested.

<PAGE>

         5.       Section 10.1 (a) shall be rewritten in its entirety as
                  follows:

                  (a)      The Benefit Amounts shall become payable upon the
                           later of (i) the Participant's termination or
                           employment with the Company or Subsidiary or (ii) the
                           date the Participant ceases to be a Director of the
                           Company or (iii) the date selected by the Participant
                           ("Payment Date"). The vested portion of the Benefit
                           Amounts shall be valued and paid to the Participant
                           or his Beneficiary commencing as of the Valuation
                           Date coinciding with or next following the Payment
                           Date. The Payment Date shall not be subject to
                           modification unless one of the following events
                           occurs:

                           (1)      The Participant makes an election to change
                                    the Payment Date which is then in effect
                                    ("Modified Payment Date") provided that any
                                    such subsequent election must occur (i) no
                                    earlier than 1 year after the date on which
                                    the election then in effect was made and
                                    (ii) no less than 2 years prior to the
                                    Payment Date then in effect.

                           (2)      The Committee, in its sole and absolute
                                    discretion, consents to the Participants'
                                    election of a Modified Payment Date.

                           (3)      The Participant elects a Modified Payment
                                    Date and the election does not satisfy (1)
                                    or (2) above. In such event, the
                                    Participant's accounts under the Plan shall
                                    be reduced by an amount equal to 10% of the
                                    value of such accounts as of the Valuation
                                    Date coincident with or next following the
                                    Modified Payment Date.

         6.       In all other respects, the Plan shall remain in full force and
                  effect.

                                   CERTIFICATE

         The undersigned, Secretary of Roto-Rooter, Inc., hereby certifies that
the foregoing is a true and correct copy of Amendment No. 2 to its Excess
Benefit Plan No. 1.

         Signed in Cincinnati, Ohio as of this 7th day of November, 2003.

                                             /s/ Naomi C. Dallob
                                             -----------------------------------
                                             Naomi C. Dallob, Secretary

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.41
<SEQUENCE>9
<FILENAME>l05867aexv10w41.txt
<DESCRIPTION>EX-10.41
<TEXT>
<PAGE>
                                  EXHIBIT 10.41

                            Schedule to Exhibit 10.39

Employee                    Title                                       Amount
Edward L. Hutton           Chairman                                  390,318.62


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.42
<SEQUENCE>10
<FILENAME>l05867aexv10w42.txt
<DESCRIPTION>EX-10.42
<TEXT>
<PAGE>

                                  EXHIBIT 10.42

                            Schedule to Exhibit 10.40

Employee                   Title                                       Amount
Kevin J. McNamara          President and Chief Executive Officer     489,759.28

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.44
<SEQUENCE>11
<FILENAME>l05867aexv10w44.txt
<DESCRIPTION>EX-10.44
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.44

                                                                  EXECUTION COPY

                                CREDIT AGREEMENT

                          DATED AS OF FEBRUARY 24, 2004

                                      AMONG

                                ROTO-ROOTER, INC.

                  THE LENDERS FROM TIME TO TIME PARTIES HERETO

                                       AND

                       BANK ONE, NA (MAIN OFFICE CHICAGO),

                             AS ADMINISTRATIVE AGENT

===============================================================================

                         BANC ONE CAPITAL MARKETS, INC.,
                      AS LEAD ARRANGER AND SOLE BOOK RUNNER

===============================================================================


                         SIDLEY AUSTIN BROWN & WOOD LLP
                                 Bank One Plaza
                            10 South Dearborn Street
                             Chicago, Illinois 60603

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                             <C>
ARTICLE I      DEFINITIONS..................................................     1
      1.1.  Certain Defined Terms...........................................     1
      1.2.  Plural Forms....................................................    24

ARTICLE II     THE CREDITS..................................................    25

      2.1. Revolving Loan Commitments and Term Loan Commitments.............    25
      2.2. Required Payments; Termination...................................    25
      2.3. Ratable Loans; Types of Advances.................................    28
      2.4. Swing Line Loans............................................ ....    28
      2.5. Commitment Fee; Aggregate Revolving Loan Commitment..............    30
      2.6. Minimum Amount of Each Advance...................................    30
      2.7. Optional Principal Payments......................................    31
      2.8. Method of Selecting Types and Interest Periods for New Advances..    31
      2.9.  Conversion and Continuation of Outstanding Advances; No
            Conversion or Continuation of Eurodollar Advances After Event
            of Default......................................................    31
      2.10. Changes in Interest Rate, etc...................................    32
      2.11. Rates Applicable After Event of Default.........................    33
      2.12. Method of Payment...............................................    33
      2.13. Noteless Agreement; Evidence of Indebtedness....................    33
      2.14. Telephonic Notices..............................................    34
      2.15. Interest Payment Dates; Interest and Fee Basis..................    34
      2.16. Notification of Advances, Interest Rates, Prepayments and
            Revolving Loan Commitment Reductions; Availability of Loans.....    35
      2.17. Lending Installations...........................................    35
      2.18. Non-Receipt of Funds by the Administrative Agent................    35
      2.19. Replacement of Lender...........................................    36
      2.20. Facility LCs....................................................    36
      2.21. Financial Contracts.............................................    42

ARTICLE III    YIELD PROTECTION; TAXES......................................    42

      3.1.  Yield Protection................................................    42
      3.2.  Changes in Capital Adequacy Regulations.........................    43
      3.3.  Availability of Types of Advances...............................    44
      3.4.  Funding Indemnification.........................................    44
      3.5.  Taxes...........................................................    44
      3.6.  Lender Statements; Survival of Indemnity........................    47
      3.7.  Alternative Lending Installation................................    48

ARTICLE IV     CONDITIONS PRECEDENT.........................................    48

      4.1.  Initial Credit Extension........................................    48
      4.2.  Each Credit Extension...........................................    50
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                             <C>
ARTICLE V      REPRESENTATIONS AND WARRANTIES...............................    51

      5.1.  Existence and Standing..........................................    51
      5.2.  Authorization and Validity......................................    51
      5.3.  No Conflict; Government Consent.................................    51
      5.4.  Financial Statements............................................    52
      5.5.  Material Adverse Change.........................................    52
      5.6.  Taxes...........................................................    52
      5.7.  Litigation and Contingent Obligations...........................    52
      5.8.  Subsidiaries....................................................    52
      5.9.  ERISA...........................................................    53
      5.10. Accuracy of Information.........................................    53
      5.11. Regulation U....................................................    53
      5.12. Material Agreements; Restrictions on Dividends..................    53
      5.13. Compliance With Laws............................................    53
      5.14. Ownership of Properties; Priority of Liens......................    54
      5.15. Plan Assets; Prohibited Transactions............................    54
      5.16. Environmental Matters...........................................    54
      5.17. Investment Company Act..........................................    54
      5.18. Public Utility Holding Company Act..............................    54
      5.19. Insurance.......................................................    54
      5.20. No Event of Default or Unmatured Event of Default...............    54
      5.21. SDN List Designation............................................    54
      5.22. Solvency........................................................    55

ARTICLE VI     COVENANTS....................................................    55

      6.1.  Financial Reporting.............................................    55
      6.2.  Use of Proceeds.................................................    57
      6.3.  Notice of Event of Default......................................    57
      6.4.  Conduct of Business.............................................    57
      6.5.  Taxes...........................................................    58
      6.6.  Insurance.......................................................    58
      6.7.  Compliance with Laws............................................    58
      6.8.  Maintenance of Properties.......................................    58
      6.9.  Inspection; Keeping of Books and Records........................    58
      6.10. Restricted Payments.............................................    59
      6.11. Merger or Dissolution...........................................    60
      6.12. Sale of Assets..................................................    61
      6.13. Investments and Acquisitions....................................    62
      6.14. Indebtedness....................................................    65
      6.15. Liens...........................................................    67
      6.16. Transactions with Affiliates....................................    71
      6.17. Financial Contracts.............................................    71
      6.18. Subsidiary Covenants............................................    71
      6.19. Contingent Obligations..........................................    72
      6.20. Leverage Ratio; Senior Leverage Ratio...........................    72
      6.21. Fixed Charge Coverage Ratio.....................................    74
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                             <C>
      6.22. Minimum Consolidated Net Worth..................................    75
      6.23. Capital Expenditures............................................    75
      6.24. Operating Leases................................................    75
      6.25. Guarantors......................................................    76
      6.26. Collateral......................................................    76
      6.27. Sale and Leaseback Transactions.................................    77
      6.28. Intentionally Omitted...........................................    77
      6.29. Revolving Credit Availability...................................    77
      6.30. Prepayment of Indebtedness......................................    77
      6.31. Amendments to Senior Secured Indenture Documents and Senior
            Unsecured Indenture Documents...................................    77

ARTICLE VII    EVENTS OF DEFAULT............................................    78


ARTICLE VIII   ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES...............    81

      8.1.  Acceleration....................................................    81
      8.2.  Amendments......................................................    82
      8.3.  Preservation of Rights..........................................    83

ARTICLE IX     GENERAL PROVISIONS...........................................    84

      9.1.  Survival of Representations.....................................    84
      9.2.  Governmental Regulation.........................................    84
      9.3.  Headings........................................................    84
      9.4.  Entire Agreement................................................    84
      9.5.  Several Obligations; Benefits of this Agreement.................    84
      9.6.  Expenses; Indemnification.......................................    84
      9.7.  Numbers of Documents............................................    85
      9.8.  Accounting......................................................    85
      9.9.  Severability of Provisions......................................    86
      9.10. Nonliability of Lenders.........................................    86
      9.11. Confidentiality.................................................    86
      9.12. Lenders Not Utilizing Plan Assets...............................    87
      9.13. Nonreliance.....................................................    87
      9.14. Disclosure......................................................    87
      9.15. Performance of Obligations......................................    87
      9.16. USA Patriot Act Notification....................................    88
            IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
            ACCOUNT.........................................................    88
      9.17. Subordination of Intercompany Indebtedness......................    88

ARTICLE X      THE ADMINISTRATIVE AGENT.....................................    89

      10.1. Appointment; Nature of Relationship.............................    89
      10.2. Powers..........................................................    90
      10.3. General Immunity................................................    90
      10.4. No Responsibility for Loans, Recitals, etc......................    90
</TABLE>

                                       iii

<PAGE>

<TABLE>
<S>                                                                            <C>
      10.5. Action on Instructions of Lenders...............................    90
      10.6. Employment of Agents and Counsel................................    91
      10.7. Reliance on Documents; Counsel..................................    91
      10.8. Administrative Agent's Reimbursement and Indemnification........    91
      10.9. Notice of Event of Default......................................    92
      10.10.Rights as a Lender..............................................    92
      10.11.Lender Credit Decision..........................................    92
      10.12.Successor Administrative Agent..................................    92
      10.13.Administrative Agent and Arranger Fees..........................    93
      10.14.Delegation to Affiliates........................................    93
      10.15.Intentionally Omitted...........................................    93
      10.16.Collateral Documents............................................    93

ARTICLE XI     SETOFF; RATABLE PAYMENTS.....................................    95

      11.1. Setoff..........................................................    95
      11.2. Ratable Payments................................................    95

ARTICLE XII    BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS............    95

      12.1. Successors and Assigns..........................................    95
      12.2. Participations..................................................    96
      12.3. Assignments.....................................................    97
      12.4. Dissemination of Information....................................    99
      12.5. Tax Treatment...................................................    99

ARTICLE XIII   NOTICES......................................................    99

      13.1. Notices; Effectiveness; Electronic Communication................    99
      13.2. Change of Address, Etc.........................................    100

ARTICLE XIV    COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC
               EXECUTION...................................................    100

      14.1. Counterparts; Effectiveness....................................    100
      14.2. Electronic Execution of Assignments............................    100

ARTICLE XV     CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
               TRIAL.......................................................    101
</TABLE>

                                       iv

<PAGE>

                                    SCHEDULES

Commitment Schedule

Pricing Schedule

Schedule 2.20 -   Existing Letters of Credit

Schedule 5.8-     Subsidiaries

Schedule 6.13-    Existing Investments

Schedule 6.14 -   Existing Indebtedness

Schedule 6.15-    Existing Liens; Closing Date Surety Bond Liens

Schedule 6.16-    Transactions with Affiliates

Schedule 6.18-    Subsidiary Covenants

                                    EXHIBITS

Exhibit A-1 -     Form of Borrower's In-House Counsel's Opinion

Exhibit A-2 -     Form of Cravath, Swaine & Moore LLP (Special New York
                  Counsel) Opinion

Exhibit A-3 -     Form of Richards Layton & Finger, P.A. (Special Delaware
                  Counsel) Opinion

Exhibit B   -     Form of Compliance Certificate

Exhibit C   -     Form of Assignment and Assumption Agreement

Exhibit D   -     Form of Loan/Credit Related Money Transfer Instruction

Exhibit E-1 -     Form of Promissory Note for Revolving Loan (if requested)

Exhibit E-2 -     Form of Promissory Note for Term Loan (if requested)

Exhibit F   -     Officer's Certificate

Exhibit G   -     List of Closing Documents

Exhibit H   -     Form of Intercreditor Agreement

Exhibit I   -     Form of Senior Secured Note and Senior Secured Indenture

Exhibit J   -     Form of Senior Unsecured Note and Senior Unsecured Indenture

                                       ii

<PAGE>

                                CREDIT AGREEMENT

     This Credit Agreement, dated as of February 24, 2004, is entered into by
and among Roto-Rooter, Inc., a Delaware corporation, the Lenders, the LC Issuer,
and Bank One, NA, a national banking association having its principal office in
Chicago, Illinois, as Administrative Agent. The parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     1.1. CERTAIN DEFINED TERMS. As used in this Agreement:

     "ACCOUNTING CHANGES" is defined in Section 9.8 hereof.

     "ACQUISITION" means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which the Borrower or any of its
Subsidiaries (i) acquires any going business or all or substantially all of the
assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage of voting
power) of the outstanding ownership interests of a partnership or limited
liability company of any Person.

     "ADMINISTRATIVE AGENT" means Bank One in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, as Administrative Agent, and any successor Administrative
Agent appointed pursuant to Article X.

     "ADVANCE" means a borrowing hereunder consisting of the aggregate amount of
several Revolving Loans or Term Loans, as the case may be (i) made by some or
all of the Lenders on the same Borrowing Date, or (ii) converted or continued by
the Lenders on the same date of conversion or continuation, consisting, in
either case, of the aggregate amount of the several Loans of the same Type and,
in the case of Eurodollar Loans, for the same Interest Period. The term
"Advance" shall include Swing Line Loans unless otherwise expressly provided.

     "AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of voting securities, by contract
or otherwise.

     "AGGREGATE OUTSTANDING REVOLVING CREDIT EXPOSURE" means, at any time, the
aggregate of the Outstanding Revolving Credit Exposure of all the Lenders.

<PAGE>

     "AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the Revolving
Loan Commitments of all the Lenders, as may be increased or reduced from time to
time pursuant to the terms hereof. The initial Aggregate Revolving Loan
Commitment is One Hundred Million and 00/100 Dollars ($100,000,000).

     "AGGREGATE TERM LOAN COMMITMENT" means the aggregate of the Term Loan
Commitments of all the Lenders, as may be reduced from time to time pursuant
hereto. The initial Aggregate Term Loan Commitment is Thirty-Five Million and
00/100 Dollars ($35,000,000).

     "AGREEMENT" means this Credit Agreement, as it may be amended, restated,
supplemented or otherwise modified and as in effect from time to time.

     "AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect in the United States from time to time, applied in a
manner consistent with that used in preparing the financial statements of the
Borrower referred to in Section 5.4; provided, however, that except as provided
in Section 9.8, with respect to the calculation of the financial covenants set
forth in Sections 6.20 through 6.24 (and the defined terms used in such
Sections), "Agreement Accounting Principles" means generally accepted accounting
principles as in effect in the United States as of the Closing Date, applied in
a manner consistent with that used in preparing the financial statements of the
Borrower referred to in Section 5.4.

     "ALTERNATE BASE RATE" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.

     "APPLICABLE FEE RATE" means, with respect to the Commitment Fee at any
time, the percentage rate per annum which is applicable at such time with
respect to such fee as set forth in the Pricing Schedule.

     "APPLICABLE MARGIN" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.

     "APPLICABLE PLEDGE PERCENTAGE" means 100%, but (x) 65% in the case of a
pledge of capital stock of a Foreign Subsidiary or (y) 0% in the case of a
pledge of capital stock of a Foreign Subsidiary to the extent a pledge would
cause a Financial Assistance Problem.

     "APPROVED FUND" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

     "ARRANGEr" means Banc One Capital Markets, Inc., a Delaware corporation,
and its successors, in its capacity as Lead Arranger and Sole Book Runner.

     "ARTICLE" means an article of this Agreement unless another document is
specifically referenced.

                                        2

<PAGE>

     "ASSET SALE" means, with respect to the Borrower or any Subsidiary, the
sale, lease, conveyance, disposition or other transfer by such Person of any of
its assets (including by way of a sale-leaseback transaction, and including the
sale or other transfer of any of the capital stock or other equity interests of
such Person or any Subsidiary of such Person but excluding cash and cash
equivalents other than Cash Equivalent Investments) to any Person other than the
Borrower or any of its Wholly-Owned Subsidiaries other than (i) the sale or
other disposition of inventory in the ordinary course of business, (ii) the sale
or other disposition of any obsolete, excess, damaged, surplus or worn-out
Equipment or overdue Receivables disposed of in the ordinary course of business,
(iii) leases or licenses of assets in the ordinary course of business consistent
with past practice, (iv) transfers consisting of Restricted Payments permitted
under Section 6.10, dispositions permitted by Section 6.12.11, Investments
permitted under Section 6.13 and Liens permitted under Section 6.15, and (v)
sales or liquidiations of Cash Equivalent Investments.

     "ASSIGNMENT AGREEMENT" is defined in Section 12.3.1.

     "AUTHORIZED OFFICER" means any of the Chief Executive Officer, President,
Chief Financial Officer, Treasurer or Controller of the Borrower, or such other
officer of the Borrower as may be designated by the Borrower in writing to the
Administrative Agent from time to time, acting singly.

     "BANK ONE" means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.

     "BORROWER" means Roto-Rooter, Inc., a Delaware corporation, and its
permitted successors and assigns (including, without limitation, a debtor in
possession on its behalf).

     "BORROWING DATE" means a date on which an Advance is made hereunder.

     "BORROWING NOTICE" is defined in Section 2.8.

     "BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Illinois for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in Dollars are carried
on in the London interbank market and (ii) for all other purposes, a day (other
than a Saturday or Sunday) on which banks generally are open in Chicago,
Illinois for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.

     "CAPITAL EXPENDITURES" means, without duplication, any expenditures for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with Agreement Accounting Principles.

     "CAPITALIZED LEASE" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.

                                        3

<PAGE>

     "CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be classified as
a liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.

     "CASH EQUIVALENT INVESTMENTS" means (i) direct obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, (iv) certificates of deposit,
bankers' acceptances, money market deposit accounts, and time deposits issued by
or maintained with, as applicable, commercial banks (whether domestic or
foreign) having capital and surplus in excess of $100,000,000, (v) fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (i) above and entered into with a financial
institution satisfying the criteria described in clause (iv) above, and (vi) in
the case of any Foreign Subsidiary, (A) marketable direct obligations issued by,
or unconditionally guaranteed by, the sovereign nation in which such Foreign
Subsidiary is organized and is conducting business or issued by any agency of
such sovereign nation and backed by the full faith and credit of such sovereign
nation, in each case maturing within one year from the date of acquisition, so
long as the Indebtedness of such sovereign nation is rated at least A-1 or
better by S&P or P-1 or better by Moody's or carries an equivalent rating from a
comparable foreign rating agency or (B) Investments of the type and maturity
described in clauses (ii) through (v) above of foreign obligors, which
Investments or obligors have ratings described in such clauses or equivalent
ratings from comparable foreign rating agencies..

     "CASH FLOW PERIOD" means each fiscal year of the Borrower, beginning with
the fiscal year ending 2004.

     "CHAMPVA" means, collectively, the Civilian Health and Medical Program of
the Department of Veteran Affairs, a program of medical benefits covering
retirees and dependents of former members of the armed services administered by
the United States Department of Veteran Affairs, and all laws, rules,
regulations, manuals, orders, guidelines or requirements pertaining to such
program including (a) all federal statutes (whether set forth in 38 U.S.C.
{section} 1713 or elsewhere) affecting such program or, to the extent applicable
to CHAMPVA; and (b) all rules, regulations (including 38 C.F.R. {section}
17.54), manuals, orders and administrative, reimbursement and other guidelines
of all governmental authorities promulgated in connection with such program
(whether or not having the force of law), in each case as the same may be
amended, supplemented or otherwise modified from time to time.

     "CHAMPVA RECEIVABLE" means a Receivable payable pursuant to the CHAMPVA
program.

     "CHANGE OF CONTROL" means (i) the acquisition by any Person, or any group
of Persons (within the meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended) of 50% or more of the outstanding
shares of common stock of the Borrower; or (ii) the occurrence of a "Change of
Control" as defined in the Senior Secured Indenture Documents.

                                        4

<PAGE>

     "CHEMED CAPITAL TRUST" means Chemed Capital Trust, a Delaware statutory
business trust and a Wholly-Owned Subsidiary of the Borrower, together with its
permitted successors and assigns.

     "CHEMED TRUST SECURITIES" means the 575,503 convertible trust preferred
securities of Chemed Capital Trust issued in exchange for shares of the
Borrower's capital stock pursuant to an exchange offer completed on February 1,
2000.

     "CLOSING DATE" means February 24, 2004.

     "CLOSING DATE STOCK AWARD PLAN" means the Borrower's employee stock award
plan in existence on the Closing Date.

     "CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.

     "COLLATERAL" means all Property and interests in Property now owned or
hereafter acquired by the Borrower or any of its Domestic Subsidiaries in or
upon which a security interest, lien or mortgage is granted to the Collateral
Agent, for the benefit of the Holders of Secured Obligations and the other
creditors of the Borrower subject to the Intercreditor Agreement, whether under
the Pledge and Security Agreement, under any of the other Collateral Documents
or under any of the other Loan Documents.

     "COLLATERAL AGENT" means Bank One, together with its permitted successors
and assigns.

     "COLLATERAL DOCUMENTS" means all agreements, instruments and documents
executed in connection with this Agreement or the Intercreditor Agreement that
are intended to create or evidence Liens to secure the Secured Obligations,
including, without limitation, the Pledge and Security Agreement, the
Intellectual Property Security Agreements, and all other security agreements,
mortgages, deeds of trust, loan agreements, notes, guarantees, subordination
agreements, pledges, powers of attorney, consents, assignments, contracts, fee
letters, notices, leases, financing statements and all other written matter
whether heretofore, now, or hereafter executed by the Borrower or any of its
Subsidiaries and delivered to the Collateral Agent.

     "COLLATERAL SHORTFALL AMOUNT" is defined in Section 8.1.

     "COMMITMENT FEE" is defined in Section 2.5.1.

     "COMMITMENT SCHEDULE" means the Schedule identifying each Lender's
Revolving Loan Commitment and Term Loan Commitment as of the Closing Date
attached hereto and identified as such.

     "CONSOLIDATED CAPITAL EXPENDITURES" means, with reference to any period,
the Capital Expenditures of the Borrower and its consolidated Subsidiaries
calculated on a consolidated basis for such period.

                                        5

<PAGE>

     "CONSOLIDATED CURRENT MATURITIES" means, with reference to any period, all
payments of principal due within twelve (12) calendar months on and after the
last day of such period with respect to all Consolidated Indebtedness of the
Borrower.

     "CONSOLIDATED EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization expense of the Borrower and its consolidated Subsidiaries
(including amortization recorded in connection with the application of Financial
Accounting Standard No. 142 (Goodwill and Other Intangibles)), (v) payments made
in connection with the Westbrook Agreement in the amount of $25,000,000 and
transaction fees and expenses paid in connection with the Transactions, (vi) any
severance payments related to the Target Acquisition not to exceed $14,500,000
plus any employment taxes and employee benefit charges payable in connection
therewith, (vii) dividends, distributions and payments not in excess of
$2,800,000 under the Closing Date Stock Award Plan plus any employment taxes and
employee benefit charges payable in connection therewith, and (viii) all other
non-cash charges of the Borrower and its consolidated Subsidiaries (excluding
any such non-cash charge to the extent it represents an accrual of or reserve
for cash expenditures in any future period) less interest income and all
non-cash items of income of the Borrower and its consolidated Subsidiaries in
each case for such period. For purposes of calculating Consolidated EBITDA for
the Borrower and its consolidated Subsidiaries for those periods that require
financial information for the fiscal quarter ending March 31, 2004, the Borrower
shall include the Target on a pro forma basis as though the Target Acquisition
had occurred on January 1, 2004.

     "CONSOLIDATED FUNDED INDEBTEDNESS" means, at any time, with respect to any
Person, without duplication, (i) the aggregate Dollar amount of Consolidated
Indebtedness which would be classified on the balance sheet of such Person, as
of the applicable determination date, as long-term Indebtedness, plus (ii) the
aggregate stated or face amount of all Letters of Credit at such time for which
such Person is the account party or is otherwise liable.

     "CONSOLIDATED INDEBTEDNESS" means, at any time, with respect to any Person,
the Indebtedness of such Person and its consolidated Subsidiaries calculated on
a consolidated basis as of such time.

     "CONSOLIDATED INTEREST EXPENSE" means, with reference to any period, the
interest expense of the Borrower and its consolidated Subsidiaries calculated on
a consolidated basis for such period, in accordance with Agreement Accounting
Principles. Notwithstanding anything to the contrary herein, any premium paid in
connection with the repayment of Indebtedness of the Borrower in connection with
the Transactions and interest on the Trust Securities paid on or prior to
January 1, 2005 shall not be included in Consolidated Interest Expense.

     "CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of the Borrower and its consolidated Subsidiaries calculated on
a consolidated basis for such period in accordance with Agreement Accounting
Principles.

     "CONSOLIDATED NET WORTH" means at any time, with respect to any Person, the
consolidated stockholders' equity of such Person and its consolidated
Subsidiaries, plus minority

                                        6

<PAGE>

interests in Subsidiaries, calculated on a consolidated basis in accordance with
Agreement Accounting Principles.

     "CONSOLIDATED SENIOR FUNDED DEBT" means Indebtedness outstanding under the
Loan Documents and the Senior Secured Notes.

     "CONTINGENT OBLIGATION" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any operating agreement,
take-or-pay contract or the obligations of any such Person as general partner of
a partnership with respect to the liabilities of the partnership (except to the
extent expressly without recourse to such Person).

     "CONTINUING DIRECTOR" means, with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (i) was a
member of such board of directors on the Closing Date, or (ii) was nominated for
election or elected to such board of directors with the approval of the required
majority of the Continuing Directors who were members of such board at the time
of such nomination or election.

     "CONTROLLED GROUP" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.

     "CONVERSION/CONTINUATION NOTICE" is defined in Section 2.9.

     "CREDIT EXTENSION" means the making of an Advance or the issuance of a
Facility LC hereunder.

     "CREDIT EXTENSION DATE" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.

     "CREDIT PARTY" means, at any time, any of the Borrower and any Person which
is a Guarantor at such time; provided, however, that neither VNF nor Chemed
Capital Trust shall be deemed a Credit Party.

     "DEEMED DIVIDEND PROBLEM" means, with respect to any Foreign Subsidiary,
such Foreign Subsidiary's accumulated and undistributed earnings and profits
being deemed to be repatriated to the Borrower or the applicable parent Domestic
Subsidiary for U.S. federal income tax purposes and the effect of such
repatriation causing adverse tax consequences to the Borrower or such parent
Domestic Subsidiary, in each case as determined by the Borrower in its
commercially reasonable judgment acting in good faith and, if applicable, in
consultation with its legal and tax advisors.

     "DISQUALIFIED STOCK" means any capital stock or other equity interest that,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), matures

                                        7

<PAGE>

or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder thereof, in whole or in
part, on or prior to the date that is 91 days after the later of the (i) the
Revolving Loan Termination Date and (ii) the Term Loan Maturity Date.

     "DIVIDEND COVERAGE AMOUNT" means, for the fourth fiscal quarter of any
fiscal year of the Borrower, an amount equal to $1,250,000 plus such amount as
is required to cause the aggregate principal amount of Term Loan payments made
or required to be made during such fiscal year to equal or exceed the aggregate
amount of cash dividends paid by the Borrower to the holders of its common stock
during such fiscal year.

     "DOLLAR", "dollar" and "$" means the lawful currency of the United States
of America.

     "DOMESTIC SUBSIDIARY" means any Subsidiary of any Person organized under
the laws of a jurisdiction located in the United States of America.

     "ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, injunctions, permits, and legally enforceable governmental
concessions, grants, franchises, licenses, agreements and other governmental
restrictions relating to (i) the protection of the environment, (ii) emissions,
discharges or releases of pollutants, contaminants, hazardous substances or
wastes into surface water, ground water or land, or (iii) the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, hazardous substances or wastes or the
clean-up or other remediation thereof.

     "EQUIPMENT" means all of the Borrower's and each Subsidiary's present and
future (i) equipment, including, without limitation, machinery, manufacturing,
distribution, data processing and office equipment, assembly systems, tools,
molds, dies, fixtures, appliances, furniture, furnishings, vehicles, vessels,
aircraft, aircraft engines, and trade fixtures, (ii) other tangible personal
property (other than inventory), and (iii) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection therewith,
and any substitutions therefor and replacements, products and proceeds thereof.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rules or regulations promulgated thereunder.

     "EURODOLLAR ADVANCE" means an Advance which, except as otherwise provided
in Section 2.11, bears interest at the applicable Eurodollar Rate.

     "EURODOLLAR BASE RATE" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers' Association LIBOR rate
for deposits in Dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, if no such British Bankers' Association LIBOR
rate is available to the Administrative Agent, the applicable Eurodollar Base
Rate for the relevant Interest Period shall instead be the rate determined by
the Administrative Agent to be the rate at which Bank One or one of its
affiliate banks offers to place deposits in Dollars with first-class banks in
the London interbank market at approximately 11:00 a.m. (London time) two (2)

                                        8

<PAGE>

Business Days prior to the first day of such Interest Period, in the approximate
amount of Bank One's relevant Eurodollar Loan and having a maturity equal to
such Interest Period.

     "EURODOLLAR LOAN" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.

     "EURODOLLAR RATE" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin then in effect, changing as and when the Applicable
Margin changes.

     "EVENT OF DEFAULT" means an event described in Article VII.

     "EVENT OF LOSS" means, with respect to any Property, any of the following:
(i) any loss, destruction or damage of such Property or (ii) any condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise, of
such Property, or confiscation of such Property or the requisition of the use of
such Property by any Governmental Authority.

     "EXCESS CASH FLOW" means, for any Cash Flow Period, an amount, determined
without duplication for any items or components thereof, equal to the Borrower's
Consolidated EBITDA plus the sum of (i) the amount, if any, by which Net Working
Capital decreased during such Cash Flow Period plus (ii) the net amount, if any,
by which the consolidated deferred revenues of the Borrower and its consolidated
Subsidiaries increased during such Cash Flow Period minus income taxes paid in
cash during such period minus Capital Expenditures permitted under this
Agreement that are paid in cash during such period minus Interest Expense for
such period minus repaid and prepaid principal payments in respect of
Indebtedness (including Indebtedness in respect of Revolving Loans to the extent
accompanied by a permanent reduction in Revolving Loan Commitments) owing by the
Borrower and its Subsidiaries during such period other than pursuant to Section
2.7 minus the cash portion of the Purchase Price paid in connection with any
Permitted Acquisition during such Cash Flow Period and minus the sum of (i) any
non-cash gains included in determining such consolidated net income (or loss)
for such Cash Flow Period plus (ii) the amount, if any by which Net Working
Capital increased during such fiscal year plus (iii) the net amount, if any, by
which the consolidated deferred revenues of the Borrower and its consolidated
Subsidiaries decreased during such fiscal year.

     "EXCLUDED TAXES" means, in the case of each Lender or applicable Lending
Installation and the Administrative Agent, (i) taxes imposed on its overall net
income, and franchise taxes imposed on it, by (a) the jurisdiction under the
laws of which such Lender or the Administrative Agent is incorporated or
organized or any political combination or subdivision or taxing authority
thereof or (b) the jurisdiction in which the Administrative Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation or office making or booking a Loan or Facility LC is located, (ii)
any branch profits taxes imposed by the United States of America or any similar
tax imposed by any other jurisdiction in which the Borrower is located and (iii)
in the case of a Non U.S. Lender (as defined in Section 3.5), any withholding
tax that is imposed on amounts payable to such Non U.S. Lender at the time such
Non U.S. Lender becomes a party to this Agreement (or designates a new lending
office).

                                        9

<PAGE>

     "EXHIBIT" refers to an exhibit to this Agreement, unless another document
is specifically referenced.

     "EXISTING CREDIT AGREEMENTS" means (i) that certain Credit Agreement dated
as of December 24, 2001 by and between the Borrower (formerly known as Chemed
Corporation) and Bank One, NA, as the same has been amended or supplemented
prior to the Closing Date, and (ii) that certain Amended and Restated Credit
Agreement dated as of August 6, 2003 by and among Vitas Hospice Services,
L.L.C., the Target, the institutions party thereto as lenders and BNP Paribas as
the Agent, as the same has been amended or supplemented prior to the Closing
Date.

     "EXISTING LETTERS OF CREDIT" means those Letters of Credit identified in
Schedule 2.20.

     "FACILITY LC" is defined in Section 2.20.1.

     "FACILITY LC APPLICATION" is defined in Section 2.20.3.

     "FACILITY LC COLLATERAL ACCOUNT" is defined in Section 2.20.11.

     "FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m.
(Chicago, Illinois time) on such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent in its sole discretion.

     "FINANCIAL CONTRACT" of a Person means (i) any exchange-traded or over-
the-counter future, forward, swap or option contract or other financial
instrument with similar characteristics or (ii) any Rate Management Transaction.

     "FINANCIAL ASSISTANCE PROBLEM" means, with respect to any Foreign
Subsidiary, the inability of such Foreign Subsidiary to become a Subsidiary
Guarantor or to permit its assets from being pledged pursuant to a pledge or
security agreement on account of legal or financial limitations imposed by the
jurisdiction of organization of such Foreign Subsidiary or other relevant
jurisdictions having authority over such Foreign Subsidiary, in each case as
determined by the Borrower in its commercially reasonable judgment acting in
good faith and in consultation with its legal and tax advisors.

     "FINANCING" means, with respect to any Person, (i) the issuance or sale by
such Person of any equity interests in such Person, or (ii) the issuance or sale
by such Person of any Indebtedness other than Indebtedness permitted under
Section 6.14; provided, however, that the foregoing clause (ii) shall not permit
the incurrence by the Borrower or any Subsidiary of any Indebtedness if such
incurrence is not otherwise permitted by Section 6.14.

     "FIRREA" means the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended, modified or supplemented from time to time.

                                       10

<PAGE>

     "FIRST TIER FOREIGN SUBSIDIARY" means each Foreign Subsidiary with respect
to which any one or more of the Borrower and its Domestic Subsidiaries directly
owns more than 50% of such Foreign Subsidiary's issued and outstanding ordinary
equity interests.

     "FLOATING RATE" means, for any day, a rate per annum equal to the sum of
(i) the Alternate Base Rate for such day, changing when and as the Alternate
Base Rate changes plus (ii) the Applicable Margin then in effect, changing as
and when the Applicable Margin changes.

     "FLOATING RATE ADVANCE" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.

     "FLOATING RATE LOAN" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the Floating Rate.

     "FOREIGN SUBSIDIARY" means any Subsidiary of any Person which is not a
Domestic Subsidiary of such Person.

     "FUND" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

     "GOVERNMENTAL AUTHORITY" means any nation or government, any foreign,
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

     "GOVERNMENTAL RECEIVABLES" means, collectively, any and all Receivables
which are (a) Medicare Receivables, (b) Medicaid Receivables, (c) CHAMPVA
Receivables, (d) TRICARE Receivables, or (e) any other Receivables payable by a
Governmental Authority approved by the Administrative Agent.

     "GUARANTOR" means each Subsidiary (other than VNF and Chemed Capital Trust)
of the Borrower which is a party to the Guaranty Agreement, including each
Subsidiary of the Borrower which becomes a party to the Guaranty Agreement
pursuant to a joinder or other supplement thereto.

     "GUARANTY AGREEMENT" means the Guaranty Agreement, dated as of the Closing
Date, made by the Guarantors in favor of the Administrative Agent for the
benefit of the Holders of Secured Obligations, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

     "HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
Obligations from time to time and shall refer to (i) each Lender in respect of
its Loans, (ii) the LC Issuer in respect of Reimbursement Obligations, (iii) the
Administrative Agent, the Lenders and the LC Issuer in respect of all other
present and future obligations and liabilities of the Borrower or any of its
Domestic Subsidiaries of every type and description arising under or in
connection with this Agreement or any other Loan Document, (iv) each Lender (or
affiliate thereof), in respect of all Rate Management Obligations of the
Borrower to such Lender (or such affiliate) as exchange party or counterparty
under any Rate Management Transaction, unless the Borrower and such

                                       11

<PAGE>

Lender mutually agree that such Rate Management Obligations do not constitute
Secured Obligations, (v) each Person benefiting from indemnities made by the
Borrower or any Subsidiary hereunder or in any Loan Document in respect of the
obligations and liabilities of the Borrower or such Subsidiary to such Person,
and (vi) their respective permitted successors, transferees and assigns.

     "INDEBTEDNESS" of a Person means, at any time, without duplication, such
Person's (i) obligations for borrowed money, (ii) obligations representing the
deferred purchase price of Property or services (other than current accounts
payable arising in the ordinary course of such Person's business), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, bonds, debentures,
acceptances, or other similar instruments, (v) obligations to purchase
securities or other Property arising out of or in connection with the sale of
the same or substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) Contingent Obligations of such Person in respect of
Indebtedness, (viii) reimbursement obligations under Letters of Credit, bankers'
acceptances, surety bonds and similar instruments, (ix) for purposes of Section
6.14 only, Net Mark-to-Market Exposure under Rate Management Transactions and
other Financial Contracts, and (x) any other obligation for borrowed money which
in accordance with Agreement Accounting Principles would be classified as
indebtedness on the consolidated balance sheet of such Person.

     "INTELLECTUAL PROPERTY SECURITY AGREEMENTS" means the intellectual property
security agreements as any Credit Party may from time to time make in favor of
the Collateral Agent for the benefit of the Holders of Secured Obligations and
the other creditors of the Borrower subject to the Intercreditor Agreement, in
each case as the same may be amended, restated, supplemented or otherwise
modified from time to time.

     "INTERCREDITOR AGREEMENT" means the Collateral Sharing Agreement, dated as
of February 24, 2004, substantially similar in form and substance to Exhibit H
hereto, by and among the Administrative Agent on behalf of the Lenders, Wells
Fargo Bank, National Association, as Trustee on behalf of the holders of the
Senior Secured Notes, the Collateral Agent, and the Borrower, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

     "INTEREST PERIOD" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months, or, to the extent available as determined by the
Administrative Agent in its reasonable judgment, nine or twelve months,
commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on but exclude the day which
corresponds numerically to such date one, two, three, six, or, if applicable,
nine or twelve months thereafter, provided, however, that if there is no such
numerically corresponding day in such next, second, third, sixth or, if
applicable, ninth or twelfth succeeding month, such Interest Period shall end on
the last Business Day of such next, second, third, sixth or, if applicable,
ninth or twelfth succeeding month. If an Interest Period would otherwise end on
a day which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.

                                       12

<PAGE>

     "INVESTMENT" of a Person means any loan, advance (other than commission,
travel, relocation and other loans and advances to officers or employees made in
the ordinary course of business), extension of credit (other than Receivables
arising in the ordinary course of business) or contribution of capital by such
Person; stocks, bonds, mutual funds, partnership interests, notes, debentures or
other securities owned by such Person; any deposit accounts and certificate of
deposit owned by such Person; and structured notes, derivative financial
instruments and other similar instruments or contracts owned by such Person.

     "LC FEE" is defined in Section 2.20.4.

     "LC ISSUER" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.

     "LC OBLIGATIONS" means, at any time, the sum, without duplication, of (i)
the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations. No amount owing under a Letter of Credit issued under the Existing
Credit Agreements that is not an Existing Letter of Credit and that is cash
collateralized or supported by a back-to-back Letter of Credit in accordance
with the terms of this Agreement shall constitute an LC Obligation.

     "LC PAYMENT DATE" is defined in Section 2.20.5.

     "LENDERS" means the lending institutions listed on the signature pages of
this Agreement and their respective permitted successors and assigns. Unless
otherwise specified, the term "Lenders" includes the Swing Line Lender and the
LC Issuer.

     "LENDING INSTALLATION" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent listed on the signature pages hereof or on the
administrative information sheets provided to the Administrative Agent in
connection herewith or on a Schedule or otherwise selected by such Lender or the
Administrative Agent pursuant to Section 2.17.

     "LETTER OF CREDIT" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.

     "LEVERAGE RATIO" has the meaning set forth in Section 6.20.1.

     "LIEN" means any lien (statutory or other), security interest, mortgage,
pledge, hypothecation, assignment, deposit arrangement, or encumbrance of any
kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement, and, in the case of stock agreements, any purchase option,
call or similar right of a Person with respect to such stock).

     "LOAN" means, with respect to a Lender, such Lender's loan made pursuant to
Article II (or any conversion or continuation thereof), whether constituting a
Term Loan, Revolving Loan or a Swing Line Loan.

                                       13

<PAGE>

     "LOAN DOCUMENTS" means this Agreement, the Facility LC Applications, the
Intercreditor Agreement, the Collateral Documents, the Guaranty Agreement and
all other documents, instruments, notes (including any Notes issued pursuant to
Section 2.13 (if requested)) and agreements executed in connection herewith or
therewith or contemplated hereby or thereby, as the same may be amended,
restated or otherwise modified and in effect from time to time.

     "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, condition (financial or otherwise), operations, performance or
Property of the Borrower and its Subsidiaries taken as a whole, (ii) the ability
of the Borrower or any Subsidiary to perform its material obligations under the
Loan Documents, or (iii) the validity or enforceability of the Loan Documents or
the rights or remedies of the Administrative Agent, the Collateral Agent, the LC
Issuer or the Lenders thereunder or their rights with respect to the Collateral.

     "MATERIAL INDEBTEDNESS" means any Indebtedness in an outstanding principal
amount of $10,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than Dollars).

     "MATERIAL INDEBTEDNESS AGREEMENT" means any agreement under which any
Material Indebtedness is outstanding or is governed.

     "MEDICAID" shall mean, collectively, the health care assistance program
established by Title XIX of the Social Security Act (42 U.S.C.
{section}{section} 1396 et seq.) and any statutes succeeding thereto, and all
laws, rules, regulations, manuals, orders, guidelines or requirements pertaining
to such program including (a) all federal statutes (whether set forth in Title
XIX of the Social Security Act or elsewhere) affecting such program; (b) all
state statutes and plans for medical assistance enacted in connection with such
program and federal rules and regulations promulgated in connection with such
program; and (c) all applicable provisions of all rules, regulations, manuals,
orders and administrative reimbursement guidelines and requirements of all
government authorities promulgated in connection with such program (whether or
not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.

     "MEDICAID RECEIVABLE" shall mean a Receivable payable pursuant to the
Medicaid program.

     "MEDICARE" shall mean, collectively, the health insurance program for the
aged and disabled established by Title XVIII of the Social Security Act (42
U.S.C. {section}{section} 1395 et seq.) and any statutes succeeding thereto, and
all laws, rules, regulations, manuals, orders or guidelines pertaining to such
program including (a) all federal statutes (whether set forth in Title XVIII of
the Social Security Act or elsewhere) affecting such program; and (b) all
applicable provisions of all rules, regulations, manuals, orders and
administrative reimbursement guidelines and requirements of all governmental
authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.

     "MEDICARE RECEIVABLE" shall mean a Receivable payable pursuant to the
Medicare program.

                                       14

<PAGE>

     "MODIFY" and "MODIFICATION" are defined in Section 2.20.1.

     "MOODY'S" means Moody's Investors Services, Inc. and any successor thereto.

     "MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, which is covered by Title IV of ERISA and to which the
Borrower or any member of the Controlled Group is obligated to make
contributions.

     "NET CASH PROCEEDS" means, (1) with respect to any Asset Sale or any
Financing by any Person, (a) cash (freely convertible into Dollars) received by
such Person from such Asset Sale (including cash received as consideration for
the assumption or incurrence of liabilities incurred in connection with or in
anticipation of such Asset Sale) or such Financing, after (i) provision for all
income or other taxes measured by or resulting from such sale of Property
(including reasonably estimated taxes), and the amount of any reserves
established by such Person to fund contingent liabilities reasonably estimated
to be payable that are directly attributable to such Asset Sale or Financing (as
determined reasonably and in good faith by the chief financial officer of such
Person), (ii) payment of all reasonable brokerage commissions or discounts and
other fees and expenses related to such Asset Sale or Financing, (iii) all
amounts used to repay, redeem or repurchase Indebtedness secured by a Lien on
any asset disposed of, sold, leased, conveyed or otherwise transferred in such
Asset Sale or which is or may be required (by the express terms of the
instrument governing such Indebtedness) to be repaid, redeemed or repurchased in
connection with such Asset Sale (including payments made to obtain or avoid the
need for the consent of any holder of such Indebtedness) or Financing and (2)
with respect to an Event of Loss of a Person, cash (freely convertible in
Dollars) received by or for such Person's account, net of (i) reasonable costs
or expenses incurred in connection with such Event of Loss, including those
costs and expenses incurred in investigating or recovering such cash and
reasonable reserves associated therewith in accordance with Agreement Accounting
Principles, (ii) amounts required to repay, redeem or repurchase any
Indebtedness or statutory or other obligations secured by any Lien on the
property (or portion thereof) so damaged or taken (other than the Secured
Obligations) or which is required to be and is repaid, redeemed or repurchased
in connection with such Event of Loss, and (iii) provision for all income or
other taxes measured by or resulting from such Event of Loss (including
reasonably estimated taxes), and the amount of any reserves established by such
Person to fund contingent liabilities reasonably estimated to be payable that
are directly attributable to such Event of Loss (as determined reasonably and in
good faith by the chief financial officer of such Person).

     "NET MARK-TO-MARKET EXPOSURE" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions, as determined
by such Person in good faith. "Unrealized losses" means the fair market value of
the cost to such Person of replacing such Rate Management Transaction as of the
date of determination (assuming the Rate Management Transaction were to be
terminated as of that date), and "unrealized profits" means the fair market
value of the gain to such Person of replacing such Rate Management Transaction
as of the date of determination (assuming such Rate Management Transaction were
to be terminated as of that date).

                                       15

<PAGE>

     "NET WORKING CAPITAL" means, at any date, (a) the consolidated current
assets of the Borrower and its consolidated Subsidiaries as of such date
(excluding cash, Cash Equivalent Investments, and Unapplied PIP) minus (b) the
consolidated current liabilities of the Borrower and its consolidated
Subsidiaries as of such date (excluding current liabilities in respect of
Indebtedness and PIP Settlements). Net Working Capital at any date may be a
positive or negative number. Net Working Capital increases when it becomes more
positive or less negative and decreases when it becomes less positive or more
negative.

     "NON-U.S. LENDER" is defined in Section 3.5(iv).

     "NOTE" is defined in Section 2.13.

     "OBLIGATIONS" means all Loans, all Reimbursement Obligations, advances,
debts, liabilities, obligations, covenants and duties owing by the Borrower to
the Administrative Agent, any Lender, the Swing Line Lender, the LC Issuer, the
Arranger, or any indemnitee under the provisions of Section 9.6 or any other
provisions of the Loan Documents, in each case of any kind or nature, present or
future, arising under this Agreement or any other Loan Document, whether or not
evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of credit, loan,
foreign exchange risk, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, attorneys' fees and disbursements (in each case whether or not
allowed), and any other sum chargeable to the Borrower or any of its
Subsidiaries under this Agreement or any other Loan Document.

     "OPERATING LEASE" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.

     "OPERATING LEASE OBLIGATIONS" means, as at any date of determination, the
amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease, by applying a discount rate (which discount
rate shall equal the discount rate which would be applied under Agreement
Accounting Principles if such Operating Lease were a Capitalized Lease) from the
date on which each fixed lease payment is due under such Operating Lease to such
date of determination, of all fixed lease payments due under all Operating
Leases of the Borrower and its Subsidiaries.

     "OTHER TAXES" is defined in Section 3.5(ii).

     "OUTSTANDING REVOLVING CREDIT EXPOSURE" means, as to any Lender at any
time, the sum of (i) the aggregate principal amount of its Revolving Loans
outstanding at such time, plus (ii) an amount equal to its ratable obligation to
purchase participations in the aggregate principal amount of Swing Line Loans
outstanding at such time, plus (iii) an amount equal to its ratable obligation
to purchase participations in the LC Obligations at such time.

     "PARTICIPANTS" is defined in Section 12.2.1.

                                       16

<PAGE>

     "PAYMENT DATE" means the last day of each March, June, September and
December, the Revolving Loan Termination Date and the Term Loan Maturity Date.

     "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

     "PERMITTED ACQUISITION" is defined in Section 6.13.21.

     "PERSON" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

     "PIP" means periodic interim payments (or similar payments) made by any
Governmental Authority to any Credit Party under the Medicare, Medicaid, TRICARE
or CHAMPVA programs or any similar program of any Governmental Authority.

     "PIP SETTLEMENTS" has the meaning ascribed to such term in Section 6.9(ii)
hereof.

     "PLAN" means an employee pension benefit plan, excluding any Multiemployer
Plan, which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code as to which the Borrower or any member
of the Controlled Group may have any liability.

     "PLEDGE AND SECURITY AGREEMENT" means that certain Pledge and Security
Agreement, dated as of the Closing Date, by and between the Credit Parties and
the Collateral Agent for the benefit of the Holders of Secured Obligations and
the other creditors of the Borrower subject to the Intercreditor Agreement, as
the same may be amended, restated, supplemented, or otherwise modified from time
to time.

     "PLEDGE SUBSIDIARY" means each Domestic Subsidiary and, at the option of
the Administrative Agent, each First Tier Foreign Subsidiary.

     "PRICING SCHEDULE" means the Schedule identifying the Applicable Margin and
Applicable Fee Rate attached hereto and identified as such.

     "PRIME RATE" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.

     "PROPERTY" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person.

     "PRO RATA SHARE" means, with respect to any Lender, the percentage obtained
by multiplying 100% by the quotient of (i) the sum of such Lender's Revolving
Loan Commitment and Term Loans at such time divided by (ii) the sum of the
Aggregate Revolving Loan Commitment and the aggregate amount of all of the Term
Loans at such time; provided, however, if all of the Revolving Loan Commitments
and Term Loan Commitments are terminated pursuant to the terms of this
Agreement, then "Pro Rata Share" means the percentage obtained by multiplying
100% by the quotient of (a) the sum of such Lender's Outstanding

                                       17

<PAGE>

Revolving Credit Exposure and outstanding Term Loans at such time divided by (b)
the sum of the Aggregate Outstanding Revolving Credit Exposure and the aggregate
outstanding amount of all Term Loans at such time.

     "PURCHASE PRICE" means the total consideration and other amounts payable in
connection with any Acquisition, including, without limitation, any portion of
the consideration payable in cash, all Indebtedness, liabilities and contingent
obligations incurred or assumed in connection with such Acquisition and all
transaction costs and expenses incurred in connection with such Acquisition, but
exclusive of the value of any capital stock or other equity interests of the
Borrower or any Subsidiary issued as consideration for such Acquisition.

     "PURCHASERS" is defined in Section 12.3.1.

     "RATE MANAGEMENT OBLIGATIONS" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.

     "RATE MANAGEMENT TRANSACTION" means any transaction (including an agreement
with respect thereto) now existing or hereafter entered by the Borrower or a
Subsidiary which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.

     "RECEIVABLE(s)" means and includes all of the Borrower's and each
Subsidiary's presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Borrower or such
Subsidiary to payment for goods sold or leased or for services rendered (except
those evidenced by instruments or chattel paper), whether or not they have been
earned by performance, and all rights in any merchandise or goods which any of
the same may represent, and all rights, title, security and guarantees with
respect to each of the foregoing, including, without limitation, any right of
stoppage in transit.

     "REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

     "REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks

                                       18

<PAGE>

and non-broker lenders for the purpose of purchasing or carrying margin stocks
applicable to member banks of the Federal Reserve System.

     "REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).

     "REIMBURSEMENT OBLIGATIONS" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.20 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.

     "REPORTABLE EVENT" means a reportable event, as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within thirty
(30) days of the occurrence of such event, provided, however, that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section 302
of ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.

     "REPORTS" is defined in Section 9.6.

     "REQUIRED LENDERS" means Lenders in the aggregate having more than 50% of
the sum of the Aggregate Revolving Loan Commitment and the Aggregate Term Loan
Commitment (or, if all of the Revolving Loan Commitments and Term Loan
Commitments are terminated pursuant to the terms of this Agreement, the
Aggregate Outstanding Revolving Credit Exposure and aggregate outstanding
principal amount of Term Loans at such time).

     "REQUIRED MANDATORY PREPAYMENT AMOUNT" means, with respect to any mandatory
prepayment of the Loans made in accordance with Section 2.2(c)(ii), an amount,
based on the then applicable Leverage Ratio, equal to the Net Cash Proceeds
allocable to the Loans in respect of such prepayment times the then applicable
percentage set forth below.

<TABLE>
<CAPTION>

                                        PERCENTAGE OF NET CASH PROCEEDS TO BE APPLIED
       LEVERAGE RATIO                        IN REDUCTION OF OUTSTANDING LOANS
- ----------------------------------      ---------------------------------------------
<S>                                     <C>
    Greater than 3.50 to 1.00                                75%
Less than or equal to 3.50 to 1.00                           50%
</TABLE>

     "RESERVE REQUIREMENT" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
"Eurocurrency liabilities" (as defined in Regulation D) for such Interest
Period.

                                       19

<PAGE>

     "RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct
or indirect, on account of any equity interests of the Borrower or the Target
now or hereafter outstanding, except a dividend payable solely in the Borrower's
or the Target's capital stock (other than Disqualified Stock) or in options,
warrants or other rights to purchase such capital stock, or (ii) any redemption,
retirement, purchase or other acquisition for value, direct or indirect, of any
equity interests of the Borrower or any of its Subsidiaries now or hereafter
outstanding, other than in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary of the Borrower) of
other equity interests of the Borrower (other than Disqualified Stock).

     "REVOLVING LOAN" means, with respect to a Lender, such Lender's loan made
pursuant to its commitment to lend set forth in Section 2.1.1 (and any
conversion or continuation thereof).

     "REVOLVING LOAN COMMITMENT" means, for each Lender, including without
limitation, each LC Issuer, such Lender's obligation to make Revolving Loans to,
and participate in Facility LCs issued upon the application of, the Borrower in
an aggregate amount not exceeding the amount set forth for such Lender on the
Commitment Schedule or in any Assignment Agreement delivered pursuant to Section
12.3, as such amount may be modified from time to time pursuant to the terms
hereof.

     "REVOLVING LOAN PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by multiplying 100% by the quotient of (i) such Lender's
Revolving Loan Commitment at such time divided by (ii) the Aggregate Revolving
Loan Commitment at such time; provided, however, if all of the Revolving Loan
Commitments are terminated pursuant to the terms of this Agreement, then
"Revolving Loan Pro Rata Share" means the percentage obtained by multiplying
100% by the quotient of (a) such Lender's Outstanding Revolving Credit Exposure
at such time divided by (b) the Aggregate Outstanding Revolving Credit Exposure
at such time.

     "REVOLVING LOAN TERMINATION DATE" means the earlier of (a) February 24,
2009, and (b) the date of termination in whole of the Aggregate Revolving Loan
Commitment pursuant to Section 2.2 hereof or the Revolving Loan Commitments
pursuant to Section 8.1 hereof.

     "ROTO-ROOTER STOCK ISSUANCE" means any issuance of equity interests in the
Borrower to non-Affiliates.

     "S&P" means Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.

     "SALE AND LEASEBACK TRANSACTION" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.

     "SCHEDULE" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

     "SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.

                                       20

<PAGE>

     "SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii) all
Rate Management Obligations owing in connection with Rate Management
Transactions to any Lender or any affiliate of any Lender, unless the Borrower
and any such Lender mutually agree that such Rate Management Obligations do not
constitute Secured Obligations.

     "SENIOR SECURED INDENTURE" means the Indenture, dated as of February 24,
2004, in form and substance substantially similar to Exhibit I, by and between
the Borrower and Wells Fargo Bank, National Association as Trustee for the
purchasers of the Senior Secured Notes, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

     "SENIOR SECURED INDENTURE DOCUMENTS" means the Senior Secured Notes, the
Senior Secured Indenture, the "Security Documents" as defined in the Senior
Secured Indenture, the Intercreditor Agreement, the "Intellectual Property
Security Agreements" as defined in the Senior Secured Indenture, and the
agreements, documents, and instruments delivered in connection therewith, as
each of the foregoing may be amended, restated, supplemented or otherwise
modified from time to time.

     "SENIOR SECURED NOTES" means those certain Floating Rate Senior Secured
Notes due 2010, in form and substance substantially similar to Exhibit I, in an
initial aggregate principal amount equal to $110,000,000, issued by the Borrower
pursuant to the Senior Secured Indenture, as such Notes may be amended,
restated, supplemented or otherwise modified from time to time.

     "SENIOR UNSECURED INDENTURE" means the Indenture, dated as of February 24,
2004, in form and substance substantially similar to Exhibit J, by and between
the Borrower and LaSalle Bank National Association, as Trustee for the
purchasers of the Senior Unsecured Notes, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

     "SENIOR UNSECURED INDENTURE DOCUMENTS" means the Senior Unsecured Notes,
the Senior Unsecured Indenture, and the agreements, documents, and instruments
delivered in connection therewith, as each of the foregoing may be amended,
restated, supplemented or otherwise modified from time to time.

     "SENIOR UNSECURED NOTES" means those certain unsecured 8-3/4% Senior
Unsecured Notes due 2011, in form and substance substantially similar to Exhibit
J, in an initial aggregate principal amount equal to $150,000,000, issued by the
Borrower pursuant to the Senior Unsecured Indenture, as such Notes may be
amended, restated, supplemented, or otherwise modified from time to time.

     "SERVICE AMERICA WRITE-DOWN" means the write-down, in accordance with
generally accepted accounting principles in effect on the date of such write-
down, of $15,000,000 of goodwill associated with Service America Network, Inc.

     "SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.

     "SUBORDINATED CHEMED DEBENTURES" means the Convertible Junior Subordinated
Debentures due 2030, issued by the Borrower pursuant to the Indenture, dated as
of February 7,

                                       21

<PAGE>

2000, between the Borrower and Firstar Bank, National Association, as trustee,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.

     "SUBSIDIARY" of a Person means (i) any corporation of which more than 50%
of the outstanding securities having ordinary voting power shall at the time be
owned or controlled, directly or indirectly, by such Person or by one or more of
its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii)
any partnership, limited liability company, association, joint venture or
similar business organization of which more than 50% of the ownership interests
having ordinary voting power shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary" shall mean
a Subsidiary of the Borrower, including, without limitation, the Target.

     "SUBSTANTIAL PORTION" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which represents more than 10% of the
consolidated tangible assets of the Borrower and its Subsidiaries or Property
which is responsible for more than 10% of the consolidated net revenues of the
Borrower and its Subsidiaries, in each case, as would be shown in the
consolidated financial statements of the Borrower and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made (or if financial statements have not been delivered
hereunder for that month which begins the twelve-month period, then the
financial statements delivered hereunder for the quarter ending immediately
prior to that month).

     "SWING LINE BORROWING NOTICE" is defined in Section 2.4.2.

     "SWING LINE COMMITMENT" means the obligation of the Swing Line Lender to
make Swing Line Loans up to a maximum principal amount of $5,000,000 at any one
time outstanding.

     "SWING LINE LENDER" means Bank One.

     "SWING LINE LOAN" means a Loan made available to the Borrower by the Swing
Line Lender pursuant to Section 2.4.

     "TARGET" means Vitas Healthcare Corporation, a Delaware corporation.

     "TARGET ACQUISITION" means the direct or indirect Acquisition of the Target
by the Borrower or a Subsidiary thereof pursuant to the Agreement and Plan of
Merger, dated as of December 18, 2003, by and among the Borrower, the Target and
Marlin Merger Corp., as the same may be amended, restated, supplemented or
otherwise modified from time to time prior to the Closing Date.

     "TARGET SEVERANCE PROGRAM" means the termination or reassignment of
Target's management team upon the effectiveness of the Target Acquisition and
the payments received by the members of such management team as a result of such
termination or reassignment.

     "TARGET STOCK ISSUANCE" means any sale of the Target's equity interests to
non-Affiliates in conjunction with a public offering of such equity interests.

                                       22

<PAGE>

     "TAXES" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.

     "TERM LOAN" and "TERM LOANS" are defined in Section 2.1.2.

     "TERM LOAN COMMITMENT" means, as to each Lender, its obligation to make
Term Loans to the Borrower pursuant to Section 2.1.2 in an aggregate principal
amount set forth for such Lender on the Commitment Schedule.

     "TERM LOAN MATURITY DATE" means February 24, 2009.

     "TERM LOAN PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by multiplying 100% by the quotient of (a) such Lender's
Term Loans at such time divided by (b) the aggregate amount of all of the Term
Loans at such time.

     "THIRD PARTY PAYOR" shall mean any Governmental Authority, insurance
company, health maintenance organization, preferred provider organization or
similar entity that is obligated to make payments with respect to a Receivable.

     "TRANSACTIONS" means, collectively, the following transactions, which shall
be consummated on or about the Closing Date: (i) the consummation of the Target
Acquisition, (ii) the repayment of approximately $74,400,000 of existing
Indebtedness of the Target, plus accrued interest thereon, (iii) the repayment
of approximately $30,400,000 of existing Indebtedness of the Borrower (including
a $4,000,000 make whole premium), plus accrued interest thereon, (iv) the
assignment of the Westbrook Agreement by the Borrower to the Target, the payment
of $25,000,000 by the Target to Hugh Westbrook pursuant to the Westbrook
Agreement and the performance of the other obligations under the Westbrook
Agreement, (v) the consummation of the offering and sale of the Senior Secured
Notes, the Senior Unsecured Notes and the capital stock of the Borrower and the
execution and delivery of notes, indentures and other agreements in connection
therewith, (vi) the Company and certain of its Subsidiaries entering into the
this Agreement and the other Loan Documents and the borrowing on the Closing
Date of $75,000,000 hereunder (vii) the issuance or deemed issuance of Facility
LCs under this Agreement to replace or backstop, or the cash collateralization
of, Letters of Credit issued to the account of the Borrower or any of its
Subsidiaries or the Target or any of its Subsidiaries, (viii) the cancellation
of a warrant held by the Borrower for shares of the stock of the Target and (ix)
the payment of fees and expenses in connection with the foregoing.

     "TRANSFEREE" is defined in Section 12.4.

     "TRICARE" means, collectively, a program of medical benefits covering
former and active members of the uniformed services and certain of their
dependents, financed and administered by the United States Departments of
Defense, Health and Human Services and Transportation, which program was
formerly known as the Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS), and all laws, rules, regulations, manuals, orders and
administrative, reimbursement and other guidelines of all governmental
authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.

                                       23

<PAGE>

     "TRICARE Receivable" means a Receivable payable pursuant to the TRICARE
program.

     "TRUST SECURITIES" means the Chemed Preferred Securities, the Subordinated
Chemed Debentures, and the guarantee by the Borrower to the holders of the
Chemed Preferred Securities of amounts payable thereunder.

     "TYPE" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance and with respect to any Loan, its nature as a
Floating Rate Loan or a Eurodollar Loan.

     "UNAPPLIED PIP" has the meaning ascribed to such term in Section 6.9(ii).

     "UNFUNDED LIABILITIES" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under each Single Employer Plan
exceeds the fair market value of all such Plan's assets allocable to such
benefits, all determined as of the then most recent valuation date for such Plan
for which a valuation report is available, using actuarial assumptions for
funding purposes as set forth in such report.

     "UNMATURED EVENT OF DEFAULT" means an event which but for the lapse of time
or the giving of notice, or both, would constitute an Event of Default.

     "VNF" means Vitas of North Florida, Inc., a Florida not-for-profit
corporation and a Wholly-Owned Subsidiary of the Target.

     "WESTBROOK AGREEMENT" means the Non-Compete and Consulting Agreement dated
as of December 18, 2003 between the Borrower and Hugh Westbrook.

     "WHOLLY-OWNED SUBSIDIARY" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which (other than directors' qualifying shares
or shares issued to third parties to the extent necessary to satisfy any
licensing requirements under applicable law with respect to the Borrower's or
any of its Subsidiaries' businesses) shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which (other than directors' qualifying shares
or shares issued to third parties to the extent necessary to satisfy any
licensing requirements under applicable law with respect to the Borrower's or
any of its Subsidiaries' businesses) shall at the time be so owned or
controlled.

     1.2. PLURAL FORMS. The foregoing definitions shall be equally applicable to
both the singular and plural forms of the defined terms.

                                       24

<PAGE>

                                   ARTICLE II

                                   THE CREDITS

     2.1. REVOLVING LOAN COMMITMENTS AND TERM LOAN COMMITMENTS.

     2.1.1 REVOLVING LOANS. From and including the Closing Date and prior to the
Revolving Loan Termination Date, upon the satisfaction of the conditions
precedent set forth in Section 4.1 and 4.2, as applicable, each Lender severally
and not jointly agrees, on the terms and conditions set forth in this Agreement,
to (i) make Revolving Loans to the Borrower from time to time and (ii)
participate in Facility LCs issued upon the request of the Borrower, in each
case in an amount not to exceed in the aggregate at any one time outstanding of
its Revolving Loan Pro Rata Share of the excess of the Aggregate Revolving Loan
Commitment over the Aggregate Outstanding Revolving Credit Exposure; provided
that at no time shall the Aggregate Outstanding Revolving Credit Exposure
hereunder exceed the Aggregate Revolving Loan Commitment. Subject to the terms
of this Agreement, the Borrower may borrow, repay and reborrow Revolving Loans
at any time prior to the Revolving Loan Termination Date. The commitment of each
Lender to lend hereunder shall automatically expire on the Revolving Loan
Termination Date. The LC Issuer will issue Facility LCs hereunder on the terms
and conditions set forth in Section 2.20.

          2.1.2 TERM LOANS. Each Lender severally and not jointly agrees to make
     a term loan, in Dollars, to the Borrower on the Closing Date in an amount
     equal to such Lender's Term Loan Commitment (each such loan being referred
     to herein individually as a "Term Loan" and collectively as the "Term
     Loans"). The unpaid principal balance of the Term Loans shall be repaid in
     twenty (20) consecutive quarterly principal installments, payable on the
     last Business Day of each fiscal quarter of the Borrower, commencing on
     June 30, 2004, and continuing thereafter until the Term Loan Maturity Date,
     and the Term Loans shall be permanently reduced by the amount of each
     installment on the date payment thereof is made hereunder. Each such
     installment, other than the installment due on the last Business Day of the
     fourth fiscal quarter of each fiscal year, shall be in an amount equal to
     $1,250,000. The Term Loan installment due on the last Business Day of the
     fourth fiscal quarter of each fiscal year shall be in an amount equal to
     the Dividend Coverage Amount. Notwithstanding the foregoing, the final
     installment for the Term Loans shall be in the amount of the then
     outstanding principal balance of the Term Loans. In addition,
     notwithstanding the immediately preceding sentence, the then outstanding
     principal balance of the Term Loans, if any, shall be due and payable on
     the Term Loan Maturity Date. No installment of any Term Loan shall be
     reborrowed once repaid. In addition to the scheduled payments on the Term
     Loans, the Borrower (a) may make the voluntary prepayments described in
     Section 2.7 for credit against the scheduled payments on the Term Loans
     pursuant to Section 2.7 and (b) shall make the mandatory prepayments
     prescribed in Section 2.2 for credit against the scheduled payments on the
     Term Loans pursuant to Section 2.2.

     2.2. REQUIRED PAYMENTS; TERMINATION. (a) Any outstanding Revolving Loans
shall be paid in full by the Borrower on the Revolving Loan Termination Date,
any outstanding Term

                                       25

<PAGE>

Loans shall be paid in full by the Borrower on the Term Loan Maturity Date, and
all other due and unpaid Secured Obligations shall be paid in full by the
Borrower on the later of the date when due or the Revolving Loan Termination
Date and the Term Loan Maturity Date, as applicable. In addition, if at any time
the Aggregate Outstanding Revolving Credit Exposure hereunder exceeds the
Aggregate Revolving Loan Commitment, the Borrower shall promptly repay
outstanding Revolving Loans and Swing Line Loans (or, if no Revolving Loans or
Swing Line Loans are outstanding, cash collateralize the outstanding LC
Obligations by depositing funds in the Facility LC Collateral Account in
accordance with Section 2.20.11) in an aggregate amount equal to the excess of
the Aggregate Outstanding Revolving Credit Exposure over the Aggregate Revolving
Loan Commitment. Notwithstanding the termination of the Revolving Loan
Commitments under this Agreement on the Revolving Loan Termination Date, until
all of the Obligations (other than obligations to pay fees and expenses with
respect to which the Borrower has not received an invoice and contingent
indemnity obligations) shall have been fully paid and satisfied, all of the
rights and remedies under this Agreement and the other Loan Documents shall
survive to the extent provided herein.

     (b) ASSET SALES AND CASUALTY EVENTS. Upon (1) the consummation of any Asset
Sale (including sales of equity interests in the Borrower's Subsidiaries (other
than a Target Stock Issuance), but excluding sales, dispositions or transfers
permitted under Sections 6.12.1, 6.12.2, or 6.12.3), by the Borrower or any
Subsidiary or (2) the Borrower or any Subsidiary suffering an Event of Loss, in
each case within five (5) Business Days after the Borrower's or any of its
Subsidiaries' receipt of any Net Cash Proceeds (or conversion to cash of
non-cash proceeds (whether principal or interest and including securities and
release of escrow arrangements)) received from any such Asset Sale or Event of
Loss, the Borrower shall do one or more of the following, at its option: (x)
redeem or make an offer to repurchase Indebtedness outstanding under the Senior
Secured Indenture Documents or Indebtedness outstanding under the Senior
Unsecured Indenture Documents and (y) make a mandatory prepayment of Loans
outstanding hereunder (with prepayments of Loans hereunder being first applied
to reduce outstanding Term Loans, then applied to reduce outstanding Revolving
Loans, if any, and otherwise applied in accordance with Section 2.2(e)), in an
amount equal to one hundred percent (100%) of such Net Cash Proceeds; provided,
however, that the amount of such Net Cash Proceeds applied pursuant to clause
(y) shall be at least equal to, but may be greater than, the lesser of (A) the
aggregate outstanding Term Loans and (B) the ratable portion of such Net Cash
Proceeds so applied pursuant to clauses (x) and (y) that is allocable to the
Term Loans based upon Indebtedness outstanding under the Senior Secured
Indenture Documents, Indebtedness outstanding under the Senior Unsecured
Indenture Documents, and the principal amount of the Term Loans outstanding on
the date of such prepayment. To the extent that an offer to repurchase
Indebtedness outstanding under the Senior Secured Indenture Documents or the
Senior Unsecured Indenture Documents is rejected, the Borrower shall not then be
required to use such Net Cash Proceeds to prepay the Loans. Notwithstanding the
foregoing, Net Cash Proceeds of Asset Sales or Events of Loss, with respect to
which the Borrower shall have given the Administrative Agent written notice of
its intention to repair or replace the Property subject to any such Asset Sale
or Event of Loss or invest such Net Cash Proceeds in the purchase of assets
(other than securities, unless those securities represent equity interests in an
entity that becomes a Guarantor) to be used by one or more of the Borrower or
the Guarantors in their businesses within one year following such Event of Loss,
shall not be subject to the provisions of

                                       26

<PAGE>

the first sentence of this Section 2.2(b) unless and to the extent that such
applicable period shall have expired without such repair, replacement or
investment having been made.

     (c) FINANCINGS.

     (i) INDEBTEDNESS FINANCINGS. Upon the consummation of any Financing
constituting an issuance of Indebtedness by the Borrower or any Subsidiary of
the Borrower, within three (3) Business Days after the Borrower's or any of its
Subsidiaries' receipt of any Net Cash Proceeds, the Borrower shall do one or
more of the following at its option: (x) redeem or make an offer to repurchase
Indebtedness outstanding under the Senior Secured Indenture Documents or
Indebtedness outstanding under the Senior Unsecured Indenture Documents and (y)
make a mandatory prepayment of Loans outstanding hereunder (with prepayments of
Loans hereunder being first applied to reduce outstanding Term Loans, then
applied to reduce outstanding Revolving Loans, if any, and otherwise applied in
accordance with Section 2.2(e)), in an amount equal to one hundred percent
(100%) of such Net Cash Proceeds; provided, however, that the amount of such Net
Cash Proceeds applied pursuant to clause (y) shall be at least equal to, but may
be greater than, the lesser of (A) the aggregate outstanding Term Loans and (B)
the ratable portion of such Net Cash Proceeds so applied pursuant to clauses (x)
and (y) that is allocable to the Term Loans based upon Indebtedness outstanding
under the Senior Secured Indenture Documents, Indebtedness outstanding under the
Senior Unsecured Indenture Documents, and the principal amount of the Term Loans
outstanding on the date of such prepayment. To the extent that an offer to
repurchase Indebtedness outstanding under the Senior Secured Indenture Documents
or the Senior Unsecured Indenture Documents is rejected, the Borrower shall not
then be required to use such Net Cash Proceeds to prepay the Loans.

     (ii) FINANCINGS CONSTITUTING ROTO-ROOTER STOCK ISSUANCES OR TARGET STOCK
ISSUANCES. Upon the consummation of a Roto-Rooter Stock Issuance or a Target
Stock Issuance, within three (3) Business Days after the Borrower's or any of
its Subsidiaries' receipt of any Net Cash Proceeds, the Borrower shall do one or
more of the following: (x) redeem or make an offer to repurchase Indebtedness
outstanding under the Senior Secured Indenture Documents or Indebtedness
outstanding under the Senior Unsecured Indenture Documents and (y) make a
mandatory prepayment of Loans outstanding hereunder (with prepayments of Loans
hereunder being first applied to reduce outstanding Term Loans, then applied to
reduce outstanding Revolving Loans, if any, and otherwise applied in accordance
with Section 2.2(e)), in an amount equal to the Required Mandatory Prepayment
Amount; provided, however, that the Required Mandatory Prepayment Amount payable
under clause (y) shall be at least equal to, but may be greater than, the lesser
of, after giving effect to the percentage of total Net Cash Proceeds used to
determine the Required Mandatory Prepayment Amount, (A) the aggregate
outstanding Term Loans and (B) the ratable portion of such Net Cash Proceeds so
applied pursuant to clauses (x) and (y) that is allocable to the Term Loans
based upon Indebtedness outstanding under the Senior Secured Indenture
Documents, Indebtedness outstanding under the Senior Unsecured Indenture
Documents, and the principal amount of the Term Loans outstanding on the date of
such prepayment. To the extent that an offer to repurchase Indebtedness
outstanding under the Senior Secured Indenture Documents or the Senior Unsecured
Indenture Documents is rejected, the Borrower shall not then be required to use
such Net Cash Proceeds to prepay the Loans.

                                       27

<PAGE>

     (d) EXCESS CASH FLOW. Within 90 days after the end of each Cash Flow Period
that occurs while Term Loans are outstanding, the Borrower shall calculate
Excess Cash Flow for such Cash Flow Period and shall make a mandatory prepayment
of the Term Loans, payable not later than 90 days after the end of such Cash
Flow Period, in an amount equal to the excess of (i) fifty percent (50%) of such
Excess Cash Flow over (ii) prepayments of Term Loans pursuant to Section 2.7
that were made during such Cash Flow Period. Each such prepayment shall be
subject to the provisions governing the application of payments set forth in
Section 2.2(e)

     (e) APPLICATION OF DESIGNATED PREPAYMENTS. Each mandatory prepayment
required by clauses (b) and (c) (in each case to the extent payable with respect
to the Term Loans), and (d) of this Section 2.2 shall be referred to herein as a
"Designated Prepayment." Designated Prepayments shall be applied to reduce the
subsequent scheduled repayments of Term Loans ratably. Designated Prepayments of
Term Loans shall first be applied to Floating Rate Loans and to any Eurodollar
Rate Loans maturing on such date and then to subsequently maturing Eurodollar
Rate Loans in order of maturity. Notwithstanding the foregoing, so long as no
Event of Default has occurred and is then continuing and at the Borrower's
option, the Administrative Agent shall hold all Designated Prepayments to be
applied to Eurodollar Rate Loans in escrow for the benefit of the Lenders and
shall release such amounts upon the expiration of the Interest Periods
applicable to any such Eurodollar Rate Loans being prepaid (it being understood
and agreed that interest shall continue to accrue on the Obligations until such
time as such prepayments are released from escrow and applied to reduce the
Obligations); provided, however, that upon the occurrence and continuance of an
Event of Default, such escrowed amounts may be applied to Eurodollar Rate Loans
without regard to the expiration of any Interest Period and the Borrower shall
make all payments under Section 3.4 resulting therefrom. No mandatory prepayment
made pursuant to clause (b) or (c) of this Section 2.2 shall result in a
corresponding reduction of the Revolving Loan Commitments unless so requested by
the Borrower or required on the date of such mandatory prepayment by the
Required Lenders.

     2.3. RATABLE LOANS; TYPES OF ADVANCES. (a) Each Advance hereunder (other
than a Swing Line Loan) shall consist of Loans made from the several Lenders.
Such Loans shall be made ratably in proportion to their respective Revolving
Loan Pro Rata Shares or Term Loan Pro Rata Shares, as applicable.

     (b) The Advances may be Floating Rate Advances or Eurodollar Advances, or a
combination thereof, selected by the Borrower in accordance with Sections 2.8
and 2.9, or Swing Line Loans selected by the Borrower in accordance with Section
2.4.

     2.4. SWING LINE LOANS.

          2.4.1 AMOUNT OF SWING LINE LOANS. Upon the satisfaction of the
     conditions precedent set forth in Section 4.2 and, if such Swing Line Loan
     is to be made on the date of the initial Credit Extension hereunder, the
     satisfaction of the conditions precedent set forth in Section 4.1 as well,
     from and including the date of this Agreement and prior to the Revolving
     Loan Termination Date, the Swing Line Lender agrees, on the terms and
     conditions set forth in this Agreement, to make Swing Line Loans to the
     Borrower from

                                       28

<PAGE>

     time to time in an aggregate principal amount not to exceed the Swing Line
     Commitment, provided that the Aggregate Outstanding Revolving Credit
     Exposure shall not at any time exceed the Aggregate Revolving Loan
     Commitment, and provided further that at no time shall the sum of (i) the
     Swing Line Lender's Pro Rata Share of the Swing Line Loans then
     outstanding, plus (ii) the outstanding Revolving Loans made by the Swing
     Line Lender pursuant to Section 2.1 (including its participation in any
     Facility LCs), exceed the Swing Line Lender's Revolving Loan Commitment at
     such time. Subject to the terms of this Agreement, the Borrower may borrow,
     repay and reborrow Swing Line Loans at any time prior to the Revolving Loan
     Termination Date.

          2.4.2 BORROWING NOTICE. The Borrower shall deliver to the
     Administrative Agent and the Swing Line Lender irrevocable notice (a "Swing
     Line Borrowing Notice") not later than 12:00 noon (Chicago, Illinois time)
     on the Borrowing Date of each Swing Line Loan, specifying (i) the
     applicable Borrowing Date (which date shall be a Business Day), and (ii)
     the aggregate amount of the requested Swing Line Loan which shall be an
     amount not less than $100,000. The Swing Line Loans shall bear interest at
     the Floating Rate or at such other rate as is agreed upon by the Borrower
     and the Swing Line Lender.

          2.4.3 MAKING OF SWING LINE LOANS. Promptly after receipt of a Swing
     Line Borrowing Notice, the Administrative Agent shall notify each Lender by
     fax or other similar form of transmission, of the requested Swing Line
     Loan. Not later than 2:00 p.m. (Chicago, Illinois time) on the applicable
     Borrowing Date, the Swing Line Lender shall make available the Swing Line
     Loan, in funds immediately available in Chicago, to the Administrative
     Agent at its address specified pursuant to Article XIII. The Administrative
     Agent will promptly make the funds so received from the Swing Line Lender
     available to the Borrower on the Borrowing Date at the Administrative
     Agent's aforesaid address.

          2.4.4 REPAYMENT OF SWING LINE LOANS. Each Swing Line Loan shall be
     paid in full by the Borrower on or before the fifth (5th) Business Day
     after the Borrowing Date for such Swing Line Loan. In addition, the Swing
     Line Lender (i) may at any time in its sole discretion with respect to any
     outstanding Swing Line Loan, or (ii) shall, on the fifth (5th) Business Day
     after the Borrowing Date of any Swing Line Loan, require each Lender
     (including the Swing Line Lender) to make a Revolving Loan in the amount of
     such Lender's Revolving Loan Pro Rata Share of such Swing Line Loan
     (including, without limitation, any interest accrued and unpaid thereon),
     for the purpose of repaying such Swing Line Loan. Not later than 1:00 p.m.
     (Chicago, Illinois time) on the date of any notice received pursuant to
     this Section 2.4.4, each Lender shall make available its required Revolving
     Loan, in funds immediately available in Chicago to the Administrative Agent
     at its address specified pursuant to Article XIII. Revolving Loans made
     pursuant to this Section 2.4.4 shall initially be Floating Rate Loans and
     thereafter may be continued as Floating Rate Loans or converted into
     Eurodollar Loans in the manner provided in Section 2.9 and subject to the
     other conditions and limitations set forth in Article II. Unless a Lender
     shall have notified the Swing Line Lender, prior to its making any Swing
     Line Loan, that any applicable condition precedent set forth in Sections
     4.1 or 4.2, as applicable, had not been satisfied, such Lender's obligation
     to make Revolving Loans pursuant to this Section 2.4.4 to repay Swing Line
     Loans shall be

                                       29

<PAGE>

     unconditional, continuing, irrevocable and absolute and shall not be
     affected by any circumstances, including, without limitation, (a) any
     set-off, counterclaim, recoupment, defense or other right which such Lender
     may have against the Swing Line Lender or any other Person, (b) the
     occurrence or continuance of an Event of Default or Unmatured Event of
     Default, (c) any adverse change in the condition (financial or otherwise)
     of the Borrower, or (d) any other circumstances, happening or event
     whatsoever. In the event that any Lender fails to make payment to the
     Administrative Agent of any amount due under this Section 2.4.4, the
     Administrative Agent shall be entitled to receive, retain and apply against
     such obligation the principal and interest otherwise payable to such Lender
     hereunder until the Administrative Agent receives such payment from such
     Lender or such obligation is otherwise fully satisfied. In addition to the
     foregoing, if for any reason any Lender fails to make payment to the
     Administrative Agent of any amount due under this Section 2.4.4, such
     Lender shall be deemed, at the option of the Administrative Agent, to have
     unconditionally and irrevocably purchased from the Swing Line Lender,
     without recourse or warranty, an undivided interest and participation in
     the applicable Swing Line Loan in the amount of such Revolving Loan, and
     such interest and participation may be recovered from such Lender together
     with interest thereon at the Federal Funds Effective Rate for each day
     during the period commencing on the date of demand and ending on the date
     such amount is received. On the Revolving Loan Termination Date, the
     Borrower shall repay in full the outstanding principal balance of the Swing
     Line Loans.

     2.5. COMMITMENT FEE; AGGREGATE REVOLVING LOAN COMMITMENT.

          2.5.1 COMMITMENT FEE. The Borrower shall pay to the Administrative
     Agent, for the account of the Lenders with Revolving Loan Commitments in
     accordance with their Revolving Loan Pro Rata Shares, from and after the
     Closing Date until the date on which the Aggregate Revolving Loan
     Commitment shall be terminated in whole, a commitment fee (the "Commitment
     Fee") accruing at the rate of the then Applicable Fee Rate on the average
     daily excess of the Aggregate Revolving Loan Commitment over the Aggregate
     Outstanding Revolving Credit Exposure. All such Commitment Fees payable
     hereunder shall be payable quarterly in arrears on each Payment Date.

          2.5.2 REDUCTIONS IN AGGREGATE REVOLVING LOAN COMMITMENT. The Borrower
     may permanently reduce the Aggregate Revolving Loan Commitment in whole, or
     in part, ratably among the Lenders in the minimum amount of $5,000,000 (and
     in multiples of $1,000,000 in excess thereof), upon at least three (3)
     Business Days' written notice to the Administrative Agent, which notice may
     be conditional and shall specify the amount of any such reduction,
     provided, however, that the amount of the Aggregate Revolving Loan
     Commitment may not be reduced below the Aggregate Outstanding Revolving
     Credit Exposure. All accrued Commitment Fees shall be payable on the
     effective date of any termination of the obligations of the Lenders to make
     Credit Extensions hereunder and on the final date upon which all Loans are
     repaid.

          2.6. MINIMUM AMOUNT OF EACH ADVANCE. Each Eurodollar Advance shall be
     in the minimum amount of $2,000,000 (and in multiples of $500,000 if in
     excess thereof), and each Floating Rate Advance (other than an Advance to
     repay Swing Line Loans) shall be in the

                                       30

<PAGE>

     minimum amount of $1,000,000 (and in multiples of $250,000 if in excess
     thereof), provided, however, that any Floating Rate Advance may be (i) in
     the amount of the excess of the Aggregate Revolving Loan Commitment over
     the Aggregate Outstanding Revolving Credit Exposure or (ii) in such amount
     as is required, in accordance with Section 2.20.6, to finance the
     reimbursement of a draw under a Facility LC.

     2.7. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances (other than
Swing Line Loans), or any portion of the outstanding Floating Rate Advances
(other than Swing Line Loans), in a minimum aggregate amount of $500,000 or any
integral multiple of $100,000 in excess thereof, with notice to the
Administrative Agent by 11:00 a.m. (Chicago, Illinois time) on the date of
repayment, which notice may be conditional. The Borrower may at any time pay,
without penalty or premium, all outstanding Swing Line Loans, or, in a minimum
amount of $100,000 and increments of $50,000 in excess thereof, any portion of
the outstanding Swing Line Loans, with notice to the Administrative Agent and
the Swing Line Lender by 11:00 a.m. (Chicago, Illinois time) on the date of
repayment, which notice may be conditional. The Borrower may from time to time
pay, subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances,
or, in a minimum aggregate amount of $1,000,000 or any integral multiple of
$500,000 in excess thereof, any portion of the outstanding Eurodollar Advances
upon three (3) Business Days' prior notice to the Administrative Agent, which
notice may be conditional.

     2.8. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance, the Interest Period applicable thereto from time to time; provided that
there shall be no more than 5 Interest Periods in effect with respect to all of
the Loans at any time, unless such limit has been waived by the Administrative
Agent in its sole discretion. The Borrower shall give the Administrative Agent
irrevocable notice (a "Borrowing Notice") not later than 10:00 a.m. (Chicago,
Illinois time) at least one Business Day before the Borrowing Date of each
Floating Rate Advance (other than a Swing Line Loan) and three (3) Business Days
before the Borrowing Date for each Eurodollar Advance, specifying:

     (i)     the Borrowing Date, which shall be a Business Day, of such Advance,

     (ii)    the aggregate amount of such Advance,

     (iii)   the Type of Advance selected, and

     (iv)    in the case of each Eurodollar Advance, the Interest Period
             applicable thereto.

Not later than 12:00 noon (Chicago, Illinois time) on each Borrowing Date, each
Lender shall make available its Loan or Loans in Federal or other funds
immediately available in Chicago to the Administrative Agent at its address
specified pursuant to Article XIII. The Administrative Agent will promptly make
the funds so received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.

     2.9. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES; NO CONVERSION OR
CONTINUATION OF EURODOLLAR ADVANCES AFTER EVENT OF DEFAULT. Floating Rate
Advances (other

                                       31

<PAGE>

than Swing Line Advances) shall continue as Floating Rate Advances unless and
until such Floating Rate Advances are converted into Eurodollar Advances
pursuant to this Section 2.9 or are repaid in accordance with Section 2.7. Each
Eurodollar Advance shall continue as a Eurodollar Advance until the end of the
then applicable Interest Period therefor, at which time such Eurodollar Advance
shall be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.7 or (y) the
Borrower shall have given the Administrative Agent a Conversion/Continuation
Notice (as defined below) requesting that, at the end of such Interest Period,
such Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section 2.6, the Borrower may elect
from time to time to convert all or any part of an Advance of any Type (other
than a Swing Line Advance) into any other Type or Types of Advances; provided
that any conversion of any Eurodollar Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto. Notwithstanding anything to
the contrary contained in this Section 2.9, during the continuance of an Event
of Default or an Unmatured Event of Default, the Administrative Agent may (or
shall at the direction of the Required Lenders), by notice to the Borrower,
declare that no Advance may be made, converted or continued as a Eurodollar
Advance. The Borrower shall give the Administrative Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an Advance or
continuation of a Eurodollar Advance not later than 10:00 a.m. (Chicago,
Illinois time) at least one (1) Business Day, in the case of a conversion into a
Floating Rate Advance, or three (3) Business Days, in the case of a conversion
into or continuation of a Eurodollar Advance, prior to the date of the requested
conversion or continuation, specifying:

     (i)     the requested date, which shall be a Business Day, of such
             conversion or continuation,

     (ii)    the aggregate amount and Type of the Advance which is to be
             converted or continued, and

     (iii)   the amount of such Advance which is to be converted into or
             continued as a Eurodollar Advance and the duration of the Interest
             Period applicable thereto.

     2.10. CHANGES IN INTEREST RATE, ETC. Each Floating Rate Advance (other than
a Swing Line Advance) shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is made or is
automatically converted from a Eurodollar Advance into a Floating Rate Advance
pursuant to Section 2.9, to but excluding the date it is paid or is converted
into a Eurodollar Advance pursuant to Section 2.9 hereof, at a rate per annum
equal to the Floating Rate for such day. Each Swing Line Loan shall bear
interest on the outstanding principal amount thereof, for each day from and
including the day such Swing Line Loan is made to but excluding the date it is
fully paid at a rate per annum equal to the Floating Rate for such day. Changes
in the rate of interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in the Alternate
Base Rate. Each Eurodollar Advance shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined by the Administrative Agent as applicable to
such Eurodollar Advance based upon the Borrower's selections under Sections 2.8
and 2.9 and otherwise in accordance with the terms hereof. No Interest Period in
respect of any

                                       32

<PAGE>

Revolving Loan may end after the Revolving Loan Termination Date. No Interest
Period in respect of any Term Loan may end after the Term Loan Maturity Date.

     2.11. RATES APPLICABLE AFTER EVENT OF DEFAULT. During the continuance of an
Event of Default (including the Borrower's failure to pay any Loan at maturity)
the Required Lenders may, at their option, by notice to the Borrower (which
notice may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that (i) each Eurodollar Advance shall bear interest
for the remainder of the applicable Interest Period at the rate otherwise
applicable to such Interest Period plus 2% per annum, (ii) each Floating Rate
Advance shall bear interest at a rate per annum equal to the Floating Rate in
effect from time to time plus 2% per annum, and (iii) the LC Fee shall be
increased by 2% per annum; provided that, during the continuance of an Event of
Default under Section 7.6 or 7.7, the interest rates set forth in clauses (i)
and (ii) above and the increase in the LC Fee set forth in clause (iii) above
shall be applicable to all Credit Extensions, Advances, fees and other
Obligations hereunder without any election or action on the part of the
Administrative Agent or any Lender.

     2.12. METHOD OF PAYMENT. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Administrative Agent at the Administrative Agent's address specified
pursuant to Article XIII, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative Agent to the
Borrower, by 12:00 noon (Chicago, Illinois time) on the date when due and shall
(except with respect to repayments of Swing Line Loans, and except in the case
of Reimbursement Obligations for which the LC Issuer has not been fully
indemnified by the Lenders, or as otherwise specifically required hereunder) be
applied ratably by the Administrative Agent among the Lenders. Each payment
delivered to the Administrative Agent for the account of any Lender shall be
delivered promptly by the Administrative Agent to such Lender in the same type
of funds that the Administrative Agent received at its address specified
pursuant to Article XIII or at any Lending Installation specified in a notice
received by the Administrative Agent from such Lender. The Administrative Agent
is hereby authorized to charge the account of the Borrower maintained with Bank
One for each payment of the Obligations as it becomes due hereunder. Each
reference to the Administrative Agent in this Section 2.12 shall also be deemed
to refer, and shall apply equally, to the LC Issuer in the case of payments
required to be made by the Borrower to the LC Issuer pursuant to Section 2.20.6.

     2.13.   NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS.

          (i)       Each Lender shall maintain in accordance with its usual
                    practice an account or accounts evidencing the indebtedness
                    of the Borrower to such Lender resulting from each Loan made
                    by such Lender from time to time, including the amounts of
                    principal and interest payable and paid to such Lender from
                    time to time hereunder.

          (ii)      The Administrative Agent shall also maintain accounts in
                    which it will record (a) the date and the amount of each
                    Loan made hereunder, the Type thereof and the Interest
                    Period (in the case of a Eurodollar Advance) with respect
                    thereto, (b) the amount of any principal or interest due and
                    payable or to become due and payable

                                       33

<PAGE>

                    from the Borrower to each Lender hereunder, (c) the original
                    stated amount of each Facility LC and the amount of LC
                    Obligations outstanding at any time, (d) the effective date
                    and amount of each Assignment Agreement delivered to and
                    accepted by it and the parties thereto pursuant to Section
                    12.3, (e) the amount of any sum received by the
                    Administrative Agent hereunder from the Borrower and each
                    Lender's share thereof, and (f) all other appropriate debits
                    and credits as provided in this Agreement, including,
                    without limitation, all fees, charges, expenses and
                    interest.

          (iii)     The entries maintained in the accounts maintained pursuant
                    to paragraphs (i) and (ii) above shall be prima facie
                    evidence of the existence and amounts of the Obligations
                    therein recorded; provided, however, that the failure of the
                    Administrative Agent or any Lender to maintain such accounts
                    or any error therein shall not in any manner affect the
                    obligation of the Borrower to repay the Obligations in
                    accordance with their terms.

          (iv)      Any Lender may request that its Term Loans, Revolving Loans
                    or, in the case of the Swing Line Lender, the Swing Line
                    Loans, be evidenced by promissory notes (the "Notes") in
                    substantially the form of Exhibit E-1 or E-2, with
                    appropriate changes for notes evidencing Swing Line Loans.
                    In such event, the Borrower shall prepare, execute and
                    deliver to such Lender such Note(s) payable to such Lender.
                    Thereafter, the Loans evidenced by such Note(s) and interest
                    thereon shall at all times (prior to any assignment pursuant
                    to Section 12.3) be represented by one or more Notes payable
                    to the payee named therein, except to the extent that any
                    such Lender subsequently returns any such Note(s) for
                    cancellation and requests that such Loans once again be
                    evidenced as described in paragraphs (i) and (ii) above.

     2.14. TELEPHONIC NOTICES. The Borrower hereby authorizes the Lenders and
the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Administrative Agent or any Lender in
good faith believes to be acting on behalf of the Borrower, it being understood
that the foregoing authorization is specifically intended to allow Borrowing
Notices and Conversion/Continuation Notices to be given telephonically. The
Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation, signed by an Authorized Officer, if such confirmation is requested
by the Administrative Agent or any Lender, of each telephonic notice. If the
written confirmation differs in any material respect from the action taken by
the Administrative Agent and the Lenders, the records of the Administrative
Agent and the Lenders shall govern absent manifest error.

     2.15. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued on
each Floating Rate Advance shall be payable in arrears on each Payment Date,
commencing with the first such date to occur after the Closing Date, on any date
on which the Floating Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a Eurodollar
Advance on a day other than a Payment Date shall be payable on the date of
conversion. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on

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any date on which the Eurodollar Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Eurodollar Advance having
an Interest Period longer than three months shall also be payable on the last
day of each three-month interval during such Interest Period. Interest on
Eurodollar Advances, LC Fees and all other fees hereunder shall be calculated
for actual days elapsed on the basis of a 360-day year. Interest on Floating
Rate Advances shall be calculated for actual days elapsed on the basis of a
365/366- day year. Interest shall be payable for the day an Advance is made but
not for the day of any payment on the amount paid if payment is received prior
to 12:00 noon (Chicago, Illinois time) at the place of payment. If any payment
of principal of or interest on an Advance, any fees or any other amounts payable
to the Administrative Agent or any Lender hereunder shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest, fees and commissions in connection with
such payment.

     2.16. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND REVOLVING
LOAN COMMITMENT REDUCTIONS; AVAILABILITY OF LOANS. Promptly after receipt
thereof, the Administrative Agent will notify each Lender of the contents of
each Aggregate Revolving Loan Commitment reduction notice, Borrowing Notice,
Swing Line Borrowing Notice, Conversion/Continuation Notice, and repayment
notice received by it hereunder. Promptly after notice from the LC Issuer, the
Administrative Agent will notify each Lender of the contents of each request for
issuance of a Facility LC hereunder. The Administrative Agent will notify the
Borrower and each Lender of the interest rate applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give the
Borrower and each Lender prompt notice of each change in the Alternate Base
Rate. Not later than 12:00 noon (Chicago, Illinois time) on each Borrowing Date,
each Lender shall make available its Revolving Loan or Revolving Loans in funds
immediately available in Chicago to the Administrative Agent at its address
specified pursuant to Article XIII. The Administrative Agent will promptly make
the funds so received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.

     2.17. LENDING INSTALLATIONS. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as
applicable, and may change its Lending Installation from time to time. All terms
of this Agreement shall apply to any such Lending Installation and the Loans,
Facility LCs, participations in LC Obligations and any Notes issued hereunder
shall be deemed held by each Lender or the LC Issuer, as applicable, for the
benefit of any such Lending Installation. Each Lender and the LC Issuer may, by
written notice to the Administrative Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.

     2.18. NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the Borrower
or a Lender, as the case may be, notifies the Administrative Agent prior to the
date on which it is scheduled to make payment to the Administrative Agent of (i)
in the case of a Lender, the proceeds of a Loan or (ii) in the case of the
Borrower, a payment of principal, interest or fees to the Administrative Agent
for the account of the Lenders, that it does not intend to make such

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<PAGE>

payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Administrative Agent until the date the Administrative Agent recovers
such amount at a rate per annum equal to (x) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day for the first three (3) days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.

     2.19. REPLACEMENT OF LENDER. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3, or if any
Lender defaults in its obligations to extend Loans or participate in Facility
LCs hereunder (any Lender so affected an "Affected Lender"), the Borrower may
elect to terminate or replace the Revolving Loan Commitment, Term Loan
Commitment and Loans of such Affected Lender, provided that no Event of Default
shall have occurred and be continuing at the time of such termination or
replacement, and provided further that, concurrently with such termination or
replacement, (i) if the Affected Lender is being replaced, another bank or other
entity which is reasonably satisfactory to the Borrower and the Administrative
Agent shall agree, as of such date, to purchase for cash the Outstanding
Revolving Credit Exposure and Term Loans of the Affected Lender pursuant to an
Assignment Agreement substantially in the form of Exhibit C and to become a
Lender for all purposes under this Agreement and to assume all obligations of
the Affected Lender to be terminated as of such date and to comply with the
requirements of Section 12.3 applicable to assignments, and (ii) the Borrower
shall pay to such Affected Lender in immediately available funds on the day of
such replacement (A) all interest, fees and other amounts then accrued but
unpaid to such Affected Lender by the Borrower hereunder to and including the
date of termination, including without limitation payments due to such Affected
Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 3.4 had the Loans of such Affected Lender been prepaid on such
date rather than sold to the replacement Lender, in each case to the extent not
paid by the purchasing lender and (iii) if the Affected Lender is being
terminated, the Borrower shall pay to such Affected Lender all Obligations due
to such Affected Lender (including the amounts described in the immediately
preceding clauses (i) and (ii) plus, to the extent not paid by the replacement
Lender, the outstanding principal balance of such Affected Lender's Credit
Extensions). The Administrative Agent shall record such payments made by the
Borrower in accordance with Section 2.13.

     2.20. FACILITY LCs.

          2.20.1 EXISTING LETTERS OF CREDIT; ISSUANCE. The Borrower, the
     Lenders, the Administrative Agent and the LC Issuer agree and confirm that,
     as of the Closing Date, and subject to the satisfaction of the condition
     precedent set forth in Section 4.1, the

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<PAGE>

     Existing Letters of Credit shall (x) be deemed to have been issued pursuant
     to this Agreement, (y) constitute Facility LCs, and (z) be governed by this
     Section 2.20, together with the other terms and conditions of this
     Agreement. The LC Issuer hereby agrees, on the terms and conditions set
     forth in this Agreement, to issue standby Letters of Credit (each, a
     "Facility LC") and to renew, extend, increase, decrease or otherwise modify
     each Facility LC ("Modify," and each such action, a "Modification"), from
     time to time from and including the date of this Agreement and prior to the
     Revolving Loan Termination Date upon the request of the Borrower; provided
     that immediately after each such Facility LC is issued or Modified, (i) the
     aggregate amount of the outstanding LC Obligations shall not exceed
     $40,000,000 and (ii) the Aggregate Outstanding Revolving Credit Exposure
     shall not exceed the Aggregate Revolving Loan Commitment. Subject to the
     remaining terms of this Section 2.20.1, no Facility LC shall have an expiry
     date later than the earlier of (x) the fifth Business Day prior to the
     Revolving Loan Termination Date and (y) one year after its issuance;
     provided that any Facility LC with a one-year term may provide for the
     renewal thereof for additional one-year periods (which in no event shall
     extend beyond the date referred to in the preceding clause (x)); provided,
     further, that so long as approved by the Administrative Agent and the LC
     Issuer (which approvals shall not be unreasonably withheld), Facility LCs
     with stated face amounts not in excess of $250,000 in the aggregate may
     have expiry dates that occur within three years of the dates of issuance
     thereof but in any event no later than the date referred to in the
     preceding clause (x)). Notwithstanding anything to the contrary set forth
     in this Agreement, a Facility LC may have an expiry date which occurs after
     the Revolving Loan Termination Date so long as the Administrative Agent
     receives from the Borrower, at least five (5) Business Days prior to the
     Revolving Loan Termination Date, an amount in immediately available funds
     equal to at least 105% of the LC Obligations owing under or in connection
     with such Facility LC. Such funds shall secure the repayment of such LC
     Obligations and any other then outstanding Secured Obligations, if any, in
     respect of such Facility LC and shall be deposited in a deposit account
     maintained by Bank One. The Borrower shall ensure that the Collateral Agent
     for the benefit of the LC Issuer and the Lenders at all times maintains a
     perfected first priority Lien upon and control over such deposit account.
     Such funds and any interest accrued thereon (to the extent not applied to
     reimburse the LC Issuer for any draw under a Facility LC) shall be returned
     to the Borrower within three Business Days after the expiration of the
     Facility LC relating to the LC Obligations secured by such funds.

          2.20.2 PARTICIPATIONS. Upon the issuance or Modification by the LC
     Issuer of a Facility LC in accordance with this Section 2.20, the LC Issuer
     shall be deemed, without further action by any party hereto, to have
     unconditionally and irrevocably sold to each Lender, and each Lender shall
     be deemed, without further action by any party hereto, to have
     unconditionally and irrevocably purchased from the LC Issuer, a
     participation in such Facility LC (and each Modification thereof) and the
     related LC Obligations in proportion to its Revolving Loan Pro Rata Share.

          2.20.3 NOTICE. Subject to Section 2.20.1, the Borrower shall give the
     LC Issuer notice prior to 10:00 a.m. (Chicago, Illinois time) at least five
     (5) Business Days prior to the proposed date of issuance or Modification of
     each Facility LC, specifying the beneficiary, the proposed date of issuance
     (or Modification) and the expiry date of such

                                       37

<PAGE>

     Facility LC, and describing the proposed terms of such Facility LC and the
     nature of the transactions proposed to be supported thereby. Upon receipt
     of such notice, the LC Issuer shall promptly notify the Administrative
     Agent, and, upon issuance only, the Administrative Agent shall promptly
     notify each Lender, of the contents thereof and of the amount of such
     Lender's participation in such proposed Facility LC. The issuance or
     Modification by the LC Issuer of any Facility LC shall, in addition to the
     conditions precedent set forth in Article IV (the satisfaction of which the
     LC Issuer shall have no duty to ascertain), be subject to the conditions
     precedent that such Facility LC shall be satisfactory to the LC Issuer and
     that the Borrower shall have executed and delivered such application
     agreement and/or such other instruments and agreements relating to such
     Facility LC as the LC Issuer shall have reasonably requested (each, a
     "Facility LC Application"). In the event of any conflict between the terms
     of this Agreement and the terms of any Facility LC Application, the terms
     of this Agreement shall control.

          2.20.4 LC FEES. The Borrower shall pay to the Administrative Agent,
     for the account of the Lenders ratably in accordance with their respective
     Revolving Loan Pro Rata Shares, a letter of credit fee at a per annum rate
     equal to 1.50% on the average daily undrawn stated amount under such
     Facility LC, such fee to be payable in arrears on each Payment Date. The
     Borrower shall also pay to the LC Issuer for its own account (x) at the
     time of issuance of each Facility LC, a fronting fee in an amount equal to
     0.125% times the face amount of such Facility LC, and (y) documentary and
     processing charges in connection with the issuance or Modification of and
     draws under Facility LCs in accordance with the LC Issuer's standard
     schedule for such charges as in effect from time to time. Each fee
     described in this Section 2.20.4 shall constitute an "LC Fee".

          2.20.5 ADMINISTRATION; REIMBURSEMENT BY LENDERS. Upon receipt from the
     beneficiary of any Facility LC of any demand for payment under such
     Facility LC, the LC Issuer shall notify the Administrative Agent and the
     Administrative Agent shall promptly notify the Borrower and each other
     Lender as to the amount to be paid by the LC Issuer as a result of such
     demand and the proposed payment date (the "LC Payment Date"). The
     responsibility of the LC Issuer to the Borrower and each Lender shall be
     only to determine that the documents (including each demand for payment)
     delivered under each Facility LC in connection with such presentment shall
     be in conformity in all material respects with such Facility LC. The LC
     Issuer shall endeavor to exercise the same care in the issuance and
     administration of the Facility LCs as it does with respect to letters of
     credit in which no participations are granted, it being understood that in
     the absence of any gross negligence or willful misconduct by the LC Issuer,
     each Lender shall be unconditionally and irrevocably liable without regard
     to the occurrence of any Event of Default or any condition precedent
     whatsoever, to reimburse the LC Issuer on demand for (i) such Lender's
     Revolving Loan Pro Rata Share of the amount of each payment made by the LC
     Issuer under each Facility LC to the extent such amount is not reimbursed
     by the Borrower pursuant to Section 2.20.6 below, plus (ii) interest on the
     foregoing amount to be reimbursed by such Lender, for each day from the
     date of the LC Issuer's demand for such reimbursement (or, if such demand
     is made after 11:00 a.m. (Chicago, Illinois time) on such date, from the
     next succeeding Business Day) to the date on which such Lender pays the
     amount to be reimbursed by it, at a rate of interest per

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<PAGE>

     annum equal to the Federal Funds Effective Rate for the first three (3)
     days and, thereafter, at a rate of interest equal to the rate applicable to
     Floating Rate Advances.

          2.20.6 REIMBURSEMENT BY BORROWER. The Borrower shall be irrevocably
     and unconditionally obligated to reimburse the LC Issuer for any amounts to
     be paid by the LC Issuer. Upon any drawing under any Facility LC, a
     reimbursement in respect thereof shall be made by the Borrower on the date
     of the drawing if the Borrower shall have received written notice of such
     drawing prior to 10:00 a.m. Chicago time on such date, or, if such notice
     has not been received by the Borrower prior to such time on such date, then
     not later than 12:00 noon Chicago time on (i) the Business Day that the
     Borrower receives such notice, if such notice is received prior to 10:00
     a.m. Chicago time on the day of receipt or (ii) the Business Day
     immediately following the day that the Borrower receives such notice, if
     such notice is not received prior to such time on the day of receipt;
     provided that neither the Borrower nor any Lender shall hereby be precluded
     from asserting any claim for direct (but not consequential) damages
     suffered by the Borrower or such Lender to the extent, but only to the
     extent, caused by (i) the willful misconduct or gross negligence of the LC
     Issuer in determining whether a request presented under any Facility LC
     issued by it complied with the terms of such Facility LC or (ii) the LC
     Issuer's failure to pay under any Facility LC issued by it after the
     presentation to it of a request strictly complying with the terms and
     conditions of such Facility LC. Whether or not an Event of Default or
     Unmatured Event of Default has occurred and is continuing, unless the
     Borrower elects to repay a Reimbursement Obligation, regardless of whether
     the conditions for making a Revolving Loan under Section 4.2 have been
     satisfied, such unpaid Reimbursement Obligation shall be automatically
     converted into a Revolving Loan as of the date of the payment by the LC
     Issuer giving rise to the Reimbursement Obligation. Such Revolving Loan
     shall be in an amount equal to the amount of the unpaid Reimbursement
     Obligation. Such Revolving Loan shall initially constitute a Floating Rate
     Advance and the proceeds of such Advance shall be used to repay such
     Reimbursement Obligation. Such Floating Rate Advance may be converted into
     a Eurodollar Advance in accordance with the terms of Section 2.9. If the
     Borrower at any time fails to repay a Reimbursement Obligation pursuant to
     this Section 2.20, such unpaid Reimbursement Obligation shall at that time
     be automatically converted into an Obligation and the Borrower shall be
     deemed to have elected to borrow a Revolving Loan from the Lenders, as of
     the date of the payment by the LC Issuer giving rise to the Reimbursement
     Obligation, in an amount equal to the amount of the unpaid Reimbursement
     Obligation. Such Revolving Loan shall be made as of the date of the payment
     giving rise to such Reimbursement Obligation, automatically, without notice
     and without any requirement to satisfy the conditions precedent otherwise
     applicable to a Revolving Loan if the Borrower shall have failed to make
     such payment to the Administrative Agent for the account of the LC Issuer
     prior to such time. Such Revolving Loan shall constitute a Floating Rate
     Advance and the proceeds of such Advance shall be used to repay such
     Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
     Reimbursement Obligation on the day such Reimbursement Obligation arises
     and, for any reason, the Lenders are unable to make or have no obligation
     to make a Revolving Loan, then such Reimbursement Obligation shall bear
     interest from and after such day, until paid in full, at the interest rate
     applicable to a Floating Rate Advance. The Borrower agrees to indemnify the
     LC Issuer against any

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<PAGE>

     loss or expense determined by the LC Issuer in good faith to have resulted
     from any conversion pursuant to this Section 2.20 by reason of the
     inability of the LC Issuer to convert the amount received from the Borrower
     or from the Lenders, as applicable, into an amount equal to the amount of
     such Reimbursement Obligation. The LC Issuer will pay to each Lender
     ratably in accordance with its Revolving Loan Pro Rata Share all amounts
     received by it from the Borrower for application in payment, in whole or in
     part, of the Reimbursement Obligation in respect of any Facility LC issued
     by the LC Issuer, but only to the extent such Lender has made payment to
     the LC Issuer in respect of such Facility LC pursuant to Section 2.20.5.

          2.20.7 OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
     Section 2.20 shall be absolute and unconditional under any and all
     circumstances and irrespective of any setoff, counterclaim or defense to
     payment which the Borrower may have or have had against the LC Issuer, any
     Lender or any beneficiary of a Facility LC. The Borrower further agrees
     with the LC Issuer and the Lenders that the LC Issuer and the Lenders shall
     not be responsible for, and the Borrower's Reimbursement Obligation in
     respect of any Facility LC shall not be affected by, among other things,
     the validity or genuineness of documents or of any endorsements thereon,
     even if such documents should in fact prove to be in any or all respects
     invalid, fraudulent or forged, or any dispute between or among the
     Borrower, any of its Affiliates, the beneficiary of any Facility LC or any
     financing institution or other party to whom any Facility LC may be
     transferred or any claims or defenses whatsoever of the Borrower or of any
     of its Affiliates against the beneficiary of any Facility LC or any such
     transferee. The LC Issuer shall not be liable for any error, omission,
     interruption or delay in transmission, dispatch or delivery of any message
     or advice, however transmitted, in connection with any Facility LC. The
     Borrower agrees that any action taken or omitted by the LC Issuer or any
     Lender under or in connection with each Facility LC and the related drafts
     and documents, if done without gross negligence or willful misconduct,
     shall be binding upon the Borrower and shall not put the LC Issuer or any
     Lender under any liability to the Borrower. Nothing in this Section 2.20.7
     is intended to limit the right of the Borrower to make a claim against the
     LC Issuer for damages as contemplated by the proviso to the first sentence
     of Section 2.20.6.

          2.20.8 ACTIONS OF LC ISSUER. The LC Issuer shall be entitled to rely,
     and shall be fully protected in relying, upon any Facility LC, draft,
     writing, resolution, notice, consent, certificate, affidavit, letter,
     cablegram, telegram, telecopy, telex or teletype message, statement, order
     or other document believed by it to be genuine and correct and to have been
     signed, sent or made by the proper Person or Persons, and upon advice and
     statements of legal counsel, independent accountants and other experts
     selected by the LC Issuer. The LC Issuer shall be fully justified in
     failing or refusing to take any action under this Agreement unless it shall
     first have received such advice or concurrence of the Required Lenders as
     it reasonably deems appropriate or it shall first be indemnified to its
     reasonable satisfaction by the Lenders against any and all liability and
     expense which may be incurred by it by reason of taking or continuing to
     take any such action. Notwithstanding any other provision of this Section
     2.20, the LC Issuer shall in all cases be fully protected in acting, or in
     refraining from acting, under this Agreement in accordance with a request
     of the Required Lenders, and such request and any action taken

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<PAGE>

     or failure to act pursuant thereto shall be binding upon the Lenders and
     any future holders of a participation in any Facility LC.

          2.20.9 INDEMNIFICATION. The Borrower hereby agrees to indemnify and
     hold harmless each Lender, the LC Issuer and the Administrative Agent, and
     their respective directors, officers, agents and employees from and against
     any and all claims and damages, losses, liabilities and related reasonable
     out-of-pocket costs or expenses which such Lender, the LC Issuer or the
     Administrative Agent may incur (or which may be claimed against such
     Lender, the LC Issuer or the Administrative Agent by any Person whatsoever)
     by reason of or in connection with the issuance, execution and delivery or
     transfer of or payment or failure to pay under any Facility LC or any
     actual or proposed use of any Facility LC, including, without limitation,
     any such claims, damages, losses, liabilities, costs or expenses which the
     LC Issuer may incur by reason of or in connection with (i) the failure of
     any other Lender to fulfill or comply with its obligations to the LC Issuer
     hereunder (but nothing herein contained shall affect any rights the
     Borrower may have against any defaulting Lender) or (ii) by reason of or on
     account of the LC Issuer issuing any Facility LC which specifies that the
     term "Beneficiary" included therein includes any successor by operation of
     law of the named Beneficiary, but which Facility LC does not require that
     any drawing by any such successor Beneficiary be accompanied by a copy of a
     legal document, satisfactory to the LC Issuer, evidencing the appointment
     of such successor Beneficiary; provided that the Borrower shall not be
     required to indemnify any Lender, the LC Issuer or the Administrative Agent
     for any claims, damages, losses, liabilities, costs or expenses to the
     extent, but only to the extent, caused by (x) the willful misconduct or
     gross negligence of the LC Issuer in determining whether a request
     presented under any Facility LC complied with the terms of such Facility LC
     or (y) the LC Issuer's failure to pay under any Facility LC after the
     presentation to it of a request strictly complying with the terms and
     conditions of such Facility LC. Nothing in this Section 2.20.9 is intended
     to limit the obligations of the Borrower under any other provision of this
     Agreement.

          2.20.10 LENDERS' INDEMNIFICATION. Each Lender shall, ratably in
     accordance with its Revolving Loan Pro Rata Share, indemnify the LC Issuer,
     its affiliates and their respective directors, officers, agents and
     employees (to the extent not reimbursed by the Borrower) against any cost,
     expense (including reasonable counsel fees and disbursements), claim,
     demand, action, loss or liability (except such as result from such
     indemnitees' gross negligence or willful misconduct or the LC Issuer's
     failure to pay under any Facility LC after the presentation to it of a
     request strictly complying with the terms and conditions of the Facility
     LC) that such indemnitees may suffer or incur in connection with this
     Section 2.20 or any action taken or omitted by such indemnitees hereunder.

          2.20.11 FACILITY LC COLLATERAL ACCOUNT. The Borrower agrees that it
     will, upon the request of the Administrative Agent or the Required Lenders
     and until the final expiration date of any Facility LC and thereafter as
     long as any amount is payable to the LC Issuer or the Lenders in respect of
     any Facility LC, maintain a special collateral account pursuant to
     arrangements reasonably satisfactory to the Administrative Agent and the
     Borrower (the "Facility LC Collateral Account") at the Administrative
     Agent's

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<PAGE>

     office at the address specified pursuant to Article XIII, in the name of
     the Borrower but under the sole dominion and control of the Collateral
     Agent for the benefit of the LC Issuers and the Lenders and in which the
     Borrower shall have no interest other than as set forth in Section 8.1. The
     Borrower hereby pledges, assigns and grants to the Collateral Agent, on
     behalf of and for the ratable benefit of the Lenders and the LC Issuer, a
     security interest in all of the Borrower's right, title and interest in and
     to all funds which may from time to time be on deposit in the Facility LC
     Collateral Account to secure the prompt and complete payment and
     performance of the Secured Obligations in respect of Facility LCs. The
     Borrower shall deposit cash collateral pursuant to this paragraph as and to
     the extent required by Section 2.2 as collateral for the payment and
     performance of the LC Obligations and the other Secured Obligations in
     respect of Facility LCs. Each such deposit shall be held by the Collateral
     Agent as collateral for the payment and performance of the obligations of
     the Borrower for the portion of the LC Obligations relating to Facility LCs
     issued for the account of the Borrower under this Agreement. The Collateral
     Agent will invest any funds on deposit from time to time in the Facility LC
     Collateral Account in certificates of deposit of Bank One having a maturity
     not exceeding thirty (30) days. Interest or profits, if any, on such
     investments shall accumulate in such account. Moneys in such account shall
     be applied to reimburse the LC Issuer for Reimbursement Obligations for
     which it has not been reimbursed and as collateral for the remaining LC
     Obligations. If the Borrower is required to provide an amount of cash
     collateral hereunder pursuant to Section 8.1, such amount (to the extent
     not applied) shall be returned to such Borrower within three Business Days
     after all Events of Default have been cured or waived. If the Borrower is
     required to provide an amount of cash collateral hereunder pursuant to
     Section 2.2, such amount (to the extent not applied as aforesaid) shall be
     returned to the Borrower as and to the extent that, after giving effect to
     such return, the Borrower would remain in compliance with Section 2.2.
     Nothing in this Section 2.20.11 shall either require the Borrower or any
     Guarantor to deposit any funds in the Facility LC Collateral Account or
     limit the right of the Administrative Agent or the Collateral Agent to
     release any funds held in the Facility LC Collateral Account in each case
     other than as required by this Section, Section 2.2 or Section 8.1.

          2.20.12 RIGHTS AS A LENDER. In its capacity as a Lender, the LC Issuer
     shall have the same rights and obligations as any other Lender.

     2.21. FINANCIAL CONTRACTS. The Borrower confirms that all Rate Management
Obligations owed to Lenders shall for purposes of the Senior Secured Indenture
constitute "Credit Agreement Obligations" as defined therein (unless the
Borrower and any applicable Lender mutually agree that such Rate Management
Obligations do not constitute "Credit Agreement Obligations").

                                   ARTICLE III

                             YIELD PROTECTION; TAXES

     3.1. YIELD PROTECTION. If, on or after the Closing Date, the adoption of
any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or

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<PAGE>

not having the force of law), or any change in any such law, rule, regulation,
policy, guideline or directive or in the interpretation or administration
thereof by any governmental or quasi- governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender or applicable Lending Installation or the LC Issuer
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:

     (i)     imposes or increases or deems applicable any reserve,
             assessment, insurance charge, special deposit or similar
             requirement against assets of, deposits with or for the
             account of, or credit extended by, any Lender or any
             applicable Lending Installation or the LC Issuer (other than
             reserves and assessments taken into account in determining
             the interest rate applicable to Eurodollar Advances), or

     (ii)    imposes any other condition the result of which is to
             increase the cost to any Lender or any applicable Lending
             Installation of making, funding or maintaining its Revolving
             Loan Commitment or Eurodollar Loans or of issuing or
             participating in Facility LCs, or reduces any amount
             receivable by any Lender or any applicable Lending
             Installation or the LC Issuer in connection with its
             Revolving Loan Commitment or Eurodollar Loans or Facility
             LCs (including participations therein), or requires any
             Lender or any applicable Lending Installation or the LC
             Issuer to make any payment calculated by reference to the
             amount of Revolving Loan Commitment or Eurodollar Loans or
             Facility LCs (including participations therein) held or
             interest or LC Fees received by it, by an amount deemed
             material by such Lender or the LC Issuer, as applicable.

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer of making or maintaining its
Eurodollar Loans or Revolving Loan Commitment or of issuing or participating in
Facility LCs, as applicable, or to reduce the return received by such Lender or
applicable Lending Installation or LC Issuer in connection with such Eurodollar
Loans or Revolving Loan Commitment, or Facility LCs (including participations
therein), then, within fifteen (15) days of demand, accompanied by the written
statement required by Section 3.6, by such Lender or LC Issuer, the Borrower
shall pay such Lender or LC Issuer such additional amount or amounts as will
compensate such Lender or LC Issuer for such increased cost or reduction in
amount received.

     3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender or LC Issuer
determines the amount of capital required or expected to be maintained by such
Lender or LC Issuer, any Lending Installation of such Lender or LC Issuer or any
corporation controlling such Lender or LC Issuer is increased as a result of a
Change (as defined below), then, within fifteen (15) days of demand, accompanied
by the written statement required by Section 3.6, by such Lender or LC Issuer,
the Borrower shall pay such Lender or LC Issuer the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or LC Issuer determines is attributable to
this Agreement, its Outstanding Revolving Credit Exposure, its Term Loans, its
Term Loan Commitment to make Term Loans, its Revolving Loan Commitment to make
Revolving Loans and issue or participate in Facility LCs, as applicable,
hereunder (after taking into account such Lender's or LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the Closing Date in the
Risk-Based Capital

                                       43

<PAGE>

Guidelines or (ii) any adoption of, or change in, or change in the
interpretation or administration of any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the Closing Date which
affects the amount of capital required or expected to be maintained by any
Lender or LC Issuer or any Lending Installation or any corporation controlling
any Lender or LC Issuer. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the Closing
Date, including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the Closing Date.

     3.3. AVAILABILITY OF TYPES OF ADVANCES. If the Administrative Agent
determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or no reasonable basis exists for
determining the Eurodollar Base Rate, then the Administrative Agent shall
suspend the availability of Eurodollar Advances and require any affected
Eurodollar Advances to be repaid or converted to Floating Rate Advances on the
respective last days of the then current Interest Periods with respect to such
Revolving Loans or within such earlier period as required by law, subject to the
payment of any funding indemnification amounts required by Section 3.4.

     3.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not
made or continued, or a Floating Rate Advance is not converted into a Eurodollar
Advance, on the date specified by the Borrower for any reason other than default
by the Lenders, or a Eurodollar Advance is not prepaid on the date specified by
the Borrower for any reason, the Borrower will indemnify each Lender for any
loss or cost (excluding lost profit) incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.

     3.5.    TAXES.

     (i)     All payments by the Borrower to or for the account of any
             Lender or the LC Issuer or the Administrative Agent
             hereunder or under any Note shall be made free and clear of
             and without deduction for any and all Taxes. If the Borrower
             shall be required by law to deduct any Taxes from or in
             respect of any sum payable hereunder to any Lender, LC
             Issuer or the Administrative Agent, (a) the sum payable
             shall be increased as necessary so that after making all
             required deductions (including deductions applicable to
             additional sums payable under this Section 3.5) such Lender,
             LC Issuer or the Administrative Agent (as the case may be)
             receives an amount equal to the sum it would have received
             had no such deductions been made, (b) the Borrower shall
             make such deductions, (c) the Borrower shall pay the full
             amount deducted to the relevant authority in accordance with
             applicable law and (d) the Borrower shall furnish to the
             Administrative Agent the original copy of a receipt
             evidencing payment thereof


                                       44

<PAGE>

             or, if a receipt cannot be obtained with reasonable efforts, such
             other evidence of payment as is reasonably acceptable to the
             Administrative Agent, in each case within thirty (30) days after
             such payment is made.

     (ii)    In addition, the Borrower shall pay any present or future stamp or
             documentary taxes and any other excise or property taxes, charges
             or similar levies which arise from any payment made hereunder or
             under any Note or Facility LC Application or from the execution or
             delivery of, or otherwise with respect to, this Agreement or any
             Note or Facility LC Application ("Other Taxes").

     (iii)   The Borrower shall indemnify the Administrative Agent, the LC
             Issuer and each Lender for the full amount of Taxes or Other
             Taxes (including, without limitation, any Taxes or Other Taxes
             imposed on amounts payable under this Section 3.5) paid by the
             Administrative Agent, the LC Issuer or such Lender as a result of
             its Revolving Loan Commitment, any Credit Extensions made by it
             hereunder, any Facility LC issued or participated in by it
             hereunder, or otherwise in connection with its participation in
             this Agreement and any liability (including penalties, interest
             and expenses) arising therefrom or with respect thereto;
             provided, however, that the Borrower shall not be obligated to
             reimburse the Administrative Agent, the LC Issuer or a Lender in
             respect of penalties, interest or similar liabilities
             attributable to such Taxes or Other Taxes if such penalties,
             interest or similar liabilities are attributable to a failure or
             delay by the Administrative Agent, the LC Issuer or a Lender to
             make a written request therefore pursuant to Section 3.6;
             provided, further, that no request delivered within the ninety
             (90) day period described in Section 3.6 shall constitute a
             delayed request. Payments due under this indemnification shall be
             made within thirty (30) days of the date the Administrative
             Agent, the LC Issuer or such Lender makes demand therefor
             pursuant to Section 3.6.

     (iv)    Each Lender that is not incorporated under the laws of the United
             States of America or a state thereof (each a "Non-U.S. Lender")
             agrees that it will, not more than ten (10) Business Days after
             the date on which it becomes a party to this Agreement or changes
             its lending office under this Agreement (but in any event before
             a payment is due to it hereunder), (i) deliver to each of the
             Borrower and the Administrative Agent two duly completed copies
             of United States Internal Revenue Service Form W-8BEN or W-8ECI,
             certifying in either case that such Lender is entitled to receive
             payments under this Agreement without deduction or withholding of
             any United States federal income taxes (including backup
             withholding taxes), or (ii) in the case of a Non-U.S. Lender that
             is fiscally transparent, deliver to the Administrative Agent a
             United States Internal Revenue Form W-8IMY together with the
             applicable accompanying forms, W-8 or W-9, as the case may be,
             and certify that it is entitled to an exemption from United
             States Federal income tax (including backup withholding taxes).
             Each Non- U.S. Lender further undertakes to deliver to each of
             the Borrower and the Administrative Agent (x) renewals or
             additional copies of such form (or any successor form) on or
             before the date that such form expires or becomes obsolete, and
             (y) after the occurrence of any event requiring a change in the
             most recent forms so delivered

                                       45
<PAGE>

             by it, such additional forms or amendments thereto as may be
             reasonably requested by the Borrower or the Administrative Agent.
             All forms or amendments described in the preceding sentence shall
             certify that such Lender is entitled to receive payments under
             this Agreement without deduction or withholding of any United
             States federal income taxes, unless an event (including without
             limitation any change in treaty, law or regulation) has occurred
             prior to the date on which any such delivery would otherwise be
             required which renders all such forms inapplicable or which would
             prevent such Lender from duly completing and delivering any such
             form or amendment with respect to it and such Lender advises the
             Borrower and the Administrative Agent that it is not capable of
             receiving payments without any deduction or withholding of United
             States federal income tax.

     (v)     For any period during which a Non-U.S. Lender has failed to provide
             the Borrower with an appropriate form pursuant to clause (iv) above
             (unless such failure is due to a change in treaty, law or
             regulation, or any change in the interpretation or administration
             thereof by any governmental authority, occurring subsequent to the
             date on which a form originally was required to be provided), such
             Non-U.S. Lender shall not be entitled to indemnification under this
             Section 3.5 with respect to Taxes imposed by the United States;
             provided that, should a Non-U.S. Lender which is otherwise exempt
             from or subject to a reduced rate of withholding tax become subject
             to Taxes because of its failure to deliver a form required under
             clause (iv) above, the Borrower shall take such steps as such Non-
             U.S. Lender shall reasonably request to assist such Non-U.S. Lender
             to recover such Taxes.

     (vi)    Any Lender that is entitled to an exemption from or reduction of
             withholding tax with respect to payments under this Agreement or
             any Note pursuant to the law of any relevant jurisdiction or any
             treaty shall deliver to the Borrower (with a copy to the
             Administrative Agent), at the time or times prescribed by
             applicable law, such properly completed and executed documentation
             prescribed by applicable law or reasonably requested by the
             Borrower as will permit such payments to be made without
             withholding or at a reduced rate.

     (vii)   If the U.S. Internal Revenue Service or any other governmental
             authority of the United States or any other country or any
             political subdivision thereof asserts a claim that the
             Administrative Agent did not properly withhold tax from amounts
             paid to or for the account of any Lender (because the appropriate
             form was not delivered or properly completed, because such Lender
             failed to notify the Administrative Agent of a change in
             circumstances which rendered its exemption from withholding
             ineffective, or for any other reason), such Lender shall indemnify
             the Administrative Agent fully for all amounts paid, directly or
             indirectly, by the Administrative Agent as tax, withholding
             therefor, or otherwise, including penalties and interest, and
             including taxes imposed by any jurisdiction on amounts payable to
             the Administrative Agent under this subsection, together with all
             costs and expenses related thereto (including attorneys fees and
             time charges of attorneys for the Administrative Agent, which
             attorneys may be

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<PAGE>

             employees of the Administrative Agent). The obligations of the
             Lenders under this Section 3.5(vii) shall survive the payment of
             the Obligations and termination of this Agreement.

     (viii)  The Administrative Agent, the LC Issuer and each Lender shall take
             such steps as the Borrower reasonably requests to apply or
             otherwise take advantage of any tax refund or offsetting tax credit
             or other similar tax benefit arising out of or in conjunction with
             any amounts for which they have been indemnified by the Borrower or
             with respect to which the Borrower has paid additional amounts
             pursuant to this Section 3.5. If the Administrative Agent, the LC
             Issuer or a Lender determines that it has received a tax benefit
             arising out of or in conjunction with any amounts as to which it
             has been indemnified by the Borrower or with respect to which the
             Borrower has paid additional amounts pursuant to this Section 3.5,
             it shall pay over such refund to the Borrower (but only to the
             extent of indemnity payments made, or additional amounts paid by
             the Borrower under this Section 3.5 with respect to the amounts
             giving rise to such refund); provided, however, that during the
             continuance of an Event of Default, any such refund shall be
             applied in reduction of the Secured Obligations.

     (ix)    The Administrative Agent, the LC Issuer, and each Lender shall take
             reasonable steps to avoid the need for the Borrower to pay any
             amounts under this Section 3.5, but they shall not be required to
             take any steps that would impose material costs or other detriments
             on them. Any such cost incurred by the Administrative Agent, the LC
             Issuer or any Lender shall constitute a Secured Obligation and the
             Borrower shall reimburse such Person for such cost.

     3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. Each Lender shall deliver a
written statement of such Lender to the Borrower (with a copy to the
Administrative Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4
or 3.5. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type, currency and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by the Borrower of such written
statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5
shall survive payment of the Obligations and termination of this Agreement;
provided that the Borrower shall not be required to make any payments pursuant
to Section 3.1, 3.2, 3.4 or 3.5 to a Lender or LC Issuer for any increased costs
incurred or reductions suffered more than ninety (90) days prior to the date
that such Lender or LC Issuer, as the case may be, notifies the Borrower of the
circumstances giving rise to such increased costs or reductions and of such
Lender's or the LC Issuer's intention to claim compensation therefor (except
that, if the circumstances giving rise to such increased costs or reductions are
retroactive, then the ninety (90) day period referred to above shall be extended
to include the period of retroactive effect thereof).

                                      47

<PAGE>

     3.7. ALTERNATIVE LENDING INSTALLATION. To the extent reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Loans to reduce any liability of the Borrower to such Lender
under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar
Advances under Section 3.3, so long as such designation is not, in the judgment
of such Lender, reasonably disadvantageous to such Lender. A Lender's
designation of an alternative Lending Installation shall not affect the
Borrower's rights under Section 2.19 to replace a Lender.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

     4.1. INITIAL CREDIT EXTENSION. The Lenders shall not be required to make
the initial Credit Extension hereunder, which initial Credit Extension shall
occur no later than March 15, 2004, unless the following conditions precedent
are satisfied (or waived by the Administrative Agent) immediately prior to or
substantially concurrent with such initial Credit Extension:

          4.1.1 Copies of the articles or certificate of incorporation (or the
     equivalent thereof) of each Credit Party, in each case, together with all
     amendments thereto, and a certificate of good standing, each certified by
     the appropriate governmental officer in its jurisdiction of organization.

          4.1.2 Copies, certified by the Secretary or Assistant Secretary (or
     the equivalent thereof) of each Credit Party, in each case, of its by-laws
     and of its Board of Directors' resolutions and of resolutions or actions of
     any other body authorizing the execution of the Loan Documents to which
     such Credit Party is a party.

          4.1.3 An incumbency certificate, executed by the Secretary or
     Assistant Secretary (or the equivalent thereof) of each Credit Party, in
     each case, which shall identify by name and title and bear the signatures
     of the Authorized Officers and any other officers of such Credit Party
     authorized to sign the Loan Documents to which such Credit Party is party,
     upon which certificate the Administrative Agent and the Lenders shall be
     entitled to rely until informed of any change in writing by such Credit
     Party.

          4.1.4 A certificate signed by the chief financial officer of the
     Borrower, stating that on the initial Credit Extension Date (i) no Event of
     Default or Unmatured Event of Default has occurred and is continuing, (ii)
     all of the representations and warranties in Article V shall be true and
     correct in all material respects as of such date and (iii) other than (A)
     the Service America Write-down and (B) as disclosed in public filings with
     the Securities and Exchange Commission prior to the initial Credit
     Extension Date, no material adverse change in the business, condition
     (financial or otherwise), operations, performance or Property of (1) the
     Borrower and its Subsidiaries, taken as a whole, or (2) the Target and its
     Subsidiaries, taken as a whole, has occurred since December 31, 2002.

          4.1.5 (a) A written opinion of the Borrower's in-house counsel, in
     form and substance reasonably satisfactory to the Administrative Agent and
     addressed to the Administrative Agent and the Lenders, in substantially the
     form of Exhibit A-1, (b) a

                                      48

<PAGE>

     written opinion of Cravath, Swaine & Moore LLP, special New York counsel to
     the Borrower, in form and substance reasonably satisfactory to the
     Administrative Agent and addressed to the Administrative Agent and the
     Lenders, in substantially the form of Exhibit A-2, and (c) a written
     opinion of Richards, Layton & Finger, P.A., special counsel to the
     Borrower, in form and substance reasonably satisfactory to the
     Administrative Agent and addressed to the Administrative Agent and the
     Lenders, in substantially the form of Exhibit A-3.

          4.1.6 Any Notes requested by a Lender pursuant to Section 2.13 payable
     to the order of each such requesting Lender.

          4.1.7 Written money transfer instructions, in substantially the form
     of Exhibit D, addressed to the Administrative Agent and signed by an
     Authorized Officer, together with such other related money transfer
     authorizations as the Administrative Agent may have reasonably requested.

          4.1.8 The Administrative Agent shall have received the consolidated
     financial statements of the Borrower and its Subsidiaries for the
     Borrower's fiscal quarter ended September 30, 2003 and the audited
     financial statements of the Target for the Target's fiscal year ended
     September 30, 2003.

          4.1.9 The Administrative Agent and the Lenders shall have received pro
     forma opening financial statements ("Pro Forma Opening Statements") giving
     effect to the Target Acquisition and five year financial statement
     projections ("Projections"), together with such information as the
     Administrative Agent may reasonably request to confirm the tax, legal, and
     business assumptions made in such Pro Forma Opening Statements and
     Projections, such Pro Forma Opening Statements and Projections
     demonstrating, in the reasonable judgment of the Administrative Agent,
     together with all other information then available to the Administrative
     Agent, that the Borrower and its Subsidiaries have the ability to repay
     their debts and satisfy their other respective obligations as and when due
     and to comply with Sections 6.20 through 6.24.

          4.1.10 The Administrative Agent shall have received evidence
     reasonably satisfactory to the Administrative Agent of the payment of all
     principal, interest, fees and premiums, if any, on all Indebtedness under
     the Existing Credit Agreements, and the agreement to release all Liens and
     the termination of the applicable agreements relating thereto, all taking
     effect concurrently with the effectiveness of this Agreement; provided,
     however, that any Existing Letters of Credit incorporated into and governed
     by the terms of this Agreement shall not be required to be terminated in
     connection with the termination of the Existing Credit Agreements and the
     agreements, documents, and instruments related thereto; provided, further,
     that Letters of Credit issued under the Existing Credit Agreements that do
     not constitute Existing Letters of Credit and that are either cash
     collateralized or supported by back-to- back Letters of Credit in a manner
     reasonably acceptable to the Administrative Agent, together with
     agreements, documents and instruments directly related to such Letters of
     Credit, shall not be required to be terminated in connection with the
     termination of the Existing Credit Agreements and the agreements,
     documents, and instruments related thereto.

                                       49

<PAGE>

          4.1.11 All legal matters shall be reasonably satisfactory to the
     Administrative Agent.

          4.1.12 The Borrower shall have received capital contributions,
     proceeds from the issuance of the Senior Secured Notes, and proceeds from
     the issuance of the Senior Unsecured Notes in an aggregate amount equal to
     or greater than $260,000,000 or such other amount reasonably satisfactory
     to the Administrative Agent.

          4.1.13 The Administrative Agent shall have received a fully executed
     copy of the Intercreditor Agreement.

          4.1.14 The Administrative Agent shall have received fully executed
     copies of the Senior Secured Indenture, the Senior Unsecured Indenture, and
     the Senior Secured Notes and Senior Unsecured Notes issued pursuant to the
     foregoing, in each case on or prior to the Closing Date.

          4.1.15 The Target Acquisition shall be consummated, on the Closing
     Date, pursuant to the terms of the Agreement and Plan of Merger, dated as
     of December 18, 2003, by and among the Borrower, the Target, and Marlin
     Merger Corp., as such agreement was in effect on December 18, 2003;
     provided, however, that amendments or modifications to such agreement
     subsequent to December 18, 2003 shall not preclude the Borrower's
     satisfaction of the condition set forth in this Section 4.1.15 so long as
     any such amendment or modification that is materially adverse to the
     Lenders has been approved by the Administrative Agent (such approval not to
     be unreasonably withheld).

          4.1.16 The Administrative Agent shall have received evidence
     reasonably satisfactory to it that the Collateral Agent, on behalf of the
     creditors of the Borrower party to the Intercreditor Agreement, holds a
     perfected first-priority Lien upon the Collateral or that arrangements
     reasonably satisfactory to the Administrative Agent for perfecting such
     Liens are in place.

          4.1.17 Such other documents as the Administrative Agent or its counsel
     may have reasonably requested, including, without limitation, the
     Collateral Documents and those other documents set forth in Exhibit G
     hereto.

     4.2. EACH CREDIT EXTENSION. The Lenders shall not (except as otherwise set
forth in Section 2.4.4 or Section 2.20.6 with respect to Revolving Loans
extended for the purpose of repaying Swing Line Loans or reimbursing draws under
Facility LCs, as the case may be) be required to make any Credit Extension
unless on the applicable Credit Extension Date:

          4.2.1 There exists no Event of Default or Unmatured Event of Default.

          4.2.2 The representations and warranties contained in Article V are
     true and correct as of such Credit Extension Date in all material respects
     except to the extent any such representation or warranty is stated to
     relate solely to an earlier date, in which case such representation or
     warranty shall have been true and correct in all material respects on and
     as of such earlier date.

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<PAGE>

     Each Borrowing Notice or Swing Line Borrowing Notice, as the case may be,
or request for issuance of a Facility LC, with respect to each such Credit
Extension shall constitute a representation and warranty by the Borrower that
the conditions contained in Sections 4.2.1 and 4.2.2 have been satisfied.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to each Lender and the Administrative
Agent as of each of (i) the date of the initial Credit Extension hereunder and
(ii) each date as required by Section 4.2:

     5.1. EXISTENCE AND STANDING. Each of the Borrower and its Subsidiaries is a
corporation, partnership (in the case of Subsidiaries only) or limited liability
company duly incorporated or organized, as the case may be, validly existing and
(to the extent such concept applies to such entity) in good standing under the
laws of its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.

     5.2. AUTHORIZATION AND VALIDITY. The Borrower has the power and authority
and legal right to execute and deliver the Loan Documents to which it is a party
and to perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper proceedings, and the
Loan Documents to which the Borrower is a party constitute legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, fraudulent conveyances, reorganization or similar laws
relating to or affecting the enforcement of creditors' rights generally; (ii)
general equitable principles (whether considered in a proceeding in equity or at
law); and (iii) requirements of reasonableness, good faith and fair dealing.

     5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and delivery by
the Borrower or its Subsidiaries, as applicable, of the Loan Documents to which
such Person is a party, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (i) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Subsidiaries except for violations which
individually or in the aggregate would not reasonably be expected to result in a
Material Adverse Effect, or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating agreement or
other management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with, or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of the
Borrower or a Subsidiary pursuant to the terms of, any such indenture,
instrument or agreement, other than indentures, instruments or agreements which
will be terminated on the Closing Date in connection with the full repayment of
Indebtedness

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outstanding under such indentures, instruments or agreements, and except for
violations which individually or in the aggregate would not reasonably be
expected to result in a Material Adverse Effect. No material order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other material action in
respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Borrower or any of its Subsidiaries,
is required to be obtained by the Borrower or any of its Subsidiaries in
connection with the execution and delivery of the Loan Documents, the borrowings
under this Agreement, the payment and performance by the Borrower of the
Obligations or the legality, validity, binding effect or enforceability of any
of the Loan Documents, except filings necessary to perfect Liens created under
the Loan Documents.

     5.4. FINANCIAL STATEMENTS. The December 31, 2002 audited consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Administrative Agent and the Lenders were prepared in accordance with
generally accepted accounting principles in effect on the date such statements
were prepared and fairly present in all material respects the consolidated
financial condition and operations of the Borrower and its Subsidiaries at such
date and the consolidated results of their operations for the period then ended
in accordance with generally accepted accounting principles in effect on the
date such statements were prepared.

     5.5. MATERIAL ADVERSE CHANGE. Other than (i) the Service America Write-
down and (ii) as disclosed in public filings with the Securities and Exchange
Commission prior to the initial Credit Extension Date, since December 31, 2002,
there has been no change in the business, condition (financial or otherwise),
operations, performance or Property of the Borrower and its Subsidiaries taken
together, in each case which could reasonably be expected to have a Material
Adverse Effect.

     5.6. TAXES. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except (i) in respect of
such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with Agreement Accounting
Principles or (ii) to the extent that the failure to do so would not reasonably
be expected to have a Material Adverse Effect. The United States federal income
tax returns of the Borrower and its Subsidiaries have been audited by the
Internal Revenue Service through the 1997 fiscal year. No Liens have been filed
and no claims are being asserted with respect to such taxes that would
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.

     5.7. LITIGATION AND CONTINGENT OBLIGATIONS. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions.

     5.8. SUBSIDIARIES. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of

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organization and the percentage of their respective capital stock or other
ownership interests owned by the Borrower or other Subsidiaries. All of the
issued and outstanding shares of capital stock or other ownership interests of
such Subsidiaries have been (to the extent such concepts are relevant with
respect to such ownership interests) duly authorized and issued and are fully
paid and non-assessable.

     5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans would not
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any other member of the Controlled Group has incurred, or reasonably expects
to incur, pursuant to Section 4201 of ERISA, any withdrawal liability to
Multiemployer Plans that in the aggregate would reasonably be expected to have a
Material Adverse Effect. Each Plan complies in all material respects with all
applicable requirements of law and regulations. No Reportable Event has occurred
with respect to any Plan that would reasonably be expected to have a Material
Adverse Effect. No steps have been taken to reorganize or terminate, within the
meaning of Title IV of ERISA, any Multiemployer Plan.

     5.10. ACCURACY OF INFORMATION. The Loan Documents and other written
statements furnished by the Borrower and its Subsidiaries to the Administrative
Agent in connection with the negotiation of, and compliance with, the Loan
Documents (as modified or supplemented by information so furnished) taken as a
whole do not contain any material misstatement of fact or omit to state a
material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading; provided, however,
that with respect to projected financial information, the Borrower and its
Subsidiaries represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.

     5.11. REGULATIONS T, U, AND X. The Borrower will ensure that no use of
Advances or proceeds thereof will violate Regulation T, U or X.

     5.12. MATERIAL AGREEMENTS; RESTRICTIONS ON DIVIDENDS. As of the Closing
Date, neither the Borrower nor any Subsidiary is a party to any agreement or
instrument or subject to any charter or other corporate restriction which could
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, neither the Borrower nor any Subsidiary is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect (other than any
agreement or instrument evidencing or governing Indebtedness).

     5.13. COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries have complied
with all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property, except such non- compliances that would not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. This Section 5.13 does not relate to taxes which are the subject
of Section 5.6, to employee benefits or ERISA matters which are the subject of
Section 5.9 and environmental matters which are the subject of Section 5.16.

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     5.14. OWNERSHIP OF PROPERTIES; PRIORITY OF LIENS. The Borrower and its
Subsidiaries have good title, free of all Liens other than those permitted by
Section 6.15, to all of the material Property and assets reflected in the
Borrower's most recent consolidated financial statements provided to the
Administrative Agent, as owned by the Borrower and its Subsidiaries. To the
extent governed by Article 8 or Article 9 of the UCC, when financing statements
have been filed in the appropriate offices, the Collateral Agent has a perfected
first priority Lien upon all of the Collateral, subject to (i) Liens permitted
by Section 6.15, (ii) filings under any federal statute for patents, trademarks,
and copyrights, and (iii) Collateral in which security interests or liens can
only be perfected through compliance with the terms of the Federal Assignment of
Claims Act.

     5.15. PLAN ASSETS; PROHIBITED TRANSACTIONS. The Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. {section}
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code).

     5.16. ENVIRONMENTAL MATTERS. In the ordinary course of its business, the
officers of the Borrower consider the effect of Environmental Laws applicable to
the business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that the status of the Borrower's compliance with Environmental Laws
cannot reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.

     5.17. INVESTMENT COMPANY ACT. Neither the Borrower nor any Subsidiary is
required to register as an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

     5.18. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

     5.19. INSURANCE. The Borrower maintains, and has caused each Subsidiary to
maintain, with financially sound and reputable insurance companies, or pursuant
to self-insurance arrangements, insurance on all their material Property in such
amounts, subject to such deductibles and self-insurance retentions and covering
such properties and risks as is reasonably consistent with sound business
practice.

     5.20. NO EVENT OF DEFAULT OR UNMATURED EVENT OF DEFAULT. No Event of
Default or Unmatured Event of Default has occurred and is continuing.

     5.21. SDN LIST DESIGNATION. Neither the Borrower nor any of its
Subsidiaries or Affiliates is a country, individual or entity named on the
Specifically Designated National and

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Blocked Persons (SDN) list issued by the Office of Foreign Asset Control of the
Department of the Treasury of the United States of America.

     5.22. SOLVENCY. Immediately after the consummation of the transactions to
occur as of the initial Credit Extension Date, including, without limitation,
the Target Acquisition, and immediately following the making of each Credit
Extension on the initial Credit Extension Date, including, without limitation,
Credit Extensions to fund the Target Acquisition, and after giving effect to the
application of the proceeds of such Credit Extensions: (i) the fair value of the
assets of the Borrower and its Subsidiaries on a consolidated basis, at fair
valuation, will exceed the debts and liabilities, subordinated, contingent, or
otherwise, of the Borrower and its Subsidiaries on a consolidated basis, (ii)
the present fair saleable value of the Property of the Borrower and its
Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of the Borrower and its Subsidiaries
on a consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured, (iii) the Borrower and its Subsidiaries on a consolidated basis will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured, and (iv) the Borrower
and its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the Closing
Date and after the initial Credit Extension Date.

                                   ARTICLE VI

                                    COVENANTS

     Until the Revolving Loan Commitments have expired or been terminated, the
LC Obligations have expired, been reimbursed or been cash collateralized (in
each case in accordance with the terms of this Agreement), and the other
Obligations have been paid in full (other than obligations to pay fees and
expenses with respect to which the Borrower has not received an invoice,
contingent indemnity obligations, other contingent obligations, and Rate
Management Obligations), unless the Required Lenders shall otherwise consent in
writing:

     6.1. FINANCIAL REPORTING. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Lenders:

          6.1.1 Within ninety (90) days after the close of each of its fiscal
     years, financial statements prepared in accordance with Agreement
     Accounting Principles on a consolidated and consolidating basis for itself
     and its consolidated Subsidiaries, including balance sheets as of the end
     of such period, statements of income and statements of cash flows,
     accompanied by (a) an audit report, unqualified as to scope, of a
     nationally recognized firm of independent public accountants or other
     independent public accountants reasonably acceptable to the Required
     Lenders (it being understood and agreed that consolidating financial
     statements need not be certified by such accountants); (b) any management
     letter prepared by said accountants and (c) a certificate of said
     accountants (which certificate may be limited to the extent required by
     generally accepted accounting principles, rules or guidelines) that, in the
     course of their audit of the financial

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<PAGE>

     statements of the Borrower and its consolidated Subsidiaries, which audit
     was conducted in accordance with generally accepted accounting standards,
     they have obtained no knowledge of any Event of Default or Unmatured Event
     of Default, or if, in the opinion of such accountants, any Event of Default
     or Unmatured Event of Default shall exist, stating the nature and status
     thereof.

          6.1.2 Within forty-five (45) days after the close of the first three
     quarterly periods of each of its fiscal years, for itself and its
     consolidated Subsidiaries, consolidated and consolidating unaudited balance
     sheets as at the close of each such period and consolidated and
     consolidating statements of income and a statement of cash flows for the
     period from the beginning of such fiscal year to the end of such quarter,
     all certified as to fairness of presentation in all material respects in
     accordance with Agreement Accounting Principles, compliance with Agreement
     Accounting Principles, and consistency by its chief financial officer or
     treasurer, except for normal year-end audit adjustments and the absence of
     footnotes.

          6.1.3 Together with the financial statements required under Sections
     6.1.1 and 6.1.2, a compliance certificate in substantially the form of
     Exhibit B signed by its chief financial officer or treasurer showing the
     calculations necessary to determine compliance with Sections 6.20 through
     6.24, an officer's certificate in substantially the form of Exhibit F
     stating that, to such officer's knowledge, no Event of Default or Unmatured
     Event of Default exists, or if any Event of Default or Unmatured Event of
     Default exists, stating the nature and status thereof.

          6.1.4 As soon as possible and in any event within ten (10) days after
     the Borrower knows that any material Reportable Event has occurred with
     respect to any Plan, a statement, signed by the chief financial officer or
     treasurer of the Borrower, describing said Reportable Event and the action
     which the Borrower proposes to take with respect thereto.

          6.1.5 As soon as possible and in any event within ten (10) days after
     receipt by the Borrower, a copy of (a) any notice or claim to the effect
     that the Borrower or any of its Subsidiaries is or may be liable to any
     Person as a result of the release by the Borrower, any of its Subsidiaries,
     or any other Person of any toxic or hazardous waste or substance into the
     environment, and (b) any notice alleging any violation of any Environmental
     Law by the Borrower or any of its Subsidiaries, which, in either case,
     could reasonably be expected to have a Material Adverse Effect.

          6.1.6 Promptly upon the filing thereof, copies of all registration
     statements and copies of all filings on forms 10-K, 10-Q, or 8-K which the
     Borrower or any of its Subsidiaries makes with the Securities and Exchange
     Commission, including, without limitation, all certifications and other
     filings required by Section 302 and Section 906 of the Sarbanes-Oxley Act
     of 2002 and all rules and regulations related thereto.

          6.1.7 As soon as practicable, and in any event within thirty (30) days
     after the beginning of each fiscal year of the Borrower, a copy of the plan
     and forecast (including

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     a projected consolidated balance sheet, income statement and funds flow
     statement) of the Borrower for such fiscal year.

          6.1.8 As soon as possible, and in any event within three (3) Business
     Days (in the case of the Borrower) and fifteen (15) days (in the case of
     any Guarantor) after the occurrence thereof, a reasonably detailed
     notification to the Administrative Agent and its counsel of any change in
     the jurisdiction of organization of the Borrower or any Guarantor.

          6.1.9 Such other information (including non-financial information) as
     the Administrative Agent or any Lender may from time to time reasonably
     request.

     If any information which is required to be furnished to the Lenders under
this Section 6.1 is required by law or regulation to be filed by the Borrower
with a government body on an earlier date, then the information required
hereunder shall be furnished to the Lenders promptly following such earlier
date.

     6.2. USE OF PROCEEDS. The Borrower will, and will cause each Subsidiary to,
use (i) the proceeds of the Term Loans in compliance with Section 2.1.2 and
solely to refinance certain existing Indebtedness outstanding on the Closing
Date and to pay a portion of the consideration to be paid in connection with the
Target Acquisition, and (ii) the proceeds of the Revolving Loans to pay a
portion of the consideration to be paid in connection with the Target
Acquisition, to refinance certain Indebtedness outstanding on the Closing Date,
to provide cash collateral for certain Letters of Credit not constituting
Facility LCs or Existing Letters of Credit, and for general corporate purposes,
including, without limitation, for working capital, commercial paper liquidity
support, Permitted Acquisitions, and to pay fees and expenses incurred in
connection with this Agreement. The Borrower shall use the proceeds of Credit
Extensions in compliance with all applicable legal and regulatory requirements
and any such use shall not result in a violation of any such requirements,
including, without limitation, Regulation T, U and X, the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder.

     6.3. NOTICE OF EVENT OF DEFAULT. Within three (3) Business Days after an
Authorized Officer becomes aware thereof, the Borrower will give notice in
writing to the Lenders of the occurrence of any Event of Default or Unmatured
Event of Default.

     6.4. CONDUCT OF BUSINESS. The Borrower will, and will cause each Subsidiary
to, carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted
(including, without limitation, the business currently conducted by the Target),
and do all things necessary to remain duly incorporated or organized, validly
existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, as in
effect on the Closing Date, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted; provided,
however, that the foregoing shall not prohibit any merger, dissolution, or
consolidation permitted under Section 6.11.

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<PAGE>

     6.5. TAXES. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay all material taxes, assessments
and governmental charges and levies before the same shall become delinquent or
in default upon it or its income, profits or Property, except those which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been set aside in accordance with Agreement
Accounting Principles.

     6.6. INSURANCE. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies, or pursuant
to self-insurance arrangements, insurance on all their material Property in such
amounts, subject to such deductibles and self-insurance retentions, and covering
such risks as is consistent with sound business practice, and the Borrower will
furnish to any Lender upon request full information as to the insurance carried.
The Borrower shall deliver to the Collateral Agent and the Administrative Agent
endorsements in form and substance reasonably acceptable to the Collateral Agent
and the Administrative Agent (x) to all "All Risk" physical damage insurance
policies on all of the Borrower's and its Subsidiaries' tangible real and
personal property and assets and business interruption insurance policies naming
the Collateral Agent as loss payee and (y) to all general liability and other
liability policies naming the Collateral Agent as an additional insured. In the
event the Borrower or any of its Subsidiaries at any time or times hereafter
shall fail to obtain or maintain any of the policies or insurance required
herein or to pay any premium in whole or in part relating thereto, then the
Administrative Agent, without waiving or releasing any obligations or resulting
Event of Default hereunder, may at any time or times thereafter (but shall be
under no obligation to do so) obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which the
Administrative Agent deems advisable. All sums so disbursed by the
Administrative Agent shall constitute part of the Obligations, payable as
provided in this Agreement.

     6.7. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, ERISA and Section 302 and Section
906 of the Sarbanes-Oxley Act of 2002, except where the failure to do so
individually or in the aggregate would not reasonably be expected to result in a
Material Adverse Effect.

     6.8. MAINTENANCE OF PROPERTIES. Subject to Section 6.12, the Borrower will,
and will cause each Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property material to the operation of its
business in good repair, working order and condition (ordinary wear and tear
excepted), and make all necessary and proper repairs, renewals and replacements
to any such Property so that its business carried on in connection therewith may
be properly conducted at all times.

     6.9. INSPECTION; KEEPING OF BOOKS AND RECORDS.

     (i)     The Borrower will, and will cause each Subsidiary to, permit (x)
             the Administrative Agent at any time and (y) the Lenders during the
             continuance of an Event of Default, in each case by their
             respective representatives and agents, to inspect any of the
             Property, including, without limitation, the Collateral, books

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<PAGE>

             and financial records of the Borrower and each Subsidiary, to
             examine and make copies of the books of accounts and other
             financial records of the Borrower and each Subsidiary, and to
             discuss the affairs, finances and accounts of the Borrower and
             each Subsidiary with, and to be advised as to the same by, their
             respective officers at such reasonable times and intervals as the
             Administrative Agent or any Lender may designate (in each case
             other than (x) records subject to attorney-client privilege and
             (y) patent-related information the disclosure of which is
             prohibited by applicable law or the rules and regulations of a
             Governmental Authority). The Borrower shall keep and maintain,
             and cause each of its Subsidiaries to keep and maintain, in all
             material respects, proper books of record and account in which
             entries in conformity with Agreement Accounting Principles shall
             be made of all dealings and transactions in relation to their
             respective businesses and activities.

     (ii)    Except to the extent the Administrative Agent may reasonably
             consent to any change, the Borrower will, or will cause each
             Subsidiary to, continue to account for PIP in the same manner as
             the Credit Parties account for PIP as of the Closing Date which is
             as follows: (i) when PIP is received by any Credit Parties, funds
             are initially allocated (a) as a debit to cash on the Credit
             Parties' general ledger; and (B) as a corresponding credit in a
             contra-account reserve established with respect to the Credit
             Parties' accounts, with the funds in such contra-account not
             specifically allocated to identified accounts (the amount of funds
             in such contra-account from time to time are referred to as
             "Unapplied PIP"); (ii) at such time as the Borrower allocates any
             portion of PIP to identified accounts, the contra-account for
             Unapplied PIP is reduced by that amount and the identified account
             is extinguished by that amount; and (iii) at such time as the
             Borrower determines any portion of PIP represents an overpayment
             under applicable Medicare, Medicaid, TRICARE, CHAMPVA or any other
             program of any Governmental Authority, Borrower transfers such
             overpaid portion on its books from the contra-account for Unapplied
             PIP to a liability entry on its general ledger entitled "PIP
             Settlements".

     6.10. RESTRICTED PAYMENTS. The Borrower will not, nor will it permit any
Subsidiary to, make any Restricted Payment (other than dividends payable in its
own capital stock) except that,

          6.10.1 Any Subsidiary may declare and pay dividends or make
     distributions (i) payable solely in its capital stock to the direct or
     indirect holders of its capital stock or (ii) payable in dividends and
     distributions to the Borrower or to a Subsidiary that is a Guarantor (and
     if such Subsidiary has shareholders other than the Borrower or a Subsidiary
     that is a Guarantor, to its shareholders on a pro rata basis).

          6.10.2 The Borrower may make dividends or distributions in respect of
     capital stock subject to the Closing Date Stock Award Plan so long as the
     aggregate amount of dividends or distributions made in cash in respect
     thereof does not exceed $2,800,000 and the aggregate amount of dividends or
     distributions made in capital stock in respect thereof does not exceed
     $5,500,000.

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<PAGE>

          6.10.3 The Borrower may declare and pay dividends with respect to its
     capital stock payable solely in additional shares of its capital stock (or
     warrants, options, or other rights to acquire additional shares of its
     capital stock).

          6.10.4 Repurchases of capital stock deemed to occur upon exercise of
     stock options if such capital stock represents a portion of the exercise
     price of such options, and repurchases of capital stock of Subsidiaries
     consisting of directors' qualifying shares or repurchases of shares issued
     to third parties to the extent necessary to satisfy any licensing
     requirements under applicable law with respect to the Borrower's or any of
     its Subsidiaries' businesses.

          6.10.5 Cash payments in lieu of the issuance of fractional shares in
     connection with the exercise of warrants, options or other securities
     convertible into or exchangeable for capital stock of the Borrower;
     provided, however, that any such cash payment shall not be for the purpose
     of evading the limitations of this Section 6.10.

          6.10.6 The payment of scheduled, quarterly cash dividends on the
     Chemed Trust Securities declared on or prior to December 31, 2004 in an
     amount not to exceed $2.00 per share per year, and the redemption of the
     Chemed Trust Securities and the Subordinated Chemed Debentures declared on
     or prior to December 31, 2004 at the scheduled redemption price.

          6.10.7 So long as no Event of Default or Unmatured Event of Default
     exists at the time thereof, the Borrower may declare and pay dividends on
     its capital stock so long as (x) the amount of any dividend for any share
     of capital stock does not exceed $0.48, and (y) the aggregate amount of
     dividends paid on such capital stock does not exceed $7,000,000 in any
     fiscal year.

          6.10.8 Any purchase, repurchase, redemption, retirement or other
     acquisition for value of shares of, or options to purchase shares of,
     common stock of the Borrower or any of its Subsidiaries from employees,
     former employees, directors or former directors of the Borrower or any of
     its Subsidiaries (or permitted transferees of such employees, former
     employees, directors or former directors), pursuant to the terms of
     agreements (including employment agreements) or plans (or amendments
     thereto) approved by the Board of Directors under which such individuals
     purchase or sell or are granted the option to purchase or sell, shares of
     such common stock; provided, however, that the aggregate amount of such
     purchases, repurchases, redemptions, retirements and other acquisitions for
     value will not exceed $2,000,000 in any calendar year.

          6.10.9 Additional Restricted Payments to the extent not otherwise
     permitted under this 6.10 so long as the aggregate amount of such
     additional Restricted Payments does not exceed $1,000,000 at any time.

     6.11. MERGER OR DISSOLUTION. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate into any other Person or dissolve, except
that:

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          6.11.1 A Guarantor may merge into (x) the Borrower or (y) a
     Wholly-Owned Subsidiary that is a Guarantor or becomes a Guarantor promptly
     upon the completion of the applicable merger or consolidation.

          6.11.2 A Subsidiary that is not a Guarantor and not required to be a
     Guarantor may merge or consolidate with or into any other Person; provided,
     however, that if the equity interests of such Subsidiary have been pledged
     to the Collateral Agent as Collateral, then such merger or consolidation
     shall not be permitted unless such Subsidiary is the surviving entity of
     such merger or consolidation or such merger or consolidation is approved in
     writing by the Administrative Agent prior to the consummation thereof (such
     approval not to be unreasonably withheld).

          6.11.3 The Borrower or any Subsidiary may consummate any merger or
     consolidation in connection with the Target Acquisition or any Permitted
     Acquisition.

          6.11.4 Any Person may merge into the Borrower, provided that the
     Borrower shall be the continuing or surviving entity resulting from such
     merger.

          6.11.5 Any Subsidiary may liquidate or dissolve if the Borrower
     determines in good faith that such liquidation or dissolution is in the
     best interests of the Borrower and the Subsidiaries and is not materially
     disadvantageous to the Lenders.

          6.12. SALE OF ASSETS. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property (other than cash
or cash equivalents not constituting Cash Equivalent Investments) to any other
Person, except:

          6.12.1 Sales or other dispositions of inventory in the ordinary course
     of business.

          6.12.2 A disposition or transfer of assets by a Subsidiary to the
     Borrower or a Guarantor or by the Borrower to a Guarantor.

          6.12.3 A disposition of obsolete, excess, damaged or worn-out
     Property, Property no longer used or useful in the business of the Borrower
     or its Subsidiaries or other assets in the ordinary course of business of
     the Borrower or any Subsidiary.

          6.12.4 The Target Stock Issuance so long as the form and substance
     thereof is reasonably satisfactory to the Required Lenders.

          6.12.5 Sales or liquidations of Cash Equivalent Investments.

          6.12.6 Each of the Borrower and its Subsidiaries may grant licenses,
     sublicenses, leases or subleases to other Persons not materially
     interfering with the conduct of the business of the Borrower or any of its
     Subsidiaries.

          6.12.7 Restricted Payments permitted by Section 6.10.

          6.12.8 Investments permitted by Section 6.13.

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          6.12.9 Liens permitted by Section 6.15.

          6.12.10 Sale and Leaseback Transactions permitted by Section 6.27.

          6.12.11 Sales of directors' qualifying shares or shares issued to
     third parties to the extent necessary to satisfy any licensing requirements
     under applicable law with respect to the Borrower's or any of its
     Subsidiaries' businesses.

          6.12.12 Leases, sales or other dispositions of its Property that,
     together with all other Property of the Borrower and its Subsidiaries
     previously leased, sold or disposed of (other than dispositions otherwise
     permitted by this Section 6.12) as permitted by this Section during any
     fiscal year of the Borrower do not exceed $1,000,000 in the aggregate.

     6.13. INVESTMENTS AND ACQUISITIONS. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:

          6.13.1 Cash Equivalent Investments.

          6.13.2 Existing Investments in Subsidiaries and other Investments in
     existence on the Closing Date and described in Schedule 6.13.

          6.13.3 Investments permitted by Section 6.14.5.

          6.13.4 Investments (x) by a Credit Party in any newly formed
     Subsidiary so long as the newly formed Subsidiary promptly becomes a Credit
     Party thereafter and (y) by the Borrower or a Guarantor in equity interests
     in their respective Subsidiaries; provided, however, all such Investments
     subject to this clause (y) that constitute contributions to capital shall
     not, when aggregated with Indebtedness owing by such Subsidiaries to the
     Borrower or any Guarantors as permitted by Section 6.14.5, exceed
     $2,500,000 at any time outstanding (such amount, the "Permitted Non-Credit
     Party Amount"); provided, further, that not more than $400,000 of the
     Permitted Non-Credit Party Amount shall at any time consist of Investments
     other than Investments in Roto-Rooter of Canada, Ltd. as further described
     in Schedule 6.13.

          6.13.5 Investments permitted by Section 6.17.

          6.13.6 Investments consisting of Contingent Obligations not prohibited
     by Section 6.14.

          6.13.7 Investments arising out of deposits and pledges permitted by
     Section 6.15.

          6.13.8 Investments received in connection with the bankruptcy or
     reorganization of, or settlement of delinquent accounts and disputes with,
     customers and suppliers.

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          6.13.9 Investments resulting from transactions permitted by Section
     6.11.

          6.13.10 Investments resulting from transactions permitted by Section
     6.12.

          6.13.11 Investments in charitable foundations organized under Section
     501(c) of the Code in an amount not to exceed $1,000,000 in the aggregate
     in any fiscal year.

          6.13.12 Loans and advances to employees, officers and directors of the
     Borrower and its Subsidiaries not to exceed in the aggregate at any time
     (x) $6,000,000 in respect of split-dollar policies and (y) $2,000,000 in
     respect of other loans and advances.

          6.13.13 Investments in VNF not exceeding $1,000,000 in the aggregate
     in any fiscal year.

          6.13.14 Payroll, travel and similar advances to cover matters that are
     expected at the time of such advances ultimately to be treated as expenses
     for accounting purposes and that are made in the ordinary course of
     business.

          6.13.15 Investments resulting from stock, obligations or securities
     received in settlement of debts created in the ordinary course of business
     and owing to the Borrower or any Subsidiary or in satisfaction of
     judgments.

          6.13.16 Investments in any Person consisting of the licensing of
     intellectual property pursuant to joint ventures, strategic alliances or
     joint marketing arrangements with such Person, in each case made in the
     ordinary course of business.

          6.13.17 Investments in a vendor or supplier consisting of loans or
     advances to such vendor or supplier in connection with any guarantees to
     the Borrower or any Guarantor of supply by, or to fund the supply capacity
     of, such vendor or supplier, in any case not to exceed $2,000,000 at any
     time outstanding.

          6.13.18 Investments which constitute cash collateral securing
     obligations outstanding under Letters of Credit issued under the Existing
     Credit Agreements that do not constitute Existing Letters of Credit so long
     as the form and substance of such cash collateralization is reasonably
     acceptable to the Administrative Agent.

          6.13.19 Investments consisting of loans or advances by the Borrower or
     a Subsidiary thereof to independent contractors or subcontractors of the
     Borrower or a Subsidiary thereof; provided, however, that (x) the proceeds
     of such loans or advances are used for equipment purchases in the ordinary
     course of business or for working capital expenditures in the ordinary
     course of business, (y) the aggregate amount of loans and advances to any
     individual independent contractor or subcontractor of the Borrower or a
     Subsidiary thereof shall not exceed $250,000, and (z) the aggregate amount
     of loans and advances to all independent contractors and subcontractors of
     the Borrower and its Subsidiaries shall not exceed $4,000,000.

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          6.13.20 Additional Investments to the extent not otherwise permitted
     under Sections 6.13.1 through 6.13.19 so long as the aggregate amount of
     such additional Investments does not exceed $1,000,000 at any time.

          6.13.21 the Target Acquisition or any other Acquisitions meeting the
     following requirements or otherwise approved by the Required Lenders (each
     such Acquisition constituting a "Permitted Acquisition"):

     (i)     as of the date of the consummation of such Acquisition, no Event of
             Default or Unmatured Event of Default shall have occurred and be
             continuing or would result from such Acquisition, and the
             representation and warranty contained in Section 5.11 shall be true
             both before and after giving effect to such Acquisition;

     (ii)    such Acquisition is consummated on a non-hostile basis pursuant to
             a negotiated acquisition agreement approved by the board of
             directors or other applicable governing body of the seller or
             entity to be acquired;

     (iii)   the business to be acquired in such Acquisition is similar or
             related to one or more of the lines of business in which the
             Borrower and its Subsidiaries, including, without limitation, the
             Target, are engaged on the Closing Date;

     (iv)    as of the date of the consummation of such Acquisition, all
             material governmental and corporate approvals required in
             connection therewith shall have been obtained;

     (v)     the Purchase Price for each such Acquisition together with the
             Purchase Price of all other Permitted Acquisitions shall not exceed
             an amount equal to $3,000,000 during the period beginning on the
             Closing Date and ending on the later of the Revolving Loan
             Termination Date and the Term Loan Maturity Date;

     (vi)    prior to the consummation of such Permitted Acquisition, the
             Borrower shall have delivered to the Administrative Agent a pro
             forma consolidated balance sheet, income statement and cash flow
             statement of the Borrower and its Subsidiaries (the "Acquisition
             Pro Forma"), based on the Borrower's most recent financial
             statements delivered pursuant to Section 6.1.1 and using historical
             financial statements for the acquired entity provided by the
             seller(s) or which shall be complete and shall fairly present, in
             all material respects, the financial condition and results of
             operations and cash flows of the Borrower and its Subsidiaries in
             accordance with Agreement Accounting Principles, but taking into
             account such Permitted Acquisition and the funding of all Credit
             Extensions in connection therewith, and such Acquisition Pro Forma
             shall reflect that, on a pro forma basis, the Borrower would have
             been in compliance with the financial covenants set forth in
             Sections 6.20 through 6.24 for the period of four fiscal quarters
             reflected in the compliance certificate most recently delivered to
             the Administrative Agent pursuant to Section 6.1.3 prior to the
             consummation of such Permitted Acquisition (giving effect to such
             Permitted Acquisition and all Credit Extensions funded in
             connection therewith as if made on the first day of such period);
             and

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     (vii)   prior to each such Permitted Acquisition, the Borrower shall
             deliver to the Administrative Agent a documentation, information
             and certification package in form and substance reasonably
             acceptable to the Administrative Agent, including, without
             limitation:

            (A)   a near-final version (with no amendments to be made thereto
                  that could reasonably be expected to be materially adverse to
                  the Lenders, without the approval of the Administrative
                  Agent) of the acquisition agreement for such Acquisition
                  together with drafts of the material schedules thereto;

            (B)   a near-final version (with no amendments to be made thereto
                  that could reasonably be expected to be materially adverse to
                  the Lenders, without the approval of the Administrative
                  Agent) of all documents, instruments and agreements with
                  respect to any Indebtedness to be incurred or assumed in
                  connection with such Acquisition; and

            (C)   such other documents or information as shall be reasonably
                  requested by the Administrative Agent in connection with such
                  Acquisition.

     (viii)  as of the date on which the Permitted Acquisition is consummated,
             the Borrower shall deliver (or shall cause the delivery) to the
             Administrative Agent and the Collateral Agent all of the Collateral
             Documents necessary for the perfection of a first priority Lien
             (subject to Liens permitted by Section 6.15) in all of the Property
             to be acquired (including, as applicable, equity interests in the
             Person being acquired and such Person's Subsidiaries), all in
             accordance with the requirements of Section 6.26, and in each case
             together with opinions of counsel in form and substance reasonably
             acceptable to the Administrative Agent and the Collateral Agent.
             The Borrower shall also deliver (or shall cause the delivery) to
             the Administrative Agent a supplement to the Guaranty Agreement if
             the Permitted Acquisition is an Acquisition of equities and the
             Person being acquired is not being merged with the Borrower or any
             other Person required to be a Guarantor under the terms of this
             Agreement, the Guaranty Agreement, or the Collateral Documents;

     6.14. INDEBTEDNESS. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

          6.14.1 The Secured Obligations.

          6.14.2 Indebtedness existing on the Closing Date and described in
     Schedule 6.14 (and renewals, refinancings or extensions thereof on non-
     pricing terms and conditions, taken as a whole, not materially less
     favorable to the applicable obligor than such existing Indebtedness and in
     a principal amount not in excess of that outstanding as of the date of such
     renewal, refinancing or extension plus the amount of any interest, premium
     or penalties required to be paid thereon plus fees and expenses associated
     therewith).

          6.14.3 Indebtedness arising under Rate Management Transactions
     permitted under Section 6.17.

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          6.14.4 Secured or unsecured purchase money Indebtedness (including
     Capitalized Leases) and Indebtedness in respect of Sale and Leaseback
     Transactions permitted under Section 6.27 that is incurred by the Borrower
     or any of its Subsidiaries after the Closing Date to finance the
     acquisition of assets used in its business, if (1) the total of all such
     Indebtedness for the Borrower and its Subsidiaries taken together incurred
     on or after the Closing Date shall not exceed an aggregate principal amount
     of $1,000,000 at any one time outstanding, (2) such Indebtedness when
     incurred shall not exceed the purchase price of the asset(s) financed, (3)
     no such Indebtedness shall be refinanced for a principal amount in excess
     of the principal balance outstanding thereon at the time of such
     refinancing plus the amount of any interest, premium or penalties required
     to be paid thereon plus fees and expenses associated therewith, and (4) any
     Lien securing such Indebtedness is permitted under Section 6.15 (such
     Indebtedness being referred to herein as "Permitted Purchase Money
     Indebtedness").

          6.14.5 Indebtedness arising from intercompany loans and advances (i)
     made by any Credit Party to any other Credit Party, (ii) made by any
     Subsidiary that is not a Credit Party to any Credit Party; provided that
     all such Indebtedness described in this clause (ii) shall be expressly
     subordinated to the Secured Obligations pursuant to subordination
     provisions reasonably acceptable to the Administrative Agent, or (iii) made
     by any Credit Party to any Subsidiary that is not a Credit Party; provided
     that the aggregate of all such Indebtedness described in this clause (iii)
     shall not exceed $250,000 at any time.

          6.14.6 Contingent Obligations of the Borrower of any Indebtedness of
     any Subsidiary permitted under this Section 6.14.

          6.14.7 Contingent Obligations of any Subsidiary of the Borrower that
     is a Guarantor with respect to any Indebtedness of the Borrower or any
     other Subsidiary permitted under this Section 6.14.

          6.14.8 Indebtedness outstanding under the Senior Secured Indenture
     Documents and any extensions, renewals, refinancings or replacements of
     such Indebtedness so long as the aggregate principal amount of the
     Indebtedness resulting from such extension, renewal, refinancing, or
     replacement does not exceed the aggregate principal amount of Indebtedness
     outstanding under the Senior Secured Indenture Documents on the Closing
     Date plus interest, premiums, penalties, fees and expenses paid in respect
     of refinancing, renewing, extending or refunding such Indebtedness, (y) the
     holders of the Indebtedness resulting from such extension, renewal,
     refinancing or replacement are subject to the Intercreditor Agreement, and
     (z) the Borrower and its Subsidiaries are in compliance with Section 6.31.

          6.14.9 Indebtedness outstanding under the Senior Unsecured Indenture
     Documents and any extensions, renewals, refinancings or replacements of
     such Indebtedness plus interest, premiums, penalties, fees and expenses
     paid in respect of refinancing, renewing, extending or refunding such
     Indebtedness, so long as the Borrower and its Subsidiaries are in
     compliance with Section 6.31.

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          6.14.10 Indebtedness of any Subsidiary of the Borrower at the time
     such Subsidiary is merged or consolidated with or into the Borrower or any
     Subsidiary and is not created in contemplation of such event.

          6.14.11 Undrawn amounts under Letters of Credit that were issued under
     the Existing Credit Agreements, that are not Existing Letters of Credit,
     and that are cash collateralized or supported by back-to-back Letters of
     Credit on terms reasonably acceptable to the Administrative Agent.

          6.14.12 Indebtedness arising from judgments or orders in circumstances
     not constituting an Event of Default.

          6.14.13 Indebtedness incurred under Financial Contracts entered into
     in the ordinary course of financial management and not for speculative
     purposes.

          6.14.14 Indebtedness in respect of performance bonds, bankers'
     acceptances and surety or appeal bonds provided by the Borrower and its
     Subsidiaries in the ordinary course of their business.

          6.14.15 Indebtedness arising from the agreements of the Borrower or a
     Subsidiary providing for indemnification, adjustment of purchase price or
     similar obligations, in each case incurred in connection with the
     disposition of any business, assets or a Subsidiary of the Borrower in
     accordance with the terms of this Agreement other than guarantees of
     Indebtedness incurred by any Person acquiring all or any portion of such
     business, assets or Subsidiary for the purpose of financing such
     acquisition.

          6.14.16 Indebtedness arising from the honoring by a bank or other
     financial institution of a check, draft or similar instrument drawn against
     insufficient funds in the ordinary course of business, provided that such
     Indebtedness is extinguished within five Business Days of its incurrence.

          6.14.17 Obligations arising from or representing deferred compensation
     to employees of the Borrower or its Subsidiaries that constitute or are
     deemed to be Indebtedness under Agreement Accounting Principles and that
     are incurred in the ordinary course of business.

          6.14.18 Indebtedness incurred by a Guarantor, to the extent that the
     proceeds of such Indebtedness are used to repay Indebtedness under this
     Agreement or the Senior Secured Notes.

          6.14.19 Additional unsecured Indebtedness of the Borrower or any
     Subsidiary, to the extent not otherwise permitted under this Section 6.14;
     provided, however, that the aggregate principal amount of such Indebtedness
     shall not exceed $5,000,000 at any time outstanding.

     6.15. Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:

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          6.15.1 Liens securing (x) Secured Obligations and (y) Indebtedness
     permitted under Section 6.14.8 so long as the holders of such Indebtedness
     are bound by and subject to the terms of the Intercreditor Agreement.

          6.15.2 Liens for taxes, assessments or governmental charges or levies
     on its Property if the same shall not at the time be delinquent or
     thereafter can be paid without penalty, or are being contested in good
     faith and by appropriate proceedings and for which reserves, if any,
     required in accordance with Agreement Accounting Principles shall have been
     set aside on its books.

          6.15.3 Liens imposed by law, such as landlords', wage earners',
     carriers', warehousemen's and mechanics' liens and other similar liens
     arising in the ordinary course of business which secure payment of
     obligations not more than forty-five (45) days past due or which are being
     contested in good faith by appropriate proceedings and for which reserves,
     if any, required in accordance with Agreement Accounting Principles shall
     have been set aside on its books.

          6.15.4 Liens arising out of pledges or deposits under worker's
     compensation laws, unemployment insurance, old age pensions, or other
     social security or retirement benefits, or similar legislation.

          6.15.5 Liens existing on the Closing Date and described in Schedule
     6.15.

          6.15.6 Deposits securing liability to insurance carriers under
     insurance or self-insurance arrangements.

          6.15.7 Deposits to secure the performance of bids, contracts (other
     than for borrowed money), leases, public or statutory obligations, surety
     and appeal bonds, contested taxes, the payment of rent, performance bonds
     and other obligations of a like nature incurred in the ordinary course of
     business.

          6.15.8 Easements, reservations, rights-of-way, zoning, building and
     other restrictions, survey exceptions and other similar encumbrances as to
     real property of the Borrower and its Subsidiaries which customarily exist
     on properties of corporations engaged in similar activities and similarly
     situated and which do not materially interfere with the conduct of the
     business of the Borrower or such Subsidiary conducted at the property
     subject thereto.

          6.15.9 Purchase money Liens securing Permitted Purchase Money
     Indebtedness (as defined in Section 6.14); provided, that such Liens shall
     not apply to any property of the Borrower or its Subsidiaries other than
     that purchased with the proceeds of such Permitted Purchase Money
     Indebtedness.

          6.15.10 Liens existing on any asset of any Subsidiary of the Borrower
     at the time such Subsidiary becomes a Subsidiary and not created in
     contemplation of such event.

          6.15.11 Liens on any asset securing Indebtedness incurred or assumed
     for the purpose of financing or refinancing all or any part of the cost of
     acquiring or constructing

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     such asset; provided that such Lien attaches to such asset concurrently
     with or within eighteen (18) months after the acquisition or completion or
     construction thereof.

          6.15.12 Liens existing on any asset of any Subsidiary of the Borrower
     at the time such Subsidiary is merged or consolidated with or into the
     Borrower or any Subsidiary and not created in contemplation of such event.

          6.15.13 Liens existing on any asset prior to the acquisition thereof
     by the Borrower or any Subsidiary and not created in contemplation thereof;
     provided that such Liens do not encumber any other property or assets.

i          6.15.14 Liens arising out of the refinancing, extension, renewal or
     refunding of any Indebtedness secured by any Lien permitted under this
     Section 6.15; provided that (a) such Indebtedness is not secured by any
     additional assets, and (b) the principal amount of such Indebtedness
     secured by any such Lien is not increased, except to the extent such
     increase includes interest, premiums, penalties, fees and expenses paid
     in respect of refinancing, extending, renewing or refunding such
     Indebtedness.

          6.15.15 Bankers' liens and rights of set off with respect to customary
     depositary arrangements entered into in the ordinary course of business.

          6.15.16 Liens on assets of any Subsidiary of any Credit Party in favor
     of any Credit Party securing borrowings from such Credit Party.

          6.15.17 Liens to collateralize Letters of Credit issued under the
     Existing Credit Agreements that remain outstanding after the Closing Date,
     do not constitute Existing Letters of Credit, and are cash collateralized
     or supported by back-to-back Letters of Credit on terms reasonably
     acceptable to the Administrative Agent.

          6.15.18 Liens in favor of customs and revenue authorities which secure
     payment of customs duties in connection with the importation of goods.

          6.15.19 Liens arising out of Capitalized Leases or Operating Leases.

          6.15.20 Licenses, sublicenses, leases or subleases granted to others
     in the ordinary course of business that do not interfere in any material
     respect with the business of the Borrower and its Subsidiaries.

          6.15.21 Liens arising from judgments, awards, orders or attachments in
     circumstances not constituting an Event of Default.

          6.15.22 Liens affecting the interest of the landlord of any ground
     lease.

          6.15.23 Liens securing Indebtedness permitted by Section 6.14.14.

          6.15.24 Liens issued in favor of surety bonds in existence on the
     Closing Date and identified on Schedule 6.15.

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          6.15.25 Liens of any landlord arising under a real property lease to
     the extent such Liens arise in the ordinary course of business and secure
     obligations not more than forty-five (45) days past due or which are being
     contested in good faith by appropriate proceedings and for which reserves,
     if any, required in accordance with Agreement Accounting Principles shall
     have been set aside on its books.

          6.15.26 Liens in favor of any Holder of Secured Obligations securing
     Rate Management Obligations permitted under Section 6.17.

          6.15.27 Liens deemed to exist in connection with Cash Equivalent
     Investments of the type described in clause (v) of the definition thereof.

          6.15.28 Rights of recoupment and any other Liens, rights and benefits
     of any governmental Third Party Payor with respect to Governmental
     Receivables.

          6.15.29 Additional Liens to the extent not otherwise permitted under
     this Section 6.15 so long as the aggregate amount of Indebtedness secured
     thereby does not exceed $1,000,000 at any time and the aggregate value of
     the Property subject thereto does not exceed $1,000,000 at any time.

     If the Borrower or any Guarantor creates any initial or additional Lien on
any Property to secure the Senior Secured Notes, it must concurrently grant a
first-priority Lien that is equal and ratable with any other first-priority Lien
upon such Property as security for the Secured Obligations. In addition, neither
the Borrower nor any of its Subsidiaries shall become a party to any agreement,
note, indenture or other instrument, or take any other action, which would
prohibit the creation of a Lien on any of its Properties or other assets in
favor of the Collateral Agent or the Administrative Agent for the benefit of the
Holders of Secured Obligations; provided, that (i) any agreement, note,
indenture or other instrument in connection with (A) purchase money Indebtedness
(including Capitalized Leases) and Indebtedness in respect of Sale and Leaseback
Transactions for which the related Liens are permitted hereunder may prohibit
the creation of a Lien in favor of the Collateral Agent or the Administrative
Agent for the benefit of the Holders of Secured Obligations, with respect to the
assets or Property obtained with the proceeds of such Indebtedness, (B) the
Senior Unsecured Notes and other agreements with respect to unsecured
Indebtedness governed by indentures or credit agreements or note purchase
agreements with institutional investors permitted by this Agreement may contain
terms that are not materially more restrictive (as reasonably determined by the
Administrative Agent), taken as a whole, than those contained in the Senior
Unsecured Notes Documents, (C) the Senior Secured Notes and other agreements
with respect to secured Indebtedness governed by indentures or credit agreements
or note purchase agreements with institutional investors permitted by this
Agreement may contain terms that are not materially more restrictive (as
reasonably determined by the Administrative Agent), taken as a whole, than those
contained in the Senior Secured Indenture Documents, (ii) this paragraph shall
not prohibit (A) customary restrictions contained in purchase and sale
agreements limiting the transfer of the subject assets pending closing, (B)
customary non-assignment provisions in leases and other contracts entered into
in the ordinary course of business, (C) agreements in effect as of the Closing
Date and not entered into in contemplation of the transactions effected in
connection with the Target Acquisition, (D) any restriction existing under
agreements relating to assets acquired by the Borrower or a Subsidiary

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in a transaction permitted hereby, and (E) any restriction or condition as
required by applicable law; provided that such agreements existed at the time of
such acquisition, were not put into place in anticipation of such acquisition
and are not applicable to any assets other than assets so acquired and (iii) any
restriction existing under any agreement of a Person acquired as a Subsidiary
pursuant to a transaction permitted hereby; provided that any such agreement
existed at the time of such acquisition, was not put into place in anticipation
of such acquisition and was not applicable to any Person or assets other than
the Person or assets so acquired.

     6.16. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate (other than the Borrower and its
Subsidiaries) except (i) pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and upon terms no less favorable to the
Borrower or such Subsidiary than the Borrower or such Subsidiary would obtain in
a comparable arm's-length transaction, (ii) transactions between or among the
Credit Parties not involving any other Affiliate, (iii) transactions between or
among Subsidiaries that are not Guarantors not involving any other Affiliate,
(iv) the Borrower and its Subsidiaries may make loans and advances to directors,
officers, and employees of the Borrower and its Subsidiaries in the ordinary
course of business, (v) the Borrower and its Subsidiaries may make payments in
respect of transactions required to be made pursuant to agreements or
arrangements in effect on the Closing Date and set forth on Schedule 6.16, (vi)
the Borrower and its Subsidiaries may enter into, make payments under, or issue
securities, stock options or similar rights pursuant to employment arrangements,
employee benefit plans, equity option plans, indemnification provisions and
other compensatory arrangements with directors, officers, and employees of the
Borrower and its Subsidiaries in the ordinary course of business, so long as
such payments and issuances otherwise comply with the terms of this Agreement,
(vii) the Borrower and its Subsidiaries may make Restricted Payments permitted
by Section 6.10, (viii) the Borrower and its Subsidiaries may enter into
transactions permitted by Section 6.11, 6.12, 6.13 or 6.14, (ix) the
Transactions and (x) the making of severance payments to directors, officers or
employees of the Target that are required pursuant to arrangements in effect
prior to the date that the Borrower acquired the Target.

     6.17. FINANCIAL CONTRACTS. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Rate Management
Transactions except for those entered into in the ordinary course of business
for bona fide hedging purposes and not for speculative purposes.

     6.18. SUBSIDIARY COVENANTS. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary (i) to
pay dividends or make any other distribution on its stock, (ii) to pay any
Indebtedness or other obligation owed to the Borrower or any other Subsidiary,
(iii) to make loans or advances or other Investments in the Borrower or any
other Subsidiary, or (iv) to sell, transfer or otherwise convey any of its
property to the Borrower or any other Subsidiary, except (A) any restriction
existing under (1) the Loan Documents, (2) agreements disclosed in Schedule
6.18, (3) the Senior Unsecured Notes Documents, the Senior Secured Notes
Documents and agreements with respect to Indebtedness permitted by this
Agreement containing provisions described in clauses (i), (ii) and (iii) above
that are not

                                       71

<PAGE>

materially more restrictive (as reasonably determined by the Administrative
Agent), taken as a whole, than those of the Senior Unsecured Notes Documents or
Senior Secured Notes Documents, (B) customary non- assignment, subletting or
transfer provisions in leases, licenses and other contracts entered into in the
ordinary course of business, (C) customary restrictions contained in purchase
and sale agreements limiting the transfer of the subject assets pending closing,
(D) any restriction or condition as required by applicable law, (E) any
restriction existing under agreements relating to assets acquired by the
Borrower or a Subsidiary in a transaction permitted hereby; provided that such
agreements existed at the time of such acquisition, were not put into place in
anticipation of such acquisition and are not applicable to any assets other than
assets so acquired, (F) any restriction existing under any agreement of a Person
acquired as a Subsidiary in a transaction permitted hereby; provided any such
agreement existed at the time of such acquisition, was not put into place in
anticipation of such acquisition and was not applicable to any Person or assets
other than the Person or assets so acquired, (G) agreements with respect to
Indebtedness secured by Liens permitted by Section 6.15 that restrict the
ability to transfer the assets securing such Indebtedness and (H) any
encumbrance or restriction pursuant to an agreement effecting a refinancing of
Indebtedness incurred pursuant to an agreement referred to in clause (A)(2)(E)
or (F) of this covenant or this clause (H) or contained in any amendment to an
agreement referred to in clause (A)(2)(E) or (F) of this covenant or this clause
(H); provided, however, that the encumbrances and restrictions contained in any
such refinancing agreement or amendment, taken as a whole, are not materially
more restrictive than the encumbrances and restrictions contained in such
predecessor agreements (as reasonably determined by the Administrative Agent).

     6.19. CONTINGENT OBLIGATIONS. The Borrower will not, nor will it permit any
Subsidiary to, make or suffer to exist any Contingent Obligation in respect of
Indebtedness of another Person (including, without limitation, any Contingent
Obligation with respect to the obligations of a Subsidiary), except (i) by
endorsement of instruments for deposit or collection in the ordinary course of
business, (ii) the Reimbursement Obligations and any reimbursement obligations
in respect of Letters of Credit issued under the Existing Credit Agreements that
do not constitute Existing Letters of Credit and that are cash collateralized or
supported by back-to-back Letters of Credit in a manner reasonably acceptable to
the Administrative Agent, (iii) any Contingent Obligation in respect of the
Secured Obligations, (iv) any Indebtedness permitted by Section 6.14, and (v)
any Contingent Obligation in respect of any Indebtedness permitted by Section
6.14.

     6.20. LEVERAGE RATIO; SENIOR LEVERAGE RATIO.

          6.20.1 LEVERAGE RATIO. The Borrower will not permit the ratio (the
     "Leverage Ratio"), determined as of the end of each of its fiscal quarters
     set forth below, of (i) Consolidated Funded Indebtedness of the Borrower to
     (ii) Consolidated EBITDA for the then most-recently ended four fiscal
     quarters (subject to the remainder of this Section 6.20.1) to be greater
     than the applicable "Maximum Leverage Ratio" set forth below:

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<PAGE>

<TABLE>
<CAPTION>
 FISCAL QUARTER ENDING           MAXIMUM LEVERAGE RATIO
 ---------------------           ----------------------
<S>                              <C>
 Each of June 30, 2004,               5.50 to 1.00
September 30, 2004 and
  December 31, 2004

 Each of March 31, 2005,              4.75 to 1.00
 June 30, 2005, September
30, 2005, and December 31,
         2005

 Each of March 31, 2006 and           4.25 to 1.00
 each fiscal quarter thereafter
</Table>

     The first determination of the Leverage Ratio shall occur as of the end of
     the Borrower's fiscal quarter ending June 30, 2004. For purposes of making
     such determination, Consolidated EBITDA shall equal two (2) times
     Consolidated EBITDA for the period beginning January 1, 2004 and ending
     June 30, 2004. The second determination of the Leverage Ratio shall occur
     as of the end of the Borrower's fiscal quarter ending September 30, 2004.
     For purposes of making such determination, Consolidated EBITDA shall equal
     four-thirds (4/3) times Consolidated EBITDA for the period beginning
     January 1, 2004 and ending September 30, 2004. Thereafter, Consolidated
     EBITDA shall be calculated using the actual amount thereof as of the last
     day of each fiscal quarter for the most recently ended four consecutive
     fiscal quarters. Consolidated Funded Indebtedness shall in all cases be
     determined as of the last day of the applicable fiscal quarter.

          6.20.2 SENIOR LEVERAGE RATIO. The Borrower will not permit the ratio
     (the "Senior Leverage Ratio"), determined as of the end of each of its
     fiscal quarters set forth below, of (i) Consolidated Senior Funded Debt of
     the Borrower to (ii) Consolidated EBITDA for the then most recently ended
     four fiscal quarters (subject to the remainder of this Section 6.20.2) to
     be greater than the applicable "Maximum Senior Leverage Ratio" set forth
     below:

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<PAGE>

<TABLE>
<CAPTION>
 FISCAL QUARTER ENDING           MAXIMUM LEVERAGE RATIO
 ---------------------           ----------------------
<S>                              <C>
 Each of June 30, 2004,               3.375 to 1.00
September 30, 2004 and
  December 31, 2004

 Each of March 31, 2005,              2.875 to 1.00
 June 30, 2005, September
30, 2005, and December
       31, 2005

  Each of March 31, 2006              2.624 to 1.00
 and each fiscal quarter
      thereafter
</TABLE>

     The first determination of the Senior Leverage Ratio shall occur as of the
     end of the Borrower's fiscal quarter ending June 30, 2004. For purposes of
     making such determination, Consolidated EBITDA shall equal two (2) times
     Consolidated EBITDA for the period beginning January 1, 2004 and ending
     June 30, 2004. The second determination of the Senior Leverage Ratio shall
     occur as of the end of the Borrower's fiscal quarter ending September 30,
     2004. For purposes of making such determination, Consolidated EBITDA shall
     equal four-thirds (4/3) times Consolidated EBITDA for the period beginning
     January 1, 2004 and ending September 30, 2004. Thereafter, Consolidated
     EBITDA shall be calculated using the actual amount thereof as of the last
     day of each fiscal quarter for the most recently ended four consecutive
     fiscal quarters. Consolidated Senior Funded Debt shall in all cases be
     determined as of the last day of the applicable fiscal quarter.

     6.21. FIXED CHARGE COVERAGE RATIO. The Borrower will not permit the ratio
(the "Fixed Charge Coverage Ratio"), determined as of the end of each of its
fiscal quarters for the then most-recently ended four fiscal quarters of (i)
Consolidated EBITDA minus Consolidated Capital Expenditures to (ii) Consolidated
Interest Expense plus Consolidated Current Maturities during such period
(including, without limitation, Capitalized Lease Obligations) plus cash
dividends paid on the equity interests of the Borrower during such period plus
expenses for taxes paid or taxes accrued during such period, all calculated for
the Borrower and its Subsidiaries on a consolidated basis, to be less than the
applicable "Minimum Fixed Charge Coverage Ratio" below:

                                       74

<PAGE>

<TABLE>
<CAPTION>
 FISCAL QUARTER ENDING           MAXIMUM LEVERAGE RATIO
 ---------------------           ----------------------
<S>                              <C>
 Each of June 30, 2004,                1.15 to 1.00
September 30, 2004 and
  December 31, 2004

 Each of March 31, 2005,              1.375 to 1.00
 June 30, 2005, September
30, 2005, and December
      31, 2005

 Each of March 31, 2006                1.50 to 1.00
 and each fiscal quarter
      thereafter
</TABLE>

Notwithstanding the foregoing, the first determination of the Fixed Charge
Coverage Ratio shall occur as of the end of the Borrower's fiscal quarter ending
June 30, 2004. For purposes of making such determination, Consolidated EBITDA
shall equal two (2) times Consolidated EBITDA for the period beginning January
1, 2004 and ending June 30, 2004. The second determination of the Fixed Charge
Coverage Ratio shall occur as of the end of the Borrower's fiscal quarter ending
September 30, 2004. For purposes of making such determination, Consolidated
EBITDA shall equal four-thirds (4/3) times Consolidated EBITDA for the period
beginning January 1, 2004 and ending September 30, 2004. Thereafter,
Consolidated EBITDA shall be calculated using the actual amount thereof as of
the last day of each fiscal quarter for the most recently ended four consecutive
fiscal quarters.

     6.22. MINIMUM CONSOLIDATED NET WORTH. The Borrower will at all times
maintain Consolidated Net Worth of not less than (i) $232,000,000 plus (ii) 50%
of Consolidated Net Income (if positive) earned in each fiscal quarter beginning
with the fiscal quarter ending June 30, 2004 plus (iii) the amount of all Net
Cash Proceeds resulting from issuances of the Borrower's or any Subsidiary's
capital stock or other equity interests to a Person other than the Borrower or
any Subsidiary.

     6.23. CAPITAL EXPENDITURES. The Borrower will not, nor will it permit any
Subsidiary to, expend, or be committed to expend, in excess of $20,000,000 (the
"Base Amount") for Capital Expenditures of the Borrower and its Subsidiaries
during any fiscal year of the Borrower; provided, however, that if the aggregate
amount of Capital Expenditures actually expended during any such fiscal year is
less than the Base Amount (the difference being the "Unused CapEx Amount"),
then, the permitted amount of Capital Expenditures during the immediately
succeeding fiscal year (and no other succeeding fiscal year) shall be an amount
equal to the Base Amount plus the Unused CapEx Amount, with the Unused Cap Ex
Amount being deemed utilized first with any excess Base Amount available to use
in the immediately succeeding fiscal year in accordance herewith.

     6.24. OPERATING LEASES. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Operating Lease, synthetic
lease or tax ownership operating

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<PAGE>

lease, except for Operating Leases which give rise to Operating Lease
Obligations not in excess of $20,000,000 annually.

     6.25. GUARANTORS. The Borrower shall cause each of its Domestic
Subsidiaries to guarantee pursuant to the Guaranty Agreement or supplement
thereto the Secured Obligations. In furtherance of the above, the Borrower shall
promptly (and in any event within forty-five (45) days thereof) (i) provide
written notice to the Administrative Agent upon any Person becoming a Domestic
Subsidiary, setting forth information in reasonable detail describing all of the
assets of such Person, (ii) cause such Person to execute a supplement to the
Guaranty Agreement and such other Collateral Documents as are necessary for the
Borrower and its Subsidiaries to comply with Section 6.26, (iii) cause the
Applicable Pledge Percentage of the issued and outstanding equity interests of
such Person to be delivered to the Collateral Agent (together with undated stock
powers signed in blank, if applicable) and pledged to the Collateral Agent
pursuant to an appropriate pledge agreement(s) in substantially the form of the
Pledge and Security Agreement (or joinder or other supplement thereto) and
otherwise in form reasonably acceptable to the Collateral Agent and (iv) deliver
such other documentation as the Collateral Agent may reasonably request in
connection with the foregoing, including, without limitation, certified
resolutions and other authority documents of such Person and, to the extent
requested by the Collateral Agent, favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to above), all in form, content
and scope reasonably satisfactory to the Collateral Agent; provided, however,
that in respect of subclause (iii), no Credit Party shall be required to pledge
(w) the equity interests of Roto-Rooter of Canada, Ltd., Chemed Capital Trust or
VNF, (x) more than 40% of the equity interests of RR Plumbing Services
Corporation, (y) more than 49% of the equity interests of Complete Plumbing
Services Inc., or (z) more than 80% of the equity interests of Nurotoco of New
Jersey, Inc.; provided, further, that, except to the extent necessary to satisfy
any licensing requirement under applicable law with respect to the Borrower's or
any Subsidiary's business, the Borrower will not permit, nor will it permit any
other Credit Party to, grant a security interest in, pledge or deliver to any
non-Credit Party those equity interests that are not pledged or delivered to the
Collateral Agent pursuant to this Section 6.25.

     6.26. COLLATERAL. The Borrower will cause, and will cause each other Credit
Party to cause, all of its owned Property (other than real property) to be
subject at all times to first priority, perfected Liens in favor of the
Collateral Agent for the benefit of the creditors of the Borrower that are party
to the Intercreditor Agreement, including, without limitation, the Holders of
Secured Obligations, to secure the Secured Obligations and the other
Indebtedness subject to the Intercreditor Agreement in accordance with the terms
and conditions of the Collateral Documents, subject in any case to Liens
permitted by Section 6.15 hereof; provided, however, that the Borrower and the
other Credit Parties shall not be required to comply with the terms of the
Federal Assignment of Claims Act in connection with their pledge of any
Collateral to the Collateral Agent. Without limiting the generality of the
foregoing, the Borrower will cause the Applicable Pledge Percentage of the
issued and outstanding equity interests of each Pledge Subsidiary directly owned
by the Borrower or any other Credit Party to be subject at all times to a first
priority, perfected Lien in favor of the Collateral Agent in accordance with the
terms and conditions of this Agreement and the Collateral Documents or such
other security documents as the Collateral Agent shall reasonably request, in
each case to the extent, and within such time period as is, reasonably required
by the Collateral Agent, subject in any case to Liens permitted

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<PAGE>

by Section 6.15. Notwithstanding the foregoing, (i) no Credit Party shall be
required to pledge (A) the equity interests of Roto-Rooter of Canada, Ltd.,
Chemed Capital Trust or VNF, (B) more than 40% of the equity interests of RR
Plumbing Services Corporation, (C) more than 49% of the equity interests of
Complete Plumbing Services Inc., or (D) more than 80% of the equity interests of
Nurotoco of New Jersey, Inc.; provided, however, that, except to the extent
necessary to satisfy any licensing requirement under applicable law with respect
to the Borrower's or any Subsidiary's business, the Borrower will not permit,
nor will it permit any other Credit Party to, grant a security interest in,
pledge or deliver to any non-Credit Party those equity interests that are not
pledged or delivered to the Collateral Agent pursuant to this Section 6.26; and
(ii) no pledge agreement in respect of the equity interests of a Foreign
Subsidiary shall be required hereunder to the extent such pledge thereunder is
prohibited by applicable law or its counsel reasonably determines that such
pledge would not provide material credit support for the benefit of the
creditors of the Borrower that are party to the Intercreditor Agreement pursuant
to legally valid, binding and enforceable pledge agreements.

     6.27. SALE AND LEASEBACK TRANSACTIONS. The Borrower shall not, nor shall it
permit any Subsidiary to, enter into any Sale and Leaseback Transaction, other
than Sale and Leaseback Transactions in respect of which the net cash proceeds
received in connection therewith does not exceed $250,000 in the aggregate
during any fiscal year of the Borrower, determined on a consolidated basis for
the Borrower and its Subsidiaries.

     6.28. INTENTIONALLY OMITTED.

     6.29. REVOLVING CREDIT AVAILABILITY. On the Closing Date, immediately after
giving effect to all Credit Extensions made on the Closing Date (including the
Existing Letters of Credit), the excess of the Aggregate Revolving Loan
Commitment over the Aggregate Outstanding Revolving Credit Exposure shall equal
or exceed $10,000,000.

     6.30. PREPAYMENT OF INDEBTEDNESS. The Borrower will not, and will not
permit any Subsidiary, to voluntarily prepay any Indebtedness other than (i) the
Obligations and Indebtedness permitted by Section 6.14.4, 6.14.5, 6.14.8 and
6.14.9, (ii) any other Indebtedness so long as such other Indebtedness is
voluntarily prepaid with cash proceeds resulting from the sale to non-
Affiliates of equity interests in the Borrower or any Subsidiary thereof, (iii)
pursuant to renewals, refinancings and extensions of Indebtedness permitted by
Section 6.14, and (iv) payments of Indebtedness that would become due or would
be required to be redeemed or repurchased as a result of the voluntary sale or
transfer of Property that is being sold or transferred.

     6.31. AMENDMENTS TO SENIOR SECURED INDENTURE DOCUMENTS AND SENIOR UNSECURED
INDENTURE DOCUMENTS. The Borrower will not, and will not permit any Subsidiary
to, amend the Senior Secured Notes, the other Senior Secured Indenture
Documents, the Senior Unsecured Notes, the other Senior Unsecured Indenture
Documents or any document, agreement or instrument evidencing any Indebtedness
incurred pursuant to the Senior Secured Indenture Documents or the Senior
Unsecured Indenture Documents (or any replacements, substitutions, extensions or
renewals thereof) or pursuant to which such Indebtedness is issued to the extent
such amendment, modification or supplement provides for the following or which
has any of the following effects: (i) results in the Indebtedness outstanding
under the Senior Unsecured

                                      77

<PAGE>

Indenture Documents being secured by the Borrower's or any Subsidiary's
Property; (ii) prohibits the Borrower or any Subsidiary from securing the
Secured Obligations or the Indebtedness outstanding under the Senior Secured
Indenture Documents; (iii) shortens the final maturity date of the Indebtedness
outstanding under the Senior Secured Indenture Documents or the Senior Unsecured
Indenture Documents or otherwise accelerates the amortization schedule for
Indebtedness outstanding under the Senior Secured Indenture Documents or the
Senior Unsecured Indenture Documents; (iv) increases the overall principal
amount of the Indebtedness outstanding under the Senior Secured Indenture
Documents or the Senior Unsecured Indenture Documents or increases the amount of
any single scheduled installment of principal or interest other than in
connection with issuances of additional Senior Secured Notes and Senior
Unsecured Notes permitted by Sections 6.14.8 and 6.14.9, respectively; (v)
shortens or accelerates the date upon which any installment of principal or
interest becomes due or adds any additional mandatory prepayment or redemption
provisions not set forth in the Senior Secured Indenture Documents or the Senior
Unsecured Indenture Documents on the Closing Date; or (vi) adds to or otherwise
includes in any Senior Unsecured Indenture Document a default or event of
default provision, including, without limitation, a cross-default, that is
triggered by the occurrence of an Event of Default or Unmatured Event of Default
under the Loan Documents or a default, event of default, unmatured default,
unmatured event of default, or other similar event under the Senior Secured
Indenture Documents, unless such Event of Default hereunder or comparable event
under the Senior Secured Indenture Documents results from the non-payment of the
Obligations upon the maturity thereof or the non-payment of the Indebtedness
outstanding under the Senior Secured Indenture Documents upon the maturity
thereof or the acceleration of the Obligations or the acceleration of the
repayment of the Indebtedness outstanding under the Senior Secured Indenture
Documents.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

     The occurrence of any one or more of the following events shall constitute
an Event of Default:

     7.1 Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries to the Lenders or the Administrative
Agent under or in connection with this Agreement, any Credit Extension, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be false in any material respect on the date as of
which made or deemed made.

     7.2 Nonpayment of (i) principal of any Loan when due, (ii) any
Reimbursement Obligation within one Business Day after the same becomes due, or
(iii) interest upon any Loan or any Commitment Fee, LC Fee or other Obligations
under any of the Loan Documents within five (5) Business Days after such
interest, fee or other Obligation becomes due.

     7.3 The breach by the Borrower of any of the terms or provisions of Section
6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18, 6.19, 6.20, 6.21,
6.22, 6.23, 6.24, 6.25, 6.26, 6.27, 6.28, 6.29, 6.30, and 6.31.

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<PAGE>

     7.4 The breach by the Borrower (other than a breach which constitutes an
Event of Default under another Section of this Article VII) of any of the terms
or provisions of (i) this Agreement or (ii) any other Loan Document (beyond the
applicable grace period with respect thereto, if any), in each case which is not
remedied within thirty (30) days after the earlier to occur of (x) written
notice thereof from the Administrative Agent or any Lender to the Borrower or
(y) an Authorized Officer otherwise becomes aware of any such breach.

     7.5 Failure of the Borrower or any of its Subsidiaries to pay when due any
Material Indebtedness (subject to any applicable grace period with respect
thereto, if any, set forth in the Material Indebtedness Agreement evidencing
such Material Indebtedness) which failure has not been (i) timely cured or (ii)
waived in writing by the requisite holders of such Material Indebtedness; or the
default by the Borrower or any of its Subsidiaries in the performance (beyond
the applicable grace period with respect thereto, if any) of any term, provision
or condition contained in any Material Indebtedness Agreement and such default
has not been (x) timely cured or (y) waived in writing by the requisite holders
of the Material Indebtedness in respect thereof, or any other event shall occur
or condition exist, the effect of which default, event or condition is to cause,
or to permit the holder(s) of such Material Indebtedness or the lender(s) under
any Material Indebtedness Agreement to cause, such Material Indebtedness to
become due prior to its stated maturity or any commitment to lend under any
Material Indebtedness Agreement to be terminated prior to its stated expiration
date; or any Material Indebtedness of the Borrower or any of its Subsidiaries
shall be declared to be due and payable or required to be prepaid or repurchased
(other than by a regularly scheduled payment) prior to the stated maturity
thereof, in each case other than secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the Property securing such
Indebtedness; or the Borrower or any of its Subsidiaries shall not pay, or admit
in writing its inability to pay, its debts generally as they become due.

     7.6 The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, or (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6.

     7.7 Without the application, approval or consent of the Borrower or any of
its Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of sixty (60) consecutive days.

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<PAGE>

     7.8 The Borrower or any of its Subsidiaries shall fail within thirty (30)
days to pay, bond or otherwise discharge one or more judgments or orders for the
payment of money in excess of $10,000,000 (or the equivalent thereof in
currencies other than Dollars) in the aggregate, which judgment(s), in any such
case, is/are not stayed on appeal or otherwise being appropriately contested in
good faith.

     7.9 The Unfunded Liabilities of all Single Employer Plans shall exceed
$5,000,000 in the aggregate, or any Reportable Event shall occur in connection
with any Plan and such Reportable Event would reasonably be expected to have a
Material Adverse Effect.

     7.10 Any Change of Control shall occur.

     7.11 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred,
pursuant to Section 4201 of ERISA, withdrawal liability to such Multiemployer
Plan in an amount which, when aggregated with all other amounts required to be
paid to Multiemployer Plans by the Borrower or any other member of the
Controlled Group as withdrawal liability (determined as of the date of such
notification), exceeds $5,000,000 or requires payments exceeding $5,000,000 per
annum.

     7.12 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and the other members of the Controlled
Group (taken as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be increased, in the
aggregate, over the annual amounts contributed to such Multiemployer Plans for
the respective plan years of such Multiemployer Plans immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $5,000,000.

     7.13 Other than with respect to environmental proceedings, investigations,
violations, or liabilities disclosed by the Borrower to the Administrative Agent
and the Lenders prior to the Closing Date, the Borrower or any of its
Subsidiaries shall (i) be the subject of any proceeding or investigation
pertaining to the release by the Borrower, any of its Subsidiaries or any other
Person of any toxic or hazardous waste or substance into the environment, or
(ii) violate any Environmental Law, which, in the case of an event described in
clause (i) or clause (ii), has resulted in liability to the Borrower or any of
its Subsidiaries in an amount equal to $5,000,000 or more, which liability is
not paid, bonded or otherwise discharged within forty- five (45) days or which
is not stayed on appeal and being appropriately contested in good faith.

     7.14 Any Loan Document shall fail to remain in full force or effect or any
action shall be taken by the Borrower to assert the invalidity or
unenforceability of, or which results in the invalidity or unenforceability of,
any Loan Document or any Lien in favor of the Collateral Agent or the
Administrative Agent under the Loan Documents as to assets that are material to
the Borrower and its Subsidiaries taken as a whole, or such Lien shall not have
the priority contemplated by the Loan Documents, except (i) as a result of the
sale or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents or (ii) as a result of the Collateral Agent's
failure to maintain possession of any stock certificates, promissory notes

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<PAGE>

or other instruments delivered to it under any Loan Document or as a result of
the negligent or willful failure of the Collateral Agent to take such action as
is necessary to continue such Liens.

                                  ARTICLE VIII

                 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

     8.1. Acceleration.

     (i)     If any Event of Default described in Section 7.6 or 7.7 occurs with
             respect to the Borrower, the obligations of the Lenders to make
             Loans hereunder and the obligation and power of the LC Issuer to
             issue Facility LCs shall automatically terminate and the Secured
             Obligations shall immediately become due and payable without any
             election or action on the part of the Administrative Agent, the LC
             Issuer or any Lender, and the Borrower will be and become thereby
             unconditionally obligated, without any further notice, act or
             demand, to pay the Administrative Agent an amount in immediately
             available funds, which funds shall be held in the Facility LC
             Collateral Account, equal to the difference of (x) the amount of LC
             Obligations at such time less (y) the amount or deposit in the
             Facility LC Collateral Account at such time which is free and clear
             of all rights and claims of third parties and has not been applied
             against the Secured Obligations (the "Collateral Shortfall
             Amount"). If any other Event of Default occurs, the Required
             Lenders (or the Administrative Agent with the consent of the
             Required Lenders) may (a) terminate or suspend the obligations of
             the Lenders to make Loans hereunder and the obligation and power of
             the LC Issuer to issue Facility LCs, or declare the Secured
             Obligations to be due and payable, or both, whereupon the Secured
             Obligations shall become immediately due and payable, without
             presentment, demand, protest or notice of any kind, all of which
             the Borrower hereby expressly waives and (b) upon notice to the
             Borrower and in addition to the continuing right to demand payment
             of all amounts payable under this Agreement, make demand on the
             Borrower to pay, and the Borrower will forthwith upon such demand
             and without any further notice or act pay to the Administrative
             Agent the Collateral Shortfall Amount which funds shall be
             deposited in the Facility LC Collateral Account.

     (ii)    If at any time while any Event of Default is continuing, the
             Administrative Agent determines that the Collateral Shortfall
             Amount at such time is greater than zero, the Administrative Agent
             may make demand on the Borrower to pay, and the Borrower will,
             forthwith upon such demand and without any further notice or act,
             pay to the Administrative Agent the Collateral Shortfall Amount,
             which funds shall be deposited in the Facility LC Collateral
             Account.

     (iii)   While an Event of Default is continuing, the Administrative Agent
             may at any time or from time to time after funds are deposited in
             the Facility LC Collateral Account, apply such funds to the payment
             of the Secured Obligations in respect of Facility LCs and any other
             amounts as shall from time to time have become due

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             and payable by the Borrower to the Lenders or the LC Issuer under
             the Loan Documents.

     (iv)    At any time while any Event of Default is continuing, neither the
             Borrower nor any Person claiming on behalf of or through the
             Borrower shall have any right to withdraw any of the funds held in
             the Facility LC Collateral Account. After all of the Secured
             Obligations have been indefeasibly paid in full and the Aggregate
             Revolving Loan Commitment and Aggregate Term Loan Commitment have
             been terminated, any funds remaining in the Facility LC Collateral
             Account shall be paid to the Collateral Agent or paid to whomever
             may be legally entitled thereto at such time.

     (v)     If, after acceleration of the maturity of the Obligations or
             termination of the obligations of the Lenders to make Loans and the
             obligation and power of the LC Issuer to issue Facility LCs
             hereunder as a result of any Event of Default (other than any Event
             of Default as described in Section 7.6 or 7.7 with respect to the
             Borrower) and before any judgment or decree for the payment of the
             Obligations due shall have been obtained or entered, the Required
             Lenders (in their sole discretion) shall so direct, the
             Administrative Agent shall, by notice to the Borrower, rescind and
             annul such acceleration and/or termination.

     8.2. AMENDMENTS. Subject to the provisions of this Section 8.2 and the
Intercreditor Agreement, the Required Lenders (or the Administrative Agent with
the consent in writing of the Required Lenders) and the Borrower may enter into
agreements supplemental hereto for the purpose of adding or modifying any
provisions to the Loan Documents or changing in any manner the rights of the
Lenders or the Borrower hereunder or thereunder or waiving any Event of Default
hereunder or thereunder; provided, however, that no such supplemental agreement
shall, without the consent of each Lender directly affected thereby:

          8.2.1 Extend the Revolving Loan Termination Date, extend the final
     maturity of any Revolving Loan or extend the expiry date of any Facility LC
     to a date after the Revolving Loan Termination Date (except as expressly
     permitted in Section 2.20.1), extend the final maturity date of any Term
     Loan to a date after the Term Loan Maturity Date, or postpone any regularly
     scheduled payment of principal of any Loan or forgive all or any portion of
     the principal amount thereof, or any Reimbursement Obligation related
     thereto, or reduce the rate or extend the time of payment of interest or
     fees thereon or Reimbursement Obligations related thereto (other than (x) a
     waiver of the application of the default rate of interest pursuant to
     Section 2.11 hereof and (y) any reduction of the amount of or any
     modification of the payment date for the mandatory payments required under
     Section 2.2, in each case which shall only require the approval of the
     Required Lenders).

          8.2.2 Reduce the percentage specified in the definition of Required
     Lenders or any other percentage of Lenders specified to be the applicable
     percentage in this Agreement to act on specified matters or amend the
     definition of "Pro Rata Share", "Revolving Loan Pro Rata Share" or "Term
     Loan Pro Rata Share".

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          8.2.3 Increase the amount of the Revolving Loan Commitment or Term
     Loan Commitment of any Lender hereunder, or permit the Borrower to assign
     its rights or obligations under this Agreement.

          8.2.4 Amend this Section 8.2.

          8.2.5 Other than in connection with a transaction permitted under this
     Agreement, release all or substantially all of the Collateral.

          8.2.6 Other than in connection with a transaction permitted under this
     Agreement, release all or substantially all of the Guarantors from their
     obligations under the Guaranty Agreement or any other agreement pursuant to
     which such Guarantors guarantee the repayment of the Secured Obligations.

Notwithstanding the foregoing, no Lender's consent shall be required for any
amendment, modification or waiver if (i) by the terms of such amendment,
modification or waiver the Revolving Loan Commitment and the Term Loan
Commitment, as applicable, of such Lender shall terminate upon the effectiveness
of such amendment, modification or waiver and (ii) at the time such amendment,
modification or waiver becomes effective, such Lender receives payment in full
of all of the Obligations (other than obligations to pay fees and expenses with
respect to which the Borrower has not received an invoice, Rate Management
Obligations, contingent indemnity obligations and other contingent obligations)
owing to it under the Loan Documents. No amendment of any provision of this
Agreement relating to the Administrative Agent shall be effective without the
written consent of the Administrative Agent. The Administrative Agent may waive
payment of the fee required under Section 12.3.3 without obtaining the consent
of any other party to this Agreement. No amendment of any provision of this
Agreement relating to the Swing Line Lender or any Swing Line Loan shall be
effective without the written consent of the Swing Line Lender. No amendment of
any provision of this Agreement relating to the LC Issuer shall be effective
without the written consent of the LC Issuer.

     8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders, the LC
Issuer or the Administrative Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver of any Event of
Default or an acquiescence therein, and the making of a Credit Extension
notwithstanding the existence of an Event of Default or Unmatured Event of
Default or the inability of the Borrower to satisfy the conditions precedent to
such Credit Extension shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by, or by the Administrative
Agent with the consent of, the requisite number of Lenders required pursuant to
Section 8.2, and then only to the extent in such writing specifically set forth.
All remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Administrative Agent, the LC Issuer
and the Lenders until all of the Secured Obligations have been paid in full.

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                                   ARTICLE IX

                               GENERAL PROVISIONS

     9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.

     9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.

     9.3. HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.

     9.4. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Administrative Agent, the Collateral
Agent, the LC Issuer and the Lenders and supersede all prior agreements and
understandings among the Borrower, the Administrative Agent, the Collateral
Agent, the LC Issuer and the Lenders relating to the subject matter thereof
other than those contained in the fee letter described in Section 10.13 which
shall survive and remain in full force and effect during the term of this
Agreement.

     9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided, however, that
the parties hereto expressly agree that the Arranger shall enjoy the benefits of
the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set
forth therein and shall have the right to enforce such provisions on its own
behalf and in its own name to the same extent as if it were a party to this
Agreement.

     9.6. EXPENSES; INDEMNIFICATION. (i) The Borrower shall reimburse the
Administrative Agent and the Arranger for any reasonable out-of-pocket costs and
expenses (including reasonable out-of-pocket attorneys' fees and out-of- pocket
expenses of and fees for other advisors and professionals engaged by the
Administrative Agent or the Arranger) paid or incurred by the Administrative
Agent or the Arranger in connection with the investigation, preparation,
negotiation, documentation, execution, delivery, syndication, distribution
(including, without limitation, via the internet), review, amendment,
modification and administration of the Loan Documents. The Borrower also agrees
to reimburse the Administrative Agent, the Arranger, the LC Issuer and the
Lenders for any reasonable out-of-pocket costs and expenses (including
reasonable out-of-pocket attorneys' fees and expenses) paid or incurred by the
Administrative Agent, the Arranger, the LC Issuer or any Lender in connection
with the collection and enforcement of the Loan Documents. Expenses being
reimbursed by the

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Borrower under this Section include, without limitation, costs and expenses
incurred in connection with the Reports described in the following sentence. The
Borrower acknowledges that from time to time Bank One may prepare and may
distribute to the Lenders (but shall have no obligation or duty to prepare or to
distribute to the Lenders) certain audit reports (the "Reports") pertaining to
the Borrower's assets for internal use by Bank One from information furnished to
it by or on behalf of the Borrower, after Bank One has exercised its rights of
inspection pursuant to this Agreement.

     (ii) The Borrower hereby further agrees to indemnify the Administrative
Agent, the Arranger, the LC Issuer, each Lender, their respective affiliates,
and each of their directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and related reasonable out-of-pocket
expenses (including, without limitation, all reasonable out-of-pocket expenses
of litigation or preparation therefor whether or not the Administrative Agent,
the Arranger, the LC Issuer, any Lender or any affiliate is a party thereto, and
all reasonable out-of-pocket attorneys' fees and expenses) which any of them may
pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Credit Extension
hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.

     (iii) The Collateral Agent shall receive the benefits of the provisions of
this Section 9.6 with respect to all losses, claims, damages, penalties,
judgments, liabilities and expenses resulting under or in connection with the
Collateral Documents.

     9.7. NUMBERS OF DOCUMENTS. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders, to the extent that the Administrative Agent deems appropriate.

     9.8. ACCOUNTING. Except as provided to the contrary herein, all accounting
terms used in the calculation of any financial covenant or test shall be
interpreted and all accounting determinations hereunder in the calculation of
any financial covenant or test shall be made in accordance with Agreement
Accounting Principles. If any changes in generally accepted accounting
principles are hereafter required or permitted and are adopted by the Borrower
or any of its Subsidiaries with the agreement of its independent certified
public accountants and such changes result in a change in the method of
calculation of any of the financial covenants, tests, restrictions or standards
herein or in the related definitions or terms used therein ("Accounting
Changes"), the parties hereto agree, at the Borrower's request, to enter into
negotiations, in good faith, in order to amend such provisions in a credit
neutral manner so as to reflect equitably such changes with the desired result
that the criteria for evaluating the Borrower's and its Subsidiaries' financial
condition shall be the same after such changes as if such changes had not been
made; provided, however, until such provisions are amended in a manner
reasonably satisfactory to the Administrative Agent and the Required Lenders, no
Accounting Change shall be given effect in such calculations. In the event such
amendment is entered into, all references in this Agreement to Agreement
Accounting Principles shall mean generally accepted accounting principles as of

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the date of such amendment. Notwithstanding the foregoing, all financial
statements to be delivered by the Borrower pursuant to Section 6.1 shall be
prepared in accordance with generally accepted accounting principles in effect
at such time.

     9.9. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.

     9.10. NONLIABILITY OF LENDERS. The relationship between the Borrower on the
one hand and the Lenders, the LC Issuer and the Administrative Agent on the
other hand shall be solely that of borrower and lender. Neither the
Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Administrative Agent,
the Arranger, the LC Issuer nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations. The Borrower agrees that neither
the Administrative Agent, the Arranger, the LC Issuer nor any Lender shall have
liability to the Borrower (whether sounding in tort, contract or otherwise) for
losses suffered by the Borrower in connection with, arising out of, or in any
way related to, the transactions contemplated and the relationship established
by the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined in a final non- appealable judgment by a
court of competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought.
Neither the Administrative Agent, the Arranger, the LC Issuer nor any Lender
shall have any liability to the Borrower with respect to, and the Borrower
hereby waives, releases and agrees not to sue for, any special, indirect,
consequential or punitive damages suffered by the Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.

     9.11. CONFIDENTIALITY. The Administrative Agent and each Lender agrees to
hold the "Information" (as defined below) which it may receive from the Borrower
in connection with this Agreement in confidence, except for disclosure (i) on a
confidential basis to its Affiliates and to any other party to this Agreement,
(ii) on a confidential basis to legal counsel, accountants, and other
professional advisors to such Lender, (iii) to regulatory officials as
requested, (iv) to any Person as required by law, regulation, or legal process,
(v) to any Person as required in connection with any legal proceeding to which
it is a party, (vi) subject to an agreement containing provisions substantially
the same as those of this Section, on a confidential basis to its direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, and (vii)
permitted by Section 12.4. Without limiting Section 9.4, the Borrower agrees
that the terms of this Section 9.11 shall set forth the entire agreement between
the Borrower and each Lender (including the Administrative Agent) with respect
to any confidential information previously or hereafter received by such Lender
in connection with this Agreement, and this Section 9.11 shall supersede any and
all prior confidentiality agreements entered into by such Lender with respect to
such confidential information. For the purposes of this Section, "Information"
means all information received from the Borrower or any of its Subsidiaries
relating to the Borrower or any of its Subsidiaries or their respective
businesses, as the case may be, other than any such information that is
available

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to the Administrative Agent, the Collateral Agent, the LC Issuer or any Lender
on a nonconfidential basis.

     9.12. LENDERS NOT UTILIZING PLAN ASSETS. Each Lender represents and
warrants that none of the consideration used by such Lender to make its Credit
Extensions constitutes for any purpose of ERISA or Section 4975 of the Code
assets of any "plan" as defined in Section 3(3) of ERISA or Section 4975 of the
Code and the rights and interests of such Lender in and under the Loan Documents
shall not constitute such "plan assets" under ERISA.

     9.13. NONRELIANCE. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U) as collateral in the
extension or maintenance of the credit provided for herein.

     9.14. DISCLOSURE. The Borrower and each Lender, including the LC Issuer,
hereby acknowledge and agree that each Lender and/or its Affiliates from time to
time may hold investments in, make other loans to or have other relationships
with the Borrower and its Affiliates.

     9.15. PERFORMANCE OF OBLIGATIONS. Subject to the terms of the Intercreditor
Agreement, the Borrower agrees that the Collateral Agent or the Administrative
Agent may, but shall have no obligation to (i) after the occurrence and during
the continuance of an Event of Default, pay or discharge taxes, liens, security
interests or other encumbrances levied or placed on or threatened against any
Collateral and (ii) after the occurrence and during the continuance of an Event
of Default make any other payment or perform any act required of the Borrower
under any Loan Document or take any other action which the Collateral Agent or
the Administrative Agent in its discretion deems necessary or desirable to
protect or preserve the Collateral, including, without limitation, any action to
(x) effect any repairs or obtain any insurance called for by the terms of any of
the Loan Documents and to pay all or any part of the premiums therefor and the
costs thereof and (y) pay any rents payable by the Borrower which are more than
thirty (30) days past due, or as to which the landlord has given notice of
termination, under any lease. The Administrative Agent shall use its best
efforts to give or cause the Collateral Agent to give the Borrower notice of any
action taken under this Section 9.15 prior to the taking of such action or
promptly thereafter provided the failure to give such notice shall not affect
the Borrower's obligations in respect thereof. The Borrower agrees to pay the
Administrative Agent, upon demand, the principal amount of all funds advanced by
the Administrative Agent under this Section 9.15 together with interest thereon
at the rate from time to time applicable to Floating Rate Loans from the date of
such advance until the outstanding principal balance thereof is paid in full. If
the Borrower fails to make payment in respect of any such advance under this
Section 9.15 within one (1) Business Day after the date the Borrower receives
written demand therefor from the Administrative Agent, the Administrative Agent
shall promptly notify each Lender and each Lender agrees that it shall thereupon
make available to the Administrative Agent, in Dollars in immediately available
funds, the amount equal to such Lender's Pro Rata Share of such advance. If such
funds are not made available to the Administrative Agent by such Lender within
one (1) Business Day after the Administrative Agent's demand therefor, the
Administrative Agent will be entitled to recover any such amount from such
Lender together with interest thereon at the Federal Funds Effective Rate for
each day during the period commencing on the date of such demand and ending on
the date such amount is received. The

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failure of any Lender to make available to the Administrative Agent its Pro Rata
Share of any such unreimbursed advance under this Section 9.15 shall neither
relieve any other Lender of its obligation hereunder to make available to the
Administrative Agent such other Lender's Pro Rata Share of such advance on the
date such payment is to be made nor increase the obligation of any other Lender
to make such payment to the Administrative Agent. All outstanding principal of,
and interest on, advances made under this Section 9.15 shall constitute
Obligations secured by the Collateral until paid in full by the Borrower.

     9.16. USA PATRIOT ACT NOTIFICATION. The following notification is provided
to the Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318:

     IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help
the government of the United States of America fight the funding of terrorism
and money laundering activities, Federal law requires all financial institutions
to obtain, verify, and record information that identifies each Person that opens
an account, including any deposit account, treasury management account, loan,
other extension of credit, or other financial services product. Accordingly,
when the Borrower opens an account, the Administrative Agent and the Lenders
will ask for the Borrower's name, tax identification number, business address,
and other information that will allow the Administrative Agent and the Lenders
to identify the Borrower. The Administrative Agent and the Lenders may also ask
to see the Borrower's legal organizational documents or other identifying
documents.

     9.17. SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees
that any and all claims of the Borrower against any Guarantor with respect to
any "Intercompany Indebtedness" (as hereinafter defined) shall be subordinate
and subject in right of payment to the prior payment, in full and in cash, of
all Secured Obligations; provided that, and not in contravention of the
foregoing, unless an Event of Default has occurred and is continuing and the
Borrower receives from the Administrative Agent a payment blockage notice
pursuant to this Section 9.17 that has not been withdrawn, the Borrower may
make loans to and receive payments in the ordinary course with respect to such
Intercompany Indebtedness from the Guarantors, to the extent permitted by the
terms of this Agreement and the other Loan Documents. Notwithstanding any
right of the Borrower to ask, demand, sue for, take or receive any payment
from the Guarantors, all rights, liens and security interests of the Borrower,
whether now or hereafter arising and howsoever existing, in any assets of any
such guarantor shall be and are subordinated to the rights of the Holders of
Secured Obligations in those assets. The Borrower shall not have any right to
possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, unless and until all of the Secured Obligations
(other than obligations to pay fees and expenses with respect to which the
Borrower has not received an invoice, Rate Management Obligations, contingent
indemnity obligations, and other contingent obligations) shall have been fully
paid and satisfied (in cash). If all or any part of the assets of any such
guarantor, or the proceeds thereof, are subject to any distribution, division
or application to the creditors of such guarantor, whether partial or
complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other similar action or proceeding, then, and in any such event (such
events being herein referred to as an "Insolvency Event"), any payment or
distribution of any kind or character, either in cash, securities or other
property, which shall be payable or deliverable upon or with respect to any
Indebtedness of any Guarantor, to the

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Borrower ("Intercompany Indebtedness") shall be paid or delivered directly to
the Administrative Agent, who shall remit it to the Collateral Agent if required
under the Intercreditor Agreement for application in accordance with the
Intercreditor Agreement, or, if not required under the Intercreditor Agreement,
for application to any of the Secured Obligations, due or to become due, until
such Secured Obligations (other than obligations to pay fees and expenses with
respect to which the Borrower has not received an invoice, Rate Management
Obligations, contingent indemnity obligations, and other contingent obligations)
shall have first been fully paid and satisfied (in cash). Should any payment,
distribution, security or instrument or proceeds thereof be received by the
Borrower upon or with respect to the Intercompany Indebtedness after an
Insolvency Event prior to the satisfaction of all of the Secured Obligations
(other than obligations to pay fees and expenses with respect to which the
Borrower has not received an invoice, Rate Management Obligations, contingent
indemnity obligations and other contingent obligations), the Borrower shall
receive and hold the same in trust, as trustee, for the benefit of the Holders
of Secured Obligations and the holders of obligations under the Senior Secured
Indenture Documents and shall forthwith deliver the same to the Administrative
Agent, who shall remit it to the Collateral Agent if required under the
Intercreditor Agreement for application in accordance with the Intercreditor
Agreement or, if not required under the Intercreditor Agreement, for application
to any of the Secured Obligations, in precisely the form received (except for
the endorsement or assignment of the Borrower where necessary), and, until so
delivered, the same shall be held in trust by the Borrower as the property of
the Administrative Agent or the Collateral Agent, as applicable. If the Borrower
fails to make any such endorsement or assignment to the Collateral Agent or the
Administrative Agent, the Collateral Agent or the Administrative Agent or any of
its officers or employees are irrevocably authorized to make the same. The
Borrower agrees that until the Secured Obligations (other than obligations to
pay fees and expenses with respect to which the Borrower has not received an
invoice, Rate Management Obligations, contingent indemnity obligations, and
other contingent obligations) have been paid in full (in cash) and satisfied,
the Borrower will not assign or transfer to any Person (other than the Agent)
any claim the Borrower has or may have against any Guarantor except as otherwise
permitted by the Loan Documents.

                                    ARTICLE X

                            THE ADMINISTRATIVE AGENT

     10.1. APPOINTMENT; NATURE OF RELATIONSHIP. Bank One, NA is hereby appointed
by each of the Lenders as its contractual representative (herein referred to as
the "Administrative Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Administrative Agent to act as
the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. The Administrative
Agent agrees to act as such contractual representative upon the express
conditions contained in this Article X. Notwithstanding the use of the defined
term "Administrative Agent," it is expressly understood and agreed that the
Administrative Agent shall not have any fiduciary responsibilities to any of the
Holders of Secured Obligations by reason of this Agreement or any other Loan
Document and that the Administrative Agent is merely acting as the contractual
representative of the Lenders with only those duties as are expressly set forth
in this Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Administrative Agent (i) does not hereby assume
any

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fiduciary duties to any of the Holders of Secured Obligations, (ii) is a
"representative" of the Holders of Secured Obligations within the meaning of the
term "secured party" as defined in the Illinois Uniform Commercial Code and
(iii) is acting as an independent contractor, the rights and duties of which are
limited to those expressly set forth in this Agreement and the other Loan
Documents. Each of the Lenders, for itself and on behalf of its Affiliates as
Holders of Secured Obligations, hereby agrees to assert no claim against the
Administrative Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Holder of Secured Obligations
hereby waives.

     10.2. POWERS. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties or fiduciary duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Administrative Agent.

     10.3. GENERAL IMMUNITY. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, or any
Lender or Holder of Secured Obligations for any action taken or omitted to be
taken by it or them hereunder or under any other Loan Document or in connection
herewith or therewith except to the extent such action or inaction is determined
in a final, non-appealable judgment by a court of competent jurisdiction to have
arisen from the gross negligence or willful misconduct of such Person.

     10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(a) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Administrative
Agent; (d) the existence or possible existence of any Event of Default or
Unmatured Event of Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any Collateral; or (g) the financial
condition of the Borrower or any guarantor of any of the Obligations or of any
of the Borrower's or any such guarantor's respective Subsidiaries. The
Administrative Agent shall have no duty to disclose to the Lenders information
that is not required to be furnished by the Borrower to the Administrative Agent
at such time, but is voluntarily furnished by the Borrower to the Administrative
Agent (either in its capacity as Administrative Agent or in its individual
capacity).

     10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders (or all of the Lenders in the event that and to the
extent that this Agreement expressly requires such), and such instructions and
any action taken or failure to act pursuant thereto shall be binding on all of
the Lenders. The Lenders hereby acknowledge that the Administrative Agent shall
be under no duty

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to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Loan Document unless it shall be
requested in writing to do so by the Required Lenders (or all of the Lenders in
the event that and to the extent that this Agreement expressly requires such).
The Administrative Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.

     10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Administrative Agent may
execute any of its duties as Administrative Agent hereunder and under any other
Loan Document by or through employees, agents, and attorneys-in-fact and shall
not be answerable to the Lenders, except as to money or securities received by
it or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Administrative Agent
shall be entitled to advice of counsel concerning the contractual arrangement
between the Administrative Agent and the Lenders and all matters pertaining to
the Administrative Agent's duties hereunder and under any other Loan Document.

     10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex, electronic mail message, statement, paper or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Administrative Agent, which counsel may be
employees of the Administrative Agent. For purposes of determining compliance
with the conditions specified in Sections 4.1 and 4.2, each Lender that has
signed this Agreement shall be deemed to have consented to, approved or accepted
or to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Administrative Agent shall have received notice from such Lender prior to the
applicable date specifying its objection thereto.

     10.8. ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders
agree to reimburse and indemnify the Administrative Agent ratably in proportion
to the Lenders' Pro Rata Shares (i) for any amounts not reimbursed by the
Borrower for which the Administrative Agent is entitled to reimbursement by the
Borrower under the Loan Documents, (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses incurred by the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders) and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby (including,
without limitation, for any such amounts incurred by or asserted against the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders), or the enforcement
of any of the terms of the Loan Documents or of any such other documents,
provided that (i) no Lender shall be liable for any of the foregoing to the
extent any of the foregoing is found in a final, non-appealable judgment by a
court of competent jurisdiction to

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have resulted from the gross negligence or willful misconduct of the
Administrative Agent and (ii) any indemnification required pursuant to Section
3.5(vii) shall, notwithstanding the provisions of this Section 10.8, be paid by
the relevant Lender in accordance with the provisions thereof. The obligations
of the Lenders under this Section 10.8 shall survive payment of the Secured
Obligations and termination of this Agreement.

     10.9. NOTICE OF EVENT OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Event of Default or
Unmatured Event of Default hereunder unless the Administrative Agent has
received written notice from a Lender or the Borrower referring to this
Agreement describing such Event of Default or Unmatured Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders.

     10.10.RIGHTS AS A LENDER. In the event the Administrative Agent is a
Lender, the Administrative Agent shall have the same rights and powers hereunder
and under any other Loan Document with respect to its Revolving Loan Commitment
and its Credit Extensions as any Lender and may exercise the same as though it
were not the Administrative Agent, and the term "Lender" or "Lenders" shall, at
any time when the Administrative Agent is a Lender, unless the context otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Administrative Agent, in its individual capacity, is not obligated to remain a
Lender.

     10.11. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Arranger
or any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent, the Arranger or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents.

     10.12. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower,
such resignation to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, forty-five (45) days after the retiring Administrative Agent gives
notice of its intention to resign. The Administrative Agent may be removed at
any time with or without cause by written notice received by the Administrative
Agent from the Required Lenders, such removal to be effective on the date
specified by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint, on behalf of the Borrower and
the Lenders, a successor Administrative Agent reasonably acceptable to the
Borrower. If no successor Administrative Agent shall have been so appointed by
the

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Required Lenders within thirty (30) days after the resigning Administrative
Agent's giving notice of its intention to resign, then the resigning
Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent reasonably acceptable to the Borrower.
Notwithstanding the previous sentence, the Administrative Agent may at any time
without the consent of the Borrower or any Lender, appoint any of its Affiliates
which is a commercial bank as a successor Administrative Agent hereunder. If the
Administrative Agent has resigned or been removed and no successor
Administrative Agent has been appointed, the Lenders may perform all the duties
of the Administrative Agent hereunder and the Borrower shall make all payments
in respect of the Obligations to the applicable Lender and for all other
purposes shall deal directly with the Lenders. No successor Administrative Agent
shall be deemed to be appointed hereunder until such successor Administrative
Agent has accepted the appointment. Any such successor Administrative Agent
shall be a commercial bank having capital and retained earnings of at least
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning or removed Administrative Agent. Upon the
effectiveness of the resignation or removal of the Administrative Agent, the
resigning or removed Administrative Agent shall be discharged from its duties
and obligations hereunder and under the Loan Documents. After the effectiveness
of the resignation or removal of an Administrative Agent, the provisions of this
Article X shall continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 10.12, then the term "Prime Rate" as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new
Administrative Agent.

     10.13. ADMINISTRATIVE AGENT AND ARRANGER FEES. The Borrower agrees to pay
to the Administrative Agent and the Arranger, for their respective accounts, the
fees agreed to by the Borrower, the Administrative Agent and the Arranger
pursuant to that certain letter agreement dated January 12, 2004, or as
otherwise agreed from time to time.

     10.14. DELEGATION TO AFFILIATES. The Borrower and the Lenders agree that
the Administrative Agent may delegate any of its duties under this Agreement to
any of its Affiliates. Any such Affiliate (and such Affiliate's directors,
officers, agents and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the indemnification, waiver
and other protective provisions to which the Administrative Agent is entitled
under Articles IX and X.

     10.15. INTENTIONALLY OMITTED

     10.16. COLLATERAL DOCUMENTS. (a) Each Lender authorizes the Administrative
Agent and the Collateral Agent to enter into, on behalf of each such Lender, the
Intercreditor Agreement and each of the Collateral Documents to which it is a
party and to take all action contemplated by such documents. Each Lender agrees
that no Holder of Secured Obligations (other than the Administrative Agent)
shall have the right individually to seek to realize upon the security granted
by any Collateral Document, it being understood and agreed that such rights and

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remedies may be exercised solely by the Administrative Agent for the benefit of
the Holders of Secured Obligations or the Collateral Agent for the benefit of
the Holders of Secured Obligations and the Borrower's other creditors subject to
the Intercreditor Agreement and upon the terms of the Collateral Documents.

     (b) In the event that any Collateral is hereafter pledged by any Person as
collateral security for the Secured Obligations, the Administrative Agent is
hereby authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Collateral Agent; provided, however,
that any such Person also shall have pledged and granted a Lien in such
Collateral on an equal and ratable basis for the benefit of the holders of the
obligations outstanding under the Senior Secured Indenture Documents.

     (c) Subject to the Intercreditor Agreement, the Lenders hereby authorize
the Administrative Agent, at its option and in its discretion, to direct the
Collateral Agent to release any Lien granted to or held by the Collateral Agent
upon any Collateral (i) upon termination of the Revolving Loan Commitments, Term
Loan Commitments and payment and satisfaction of all of the Obligations (other
than obligations to pay fees and expenses with respect to which the Borrower has
not received an invoice, contingent indemnity obligations, and Rate Management
Obligations) at any time arising under or in respect of this Agreement or the
Loan Documents or the transactions contemplated hereby or thereby; (ii) as
permitted by, but only in accordance with, the terms of the applicable Loan
Document; or (iii) if approved, authorized or ratified in writing by the
Required Lenders, unless such release is required to be approved by all of the
Lenders hereunder. Upon request by the Administrative Agent at any time, the
Lenders will confirm in writing the Administrative Agent's authority to direct
the Collateral Agent to release particular types or items of Collateral pursuant
to this Section 10.16. The Lenders confirm that the Collateral Agent may take
actions described in this Section 10.16(c) so long as such actions are permitted
under and comply with the terms of the Intercreditor Agreement.

     (d) Subject to the terms of the Intercreditor Agreement, upon any sale or
transfer of assets constituting Collateral which is permitted pursuant to the
terms of any Loan Document, or consented to in writing by the Required Lenders
or all of the Lenders, as applicable, the security interest in such Collateral
shall be automatically released. In connection with any such release, the
Administrative Agent shall (and is hereby irrevocably authorized by the Lenders
to) direct the Collateral Agent to execute such documents as may be necessary to
evidence the release of the Liens granted to the Collateral Agent for the
benefit of the Holders of Secured Obligations herein or pursuant hereto upon the
Collateral that was sold or transferred; provided, however, that (i) the
Administrative Agent shall not be required to direct the Collateral Agent to
execute any such document on terms which, in the Administrative Agent's opinion,
would expose the Administrative Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Secured Obligations or any Liens upon (or obligations of the Borrower
or any Subsidiary in respect of) all interests retained by the Borrower or any
Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral.

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                                   ARTICLE XI

                            SETOFF; RATABLE PAYMENTS

     11.1. SETOFF. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any other Event of Default occurs, any and all deposits (including
all account balances, whether provisional or final and whether or not collected
or available) and any other Indebtedness at any time held or owing by any Lender
or any Affiliate of any Lender to or for the credit or account of the Borrower
may be offset and applied toward the payment of the Secured Obligations owing to
such Lender, whether or not the Secured Obligations, or any part thereof, shall
then be due.

     11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Outstanding Revolving Credit Exposure or its Term
Loans (other than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in
a greater proportion than that received by any other Lender, such Lender agrees,
promptly upon demand, to purchase a participation in the Aggregate Outstanding
Revolving Credit Exposure and Term Loans held by the other Lenders so that after
such purchase each Lender will hold its Pro Rata Share, Revolving Loan Pro Rata
Share and Term Loan Pro Rata Share. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their respective Pro Rata Shares. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.

                                   ARTICLE XII

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

     12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and the Lenders and their respective successors and assigns
permitted hereby, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents without the prior
written consent of each Lender, (ii) any assignment by any Lender must be made
in compliance with Section 12.3, and (iii) any transfer by Participation must be
made in compliance with Section 12.2. Any attempted assignment or transfer by
any party not made in compliance with this Section 12.1 shall be null and void,
unless such attempted assignment or transfer is treated as a participation in
accordance with Section 12.3.2. The parties to this Agreement acknowledge that
clause (ii) of this Section 12.1 relates only to absolute assignments and this
Section 12.1 does not prohibit assignments creating security interests,
including, without limitation, (x) any pledge or assignment by any Lender of all
or any portion of its rights under this Agreement and any Note to a Federal
Reserve Bank, (y) in the case of a Lender which is a Fund, any pledge or
assignment of all or any portion of its rights under this Agreement and any Note
to its trustee in support of its obligations to its trustee or (z) any pledge or
assignment by any Lender of all or any portion of its rights under this
Agreement and any Note to direct or indirect contractual counterparties in swap
agreements relating to the Loans; provided, however,

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that (i) no such pledge or assignment creating a security interest shall release
the transferor Lender from its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto, (ii) the Lender making
such pledge or assignment shall retain the sole right to approve, without
consent of any pledgee or assignee, any amendment, modification or waiver of any
provisions of the Loan Documents, and (iii) the Borrower shall continue to deal
solely and directly with such Lenders in connection such Lenders' rights and
obligations under the Loan Documents unless and until the parties thereto have
complied with the provisions of Section 12.3. The Administrative Agent may treat
the Person which made any Loan or which holds any Note as the owner thereof for
all purposes hereof unless and until such Person complies with Section 12.3;
provided, however, that the Administrative Agent may in its discretion (but
shall not be required to) follow instructions from the Person which made any
Loan or which holds any Note to direct payments relating to such Loan or Note to
another Person. Any assignee of the rights to any Loan or any Note agrees by
acceptance of such assignment to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person, who at the time
of making such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder or assignee of the
rights to such Loan.

     12.2. PARTICIPATIONS.

          12.2.1 PERMITTED PARTICIPANTS; EFFECT. Any Lender may at any time sell
     to one or more banks or other entities ("Participants") participating
     interests in any Outstanding Revolving Credit Exposure of such Lender, any
     Term Loans of such Lender, any Note held by such Lender, any Revolving Loan
     Commitment of such Lender or any other interest of such Lender under the
     Loan Documents. In the event of any such sale by a Lender of participating
     interests to a Participant, such Lender's obligations under the Loan
     Documents shall remain unchanged, such Lender shall remain solely
     responsible to the other parties hereto for the performance of such
     obligations, such Lender shall remain the owner of its Outstanding
     Revolving Credit Exposure and Term Loans and the holder of any Note issued
     to it in evidence thereof for all purposes under the Loan Documents, all
     amounts payable by the Borrower under this Agreement shall be determined as
     if such Lender had not sold such participating interests, and the Borrower
     and the Administrative Agent shall continue to deal solely and directly
     with such Lender in connection with such Lender's rights and obligations
     under the Loan Documents.

          12.2.2 VOTING RIGHTS. Each Lender shall retain the sole right to
     approve, without the consent of any Participant, any amendment,
     modification or waiver of any provision of the Loan Documents other than
     any amendment, modification or waiver with respect to any Credit Extension
     or Revolving Loan Commitment in which such Participant has an interest
     which would require consent of all of the Lenders pursuant to the terms of
     Section 8.2.

          12.2.3 BENEFIT OF CERTAIN PROVISIONS. To the extent permitted by law,
     the Borrower agrees that each Participant shall be deemed to have the right
     of setoff provided in Section 11.1 in respect of its participating interest
     in amounts owing under the Loan Documents to the same extent as if the
     amount of its participating interest were owing directly to it as a Lender
     under the Loan Documents, provided that each Lender shall

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     retain the right of setoff provided in Section 11.1 with respect to the
     amount of participating interests sold to each Participant. The Lenders
     agree to share with each Participant, and each Participant, by exercising
     the right of setoff provided in Section 11.1, agrees to share with each
     Lender, any amount received pursuant to the exercise of its right of
     setoff, such amounts to be shared in accordance with Section 11.2 as if
     each Participant were a Lender. The Borrower further agrees that each
     Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4 and
     3.5 to the same extent as if it were a Lender and had acquired its interest
     by assignment pursuant to Section 12.3, provided that (i) a Participant
     shall not be entitled to receive any greater payment under Section 3.1, 3.2
     or 3.5 than the Lender who sold the participating interest to such
     Participant would have received had it retained such interest for its own
     account, unless the sale of such interest to such Participant is made with
     the prior written consent of the Borrower, and (ii) any Participant not
     incorporated under the laws of the United States of America or any State
     thereof agrees to comply with the provisions of Section 3.5 to the same
     extent as if it were a Lender.

     12.3. ASSIGNMENTS.

          12.3.1 PERMITTED ASSIGNMENTS. Any Lender may at any time assign to one
     or more banks or other entities ("Purchasers") all or any part of its
     rights and obligations under the Loan Documents. Such assignment shall be
     evidenced by an agreement substantially in the form of Exhibit C or in such
     other form as may be agreed to by the parties thereto (each such agreement,
     an "Assignment Agreement"). Each such assignment with respect to a
     Purchaser which is not a Lender or an Affiliate of a Lender or an Approved
     Fund shall either be in an amount equal to the entire applicable Revolving
     Loan Commitment, Term Loan Commitment and Outstanding Revolving Credit
     Exposure and/or Term Loans, as applicable, of the assigning Lender or
     (unless each of the Borrower and the Administrative Agent otherwise
     consents) be in an aggregate amount not less than $5,000,000. The amount of
     the assignment shall be based on the Revolving Loan Commitment, Term Loan
     Commitment, Outstanding Revolving Credit Exposure (if the Revolving Loan
     Commitment has been terminated) and/or outstanding Term Loans (if the Term
     Loan Commitment has been terminated), as applicable, subject to the
     assignment, determined as of the date of such assignment or as of the
     "Trade Date," if the "Trade Date" is specified in the Assignment Agreement.

          12.3.2 CONSENTS. The consent of the Borrower shall be required prior
     to an assignment becoming effective unless the Purchaser is a Lender, an
     Affiliate of a Lender or an Approved Fund; provided that the consent of the
     Borrower shall not be required if (i) an Event of Default or an Unmatured
     Event of Default has occurred and is continuing or (ii) if such assignment
     is in connection with the physical settlement of any Lender's obligations
     to direct or indirect contractual counterparties in swap agreements
     relating to the Loans. The consent of the Administrative Agent shall be
     required prior to an assignment becoming effective unless the Purchaser is
     a Lender, an Affiliate of a Lender or an Approved Fund. Any consent
     required under this Section 12.3.2 shall not be unreasonably withheld or
     delayed.

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          12.3.3 EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Administrative
     Agent of an Assignment Agreement, together with any consents required by
     Sections 12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the
     Administrative Agent for processing such assignment (unless such fee is
     waived by the Administrative Agent), such assignment shall become effective
     on the effective date specified in such assignment. The Assignment
     Agreement shall contain a representation by the Purchaser to the effect
     that none of the consideration used to make the purchase of the Revolving
     Loan Commitment and Outstanding Revolving Credit Exposure and/or Term
     Loans, as applicable, under the applicable Assignment Agreement constitutes
     "plan assets" as defined under ERISA or Section 4975 of the Code and that
     the rights and interests of the Purchaser in and under the Loan Documents
     will not be "plan assets" under ERISA or Section 4975 of the Code. On and
     after the effective date of such assignment, such Purchaser shall for all
     purposes be a Lender party to this Agreement and any other Loan Document
     executed by or on behalf of the Lenders and shall have all the rights and
     obligations of a Lender under the Loan Documents, to the same extent as if
     it were an original party thereto, and the transferor Lender shall be
     released with respect to the Revolving Loan Commitment and Outstanding
     Revolving Credit Exposure and/or Term Loans, as applicable, assigned to
     such Purchaser without any further consent or action by the Borrower, the
     Lenders or the Administrative Agent. In the case of an assignment covering
     all of the assigning Lender's rights and obligations under this Agreement,
     such Lender shall cease to be a Lender hereunder but shall continue to be
     entitled to the benefits of, and subject to, those provisions of this
     Agreement and the other Loan Documents which survive payment of the
     Obligations and termination of the applicable agreement. Any assignment or
     transfer by a Lender of rights or obligations under this Agreement that
     does not comply with this Section 12.3 shall be treated for purposes of
     this Agreement as a sale by such Lender of a participation in such rights
     and obligations in accordance with Section 12.2. Upon the consummation of
     any assignment to a Purchaser pursuant to this Section 12.3.3, the
     transferor Lender, the Administrative Agent and the Borrower shall, if the
     transferor Lender or the Purchaser desires that its Loans be evidenced by
     Notes, make appropriate arrangements so that new Notes or, as appropriate,
     replacement Notes are issued to such transferor Lender, if applicable, and
     new Notes or, as appropriate, replacement Notes, are issued to such
     Purchaser, in each case in principal amounts reflecting their respective
     Revolving Loan Commitments (or, if the Revolving Loan Termination Date has
     occurred, their respective Outstanding Revolving Credit Exposure) or Term
     Loan Commitments (or, if the Term Loan Commitments have been terminated,
     outstanding Term Loans), as applicable, as adjusted pursuant to such
     assignment.

          12.3.4 REGISTER. The Administrative Agent, acting solely for this
     purpose as an agent of the Borrower, shall maintain at one of its offices
     in Chicago, Illinois a copy of each Assignment Agreement delivered to it
     and a register for the recordation of the names and addresses of the
     Lenders, and the Revolving Loan Commitments of, and principal amounts of
     the Credit Extensions owing to, each Lender pursuant to the terms hereof
     from time to time (the "Register"). The entries in the Register shall be
     conclusive, and the Borrower, the Administrative Agent and the Lenders may
     treat each Person whose name is recorded in the Register pursuant to the
     terms hereof as a Lender hereunder for all purposes of this Agreement,
     notwithstanding notice to the contrary. The

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     Register shall be available for inspection by the Borrower at any
     reasonable time and from time to time upon reasonable prior notice.

     12.4. DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.

     12.5. TAX TREATMENT. If any interest in any Loan Document is transferred to
any Transferee which is not incorporated under the laws of the United States or
any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(iv).

                                  ARTICLE XIII

                                     NOTICES

     13.1. NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION

          13.1.1 NOTICES GENERALLY. Except in the case of notices and other
     communications expressly permitted to be given by telephone (and except as
     provided in Section 13.1.2 below), all notices and other communications
     provided for herein shall be in writing and shall be delivered by hand or
     overnight courier service, mailed by certified or registered mail or sent
     by telecopier as follows:

          (i)     if to the Borrower, at its address or telecopier number set
                  forth on the signature page hereof;

          (ii)    if to the Administrative Agent, at its address or telecopier
                  number set forth on the signature page hereof;

          (iii)   if to the LC Issuer, at its address or telecopier number set
                  forth on the signature page hereof;

          (iv)    if to a Lender, to it at its address (or telecopier number)
                  set forth in its Administrative Questionnaire.

     Notices sent by hand or overnight courier service, or mailed by certified
     or registered mail, shall be deemed to have been given when received;
     notices sent by telecopier shall be deemed to have been given when sent
     (except that, if not given during normal business hours for the recipient,
     shall be deemed to have been given at the opening of business on the next
     Business Day for the recipient). Notices delivered through electronic
     communications to the extent provided in Section 13.1.2 below, shall be
     effective as provided in said Section 13.1.2.

                                       99

<PAGE>

          13.1.2 ELECTRONIC COMMUNICATIONS. Notices and other communications to
     the Lenders and the LC Issuer hereunder may be delivered or furnished by
     electronic communication (including e-mail and internet or intranet
     websites) pursuant to procedures approved by the Administrative Agent or as
     otherwise determined by the Administrative Agent; provided that the
     foregoing shall not apply to notices to any Lender or the LC Issuer
     pursuant to Article II if such Lender or the LC Issuer, as applicable, has
     notified the Administrative Agent that it is incapable of receiving notices
     under such Article by electronic communication. The Administrative Agent or
     the Borrower may, in its respective discretion, agree to accept notices and
     other communications to it hereunder by electronic communications pursuant
     to procedures approved by it or as it otherwise determines, provided that
     such determination or approval may be limited to particular notices or
     communications. Unless the Administrative Agent otherwise prescribes, (i)
     notices and other communications sent to an e-mail address shall be deemed
     received upon the sender's receipt of an acknowledgement from the intended
     recipient (such as by the "return receipt requested" function, as
     available, return e-mail or other written acknowledgement), provided that
     if such notice or other communication is not given during the normal
     business hours of the recipient, such notice or communication shall be
     deemed to have been given at the opening of business on the next Business
     Day for the recipient, and (ii) notices or communications posted to an
     Internet or intranet website shall be deemed received upon the deemed
     receipt by the intended recipient at its e-mail address as described in the
     foregoing clause (i) of notification that such notice or communication is
     available and identifying the website address therefor.

     13.2. CHANGE OF ADDRESS, ETC. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.

                                   ARTICLE XIV

         COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION

     14.1. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Article IV, this
Agreement shall become effective when it shall have been executed by the
Borrower, the Administrative Agent, the LC Issuer and the Lenders and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of such parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

     14.2. ELECTRONIC EXECUTION OF ASSIGNMENTS. The words "execution," "signed,"
"signature," and words of like import in any Assignment Agreement shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any

                                       100

<PAGE>

applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, or any other state laws based on the Uniform Electronic
Transactions Act.

                                   ARTICLE XIV

          CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

     15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT
OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS OR PRINCIPLES) OF THE
STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.

     15.2 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
ADMINISTRATIVE AGENT, THE LC ISSUER, ANY LENDER OR ANY HOLDER OF SECURED
OBLIGATIONS OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, THE LC ISSUER, ANY
LENDER OR ANY HOLDER OF SECURED OBLIGATIONS INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT MAY BE BROUGHT IN A COURT IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW
YORK. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE LC
ISSUER, ANY LENDER OR ANY HOLDER OF SECURED OBLIGATIONS TO BRING PROCEEDINGS
AGAINST THE BORROWER OR LIMIT THE RIGHTS OF THE BORROWER TO BRING PROCEEDINGS
AGAINST SUCH OTHER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.

     15.3 WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE LC
ISSUER, EACH LENDER, AND EACH OTHER HOLDER OF SECURED OBLIGATIONS HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.

                                       101

<PAGE>

               The remainder of this page is intentionally blank.

                                       102

<PAGE>

     IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the
Administrative Agent have executed this Agreement as of the date first above
written.

                                   ROTO-ROOTER, INC.
                                   as the Borrower

                                   By: /s/ Naomi C. Dallob
                                       ------------------------------

                                   Print Name: Naomi C. Dallob
                                   Title:      Secretary
                                               2600 Chemed Center
                                               255 East Fifth Street
                                               Cincinnati, OH 45202

                                   Attention: Timothy S. O'Toole
                                   Telephone: (513) 762-6702
                                         FAX: (513) 287-6216

                                   BANK ONE, NA (MAIN OFFICE
                                   CHICAGO), as a Lender, as Swing Line
                                   Lender, as LC Issuer, and as Administrative
                                   Agent

                                   By: /s/ Thomas J. Reinhold
                                       ------------------------------
                                   Print Name: Thomas J. Reinhold
                                   Title:      Vice President
                                               8044 Montgomery Road
                                               OH3-4017
                                               Cincinnati, OH 45236

                                   Attention: Thomas J. Reinhold
                                              Telephone:  (513) 985-5118
                                              Facsimile:  (513) 985-5760

<PAGE>

                               COMMITMENT SCHEDULE

                           REVOLVING LOAN COMMITMENTS

<TABLE>
<CAPTION>
                  Amount of Revolving Loan        % of Aggregate Revolving
Lender                  Commitment                      Loan Commitment
- ------            ------------------------        --------------------------
<S>               <C>                             <C>
Bank One, NA        $100,000,000.00                100%

TOTAL               $100,000,000.00                100%
</TABLE>

                     TERM LOAN COMMITMENTS ON FOLLOWING PAGE

<PAGE>

                              TERM LOAN COMMITMENTS

<TABLE>
<CAPTION>
                    Amount of Term Loan           % of Aggregate Term Loan
Lender                  Commitment                      Loan Commitment
- ------              -------------------           ------------------------
<S>                 <C>                           <C>
Bank One, NA        $35,000,000.00                 100%

TOTAL               $35,000,000.00                 100%
</TABLE>

<PAGE>

                                PRICING SCHEDULE

<TABLE>
<CAPTION>
APPLICABLE            LEVEL I     LEVEL II     LEVEL III     LEVEL IV     LEVEL V     LEVEL VI     LEVEL VII
MARGIN                STATUS      STATUS       STATUS        STATUS       STATUS      STATUS       STATUS
- ------------------------------------------------------------------------------------------------------------
<S>                   <C>         <C>          <C>           <C>          <C>         <C>          <C>
Eurodollar            3.75%       3.50%        3.25%         3.00%        2.75%       2.50%        2.00%
Rate for
Revolving
Loans
- ------------------------------------------------------------------------------------------------------------
Eurodollar            4.00%       3.75%        3.50%         3.25%        3.00%       2.75%        2.25%
Rate for Term
Loans
- ------------------------------------------------------------------------------------------------------------
Floating Rate         2.50%       2.25%        2.00%         1.75%        1.50%       1.25%        0.75%
for Revolving
Loans and
Term Loans
- ------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
APPLICABLE            LEVEL I     LEVEL II     LEVEL III     LEVEL IV     LEVEL V     LEVEL VI     LEVEL VII
MARGIN                STATUS      STATUS       STATUS        STATUS       STATUS      STATUS       STATUS
- ------------------------------------------------------------------------------------------------------------
<S>                   <C>         <C>          <C>           <C>          <C>         <C>          <C>
Commitment Fee        0.50%       0.50%        0.50%         0.50%        0.50%       0.375%       0.375%
</TABLE>

     For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:

     "FINANCIALS" means the annual or quarterly financial statements of the
Borrower delivered pursuant to Section 6.1.

     "LEVEL I STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is equal to or greater than 5.00 to 1.00.

     "LEVEL II STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status and (ii) the Leverage Ratio is
equal to or greater than 4.75 to 1.00 but less than 5.00 to 1.00.

     "LEVEL III STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Leverage Ratio is equal to or greater than 4.00 to 1.00 but less than 4.75 to
1.00.

                                        2

<PAGE>

     "LEVEL IV STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status, Level II Status or Level III
Status and (ii) the Leverage Ratio is equal to or greater than 3.50 to 1.00 but
less than 4.00 to 1.00.

     "LEVEL V STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status, Level II Status, Level III Status
or Level IV Status and (ii) the Leverage Ratio is equal to or greater than 3.00
to 1.00 but less than 3.50 to 1.00.

     "LEVEL VI STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status, Level II Status, Level III
Status, Level IV Status or Level V Status and (ii) the Leverage Ratio is equal
to or greater than 2.50 to 1.00 but less than 3.00 to 1.00.

     "LEVEL VII STATUS" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Borrower
has not qualified for Level I Status, Level II Status, Level III Status, Level
IV Status, Level V Status, or Level VI Status.

     "STATUS" means either Level I Status, Level II Status, Level III Status,
Level IV Status, Level V Status, Level VI Status or Level VII Status.

     The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with foregoing table based on the Borrower's Status as reflected in
the then most recent Financials. Adjustments, if any, to the Applicable Margin
or Applicable Fee Rate shall be effective five Business Days after the
Administrative Agent has received the applicable Financials. If the Borrower
fails to deliver the Financials to the Administrative Agent at the time required
pursuant to Section 6.1, then the Applicable Margin and Applicable Fee Rate
shall be the highest Applicable Margin and Applicable Fee Rate set forth in the
foregoing table until five days after such Financials are so delivered.

     Notwithstanding the foregoing, Level III Status shall be in effect until
the Administrative Agent receives the Financials for the Borrower's fiscal
quarter ending on June 30, 2004 and adjustments to the Applicable Margin and
Applicable Fee Rate shall thereafter be effected in accordance with the
preceding paragraph.

                                        3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.45
<SEQUENCE>12
<FILENAME>l05867aexv10w45.txt
<DESCRIPTION>EX-10.45
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.45

                                                                  EXECUTION COPY

                          PLEDGE AND SECURITY AGREEMENT

          THIS PLEDGE AND SECURITY AGREEMENT, dated as of February 24, 2004 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Security Agreement"), is entered into by and among ROTO-ROOTER,
INC., a Delaware corporation (the "Borrower"), the Subsidiaries of the Borrower
set forth on the signature pages hereto (together with the Borrower, the
"Initial Grantors"), those additional Subsidiaries of the Borrower, whether now
existing or hereafter formed, which become parties to this Security Agreement by
executing a supplement hereto (a "Security Agreement Supplement") in
substantially the form of Annex I hereto (such additional Subsidiaries, together
with the Initial Grantors, the "Grantors"), and BANK ONE, NA, a national banking
association having its principal office in Chicago, Illinois, in its capacity as
Collateral Agent (the "Collateral Agent") under the Intercreditor Agreement (as
defined below).

                              PRELIMINARY STATEMENT

          WHEREAS, the Borrower, certain financial institutions (the "Lenders"),
and Bank One, NA (Main Office Chicago), as Administrative Agent (the
"Administrative Agent"), have entered into a Credit Agreement dated as of
February 24, 2004 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Existing Credit Agreement", and
together with the other "Loan Documents" as defined therein, the "Bank Group
Documents");

          WHEREAS, the Grantors (other than the Borrower) shall guaranty the
Borrower's obligations under the Existing Credit Agreement and the agreements,
documents and instruments delivered in connection therewith pursuant to a
Guaranty Agreement dated as of February 24, 2004 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Existing
Credit Agreement Guaranty");

          WHEREAS, the Borrower has entered into an Indenture, dated as of
February 24, 2004 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Note Indenture") pursuant to which
the Borrower has issued, in an initial aggregate principal amount equal to
$110,000,000, certain Floating Rate Senior Secured Notes due 2010 (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the "Senior Secured Notes" and together with (i) the exchange notes issued in
exchange therefor as contemplated by the Registration Rights Agreement dated as
of February 24, 2004, among the Borrower, the other Grantors and the
"Purchasers" (as defined therein) and (ii) any additional notes issued under the
Note Indenture by the Borrower, to the extent permitted by the Note Indenture
and the Existing Credit Agreement, the "Notes"), and pursuant to which the
Grantors (other than the Borrower) shall guaranty the Borrower's obligations
under the Note

<PAGE>

Indenture, the Notes and the agreements, documents and instruments delivered in
connection therewith;

          WHEREAS, the Grantors wish to secure, on an equal and ratable basis,
their respective obligations under the Existing Credit Agreement, the Note
Indenture, the Notes and the agreements, documents and instruments delivered in
connection therewith and certain other obligations, including, without
limitation, the Existing Credit Agreement Guaranty (collectively, as the same
may be amended, restated, supplemented or otherwise modified from time to time,
together with the "Senior Loan Documents" and the "Noteholder Documents" (as
each is defined in the Intercreditor Agreement), the "Roto-Rooter Credit
Documents"), pursuant to this Security Agreement; and

          WHEREAS, in accordance with the Collateral Sharing Agreement, dated as
of February 24, 2004, by and among the Administrative Agent for the benefit of
the Lenders, Wells Fargo Bank, National Association, as Trustee (the "Trustee")
for the benefit of the holders of the Notes, the Collateral Agent and the
Borrower (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the "Intercreditor Agreement"), the Administrative
Agent on behalf of the Lenders and the Trustee on behalf of the holders of the
Notes (collectively, together with the other "Secured Parties" (as defined in
the Intercreditor Agreement) the "Roto-Rooter Creditors") have appointed the
Collateral Agent to be the beneficiary of the Liens granted hereunder;

          NOW THEREFORE, in consideration of the premises set forth herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Grantors and the Collateral Agent, on behalf of the
Roto-Rooter Creditors, hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          1.1. TERMS DEFINED IN NEW YORK UNIFORM COMMERCIAL CODE. Terms defined
in the New York UCC which are not otherwise defined in this Security Agreement
are used herein as defined in the New York UCC.

          1.2. DEFINITIONS OF CERTAIN TERMS USED HEREIN. As used in this
Security Agreement, in addition to the terms defined in the Preliminary
Statement, the following terms shall have the following meanings. Capitalized
terms used but not defined herein have the meanings given to them in the
Intercreditor Agreement.

          "Accounts" shall have the meaning set forth in Article 9 of the New
York UCC.

          "Applicable Pledge Percentage" means 100%, but (x) 65% in the case of
a pledge of capital stock of a Foreign Subsidiary or (y) 0% in the case of a
pledge of capital stock of a Foreign Subsidiary to the extent a pledge would
cause a Financial Assistance Problem.

                                        2

<PAGE>

          "ARTICLE" means a numbered article of this Security Agreement, unless
another document is specifically referenced.

          "CHATTEL PAPER" shall have the meaning set forth in Article 9 of the
New York UCC.

          "CHEMED CAPITAL TRUST" means Chemed Capital Trust, a Delaware
statutory business trust and a wholly-owned Subsidiary of the Borrower, together
with its permitted successors and assigns.

          "COLLATERAL" means all Accounts, Chattel Paper, Commercial Tort
Claims, Deposit Accounts, Documents, Equipment, General Intangibles, Goods,
Instruments, Inventory, Investment Property, Letter-Of-Credit Rights, Letters of
Credit, Pledged Deposits and Supporting Obligations with respect to the
foregoing, wherever located in which any Grantor now has or hereafter acquires
any right or interest, and the proceeds (including Stock Rights), insurance
proceeds and products thereof, together with all books and records, customer
lists, credit files, computer files, programs, printouts and other computer
materials and records related thereto, any cash or cash equivalents to the
extent deposited into the Special Letter of Credit Cash Collateral Account to
collateralize Letters of Credit issued under the Existing Credit Agreement;
provided that such amounts deposited into the Special Letter of Credit Cash
Collateral Account shall only be applied to satisfy LC Obligations owing under
and as defined in the Existing Credit Agreement until such time as all such
Letters of Credit giving rise to LC Obligations expire or are terminated and all
amounts owing as a result of draws under such Letters of Credit have been
satisfied). Notwithstanding the foregoing, the Collateral shall not include (a)
any property to the extent that such grant of a security interest is prohibited
by any law of a Governmental Authority, requires a consent not obtained of any
Governmental Authority pursuant to such law or is prohibited by, or constitutes
a breach or default under, or gives rise to a right on the part of the parties
thereto other than a Grantor to terminate (or to materially modify), or requires
any consent not obtained under, any contract, lease, license, agreement,
instrument or other document or, in the case of any Investment Property, any
applicable shareholder or similar agreement, except to the extent that such law
or the term in such contract, lease, license, agreement, instrument or other
document or shareholder or similar agreement providing for such prohibition,
breach, default or right of termination or modification or requiring such
consent is ineffective under applicable law, or (b) Excluded Equity Interests.

          "COMMERCIAL TORT CLAIMS" means all rights and interests in and to any
commercial tort claims which are listed on Exhibit "C" hereto or which are
listed on a Supplement to such Exhibit.

          "CONTROL" shall have the meaning set forth in Article 8 or, if
applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the New York
UCC.

          "DEPOSIT ACCOUNTS" shall have the meaning set forth in Article 9 of
the New York UCC.

                                        3

<PAGE>

          "DOMESTIC SUBSIDIARY" means any Subsidiary of any Person organized
under the laws of a jurisdiction located in the United States of America.

          "DOCUMENTS" shall have the meaning set forth in Article 9 of the New
York UCC.

          "EQUIPMENT" shall have the meaning set forth in Article 9 of the New
York UCC.

          "EXCLUDED EQUITY INTERESTS" means (i) equity interests in Roto-Rooter
of Canada, Ltd., Chemed Capital Trust and VNF, (ii) more than 40% of the equity
interests of RR Plumbing Services Corporation, (iii) more than 49% of the equity
interests of Complete Plumbing Services, Inc., (iv) more than 80% of the equity
interest of Nurotoco of New Jersey, Inc., (v) more than the Applicable Pledge
Percentage of any Foreign Subsidiary, and (vi) equity interests in any Foreign
Subsidiary other than a First Tier Foreign Subsidiary.

          "EXHIBIT" refers to a specific exhibit to this Security Agreement (as
supplemented from time to time), unless another document is specifically
referenced.

          "FACILITY LCs" shall have the meaning set forth in the Existing Credit
Agreement.

          "FINANCIAL ASSISTANCE PROBLEM" means, with respect to any Foreign
Subsidiary, the inability of such Foreign Subsidiary to permit its assets from
being pledged pursuant to a pledge or security agreement on account of legal or
financial limitations imposed by the jurisdiction of organization of such
Foreign Subsidiary or other relevant jurisdictions having authority over such
Foreign Subsidiary, in each case as determined by the Borrower in its
commercially reasonable judgment acting in good faith and in consultation with
its legal and tax advisors.

          "FIRST TIER FOREIGN SUBSIDIARY" means each Foreign Subsidiary with
respect to which any one or more of the Borrower and its Domestic Subsidiaries
directly owns more than 50% of such Foreign Subsidiary's issued and outstanding
ordinary equity interests.

          "FOREIGN SUBSIDIARY" means any Subsidiary of any Person which is not a
Domestic Subsidiary of such Person.

          "GENERAL INTANGIBLES" shall have the meaning set forth in Article 9 of
the New York UCC.

          "GOODS" shall have the meaning set forth in Article 9 of the New York
UCC.

          "GOVERNMENTAL AUTHORITY" means any nation or government, any foreign,
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

          "INSTRUMENTS" shall have the meaning set forth in Article 9 of the New
York UCC.

          "INVENTORY" shall have the meaning set forth in Article 9 of the New
York UCC.

                                        4

<PAGE>

          "INVESTMENT PROPERTY" shall have the meaning set forth in Article 9 of
the New York UCC.

          "LC ISSUER" shall have the meaning set forth in the Existing Credit
Agreement.

          "LC OBLIGATIONS" shall have the meaning set forth in the Existing
Credit Agreement.

          "LETTER-OF-CREDIT RIGHTS" shall have the meaning set forth in Article
9 of the New York UCC.

          "LETTERS OF CREDIT" shall have the meaning set forth in Article 5 of
the New York UCC.

          "LIEN" means any lien (statutory or other), security interest,
mortgage, pledge, hypothecation, assignment, deposit arrangement, or encumbrance
of any kind or nature whatsoever (including, without limitation, the interest of
a vendor or lessor under any conditional sale, capitalized lease or other title
retention agreement, and, in the case of stock agreements, any purchase option,
call or similar right of a Person with respect to such stock).

          "NEW YORK UCC" means the New York Uniform Commercial Code as in effect
from time to time.

          "OBLIGATIONS" means "Secured Obligations" as defined in the
Intercreditor Agreement.

          "PERSON" means any individual, corporation, firm, enterprise,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company or other entity of any kind, or
any government or political subdivision or any agency, department or
instrumentality thereof.

          "PLEDGED DEPOSITS" means all time deposits of money (other than
Deposit Accounts and Instruments), whether or not evidenced by certificates,
which a Grantor may from time to time designate as pledged to the Collateral
Agent or to any Roto-Rooter Creditor as security for any Obligation, and all
rights to receive interest on said deposits.

          "RECEIVABLES" means the Accounts, Chattel Paper, Documents, Investment
Property, Instruments or Pledged Deposits, and any other rights or claims to
receive money which are General Intangibles or which are otherwise included as
Collateral.

          "RELEVANT DATE" means (i) in respect of the Initial Grantors, the date
of this Security Agreement and (ii) in respect any Grantor that becomes a party
to this Security Agreement pursuant to the execution of a Security Agreement
Supplement, the date of such Security Agreement Supplement.

          "REQUISITE LENDERS" means the "Instructing Group" as defined in the
Intercreditor Agreement.

                                        5

<PAGE>

          "ROTO-ROOTER DEFAULT" means (i) any "Event of Default" under and as
defined in the Existing Credit Agreement and (ii) any "Event of Default" under
and as defined in the Note Indenture.

          "SECTION" means a numbered section of this Security Agreement, unless
another document is specifically referenced.

          "SECURITY" has the meaning set forth in Article 8 of the New York UCC.

          "STOCK RIGHTS" means any securities, dividends or other distributions
and any other right or property which any Grantor shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any securities or other ownership interests in a
corporation, partnership, joint venture or limited liability company
constituting Collateral and any securities, any right to receive securities and
any right to receive earnings, in which any Grantor now has or hereafter
acquires any right, issued by an issuer of such securities.

          "SUBSIDIARY" of a Person means (i) any corporation of which more than
50% of the outstanding securities having ordinary voting power shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization of which more than 50% of the ownership interests
having ordinary voting power shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary" means a
Subsidiary of the Borrower, including, without limitation, the Target.

          "SUPPORTING OBLIGATION" shall have the meaning set forth in Article 9
of the New York UCC.

          "TARGET" means Vitas Healthcare Corporation, a Delaware corporation.

          "VNF" means Vitas of North Florida, Inc., a Florida not-for-profit
corporation and a wholly-owned Subsidiary of the Target.

          The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.

                                   ARTICLE II

                           GRANT OF SECURITY INTEREST

          Each of the Grantors hereby pledges, assigns and grants to the
Collateral Agent, on behalf of and for the ratable benefit of the Roto-Rooter
Creditors, a security interest in all of such Grantor's right, title and
interest in and to (i) all capital stock or other equity interests held or owned
by such Grantor (other than Excluded Equity Interests, directors' qualifying
shares or shares issued to third parties to the extent necessary to satisfy any
licensing requirements under applicable law with respect to such Grantor's
business) and

                                        6

<PAGE>

(ii) all other Collateral, whether now owned or hereafter acquired, to secure
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

          Each of the Initial Grantors represents and warrants to the Collateral
Agent and the Roto-Rooter Creditors and each Grantor that becomes a party to
this Security Agreement pursuant to the execution of a Security Agreement
Supplement represents and warrants (after giving effect to supplements to each
of the Exhibits hereto with respect to such subsequent Grantor as attached to
such Security Agreement Supplement), that:

          3.1. TITLE, AUTHORIZATION, VALIDITY AND ENFORCEABILITY. Such Grantor
has good and valid rights in or the power to transfer the Collateral owned by it
and title to the Collateral owned by it with respect to which it has purported
to grant a security interest hereunder, free and clear of all Liens except for
Liens permitted under Section 4.1.6, and has full power and authority to grant
to the Collateral Agent the security interest in such Collateral pursuant
hereto. The execution and delivery by such Grantor of this Security Agreement
has been duly authorized by proper corporate or other proceedings, and this
Security Agreement constitutes a legal, valid and binding obligation of such
Grantor and creates a security interest which is enforceable against such
Grantor in all Collateral it now owns or hereafter acquires, except as
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyances, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) general equitable principles
(whether considered in a proceeding in equity or at law), and (iii) requirements
of reasonableness, good faith and fair dealing. As of the Relevant Date for such
Grantor and to the extent governed by the New York UCC, when UCC financing
statements have been filed in the appropriate offices against such Grantor in
the locations listed on Exhibit "F", the Collateral Agent will have a fully
perfected first priority security interest in that Collateral owned by such
Grantor in which a security interest may be perfected by filing, subject only to
Liens permitted under Section 4.1.5.

          3.2. [RESERVED].

          3.3. TYPE AND JURISDICTION OF ORGANIZATION. As of the Relevant Date
for such Grantor, such Grantor's exact legal name and jurisdiction of
incorporation, organization or formation (as the case may be) are set forth in
Exhibit "A".

          3.4. PRINCIPAL LOCATION. As of the Relevant Date for such Grantor,
such Grantor's mailing address and the location of its place of business (if it
has only one) or its chief executive office (if it has more than one place of
business), is set forth in Exhibit "A". Such Grantor has no other places of
business except those set forth in Exhibit "A".

          3.5. PROPERTY LOCATIONS. As of the Relevant Date for such Grantor, the
Inventory and Equipment of such

                                        7

<PAGE>

Grantor are located solely at the locations of such Grantor described in Exhibit
"A" except to the extent that such Inventory or Equipment, as the case may be,
is in transit, has been sold in accordance with the Roto-Rooter Credit Documents
or is immaterial to the business of such Grantor. All of said locations are
owned by such Grantor except for locations (i) which are leased by such Grantor
as lessee and designated in Part B of Exhibit "A" and (ii) at which Inventory is
held in a public warehouse or is otherwise held by a bailee or on consignment as
designated in Part C of Exhibit "A".

          3.6. NO OTHER NAMES. As of the Relevant Date for such Grantor, except
as described in Part D of Exhibit A, such Grantor has not conducted business
under any name (except immaterial fictitious tradenames) within the past five
(5) years except the name in which it has executed this Security Agreement,
which is the exact name as it appears in such Grantor's organizational
documents, as amended, as filed with such Grantor's jurisdiction of
organization.

          3.7. [RESERVED].

          3.8. FILING REQUIREMENTS. As of the Relevant Date for such Grantor,
none of the Collateral owned by such Grantor is of a type for which security
interests or liens may be perfected by filing under any federal statute except
for those patents, trademarks and copyrights held by any Grantor that are
described in Exhibit "B" and Collateral owned by such Grantor in which security
interests or liens can only be perfected through compliance with the terms of
the Federal Assignment of Claims Act.

          3.9. NO FINANCING STATEMENTS. No financing statement describing all or
any portion of the Collateral which has not lapsed or been terminated naming
such Grantor as debtor has been filed in any jurisdiction except (i) financing
statements naming the Collateral Agent on behalf of the Roto-Rooter Creditors as
the secured party, (ii) as described in Exhibit "D", (iii) as permitted by
Section 4.1.5 or (iv) financing statements not authorized by such Grantor or
that relate to Liens that have been released.

          3.10. FEDERAL EMPLOYER IDENTIFICATION NUMBER; STATE ORGANIZATION
NUMBER. As of the Relevant Date for such Grantor, such Grantor's Federal
employer identification number, and if such Grantor is a registered
organization, such Grantor's State organization number, are set forth on Exhibit
"A".

          3.11. PLEDGED SECURITIES AND OTHER INVESTMENT PROPERTY. Exhibit "E"
(or any Supplement to such Exhibit) sets forth a complete and accurate list of
(i) all of the capital stock, ownership interests or membership interests and
the ownership percentages thereof, owned by the Grantors and (ii) the
Instruments, Securities and other Investment Property delivered to the
Collateral Agent pursuant hereto, excluding, however, the Excluded Equity
Interests, which are not required to be delivered hereunder (the "Pledged
Securities"). Each Grantor is the direct and beneficial owner of each
Instrument, Security and other type of Investment Property listed on Exhibit "E"
(or any Supplement to such Exhibit) as being owned by it, free and clear of any
Liens, except for the security interest granted to the Collateral Agent for the
benefit of the Roto-Rooter Creditors hereunder, Liens permitted under Section
4.1.5 and transfers permitted by the

                                        8

<PAGE>

Roto-Rooter Credit Documents; provided that the Securities pledged shall not
include the Excluded Equity Interests. Each Grantor further represents and
warrants that:

          3.11.1 All such Instruments, Securities or other types of Investment
     Property owned by it which are shares of stock in a corporation or
     ownership interests in a partnership or limited liability company have been
     (to the extent such concepts are relevant with respect to such Instrument,
     Security or other type of Investment Property) duly and validly issued, are
     fully paid and non-assessable;

          3.11.2 The shares of capital stock, ownership interests or membership
     interests owned by it with respect to a subsidiary of the Borrower set
     forth on Exhibit "E" or on any Supplement to such Exhibit represent the
     aggregate outstanding amount of all of the capital stock, ownership
     interests or membership interests, as applicable, of such subsidiary
     required to be pledged hereunder pursuant to the Roto-Rooter Credit
     Documents and the ownership percentages thereof; and

          3.11.3 With respect to any certificates delivered to the Collateral
     Agent representing an ownership interest in a partnership or limited
     liability company, either such certificates are Securities as defined in
     Article 8 of the Uniform Commercial Code of the applicable jurisdiction as
     a result of actions by the issuer or otherwise, or, if such certificates
     are not Securities, such Grantor has so informed the Collateral Agent so
     that the Collateral Agent may take steps to perfect its security interest
     therein as a General Intangible.

                                   ARTICLE IV

                                    COVENANTS

          From the date of this Security Agreement, and thereafter until this
Security Agreement is terminated, each of the Initial Grantors agrees, and from
and after the effective date of any Security Agreement Supplement applicable to
any Grantor (after giving effect to supplements to each of the Exhibits hereto
with respect to such subsequent Grantor as attached to such Security Agreement
Supplement) and thereafter until this Security Agreement is terminated, each
such subsequent Grantor agrees:

          4.1. GENERAL.

          4.1.1 INSPECTION. Each Grantor will permit the Collateral Agent, at
     any time, and upon the occurrence and during the continuance of a
     Roto-Rooter Default, any Roto-Rooter Creditor, by its representatives and
     agents (i) to inspect the Collateral, (ii) to examine and make copies of
     the records of such Grantor relating to the Collateral and (iii) to discuss
     the Collateral and the related records of such Grantor with, and to be
     advised as to the same by, such Grantor's officers and employees (and, in
     the case of any Receivable, with any Person or entity

                                        9

<PAGE>

     which is or may be obligated thereon), all at such reasonable times and
     intervals as the Collateral Agent, at any time, and upon the occurrence and
     during the continuance of a Roto-Rooter Default, such Roto-Rooter Creditor,
     may reasonably determine, and all at such Grantor's expense.

          4.1.2 RECORDS AND REPORTS. Each Grantor shall keep and maintain such
     complete, accurate and proper books and records with respect to the
     Collateral owned by such Grantor as is consistent with its current
     practices and in accordance with such prudent and standard practices used
     in industries that are the same as or similar to those in which such
     Grantor is engaged, and furnish to the Collateral Agent such reports with
     respect to the identity, amount and location of the Collateral as the
     Collateral Agent shall from time to time reasonably request.

          4.1.3 FINANCING STATEMENTS AND OTHER ACTIONS; DEFENSE OF TITLE. Each
     Grantor hereby authorizes the Collateral Agent to file, and if requested
     will deliver to the Collateral Agent, all financing statements describing
     the Collateral owned by such Grantor and other documents and take such
     other actions as may from time to time be reasonably requested by the
     Collateral Agent in order to maintain a first priority perfected security
     interest in and, if applicable, Control of, the Collateral owned by such
     Grantor, subject only to Liens permitted under Section 4.1.5 and transfers
     permitted by the Roto-Rooter Credit Documents. Such financing statements
     may describe the Collateral in the same manner as described herein or may
     contain an indication or description of the Collateral that describes the
     property constituting Collateral in any other manner as the Collateral
     Agent may reasonably determine is necessary, advisable or prudent to ensure
     that the perfection of the security interest in the Collateral granted to
     the Collateral Agent herein, including, without limitation, describing such
     property as "all assets" or "all personal property whether now owned or
     hereafter acquired" or "all of the debtor's personal property and other
     assets, whether now owned or existing or hereafter acquired or arising,
     together with all products and proceeds thereof, substitutions and
     replacements therefor, and additions and accessions thereto." Each Grantor
     will take any and all actions necessary to defend title to the Collateral
     owned by such Grantor against all Persons and to defend the security
     interest of the Collateral Agent in such Collateral and the priority
     thereof against any Lien not expressly permitted hereunder. Notwithstanding
     anything to the contrary set forth herein, prior to the occurrence of a
     Roto-Rooter Default and the acceleration of the repayment of the
     Obligations as a result thereof, no Grantor shall be required to grant
     Control of any Deposit Account (or any "Securities Account" as defined in
     Article 8 of the New York UCC) to the Collateral Agent other than Deposit
     Accounts maintained with Bank One, NA or an affiliate thereof; provided,
     that no Grantor shall be required to comply with the terms of the Federal
     Assignment of Claims Act in connection with its pledge of any Collateral to
     the Collateral Agent.

          4.1.4 DISPOSITION OF COLLATERAL. No Grantor will sell, lease or
     otherwise dispose of any Collateral owned by it except (i) sales or leases
     of Inventory in the ordinary course of business, (ii) proceeds of Inventory
     and Accounts collected in

                                       10

<PAGE>

     the ordinary course of business and (iii) dispositions not prohibited by
     the Existing Credit Agreement and the Note Indenture unless and until the
     Collateral Agent shall notify the Grantors that a Roto-Rooter Default shall
     have occurred and be continuing and that during the continuance thereof the
     Grantors shall not sell or otherwise dispose of such Collateral.

          4.1.5 LIENS. No Grantor will create, incur, or suffer to exist any
     Lien on any Collateral owned by it except (i) the security interest created
     by this Security Agreement, (ii) existing Liens described in Exhibit "D",
     (iii) other Liens permitted pursuant to the applicable provisions of the
     Senior Loan Documents (including Section 6.15 of the Existing Credit
     Agreement) and the applicable provisions of the Note Indenture, (iv)
     filings under any federal statute for patents, trademarks, and copyrights
     and (v) Collateral in which security interests or liens can only be
     perfected through compliance with the terms of the Federal Assignment of
     Claims Act.

          4.1.6 CHANGE IN CORPORATE EXISTENCE, TYPE OR JURISDICTION OF
     ORGANIZATION, LOCATION, NAME. Each Grantor will:

     (i)  not change its jurisdiction of organization;

     (ii) not maintain its place of business (if it has only one) or its chief
          executive office (if it has more than one place of business) at a
          location other than a location specified on Exhibit "A"; and

     (iii) not change its name or taxpayer identification number,

     unless, in each such case, such Grantor shall have given the Collateral
     Agent prior written notice of such event or occurrence and either (x) the
     Collateral Agent shall have reasonably determined that such event or
     occurrence will not adversely affect the validity, perfection or priority
     of the Collateral Agent's security interest in the Collateral, or (y) there
     shall have been taken such steps (with the cooperation of such Grantor to
     the extent necessary or advisable) as are reasonably necessary to properly
     maintain the validity, perfection and priority of the Collateral Agent's
     security interest in the Collateral owned by such Grantor.

          4.1.7 OTHER FINANCING STATEMENTS. No Grantor will sign or authorize
     the signing on its behalf or authorize the filing of any financing
     statement naming it as debtor covering all or any portion of the Collateral
     owned by such Grantor, except any financing statement authorized under
     Section 4.1.3. or any financing statement filed in connection with a Lien
     permitted under Section 4.1.5.

     4.2. CERTAIN AGREEMENTS ON RECEIVABLES. Without the Collateral Agent's
consent, no Grantor will make or agree to make any discount, credit, rebate or
other reduction in the original amount owing on a Receivable or accept in
satisfaction of a Receivable less than the original amount thereof, except in
the ordinary course of business.

                                       11

<PAGE>

     4.3. INSTRUMENTS, SECURITIES, DOCUMENTS AND PLEDGED DEPOSITS. Each Grantor
will (i) hold in trust for the Collateral Agent upon receipt and promptly
thereafter deliver to the Collateral Agent any Security or Instrument
constituting Collateral with a value in excess of $1,000,000, (ii) upon the
designation of any Pledged Deposits, deliver to the Collateral Agent such
Pledged Deposits which are evidenced by certificates included in the Collateral
endorsed in blank, marked with such legends and assigned as the Collateral Agent
shall specify, and (iii) upon the Collateral Agent's request, upon the
occurrence and during the continuance of a Roto-Rooter Default, deliver to the
Collateral Agent (and thereafter hold in trust for the Collateral Agent upon
receipt and promptly deliver to the Collateral Agent) any Document evidencing or
constituting Collateral.

Notwithstanding anything to the contrary in this Security Agreement, so long as
no Roto-Rooter Default has occurred and is continuing, any promissory notes
(such notes described in clauses (i) and (ii) below being referred to herein as
"Employee Notes") (i) in an aggregate amount not to exceed at any time $500,000,
made to any Grantor by any of its officers, directors or employees in connection
with compensation arrangements approved by a majority of the disinterested
directors on its board of directors (or a committee thereof) or (ii) permitted
in accordance with the terms of the Roto-Rooter Credit Documents (A) shall not
be required to be delivered to Collateral Agent and (B) may be modified,
replaced, terminated or forgiven, in whole or in part, from time to time (but
not sold or otherwise transferred to any other Person) upon the approval of a
majority of the disinterested directors of the board of directors of such
Grantor without further approval of the Collateral Agent or the Roto- Rooter
Creditors.

     4.4. UNCERTIFICATED SECURITIES AND CERTAIN OTHER INVESTMENT PROPERTY. Each
Grantor will permit the Collateral Agent from time to time to cause the
appropriate issuers (and, if held with a securities intermediary, such
securities intermediary) of uncertificated securities or other types of
Investment Property not represented by certificates which are Collateral owned
by such Grantor to mark their books and records with the numbers and face
amounts of all such uncertificated securities or other types of Investment
Property not represented by certificates and all rollovers and replacements
therefor to reflect the Lien of the Collateral Agent granted pursuant to this
Security Agreement. At the request and option of the Collateral Agent, each
Grantor will take any actions necessary to cause (i) the issuers of
uncertificated securities which are Collateral and which are Securities and (ii)
any financial intermediary which is the holder of any Investment Property, to
cause the Collateral Agent to have and retain Control over such Securities or
other Investment Property. Without limiting the foregoing, each Grantor will, if
reasonably requested by the Collateral Agent, with respect to Investment
Property that is Collateral held with a financial intermediary, use commercially
reasonable efforts to cause such financial intermediary to enter into a control
agreement with the Collateral Agent in form and substance reasonably
satisfactory to the Collateral Agent. The Collateral Agent agrees with each of
the Grantors that the Collateral Agent shall not give any entitlement orders or
instructions or directions to any such issuer or intermediary, and shall not
withhold its consent to the exercise of any withdrawal or dealing rights by any
Grantor, unless a Roto-Rooter Default has occurred and is continuing, or, after
giving effect to any such investment and withdrawal rights, would occur. If the
Collateral Agent does give any entitlement orders or instructions or directions
pursuant to this Section 4.4,

                                       12

<PAGE>

     the Collateral Agent agrees with each of the Grantors that the Collateral
     Agent shall withdraw any entitlement orders or instructions or directions
     within three (3) Business Days after all Roto-Rooter Defaults have been
     cured or waived. The provisions of this paragraph shall not apply to any
     financial assets credited to a "Securities Account" (as defined in Article
     8 of the New York UCC) for which the Collateral Agent is the "Securities
     Intermediary" (as defined in Article 8 of the New York UCC).

          4.5. STOCK AND OTHER OWNERSHIP INTERESTS.

          4.5.1 REGISTRATION OF PLEDGED SECURITIES AND OTHER INVESTMENT
     PROPERTY. Each Grantor will permit any registerable Collateral owned by
     such Grantor to be registered in the name of the Collateral Agent or its
     nominee at any time at the election of the Collateral Agent upon the
     occurrence and during the continuance of a Roto-Rooter Default.

          4.5.2 EXERCISE OF RIGHTS IN PLEDGED SECURITIES AND OTHER INVESTMENT
     PROPERTY. Upon the occurrence and during the continuance of a Roto-Rooter
     Default, each Grantor will permit the Collateral Agent or its nominee at
     any time, without notice, to exercise all voting and corporate rights
     relating to the Collateral, including, without limitation, exchange,
     subscription or any other rights, privileges, or options pertaining to any
     corporate securities or other ownership interests or Investment Property in
     or of a corporation, partnership, joint venture or limited liability
     company constituting Collateral and the Stock Rights as if it were the
     absolute owner thereof.

          4.5.3 ADDITIONAL EQUITY INTERESTS. Each Grantor agrees that if, on or
     after the date on which such Grantor becomes subject hereto, such Grantor
     forms a Subsidiary or acquires equity interests in a Person and is required
     pursuant to the Roto-Rooter Credit Documents to pledge any Instruments,
     Securities or other Investment Property resulting therefrom to the
     Collateral Agent as Collateral hereunder, such Grantor shall upon request
     by the Collateral Agent, within the time periods provided therein, execute
     and deliver to the Collateral Agent a supplement to this Security Agreement
     amending Exhibit "E" to include any such pledged Instruments, Securities or
     other Investment Property.

          4.6. INTELLECTUAL PROPERTY. Each Grantor agrees that if, on or after
the date on which such Grantor becomes subject hereto, such Grantor obtains
rights to, or applies for or seeks registration of, any new patentable
invention, trademark or copyright in addition to the patents, trademarks and
copyrights described in Exhibit "B", which are all of such Grantor's patents,
trademarks and copyrights as of the date of this Security Agreement (or, if
applicable, as of the date of its delivery of a Security Agreement Supplement),
then such Grantor shall give the Collateral Agent prompt notice thereof, but in
any event not less frequently than quarterly, and the security interest granted
to the Collateral Agent hereunder shall automatically apply thereto. Each
Grantor agrees promptly upon request by the Collateral Agent to execute and
deliver to the Collateral Agent any supplement to this Security Agreement or any
other document reasonably requested by the Collateral Agent to evidence such
security interest in a form appropriate for recording in the

                                       13

<PAGE>

applicable federal office. Each Grantor also hereby authorizes the Collateral
Agent to modify this Security Agreement unilaterally (i) by amending Exhibit "B"
to include any future patents, trademarks and/or copyrights of which the
Collateral Agent receives notification from such Grantor pursuant hereto and
(ii) by recording, in addition to and not in substitution for this Security
Agreement, a duplicate original of this Security Agreement containing in Exhibit
"B" a description of such future patents, trademarks and/or copyrights; provided
that any Grantor shall have the right, exercisable within ten (10) days after it
has been notified by the Collateral Agent of the specific identification of such
patents, trademarks and/or copyrights, to advise the Collateral Agent in writing
of any inaccuracy of the representations and warranties made by such Grantor
hereunder with respect to such patents, trademarks and/or copyrights, as
applicable. Each Grantor agrees that it will use its commercially reasonable
efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct with respect
to such patents, trademarks and/or copyrights within thirty (30) days after the
date it has been notified by the Collateral Agent of the specific identification
of such patents, trademarks and/or copyrights.

     4.7. COMMERCIAL TORT CLAIMS. Each Grantor agrees that if, on or after the
date on which such Grantor becomes subject hereto, such Grantor identifies the
existence of a commercial tort claim belonging to such Grantor that has arisen
in the course of such Grantor's business in addition to the commercial tort
claims described in Exhibit "C" pursuant to which the applicable Grantor
reasonably expects to recover in excess of $5,000,000, then such Grantor shall
give the Collateral Agent prompt notice thereof, but in any event not less
frequently than quarterly. Each Grantor agrees promptly upon request by the
Collateral Agent to execute and deliver to the Collateral Agent any supplement
to this Security Agreement or any other document reasonably requested by the
Collateral Agent to evidence the grant of a security interest therein in favor
of the Collateral Agent.

     4.8. OWNERSHIP INTERESTS IN LIMITED LIABILITY COMPANIES AND PARTNERSHIPS.
Each Grantor agrees that if, on or after the date on which such Grantor becomes
subject hereto, (i) any limited partnership interests or ownership interests in
a limited liability company which are included within the Collateral owned by
such Grantor shall at any time constitute a Security or (ii) the issuer of any
such interests shall take any action to have such interests treated as a
Security, then such Grantor shall (x) promptly deliver all certificates or other
documents constituting such Security to the Collateral Agent and shall cause
such Security to be properly defined as such under Article 8 of the Uniform
Commercial Code of the applicable jurisdiction, whether as a result of actions
by the issuer thereof or otherwise, or (y) use commercially reasonable efforts
to cause the Collateral Agent's entry into a control agreement with the issuer
of such Security or with a securities intermediary relating to such Security and
shall cause such Security to be defined as such under Article 8 of the Uniform
Commercial Code of the applicable jurisdiction, whether as a result of actions
by the issuer thereof or otherwise.

     4.9. INSURANCE. Each Grantor shall comply with the terms of the Roto-
Rooter Credit Documents with respect to maintaining insurance.

                                       14

<PAGE>

                                    ARTICLE V

                        REMEDIES UPON ROTO-ROOTER DEFAULT

     5.1. ACCELERATION AND REMEDIES. Upon the acceleration of any Obligation
pursuant to the terms of the applicable Roto-Rooter Credit Document, the
Collateral Agent may, in accordance with the terms of the Intercreditor
Agreement, to the extent permitted by law, exercise any or all of the following
rights and remedies:

          5.1.1 Those rights and remedies provided in this Security Agreement or
     any Roto-Rooter Credit Document, provided that this Section 5.1.1 shall not
     be understood to limit any rights or remedies available to the Collateral
     Agent and the Roto-Rooter Creditors prior to a Roto- Rooter Default.

          5.1.2 Those rights and remedies available to a secured party under the
     New York UCC (whether or not the New York UCC applies to the affected
     Collateral) or under any other applicable law (including, without
     limitation, any law governing the exercise of a bank's right of setoff or
     bankers' lien) when a debtor is in default under a security agreement.

          5.1.3 Without notice except as specifically provided in Section 8.1 or
     elsewhere herein, sell, lease, assign, grant an option or options to
     purchase or otherwise dispose of the Collateral or any part thereof in one
     or more parcels at public or private sale, for cash, on credit or for
     future delivery, and upon such other terms as the Collateral Agent may deem
     commercially reasonable.

The Collateral Agent, on behalf of the secured parties, may comply with any
applicable state or federal law requirements in connection with a disposition of
the Collateral and such compliance will not be considered to adversely affect
the commercial reasonableness of any sale of the Collateral.

     5.2. GRANTORS' OBLIGATIONS UPON ROTO-ROOTER DEFAULT. Upon the request of
the Collateral Agent upon the occurrence and during the continuance of a
Roto-Rooter Default, each Grantor will:

          5.2.1 ASSEMBLY OF COLLATERAL. Assemble and make available to the
     Collateral Agent the Collateral and all records relating thereto at any
     place or places reasonably specified by the Collateral Agent.

          5.2.2 SECURED PARTY ACCESS. Permit the Collateral Agent, by the
     Collateral Agent's representatives and agents, to enter any premises where
     all or any part of the Collateral, or the books and records relating
     thereto, or both, are located, to take possession of all or any part of the
     Collateral and to remove all or any part of the Collateral.

     5.3. LICENSE. The Collateral Agent is hereby granted a license or other
right to use, upon the occurrence and during the continuance of a Roto- Rooter
Default, without

                                       15

<PAGE>

charge, each Grantor's labels, patents, copyrights, rights of use of any name,
trade secrets, trade names, trademarks, service marks, customer lists and
advertising matter, or any property of a similar nature, as it pertains to the
Collateral, in completing production of, advertising for sale, and selling any
Collateral, and, upon the occurrence and during the continuance of a Roto-Rooter
Default, such Grantor's rights under all licenses and all franchise agreements
shall inure to the Collateral Agent's benefit. In addition, each Grantor hereby
irrevocably agrees that the Collateral Agent may, upon the occurrence and during
the continuance of a Roto- Rooter Default, sell any of such Grantor's Inventory
directly to any Person, including without limitation Persons who have previously
purchased such Grantor's Inventory from such Grantor and in connection with any
such sale or other enforcement of the Collateral Agent's rights under this
Security Agreement, may sell Inventory which bears any trademark owned by or
licensed to such Grantor and any Inventory that is covered by any copyright
owned by or licensed to such Grantor and the Collateral Agent may finish any
work in process and affix any trademark owned by or licensed to such Grantor and
sell such Inventory as provided herein.

                                   ARTICLE VI

                        WAIVERS, AMENDMENTS AND REMEDIES

     No delay or omission of the Collateral Agent or any Roto-Rooter Creditor to
exercise any right or remedy granted under this Security Agreement shall impair
such right or remedy or be construed to be a waiver of any Roto-Rooter Default
or an acquiescence therein, and any single or partial exercise of any such right
or remedy shall not preclude any other or further exercise thereof or the
exercise of any other right or remedy. No waiver, amendment or other variation
of the terms, conditions or provisions of this Security Agreement whatsoever
shall be valid unless in writing signed by the Collateral Agent and each
Grantor, and then only to the extent in such writing specifically set forth,
provided that the addition of any Subsidiary as a Grantor hereunder by execution
of a Security Agreement Supplement (with such modifications as shall be
acceptable to the Collateral Agent) shall not require receipt of any consent
from or execution of any documentation by any other Grantor party hereto. All
rights and remedies contained in this Security Agreement or by law afforded
shall be cumulative and all shall be available to the Collateral Agent and the
Roto-Rooter Creditors until the Obligations have been paid in full.

                                   ARTICLE VII

                       PROCEEDS; COLLECTION OF RECEIVABLES

     7.1. COLLECTION OF RECEIVABLES. The Collateral Agent may at any time upon
the occurrence and during the continuance of a Roto-Rooter Default, by giving
each Grantor written notice, elect to require that the Receivables be paid
directly to the Collateral Agent for the benefit of the Roto-Rooter Creditors.
In such event, each Grantor shall, and shall permit the Collateral Agent to,
promptly notify the account debtors or obligors under the Receivables owing to
such Grantor of the Collateral Agent's interest therein and direct such account
debtors or obligors to make payment of all amounts then or

                                       16

<PAGE>

thereafter due under such Receivables directly to the Collateral Agent. Upon
receipt of any such notice from the Collateral Agent, each Grantor shall
thereafter hold in trust for the Collateral Agent, on behalf of the Roto-Rooter
Creditors, all amounts and proceeds received by it with respect to the
Receivables and Other Collateral and immediately and at all times thereafter
deliver to the Collateral Agent all such amounts and proceeds in the same form
as so received, whether by cash, check, draft or otherwise, with any necessary
endorsements. The Collateral Agent shall hold and apply funds so received as
provided by the terms of Sections 7.2 and 7.3.

     7.2. SPECIAL COLLATERAL ACCOUNT. Upon the occurrence and during the
continuance of a Roto-Rooter Default, the Collateral Agent may require all cash
proceeds of the Collateral to be deposited in the Collateral Account (as defined
in the Intercreditor Agreement) with the Collateral Agent and held there as
security for the Obligations. No Grantor shall have control over the Collateral
Account. If no Roto-Rooter Default has occurred or is continuing, the Collateral
Agent may, in its sole reasonable discretion and in accordance with the
Roto-Rooter Credit Documents, transfer amounts on deposit in the Collateral
Account to the Borrower's general operating account with the Collateral Agent.
The Borrower shall remit amounts on deposit in such general operating account to
the other Grantors as it shall determine in its reasonable discretion or as
agreed to by the Borrower and the other Grantors. Neither the Collateral Agent
nor any Roto-Rooter Creditor shall have any duty or obligation to determine or
direct the distribution or application of amounts on deposit in such general
operating account. Each Grantor agrees and confirms that it shall not bring any
claim or charge against the Collateral Agent or any Roto-Rooter Creditor in
connection with the Borrower's distribution or application of amounts on deposit
in the aforementioned general operating account. If any Roto-Rooter Default has
occurred and is continuing, the Collateral Agent may, from time to time, apply,
in accordance with the terms of the Intercreditor Agreement, the collected
balances in the Collateral Account to the payment of the Obligations when due.
When all such Roto-Rooter Defaults have been cured or waived, all such collected
balances shall be promptly released to the Borrower.

     7.3. APPLICATION OF PROCEEDS. The proceeds of the Collateral shall be
applied by the Collateral Agent to payment of the Obligations in accordance with
the Intercreditor Agreement.

                                  ARTICLE VIII

                               GENERAL PROVISIONS

     8.1. NOTICE OF DISPOSITION OF COLLATERAL; CONDITION OF COLLATERAL. To the
extent permitted by law, each Grantor hereby waives notice of the time and place
of any public sale or the time after which any private sale or other disposition
of all or any part of the Collateral may be made. To the extent such notice may
not be waived under applicable law, any notice made shall be deemed reasonable
if sent to the applicable Grantor, addressed as set forth in Article IX, at
least ten (10) days prior to (i) the date of any such public sale or (ii) the
time after which any such private sale or other disposition may be made. The
Collateral Agent shall have no obligation to clean-up or otherwise prepare the

                                       17

<PAGE>

Collateral for sale. The Collateral Agent also shall have no obligat ion to
make any representation or warranty with respect to the Collateral.

     8.2. COMPROMISES AND COLLECTION OF COLLATERAL. Each Grantor and the
Collateral Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables,
that certain of the Receivables may be or become uncollectible in whole or in
part and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be recovered
with respect to a Receivable. In view of the foregoing, each Grantor agrees that
the Collateral Agent may at any time and from time to time, if a Roto-Rooter
Default has occurred and is continuing, compromise with the obligor on any
Receivable, accept in full payment of any Receivable such amount as the
Collateral Agent in its sole discretion shall determine or abandon any
Receivable, and any such action by the Collateral Agent shall be commercially
reasonable so long as the Collateral Agent acts in good faith based on
information known to it at the time it takes any such action.

     8.3. SECURED PARTY PERFORMANCE OF GRANTOR OBLIGATIONS. Without having any
obligation to do so, upon the occurrence and during the continuance of a
Roto-Rooter Default, the Collateral Agent may perform or pay any obligation
which any Grantor has agreed to perform or pay in this Security Agreement and
such Grantor shall reimburse the Collateral Agent for any amounts paid by the
Collateral Agent pursuant to this Section 8.3. Each Grantor's obligation to
reimburse the Collateral Agent pursuant to the preceding sentence shall be an
Obligation payable on demand.

     8.4. AUTHORIZATION FOR COLLATERAL AGENT TO TAKE CERTAIN ACTION. Each
Grantor irrevocably authorizes the Collateral Agent at any time and from time to
time in the sole discretion of the Collateral Agent and appoints the Collateral
Agent as its attorney in fact, subject to the terms of the Intercreditor
Agreement, (i) to file, on behalf of such Grantor as debtor, financing
statements necessary or desirable in the Collateral Agent's sole discretion to
perfect and to maintain the perfection and priority of the Collateral Agent's
security interest in the Collateral, (ii) upon the occurrence and during the
continuance of a Roto-Rooter Default, to indorse and collect any cash proceeds
of the Collateral, (iii) to file a carbon, photographic or other reproduction of
this Security Agreement or any financing statement with respect to the
Collateral as a financing statement and to file any other financing statement or
amendment of a financing statement (which does not add new collateral or add a
debtor) in such offices as the Collateral Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the Collateral Agent's security interest in the Collateral, (iv) subject to
Section 4.4, to contact and enter into one or more agreements with the issuers
of uncertificated securities which are Collateral and which are Securities or
with financial intermediaries holding other Investment Property as may be
necessary or advisable to give the Collateral Agent Control over such Securities
or other Investment Property, (v) subject to the terms of Section 7.1, upon the
occurrence and during the continuance of a Roto-Rooter Default, to enforce
payment of the Receivables in the name of the Collateral Agent or such Grantor,
(vi) upon the occurrence and during the continuance of a Roto-Rooter Default, to
apply the proceeds of any Collateral received by the Collateral Agent to the

                                       18

<PAGE>

Obligations as provided in Article VII and (vii) to discharge past due taxes,
assessments, charges, fees or Liens on the Collateral (except for such Liens as
are specifically permitted hereunder), and each Grantor agrees to reimburse the
Collateral Agent on demand for any payment made or any expense incurred by the
Collateral Agent in connection therewith, provided that this authorization shall
not relieve any Grantor of any of its obligations under this Security Agreement
or under any Roto-Rooter Credit Document.

     8.5. SPECIFIC PERFORMANCE OF CERTAIN COVENANTS. Each Grantor acknowledges
and agrees that a breach of any of the covenants contained in Sections 4.1.4,
4.1.5, 4.3, 5.3, or 8.7 or in Article VII will cause irreparable injury to the
Collateral Agent and the Roto-Rooter Creditors, that the Collateral Agent and
the Roto-Rooter Creditors have no adequate remedy at law in respect of such
breaches and therefore agrees, without limiting the right of the Collateral
Agent or the Roto-Rooter Creditors to seek and obtain specific performance of
other obligations of the Grantors contained in this Security Agreement, that the
covenants of the Grantors contained in the Sections referred to in this Section
8.5 shall, to the extent permitted by law, be specifically enforceable against
the Grantors.

     8.6. USE AND POSSESSION OF CERTAIN PREMISES. Upon the occurrence and during
the continuance of a Roto-Rooter Default, the Collateral Agent shall be entitled
to occupy and use any premises owned or leased by the Grantors where any of the
Collateral or any records relating to the Collateral are located until the
Obligations are paid in full or the Collateral is removed therefrom, whichever
first occurs, without any obligation to pay any Grantor for such use and
occupancy.

     8.7. BENEFIT OF AGREEMENT. The terms and provisions of this Security
Agreement shall be binding upon and inure to the benefit of the Grantors, the
Collateral Agent and the Roto-Rooter Creditors and their respective permitted
successors and permitted assigns (including all Persons who become bound as a
debtor to this Security Agreement), except that the Grantors shall not have the
right to assign their rights or delegate their obligations under this Security
Agreement or any interest herein, without the prior written consent of the
Collateral Agent.

     8.8. SURVIVAL OF REPRESENTATIONS. All representations and warranties of the
Grantors contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement.

     8.9. EXPENSES. The Grantors shall reimburse the Collateral Agent for any
and all reasonable out-of-pocket expenses (including reasonable out-of- pocket
attorneys', auditors' and accountants' fees) paid or incurred by the Collateral
Agent in connection with the preparation, execution, delivery, administration,
collection and, upon the occurrence and during the continuance of a Roto-Rooter
Default, enforcement of this Agreement and in the audit, analysis,
administration, collection, preservation or sale of the Collateral (including
the reasonable out-of-pocket expenses and charges associated with any periodic
or special audit of the Collateral). Any and all costs and expenses incurred by
the Grantors in the performance of actions required pursuant to the terms hereof
shall be borne solely by the Grantors.

                                       19

<PAGE>

     8.10. HEADINGS. The title of and section headings in this Security
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.

     8.11. TERMINATION.

          8.11.1 This Security Agreement and all security interests granted
     hereby shall terminate when all the Obligations have been paid in full
     (other than obligations to pay fees and expenses with respect to which the
     Borrower has not received an invoice, Rate Management Obligations,
     contingent indemnity obligations and other contingent obligations) and the
     Lenders have no further commitment to lend under the Existing Credit
     Agreement, the LC Obligations have been reduced to zero and the LC Issuer
     has no further obligations to issue Facility LCs under the Existing Credit
     Agreement.

          8.11.2 A Grantor shall automatically be released from its obligations
     hereunder and the security interest in the Collateral of such Grantor
     granted hereby shall be automatically released upon the consummation of any
     transaction permitted by the Roto-Rooter Credit Documents as a result of
     which such Grantor ceases to be a Subsidiary of the Borrower.

               8.11.3 Upon any sale or other transfer by any Grantor of any
     Collateral that is not prohibited by the Roto-Rooter Credit Documents, or
     upon the effectiveness of any written consent to the release of the
     security interest granted hereby in any Collateral pursuant to the
     Intercreditor Agreement, the security interest in such Collateral shall be
     automatically released.

                    8.11.4 In connection with any termination or release
               pursuant to Section 8.11.1, 8.11.2 or 8.11.3, the Collateral
               Agent shall execute and deliver to any Grantor, at such Grantor's
               expense, all documents that such Grantor shall reasonably request
               to evidence such termination or release.

     8.12. ENTIRE AGREEMENT. This Security Agreement embodies the entire
agreement and understanding between the Grantors and the Collateral Agent
relating to the Collateral and supersedes all prior agreements and
understandings between the Grantors and the Collateral Agent relating to the
Collateral.

     8.13. GOVERNING LAW; CONSENT TO JURISDICTION; VENUE; JURY TRIAL.

          8.13.1 GOVERNING LAW. THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN
     ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING SECTION 5-1401 OF THE GENERAL
     OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS
     OR PRINCIPLES THEREOF) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO
     FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

                                       20

<PAGE>

               8.13.2 CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY
          SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL
          OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW
          YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF, RELATED TO
          OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER INSTRUMENT,
          DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
          AND EACH GRANTOR HEREBY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
          ACTION OR PROCEEDING MAY BE HEARD OR DETERMINED IN ANY SUCH COURT. ANY
          JUDICIAL PROCEEDING BY ANY GRANTOR AGAINST THE COLLATERAL AGENT, THE
          ADMINISTRATIVE AGENT, THE TRUSTEE, ANY LENDER OR ANY HOLDER OF SECURED
          OBLIGATIONS OR ANY AFFILIATE OF THE COLLATERAL AGENT, THE
          ADMINISTRATIVE AGENT, THE TRUSTEE, ANY LENDER OR ANY HOLDER OF SECURED
          OBLIGATIONS INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
          ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT
          OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
          IN CONNECTION HEREWITH MAY BE BROUGHT IN A COURT IN THE BOROUGH OF
          MANHATTAN IN NEW YORK, NEW YORK. NOTHING HEREIN SHALL LIMIT THE RIGHT
          OF THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT, THE TRUSTEE, ANY
          LENDER OR ANY HOLDER OF SECURED OBLIGATIONS TO BRING PROCEEDINGS
          AGAINST SUCH GRANTOR OR LIMIT THE RIGHTS OF ANY GRANTOR TO BRING
          PROCEEDINGS AGAINST SUCH OTHER PARTY IN THE COURTS OF ANY OTHER
          JURISDICTION.

               8.13.3 VENUE. EACH GRANTOR IRREVOCABLY WAIVES ANY OBJECTION
          (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE
          OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR
          HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
          RESPECT TO THIS SECURITY AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT
          OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY
          JURISDICTION SET FORTH ABOVE.

               8.13.4 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
          WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY JUDICIAL
          PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
          SOUNDING IN CONTRACT, TORT, OR OTHERWISE) IN ANY WAY ARISING OUT OF,
          RELATED TO OR CONNECTED WITH THE RELATIONSHIP ESTABLISHED AMONG THEM
          IN

                                       21

<PAGE>

          CONNECTION WITH THIS SECURITY AGREEMENT OR ANY OTHER INSTRUMENT,
          DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH.
          EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM,
          DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
          WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL
          COUNTERPART OR A COPY OF THIS SECURITY AGREEMENT WITH ANY COURT AS
          WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
          THEIR RIGHT TO TRIAL BY JURY.

               8.13.5 ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH
          OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS SECURITY AGREEMENT AND,
          SPECIFICALLY, THE PROVISIONS OF THIS SECTION 8.14, WITH ITS COUNSEL.

     8.14. INDEMNITY. Each Grantor hereby agrees, jointly with the other
Grantors and severally, to indemnify each of the Collateral Agent and each of
the Roto-Rooter Creditors, and their respective permitted successors, assigns,
agents and employees (collectively, the "Indemnified Parties"), from and against
any and all liabilities, damages, penalties, suits and related reasonable
out-of-pocket costs and expenses of any kind and nature (including, without
limitation, all such reasonable out-of pocket expenses of litigation or
preparation therefor whether or not the Collateral Agent or any Roto-Rooter
Creditor is a party thereto) imposed on, incurred by or asserted against the
Collateral Agent or the Roto-Rooter Creditors, or their respective permitted
successors, assigns, agents and employees (collectively, the "Indemnified
Amounts"), in any way relating to or arising out of this Security Agreement, or
the manufacture, purchase, acceptance, rejection, ownership, delivery, lease,
possession, use, operation, condition, sale, return or other disposition of any
Collateral (including, without limitation, latent and other defects, whether or
not discoverable by the Collateral Agent or the Roto-Rooter Creditors or any
Grantor, and any claim for patent, trademark or copyright infringement);
provided that such indemnity shall not, as to any single Indemnified Party, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnified Party.

                                   ARTICLE IX

                                     NOTICES

     9.1. SENDING NOTICES. Any notice required or permitted to be given under
this Security Agreement shall be sent (and deemed received) in the manner and to
the addresses set forth in Article XIII of the Existing Credit Agreement and
Article XII of the Note Indenture and any such notice delivered to the Borrower
shall be deemed to have been delivered to all of the Grantors.

                                       22

<PAGE>

       9.2. CHANGE IN ADDRESS FOR NOTICES. Each of the Grantors, the Collateral
Agent and the Roto-Rooter Creditors may change the address for service of notice
upon it by a notice in writing to the other parties.

                                    ARTICLE X

                              THE COLLATERAL AGENT

     Bank One, NA has been appointed Collateral Agent for the Roto-Rooter
Creditors hereunder pursuant to the Intercreditor Agreement. It is expressly
understood and agreed by the parties to this Security Agreement that any
authority conferred upon the Collateral Agent hereunder is subject to the terms
of the delegation of authority made by the Roto-Rooter Creditors pursuant to the
Intercreditor Agreement, and that the Collateral Agent has agreed to act (and
any successor Collateral Agent shall act) as such hereunder only on the express
conditions contained in such Intercreditor Agreement. Any successor Collateral
Agent appointed pursuant to the Intercreditor Agreement shall be entitled to all
the rights, interests and benefits of the Collateral Agent hereunder. The
Administrative Agent, on behalf of the Lenders, and the Trustee, on behalf of
the holders of the Notes, shall promptly notify the Grantors of any successor
Collateral Agent; provided, however, that failure to provide such notice shall
not limit or impair the rights and remedies of such successor Collateral Agent
or the Roto-Rooter Creditors hereunder.

               The remainder of this page is intentionally blank.

                                       23

<PAGE>

     IN WITNESS WHEREOF, each of the Grantors and the Collateral Agent have
executed this Security Agreement as of the date first above written.

                                ROTO-ROOTER, INC.
                                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 MANAGEMENT COMPANY
                                ROTO-ROOTER SERVICES COMPANY
                                R.R. PLUMBING SERVICES CORPORATION
                                SERVICE AMERICA NETWORK, INC.

                                By:  /s/ Naomi C. Dallob
                                     ----------------------
                                     Name: Naomi C. Dallob
                                     Title: Secretary

                                HOSPICE CARE INCORPORATED
                                 HOSPICE, INC.
                                VITAS HEALTHCARE CORPORATION
                                VITAS HEALTHCARE CORPORATION OF CALIFORNIA
                                VITAS HEALTHCARE CORPORATION OF CENTRAL FLORIDA
                                VITAS HEALTHCARE CORPORATION OF FLORIDA
                                VITAS HEALTHCARE CORPORATION OF ILLINOIS
                                VITAS HEALTHCARE CORPORATION OF OHIO
                                VITAS HEALTHCARE CORPORATION OF PENNSYLVANIA
                                VITAS HEALTHCARE CORPORATION OF WISCONSIN
                                VITAS HME SOLUTIONS, INC.
                                 VITAS HOLDINGS CORPORATION
                                VITAS HOSPICE SERVICES, L.L.C.

                                By:  /s/ Timothy S. O'Toole
                                     ------------------------
                                      Name: Timothy S. O'Toole
                                      Title: President

                                VITAS HEALTHCARE OF TEXAS, L.P.

                                By:   Vitas Hospice Services, L.L.C.,
                                      its General Partner

                                By:  /s/ Timothy S. O'Toole
                                     -----------------------
                                     Name: Timothy S. O'Toole
                                     Title: President

                                BANK ONE, NA (MAIN OFFICE CHICAGO), as
                                Collateral Agent

                                By:  /s/ Thomas J. Reinhold
                                     -----------------------
                                Name:  Thomas J. Reinhold
                                Title: Vice President

<PAGE>

                                    ANNEX I

                                       to

                          SECURITY AND PLEDGE AGREEMENT

          Reference is hereby made to the Pledge and Security Agreement (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the "Security Agreement"), dated as of February 24, 2004, made by Roto-
Rooter, Inc., a Delaware corporation (the "Borrower"), and certain of its
Subsidiaries party thereto on such date (each an "Initial Grantor", and together
with any additional Subsidiaries, including the undersigned, which become
parties thereto by executing a Security Agreement Supplement in substantially
the form hereof, the "Grantors"), in favor of the Collateral Agent. Capitalized
terms used herein and not defined herein shall have the meanings given to them
in the Security Agreement. By its execution below, the undersigned, [NAME OF NEW
GRANTOR], a [_________] [corporation/limited liability company] agrees to
become, and does hereby become, a Grantor under the Agreement and agrees to be
bound by such Agreement as if originally a party thereto. By its execution
below, the undersigned represents and warrants as to itself that all of the
representations and warranties contained in the Agreement are true and correct
in all material respects as of the date hereof. [NAME OF NEW GRANTOR] represents
and warrants that the supplements to the Exhibits to the Agreement attached
hereto are true and correct in all material respects and such supplements set
forth all information required to be scheduled under the Agreement.

          IN WITNESS WHEREOF, [NAME OF NEW GRANTOR], a [__________________]
[corporation/limited liability company] has executed and delivered this Annex I
counterpart to the Agreement as of this ___________ day of ____________, 20___.
[NAME OF NEW GRANTOR]

                                By:__________________________
                                Name:
                                Title:

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.46
<SEQUENCE>13
<FILENAME>l05867aexv10w46.txt
<DESCRIPTION>EX-10.46
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.46

                                                                  EXECUTION COPY

                               GUARANTY AGREEMENT

          THIS GUARANTY AGREEMENT (as the same may be amended, restated,
supplemented or otherwise modified from time to time, this "Guaranty") is made
as of February 24, 2004 by each of the Subsidiaries of Roto-Rooter, Inc., a
Delaware corporation (the "Borrower"), listed on the signature pages hereto
(each an "Initial Guarantor") and those additional Subsidiaries which become
parties to this Guaranty by executing a Supplement hereto (a "Guaranty
Supplement") in the form attached hereto as Annex I (such additional
Subsidiaries, together with the Initial Guarantors, the "Guarantors"), in favor
of BANK ONE, NA (Main Office Chicago), as Administrative Agent (the
"Administrative Agent") for the benefit of the Holders of Secured Obligations
under the Credit Agreement described below.

                                   WITNESSETH:

          WHEREAS, the Borrower, certain financial institutions (the "Lenders"),
and the Administrative Agent are party to that certain Credit Agreement, dated
as of the date hereof (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement") which provides,
subject to the terms and conditions thereof, for extensions of credit and other
financial accommodations by the Lenders to the Borrower;

          WHEREAS, it is a condition precedent to the initial extensions of
credit by the Lenders under the Credit Agreement that each of the Guarantors
execute and deliver this Guaranty, whereby each of the Guarantors, without
limitation and with full recourse, shall guarantee the payment when due of all
Secured Obligations, including, without limitation, all principal, interest,
letter of credit reimbursement obligations and other amounts that shall be at
any time payable by the Borrower under the Credit Agreement, certain Rate
Management Transactions or the other Loan Documents; and

          WHEREAS, in consideration of the direct and indirect financial and
other support that the Borrower has provided, and such direct and indirect
financial and other support as the Borrower may in the future provide, to the
Guarantors, and in order to induce the Lenders and the Administrative Agent to
enter into the Credit Agreement, each of the Guarantors is willing to guarantee
the Secured Obligations under the Credit Agreement, certain Rate Management
Transactions and the other Loan Documents;

          NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

          SECTION 1. Definitions. Terms defined in the Credit Agreement and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein.

          SECTION 2. Representations, Warranties and Covenants. Each of the
Guarantors represents and warrants (which representations and warranties shall
be deemed to have been renewed at the time of the making, conversion or
continuation of any Loan or issuance

<PAGE>

or Modification of any Facility LC) that:

          (a) It (i) is a corporation, limited liability company, or partnership
     duly incorporated or organized, as the case may be, validly existing and
     (to the extent such concept applies to such entity) in good standing under
     the laws of its jurisdiction of incorporation or organization, (ii) is duly
     qualified to do business as a foreign entity and (to the extent such
     concept applies to such entity) is in good standing under the laws of each
     jurisdiction in which failure to be so qualified or in good standing could
     result in a Material Adverse Effect, and (iii) has all requisite corporate,
     limited liability company or partnership power and authority, as the case
     may be, to own, operate and encumber its Property and to conduct its
     business in each jurisdiction in which its business is conducted.

          (b) It has the requisite corporate, limited liability company or
     partnership, as applicable, power and authority and legal right to execute
     and deliver this Guaranty and to perform its obligations hereunder. The
     execution and delivery by it of this Guaranty and the performance by it of
     its obligations hereunder have been duly authorized by proper proceedings,
     and this Guaranty constitutes a legal, valid and binding obligation of such
     Guarantor, enforceable against such Guarantor, in accordance with its
     terms, except as enforceability may be limited by (i) bankruptcy,
     insolvency, fraudulent conveyance, reorganization or similar laws relating
     to or affecting the enforcement of creditors' rights generally, (ii)
     general equitable principles whether considered in a proceeding in equity
     or at law, and (iii) requirements of reasonableness, good faith, and fair
     dealing.

          (c) Neither the execution and delivery by it of this Guaranty, nor the
     consummation by it of the transactions herein contemplated, nor compliance
     by it with the terms and provisions hereof, will (i) violate the
     certificate or articles of incorporation or by-laws, limited liability
     company or partnership agreement (as applicable) of such Guarantor, (ii)
     conflict with, result in a breach of or constitute (with or without notice
     or lapse of time or both) a default or violation under (A) any law, rule,
     regulation, order, writ, judgment, injunction, decree or award (including,
     without limitation, any environmental property transfer laws or
     regulations) applicable to such Guarantor except for violations which
     individually or in the aggregate would not reasonably be expected to result
     in a Material Adverse Effect or (B) any provisions of any indenture,
     material instrument or material agreement to which such Guarantor is party
     or is subject or which it or its Property is bound except for violations
     which individually or in the aggregate would not reasonably be expected to
     result in a Material Adverse Effect, (iii) result in or require the
     creation or imposition of any Lien whatsoever upon any of the property or
     assets of such Guarantor, other than Liens permitted or created by the Loan
     Documents, or (iv) require any approval of such Guarantor's board of
     directors or shareholders or unitholders except such as have been obtained.
     The execution, delivery and performance by the Guarantors of this Guaranty
     do not and will not require any registration with, consent or approval of,
     or notice to, or other action to, with or by any governmental authority,
     including under any environmental property transfer laws or regulations,
     except filings, consents or notices which have been made or to the extent
     that the failure to make such filings, consents or notices would not
     reasonably be expected to result in a

                                        2
<PAGE>

     Material Adverse Effect.

In addition to the foregoing, each of the Guarantors covenants that, until the
Revolving Loan Commitments have expired or been terminated, the LC Obligations
have expired, been reimbursed or been cash collateralized (in each case in
accordance with the terms of the Credit Agreement), and the other Obligations
have been paid in full (other than obligations to pay fees and expenses with
respect to which the Borrower has not received an invoice, Rate Management
Obligations, contingent indemnity obligations and other contingent obligations)
it will, and, if necessary, will enable the Borrower to, fully comply with those
covenants and agreements of the Borrower applicable to such Guarantor set forth
in the Credit Agreement.

          SECTION 3. The Guaranty. Each of the Guarantors hereby unconditionally
guarantees, jointly and severally with the other Guarantors, the full and
punctual payment and performance when due (whether at stated maturity, upon
acceleration or otherwise) of the Secured Obligations, including, without
limitation, (i) the principal of and interest on each Advance made to the
Borrower pursuant to the Credit Agreement, (ii) any Reimbursement Obligations of
the Borrower or the performance by it of such Reimbursement Obligations, (iii)
all Rate Management Obligations of the Borrower owing to any Lender or any
affiliate of any Lender under any Rate Management Transactions (any such Rate
Management Transaction with any Lender or any affiliate of any Lender being
herein referred to as a "Guaranteed Rate Management Transaction") unless the
Borrower and any such Lender mutually agree that any such Rate Management
Transaction does not constitute a Guaranteed Rate Management Transaction
hereunder, (iv) all other amounts payable by the Borrower under the Credit
Agreement, any Guaranteed Rate Management Transaction and the other Loan
Documents, and (v) the punctual and faithful performance, keeping, observance,
and fulfillment by the Borrower of all of the agreements, conditions, covenants,
and obligations of the Borrower contained in the Loan Documents (all of the
foregoing being referred to collectively as the "Guaranteed Obligations"). Upon
failure by the Borrower or any of its Affiliates to pay punctually any such
amount, each of the Guarantors agrees that it shall forthwith on demand pay such
amount to the Collateral Agent at the place and in the manner specified in the
Intercreditor Agreement. Each of the Guarantors hereby agrees that this Guaranty
is an absolute, irrevocable and unconditional guaranty of payment and
performance and is not a guaranty of collection.

          SECTION 4. Guaranty Unconditional. The obligations of each of the
Guarantors hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:

          (a) any extension, renewal, settlement, indulgence, compromise, waiver
     or release of or with respect to the Guaranteed Obligations or any part
     thereof or any agreement relating thereto, or with respect to any
     obligation of any other guarantor of any of the Guaranteed Obligations,
     whether (in any such case) by operation of law or otherwise, or any failure
     or omission to enforce any right, power or remedy with respect to the
     Guaranteed Obligations or any part thereof or any agreement relating
     thereto, or with respect to any obligation of any other guarantor of any of
     the Guaranteed Obligations;

                                        3
<PAGE>

          (b) any modification or amendment of or supplement to the Credit
     Agreement, any Guaranteed Rate Management Transaction or any other Loan
     Document, including, without limitation, any such amendment which may
     increase the amount of, or the interest rates applicable to, any of the
     Guaranteed Obligations guaranteed hereby;

          (c) any release, surrender, compromise, settlement, waiver,
     subordination or modification, with or without consideration, of any
     collateral securing the Guaranteed Obligations or any part thereof, any
     other guaranties with respect to the Guaranteed Obligations or any part
     thereof, or any other obligation of any person or entity with respect to
     the Guaranteed Obligations or any part thereof, or any nonperfection or
     invalidity of any direct or indirect security for the Guaranteed
     Obligations;

          (d) any change in the corporate, limited liability company,
     partnership or other existence, structure or ownership of the Borrower or
     any other guarantor of any of the Guaranteed Obligations, or any
     insolvency, bankruptcy, reorganization or other similar proceeding
     affecting the Borrower or any other guarantor of the Guaranteed
     Obligations, or any of their respective assets or any resulting release or
     discharge of any obligation of the Borrower or any other guarantor of any
     of the Guaranteed Obligations;

          (e) the existence of any claim, setoff or other rights which the
     Guarantors may have at any time against the Borrower, any other guarantor
     of any of the Guaranteed Obligations, the Administrative Agent, any Holder
     of Secured Obligations or any other Person, whether in connection herewith
     or in connection with any unrelated transactions, provided that nothing
     herein shall prevent the assertion of any such claim by separate suit or
     compulsory counterclaim;

          (f) the enforceability or validity of the Guaranteed Obligations or
     any part thereof or the genuineness, enforceability or validity of any
     agreement relating thereto or with respect to any collateral securing the
     Guaranteed Obligations or any part thereof, or any other invalidity or
     unenforceability relating to or against the Borrower or any other guarantor
     of any of the Guaranteed Obligations, for any reason related to the Credit
     Agreement, any Guaranteed Rate Management Transaction or any other Loan
     Document, or any provision of applicable law or regulation purporting to
     prohibit the payment by the Borrower or any other guarantor of the
     Guaranteed Obligations, of any of the Guaranteed Obligations;

          (g) the failure of the Collateral Agent, the Administrative Agent or
     any Holder of Secured Obligations to take any steps to perfect and maintain
     any security interest in, or to preserve any rights to, any security or
     collateral for the Guaranteed Obligations, if any;

          (h) the election by, or on behalf of, any one or more of the Holders
     of Secured Obligations, in any proceeding instituted under Chapter 11 of
     Title 11 of the United States Code (11 U.S.C. 101 et seq.) (the "Bankruptcy
     Code"), of the application of Section 1111(b)(2) of the Bankruptcy Code;

                                        4
<PAGE>

          (i) any borrowing or grant of a security interest by the Borrower, as
     debtor-in-possession, under Section 364 of the Bankruptcy Code;

          (j) the disallowance, under Section 502 of the Bankruptcy Code, of all
     or any portion of the claims of any of the Holders of Secured Obligations
     or the Administrative Agent for repayment of all or any part of the
     Guaranteed Obligations;

          (k) the failure of any other Guarantor to sign or become party to this
     Guaranty or any amendment, change, or reaffirmation hereof; or

          (l) any other act or omission to act or delay of any kind by the
     Borrower, any other guarantor of the Guaranteed Obligations, the Collateral
     Agent, the Administrative Agent, any Holder of Secured Obligations or any
     other Person or any other circumstance whatsoever which might, but for the
     provisions of this Section 4, constitute a legal or equitable discharge of
     any Guarantor's obligations hereunder.

          SECTION 5. Discharge Only Upon Payment In Full; Reinstatement In
     Certain Circumstances. Subject to Section 24, each of the Guarantors'
     obligations hereunder shall remain in full force and effect until all
     Guaranteed Obligations shall have been paid in full in cash and the
     Revolving Loan Commitments and Term Loan Commitments and all Facility LCs
     issued under the Credit Agreement shall have terminated or expired. If at
     any time any payment of the principal of or interest on any Advance, any
     Reimbursement Obligation or any other amount payable by the Borrower or any
     other party under the Credit Agreement, any Guaranteed Rate Management
     Transaction or any other Loan Document is rescinded or must be otherwise
     restored or returned upon the insolvency, bankruptcy or reorganization of
     the Borrower or otherwise, each of the Guarantors' obligations hereunder
     with respect to such payment shall be reinstated as though such payment had
     been due but not made at such time.

          SECTION 6. General Waivers; Additional Waivers.

          (a) General Waivers. To the fullest extent permitted by law, each of
     the Guarantors irrevocably waives acceptance hereof, presentment, demand or
     action on delinquency, protest, the benefit of any statutes of limitations
     and any notice not provided for herein, as well as any requirement that at
     any time any action be taken by any Person against the Borrower, any other
     guarantor of the Guaranteed Obligations, or any other Person.

          (b) Additional Waivers. Notwithstanding anything herein to the
     contrary, each of the Guarantors hereby absolutely, unconditionally,
     knowingly, and expressly waives to the fullest extent permitted by law:

               (i) any right it may have to revoke this Guaranty as to future
          indebtedness or notice of acceptance hereof;

               (ii) (1) notice of acceptance hereof; (2) notice of any loans or
          other

                                        5
<PAGE>

          financial accommodations made or extended under the Loan Documents or
          the creation or existence of any Guaranteed Obligations; (3) notice of
          the amount of the Guaranteed Obligations, subject, however, to each
          Guarantor's right to make inquiry of the Administrative Agent and the
          Holders of Secured Obligations to ascertain the amount of the
          Guaranteed Obligations at any reasonable time; (4) notice of any
          adverse change in the financial condition of the Borrower or of any
          other fact that might increase such Guarantor's risk hereunder; (5)
          notice of presentment for payment, demand, protest, and notice thereof
          as to any instruments among the Loan Documents; (6) notice of any
          Unmatured Event of Default or Event of Default; and (7) all other
          notices (except if such notice is specifically required to be given to
          such Guarantor hereunder or under the Loan Documents) and demands to
          which each Guarantor might otherwise be entitled;

               (iii) its right, if any, to require the Administrative Agent and
          the other Holders of Secured Obligations to (A) institute suit
          against, or to exhaust any rights and remedies which the
          Administrative Agent and the other Holders of Secured Obligations has
          or may have against, (1) the Borrower, the other Guarantors or any
          third party or (2) against any Collateral provided by the Borrower,
          the other Guarantors, or any third party, or (B) pursue any other
          remedy of the Administrative Agent or the other Holders of Secured
          Obligations; and any defense arising by reason of any disability or
          other defense (other than the defense that the Guaranteed Obligations
          shall have been fully and finally performed and indefeasibly paid) of
          the Borrower, the other Guarantors or any other party by reason of the
          cessation from any cause whatsoever of the liability of the Borrower
          or the other Guarantors in respect thereof;

               (iv) (1) any rights to assert against the Collateral Agent, the
          Administrative Agent and the other Holders of Secured Obligations any
          defense (legal or equitable), set-off, counterclaim, or claim which
          such Guarantor may now or at any time hereafter have against the other
          Guarantors or any other party liable to the Collateral Agent, the
          Administrative Agent and the other Holders of Secured Obligations; (2)
          any defense, set-off, counterclaim, or claim, of any kind or nature,
          arising directly or indirectly from the present or future lack of
          perfection, sufficiency, validity, or enforceability of the Guaranteed
          Obligations or any security therefor; (3) any defense such Guarantor
          has to performance hereunder, and any right such Guarantor has to be
          exonerated, arising by reason of: the impairment or suspension of the
          Collateral Agent's, the Administrative Agent's and the other Holders
          of Secured Obligations' rights or remedies against the other
          Guarantors; the alteration by the Administrative Agent and the other
          Holders of Secured Obligations of the Guaranteed Obligations; any
          discharge of the other Guarantors' obligations to the Administrative
          Agent and the other Holders of Secured Obligations by operation of law
          as a result of the Administrative Agent's and the other Holders of
          Secured Obligations' intervention or omission; or the acceptance by
          the Administrative Agent and the other Holders of Secured Obligations
          of anything in partial satisfaction of the Guaranteed Obligations; and
          (4) the benefit of any statute of limitations affecting

                                        6
<PAGE>

          such Guarantor's liability hereunder or the enforcement thereof, and
          any act which shall defer or delay the operation of any statute of
          limitations applicable to the Guaranteed Obligations shall similarly
          operate to defer or delay the operation of such statute of limitations
          applicable to such Guarantor's liability hereunder; and

               (v) any defense arising by reason of or deriving from (a) any
          claim or defense based upon an election of remedies by the
          Administrative Agent and the other Holders of Secured Obligations; or
          (b) any election by the Administrative Agent and the other Holders of
          Secured Obligations under Section 1111(b) of Title 11 of the United
          States Code entitled "Bankruptcy", as now and hereafter in effect (or
          any successor statute), to limit the amount of, or any collateral
          securing, its claim against the Guarantors.

          SECTION 7. Subordination of Subrogation; Subordination of Intercompany
Indebtedness.

          (a) Subordination of Subrogation. Until the Guaranteed Obligations
     have been fully and finally performed and indefeasibly paid in full in
     cash, the Guarantors (i) shall not exercise any right of subrogation with
     respect to such Guaranteed Obligations and (ii) shall not exercise any
     right to enforce any remedy which the Holders of Secured Obligations, the
     LC Issuer, the Collateral Agent or the Administrative Agent now have or may
     hereafter have against the Borrower, any endorser or any guarantor of all
     or any part of the Secured Obligations or any other Person in respect of
     the Guaranteed Obligations, and the Guarantors shall not exercise any right
     to participate in, any security or collateral given to the Holders of
     Secured Obligations, the LC Issuer, the Administrative Agent and the
     Collateral Agent to secure the payment or performance of all or any part of
     the Guaranteed Obligations. Should any Guarantor have the right,
     notwithstanding the foregoing, to exercise its subrogation rights in
     respect of the Guaranteed Obligations, each Guarantor hereby expressly and
     irrevocably (A) subordinates any and all rights at law or in equity to
     subrogation, reimbursement, exoneration, contribution, indemnification or
     set off that the Guarantor may have in respect of the Guaranteed
     Obligations to the indefeasible payment in full of the Guaranteed
     Obligations and (B) to the extent permitted by applicable law, waives any
     and all defenses (other than the defenses of payment and performance)
     available to a surety, guarantor or accommodation co-obligor in respect of
     the Guaranteed Obligations until the Guaranteed Obligations are
     indefeasibly paid in full in cash. Each Guarantor acknowledges and agrees
     that this subordination is intended to benefit the Administrative Agent and
     the Holders of Secured Obligations and shall not limit or otherwise affect
     such Guarantor's liability hereunder or the enforceability of this
     Guaranty, and that the Administrative Agent, the Holders of Secured
     Obligations and their respective permitted successors and assigns are
     intended third party beneficiaries of the waivers and agreements set forth
     in this Section 7.

          (b) Subordination of Intercompany Indebtedness. Each Guarantor agrees
     that any and all claims of such Guarantor against the Borrower or any other
     Guarantor hereunder (each an "Obligor") with respect to any "Intercompany
     Indebtedness" (as hereinafter defined), shall be subordinate and subject in
     right of payment to the prior

                                        7
<PAGE>

     payment, in full and in cash, of all Guaranteed Obligations; provided that,
     and not in contravention of the foregoing, unless an Event of Default has
     occurred and is continuing and such Guarantor receives from the
     Administrative Agent a payment blockage notice hereunder that has not been
     withdrawn such Guarantor may make loans to and receive payments with
     respect to such Intercompany Indebtedness from each such Obligor to the
     extent not prohibited by the terms of this Guaranty and the other Loan
     Documents. Notwithstanding any right of any Guarantor to ask, demand, sue
     for, take or receive any payment from any Obligor, all rights, liens and
     security interests of such Guarantor, whether now or hereafter arising and
     howsoever existing, in any assets of any other Obligor (whether
     constituting a part of any Collateral given to any Holder of Secured
     Obligations, the Collateral Agent or the Administrative Agent to secure
     payment of all or any part of the Guaranteed Obligations or otherwise)
     shall be and are subordinated to the rights of the Holders of Secured
     Obligations, the Collateral Agent and the Administrative Agent in those
     assets. No Guarantor shall have any right to foreclose upon any such asset,
     whether by judicial action or otherwise, unless and until all of the
     Guaranteed Obligations (other than obligations to pay fees and expenses
     with respect to which the Borrower has not received an invoice, Rate
     Management Obligations, contingent indemnity obligations and other
     contingent obligations) shall have been fully paid and satisfied (in cash).
     If all or any part of the assets of any Obligor, or the proceeds thereof,
     are subject to any distribution, division or application to the creditors
     of such Obligor, whether partial or complete, voluntary or involuntary, and
     whether by reason of liquidation, bankruptcy, arrangement, receivership,
     assignment for the benefit of creditors or any other similar action or
     proceeding, then, and in any such event (such events being herein referred
     to as an "Insolvency Event"), any payment or distribution of any kind or
     character, either in cash, securities or other property, which shall be
     payable or deliverable upon or with respect to any indebtedness of any
     Obligor to any Guarantor ("Intercompany Indebtedness") shall be paid or
     delivered directly to the Collateral Agent for application in accordance
     with the Intercreditor Agreement on any of the Guaranteed Obligations, due
     or to become due, until such Guaranteed Obligations (other than obligations
     to pay fees and expenses with respect to which the Borrower has not
     received an invoice, Rate Management Obligations, contingent indemnity
     obligations and other contingent obligations) shall have been fully paid
     and satisfied (in cash). Should any payment, distribution, security or
     instrument or proceeds thereof be received by the applicable Guarantor upon
     or with respect to the Intercompany Indebtedness after any Insolvency Event
     and prior to the satisfaction of all of the Guaranteed Obligations (other
     than obligations to pay fees and expenses with respect to which the
     Borrower has not received an invoice, Rate Management Obligations,
     contingent indemnity obligations and other contingent obligations), such
     Guarantor shall receive and hold the same in trust, as trustee, for the
     benefit of the Holders of Secured Obligations and shall forthwith deliver
     the same to the Collateral Agent in precisely the form received (except for
     the endorsement or assignment of the Guarantor where necessary), for
     application in accordance with the Intercreditor Agreement to any of the
     Guaranteed Obligations, due or not due, and, until so delivered, the same
     shall be held in trust by the Guarantor as the property of the Collateral
     Agent. If any such Guarantor fails to make any such endorsement or
     assignment to the Collateral Agent, the Collateral Agent or any of its
     officers or employees is irrevocably authorized to make the same. Each
     Guarantor agrees

                                        8
<PAGE>

     that until the Guaranteed Obligations (other than obligations to pay fees
     and expenses with respect to which the Borrower has not received an
     invoice, Rate Management Obligations, contingent indemnity obligations and
     other contingent obligations) have been paid in full (in cash) and
     satisfied, no Guarantor will assign or transfer to any Person (other than
     the Administrative Agent) any claim any such Guarantor has or may have
     against any Obligor, except as otherwise permitted by the Loan Documents.

          SECTION 8. Contribution with Respect to Guaranteed Obligations.

          (a) To the extent that any Guarantor shall make a payment under this
Guaranty (a "Guarantor Payment") which, taking into account all other Guarantor
Payments then previously or concurrently made by any other Guarantor, exceeds
the amount which otherwise would have been paid by or attributable to such
Guarantor if each Guarantor had paid the aggregate Guaranteed Obligations
satisfied by such Guarantor Payment in the same proportion as such Guarantor's
"Allocable Amount" (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Guarantors as determined immediately prior to the making of such Guarantor
Payment, then, following indefeasible payment in full in cash of the Guarantor
Payment and the Guaranteed Obligations, and termination of the Credit Agreement,
such Guarantor shall be entitled to receive contribution and indemnification
payments from, and be reimbursed by, each other Guarantor for the amount of such
excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment.

          (b) As of any date of determination, the "Allocable Amount" of any
Guarantor shall be equal to the maximum amount of the claim which could then be
recovered from such Guarantor under this Guaranty without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.

          (c) This Section 8 is intended only to define the relative rights of
the Guarantors, and nothing set forth in this Section 8 is intended to or shall
impair the obligations of the Guarantors, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Guaranty.

          (d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Guarantor or Guarantors
to which such contribution and indemnification is owing.

          (e) The rights of the indemnifying Guarantors against other Guarantors
under this Section 8 shall be exercisable upon the full and indefeasible payment
of the Guaranteed Obligations in cash and the termination of the Credit
Agreement, including, without limitation, the termination of the Revolving Loan
Commitments and the Term Loan Commitments thereunder.

                                        9
<PAGE>

          SECTION 9. Stay of Acceleration. If the time for payment of any amount
payable by the Borrower under the Credit Agreement, any Guaranteed Rate
Management Transaction or any other Loan Document is accelerated pursuant to the
terms thereof, but such acceleration is stayed upon the insolvency, bankruptcy
or reorganization of the Borrower or any of its Affiliates, all such amounts
otherwise subject to acceleration under the terms of the Credit Agreement, any
Guaranteed Rate Management Transaction or any other Loan Document shall, to the
extent permitted by law, nonetheless be payable by each of the Guarantors
hereunder forthwith on demand by the Administrative Agent.

          SECTION 10. Notices. All notices, requests and other communications to
any party hereunder shall be given in the manner prescribed in Article XIII of
the Credit Agreement with respect to the Administrative Agent at its notice
address therein and, with respect to any Guarantor, in the care of the Borrower
at the address of the Borrower set forth in the Credit Agreement, or such other
address or telecopy number as such party may hereafter specify for such purpose
by notice to the Administrative Agent in accordance with the provisions of such
Article XIII.

          SECTION 11. No Waivers. No failure or delay by the Administrative
Agent, the Collateral Agent or any Holder of Secured Obligations in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies provided in this Guaranty, the Credit Agreement, any
Guaranteed Rate Management Transaction and the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies provided by law.

          SECTION 12. Successors and Assigns. This Guaranty is for the benefit
of the Administrative Agent, the Collateral Agent and the Holders of Secured
Obligations and their respective permitted successors and assigns, provided,
that no Guarantor shall have any right to assign its rights or obligations
hereunder without the consent of all of the Lenders, and any such assignment in
violation of this Section 12 shall be null and void; and in the event of an
assignment of any amounts payable under the Credit Agreement, any Guaranteed
Rate Management Transaction or the other Loan Documents in accordance with the
respective terms thereof, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Guaranty shall be binding upon each of the Guarantors and their respective
successors and assigns.

          SECTION 13. Changes in Writing. Other than in connection with the
addition of additional Subsidiaries, which become parties hereto by executing a
Guaranty Supplement, neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated orally, but only in writing signed by
each of the Guarantors, the Collateral Agent and the Administrative Agent with
the consent of the Required Lenders under the Credit Agreement (or all of the
Lenders if required pursuant to the terms of Section 8.2 of the Credit
Agreement).

          SECTION 14. GOVERNING LAW. THE ADMINISTRATIVE AGENT ACCEPTS THIS
GUARANTY, ON BEHALF OF ITSELF AND THE HOLDERS OF SECURED

                                       10
<PAGE>

OBLIGATIONS, AT NEW YORK, NEW YORK BY ACKNOWLEDGING AND AGREEING TO IT THERE.
ANY DISPUTE BETWEEN ANY GUARANTOR AND THE ADMINISTRATIVE AGENT OR ANY LENDER, OR
ANY HOLDER OF SECURED OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
GUARANTY, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO
THE CONFLICTS OF LAWS PROVISIONS OR PRINCIPLES THEREOF) OF THE STATE OF NEW
YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

          SECTION 15. CONSENT TO JURISDICTION; VENUE; JURY TRIAL.

          (A) CONSENT TO JURISDICTION. EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF, RELATED TO OR CONNECTED WITH THIS GUARANTY OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, AND EACH GUARANTOR HEREBY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD OR DETERMINED IN ANY SUCH COURT. ANY JUDICIAL
PROCEEDING BY ANY GUARANTOR AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY
HOLDER OF SECURED OBLIGATIONS OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, ANY
LENDER OR ANY HOLDER OF SECURED OBLIGATIONS INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
GUARANTY OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH MAY BE BROUGHT IN A COURT IN THE BOROUGH OF MANHATTAN IN NEW
YORK, NEW YORK. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE
AGENT, ANY LENDER OR ANY HOLDER OF SECURED OBLIGATIONS TO BRING PROCEEDINGS
AGAINST SUCH GUARANTOR OR LIMIT THE RIGHTS OF ANY GUARANTOR TO BRING PROCEEDINGS
AGAINST SUCH OTHER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.

          (B) VENUE. EACH GUARANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH

                                       11
<PAGE>

ABOVE.

          (C) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED WITH THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS GUARANTY OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY
AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
GUARANTY WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

          (D) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
PARTY HERETO THAT IT HAS DISCUSSED THIS GUARANTY AND, SPECIFICALLY, THE
PROVISIONS OF THIS SECTION 15, WITH ITS COUNSEL.

          SECTION 16. No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Guaranty. In the
event an ambiguity or question of intent or interpretation arises, this Guaranty
shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Guaranty.

          SECTION 17. Taxes, Expenses of Enforcement, Etc.

          (a) Taxes. Each Guarantor agrees to be bound by the terms and
     provisions of Section 3.5 of the Credit Agreement (including, without
     limitation, the promises made and the obligations accepted by the Borrower
     therein), as if each reference in such Section (i) to a "Borrower" were a
     reference to such Guarantor, (ii) to the Credit Agreement (including any
     reference to "this Agreement", "hereunder", "hereof", "herein" or words of
     like import referring thereto) were a reference to this Guaranty, and (iii)
     to any "Lender" or the "Lenders" were a reference to any "Holder of Secured
     Obligations" or the "Holders of Secured Obligations".

          (b) Expenses of Enforcement, Etc. During the continuation of an Event
     of Default under the Credit Agreement, the Required Lenders shall have the
     right at any time to direct the Administrative Agent or, in accordance with
     the Intercreditor Agreement, the Collateral Agent to commence enforcement
     proceedings with respect to the Guaranteed Obligations. The Guarantors
     agree to reimburse the Administrative Agent, the Collateral Agent and the
     Holders of Secured Obligations for any reasonable out-of-pocket costs and
     expenses (including reasonable out-of-pocket attorneys' fees)

                                       12
<PAGE>

     paid or incurred by the Administrative Agent, the Collateral Agent or any
     Holders of Secured Obligations in connection with the collection and
     enforcement of amounts due under the Loan Documents, including without
     limitation this Guaranty. Each of the Collateral Agent and the
     Administrative Agent agrees to distribute payments received from any of the
     Guarantors hereunder in accordance with the terms of the Credit Agreement
     and the Intercreditor Agreement.

          SECTION 18. Setoff. Subject to the terms of the Intercreditor
Agreement, at any time after all or any part of the Guaranteed Obligations have
become due and payable (by acceleration or otherwise), each Holder of Secured
Obligations and the Administrative Agent may, without notice to any Guarantor
and regardless of the acceptance of any security or collateral for the payment
hereof, appropriate and apply toward the payment of all or any part of the
Guaranteed Obligations (i) any indebtedness due or to become due from such
Holder of Secured Obligations or the Administrative Agent to any Guarantor, and
(ii) any monies, credits or other property belonging to any Guarantor, at any
time held by or coming into the possession of such Holder of Secured Obligations
or the Administrative Agent or any of their respective affiliates.

          SECTION 19. Financial Information. Each Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of the
Borrower and any and all endorsers and/or other Guarantors of all or any part of
the Guaranteed Obligations, and of all other circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations, or any part thereof, that diligent
inquiry would reveal, and each Guarantor hereby agrees that none of the Holders
of Secured Obligations or the Administrative Agent shall have any duty to advise
such Guarantor of information known to any of them regarding such condition or
any such circumstances. In the event any Holder of Secured Obligations or the
Administrative Agent, in its sole discretion, undertakes at any time or from
time to time to provide any such information to a Guarantor, such Holder of
Secured Obligations or the Administrative Agent shall be under no obligation (i)
to undertake any investigation not a part of its regular business routine, (ii)
to disclose any information which such Holder of Secured Obligations or the
Administrative Agent, pursuant to accepted or reasonable commercial finance or
banking practices, wishes to maintain confidential or (iii) to make any other or
future disclosures of such information or any other information to such
Guarantor.

          SECTION 20. Severability. Wherever possible, each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.

          SECTION 21. Merger. This Guaranty represents the final agreement of
each of the Guarantors with respect to the matters contained herein and may not
be contradicted by evidence of prior or contemporaneous agreements, or
subsequent oral agreements, between any Guarantor and any Holder of Secured
Obligations, the Administrative Agent or the Collateral Agent.

          SECTION 22. Headings. Section headings in this Guaranty are for
convenience of reference only and shall not govern the interpretation of any
provision of this Guaranty.

                                       13
<PAGE>

          SECTION 23. Counterparts. This Guaranty may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
constituting an original, but all together one and the same instrument. SECTION
24. Termination or Release.

          (a) This Guaranty and the guarantees made herein shall terminate when
all the Guaranteed Obligations have been paid in full (other than obligations to
pay fees and expenses with respect to which the Borrower has not yet received an
invoice, Rate Management Obligations, contingent indemnity obligations and other
contingent obligations) and the Lenders have no further commitment to lend under
the Credit Agreement, the LC Obligations have been reduced to zero and the LC
Issuer has no further obligations to issue Facility LCs under the Credit
Agreement.

          (b) A Guarantor shall automatically be released from its obligations
hereunder upon the consummation of any transaction permitted by the Loan
Documents as a result of which such Guarantor ceases to be a Subsidiary of the
Borrower.

          (c) In connection with any termination or release pursuant to
paragraph (a) or (b), the Administrative Agent shall execute and deliver to any
Guarantor, at such Guarantor's expense, all documents that such Guarantor shall
reasonably request to evidence such termination or release.

          SECTION 25. Guaranty Enforceable by the Collateral Agent.
Notwithstanding anything to the contrary contained elsewhere in this Guaranty,
the Administrative Agent and the Holders of Secured Obligations acknowledge and
agree (by their acceptance of the benefits of this Guaranty) that this Guaranty
may be enforced only by the action of the Collateral Agent, in each case acting
upon the instructions of the Instructing Group (as defined in the Intercreditor
Agreement) and that neither the Administrative Agent nor any Holder of Secured
Obligations shall have any right individually to enforce this Guaranty or to
realize upon the security to be granted by the Collateral Documents, it being
understood and agreed that such rights and remedies may be exercised by the
Collateral Agent for the benefit of the Administrative Agent and the Holders of
Secured Obligations upon the terms of this Guaranty and the Collateral
Documents; provided, however, that all proceeds of such enforcement or
realization shall be applied as among the Guaranteed Obligations in the manner
provided in the Intercreditor Agreement.

          SECTION 26. Payments by Guarantors. Any term or provision of this
Guaranty to the contrary notwithstanding, the maximum aggregate amount of the
Secured Obligations guaranteed hereunder by any Guarantor shall not exceed the
maximum amount that can be hereby guaranteed without rendering this Guaranty, as
it relates to such Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.

                                       14
<PAGE>

               IN WITNESS WHEREOF, the Initial Guarantors have caused this
Guaranty to be duly executed by its authorized officer as of the day and year
first above written.

                                 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 Management Company
                                 Roto-Rooter Services Company
                                 R.R. Plumbing Services Corporation
                                 Service America Network, Inc.

                                 By:  /s/ Naomi C. Dallob
                                      -----------------------------
                                      Name: Naomi C. Dallob
                                      Title: Secretary

                                 Hospice Care Incorporated
                                 Hospice, Inc.
                                 Vitas Healthcare Corporation
                                 Vitas Healthcare Corporation of California
                                 Vitas Healthcare Corporation of Central Florida
                                 Vitas Healthcare Corporation of Florida
                                 Vitas Healthcare Corporation of Illinois
                                 Vitas Healthcare Corporation of Ohio
                                 Vitas Healthcare Corporation of Pennsylvania
                                 Vitas Healthcare Corporation of Wisconsin
                                 Vitas HME Solutions, Inc.
                                 Vitas Holdings Corporation
                                 Vitas Hospice Services, L.L.C.

                                 By:  /s/ Timothy S. O'Toole
                                      -----------------------------
                                      Name: Timothy S. O'Toole
                                      Title: President

                                 Vitas Healthcare of Texas, L.P.

                                 By:   Vitas Hospice Services, L.L.C.,
                                       its General Partner

                                 By:  /s/ Timothy S. O'Toole
                                      -----------------------------
                                      Name: Timothy S. O'Toole
                                      Title: President

<PAGE>

Acknowledged and Agreed
as of February 24, 2004

BANK ONE, NA (MAIN OFFICE CHICAGO),
as Administrative Agent

By: /s/ Thomas J. Reinhold
    ---------------------------
    Name:  Thomas J. Reinhold
    Title: Vice President

<PAGE>

Annex I
                          ANNEX I TO GUARANTY AGREEMENT

          Reference is hereby made to the Guaranty Agreement (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"Guaranty"), dated as of February 24, 2004, made by certain Subsidiaries of
Roto-Rooter, Inc. (each an "Initial Guarantor", and together with any additional
Subsidiaries which become parties to the Guaranty by executing a Supplement
thereto substantially similar in form and substance hereto, the "Guarantors"),
in favor of the Administrative Agent, for the ratable benefit of the Holders of
Secured Obligations, under the Credit Agreement. Each capitalized term used
herein and not defined herein shall have the meaning given to it in the
Guaranty. By its execution below, the undersigned, [NAME OF NEW GUARANTOR], a
[corporation] [partnership] [limited liability company], agrees to become, and
does hereby become, a Guarantor under the Guaranty and agrees to be bound by
such Guaranty as if originally a party thereto. By its execution below, the
undersigned represents and warrants as to itself that all of the representations
and warranties contained in Section 2 of the Guaranty are true and correct in
all respects as of the date hereof.

          IN WITNESS WHEREOF, [NAME OF NEW GUARANTOR], a [corporation]
[partnership] [limited liability company] has executed and delivered this Annex
I counterpart to the Guaranty as of this __________ day of _________, ____.

                                      [NAME OF NEW GUARANTOR]

                                      By:____________________________________
                                         Name:
                                         Title:

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>14
<FILENAME>l05867aexv13.txt
<DESCRIPTION>EX-13
<TEXT>
<PAGE>

                                   EXHIBIT 13

                                   ROTO-ROOTER

                                INCORPORATED LOGO

                                ROTO-ROOTER, INC.
                               2003 ANNUAL REPORT

<PAGE>

                                                                             -2-

INSIDE FRONT COVER

CORPORATE OFFICERS

EDWARD L. HUTTON
Chairman

KEVIN J. MCNAMARA
President & Chief Executive Officer

TIMOTHY S. O'TOOLE
Executive Vice President

SPENCER S. LEE
Executive Vice President

ARTHUR V. TUCKER, JR.
Vice President & Controller

NAOMI C. DALLOB
Vice President & Secretary

DAVID P. WILLIAMS
Vice President & Chief Financial Officer

THOMAS C. HUTTON
Vice President

JOHN M. MOUNT
Vice President

THOMAS J. REILLY
Vice President

DIRECTORS

EDWARD L. HUTTON
Chairman, Roto-Rooter, Inc.

KEVIN J. MCNAMARA
President & Chief Executive Officer,
Roto-Rooter, Inc.

CHARLES H. ERHART, JR. (1, 2*, 3)
Former President, W.R. Grace & Co. (retired)

JOEL F. GEMUNDER
President & Chief Executive Officer, Omnicare, Inc.

PATRICK P. GRACE (1, 3)
President, MLP Capital, Inc. (real estate and mining)

THOMAS C. HUTTON
Vice President, Roto-Rooter, Inc.

SANDRA E. LANEY
Chairman & Chief Executive Officer,
Cadre Computer Resources Co.

TIMOTHY S. O'TOOLE
Executive Vice President, Roto-Rooter, Inc.;
President & Chief Executive Officer,
VITAS Healthcare Corporation

DONALD E. SAUNDERS (1*)
Markley Visiting Professor,
Farmer School of Business Administration,
Miami University (Ohio)

GEORGE J. WALSH III (2,3*)
Partner, Thompson Hine, LLP
(law firm, New York, New York)

FRANK E. WOOD (2)
President and Chief Executive Officer,
Secret Communications, LLC (radio stations); Principal, The Darwin Group
(venture capital); and Chairman, 8e6
Technologies Corporation
(software development)

1) Audit Committee

<PAGE>

                                                                           - 3 -

2) Compensation/Incentive Committee

3) Nominating Committee

*  Committee Chairman

INSIDE BACK COVER

TEXT:

CORPORATE INFORMATION

CORPORATE HEADQUARTERS

Roto-Rooter, Inc.
Suite 2600
255 East Fifth Street
Cincinnati, Ohio 45202-4726
513-762-6900
www.RotoRooter.com

TRANSFER AGENTS & REGISTRARS

                  Individuals of record needing address changes, account
balances, account consolidations, replacement of lost certificates or lost
checks, dividend reinvestment plan statements or cost-basis data, 1099s, or
assistance with other administrative matters relating to Roto-Rooter Stock and
Chemed Capital Trust Convertible Preferred Securities (Chemed Preferred
Securities) should direct their inquiries to the designated transfer agent
listed below.

ROTO-ROOTER STOCK TRANSFER AGENT & REGISTRAR:

                  Wells Fargo Bank, N.A., Shareowner Services
                  P.O. Box 64854
                  St. Paul, Minnesota 55164-0854
                  Telephone: 800-468-9716 (TOLL-FREE)

<PAGE>

                                                                             -4-

                 Web site: www.wellsfargo.com/shareownerservices

All questions relating to administration of ROTO-ROOTER STOCK MUST be handled by
WELLS FARGO.

CHEMED PREFERRED SECURITIES TRANSFER AGENT & REGISTRAR:

                  Mellon Investor Services LLC
                  Overpeck Centre
                  85 Challenger Road
                  Ridgefield Park, New Jersey  07660
                  Telephone: 800-756-3353 (TOLL-FREE)
                   For conversions: 800-777-3674 (TOLL-FREE)
                  Web site: www.melloninvestor.com

All questions relating to administration of CHEMED PREFERRED SECURITIES MUST be
handled by MELLON.

CORPORATE INQUIRIES

                  Questions concerning company operations and financial results
should be directed to David P. Williams, Vice President & Chief Financial
Officer, at Roto-Rooter corporate headquarters by writing or by calling
800-224-3633 or 513-762-6901.

                  Annual and quarterly reports, press releases, corporate
governance guidelines, Board committee charters, Policies on Business Ethics,
the Annual Report on Form 10-K, and other printed materials may be obtained from
Roto-Rooter Investor Relations without charge by writing or by calling
800-224-3633 or 513-762-6463. Printed materials may also be viewed and
downloaded from Roto-Rooter's Web site at www.rotorooterinc.com.

<PAGE>

                                                                             -5-

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP
Cincinnati, Ohio  45202

DIVIDEND REINVESTMENT PLAN FOR HOLDERS OF 25 OR MORE SHARES

                  The Roto-Rooter Automatic Dividend Reinvestment Plan is
available to shareholders of record owning a minimum of 25 shares of Roto-Rooter
Capital Stock. A plan brochure, including fee schedule, and enrollment
information are available from the Dividend Reinvestment Agent, Wells Fargo
Bank, N.A., at the address listed above. CHEMED PREFERRED SECURITIES ARE NOT
ELIGIBLE TO PARTICIPATE IN THIS PLAN.

ANNUAL MEETING

                  The Annual Meeting of Shareholders of Roto-Rooter, Inc., will
be held on Monday, May 17, 2004, at 11 a.m. in the Grand Ballroom of The Phoenix
Club, 812 Race Street, Cincinnati, Ohio.

NUMBER OF SHAREHOLDERS

                  The approximate number of shareholders of record of
Roto-Rooter Capital Stock was 3,423 on December 31, 2003. (This number does not
include shareholders with shares held under

<PAGE>

                                                                             -6-

beneficial ownership or within clearinghouse positions of brokerage firms and
banks nor holders of Chemed Preferred Securities.)

STOCK EXCHANGE LISTINGS

                  Roto-Rooter Capital Stock is listed on the New York Stock
Exchange under the ticker symbol RRR. Chemed Capital Trust Preferred Securities
are listed on the NASDAQ Over-the-Counter Bulletin Board under the symbol CHEQP.

CAPITAL STOCK & DIVIDEND DATA

                  The high and low closing prices for Roto-Rooter Capital Stock,
as obtained from the New York Stock Exchange NYSEnet Web site, and dividends per
share paid by quarter follow:

<TABLE>
<CAPTION>
                                            Closing                Dividends
                                     --------------------            Paid
                                      High          Low           Per Share
- ----------------------------------------------------------------------------
<S>                                  <C>           <C>            <C>
2003
First Quarter                        $36.51        $31.55            $.12
Second Quarter                        40.20         32.98             .12
Third Quarter                         40.35         34.42             .12
Fourth Quarter                        51.78         33.69             .12

2002
First Quarter                        $38.30        $33.52            $.11
Second Quarter                        39.35         33.60             .11
Third Quarter                         37.04         29.85             .11
Fourth Quarter                        37.84         29.65             .12
</TABLE>

<PAGE>

                                                                             -7-

BACK COVER:

Roto-Rooter, Inc.
Suite 2600
255 East Fifth Street
Cincinnati, Ohio  45202-4726

Visit our Web sites at www.RotoRooter.com, www.serviceamerica.com, and
www.vitas.com.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-14
<SEQUENCE>15
<FILENAME>l05867aexv14.txt
<DESCRIPTION>EX-14
<TEXT>
<PAGE>

                                   EXHIBIT 14

                                ROTO-ROOTER, INC.

                           POLICIES ON BUSINESS ETHICS

         It is Roto-Rooter's policy to conduct business in accordance with the
highest standards of business ethics. This requires that all directors and
employees of the Company and its subsidiaries conduct all business in compliance
with the law, avoid actual or potential conflicts of interest and act at all
times with honesty and integrity.

         The purpose of this communication is to provide guidance on the
Company's policies on business ethics.

1.       CONFLICTS OF INTEREST

         Under established principles of law and Company policy, every director,
officer and employee of Roto-Rooter, Inc., its divisions and subsidiaries, has a
duty of undivided loyalty to the Company. Accordingly, if confronted with a
choice between the interests of the Company and personal economic interests or
obligations or duties to others, you must act in the interests of the Company.

         While it is not possible to describe all situations of potential or
actual conflict, the following categories are listed as guidance:

         1.       Receipt of compensation, gifts, entertainment, discounts,
                  services, loans or any thing of value from any competitor of
                  the Company and its subsidiaries or from suppliers, customers
                  or others with current or anticipated business dealings with
                  the Company or its subsidiaries (other than the receipt of
                  minor gifts, entertainment, discounts, services or things of
                  value not exceeding $100 per year from any one source).

         2.       Retention of a stock or other financial interest in any firm
                  described in (1) above. This would not usually apply to the
                  investment in securities of a publicly held corporation unless
                  the investor's judgment in transactions involving the
                  Roto-Rooter organization might be affected by factors such as
                  the size of the investment or the amount of business done with
                  the Company and its subsidiaries. As a general rule, a

<PAGE>

                                       2

                  2% aggregate interest by a person, members of his family and
                  associated individuals or companies would not present a
                  problem.

         3.       Acting as a director, officer, consultant, agent, employee or
                  in some other capacity for a person or firm described in (1).
                  In addition, there are prohibitions on interlocking
                  directorships and offices in certain situations. To ensure
                  compliance, all directors and officers of the Company should
                  inform the Secretary prior to accepting any other directorship
                  or office.

         4.       Having an interest in any transaction involving the Company or
                  its subsidiaries where the interest may affect the objective
                  and impartial representation of the Company.

         5.       Disclosure or other misuse of confidential information.

         6.       Speculation or dealing in goods, commodities or products
                  purchased, sold or otherwise dealt in or required by the
                  Company and its subsidiaries.

         7.       Conversion to personal benefit of a business opportunity in
                  which the Company or a subsidiary might reasonably be expected
                  to be interested, without first making it available to the
                  Company or subsidiary. For instance, you might learn of a
                  business, an invention or other property for sale which the
                  Company or a subsidiary might be interested in acquiring. If
                  you fail to disclose this to the Company and acquire the
                  property, you may be legally accountable to the Company for
                  profits realized.

         8.       Trading in securities of the Company or its subsidiaries for
                  quick profits or speculation. The Company encourages its
                  directors, officers and employees to invest in the Company's
                  securities as part of a long-range investment plan in order to
                  stimulate their interest in the success of the Company.
                  However, the Company discourages short-term trading since it
                  might create pressures inconsistent with the impartial
                  exercise of judgment on the Company's behalf. In addition, the
                  law requires all directors and certain officers of the Company
                  to pay the Company any profits on purchases/sales made in any
                  six month period.

<PAGE>

                                        3

         9.       Interests, relationships or activities of the type described
                  above taken by (a) family members, (b) any trust or estate in
                  which either the employee or family members have a substantial
                  interest, or (c) any partnership, corporation or other firm in
                  which you are a partner, director or officer in which you or
                  your family members have a substantial interest.

         Where a conflict or potential conflict develops, you should disclose
promptly and fully to your superior all pertinent facts. In many instances, the
only consequences will be your disqualification from participating in a
particular transaction, or a finding that the condition which appeared
questionable is not significant. In other cases, it may prove advisable for you
to dispose of the outside interest or for other measures to be taken.

2.       DISCLOSURE

         The Company requires full, fair, accurate, timely and understandable
disclosure in all reports and documents it files with or submits to the
Securities and Exchange Commission and in other public communications it makes.

         All books and records of the Company and its subsidiaries shall be kept
in such a way as to fully and fairly reflect all transactions. Clear, open and
frequent communication among all management levels and personnel on significant
accounting, financial and operating matters will assist in achieving this, as
well as help reach our operating goals.

         No employee shall take any action to circumvent the Company's system of
internal controls.

         Administrative and accounting controls in place shall assure that
financial and other reports are accurately and reliably prepared, and fully and
fairly disclose pertinent information.

3.       LEGAL COMPLIANCE

         The Company and its subsidiaries require compliance with all applicable
governmental laws,

<PAGE>

                                       4

rules and regulations.

4.       IMPROPER PAYMENTS AND BOOKINGS

         The Company has a policy against the making of any improper, disguised
or questionable payments or book entries of any kind. There are also numerous
laws imposing civil and criminal penalties for such acts, not only upon the
Company, but the individuals as well.

         As guidance, directors and employees may not:

         1.       Use, directly or indirectly, any funds or other assets of the
                  Company or any subsidiary for any unlawful purpose.

         2.       Even if lawful, use, directly or indirectly, any funds or
                  other assets of the Company or any subsidiary for political
                  contributions of any kind or in any form (whether cash, other
                  property, services or the furnishing of facilities), or
                  establish or administer any committee or other organization to
                  raise or make political contributions.

         3.       Establish or maintain undisclosed or unrecorded bank accounts
                  or other funds or assets of the Company or any subsidiary.

         4.       Make or permit any false, misleading or artificial entries on
                  books or records of the Company or any subsidiary. All
                  transactions shall be appropriately authorized, recorded and
                  evidenced by proper supporting documentation.

         5.       Make any payment on behalf of the Company or any of its
                  subsidiaries with the intention or understanding that it is to
                  be used for a purpose other than that described by the
                  supporting documents.

         6.       Make any payment in violation of exchange control or tax
                  regulations.

         7.       Give gifts or favors to anyone with current or anticipated
                  business dealings with the Company or its subsidiaries, if it
                  could reasonably be interpreted for the purpose of improperly
                  influencing a business decision.
<PAGE>

                                       5

         8.       Offer or make any payment or gift, directly or indirectly, to
                  any governmental official to assist the Company in obtaining,
                  retaining or directing business.

5.       REPORTING VIOLATIONS

         Any violation of these Policies on Business Ethics shall be promptly
reported in writing to any employee's supervisor, to the Company's Secretary, or
to the Company's Internal Auditor. You may also report them to the Company's
Theft and Fraud Hotline, 1-877-888-0003, 24 hours a day, 7 days a week.

         The Company will investigate any reported violations and may take
appropriate disciplinary action. The Company forbids retaliation against those
who in good faith report violations of these Policies on Business Ethics.

6.       ACCOUNTABILITY FOR ADHERENCE TO POLICIES

         Violations of these Policies on Business Ethics, even in the first
instance, may result in disciplinary action up to and including termination of
employment.

         If you have any questions at any time concerning the Policies, discuss
them with your superior, the Internal Auditor, or a person designated by the
head of your division or subsidiary.

<PAGE>

                                       6

                                   CERTIFICATE

         I,                            , certify that I have read the foregoing
Policies on Business Ethics and will comply to the best of my knowledge and
ability.

         I understand that violating the Policies may result in disciplinary
action up to and including termination of my employment.

         I acknowledge my duty to advise my supervisor, the Company's Secretary,
or Internal Auditor, of any violations of these Policies. I understand I may
also do this by calling the Theft and Fraud Hotline, 1-877-888-0003.

                                            ____________________________________
          Division or Unit Employed By               Signature

               Title or Position                        Date

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>16
<FILENAME>l05867aexv21.txt
<DESCRIPTION>EX-21
<TEXT>
<PAGE>

                                   EXHIBIT 21
                        SUBSIDIARIES OF ROTO-ROOTER, INC.

         The following is a list of subsidiaries of the Company as of December
31, 2003:Other subsidiaries which have been omitted from the list would not,
when considered in the aggregate, constitute a significant subsidiary. Each of
the companies is incorporated under the laws of the state following its name.
The percentage given for each company represents the percentage of voting
securities of such company owned by the Company or, where indicated,
subsidiaries of the Company as of December 31, 2003.

         All of the majority owned companies listed below are included in the
consolidated financial statements as of December 31, 2003.

         CCR of Ohio, Inc. (Delaware, 100%)
         Comfort Care Holdings Co. (Nevada, 100%)
         Complete Plumbing Services, Inc. (New York, 49% by Roto-Rooter Services
         Company; included within the consolidated financial statements as a
         consolidated subsidiary)
         Consolidated HVAC, Inc. (Ohio, 100% by Roto-Rooter Services Company)
         Jet Resource, Inc. (Delaware, 100%)
         Marlin Merger Corp. (Delaware, 100% by Comfort Care Holdings Co.)
         Nurotoco of Massachusetts, Inc. (Massachusetts, 100% by Roto-Rooter
         Services Company)
         Nurotoco of New Jersey, Inc. (Delaware, 80% by Roto-Rooter Services
         Company)
         Roto-Rooter Canada, Ltd. (BritishColumbia, 100% by Roto-Rooter Services
         Company)
         Roto-Rooter Corporation (Iowa, 100% by Roto-Rooter Management Company)
         Roto-Rooter Development Company (Delaware, 100% by Roto-Rooter
         Corporation)
         Roto-Rooter Management Company (Delaware, 100% by Roto-Rooter, Inc.)
         Roto-Rooter Services Company (Iowa, 100% by Roto-Rooter Management
         Company)
         RR Plumbing Services Corporation (New York, 49% by Roto-Rooter
         Management Company; included within the consolidated financial
         statements as a consolidated subsidiary)
         R.R. UK, Inc. (Delaware, 100% by Roto-Rooter Management Company)
         Service America Network, Inc. (Florida, 100%)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>17
<FILENAME>l05867aexv23.txt
<DESCRIPTION>EX-23
<TEXT>
<PAGE>

                                   EXHIBIT 23

                       CONSENT OF INDEPENDENT ACCOUNTANTS

WE HEREBY CONSENT TO THE INCORPORATION BY REFERENCE IN THE REGISTRATION
STATEMENTS ON FORM S-8 (NOS. 33-9549, 2-87202, 2-80712, 33-65244, 33-61063,
333-34525, 333-87071, 333-87073 AND 333-109104) OF ROTO-ROOTER, INC. OF OUR
REPORT DATED MARCH 5, 2004 RELATING TO THE FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULE, WHICH APPEAR IN THIS FORM 10-K.

/S/ PRICEWATERHOUSECOOPERS LLP
- --------------------------------
PRICEWATERHOUSECOOPERS LLP

CINCINNATI, OHIO
MARCH 10, 2004

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>18
<FILENAME>l05867aexv24.txt
<DESCRIPTION>EX-24
<TEXT>
<PAGE>

                                                                      EXHIBIT 24

                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as his
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 8, 2004

                                        /s/ Edward L. Hutton
                                        ------------------------------
                                        Edward L. Hutton

<PAGE>

                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as his
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 5, 2004

                                        /s/ Charles H. Erhart, Jr.
                                        ---------------------------
                                        Charles H. Erhart, Jr.

<PAGE>

                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as his
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 5, 2004

                                        /s/ Joel F. Gemunder
                                        -----------------------------------
                                        Joel F. Gemunder

<PAGE>

                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as his
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 5, 2004

                                        /s/ Patrick P. Grace
                                        ------------------------------------
                                        Patrick P. Grace

<PAGE>

                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as his
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2002, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 5, 2004

                                        /s/ Thomas C. Hutton
                                        ------------------------------------
                                        Thomas C. Hutton

<PAGE>

                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as her
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 4, 2004

                                        /s/ Sandra E. Laney
                                        ------------------------------------
                                        Sandra E. Laney

<PAGE>

                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as his
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 4, 2004

                                        /s/ Timothy S. O'Toole
                                        -------------------------------
                                        Timothy S. O'Toole

<PAGE>

                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as his
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 5, 2004

                                        /s/ Donald E. Saunders
                                        ---------------------------------
                                        Donald E. Saunders

<PAGE>

                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as his
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 5, 2004

                                        /s/ George J. Walsh III
                                        --------------------------------
                                        George J. Walsh III

<PAGE>

                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as his
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 5, 2004

                                        /s/ Frank E. Wood
                                        -----------------------------
                                        Frank E. Wood
<PAGE>
                                POWER OF ATTORNEY

                  The undersigned director of ROTO-ROOTER, INC. ("Company")
hereby appoints EDWARD L. HUTTON, KEVIN J. MCNAMARA and NAOMI C. DALLOB as his
true and lawful attorneys-in-fact for the purpose of signing the Company's
Annual Report on Form 10-K for the year ended December 31, 2003, and all
amendments thereto, to be filed with the Securities and Exchange Commission.
Each of such attorneys-in-fact is appointed with full power to act without the
other.

Dated: March 4, 2004

                                                     /s/ Spencer S. Lee
                                                     ---------------------------
                                                     Spencer S. Lee

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>19
<FILENAME>l05867aexv31w1.txt
<DESCRIPTION>EX-31.1
<TEXT>
<PAGE>

                                  EXHIBIT 31.1

 CERTIFICATION PURSUANT TO RULES 13a-14(a)/15d-14(a) OF THE EXCHANGE ACT OF 1934

I, Kevin J. McNamara, certify that:

         1.       I have reviewed this annual report on Form 10-K of
         Roto-Rooter, Inc. ("registrant");

         2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

         3.       Based on my knowledge, the financial statements, and other
         financial information included in this annual report, fairly present in
         all material respects the financial condition, results of operations,
         and cash flows of the registrant as of, and for, the periods presented
         in this report;

         4.       The registrant's other certifying officers and I are
         responsible for establishing and maintaining disclosure controls and
         procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e))
         and internal control over financial reporting (as defined in Exchange
         Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

                  a)      Designed such disclosure controls and procedures, or
                  caused such disclosure controls or procedures to be designed
                  under our supervision, to ensure that material information
                  relating to the registrant, including its consolidated
                  subsidiaries, is made known to us by others within those
                  entities, particularly during the period in which this report
                  is being prepared;

                  b)      Designed such internal control over financial
                  reporting, or caused such internal control over financial
                  reporting to be designed under our supervision, 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;

                  c)      Evaluated the effectiveness of the registrant's
                  disclosure controls and procedures and presented in this
                  report our conclusions about the effectiveness of the
                  disclosure controls and procedures, as of the end of the
                  period covered by this report based on such evaluation; and

                  d)      Disclosed in this report any change in the
                  registrant's internal control over financial reporting that
                  occurred during the registrant's fourth quarter in 2003 that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting.

         5.       The registrant's other certifying officers and I have
         disclosed, based on our most recent evaluation of internal control over
         financial reporting, to the registrant's auditors and the audit
         committee of registrant's board of directors:

<PAGE>

          a)      all significant deficiencies and material weaknesses in the
          design or operation of internal control over financial reporting which
          are reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information;

          b)      any fraud, whether or not material, that involves management
          or other employees who have a significant role in the registrant's
          internal control over financial reporting.

Date: March 10, 2004                  /s/ Kevin J. McNamara
                                    -----------------------------------
                                    Kevin J. McNamara
                                    (President & Chief Executive Officer)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>20
<FILENAME>l05867aexv31w2.txt
<DESCRIPTION>EX-31.2
<TEXT>
<PAGE>

                                  EXHIBIT 31.2

 CERTIFICATION PURSUANT TO RULES 13a-14(a)/15d-14(a) OF THE EXCHANGE ACT OF 1934

I, David P. Williams, certify that:

         1.       I have reviewed this annual report on Form 10-K of
         Roto-Rooter, Inc. ("registrant");

         2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

         3.       Based on my knowledge, the financial statements, and other
         financial information included in this annual report, fairly present in
         all material respects the financial condition, results of operations,
         and cash flows of the registrant as of, and for, the periods presented
         in this report;

         4.       The registrant's other certifying officers and I are
         responsible for establishing and maintaining disclosure controls and
         procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e))
         and internal control over financial reporting (as defined in Exchange
         Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

          a)      Designed such disclosure controls and procedures, or caused
          such disclosure controls or procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared;

          b)      Designed such internal control over financial reporting, or
          caused such internal control over financial reporting to be designed
          under our supervision, 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;

          c)      Evaluated the effectiveness of the registrant's disclosure
          controls and procedures and presented in this report our conclusions
          about the effectiveness of the disclosure controls and procedures, as
          of the end of the period covered by this report based on such
          evaluation; and

          d)      Disclosed in this report any change in the registrant's
          internal control over financial reporting that occurred during the
          registrant's fourth quarter in 2003 that has materially affected, or
          is reasonably likely to materially affect, the registrant's internal
          control over financial reporting.

         5.       The registrant's other certifying officers and I have
         disclosed, based on our most recent evaluation of internal control over
         financial reporting, to the registrant's auditors and the audit
         committee of registrant's board of directors:

<PAGE>

          a)      all significant deficiencies and material weaknesses in the
          design or operation of internal control over financial reporting which
          are reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information;

          b)      any fraud, whether or not material, that involves management
          or - other employees who have a significant role in the registrant's
          internal control over financial reporting.

Date: March 10, 2004                  /s/ David P. Williams
                                    -----------------------------------
                                    David P. Williams
                                    (Vice President and Chief Financial Officer)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.3
<SEQUENCE>21
<FILENAME>l05867aexv31w3.txt
<DESCRIPTION>EX-31.3
<TEXT>
<PAGE>

                                  EXHIBIT 31.3

 CERTIFICATION PURSUANT TO RULES 13a-14(a)/15d-14(a) OF THE EXCHANGE ACT OF 1934

I, Arthur V. Tucker, Jr., certify that:

         1.       I have reviewed this annual report on Form 10-K of
         Roto-Rooter, Inc. ("registrant");

         2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

         3.       Based on my knowledge, the financial statements, and other
         financial information included in this annual report, fairly present in
         all material respects the financial condition, results of operations,
         and cash flows of the registrant as of, and for, the periods presented
         in this report;

         4.       The registrant's other certifying officers and I are
         responsible for establishing and maintaining disclosure controls and
         procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15 (e))
         and internal control over financial reporting (as defined in Exchange
         Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

          a)      Designed such disclosure controls and procedures, or caused
          such disclosure controls or procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared;

          b)      Designed such internal control over financial reporting, or
          caused such internal control over financial reporting to be designed
          under our supervision, 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;

          c)      Evaluated the effectiveness of the registrant's disclosure
          controls and procedures and presented in this report our conclusions
          about the effectiveness of the disclosure controls and procedures, as
          of the end of the period covered by this report based on such
          evaluation; and

          d)      Disclosed in this report any change in the registrant's
          internal control over financial reporting that occurred during the
          registrant's fourth quarter in 2003 that has materially affected, or
          is reasonably likely to materially affect, the registrant's internal
          control over financial reporting.

         5.       The registrant's other certifying officers and I have dis
         closed, based on our most recent evaluation of internal control over
         financial reporting, to the registrant's auditors and the audit
         committee of registrant's board of directors:

<PAGE>

          a)      all significant deficiencies and material weaknesses in the
          design or operation of internal control over financial reporting which
          are reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information;

          b)      any fraud, whether or not material, that involves management
          or other employees who have a significant role in the registrant's
          internal control over financial reporting.

Date: March 10, 2004                  /s/ Arthur V. Tucker, Jr.
                                    --------------------------------------------
                                    Arthur V. Tucker, Jr.
                                    (Vice President and Controller)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>22
<FILENAME>l05867aexv32w1.txt
<DESCRIPTION>EX-32.1
<TEXT>
<PAGE>

                                  EXHIBIT 32.1

                       CERTIFICATION BY KEVIN J. MCNAMARA
           PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as
President and Chief Executive Officer of Roto-Rooter, Inc. ("Company"), does
hereby certify that:

          1)      the Company's Annual Report on Form 10-K for the year ending
                  December 31, 2003 ("Report"), fully complies with the
                  requirements of Section 13(a) or 15(d) of the Securities
                  Exchange Act of 1934; and

          2)      the information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Company.

Dated: March 10, 2004                    /s/ Kevin J. McNamara
                                         ---------------------
                                         Kevin J. McNamara
                                         (President and Chief Executive Officer)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>23
<FILENAME>l05867aexv32w2.txt
<DESCRIPTION>EX-32.2
<TEXT>
<PAGE>

                                  EXHIBIT 32.2

                       CERTIFICATION BY DAVID P. WILLIAMS
           PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as
Vice President and Chief Financial Officer of Roto-Rooter, Inc. ("Company"),
does hereby certify that:

          1)      the Company's Annual Report on Form 10-K for the year ending
          December 31, 2003 ("Report"), fully complies with the requirements of
          Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

          2)      the information contained in the Report fairly presents, in
          all material respects, the financial condition and results of
          operations of the Company.

Dated: March 10, 2004                                /s/ David P. Williams
                                                     ---------------------
                                                     David P. Williams
                                                     (Vice President and
                                                     Chief Financial Officer)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.3
<SEQUENCE>24
<FILENAME>l05867aexv32w3.txt
<DESCRIPTION>EX-32.3
<TEXT>
<PAGE>

                                  EXHIBIT 32.3

                     CERTIFICATION BY ARHTUR V. TUCKER, JR.
           PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as
Vice President and Controller of Roto-Rooter, Inc. ("Company"), does hereby
certify that:

          1)      the Company's Annual Report on Form 10-K for the year ending
                  December 31, 2003 ("Report"), fully complies with the
                  requirements of Section 13(a) or 15(d) of the Securities
                  Exchange Act of 1934; and

          2)      the information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Company.

Dated: March 10, 2004                         /s/ Arthur V. Tucker, Jr.
                                              ----------------------------------
                                              Arthur V. Tucker, Jr.
                                              (Vice President and Controller)

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
