<PAGE> 1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1996
Commission File Number 1-8351
CHEMED CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 31-0791746
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2600 Chemed Center, 255 E. Fifth Street, Cincinnati, Ohio 45202
(Address of principal executive offices) (Zip code)
(513) 762-6900
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class Amount Date
<S> <C> <C>
Capital Stock 9,811,918 Shares July 31, 1996
$1 Par Value
</TABLE>
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Page 1 of 13
<PAGE> 2
CHEMED CORPORATION AND
SUBSIDIARY COMPANIES
Index
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheet -
June 30, 1996 and
December 31, 1995 3
Consolidated Statement of Income -
Three months and six months ended
June 30, 1996 and 1995 4
Consolidated Statement of Cash Flows
Six months ended
June 30, 1996 and 1995 5
Notes to Unaudited Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7 - 11
PART II. OTHER INFORMATION 12 - 13
</TABLE>
Page 2 of 13
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(in thousands except share and per share data)
UNAUDITED
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
--------- ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 32,255 $ 19,187
Marketable securities -- 10,094
Accounts receivable, less allowances of $3,083 (1995 - $3,519) 87,358 87,177
Inventories
Raw materials 8,718 7,921
Finished goods and general merchandise 46,508 50,330
Statutory deposits 19,505 18,943
Other current assets 20,583 25,785
--------- ---------
Total current assets 214,927 219,437
Other investments 78,673 90,176
Properties and equipment, at cost less accumulated depreciation
depreciation of $51,796 (1995 - $47,074) 79,899 77,131
Identifiable intangible assets less accumulated amortization
of $3,424 (1995 - $2,886) 17,686 18,140
Goodwill less accumulated amortization of $22,844 (1995 - $20,978) 119,121 119,486
Other assets 9,602 7,498
--------- ---------
Total Assets $ 519,908 $ 531,868
========= =========
LIABILITIES
Current liabilities
Accounts payable $ 27,825 $ 28,411
Bank notes and loans payable 25,000 25,000
Current portion of long-term debt 7,500 7,089
Income taxes 8,840 11,965
Deferred contract revenue 25,043 23,512
Other current liabilities 45,142 49,027
--------- ---------
Total current liabilities 139,350 145,004
Deferred income taxes 11,354 15,819
Long-term debt 81,969 85,368
Other liabilities and deferred income 32,314 36,030
Minority interest 43,668 40,990
--------- ---------
Total Liabilities 308,655 323,211
--------- ---------
STOCKHOLDERS' EQUITY
Capital stock-authorized 15,000,000 shares $1 par;
issued 12,680,927 (1995 - 12,598,418) shares 12,681 12,598
Paid-in capital 147,982 145,290
Retained earnings 134,896 127,141
Treasury stock - 2,869,009 (1995 - 2,784,192) shares, at cost (84,551) (79,996)
Unearned compensation - ESOPs (30,473) (33,355)
Unrealized appreciation on investments 30,718 36,979
--------- ---------
Total Stockholders' Equity 211,253 208,657
--------- ---------
Total Liabilities and Stockholders' Equity $ 519,908 $ 531,868
========= =========
</TABLE>
See accompanying notes to unaudited financial statements.
Page 3 of 13
<PAGE> 4
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
UNAUDITED
(in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Continuing Operations
Sales $ 99,879 $ 116,860 $ 199,642 $ 225,458
Service revenues 70,592 60,484 138,290 121,744
--------- --------- --------- ---------
Total sales and service revenues 170,471 177,344 337,932 347,202
--------- --------- --------- ---------
Cost of goods sold 68,113 80,836 136,703 155,443
Cost of services provided 42,263 37,206 83,376 75,365
Selling and marketing expenses 24,639 26,084 48,897 51,544
General and administrative expenses 24,397 22,408 47,913 44,479
Depreciation 3,029 2,959 6,002 5,824
--------- --------- --------- ---------
Total costs and expenses 162,441 169,493 322,891 332,655
--------- --------- --------- ---------
Income from operations 8,030 7,851 15,041 14,547
Interest expense (1,900) (2,119) (3,831) (4,222)
Other income, net 5,181 4,727 21,479 10,376
--------- --------- --------- ---------
Income before income taxes and
minority interest 11,311 10,459 32,689 20,701
Income taxes (4,237) (4,027) (12,211) (7,841)
Minority interest in earnings of
subsidiaries (1,386) (1,127) (2,593) (2,170)
--------- --------- --------- ---------
Income from continuing operations 5,688 5,305 17,885 10,690
Discontinued Operations -- -- -- 901
--------- --------- --------- ---------
Net Income $ 5,688 $ 5,305 $ 17,885 $ 11,591
========= ========= ========= =========
Earnings Per Common Share
Income from continuing operations $ .58 $ .54 $ 1.82 $ 1.08
========= ========= ========= =========
Net income $ .58 $ .54 $ 1.82 $ 1.17
========= ========= ========= =========
Average Number of Shares Outstanding 9,837 9,869 9,852 9,866
========= ========= ========= =========
Cash Dividends Paid Per Share $ .52 $ .51 $ 1.04 $ 1.02
========= ========= ========= =========
</TABLE>
See accompanying notes to unaudited financial statements.
Page 4 of 13
<PAGE> 5
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------
1996 1995
-------- --------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 17,885 $ 11,591
Adjustments to reconcile net income to net cash
provided by operating activities:
Gains on sale of investments (17,431) (6,630)
Depreciation and amortization 9,404 8,855
Minority interest in earnings of subsidiaries 2,593 2,170
Provision for deferred income taxes (2,310) (980)
Provision for uncollectible accounts receivable 712 910
Discontinued operations -- (901)
Changes in operating assets and liabilities,
excluding amounts acquired in business combinations
Increase in accounts receivable (635) (4,115)
(Increase)/decrease in inventories and other
current assets 2,276 (4,516)
Increase in statutory deposits (562) (1,476)
Increase/(decrease) in accounts payable,
deferred contract revenue and other
current liabilities (2,193) 3,187
Increase/(decrease) in income taxes 1,930 (2,071)
Other - net (2,690) (971)
-------- --------
Net cash provided by operating activities 8,979 5,053
-------- --------
Cash Flows From Investing Activities
Proceeds from sale of investments 30,349 13,982
Capital expenditures (9,118) (6,131)
Business combinations, net of cash acquired (3,532) (8,553)
Net proceeds from sale of discontinued operations (1,065) 3,566
Purchase of investments -- (1,700)
Other - net 162 (181)
-------- --------
Net cash provided by investing activities 16,796 983
-------- --------
Cash Flows From Financing Activities
Dividends paid (10,253) (10,066)
Purchase of treasury stock (2,657) (545)
Other - net 203 68
-------- --------
Net cash used by financing activities (12,707) (10,543)
-------- --------
Increase/(Decrease) In Cash And Cash Equivalents 13,068 (4,507)
Cash and cash equivalents at beginning of period 19,187 4,722
-------- --------
Cash and cash equivalents at end of period $ 32,255 $ 215
======== ========
</TABLE>
See accompanying notes to unaudited financial statements.
Page 5 of 13
<PAGE> 6
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
Notes to Unaudited Financial Statements
1. The accompanying unaudited consolidated financial statements have been
prepared in accordance with Rule 10-01 of SEC Regulation S-X. Consequently,
they do not include all the disclosures required under generally accepted
accounting principles for complete financial statements. However, in the
opinion of the management of Chemed Corporation (the "Company"), the
financial statements presented herein contain all adjustments, consisting
only of normal recurring adjustments, necessary to present fairly the
financial position, results of operations and cash flows of the Company and
its consolidated subsidiaries ("Chemed"). For further information regarding
Chemed's accounting policies, refer to the consolidated financial
statements and notes included in Chemed's Annual Report on Form 10-K for
the year ended December 31, 1995.
2. Primary earnings per common share are computed using the weighted average
number of shares of capital stock outstanding and exclude the dilutive
effect of outstanding stock options as it is not material.
3. Following the resolution of various issues pertaining to the Company's
accruals for income taxes relative to the sale of DuBois Chemicals Inc.
("DuBois") in 1991, the Company recorded an adjustment of $1,365,000
($901,000 net of federal income taxes) to its state and local income tax
provision in the first quarter of 1995. This adjustment is classified as
"discontinued operations" in the statement of income.
4. During the first six months of 1996, the Company sold portions of its
investments in Omnicare Inc. ("Omnicare") and Exel Ltd. ("Exel"), realizing
pretax gains of $14,208,000 and $3,223,000, respectively. Similarly, during
the comparable period of 1995, the Company realized pretax gains of
$4,537,000 and $2,028,000, respectively, from the sales of portions of
investments in Omnicare and Exel.
5. In June 1996, Apria Healthcare Group, Inc. ("Apria") announced its plan to
merge with Vitas Healthcare Corporation ("Vitas"), the hospice provider in
which Chemed has maintained an investment since 1991. As a result of the
merger, which is subject to regulatory approval and which is expected to
take place before the end of 1996, Chemed will receive cash of $27,000,000,
representing redemption of its Vitas preferred stock. In addition, Chemed
will receive stock in publicly traded Apria, representing a significant
capital gain on the Vitas warrants Chemed presently holds.
Page 6 of 13
<PAGE> 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Financial Condition
- -------------------
The decline in other investments from $90.2 million at December 31,
1995 to $78.7 million at June 30, 1996 is primarily attributable to the sale of
portions of the Company's investments in Exel and Omnicare in 1996.
At June 30, 1996 Chemed had approximately $82.3 million of unused lines
of credit with various banks. Based on the Company's current financial position
and its available credit lines, management believes its sources of capital and
liquidity are satisfactory for the Company's needs in the foreseeable future.
Results of Operations
- ---------------------
Sales and service revenues and operating profit from continuing
operations by business segment follow (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales and Service
Revenues
- -----------------
National Sanitary Supply $ 77,210 $ 85,571 $154,487 $166,364
Roto-Rooter 50,038 43,271 97,821 86,998
Omnia 18,270 25,843 36,781 50,701
Patient Care 24,953 22,659 48,843 43,139
-------- -------- -------- --------
Total $170,471 $177,344 $337,932 $347,202
======== ======== ======== ========
Operating Profit
- ----------------
National Sanitary Supply $ 2,578 $ 2,876 $ 4,462 $ 4,859
Roto-Rooter 4,589 3,720 8,788 7,594
Omnia 889 1,454 2,382 2,905
Patient Care 1,497 1,202 2,570 2,058
-------- -------- -------- --------
Total $ 9,553 $ 9,252 $ 18,202 $ 17,416
======== ======== ======== ========
</TABLE>
Data relating to (a) increase or decrease in sales and service revenues
and (b) operating profit as a percent of sales and service revenues for each
segment are set forth on the following page:
Page 7 of 13
<PAGE> 8
<TABLE>
<CAPTION>
Sales and Service Operating Profit
Revenues % as a % of Sales
Increase/(Decrease) (Operating Profit)
------------------- ------------------
1996 vs. 1995 1996 1995
------------------- -------- --------
<S> <C> <C> <C>
Three Months Ended
June 30,
- ------------------
National Sanitary Supply (10)% 3.3% 3.4%
Roto-Rooter 16 9.2 8.6
Omnia (29) 4.9 5.6
Patient Care 10 6.0 5.3
Total (4) 5.6 5.2
Six Months Ended
June 30,
- ------------------
National Sanitary Supply (7)% 2.9% 2.9%
Roto-Rooter 12 9.0 8.7
Omnia (27) 6.5 5.7
Patient Care 13 5.3 4.8
Total (3) 5.4 5.0
</TABLE>
Second Quarter 1996 versus Second Quarter 1995
- ----------------------------------------------
Sales of the National Sanitary Supply segment for the second quarter of
1996 totalled $77,210,000, a decline of 10% versus sales recorded during the
second quarter of 1995. This anticipated decline was primarily due to the loss
of a large fast-food customer during the first quarter of 1996. The operating
margin declined slightly from 3.4% during the second quarter of 1995 to 3.3%
during the second quarter of 1996.
Sales and service revenues of the Roto-Rooter segment for the second
quarter of 1996 totalled $50,038,000, an increase of 16% over the revenues
recorded for the second quarter of 1995. For the second quarter of 1996,
plumbing revenues, which account for approximately one-fourth of total revenues,
and sewer and drain cleaning revenues, which account for approximately one-third
of total revenues, increased 26% and 15%, respectively, over amounts recorded in
the comparable quarter of 1995. Much of this revenue growth is attributable to
Roto-Rooter's emphasis on expanding the size and skill level of its technician
workforce, which on a year-to-date basis has increased 17% as compared with the
number of technicians employed in the second quarter of 1995. In addition,
revenues of Roto-Rooter's service contract business for the second quarter of
1996, which account for approximately 30% of total revenues, increased 8% over
revenues recorded in the second quarter of 1995. The operating margin of this
segment increased from 8.6% during the second quarter of 1995 to 9.2% during the
second quarter of 1996 as a result of effective cost management and double-digit
sales growth.
Page 8 of 13
<PAGE> 9
As anticipated, sales of the Omnia segment declined 29% to $18,270,000
during the second quarter of 1996, primarily due to the July 1995 sale of the
retail division of this segment. The operating margin of Omnia declined from
5.6% during the second quarter of 1995 to 4.9% during the second quarter of
1996, largely as a result of the unprecedented rapid decline in pulp paper
prices and the resulting competitive environment in the disposable medical and
dental products field. Omnia continues to seek acquisitions that will broaden
its product lines and restore the overall level of the group's sales and
earnings.
Service revenues of the Patient Care segment increase 10% from
$22,659,000 in the second quarter of 1995 to $24,953,000 in the second quarter
of 1996. This revenue growth is broad-based throughout Patient Care's service
market and is driven by emphasis on personal care services. As a result of
significant revenue growth Patient Care continued to leverage its fixed costs
and increase its operating margin from 5.3% during the second quarter of 1995 to
6.0% during the second quarter of 1996.
Income from operations increased from $7,851,000 during the second
quarter of 1995 to $8,030,000 during the second quarter of 1996, primarily as a
result of increases in operating profit recorded by Roto-Rooter and Patient
Care, partially offset by declines in operating profit recorded by National
Sanitary Supply and Omnia.
Other income for the second quarter of 1996 totalled $5,181,000 as
compared with $4,727,000 during the second quarter of 1995. This increase was
attributable to larger gains on the sales of investments in the 1996 quarter
versus such gains recorded in the 1995 quarter.
During the second quarter of 1996 the Company's effective income tax
rate was 37.5% as compared with 38.5% during the comparable period of 1995. The
lower rate in 1996 was attributable primarily to an increase in favorable income
tax adjustments during the period.
Chemed's income from continuing operations increased from $5,305,000
($.54 per share) during the second quarter of 1995 to $5,688,000 ($.58 per
share) during the second quarter of 1996. Earnings for 1996 and 1995 included
aftertax gains aggregating $1,995,000 ($.20 per share) and $1,858,000 ($.19 per
share), respectively, from the sales of investments.
Page 9 of 13
<PAGE> 10
Six Months Ended June 30, 1996 Versus June 30, 1995
- ---------------------------------------------------
The National Sanitary Supply segment recorded sales of $154,487,000
during the first six months of 1996, a decline of 7% versus sales recorded
during the comparable period of 1995. This decline was attributable to the
previously-mentioned loss of a large fast-food customer during the first quarter
of 1996. National Sanitary's operating margin was 2.9% during the first six
months of 1996 and 1995.
Sales and service revenues of the Roto-Rooter segment for the first six
months of 1996 increased 12% as compared with amounts recorded during the first
six months of 1995. This sales growth was attributable to revenue increases of
12% and 24%, respectively, in Roto-Rooter's sewer and drain cleaning and
plumbing repair businesses for the 1996 period. As a result of effective cost
management and double-digit sales growth, this segment's operating margin
increased from 8.7% during the first six months of 1995 to 9.0% during the first
six months of 1996.
The Omnia segment recorded sales of $36,781,000, a decline of 27%
versus sales recorded during the first six months of 1995. This decline was
attributable to the July 1995 sale of the retail division of this segment.
During the first six months of 1996 the operating margin of Omnia Inc. was 6.5%
as compared with 5.7% during the first six months of 1995. This increase was
attributable to a higher gross profit margin of the core wholesale business
during the first quarter of 1996 as compared with the margin for the first
quarter of 1995.
The Patient Care segment recorded service revenues of $58,843,000
during the first six months of 1996, an increase of 13% over revenues recorded
in the first six months of 1995. As a result, the operating profit margin of
this segment improved from 4.8% during the first six months of 1995 to 5.3%
during the first six months of 1996.
Income from operations increased from $14,547,000 during the first six
months of 1995 to $15,041,000 during the comparable period of 1996. This
increase was attributable to increases in the operating profit reported by
Roto-Rooter and Patient Care, offset by declines recorded by National Sanitary
Supply and Omnia.
Other income for the first six months of 1996 totalled $21,479,000 as
compared with $10,376,000 for the first six months of 1995. This increase was
primarily attributable to larger gains on the sales of investments during the
1996 period versus such gains recorded in 1995.
Page 10 of 13
<PAGE> 11
For the first six months of 1996 the Company's effective income tax
rate was 37.4% as compared with 37.9% during the comparable period of 1995. This
decline was attributable to larger favorable tax adjustments during the 1996
period as compared with such adjustments during the first six months of 1995.
Chemed's income from continuing operations increased from $10,690,000
($1.08 per share) during the first six months of 1995 to $17,885,000 ($1.82 per
share) during the first six months of 1996. Earnings for the six-month periods
included aftertax gains from sales of investments of $10,919,000, ($1.11 per
share) and $4,321,000 ($.43 per share) in 1996 and 1995, respectively.
Net income for the first six months of 1995 totalled $11,591,000 ($1.11
per share) and included favorable aftertax adjustments related to operations
discontinued in 1991 amounting to $901,000 ($.09 per share).
Page 11 of 13
<PAGE> 12
PART II -- OTHER INFORMATION
----------------------------
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) Chemed held its Annual Meeting of Shareholders on May 20, 1996.
(b) The names of each director elected at this Annual Meeting are as follows:
Edward L. Hutton James A. Cunningham
James H. Devlin Charles H. Erhart, Jr.
Joel F. Gemunder Patrick P. Grace
Thomas C. Hutton William R. Griffin
Sandra E. Laney W. L. Krebs
John M. Mount Kevin J. McNamara
D. Walter Robbins, Jr. Timothy S. O'Toole
G. J. Walsh III Paul C. Voet
(c) The stockholders then ratified the Board of Directors' selection of Price
Waterhouse LLP as independent accountants for the Company and its
consolidated subsidiaries for the year 1996: 8,657,115 votes were cast in
favor of the proposal, 53,343 votes were cast against it, 202,849 votes
abstained, and zero were broker non-votes.
With respect to the election of directors, the number of votes cast for
each nominee was as follows:
<TABLE>
<CAPTION>
Votes Votes
Votes For Against Withheld
--------- ------- --------
<S> <C> <C> <C>
E.L. Hutton 8,749,754 163,553 49,404
J.A. Cunningham 8,757,150 156,157 42,008
J.H. Devlin 8,766,975 146,332 32,183
C.H. Erhart, Jr. 8,766,145 147,162 33,013
J.F. Gemunder 8,756,849 156,458 42,309
P.P. Grace 8,730,578 182,729 65,580
W.R. Griffin 8,753,281 160,026 45,877
T.C. Hutton 8,757,279 156,028 41,879
W.C. Krebs 8,750,430 162,877 48,728
S.E. Laney 8,753,222 160,026 45,936
K.J. McNamara 8,767,950 145,357 31,208
J.M. Mount 8,747,150 166,157 52,008
T.S. O'Toole 8,769,039 144,268 30,119
D.W. Robbins, Jr. 8,751,883 161,424 47,275
P.C. Voet 8,762,408 150,899 36,750
G.W. Walsh III 8,775,113 138,194 24,045
</TABLE>
Page 12 of 13
<PAGE> 13
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
<TABLE>
<CAPTION>
Exhibit SK 601
No. Ref. No. Description
------- -------- ------------------
<S> <C> <C>
1 (10) Amended and Restated
Credit Agreement dated
as of June 20, 1996
2 (11) Statement re:
Computation of Per
Share Earnings
3 (27) Financial Data
Schedule
</TABLE>
(b) Reports on Form 8-K.
--------------------
A report on Form 8-K was filed dated August 8, 1996 reporting the
Company's announcement that it intends to commence a tender offer to acquire
any and all of the outstanding shares of common stock of Roto-Rooter, Inc. (a
58%-owned subsidiary of the Company) currently not held by the Company
(approximately 2,160,000 shares), for a cash price of $41.00 per share. The
report on Form 8-K included the text of the Company's press release
dated August 8, 1996.
SIGNATURES
Pursuant to the requirements 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.
Chemed Corporation
-------------------------
(Registrant)
Dated: August 12, 1996 By Kevin J. McNamara
---------------------- -------------------------
Kevin J. McNamara
President
Dated: August 12, 1996 By Arthur V. Tucker, Jr.
---------------------- -------------------------
Arthur V. Tucker, Jr.
Vice President and
Controller (Principal
Accounting Officer)
Page 13 of 13
<PAGE> 1
EXECUTION COPY
$85,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
June 20, 1996
among
Chemed Corporation,
The Banks Listed Herein
and
Bank of America National Trust
and Savings Association, as Agent
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I DEFINITIONS........................................................................................... 1
SECTION 1.01. Definitions............................................................................... 1
SECTION 1.02. Accounting Terms and Determinations....................................................... 10
ARTICLE II THE CREDITS.......................................................................................... 11
SECTION 2.01. Commitments to Lend....................................................................... 11
SECTION 2.02. Method of Borrowing....................................................................... 11
SECTION 2.03. Bid Borrowings............................................................................ 12
SECTION 2.04. Procedure for Bid Borrowings.............................................................. 12
SECTION 2.05. Notes..................................................................................... 17
SECTION 2.06. Maturity of Loans......................................................................... 18
SECTION 2.07. Interest Rates............................................................................ 18
SECTION 2.08. Fees...................................................................................... 19
SECTION 2.09. Optional Termination or Reduction of Commitments.......................................... 20
SECTION 2.10. Mandatory Termination of Commitments...................................................... 20
SECTION 2.11. Prepayments............................................................................... 20
SECTION 2.12. General Provisions as to Payments......................................................... 21
SECTION 2.13. Funding Losses............................................................................ 21
SECTION 2.14. Computation of Interest and Fees.......................................................... 22
ARTICLE III CONDITIONS.......................................................................................... 23
SECTION 3.01. Effectiveness............................................................................. 23
SECTION 3.02. Borrowings................................................................................ 23
ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................................................... 25
SECTION 4.01. Corporate Existence and Power............................................................. 25
SECTION 4.02. Corporate and Governmental Authorization; No Contravention................................ 25
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
SECTION 4.03. Binding Effect............................................................... 25
SECTION 4.04. Financial Information........................................................ 25
SECTION 4.05. Litigation................................................................... 26
SECTION 4.06. Compliance with ERISA........................................................ 26
SECTION 4.07. Environmental Matters........................................................ 26
SECTION 4.08. Taxes........................................................................ 27
SECTION 4.09. Subsidiaries................................................................. 27
SECTION 4.10. Not an Investment Company.................................................... 27
SECTION 4.11. Full Disclosure.............................................................. 27
ARTICLE V COVENANTS................................................................................ 28
SECTION 5.01. Information.................................................................. 28
SECTION 5.02. Maintenance of Certain Financial Conditions.................................. 30
SECTION 5.03. Liens........................................................................ 31
SECTION 5.04. Transactions with Affiliates................................................. 33
SECTION 5.05. Consolidation, Merger, Sale of Assets, etc................................... 33
SECTION 5.06. Nature of Business........................................................... 35
SECTION 5.07. Maintenance of Books and Office.............................................. 35
SECTION 5.08. Corporate Existence; Payment of Taxes; Maintenance of Properties; Insurance;
Compliance with Laws' Maintenance of Patents, etc............................ 35
SECTION 5.09. Use of Proceeds.............................................................. 37
ARTICLE VI DEFAULTS................................................................................ 38
SECTION 6.01. Events of Default............................................................ 38
SECTION 6.02. Notice of Default............................................................ 40
ARTICLE VII THE AGENT.............................................................................. 41
SECTION 7.01. Appointment and Authorization; "Agent"....................................... 41
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
SECTION 7.02. Agent and Affiliates........................................................ 41
SECTION 7.03. Action by Agent............................................................. 41
SECTION 7.04. Consultation with Experts................................................... 41
SECTION 7.05. Liability of Agent.......................................................... 41
SECTION 7.06. Indemnification............................................................. 42
SECTION 7.07. Credit Decision............................................................. 42
SECTION 7.08. Successor Agent............................................................. 42
SECTION 7.09. Agent's Fee................................................................. 43
SECTION 7.10. Suspension of Agent......................................................... 43
ARTICLE VIII CHANGE IN CIRCUMSTANCES.............................................................. 44
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.................... 44
SECTION 8.02. Illegality.................................................................. 44
SECTION 8.03. Increased Cost and Reduced Return........................................... 45
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans................... 46
ARTICLE IX MISCELLANEOUS.......................................................................... 47
SECTION 9.01. Notices..................................................................... 47
SECTION 9.02. No Waivers.................................................................. 47
SECTION 9.03. Expenses; Documentary Taxes; Indemnification................................ 47
SECTION 9.04. Amendments and Waivers...................................................... 48
SECTION 9.05. Successors and Assigns...................................................... 48
SECTION 9.06. Governing Law; Submission to Jurisdiction................................... 50
SECTION 9.07. Counterparts; Integration................................................... 50
SECTION 9.08. WAIVER OF JURY TRIAL........................................................ 50
PRICING SCHEDULE................................................................................... 52
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED
CREDIT AGREEMENT
AMENDED AND RESTATED AGREEMENT dated as of June 20, 1996 among
CHEMED CORPORATION, the Banks listed on the signature pages hereof and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent (the "Agent").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used
herein, have the following meanings:
"Absolute Rate" has the meaning specified in subsection
2.03(c).
"Absolute Rate Auction" means a solicitation of Competitive
Bids setting forth Absolute Rates pursuant to Section 2.03(c).
"Absolute Rate Bid Loan" means a Bid Loan that bears interest
at a rate determined with reference to the Absolute Rate.
"Adjusted Consolidated Net Worth" means, as of any date of
determination (a) the net book value (after deducting related depreciation,
obsolescence, amortization, valuation and other proper reserves) at which the
assets of the Borrower and its Consolidated Subsidiaries would be shown on the
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
at such date, minus (b) the amount at which the consolidated liabilities of the
Borrower and its Consolidated Subsidiaries (other than capital stock and
surplus) would be shown on such balance sheet, and including as liabilities all
reserves for contingencies and other potential liabilities and all minority
interests in Consolidated Subsidiaries and minus (c) unrealized appreciation on
Investments.
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.07(b).
"Affiliate" means, with respect to any Person, any other
Person (a) directly or indirectly controlling or controlled by or under direct
or indirect common control with such Person, (b) which
<PAGE> 6
other Person beneficially owns or holds 5% or more of the shares of any class of
Voting Stock of such Person or (c) 5% or more of any class of the Voting Stock
of which is beneficially owned or held by such Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock or by contract or otherwise.
"Agent" means Bank of America National Trust and Savings
Association in its capacity as agent for the Banks hereunder, and its successors
in such capacity.
"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Domestic Loans, its Domestic Lending Office and (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Arranger" means BA Securities, Inc., a Delaware corporation.
"Assignee" has the meaning set forth in Section 9.05(c).
"Bank" means each bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.05(c), and their
respective successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Reference Rate for such day and (ii) the sum of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Loan to be made by the Bank as a Base
Rate Loan pursuant to the applicable Notice of Borrowing or Article VIII.
"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Bid Borrowing" means a Borrowing hereunder consisting of one
or more Bid Loans made to the Company on the same day by one or more Banks or
Designate Bidders.
"Bid Loans" means loans made pursuant to Section 2.03.
"Bid Loan Note" means each Bank's Note evidencing the Bid
Loans in the form of Exhibit B.
2
<PAGE> 7
"Borrower" means Chemed Corporation, a Delaware corporation,
and its successors.
"Borrower's 1995 Form 10-K" means the Borrower's annual report
on Form 10-K for 1995, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"Borrowing" means a borrowing hereunder consisting of Loans
made to the Borrower at the same time by the Bank pursuant to Article II. A
Borrowing is a "Domestic Borrowing" if such Loans are Domestic Loans or a
"Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans. A Domestic
Borrowing is a "Base Rate Borrowing" if such Domestic Loans are Base Rate Loans.
"Capital Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by such Person as lessee which
would be required to be classified and accounted for as a capital lease on the
balance sheet of such Person, other than, in the case of the Borrower or a
Consolidated Subsidiary, any such lease under which the Borrower or a
Wholly-Owned Consolidated Subsidiary is the lessor.
"Capital Lease Obligation" means, with respect to any Capital
Lease, the amount of the obligation of the lessee thereunder which would appear
on the balance sheet of such lessee (or the notes thereto) in respect of such
Capital Lease.
"Change of Control" means any event or circumstance in
connection with or as a result of which any person or group of persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said Act) of
50% or more of the outstanding shares of common stock of the Borrower; or,
during any period of 12 consecutive calendar months, individuals who were
directors of the Borrower on the first day of such period shall cease to
constitute a majority of the board of directors of the Borrower.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced or increased from time to time pursuant to Sections 2.09,
2.10 and 2.11.
"Committed Loans" means loans made pursuant to Section 2.01.
"Committed Note" means each Bank's Note evidencing Committed
Loans in the form of Exhibit A.
3
<PAGE> 8
"Competitive Bid" means an offer by a Bank or Designated
Bidder to make a Bid Loan in accordance with Section 2.03(b).
"Consolidated Funded Debt" means, as at any date of
determination, the aggregate principal amount of all Funded Debt of the Borrower
and its Consolidated Subsidiaries outstanding on such date, determined on a
consolidated basis.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.
"Debt" means, as applied to any Person, (a) all debt of such
Person for borrowed money (and any notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money), (b) any obligation of such Person for all or any part of the
purchase price of property or other assets or for the cost of property or other
assets constructed or of improvements, other than accounts payable included in
current liabilities and incurred in respect of property purchased in the
ordinary course of business, (c) any obligation secured by any Lien on or
payable out of the proceeds of production from property owned or held by such
Person even though such Person has not assumed or become liable for the payment
of such obligation, (d) any Capital Lease Obligation of such Person and (e) any
Guarantee by such Person of or with respect to Debt of another Person. In
determining the Debt and assets of any Person, no effect shall be given to
deposits, trust arrangements or similar defeasance arrangements which extinguish
Debt for which such Person remains legally liable.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Designated Bidder" means an affiliate of a Bank that is an
Assignee.
"Domestic Business Day" means any business day on which banks
in San Francisco, California are open for business.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth on the signature page or pages hereof or such
other office as each Bank may hereafter designate as its Domestic Lending Office
by notice to the Borrower and the Agent.
"Domestic Loans" means Base Rate Loans.
4
<PAGE> 9
"EBIT" means income before interest expense, income taxes, and
minority interests, excluding capital gains and losses.
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to the Bank, its
office, branch or affiliate located at its address set forth on the signature
page or pages hereof or such other office, branch or affiliate of the Bank as it
may hereafter designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Bank.
"Euro-Dollar Loan" means a Loan to be made by the Bank as a
Euro-Dollar Loan pursuant to the applicable Notice of Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section
2.07(b).
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.07(b).
"Event of Default" has the meaning set forth in Section 6.01.
5
<PAGE> 10
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/lOOth of 1%) 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 by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Agent on such day on such
transactions as determined by the Agent.
"Fixed Rate Borrowing" means a Euro-Dollar Borrowing.
"Fixed Rate Loans" means Euro-Dollar Loans.
"Funded Debt" of any Person as of any date of determination
thereof means all Debt of such Person which would be classified on the balance
sheet of such Person as of such date as long-term debt, and including in any
event all Debt of such Person, whether secured or unsecured, having a final
maturity (or which, pursuant to the terms of a revolving credit agreement or
otherwise, is renewable or extendible at the option of such Person for a period
ending) more than one year after the date of the creation thereof (including any
portion thereof which is on such date included in current liabilities of such
Person).
"Guarantee" as applied to any Person means any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be
6
<PAGE> 11
protected against loss in respect thereof. The amount of any Guarantee shall be
equal to the amount of the obligation guaranteed.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two, three, six or nine months thereafter, as the Borrower may elect in the
applicable Notice of Borrowing and subject, in the case of an Interest Period
ending nine months after the date of such Borrowing, to availability as
determined by the Agent; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which begins before the Termination
Date and would otherwise end after the Termination Date shall end on
the Termination Date;
(2) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending no later than 30 days
thereafter; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on a
day which is not a Domestic Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which begins before the Termination
Date and would otherwise end after the Termination Date shall end on
the Termination Date.
(3) with respect to any Absolute Rate Bid Loan, a period of
not less than 7 days and not more than 183 days as selected by the Borrower in
the applicable Competitive Bid Request and agreed to by the appropriate Bank or
Designated Bidder; provided, that no such Interest Period shall extend beyond
the Termination Date.
"Internal Revenue Code means the Internal Revenue Code of
1986, as amended, or any successor statute.
7
<PAGE> 12
"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution, loan, time deposit or otherwise
and any gift, donation or other transfer of property to such Person.
"Lien" as to any Person means any mortgage, lien, pledge,
adverse claim, charge, security interest or other encumbrance in or on, or any
interest or title of any vendor, lessor, lender or other secured party to or of
such Person under any conditional sale or other title retention agreement or
Capital Lease with respect to, any property or asset of such Person, or the
signing or filing of a financing statement which names such Person as debtor, or
the signing of any security agreement authorizing any other Person as the
secured party thereunder to file any financing statement which names such Person
as debtor.
"Loan" means a Domestic Loan, Euro-Dollar Loan and "Loans"
means Domestic Loans or Euro-Dollar Loans or both. Loan also includes both Bid
Loans and Committed Loans.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07 (b).
"Material Debt" means any Debt of the Company or any
Subsidiary the aggregate principal amount of which exceeds $2,500,000.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $5,000,000.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the ERISA
Group during such five year period.
"Note(s)" means the promissory notes of the Borrower,
substantially in the form of Exhibits A and B hereto, evidencing the obligation
of the Borrower to repay the Loans to each Bank. Note(s) shall include both Bid
Loan Notes and Committed Loan Notes.
"Notice of Borrowing" has the meaning set forth in Section
2.02.
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section 9.05(b)
8
<PAGE> 13
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.
"Pricing Schedule" means the Pricing Schedule attached to this
Agreement.
"Reference Rate" means the rate of interest publicly announced
as its reference rate by the Agent in San Francisco, California.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having more than 50%
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding Notes evidencing more than 50% of the aggregate unpaid
principal amount of the Loans.
"Revolving Credit Period" means the period from and including
the Effective Date to but excluding the Termination Date.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower.
"Termination Date" means June 20, 2001, or, if such day is not
a Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case the
Termination Date shall be the next preceding Euro-Dollar Business Day.
9
<PAGE> 14
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all benefits under
such Plan exceeds (ii) the fair market value of all Plan assets allocable to
such benefits (excluding any accrued but unpaid contributions), all determined
as of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.
"Voting Stock" means capital stock of a corporation the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or persons performing similar
functions) of such corporation.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the equity securities (except directors' qualifying shares) of
which are owned by the Borrower or another Wholly-Owned Consolidated Subsidiary.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks.
10
<PAGE> 15
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. During the Revolving Credit
Period each Bank agrees, on the terms and conditions set forth in this
Agreement, to lend to the Borrower from time to time amounts not to exceed in
the aggregate at any one time outstanding the amount of its Commitment. Each
Borrowing under this Section shall be in an aggregate principal amount of
$1,000,000 or any larger multiple thereof (except that any such Borrowing may be
in the aggregate amount of the unused Commitments) and shall be made from the
several Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section, repay, or to the
extent permitted by Section 2.11, prepay Committed Loans and reborrow at any
time during the Revolving Credit Period under this Section.
SECTION 2.02. Method of Borrowing. (a) The Borrower shall give
the Agent notice (a "Notice of Borrowing") no later than 10:00 A.M. (Chicago
time) on a date at least one Domestic Business Day before each Domestic
Borrowing and at least three Euro-Dollar Business Days before each Euro-Dollar
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing
are to be Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's ratable
share of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(c) Not later than 11:00 A.M. (New York City time) on the date
of each Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing in Federal or other
funds immediately available in New York City, to the Agent at its address
specified in or pursuant to Section 9.01. Unless the Agent or the Required Banks
determines that any applicable condition specified in Article III has not been
11
<PAGE> 16
satisfied, the Agent will make the funds so received from the Banks available to
the Borrower at the Agent's aforesaid address.
(d) If any Bank makes a new Loan hereunder on a day on which
the Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to the
Agent as provided in subsection (c) of this Section, or remitted by the Borrower
to the Agent as provided in Section 2.12, as the case may be.
(e) Unless the Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to the
Agent such Bank's share of such Borrowing, the Agent may assume that such Bank
has made such share available to the Agent on the date of such Borrowing in
accordance with subsections (c) and (d) of this Section 2.02 and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, a rate per annum equal to the higher of the Federal Funds
Rate and the interest rate applicable thereto pursuant to Section 2.07 and (ii)
in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.03. Bid Borrowings. In addition to Committed Loans
pursuant to Section 2.02, each Bank severally agrees that the Borrower may, as
set forth in Section 2.04, from time to time request the Banks prior to the
Revolving Termination Date to submit offers to make Bid Loans to the Borrower;
provided, however, that the Banks may, but shall have no obligation to, submit
such offers and the Borrower may, but shall have no obligation to, accept any
such offers, and any Bank may designate one or more Designated Bidders to make
such offers from time to time and, if such offers are accepted by the Borrower,
to make such Bid Loans; and provided, further, that at no time shall the
outstanding aggregate principal amount of all Bid Loans made by all Banks and
Designated Bidders, plus the outstanding aggregate principal amount of all
Committed Loans made by all Banks exceed the combined Commitments.
SECTION 2.04. Procedure for Bid Borrowings. (a) When the
Borrower wishes to request the Banks to submit offers to make Bid Loans
hereunder, it shall transmit to the Agent by telephone
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<PAGE> 17
call followed promptly by facsimile transmission a notice in substantially the
form of Exhibit C (a "Competitive Bid Request") so as to be received no later
than 7:00 a.m. (San Francisco time) (x) four Euro-Dollar Business Days prior to
the date of a proposed Bid Borrowing in the case of a LIBOR Auction, or (y) two
Domestic Business Days prior to the date of a proposed Bid Borrowing in the case
of an Absolute Rate Auction, specifying:
(i) the date of such Bid Borrowing, which shall be a
Business Day;
(ii) the aggregate amount of such Bid Borrowing,
which shall be a minimum amount of $10,000,000 or in multiples of
$1,000,000 in excess thereof;
(iii) whether the Competitive Bids requested are to
be for LIBOR Bid Loans or Absolute Rate Bid Loans or both; and
(iv) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of "Interest
Period" herein.
Subject to subsection 2.04(c), the Borrower may not request Competitive Bids for
more than three Interest Periods in a single Competitive Bid Request and may not
request Competitive Bids more than once in any period of five Business Days.
(b) Upon receipt of a Competitive Bid Request, the Agent will
promptly send to the Banks and Designated Bidders by facsimile transmission an
Invitation for Competitive Bids in the form of Exhibit C-1, which shall
constitute an invitation by the Borrower to each Bank and Designated Bidder to
submit Competitive Bids offering to make the Bid Loans to which such Competitive
Bid Request relates in accordance with this Section 2.04.
(c) (i) Each Bank and Designated Bidder may at its discretion
submit a Competitive Bid containing an offer or offers to make Bid
Loans in response to any Invitation for Competitive Bids. Each
Competitive Bid must comply with the requirements of this subsection
2.04(c) and must be submitted to the Agent by facsimile transmission at
the Agent's office for notices set forth on the signature pages hereto
not later than (1) 6:30 a.m. (San Francisco time) three Business Days
prior to the proposed date of Borrowing, in the case of a LIBOR Auction
or (2) 6:30 a.m. (San Francisco time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction; provided that
Competitive Bids submitted by the Agent (or any Affiliate of the Agent)
in the capacity of a Bank or Designated Bidder may be submitted, and
may only be submitted, if the Agent or such Affiliate notifies the
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<PAGE> 18
Borrower of the terms of the offer or offers contained therein not
later than (A) 6:15 a.m. (San Francisco time) three Business Days prior
to the proposed date of Borrowing, in the case of a LIBOR Auction or
(B) 6:15 a.m. (San Francisco time) on the proposed date of Borrowing,
in the case of an Absolute Rate Auction.
(ii) Each Competitive Bid shall be in substantially
the form of Exhibit C-2, specifying therein:
(A) the proposed date of Borrowing;
(B) the principal amount of each Bid Loan
for which such Competitive Bid is being made, which principal
amount (x) may be equal to, greater than or less than the
Commitment of the quoting Bank, (y) must be $5,000,000 or in
multiples of $1,000,000 in excess thereof, and (z) may not
exceed the principal amount of Bid Loans for which Competitive
Bids were requested;
(C) in case the Borrower elects a LIBOR
Auction, the margin above or below LIBOR (the "LIBOR Bid
Margin") offered for each such Bid Loan, expressed in
multiples of 1/1000th of one basis point to be added to or
subtracted from the applicable LIBOR and the Interest Period
applicable thereto;
(D) in case the Borrower elects an Absolute
Rate Auction, the rate of interest per annum expressed in
multiples of 1/1000th of one basis point (the "Absolute Rate")
offered for each such Bid Loan; and
(E) the identity of the quoting Bank or
Designated Bidder.
A Competitive Bid may contain up to three separate offers by the
quoting Bank or Designated Bidder with respect to each Interest Period
specified in the related Invitation for Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with
Exhibit C-2 or does not specify all of the information
required by subsection (c)(ii) of this Section;
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(B) contains qualifying, conditional or
similar language;
(C) proposes terms other than or in addition
to those set forth in the applicable Invitation for
Competitive Bids; or
(D) arrives after the time set forth in
subsection (c)(i).
(d) Promptly on receipt and not later than 7:00 a.m. (San
Francisco time) three Business Days prior to the proposed date of Borrowing in
the case of a LIBOR Auction, or 7:00 a.m. (San Francisco time) on the proposed
date of Borrowing, in the case of an Absolute Rate Auction, the Agent will
notify the Borrower of the terms (i) of any Competitive Bid submitted by a Bank
or Designated Bidder that is in accordance with subsection 2.04(c), and (ii) of
any Competitive Bid that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid submitted by such Bank or Designated Bidder with
respect to the same Competitive Bid Request. Any such subsequent Competitive Bid
shall be disregarded by the Agent unless such subsequent Competitive Bid is
submitted solely to correct a manifest error in such former Competitive Bid and
only if received within the times set forth in subsection 2.04(c). The Agent's
notice to the Borrower shall specify (1) the aggregate principal amount of Bid
Loans for which offers have been received for each Interest Period specified in
the related Competitive Bid Request; and (2) the respective principal amounts
and LIBOR Bid Margins or Absolute Rates, as the case may be, so offered. Subject
only to the provisions of this subsection (d), any Competitive Bid shall be
irrevocable except with the written consent of the Agent given on the written
instructions of the Borrower.
(e) Not later than 7:30 a.m. (San Francisco time) three
Business Days prior to the proposed date of Borrowing, in the case of a LIBOR
Auction, or 7:30 a.m. (San Francisco time) on the proposed date of Borrowing, in
the case of an Absolute Rate Auction, the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it pursuant to
subsection 2.04(d). The Borrower shall be under no obligation to accept any
offer and may choose to reject all offers. In the case of acceptance, such
notice shall specify the aggregate principal amount of offers for each Interest
Period that is accepted. The Borrower may accept any Competitive Bid in whole or
in part; provided that:
(i) the aggregate principal amount of each Bid
Borrowing may not exceed the applicable amount set forth in the related
Competitive Bid Request;
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<PAGE> 20
(ii) the principal amount of each Bid Borrowing must
be $10,000,000 or in any multiple of $1,000,000 in excess thereof;
(iii) acceptance of offers may only be made on the
basis of ascending LIBOR Bid Margins or Absolute Rates within each
Interest Period, as the case may be; and
(iv) the Borrower may not accept any offer that is
described in subsection 2.04(c)(iii) or that otherwise fails to comply
with the requirements of this Agreement.
(f) If offers are made by two or more Banks or Designated
Bidders with the same LIBOR Bid Margins or Absolute Rates, as the case may be,
for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the principal amount
of Bid Loans in respect of which such offers are accepted shall be allocated by
the Agent among such Banks or Designated Bidders as nearly as possible (in such
multiples, not less than $1,000,000, as the Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers. Determination by
the Agent of the amounts of Bid Loans shall be conclusive in the absence of
manifest error.
(g) (i) The Agent will promptly notify each Bank or
Designated Bidder having submitted a Competitive Bid if its offer has
been accepted and, if its offer has been accepted, of the amount of the
Bid Loan or Bid Loans to be made by it on the date of the Bid
Borrowing.
(ii) Each Bank or Designated Bidder, which has
received notice pursuant to subsection 2.04(g)(i) that its Competitive
Bid has been accepted, shall make the amounts of such Bid Loans
available to the Agent for the account of the Borrower at the Agent's
Payment Office, by 11:00 a.m. (San Francisco time) in the case of
Absolute Rate Bid Loans, and by 11:00 a.m. (San Francisco time) in the
case of LIBOR Bid Loans, on such date of Bid Borrowing, in funds
immediately available to the Agent for the account of the Company at
the Agent's Payment Office.
(iii) Promptly following each Bid Borrowing, the
Agent shall notify each Bank and Designated Bidder of the ranges of
bids submitted and the highest and lowest Bids accepted for each
Interest Period requested by the Borrower and the aggregate amount
borrowed pursuant to such Bid Borrowing.
(iv) From time to time, the Company and the Banks and
Designated Bidders shall furnish such
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<PAGE> 21
information to the Agent as the Agent may request relating to the
making of Bid Loans, including the amounts, interest rates, dates of
borrowings and maturities thereof, for purposes of the allocation of
amounts received from the Company for payment of all amounts owing
hereunder.
(h) If, on or prior to the proposed date of Borrowing, the
Commitments have not been terminated and if, on such proposed date of Borrowing
all applicable conditions to funding referenced hereof are satisfied, the Banks
and Designated Bidders whose offers the Borrower has accepted will fund each Bid
Loan so accepted. Nothing in this Section 2.04 shall be construed as a right of
first offer in favor of the Banks or Designated Bidders or to otherwise limit
the ability of the Borrower to request and accept credit facilities from any
Person (including any of the Banks or Designated Bidders), provided that no
Default or Event of Default would otherwise arise or exist as a result of the
Borrower executing, delivering or performing under such credit facilities.
SECTION 2.05. Notes. (a) The Committed Loans of each Bank
shall be evidenced by a single Committed Loan Note payable to the order of such
Bank for the account of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans. The Bid Loans of each
Bank shall be evidenced by a single Bid Loan Note payable to the order of such
Bank for the account of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Committed Loan Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it evidences solely
Loans of the relevant type. Each such Bid Loan Note shall be in substantially
the form of Exhibit B hereto with appropriate modifications to reflect the fact
that it evidences solely Loans of the relevant type. Each reference in this
Agreement to the "Note" of such Bank shall be deemed to refer to and include any
or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Committed Loan Note or Bid
Loan Note, the Agent shall mail such Note to such Bank. Each Bank shall record
the date, amount, type and maturity of each Loan made by it and the date and
amount of each payment of principal made by the Borrower with respect thereto,
and prior to any transfer of its Note shall endorse on the schedule forming a
part thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided that the failure of any
Bank to make any such recordation
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or endorsement shall not affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a part of its Note a continuation
of any such schedule as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to the
Base Rate for such day. Such interest shall be payable for each Interest Period
on the last day thereof. Any overdue principal of or interest on any Base Rate
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate
Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin set
forth on the Pricing Schedule plus the applicable Adjusted London Interbank
Offered Rate. Such interest shall be payable for each Interest Period on the
last day thereof and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof.
"Euro-Dollar Margin" means the applicable percentage set
forth on the Pricing Schedule.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the prevailing rates per annum at which deposits in United States
dollars are offered to the Agent in the London interbank market at approximately
11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of
such Interest Period in an amount approximately equal to the principal amount of
the Euro-Dollar Loan to which such Interest Period is to apply and for a period
of time comparable to such Interest Period.
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"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement applicable to the
Agent in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered Rate
shall be adjusted automatically on and as of the effective date of any change in
the Euro-Dollar Reserve Percentage.
(c) Any overdue principal of or interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin plus the Adjusted London Interbank Offered Rate applicable to
such Loan and (ii) the Euro-Dollar Margin plus the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (x) the
average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
prevailing rates per annum at which one day (or, if such amount due remains
unpaid more than three Euro-Dollar Business Days, then for such other period of
time not longer than six months as the Bank may select) deposits in United
States dollars in an amount approximately equal to such overdue payment due to
the Agent are offered by the Agent to prime banks in the London interbank market
for the applicable period determined as provided above by (y) 1.00 minus the
EuroDollar Reserve Percentage (or, if the circumstances described in clause (a)
or (b) of Section 8.01 shall exist, at a rate per annum equal to the sum of 2%
plus the rate applicable to Base Rate Loans for such day).
(d) The Agent shall determine each interest rate applicable to
the Committed Loans hereunder. The Agent shall give prompt notice to the
Borrower and the Banks by telex or cable of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence of manifest
error. As of the date of this Agreement, the interest rate applicable to the
Committed Loans shall be at Level III on the Pricing Schedule.
SECTION 2.08. Fees. (a) Facility Fees. The Borrower shall pay
to the Agent for the Account of the Banks ratably in proportion to their
Commitments facility fees at the Facility Fee Rate (determined daily in
accordance with the Pricing Schedule). Such facility fee shall accrue (i) (from
and including the Effective Date to but excluding the date of termination of the
Commitment in its entirety on the daily aggregate amount of the Commitment
(whether used or unused) and (ii) from and including
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<PAGE> 24
such date of termination to but excluding the date the Loans shall be repaid in
their entirety, on the daily aggregate outstanding principal amount of the
Loans.
(b) Payment of Facility Fees. Accrued fees under this Section
shall be payable quarterly in arrears on each March 31, June 30, September 30
and December 31 and on the date of termination of the Commitment in its entirety
(and, if later, the date the Loans shall be repaid in their entirety).
(c) Closing Fees. The Borrower shall pay to each Bank (other
than Bank of America Illinois) a closing fee of 0.03% computed on each such
Bank's pro rata portion of the Facility. The Borrower also agrees to pay each
Bank an annual fee of 0.02%, computed on each Bank's pro rata portion of the
Facility; provided, that such pro rata portion shall not be less than
$25,000,000. The closing fee shall be payable on the date this Agreement closes
pursuant to Section 3.01. The annual fee shall be payable on each anniversary of
the closing date.
SECTION 2.09. Optional Termination or Reduction of
Commitments. During the Revolving Credit Period, the Borrower may, upon at least
two Domestic Business Days' notice to the Agent, terminate at any time, or
proportionately reduce from time to time by an aggregate amount of $5,000,000 or
any larger multiple of $1,000,000, the unused portion of the Commitment. If the
Commitment is terminated in its entirety, all accrued Facility Fees shall be
payable on the effective date of such termination.
SECTION 2.10. Mandatory Termination of Commitments. The
Commitment shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
SECTION 2.11. Prepayments. (a) The Borrower may, upon at least
one Domestic Business Day's notice to the Agent, prepay any Base Rate Borrowing
at any time, or from time to time in part in an aggregate amount of $5,000,000
or any larger multiple of $1,000,000, by paying the principal amount thereof to
be prepaid, together with accrued interest thereon to the date of prepayment.
(b) The Borrower may upon (i) at least two Euro-Dollar
Business Days' notice to the Agent, subject to Section 2.13, prepay any
Euro-Dollar Borrowing, in whole at any time, in either case by paying the
principal amount to be prepaid, together with accrued interest thereon to the
date of prepayment.
(c) Each partial optional prepayment referred to in subsection
(a) or (b) above shall be applied to prepay ratably the Loans of the several
Banks included in such Borrowing.
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(d) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans and
of facility fees hereunder, not later than 11:00 A.M. (Chicago time) on the date
when due, in Federal or other funds immediately available in Chicago to the Bank
at its address referred to in Section 9.01. The Agent will promptly distribute
to each Bank its ratable share of each such payment received by the Agent for
the account of the Banks. Whenever any payment of principal of, or interest on,
the Domestic Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan (pursuant to Section
2.11(b) or Article VIII or otherwise) on any day other than the last day of the
Interest Period applicable thereto or if the Borrower fails to borrow any Fixed
Rate Loans after notice has been given to such Bank in accordance with Section
2.02(a), the Borrower shall reimburse such Bank within 15 days after demand for
any resulting loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in
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obtaining, liquidating or employing deposits from third parties and including
the loss of margin for the period after any such payment or failure to borrow,
provided that the Bank shall have delivered to the Borrower a certificate as to
the amount of such loss or expense, which certificate shall be conclusive in the
absence of manifest error, and provided further that, in the case of any
prepayment pursuant to Section 2.09(b), such reimbursement shall be made
simultaneously with such prepayment (it being understood that such simultaneous
reimbursement shall be a condition to the Borrower's right to make such
prepayment pursuant to Section 2.11(b)).
SECTION 2.14. Computation of Interest and Fees. All interest
and fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
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ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.04):
(a) receipt by the Agent of counterparts hereof signed by each
of the parties hereto (or, in the case of any party as to which an
executed counterpart shall not have been received, receipt by the Agent
in form satisfactory to it of telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by
such party);
(b) receipt by the Agent of the duly executed Notes dated on
or before the Effective Date;
(c) receipt by the Agent of an opinion of Ms. Naomi C. Dallob,
Secretary of the Borrower, substantially in the form of Exhibit D
hereto and covering such additional matters relating to the
transactions contemplated hereby as the Agent and the Required Banks
may reasonably request;
(d) receipt by the Bank of all documents it may reasonably
request relating to the existence of the Borrower, the corporate
authority for and the validity of this Agreement and the Notes, and any
other matters relevant hereto, all in form and substance satisfactory
to the Agent and the Required Banks;
provided; that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied on or before
June 20, 1996. The Agent shall promptly notify the Borrower and the Banks of the
Effective Date, and such notice shall be conclusive and binding on all parties
hereto.
SECTION 3.02. Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) receipt by the Agent of notice of such Borrowing as
required by Section 2.02;
(b) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of
23
<PAGE> 28
the Loans will not exceed the aggregate amount of the Commitments;
(c) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the
Borrower contained in this Agreement shall be true on and as of the
date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower and the Notes, when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower.
SECTION 4.04. Financial Information.
(a) The consolidated and consolidating balance sheet of the
Borrower and its Consolidated Subsidiaries as of December 31, 1995 and the
related consolidated and consolidating statements of income, cash flows and
changes in stockholders' equity for the fiscal year then ended, reported on by
Price Waterhouse and set forth in the Borrower's 1995 Form 10-K, a copy of which
has been delivered to the Bank, fairly present, in conformity with generally
accepted accounting principles, the consolidated and consolidating financial
position of the Borrower and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and cash flows for such fiscal year.
(b) The unaudited consolidated and consolidating balance sheet
of the Borrower and its Consolidated Subsidiaries as of March 31, 1996 and the
related unaudited consolidated and consolidating statements of income and cash
flows for the three months then ended, set forth in the Borrower's quarterly
report for the fiscal quarter ended March 31, 1996 as filed with the
25
<PAGE> 30
Securities and Exchange Commission on Form 10-Q, a copy of which has been sent
to the Bank, fairly present, in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements referred
to in subsection (a) of this Section 4.04, the consolidated and consolidating
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated and consolidating results of operations and cash
flows for such three month period (subject to normal year-end adjustments).
(c) Since December 31, 1995 there has been no material adverse
change in the business, financial position, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. There is no action, suit or
proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the business, consolidated financial position or consolidated results of
operations of the Borrower and its Consolidated Subsidiaries, considered as a
whole, or which in any manner draws into question the validity or enforceability
of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of ERISA
and the Internal Revenue Code with respect to each Plan and is in compliance in
all material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary course of
its business, the Borrower conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the Borrower
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating
26
<PAGE> 31
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license, permit or
contract, any related constraints on operating activities, including any
periodic or permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted there and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Borrower has reasonably concluded
that Environmental Laws are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.08. Taxes. United States Federal income tax returns
of the Borrower and its Subsidiaries have been examined and closed through the
fiscal year ended December 31, 1993. The Borrower and its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any Subsidiary. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is not
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
SECTION 4.11. Full Disclosure. All information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Agent or any
Bank will be, true and accurate in all material respects on the date as of which
such information is stated or certified. The Borrower has disclosed to the Agent
or any Bank in writing any and all facts which materially and adversely affect
or may affect (to the extent the Borrower can now reasonably foresee) the
business, financial position, results of operations or prospects of the Borrower
and its Consolidated Subsidiaries, taken as a whole, or the ability of the
Borrower to perform its obligations under this Agreement.
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ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any
Commitment hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each
of the Banks:
(a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a consolidated and
consolidating balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal year and the related
consolidated and consolidating statements of income, cash flows and
changes in stockholders' equity for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year,
all reported on in a manner acceptable to the Securities and Exchange
Commission by Price Waterhouse or other independent public accountants
of nationally recognized standing;
(b) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated and consolidating balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such
quarter, the related consolidated and consolidating statement of income
for such quarter and for the portion of the Borrower's fiscal year
ended at the end of such quarter and the related consolidated and
consolidating statement of cash flows for the portion of the Borrower's
fiscal year ended at the end of such quarter, setting forth in each
case in comparative form the figures for the corresponding quarter or
the corresponding portion of the Borrower's previous fiscal year, as
appropriate, all certified (subject to normal year-end adjustments) as
to fairness of presentation, generally accepted accounting principles
and consistency by the chief financial officer or the chief accounting
officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
the chief financial officer or the chief accounting officer of the
Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of clauses (a) through (e), inclusive, of Section 5.02,
clause (h)(ii) of Section 5.03 and
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clause (d)(ii) of Section 5.05 and the proviso to clause (d) of such
Section on the date of such financial statements, (ii) calculation of
the Ratio (as defined on the Pricing Schedule) and a designation of the
appropriate Level and (iii) stating whether any Default exists on the
date of such certificate and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe
that any Default existed on the date of such statements and (ii)
confirming the calculations (other than any calculations required
pursuant to (A) of clause (h)(ii) of Section 5.03 or the proviso to
clause (d) of Section 5.05) set forth in the officer's certificate
delivered simultaneously therewith pursuant to clause (c) above;
(e) within five days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower
shall have filed with the Securities and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any reportable event (as defined
in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal
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liability under Title IV of ERISA or notice that any Multiemployer Plan
is in reorganization, is insolvent or has been terminated, a copy of
such notice; (iii) receives notice from the PBGC under Title IV of
ERISA of an intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for
a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code, a copy of such application; (v) gives notice of
intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives
notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a
copy of such notice; or (vii) fails to make any payment or contribution
to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement
which has resulted or could result in the imposition of a Lien or the
posting of a bond or other security, a certificate of the chief
financial officer or the chief accounting officer of the Borrower
setting forth details as to such occurrence and action, if any, which
the Borrower or applicable member of the ERISA Group is required or
proposes to take;
(i) from time to time such additional information regarding
the financial position, results of operations business or prospects of
the Borrower and its Subsidiaries as the Agent at the request of any
Bank may reasonably request; and
(j) copies of the covenant compliance worksheets delivered
pursuant to the Note Purchase Agreement dated as of November 1, 1988
for 10.67% Series B Senior Notes due November 1, 2003 and the Note
Agreement dated December 22, 1992 for the 8.15% Senior Notes due
December 15, 2004.
SECTION 5.02. Maintenance of Certain Financial Conditions. The
Borrower will not on any date permit:
(a) Adjusted Consolidated Net Worth to be less than
$135,000,000 plus 25% of consolidated net income (calculated on a
cumulative basis), commencing for periods after June 30, 1996. The
minimum amount of Adjusted Consolidated Net Worth required by the
preceding sentence shall not be reduced by 25% of any net losses
incurred in any period;
(b) the aggregate amount of Consolidated Funded Debt to exceed
150% of Adjusted Consolidated Net Worth;
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(c) the sum (without duplication) of (i) the aggregate
principal amount of outstanding Debt of all Consolidated Subsidiaries
(other than Debt of a Consolidated Subsidiary to the Borrower or
another Wholly-Owned Consolidated Subsidiary) plus (ii) the aggregate
principal amount of all outstanding Funded Debt of the Borrower and its
Consolidated Subsidiaries secured by Liens permitted by paragraphs (g),
(h) and (i) of Section 5.03 to exceed 30% of Adjusted Consolidated Net
Worth; and
(d) any Debt of the Borrower to a Consolidated Subsidiary
other than Debt (exclusive of Funded Debt) incurred in the ordinary
course of business for cash management purposes.
(e) Interest Coverage Ratio. The ratio of its EBIT to its
consolidated interest expense to exceed 3.0 to 1.0 as of the last day
of any consecutive four quarter period.
SECTION 5.03. Liens. The Borrower will not, and will not
permit any Consolidated Subsidiary to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any asset of any
character of the Borrower or any Consolidated Subsidiary (whether held on the
date hereof or hereafter acquired) or any interest therein or any income or
profits therefrom, except, subject to compliance with the last paragraph of this
Section 5.03:
(a) Liens for taxes, assessments or governmental charges or
levies either not yet due or the payment of which is not at the time
required by Section 5.08(b);
(b) Liens of landlords, carriers, warehousemen, mechanics,
materialmen and other similar Persons incurred in the ordinary course
of business for sums either not yet due or the payment of which is not
at the time required by Section 5.08(b);
(c) Liens (other than any Lien created or imposed under ERISA)
incurred or made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security insurance, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds (subject to the provisions of
paragraph (d) below), bids, leases, government contracts, performance
and return-of-money bonds and other similar obligations (exclusive in
any case of obligations incurred in connection with the borrowing of
money or the obtaining of advances or credit);
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(d) any attachment or judgment Lien arising in connection with
court proceedings, provided that (i) the execution or other enforcement
of such Lien is effectively stayed and the claims secured thereby are
being actively contested in good faith and by appropriate proceedings
diligently conducted, (ii) such reserve or other appropriate provision,
if any, as shall be required by generally accepted accounting
principles shall have been made therefor and (iii) neither the
Borrower's nor any such Consolidated Subsidiary's title to or right to
the use any of its property is impaired in any material respect by
reason of such Lien or contest;
(e) easements, licenses, rights-of-way and other rights and
privileges in the nature of easements and similar Liens incidental to
the ownership of property and not incurred in connection with the
borrowing of money or the obtaining of advances or credit and which do
not, individually or in the aggregate, interfere with the ordinary
conduct of the business of the Borrower or any Consolidated Subsidiary
or materially detract from the value of the properties subject to any
such Liens;
(f) Liens on property of any Consolidated Subsidiary securing
Debt or other obligations of such Consolidated Subsidiary owing to the
Borrower or to another Wholly-Owned Consolidated Subsidiary;
(g) Liens specified on Schedule I; provided, however, that no
such Lien shall be extended to any other property of the Borrower or
any Consolidated Subsidiary;
(h) any Lien (including a Capital Lease) incurred solely to
secure (1) the deferred purchase price of property consisting of fixed
assets acquired by the Borrower or any Consolidated Subsidiary after
the date hereof or (2) Debt incurred solely for the purpose of
financing the acquisition of such property (if such Debt is incurred at
the time of or within 60 days after such acquisition); any lien
existing on property acquired at the time of acquisition thereof or (3)
in the case of any Person which hereafter becomes a Consolidated
Subsidiary, any Lien in respect of its property existing at the time
such Person becomes a Consolidated Subsidiary; provided, however, that
(i) no such Lien shall extend to any other property
of the Borrower or any Consolidated Subsidiary, and
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(ii) the aggregate principal amount of all Debt
secured by all such Liens on all such property shall at no
time exceed an amount equal to the lesser of (A) the cost
(including the principal amount of any pre-existing Debt
secured by such Liens, whether or not the Borrower or such
Consolidated Subsidiary has any personal liability with
respect thereto) of such property to the Borrower or such
Consolidated Subsidiary, as the case may be, and (B) the fair
market value of such property (as determined in good faith by
the board of directors of the Borrower) at the time of the
incurrence of such Lien; and
(iii) Liens extending, renewing or refinancing any
Lien permitted by paragraph (g) or (h) of this Section 5.03
provided that the principal amount of the Debt secured by such
Lien is not increased and such Lien is not extended to any
other property of the Borrower or any Consolidated Subsidiary.
For all purposes of this Section 5.03, (i) any Person becoming
a Consolidated Subsidiary after the Effective Date shall be deemed to have
incurred all of its then existing Liens at the time it becomes a Consolidated
Subsidiary, (ii) any extension, renewal or refinancing of any Lien by the
Borrower or any Consolidated Subsidiary shall be deemed to be an incurrence of
such Lien at the time of such extension, renewal or refinancing and (iii) any
Lien existing on any property or asset at the time it is acquired by the
Borrower or any Consolidated Subsidiary shall be deemed to have been incurred at
the time of such acquisition.
SECTION 5.04. Transactions with Affiliates. The Borrower will
not, and will not permit any Consolidated Subsidiary to, directly or indirectly,
engage in any transaction with any Affiliate of the Borrower, other than
transactions entered into (a) either in the ordinary and reasonable course of
business or between the Borrower or such Consolidated Subsidiary, on the one
hand, and another Consolidated Subsidiary, on the other hand, and (b) upon terms
that are not less favorable (as determined in good faith by the board of
directors of the Borrower) to the Borrower or such Consolidated Subsidiary, as
the case may be, than those which might be obtained at the time on an
arm's-length basis from a Person which is not such an Affiliate.
SECTION 5.05. Consolidation, Merger, Sale of Assets, etc. The
Borrower will not, and will not permit any Consolidated Subsidiary to, liquidate
or dissolve, or consolidate or merge with any other Person, or permit any other
Person to consolidate or merge with it, or sell, lease, transfer or otherwise
dispose of any of its assets to any other Person (other than in the ordinary
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course of business), except that, subject to the last paragraph of this Section:
(a) any Consolidated Subsidiary may consolidate with or merge
with or into (i) the Borrower or any Wholly-Owned Consolidated
Subsidiary (if the Borrower or such Wholly-Owned Consolidated
Subsidiary shall be the continuing or surviving corporation) or (ii)
any other corporation (if such Consolidated Subsidiary shall be the
continuing or surviving corporation);
(b) any Consolidated Subsidiary may sell, lease, transfer or
otherwise dispose of its assets in their entirety to the Borrower or
any Wholly-Owned Consolidated Subsidiary, and may thereafter liquidate
and dissolve;
(c) the Borrower may merge with any other corporation,
provided that the Borrower shall be the continuing or surviving
corporation; and
(d) The Borrower or any Consolidated Subsidiary, in addition
to making any sale, lease, transfer or other disposition permitted by
the foregoing provisions of this Section 5.05, may in any fiscal year
sell, lease, transfer or otherwise dispose of any of its assets for
consideration consisting of cash, debt obligations of the transferee
thereof (or an Affiliate thereof), the assumption of obligations of the
Borrower or such Consolidated Subsidiary relating to such assets, or
any combination of the foregoing, which consideration, in any case,
shall be at least equal to the fair value of such assets (as determined
in good faith by the board of directors of the Borrower) at the time of
such sale, lease, transfer or other disposition, but only if (i) the
opinion of the board of directors of the Borrower such sale, lease,
transfer or other disposition is in the best interests of the Borrower
and (ii) after giving effect to such sale, lease, transfer or other
disposition and to the application of the proceeds thereof and of all
other such sales, leases, transfers and other dispositions theretofore
made in the same fiscal year, the reduction in the aggregate book value
of the consolidated total assets of the Borrower and its Consolidated
Subsidiaries resulting from such sale, lease, transfer or other
disposition and all other such sales, leases, transfers and other
dispositions theretofore made in the same fiscal year shall not be more
than 10% of the aggregate book value of such consolidated total assets
as at the end of the then most recently completed prior fiscal year;
provided, however, that (1) the consideration for which assets may be
sold, leased,
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transferred or otherwise disposed of in compliance with this subsection
(d) may not consist, in whole or in part, of the assumption of
obligations of the Borrower or any Consolidated Subsidiary relating to
such assets unless (A) in connection with, and simultaneously with the
effectiveness of such assumption, the Borrower or such Consolidated
Subsidiary, as the case may be, shall be relieved under generally
accepted accounting principles of all liability therefor or (B) the
assumption is provided by a Person whose unsecured debt obligations are
then rated Baa or higher by Moody's Investors Service, Inc. or BBB or
higher by Standard & Poor's Corporation and (2) for purposes of any
computation under this subsection (d) consolidated total assets of the
Borrower and its Consolidated Subsidiaries (A) shall not include any
assets of the Borrower and its Consolidated Subsidiaries consisting of
debt obligations of any Person received in any such sale, lease,
transfer or other disposition of assets (whether or not consummated in
such fiscal year) unless the unsecured debt obligations of such Person
shall be rated at the time of such computation Baa or higher by Moody's
Investors Service, Inc. and BBB or higher by Standard & Poor's
Corporation and (B) shall include an amount equal to the aggregate
liabilities which may be accepted as consideration in accordance with
clause (1) of this proviso.
No merger, consolidation, sale, lease, transfer or other
disposition under any of paragraphs (a) through (d), inclusive, above of this
Section shall be permitted if at the time thereof, or immediately after giving
effect thereto, any Default shall have occurred and be continuing. No sale,
lease, transfer or other disposition permitted by this Section 5.05 shall in any
event release the Borrower from any of its obligations and liabilities under
this Agreement and the Notes.
SECTION 5.06. Nature of Business. The Borrower will not, and
will not permit any Consolidated Subsidiary to, engage in any line of business
in which it is not currently engaged if as a result thereof the business of the
Borrower and its Consolidated Subsidiaries, taken as a whole, would be
substantially different from what it was as of December 31, 1995, as described
in the Borrower's 1995 Form 10-K.
SECTION 5.07. Maintenance of Books and Office. The Borrower
will, and will cause each of its Consolidated Subsidiaries to, maintain a system
of accounting established and administered in accordance with generally accepted
accounting principles, keep proper books of record and account in which full,
true and correct entries are made of its business transactions, and set aside
appropriate reserves, all in accordance with generally accepted accounting
principles. The Borrower will
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maintain its principal office at a location in the United States where notices,
presentations and demands in respect of this Agreement and the Notes may be made
upon it and will notify the Banks in advance of any change of location of such
office.
SECTION 5.08. Corporate Existence; Payment of Taxes;
Maintenance of Properties; Insurance; Compliance with Laws' Maintenance of
Patents, etc. The Borrower will, and will cause each Consolidated Subsidiary to,
(a) do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate existence (except as
otherwise permitted by Section 5.05) and its licenses, rights (charter
and statutory) and franchises, except that, subject to compliance with
Sections 5.05 and 5.07, the licenses, rights and franchises of the
Borrower or any Consolidated Subsidiary may be abandoned, modified or
terminated if in the good faith judgment of the board of directors of
the Borrower such abandonment, modification or termination is in the
best interest of the Borrower and is not disadvantageous to the Bank;
(b) pay and discharge, or cause to be paid and discharged,
when due (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon any of its
property (real, personal or mixed), or upon any part thereof, and (ii)
all lawful claims of landlords, carriers, warehousemen, mechanics,
materialmen and other similar Persons for labor, materials, supplies
and rentals which in any case, if unpaid, might by law become a Lien
upon any of its property; provided, however, that the failure of the
Borrower or any Consolidated Subsidiary to pay any such tax,
assessment, charge, levy or claim shall not constitute a Default
hereunder if and for so long as (1) the amount, applicability or
validity thereof shall concurrently be contested in good faith by
appropriate and timely proceedings and diligently conducted, (2) such
reserve or other appropriate provision, if any, as shall be required by
generally accepted accounting principles shall have been made therefor
and (3) neither the Borrower's nor any such Consolidated Subsidiary's
title to or right to the use of any of its property is impaired in any
material respect by reason of such failure to pay or contest;
(c) maintain and keep, or cause to be maintained and kept, in
good repair, working order and condition (ordinary wear and tear
excepted) all properties used or useful in the business of the Borrower
and its Consolidated Subsidiaries and from time to time make, or cause
to be made, all needful and proper repairs, renewals, replacements and
improvements
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thereof so that the business carried on in connection therewith may be
properly and advantageously conducted;
(d) maintain, or cause to be maintained, with financially
sound and reputable insurers insurance in respect of its properties and
business against loss or damage of the kinds customarily insured
against by prudent corporations of established reputation engaged in
the same or similar business and similarly situated, of such type and
in such amounts as are customarily carried under similar circumstances
by such other corporations;
(e) comply in all material respects with all applicable lawful
statutes, regulations and orders of, and all applicable lawful
restrictions imposed by, any governmental authority in respect of the
conduct of its business and the ownership of its properties (including,
without limitation, Environmental Laws and applicable statues,
regulations and orders relating to equal employment opportunities),
except such as are being contested in good faith by appropriate and
timely proceedings diligently conducted, but only if such reserve or
other appropriate provision, if any, as shall be required by generally
accepted accounting principles shall have been made therefor and
neither the Borrower's nor any such Consolidated Subsidiary's title to
or right to the use of any of its property is impaired in any material
respect by reason of such failure to comply or contest;
(f) maintain the validity of all patents, trademarks, service
marks, trade names, copyrights and the like necessary in any material
respect for the conduct of its business as now conducted and as
proposed to be conducted; and
(g) Chemed Services Agreement. The Borrower also agrees to use
its best efforts to maintain the existence of the Chemed Services
Agreement currently in effect with National Sanitary Supply and Roto
Rooter.
SECTION 5.09. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes. None of such proceeds will be used in violation of any applicable law
or regulation.
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ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. if one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of
or interest on any Loan, any fees or any other amount payable
hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.02 to 5.05, inclusive, or Section 5.09;
(c) the Borrower shall fail to observe or perform any covenant
or agreement contained in this Agreement (other than those covered by
clause (a) or (b) above) for 10 days after written notice thereof has
been given to the Borrower by the Agent at the request of the Bank;
(d) any representation, warranty, certification or statement
made by the Borrower in this Agreement or in any certificate, financial
statement or other document delivered pursuant to this Agreement shall
prove to have been incorrect in any material respect when made (or
deemed made);
(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of any Material Debt when due or within any
applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with
the giving of notice or lapse of time or both, would enable) the holder
of such debt or any Person acting on such holder's behalf to accelerate
the maturity thereof;
(g) the Borrower or any Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall
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fail generally to pay its debts as they become due, or shall
take any corporate action to authorized any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $1,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent
to terminate a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or cause a
trustee to be appointed to administer any Material Plan; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or there
shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or
more Multi-employer Plans which could cause one or more members of the
ERISA Group to incur a current payment obligation in excess of
$5,000,000;
(j) a judgement or order for the payment of money in excess of
$1,000,000 shall be rendered against the Borrower or any Subsidiary and
such judgment or order shall continue unsatisfied and unstayed for a
period of 10 days; or
(k) a Change of Control shall have occurred;
then, and in every such event, the Agent shall (i) if requested by the Required
Banks, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate and (ii) if requested by the Required Banks, by notice to
the Borrower declare the Notes (together with accrued interest thereon) to be,
and the Notes shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided that in the case of any of the Events of
Default specified in clause (g) or (h) above with respect to the Borrower,
without any notice to the
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Borrower or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice
to the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
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ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization; "Agent". Each
Bank hereby irrevocably (subject to Section 9.09) appoints, designates and
authorizes the Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
SECTION 7.02. Agent and Affiliates. Bank of America Illinois
shall have the same rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Agent, and Bank of America Illinois and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower or
any Subsidiary or affiliate of the Borrower as if it were not the Agent
hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult
with legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of
its directors, officers, agents, or employees shall be
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liable for any action taken or not taken by it in connection herewith (i) with
the consent or at the request of the Required Banks or (ii) in the absence of
its own gross negligence or willful misconduct. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Article III, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness or genuineness of this Agreement, the Notes or
any other instrument or writing furnished in connection herewith. The Agent
shall not incur any liability by acting in reliance upon any notice, consent,
certificate, statement or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from the Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with this Agreement or any action taken or
omitted by the Agent hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, 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 any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required Banks,
and shall have accepted such appointment, within 30 days after the retiring
Agent gives notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to
42
<PAGE> 47
and become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent
for its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
SECTION 7.10. Suspension of Agent. Until such time as a bank
(other than Bank of America Illinois) becomes a party to this Agreement (whether
pursuant to Section 9.05(c) or otherwise), all references herein to the Agent
shall be deemed to refer to Bank of America Illinois in its capacity as the sole
Bank.
43
<PAGE> 48
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing:
(a) the Agent determines that deposits in dollars (in the
applicable amount) are not being offered to the Agent in the relevant
market for such Interest Period, or
(b) the Required Banks determine the Adjusted London Interbank
Offered Rate, as the case may be, will not adequately and fairly
reflect the cost to the Banks of funding Euro-Dollar Loan, as the case
may be, for such Interest Period.
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Bank to make
Euro-Dollar Loans, as the case may be, shall be suspended. Unless the Borrower
notifies the Bank at least one Domestic Business Day before the date of any
Fixed Rate Borrowing for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, such Borrowing shall instead be made
as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans, such Bank shall forthwith give notice thereof to the
Borrower, the Agent and the Banks, whereupon until such Bank notifies the
Borrower, the Agent and the other Banks that the circumstances giving rise to
such suspension no longer exist, the obligation of such Bank to make Euro-Dollar
Loans shall be suspended. Before giving any notice pursuant to this Section, the
Bank shall designate a different Euro-Dollar Lending Office if such designation
will avoid the need for giving such notice and will not, in the judgment of the
Bank, be otherwise disadvantageous to the Bank. If the Bank shall determine that
it may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the then outstanding principal amount of each
such Euro-Dollar Loan, together with accrued interest thereon. Concurrently with
prepaying each such Euro-Dollar Loan,
44
<PAGE> 49
the Borrower shall borrow a Base Rate Loan in an equal principal amount from the
Bank and the Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or
after the date hereof, the adoption of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank (or
its Applicable Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) shall subject any Bank (or its Applicable Lending Office)
to any tax, duty or other charge with respect to its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans, or shall change
the basis of taxation of payments to the Bank (or its Applicable
Lending Office) of the principal of or interest on its Fixed Rate Loans
or any other amounts due under this Agreement in respect of its Fixed
Rate Loans or its obligation to make Fixed Rate Loans (except for
changes in the rate of tax on the overall net income of the Bank or its
Applicable Lending Office imposed by the jurisdiction in which the
Bank's principal executive office or Applicable Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System, but excluding with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar Reserve
Percentage) against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending Office) or
shall impose on any Bank (or its Applicable Lending Office) or on the
United States market for certificates of deposit or the London
interbank market any other condition affecting its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to any Bank (or
its Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or
to reduce the amount of any sum received or receivable by any Bank (or its
Applicable Lending Office) under this Agreement or under its Note with respect
thereto, by an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate the Bank for such
increased cost or reduction.
45
<PAGE> 50
(b) If any Bank determines that compliance with any law or
regulation or with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) has or would
have the effect of reducing the rate of return on the capital of such Bank as a
consequence of, or with reference to, the Bank's commitments or its making or
maintaining advances below the rate which the Bank (or its Parent) could have
achieved but for which compliance (taking into account the policies of the Bank
with regard to capital), then the Borrower shall from time to time, upon demand
by the Bank (with a copy of such demand to the Bank), immediately pay to the
Bank additional amounts sufficient to compensate the Bank for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section, provided that
the failure of the Bank to give such notice shall not affect such Bank's right
to compensation pursuant to this Section. A certificate of such Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Bank may use any reasonable
averaging and attribution methods.
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed
Rate Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has
been suspended pursuant to Section 8.02 or (ii) such Bank has demanded
compensation under Section 8.03(a) and the Borrower shall, by at least five
Euro-Dollar Business Days' prior notice to such Bank through the Agent have
elected that the provisions of this Section shall apply to the Bank, then,
unless and until the Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by the Banks as
Euro-Dollar Loans, as the case may be, shall be made instead as Base
Rate Loans, and
(b) after each of its Euro-Dollar Loans, as the case may be,
has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its
Base Rate Loans instead.
46
<PAGE> 51
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address or telex
number set forth on the signature pages hereof, (y) in the case of any Bank, at
its address or telex number set forth on the signature page or pages hereto or
(z) in the case of any party, such other address or telex number as such party
may hereafter specify for the purpose by notice to the Agent and the Borrower.
Each such notice request or other communication shall be effective (i) if given
by telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Bank under Article II or Article VIII shall not be effective until
received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or
any Bank in exercising any right, power or privilege hereunder or under any Note
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 herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification.
(a) The Borrower shall pay (i) all out-of-pocket expenses of the Agent,
including fees and disbursements of special counsel for the Agent, in connection
with the preparation of this Agreement, any waiver or consent hereunder or any
amendment hereof or any Default or alleged Default hereunder and (ii) if an
Event of Default occurs, all out-of-pocket expenses incurred by the Agent and
each Bank, including fees and disbursements of counsel (including costs
attributable to internal counsel), in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom. The Borrower shall indemnify each Bank against any transfer taxes,
documentary taxes, assessments or charges made by any governmental authority by
reason of the execution and delivery of this Agreement or the Notes.
(b) The Borrower agrees to indemnify the Bank and hold each
Bank harmless from and against any and all liabilities,
47
<PAGE> 52
losses, damages, costs and expenses of any kind, including, without limitation,
the reasonable fees and disbursements of counsel, which may be incurred by any
Bank (or by the Agent in connection with its actions as Agent hereunder) in
connection with any investigative, administrative or judicial proceeding
(whether or not such Bank shall be designated a party thereto) relating to or
arising out of this Agreement or any actual or proposed use of proceeds of Loans
hereunder; provided that no Bank shall have the right to be indemnified
hereunder for its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
SECTION 9.04. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by all the Banks,
(i) increase or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
commitment fees hereunder, except as provided below, (iii) postpone the date
fixed for any payment of principal of or interest on any Loan or any commitment
fees hereunder or for any reduction or termination of any Commitment, (iv)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number of Banks, which shall be required for the
Banks or any of them to take any action under this Section or any other
provision of this Agreement or (v) amend the provision of this Section 9.04, and
provided, further, that this Agreement may be amended to give effect to any
increased fees, interest rates and/or margins agreed upon pursuant to Section
8.03 or to reduce or rescind any such increases previously agreed upon pursuant
to Section 8.03, if such amendment is in writing and is signed by the Borrower
and Banks having more than 50% in aggregate amount of the Commitment.
SECTION 9.05. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower may
not assign or otherwise transfer any of its rights under this Agreement without
the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or
other institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a Bank
of a participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection
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<PAGE> 53
with such Bank's rights and obligations under this Agreement. Any agreement
pursuant to which any Bank may grant such a participating interest shall provide
that such Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of the Borrower hereunder including, without limitation, the right to approve
any amendment or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any
amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of
Section 9.04 without the consent of the Participant. The Borrower agrees that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Article VIII with respect to its participating
interest. An assignment or other transfer which is not permitted by subsection
(c) or (d) below shall be given effect for purposes of this Agreement only to
the extent of a participating interest granted in accordance with this
subsection (b).
(c) Any Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a proportionate part of all, of
its rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement, in substantially the form of Exhibit E hereto, executed by
such Assignee and such transferor Bank with (and subject to) the subscribed
consent of the Borrower and the Agent, which consent shall not be unreasonably
withheld, provided that if Bank is the transferor Bank and the Assignee is an
affiliate of such Bank no such consent shall be required. Upon execution and
delivery of such instrument and payment by such Assignee to such transferor Bank
of an amount equal to the purchase price agreed between such transferor Bank and
such Assignee, such Assignee shall be a Bank party to this Agreement and shall
have all the rights and obligations of a Bank with a Commitment as set forth in
such instrument of assumption, and the transferor Bank shall be released from
its obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower
shall make appropriate arrangements so that, if required, a new Note is issued
to the Assignee. In connection with any such assignment, the transferor Bank
shall pay to the Agent an administrative fee for processing such assignment in
the amount of $2,000.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
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<PAGE> 54
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02 or 8.03 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 9.06. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed and construed in accordance with the
laws of the State of Illinois. The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Northern District of
Illinois and of any Illinois State court sitting in Chicago for purposes of all
legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower irrevocably waives, to the
fullest extend permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
SECTION 9.07. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 9.08. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT
AND THE BANKS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
50
<PAGE> 55
CHEMED CORPORATION,
By: _______________________________
Title: Executive Vice President
-Treasurer
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
Telex number: ______________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
As Agent
By: ________________________________
Title:
Commitment
$35,000,000 BANK OF AMERICA ILLINOIS
By: ________________________________
Title: Managing Director
$25,000,000 PNC BANK, OHIO, NATIONAL ASSOCIATION
By: ________________________________
Title:
$25,000,000 NBD BANK, N.A.
By: ________________________________
Title:
51
<PAGE> 56
PRICING SCHEDULE
Each of "Margin" and "Facility Fee Rate" means, for any date,
the rates set forth below in the row opposite such term and in the column
corresponding to the "Pricing Level" that applies at such date:
<TABLE>
<CAPTION>
=================================================================================================================================
Ratio Level I Level II Level III Level IV Level V Level VI
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Euro-Dollar 20 bps 23 bps 26 bps 29 bps 32 bps 35 bps
Margin
- ---------------------------------------------------------------------------------------------------------------------------------
Facility Fee 10 bps 12 bps 14 bps 16 bps 18 bps 20 bps
Rate
=================================================================================================================================
</TABLE>
For purposes of this Schedule, the following terms have the
following meanings:
"Adjusted Consolidated Net Worth" has the meaning given to
that term in the Credit Agreement.
"bps" means basis points where a basis point equals 1/100 of
one percent.
"Consolidated Funded Debt" has the meaning given to that
term in the Credit Agreement.
"Pricing Level" refers to the determination of which of Level
I Pricing, Level II Pricing, Level III Pricing, Level IV Pricing or Level V
Pricing applies at any date.
"Ratio" shall mean Consolidated Funded Debt to the sum of
Consolidated Funded Debt and Adjusted Consolidated Net Worth.
"Level I Pricing" applies at any date if, at such date, the
Borrower's Ratio is less than or equal to 30%.
"Level II Pricing" applies at any date if, at such date, the
Borrower's Ratio is greater than 30% but less than or equal to 35%.
"Level III Pricing" applies at any date if, at such date, the
Borrower's Ratio is greater than 35% but less than or equal to 40%.
"Level IV Pricing" applies at any date if, at such date, the
Borrower's Ratio is greater than 40% but less than or equal to 45%.
52
<PAGE> 57
"Level V Pricing" applies at any date if, at such date, the
Borrower's Ratio is greater than 45% but less than or equal to 55%.
"Level VI Pricing" applies at any date if, at such date, no
other Pricing Level applies.
53
<PAGE> 58
EXHIBIT A
NOTE
Chicago, Illinois
______________, 19__
For value received, Chemed Corporation, a Delaware corporation
(the "Borrower"), promises to pay to the order of ________________________ (the
"Bank"), for the account of its Applicable Lending Office, the unpaid principal
amount of each Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below on the last day of the Interest Period relating to
such Loan. The Borrower promises to pay interest on the unpaid principal amount
of each such Loan on the dates and at the rate or rates provided for in the
Credit Agreement. All such payments of principal and interest shall be made in
lawful money of the United States in Federal or other immediately available
funds at the office of 1850 Gateway Boulevard, Concord, California 94520.
All Loans made by the Bank, the respective types and
maturities thereof and all repayments of the principal thereof shall be recorded
by the Bank and, prior to any transfer hereof, appropriate notations to evidence
the foregoing information with respect to each such Loan then outstanding shall
be endorsed by the Bank on the schedule attached hereto, or on a continuation of
such schedule attached to and made a part hereof; provided that the failure of
the Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
This note is the Note referred to in the Amended and Restated
Credit Agreement dated as of June 20, 1996, among the Borrower and the various
Banks listed on the signature pages thereof, including _________________, and
Bank of America National Trust and Savings Association, as Agent (as the same
may be amended from time to time, the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein with the same meanings. Reference is made to
the Credit Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.
CHEMED CORPORATION
By:_____________________________________
Title:
1
<PAGE> 59
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
<S> <C> <C> <C> <C> <C>
</TABLE>
2
<PAGE> 60
EXHIBIT B
FORM OF BID LOAN NOTE
June 20, 1996
The undersigned for value received, promises to pay to the order of
______________ (herein called the Bank), at the offices of Bank of America
National Trust and Savings Association located at 1850 Gateway Boulevard,
Concord, California 94520 (herein called the Agent) or at such other offices as
the Agent may specify from time to time, the principal amount of each Bid Loan
made by the Bank to the undersigned from time to time from the date hereof up to
the Termination Date pursuant to Section 2.06 of that certain Amended and
Restated Credit Agreement dated as of June 20, 1996 as amended, supplemented or
otherwise modified from time to time (herein called the Credit Agreement) by and
between the undersigned, various banks (including the Bank) and the Agent, on
the last day of the Interest Period for such Bid Loan. In any event, the
aggregate unpaid principal amount of all Bid Loans shall be due and payable on
the Termination Date.
The aggregate unpaid principal amount from time to time of Bid Loans
made by the Bank to the undersigned shall bear interest until paid at the
rate(s) per annum provided in the Credit Agreement payable at such time(s) as is
therein provided.
All capitalized terms appearing herein are, unless otherwise indicated,
used with the meanings assigned to such terms in the Credit Agreement.
This promissory note is one of the Bid Loan Notes issued pursuant to
the Amended and Restated Credit Agreement and evidences the indebtedness of the
undersigned and incurred under, and is subject to the terms and provisions of,
the Credit Agreement (and, if amended, all amendments thereto), to which
reference is hereby made for a statement of said terms and provisions.
The principal hereof and interest hereon are payable in lawful money of
the United States of America in immediately available funds. Prior to any
transfer of this Note, each Bid Loan made by the Bank to the undersigned under
the Amended and Restated Credit Agreement (including any refinancing thereof),
the interest rate and Interest Period applicable thereto and all payments of
principal hereof by the undersigned to the Bank shall be endorsed on a grid
schedule or grid schedules in the form of the schedule attached hereto and by
this reference thereto made a part of this Note. Notwithstanding the foregoing,
the failure to make, or an error in making, such endorsement shall not in any
manner affect the obligation of the undersigned hereunder.
1
<PAGE> 61
THIS NOTE HAS BEEN MADE UNDER AND IS GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF ILLINOIS.
CHEMED CORPORATION
By: _______________________________
Title: ____________________________
Address:
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 55202-4726
2
<PAGE> 62
SCHEDULE
<TABLE>
<CAPTION>
Amount of Interest Maturity Date Amount of Principal Name of Person
Date Bid Loan Rate of Interest Period Repaid Making Notation
- ---- -------- ---- ------------------ ----- ---------------
<S> <C> <C> <C> <C> <C>
</TABLE>
1
<PAGE> 63
EXHIBIT C
COMPETITIVE BID REQUEST
_____________________, 1996
Bank of America National Trust
and Savings Association,
as Agent
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attention: Agency Management Services #5596
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement dated as
of June 20, 1996 (as amended from time to time, the "Credit Agreement"), by and
among Chemed Corporation (the "Company"), the Banks party thereto, and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent for the Banks (the
"Agent"). Capitalized terms used herein have the meanings specified in the
Credit Agreement.
This is a Competitive Bid Request for Bid Loans pursuant to Section
2.04 of the Credit Agreement as follows:
(i) The name of the Company making the Competitive Bid Request is
Chemed Corporation.
(ii) The Business Day of the proposed Bid Borrowing is ______________,
19__.
(iii) The aggregate amount of the proposed Bid Borrowing is
$_________________.
(iv) The proposed Bid Borrowing to be made pursuant to Section 2.04
shall be comprised of [LIBOR] [Absolute Rate] Bid Loans.
(v) The Interest Period[s] for the Bid Loans comprised in the Borrowing
shall be ______________________, [___________________] and
[__________________].
CHEMED CORPORATION
By:________________________________
Title:_____________________________
<PAGE> 64
EXHIBIT C-1
INVITATION FOR COMPETITIVE BIDS
Via Facsimile
To the Banks Listed on Schedule A attached hereto:
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of June 20, 1996 (as amended from time to time, the "Credit
Agreement"), among Chemed Corporation (the "Company"), the Banks party thereto,
and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent for the
Banks (the "Agent"). Capitalized terms used herein have the meanings specified
in the Credit Agreement.
Pursuant to subsection 2.04 of the Credit Agreement, you are hereby
invited to submit offers to make Bid Loans to the Company based on the following
specifications:
1. Borrowing date: _______________, 199_;
2. Aggregate amount requested: $___________________;
3. [LIBOR Bid Loans] [Absolute Rate Bid Loans]; and
4. Interest Period[s]: ____________________, [________________]
and [________________].
All Competitive Bids must be in the form of Exhibit C-2 to the Credit
Agreement and must be received by the Agent no later than [__:__] a.m. (San
Francisco time) on ___________, 199_.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: _______________________________
Title: ____________________________
<PAGE> 65
Schedule A
List of Banks
Bank of America National Trust
and Savings Association, as a Bank
Facsimile: (415) 622-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
<PAGE> 66
EXHIBIT C-2
FORM OF COMPETITIVE BID
________________, 199_
Bank of America National Trust
and Savings Association,
as Agent
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attention: Agency Management Services #5596
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement dated as
of June 20, 1996 (as amended from time to time, the "Credit Agreement"), by and
among Chemed Corporation (the "Company"), the Banks party thereto, and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent for the Banks (the
"Agent"). Capitalized terms used herein have the meanings specified in the
Credit Agreement.
In response to the Competitive Bid Request of the Company dated
_____________, 199_ and in accordance with subsection 2.04 of the Credit
Agreement, the undersigned Bank offers to make [a] Bid Loan[s] thereunder in the
following principal amount[s] at the following interest rates for the following
Interest Period[s]:
Date of Borrowing: ________________, 199_
Aggregate Maximum Bid Amount: $__________________
<TABLE>
<S> <C> <C>
Principal Principal Principal
Amount $_________ Amount $_________ Amount $_________
Interest: Interest: Interest:
[Absolute [Absolute [Absolute
Rate __%, __%, __%] Rate __%, __%, __%] Rate __%, __%, __%]
or
[LIBOR [LIBOR [LIBOR
Margin +/- __%, Margin +/- __%, Margin +/- __%,
+/- __%, +/- __%] +/- __%, +/- __%] +/- __%, +/- __%]
Interest Interest Interest
Period __________ Period __________ Period __________
</TABLE>
[NAME OF BANK]
By: _______________________________
Title: ____________________________
<PAGE> 67
EXHIBIT D
OPINION OF THE GENERAL
COUNSEL OF THE BORROWER
_______________, 19__
Bank of America Illinois
231 South LaSalle Street
Chicago, Illinois 60697
Dear Sirs:
I am Secretary and Vice President of Chemed Corporation (the
"Borrower") and, in such capacity, have acted for it in connection with the
Amended and Restated Credit Agreement dated as of June 20, 1996 (the "Credit
Agreement") among the Borrower, the various Banks listed on the signature pages
thereof and Bank of America National Trust and Savings Association, as Agent.
Terms defined in the Credit Agreement are used herein as therein defined.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware, and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of
the Credit Agreement and the Notes are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of the Borrower or of any agreement, judgment, injunction, order, decree or
other instrument binding upon the Borrower or result in the creation or
imposition of any
1
<PAGE> 68
Lien on any asset of the Borrower or any of its Subsidiaries.
3. The Credit Agreement constitutes a valid and binding
agreement of the Borrower and the Notes constitute a valid and binding
obligation of the Borrower.
4. There is no action, suit or proceeding pending against, or
to the best of my knowledge threatened against or affecting, the Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official, in which there is a reasonable possibility of an adverse
decision which could materially adversely affect the business, consolidated
financial position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole, or which in any manner draws
into question the validity or enforceability of the Credit Agreement or the
Notes.
5. Each of the Borrower's corporate Subsidiaries is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
Very truly yours,
2
<PAGE> 69
EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of ____________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee") and CHEMED CORPORATION (the
"Borrower").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Amended and Restated Credit Agreement dated as of
June 20, 1996 among the Borrower, the Assignor and Bank of America National
Trust and Savings Association as Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor
has a Commitment to make Loans to the Borrower in an aggregate principal amount
at any time outstanding not to exceed $________________;
WHEREAS, Committed Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount of $___________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all
of the rights of the Assignor under the Credit Agreement in respect of a portion
of its Commitment thereunder in an amount equal to $_______________ (the
"Assigned Amount"), together with a corresponding portion of its outstanding
Committed Loans, and the Assignee proposes to accept assignment of such rights
and assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells
to the Assignee all of the rights of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the Assignor
under the Credit Agreement to the extent of the Assigned amount, including the
purchase from the Assignor of the corresponding portion of the principal amount
of the Committed Loans made by the Assignor outstanding at the date hereof. Upon
the execution and delivery
1
<PAGE> 70
hereof by the Assignor, the Assignee and the Borrower and the payment of the
amounts specified in Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights and be obligated to
perform the obligations of a Bank under the Credit Agreement with a Commitment
in an amount equal to the Assigned amount, and (ii) the Commitment of the
Assignor shall, as of the date hereof, be reduced by a like amount and the
Assignor released from its obligations under the Credit Agreement to the extent
such obligations have been assumed by the Assignee. The assignment provided for
herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds an amount equal to $______________.* It is
understood that commitment and/or facility fees accrued to the date hereof are
for the account of the Assignor and such fees accruing from and including the
date hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Amended and
Restated Credit Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the extent of such
other party's interest therein and shall promptly pay the same to such other
party.
SECTION 4. Consent of the Borrower. This Agreement is
conditioned upon the consent of the Borrower pursuant to Section 8.05(c) of the
Credit Agreement. The execution of this Agreement by the Borrower is evidence of
this consent. Pursuant to Section 8.05(c) the Borrower agrees to execute and
deliver a Note payable to the order of the Assignee to evidence the assignment
and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for
- --------
* Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable in
an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
2
<PAGE> 71
making its own independent appraisal of the business, affairs and financial
condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Illinois.
SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By______________________________________
Title:
[ASSIGNEE]
By______________________________________
Title:
CHEMED CORPORATION
By______________________________________
Title:
3
<PAGE> 72
SCHEDULE 1
EXISTING LIENS AT THE EFFECTIVE DATE
PLEASE COMPLETE
<TABLE>
<CAPTION>
DESCRIPTION OF INSTRUMENT OBLIGOR OBLIGEE DESCRIPTION OF COLLATERAL SHORT-TERM LONG-TERM TOTAL
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 1
EXHIBIT 11
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
COMPUTATION OF PER SHARE EARNINGS
(in thousands except per share data)
<TABLE>
<CAPTION>
Income from Continuing Operations
----------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Computation of Earnings Per
Common and Common
Equivalent Share (a):
- ---------------------------
Reported Income $ 5,688 $ 5,305 $17,885 $10,690
======= ======= ======= =======
Average number of shares
used to compute earnings
per common share 9,837 9,869 9,852 9,866
Effect of unexercised
stock options 59 42 65 38
------- ------- ------- -------
Average number of shares
used to compute earnings
per common and common
equivalent share 9,896 9,911 9,917 9,904
======= ======= ======= =======
Earnings per common and
common equivalent share $ 0.57 $ 0.54 $ 1.80 $ 1.08
======= ======= ======= =======
Computation of Earnings Per
Common Share Assuming
Full Dilution (a):
- ---------------------------
Reported Income $ 5,688 $ 5,305 $17,885 $10,690
======= ======= ======= =======
Average number of shares
used to compute earnings
per common share 9,837 9,869 9,852 9,866
Effect of unexercised
stock options 59 68 65 68
------- ------- ------- -------
Average number of shares
used to compute earnings
per common share assuming
full dilution 9,896 9,937 9,917 9,934
======= ======= ======= =======
Earnings per common share
assuming full dilution $ 0.57 $ 0.53 $ 1.80 $ 1.08
======= ======= ======= =======
</TABLE>
- -------
(a) This calculation is submitted in accordance with Regulation S-K Item 601
(11) although it is not required by APB Opinion No. 15 because it results
in dilution of less than 3%.
<PAGE> 2
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
COMPUTATION OF PER SHARE EARNINGS
(in thousands except per share data)
<TABLE>
<CAPTION>
Net Income
----------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Computation of Earnings Per
Common and Common
Equivalent Share (a):
- ---------------------------
Reported Income $ 5,688 $ 5,305 $17,885 $11,591
======= ======= ======= =======
Average number of shares
used to compute earnings
per common share 9,837 9,869 9,852 9,866
Effect of unexercised
stock options 59 42 65 38
------- ------- ------- -------
Average number of shares
used to compute earnings
per common and common
equivalent share 9,896 9,911 9,917 9,904
======= ======= ======= =======
Earnings per common and
common equivalent share 0.57 $ 0.54 $ 1.80 $ 1.17
======= ======= ======= =======
Computation of Earnings Per
Common Share Assuming
Full Dilution (a):
- ---------------------------
Reported Income $ 5,688 $ 5,305 $17,885 $11,591
======= ======= ======= =======
Average number of shares
used to compute earnings
per common share 9,837 9,869 9,852 9,866
Effect of unexercised
stock options 59 68 65 68
------- ------- ------- -------
Average number of shares
used to compute earnings
per common share assuming
full dilution 9,896 9,937 9,917 9,934
======= ======= ======= =======
Earnings per common share
assuming full dilution $ 0.57 $ 0.53 $ 1.80 $ 1.17
======= ======= ======= =======
</TABLE>
- -------
(a) This calculation is submitted in accordance with Regulation S-K Item 601
(11) although it is not required by APB Opinion No. 15 because it results
in dilution of less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM FORM 10-Q FOR THE
QUARTER ENDED JUNE 30, 1996 FOR CHEMED CORPORATION AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000019584
<NAME> CHEMED CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 32,255
<SECURITIES> 0
<RECEIVABLES> 90,441
<ALLOWANCES> (3,083)
<INVENTORY> 55,226
<CURRENT-ASSETS> 214,927
<PP&E> 131,695
<DEPRECIATION> (51,796)
<TOTAL-ASSETS> 519,908
<CURRENT-LIABILITIES> 139,350
<BONDS> 81,969
0
0
<COMMON> 12,681
<OTHER-SE> 198,572
<TOTAL-LIABILITY-AND-EQUITY> 519,908
<SALES> 199,642
<TOTAL-REVENUES> 337,932
<CGS> 136,703
<TOTAL-COSTS> 220,079
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 712
<INTEREST-EXPENSE> 3,831
<INCOME-PRETAX> 32,689
<INCOME-TAX> 12,211
<INCOME-CONTINUING> 17,885
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,885
<EPS-PRIMARY> 1.82
<EPS-DILUTED> 1.82
</TABLE>
