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FORM 8-K
CURRENT REPORT
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 30, 1994
CHEMED CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8351 31-0791746
(State of incorporation (Commission File No.) (I.R.S.Employer
or organization) Identification
Number)
2600 Chemed Center, 255 East 5th Street, Cincinnati, OH 45202
(address of principal executive offices) (zip code)
Registrant's telephone number, including area code:
(513) 762-6900
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Page 1 of 42
Item 2. Acquisition or Disposition of Assets
On November 30, 1994 Chemed Corporation ("Chemed") sold
1,570,000 shares of the common stock of Omnicare, Inc.
("Omnicare"), a publicly-traded affiliate in which Chemed
maintained a 20.9% ownership interest, to the underwriters CS
First Boston Corporation, Montgomery Securities and William Blair
& Company, by participating in a public offering.
The shares were sold at $37.82 per share (net of
underwriting discounts and commissions) for a total of $59.4
million, resulting in an aftertax gain of approximately
$21 million. The offering price of Omnicare common stock was
$39.50 per share. Information regarding the principles followed
in determining the price at which the shares were sold appears in
the "Underwriting" section of Omnicare's Prospectus dated
November 22, 1994 included in Amendment No. 1 to Registration
Statement on Form S-3, No. 33-85574, filed by Omnicare on
November 21, 1994; such section is incorporated herein by
reference. Chemed continues to own 727,000 shares or 5.8% of
Omnicare's common stock.
Information regarding Chemed's interest in Omnicare
previously appeared in Chemed's reports on Form 10-K for the year
ended December 31, 1993 and on Forms 10-Q for the quarters ended
March 31, June 30 and September 30, 1994.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements of Businesses Acquired. Not
applicable
(b) Pro Forma Financial Information.
The following assumptions have been made in
preparing the unaudited pro forma consolidated
statements of income of Chemed Corporation and
Subsidiary Companies ("Company") for the nine
months ended September 30, 1994 and for the year
ended December 31, 1993 and the unaudited pro
forma consolidated balance sheet of the Company as
of September 30, 1994;
( i) For purposes of preparing the unaudited
pro forma consolidated statements of
income, the Company completed the sale of
1,570,000 shares of the common stock of
Omnicare at the September 30, 1994 market
price of $40.125 per share, less
underwriting discounts and
Page 2 of 42
expenses of $3,425,000, realizing an
aftertax gain of $22,274,000 at the
beginning of each period presented;
( ii) For purposes of preparing the unaudited
pro forma consolidated balance sheet the
aforementioned sale of Omnicare stock was
completed on the balance sheet date;
(iii) A portion of the aftertax proceeds were
used to reduce borrowings under the
Company's revolving credit and term loan
agreements by $10 million during the first
nine months of 1994, resulting in a pretax
reduction of interest expense amounting to
$384,000;
( iv) The Company's equity in earnings of
affiliate (Omnicare) have been
reclassified to discontinued operations in
the unaudited pro forma consolidated
statements of income;
( v) For purposes of preparing the unaudited
pro forma consolidated statement of income
for the nine months ended
September 30, 1994 the Company's
previously recognized net gains on the
dispositions of portions of its investment
in Omnicare ($4,890,000 before income
taxes; $2,386,000 net of income taxes)
have been reclassified to discontinued
operations; and,
( vi) For purposes of preparing the unaudited
pro forma consolidated balance sheet at
September 30, 1994, the value of the
Company's remaining investment in Omnicare
(727,000 shares) has been increased to its
September 30, 1994 market value of $40.125
per share in accordance with Statement of
Financial Accounting Standards No. 115,
"Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS
No. 115").
Page 3 of 42
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1994
(in thousands)
Pro Forma Adjustments
Add/(Deduct)
---------------------
Historical Note A Note B Pro Forma
---------- ---------- ---------- ----------
ASSETS
Current assets
Cash and cash equivalents $ 15,699 $ 49,571 $ - $ 65,270
Marketable securities 2,073 - - 2,073
Accounts receivable, less allowances 80,012 - - 80,012
Current portion of note receivable 5,479 - - 5,479
Inventories 57,148 - - 57,148
Other current assets 12,939 - - 12,939
---------- ---------- ---------- ----------
Total current assets 173,350 49,571 - 222,921
Investment in affiliate 27,769 (18,980) (8,789) -
Other investments 45,308 - 29,171 74,479
Note receivable 5,455 - - 5,455
Properties and equipment, net 76,736 - - 76,736
Identifiable intangible assets, net 21,460 - - 21,460
Goodwill, net 113,198 - - 113,198
Other assets 18,495 - - 18,495
---------- ---------- ---------- ----------
Total Assets $ 481,771 $ 30,591 $ 20,382 $ 532,744
========== ========== ========== ==========
LIABILITIES
Current liabilities
Accounts payable $ 29,829 $ - - $ 29,829
Bank notes and loans payable 30,000 - - 30,000
Current portion of long-term debt 6,218 - - 6,218
Income taxes 18,052 18,317 - 36,369
Deferred contract revenue 22,915 - - 22,915
Other current liabilities 37,915 - - 37,915
---------- ---------- ---------- ----------
Total current liabilities 144,929 18,317 - 163,246
Deferred income taxes 1,758 - 6,930 8,688
Long-term debt 108,072 (10,000) - 98,072
Other liabilities and deferred income 40,582 - - 40,582
Minority interest 34,942 - - 34,942
---------- ---------- ---------- ----------
Total Liabilities 330,283 8,317 6,930 345,530
---------- ---------- ---------- ----------
STOCKHOLDERS' EQUITY
Capital stock 12,367 - - 12,367
Paid-in capital 138,674 - - 138,674
Retained earnings 103,568 22,274 - 125,842
Unrealized appreciation on investments 6,895 - 13,452 20,347
Treasury stock (70,405) - - (70,405)
Unearned compensation - ESOPs (39,611) - - (39,611)
---------- ---------- ---------- ----------
Total Stockholders' Equity 151,488 22,274 13,452 187,214
---------- ---------- ---------- ----------
Total Liabilities and
Stockholders' Equity $ 481,771 $ 30,591 $ 20,382 $ 532,744
========== ========== ========== ==========
See accompanying notes to unaudited financial statements.
Page 4 of 42
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
(in thousands, except per share data)
Pro Forma Adjustments
Add/(Deduct)
---------------------
Historical Note C Note D Pro Forma
---------- ---------- ---------- ----------
Continuing Operations
Sales $ 359,288 $ - $ - $ 359,288
Service revenues 120,254 - - $ 120,254
---------- ---------- ---------- ----------
Total sales and service revenues 479,542 - - 479,542
---------- ---------- ---------- ----------
Cost of goods sold 244,178 - - 244,178
Cost of services provided 75,061 - - 75,061
Selling and market expenses 72,218 - - 72,218
General and administrative expenses 59,862 - - 59,862
Depreciation 8,034 - - 8,034
Nonrecurring expenses 1,705 - - 1,705
---------- ---------- ---------- ----------
Total costs and expenses 461,058 - - 461,058
---------- ---------- ---------- ----------
Income from operations 18,484 - - 18,484
Interest expense (6,518) - 384 (6,134)
Other income, net 14,930 (4,890) 98 10,138
---------- ----------- ----------- ----------
Income before income taxes,
equity earnings and minority
interest 26,896 (4,890) 482 22,488
Income taxes (10,676) 2,504 (138) (8,310)
Equity in earnings of affiliate 1,720 (1,720) - -
Minority interest in earnings of
subsidiaries (2,959) - - (2,959)
---------- ---------- ---------- -----------
Income from continuing operations$ 14,981 $ (4,106) $ 344 $ 11,219
========== ========== ========== ===========
Earnings Per Common Share
Income from continuing operations$ 1.52 $ 1.14
========== ===========
Average Number of Shares
Outstanding 9,846 9,846
========== ===========
See accompanying notes to unaudited financial statements.
Page 5 of 42
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1993
(in thousands, except per share data)
Pro Forma Adjustments
Add/(Deduct)
---------------------
Historical Note C Note D Pro Forma
---------- ---------- ---------- ----------
Continuing Operations
Sales $ 401,372 $ - $ - $ 401,372
Service revenues 123,721 - - $ 123,721
---------- ---------- ---------- ----------
Total sales and services revenues 525,093 - - 525,093
---------- ---------- ---------- ----------
Cost of goods sold 269,284 - - 269,284
Cost of services provided 79,909 - - 79,909
Selling and market expenses 89,784 - - 89,784
General and administrative expenses 54,136 - - 54,136
Depreciation 8,817 - - 8,817
Nonrecurring expenses - - - -
---------- ---------- ---------- ----------
Total costs and expenses 501,930 - - 501,930
---------- ---------- ---------- ----------
Income from operations 23,163 - - 23,163
Interest expense (8,889) - - (8,889)
Other income, net 13,656 - 116 13,772
---------- ----------- ----------- ----------
Income before income taxes,
equity earnings and minority
interest 27,930 - 116 28,046
Income taxes (9,278) - (8) (9,286)
Equity in earnings of affiliate 2,299 (2,299) - -
Minority interest in earnings of
subsidiaries (3,809) - - (3,809)
---------- ---------- ---------- -----------
Income from continuing operations$ 17,142 $ (2,299) $ 108 $ 14,951
========== ========== ========== ===========
Earnings Per Common Share
Income from continuing operations$ 1.75 $ 1.53
========== ===========
Average Number of Shares
Outstanding 9,778 9,778
========== ===========
See accompanying notes to unaudited financial statements.
Page 6 of 42
CHEMED CORPORATION
EXPLANATORY NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 1994 AND DECEMBER 31, 1993
NOTE A -- This adjustment reflects the impact of the Company's
selling 1,570,000 shares of Omnicare stock at the
September 30, 1994 market price of $40.125 per share, less
underwriting discounts and expenses of $3,425,000. The effective
rate used to compute income taxes on the Company's sale of
Omnicare stock exceeds the statutory federal income tax rate of
34%, primarily due to a lower tax basis (versus book basis) of
the Company's investment in Omnicare.
NOTE B -- This adjustment represents the impact of the Company's
adjusting its remaining investment in Omnicare (727,000 shares)
to market value on September 30, 1994 ($40.125 per share) in
accordance with SFAS No. 115. The aftertax impact of that
adjustment is included in the unrealized appreciation on
investments account in the stockholders' equity section of the
balance sheet.
NOTE C -- This adjustment represents the reclassification of the
Company's equity earnings in its investment in Omnicare along
with previously recognized gains on sales of portions of its
investment in Omnicare to discontinued operations.
NOTE D -- These adjustments represent the impact of the
following:
(1) The dividend income from Omnicare on the Company's
remaining shares (727,000 shares) of Omnicare stock
owned after the above mentioned sale of 1,570,000
shares; and,
(2) The reduced level of interest expense that would
have occurred had the Company reduced its borrowings
under its revolving credit and term loan agreements
by $10,000,000 during the first nine months of 1994.
Interest expense under these credit arrangements
during 1993 was insignificant.
Page 7 of 42
(c) Exhibits.
( 2) Underwriting Agreement dated
November 21, 1994 among Chemed, Omnicare and
the Underwriters listed in Schedule A
thereto.
(99) Press release dated December 1, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
CHEMED CORPORATION
By: Arthur V. Tucker
-----------------------------
Its: Vice President & Controller
-----------------------------
Dated: December 13, 1994
Page 8 of 42
EXHIBIT 2
3,600,000 Shares
OMNICARE, INC.
Common Stock
($1 Par Value)
UNDERWRITING AGREEMENT
November 21, 1994
CS FIRST BOSTON CORPORATION
MONTGOMERY SECURITIES
WILLIAM BLAIR and COMPANY,
As Representatives of the Several Underwriters,
c/o CS First Boston Corporation,
Park Avenue Plaza,
New York, NY 10055.
Dear Madames or Sirs:
1. Introductory. Omnicare, Inc., a Delaware corporation
("Company"), proposes to issue and sell to the several Underwriters
named in Schedule A hereto ("Underwriters") 1,082,993 shares of its
Common Stock, $1 par value per share ("Securities"), and the
several Selling Stockholders named in Schedule B hereto ("Selling
Stockholders") propose to sell to the Underwriters 1,797,007 shares
of Securities (such 2,880,000 shares of Securities being
hereinafter referred to as the "U.S. Firm Securities"). The
Company also proposes to issue and the Company and Chemed
Corporation ("Chemed") also propose to sell to the Underwriters and
the Managers (as defined below), at the option of the Underwriters
and the Managers, an aggregate of not more than 540,000 additional
shares ("Optional Securities") of Securities as set forth below.
The U.S. Firm Securities and the Optional Securities that may be
sold to the Underwriters ("U.S. Optional Securities") are herein
collectively called the "U.S. Securities".
It is understood that the Company and the Selling Stockholders
are concurrently entering into a Subscription Agreement, dated the
date hereof ("Subscription Agreement"), with CS First Boston
Limited ("CSFBL"), Montgomery Securities and William Blair and
Company ("Managers") relating to the concurrent offering and sale
by the Company of 270,748 shares of Securities and by the Selling
Stockholders of 449,252 shares of Securities (such 720,000 shares
of Securities being hereinafter referred to as the "International
Firm Securities", which together with the Optional Securities that
may be sold to the Managers by the Company and Chemed
("International Optional Securities") are hereinafter called the
E - 1
Page 9 of 42
EXHIBIT 2
(Continued)
"International Securities") outside the United States and Canada
("International Offering"). The U.S. Securities and the
International Securities are collectively referred to as the
"Offered Securities". The Offered Securities being sold by the
Selling Stockholders are collectively referred to as the "Selling
Stockholder Securities". The Offered Securities being sold by the
Company are collectively referred to as the "Company Securities".
To provide for the coordination of their activities, the
Underwriters and the Managers have entered into an Agreement
Between U.S. Underwriters and Managers which permits them, among
other things, to sell the Offered Securities to each other for
purposes of resale.
The Company and the Selling Stockholders hereby agree with the
several Underwriters as follows:
2. Representations and Warranties of the Company and the
Selling Stockholders. (a) The Company represents and warrants to,
and agrees with, the several Underwriters that:
(i) A registration statement (No. 33-85574), including Post-
Effective Amendment No. 1 to Registration Statement No. 33-83752,
relating to the Offered Securities, including forms of prospectus
relating to the U.S. Securities and the International Securities,
has been filed with the Securities and Exchange Commission
("Commission") and either (i) has been declared effective under the
Securities Act of 1933 ("Act") and is not proposed to be amended or
(ii) is proposed to be amended by amendment or posteffective
amendment. If the Company does not propose to amend such
registration statement and if any posteffective amendment to such
registration statement has been filed with the Commission prior to
the execution and delivery of this Agreement, the most recent such
amendment has been declared effective by the Commission. For
purposes of this Agreement, "Effective Time" means (i) if the
Company has advised the Representatives that it does not propose to
amend such registration statement, the date and time as of which
such registration statement, or the most recent posteffective
amendment thereto (if any) filed prior to the execution and
delivery of this Agreement, was declared effective by the
Commission, or (ii) if the Company has advised the Representatives
that it proposes to file an amendment or post-effective amendment
to such registration statement, the date and time as of which such
registration statement, as amended by such amendment or post-
effective amendment, as the case may be, is declared effective by
the Commission. "Effective Date" means the date of the Effective
Time. Such registration statement, including Post-Effective
Amendment No. 1 to Registration Statement No. 33-83752, as amended
E - 2
Page 10 of 42
EXHIBIT 2
(Continued)
at the Effective Time, including all material incorporated by
reference therein and including all information (if any) deemed to
be a part of such registration statement as of the Effective Time
pursuant to Rule 430A(b) under the Act, is hereinafter referred to
as the "Registration Statement", and the form of prospectus
relating to the U.S. Securities and the form of prospectus relating
to the International Securities, each as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") under the Act or (if no such filing is required) as
included in the Registration Statement, including all material
incorporated by reference in such prospectus, is hereinafter
referred to as the "U.S. Prospectus", and the "International
Prospectus", respectively; and the U.S. Prospectus and the
International Prospectus are hereinafter collectively referred to
as the "Prospectuses".
(ii) If the Effective Time is prior to the execution and
delivery of this Agreement: (i) on the Effective Date, the
Registration Statement conformed in all respects to the
requirements of the Act and the rules and regulations of the
Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (ii) on the date of this Agreement, the
Registration Statement conforms, and at the time of filing of each
of the Prospectuses pursuant to Rule 424(b), the Registration
Statement and each of the Prospectuses will conform, in all
respects to the requirements of the Act and the Rules and
Regulations, and none of such documents includes, or will include,
any untrue statement of a material fact or omits, or will omit, to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading. If the Effective
Time is subsequent to the execution and delivery of this Agreement:
on the Effective Date, the Registration Statement and each of the
Prospectuses will conform in all respects to the requirements of
the Act and the Rules and Regulations, and none of such documents
will include any untrue statement of a material fact or will omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The two
preceding sentences do not apply to statements in or omissions from
the Registration Statement or either of the Prospectuses based upon
written information furnished to the Company by any Underwriter
through the Representatives or by any Manager through CSFBL
specifically for use therein, it being understood and agreed that
the only such information is that described as such in Section
7(c).
E - 3
Page 11 of 42
EXHIBIT 2
(Continued)
(iii) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectuses; and the Company is duly qualified to do business as
a foreign corporation in good standing in all other jurisdictions
in which its ownership or lease of property or the conduct of its
business requires such qualification.
(iv) Each subsidiary of the Company has been duly
incorporated and is an existing corporation in good standing under
the laws of the jurisdiction of its incorporation, with corporate
power and authority to own its properties and conduct its business
as described in the Prospectuses; and each subsidiary of the
Company is duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such
qualification; all of the issued and outstanding capital stock of
each subsidiary of the Company has been duly authorized and validly
issued and is fully paid and nonassessable; and the capital stock
of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects.
(v) The Offered Securities and all other outstanding shares
of capital stock of the Company have been duly authorized; all
outstanding shares of capital stock of the Company are, and, when
the Company Securities have been delivered and paid for in
accordance with this Agreement and the Subscription Agreement on
each Closing Date (as defined below), the Offered Securities will
have been, validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectuses;
and the stockholders of the Company have no preemptive rights with
respect to the Securities.
(vi) There are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid
claim against the Company or any Underwriter or Manager for a
brokerage commission, finder's fee or other like payment in
connection with the sale of the Securities.
(vii) There are no contracts, agreements or understandings
between the Company and any person granting such person the right
to require the Company to file a registration statement under the
Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
E - 4
Page 12 of 42
EXHIBIT 2
(Continued)
pursuant to any other registration statement filed by the Company
under the Act except for such contracts and agreements as to which
the Company has already satisfied its obligation to file a
registration statement under the Act or to include securities in a
registration statement filed by the Company under the Act.
(viii) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by
this Agreement or the Subscription Agreement in connection with the
issuance and sale of Offered Securities by the Company or the sale
of the Offered Securities by the Selling Stockholders, except such
as have been obtained and made under the Act and such as may be
required under state securities laws.
(ix) The execution, delivery and performance of this
Agreement and the Subscription Agreement and the issuance and sale
of the Securities will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or domestic or foreign order of any
governmental agency or body or any court, having jurisdiction over
the Company or any subsidiary of the Company or any of their
properties, or any agreement or instrument to which the Company or
any such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or by-
laws of the Company or any such subsidiary, and the Company has
full power and authority to authorize, issue and sell the Company
Securities as contemplated by this Agreement and the Subscription
Agreement, respectively.
(x) This Agreement and the Subscription Agreement have been
duly authorized, executed and delivered by the Company.
(xi) The Company and its subsidiaries have good and
marketable title in fee simple to all real properties and good and
marketable title to all other properties and assets owned by them,
in each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with
the use made or to be made thereof by them; and all leased real and
personal property held by the Company or any of its subsidiaries is
held under valid and enforceable leases with no exceptions that
would materially interfere with the use made or to be made thereof
by the Company and its subsidiaries.
E - 5
Page 13 of 42
EXHIBIT 2
(Continued)
(xii) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business
now operated by them and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to
the Company or any of its subsidiaries, would individually or in
the aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(xiii) No labor dispute with the employees of the Company or
any subsidiary exists or, to the knowledge of the Company, is
imminent that might have a material adverse effect on the Company
and its subsidiaries taken as a whole.
(xiv) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct
the business now operated by them, or presently employed by them,
and have not received any notice of infringement of or conflict
with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a
material adverse effect on the Company and its subsidiaries taken
as a whole.
(xv) Neither the Company nor any of its subsidiaries is in
violation of any statute, any rule, regulation, decision or order
of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or, toxic substances
(collectively, "environmental laws") or is subject to any claim
relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a
material adverse effect on the Company and its subsidiaries taken
as a whole; and the Company is not aware of any pending
investigation which might lead to such a claim.
(xvi) There are no pending actions, suits or proceedings
against or affecting the Company, any of its subsidiaries or any of
their respective properties that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the condition
(financial or other), business, prospects, results of operations or
E - 6
Page 14 of 42
EXHIBIT 2
(Continued)
general affairs of the Company and its subsidiaries taken as a
whole, or would materially and adversely affect the ability of the
Company to perform its obligations under this Agreement or the
Subscription Agreement, or which are otherwise material in the
context of the sale of the Offered Securities; and no such actions,
suits or proceedings are threatened or, to the Company's knowledge,
contemplated.
(xvii) To the Company's knowledge, the accountants who
certified the financial statements and supporting schedules
included or incorporated by reference in the Registration Statement
are independent public accountants as required by the Act and the
Rules and Regulations.
(xviii) The financial statements included in the Registration
Statement and the Prospectuses present fairly the financial
position of the Company and its consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the
periods shown, and such financial statements have been prepared in
conformity with the generally accepted accounting principles in the
United States applied on a consistent basis (except as set forth in
the accompanying footnotes) and comply with the requirements of the
Act; and the schedules present fairly the information required to
be stated therein and comply with the requirements of the Act. The
financial information and statistical data set forth in the
Prospectus under the captions "Prospectus Summary--Summary
Consolidated Financial Information," "Capitalization," "Selected
Consolidated Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" have
been prepared on a basis consistent with the consolidated financial
statements of the Company. The pro forma financial information
incorporated by reference in the Registration Statement comply with
the requirements of the Act and the Rules and Regulations; the
assumptions of management described in the notes to such pro forma
financial information provide a reasonable basis for presenting the
significant effects directly attributable to the transactions
described in such notes; the related pro forma adjustments give
appropriate effect to those assumptions and the pro forma column
reflects the proper application of those adjustments to the
historical financial statement amounts in the pro forma condensed
balance sheet and the pro forma condensed statement of income.
(xix) Since the date of the latest audited financial
statements included in the Prospectuses, there has been no material
adverse change, nor any development or event that may result in a
prospective material adverse change, in the condition (financial or
other), business, prospects, results of operations or general
E - 7
Page 15 of 42
EXHIBIT 2
(Continued)
affairs of the Company and its subsidiaries taken as a whole, and,
except as disclosed in or contemplated by the Prospectuses, there
has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(xx) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of
the proceeds thereof as described in the Prospectuses, will not be
an "investment company" as defined in the Investment Company Act of
1940.
(xxi) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes and the Company agrees to comply with such Section
if prior to the completion of the distribution of the Offered
Securities it commences doing such business.
(xxii) Except where the failure to file would not have a
material adverse effect, all tax returns required to be filed by
the Company or any of its subsidiaries, in any jurisdiction, have
been so filed, and all material taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due or
claimed to be due from such entities have been paid, other than
those being contested in good faith and for which adequate reserves
have been provided or those currently payable without material
penalty or interest. No material proposed additional tax
assessments have been asserted in writing against the Company or
any of its subsidiaries.
(xxiii) The Offered Securities have been approved for listing
on the New York Stock Exchange (the "Stock Exchange") subject to
official notice of issuance.
(b) Each Selling Stockholder severally represents and
warrants to, and agrees with, the several Underwriters that:
(i) Such Selling Stockholder has and on the Closing Date
hereinafter mentioned will have valid and unencumbered title to the
Selling Stockholder Securities to be sold by such Selling
Stockholder and full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the Selling
Stockholder Securities and upon the delivery of and payment for the
Securities hereunder the several Underwriters will acquire valid
and unencumbered title to the Selling Stockholder Securities.
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Page 16 of 42
EXHIBIT 2
(Continued)
(ii) The sale of the Selling Stockholder Securities by such
Selling Stockholder pursuant hereto is not prompted by any
information concerning the Company or any of its subsidiaries which
is not set forth in the Prospectuses or any supplement thereto.
(iii) This Agreement, the Subscription Agreement and the
Custody Agreement (as hereinafter defined) have been duly
authorized, executed and delivered by such Selling Stockholder.
(iv) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by
this Agreement or the Subscription Agreement in connection with the
sale of Selling Stockholder Securities by such Selling Stockholder,
except such as have been obtained and made under the Act and such
as may be required under state securities laws.
(v) The execution, delivery and performance of this
Agreement, the Subscription Agreement and the Custody Agreement,
and the consummation of the transactions herein and therein
contemplated, will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency
or body or any court, domestic or foreign, having jurisdiction over
such Selling Stockholder or any of its properties, or any agreement
or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound or to which any of the
properties of such Selling Stockholder is subject, or the charter
or by-laws of such Selling Stockholder, and such Selling
Stockholder has full power and authority to sell the Selling
Stockholder Securities as contemplated by this Agreement and the
Subscription Agreement, respectively.
(vi) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or
result, under the Securities Exchange Act of 1934 or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities and has
not effected any sales of shares of Securities which, if effected
by the issuer, would be required to be disclosed in response to
Item 701 of Regulation S-K.
(c) Chemed represents and warrants to, and agrees with,
the several Underwriters that such Selling Stockholder has no
reason to believe that the representations and warranties of the
E - 9
Page 17 of 42
EXHIBIT 2
(Continued)
Company contained in this Agreement and the Subscription Agreement
are not true and correct, is familiar with the Registration
Statement and has no knowledge of any material fact, condition or
information not disclosed in the Prospectuses or any supplement
thereto which has adversely affected or may adversely affect the
business of the Company or any of its subsidiaries.
(d) Each of the Selling Stockholders other than Chemed
severally represents and warrants to, and agrees with, the several
Underwriters that all information furnished by or on behalf of such
Selling Stockholder relating to such Selling Stockholder and the
Securities to be sold by such Selling Stockholder hereunder that is
contained in the representations and warranties of such Selling
Stockholder in such Selling Stockholder's Power of Attorney or set
forth in the Registration Statement or the Prospectuses is, and on
the relevant Closing Date hereunder will be, true, correct and
complete, and does not, and on the relevant Closing Date hereunder
will not, contain an untrue statement of a material fact or omit to
state a material fact necessary to make such statements not
misleading in light of the circumstances under which they were
made. Such Selling Stockholder is not aware (without having
conducted any independent investigation) that any of the
representations and warranties of the Company herein is untrue or
inaccurate in any material respect.
3. Purchase, Sale and Delivery of Offered Securities. On the
basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set
forth, the Company and each Selling Stockholder agree, severally
and not jointly, to sell to the Underwriters, and the Underwriters
agree, severally and not jointly, to purchase from the Company and
each Selling Stockholder, at a purchase price of $37.82 per share,
the respective numbers of shares of U.S. Firm Securities set forth
opposite the names of the Underwriters in Schedule A hereto.
Certificates in negotiable form for the Selling Stockholder
Securities to be sold by Medisave Pharmacies, Inc. ("Medisave") and
Richard L. Doane ("Doane") hereunder have been placed in custody,
for delivery under this Agreement, under Custody Agreements dated
November 18, 1994 (the "Custody Agreements"), made with U.S. Trust
Company, as custodian ("Custodian"). Each such Selling Stockholder
agrees that the shares represented by the certificates held in
custody for each such Selling Stockholder under such Custody
Agreements are subject to the interests of the Underwriters
hereunder, that the arrangements made by each such Selling
Stockholder for such custody are to that extent irrevocable, and
that the obligations of each such Selling Stockholder hereunder
E - 10
Page 18 of 42
EXHIBIT 2
(Continued)
shall not be terminated by operation of law or the occurrence of
any other event. If any other such event should occur before the
delivery of the Securities hereunder, certificates for such shares
of Securities shall be delivered by the Custodian in accordance
with the terms and conditions of this Agreement as if such other
event had not occurred, regardless of whether or not the Custodian
shall have received notice of such event.
The Company, Chemed and the Custodian will deliver the U.S.
Firm Securities to the Representatives for the accounts of the
Underwriters, against payment of the purchase price by certified or
official bank check or checks in New York Clearing House (next day)
funds drawn to the order of the Company and the Selling
Stockholders at the office of Cravath, Swaine and Moore, at 9:30
A.M., New York time, on November 30, 1994, or at such other time
not later than seven full business days thereafter as CS First
Boston Corporation ("CSFBC") and the Company determine, such time
being herein referred to as the "First Closing Date". The
certificates for the U.S. Firm Securities so to be delivered will
be in definitive form, in such denominations and registered in such
names as CSFBC requests and will be made available for checking and
packaging at the above office of Cravath, Swaine and Moore, at
least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the
Company and Chemed from time to time not more than 30 days
subsequent to the date of the initial public offering of the
Offered Securities, the Underwriters and the Managers may purchase
all or less than all of the Optional Securities, which in the case
of the Underwriters shall be at the purchase price per Security to
be paid for the U.S. Firm Securities. Unless otherwise agreed
between CSFBL and CSFBC, the U.S. Optional Securities to be
purchased by the Underwriters on any Optional Closing Date shall be
in the same proportion to all the Optional Securities to be
purchased by the Underwriters and Managers on such Optional Closing
Date as the U.S. Firm Securities bear to all the Firm Securities.
The Company and Chemed agree to sell to the Underwriters such U.S.
Optional Securities and the Underwriters agree, severally and not
jointly, to purchase such U.S. Optional Securities. The Company
and Chemed agree that the U.S. Optional Securities to be sold to
the Underwriters on any Optional Closing Date shall be sold in
equal amounts by the Company and Chemed. Such U.S. Optional
Securities shall be purchased for the account of each Underwriter
in the same proportion as the number of shares of U.S. Firm
Securities set forth opposite such Underwriter's name bears to the
total number of shares of U.S. Firm Securities (subject to
adjustment by CSFBC to eliminate fractions) and may be purchased by
E - 11
Page 19 of 42
EXHIBIT 2
(Continued)
the Underwriters only for the purpose of covering overallotments
made in connection with the sale of the U.S. Firm Securities. No
Optional Securities shall be sold or delivered unless the U.S. Firm
Securities and the International Firm Securities previously have
been, or simultaneously are, sold and delivered. The right to
purchase the Optional Securities or, any portion thereof may be
exercised from time to time upon written or telegraphic notice by
the Underwriters to the Company and Chemed setting forth the number
of Option Securities as to which the several Underwriters are
exercising the Option and to the extent not previously exercised
may be surrendered and terminated at any time upon notice by CSFBC
on behalf of Underwriters and the Managers to the Company and
Chemed.
Each time for the delivery of and payment of the U.S. Optional
Securities, being herein referred to as an "Optional Closing Date",
which may be the First Closing Date (the First Closing Date and
each Optional Closing Date, if any, being sometimes referred to as
a "Closing Date"), shall be determined by CSFBC but shall be not
later than seven full business days after written or telegraphic
notice of election to purchase Optional Securities is given. The
Company and Chemed will deliver the U.S. Optional Securities being
purchased on each Optional Closing Date to the Representatives for
the accounts of the several Underwriters, against payment of the
purchase price therefor by certified or official bank check or
checks in New York Clearing House (next day) funds drawn to the
order of the Company and Chemed, at the above office of Cravath,
Swaine and Moore. The certificates for the U.S. Optional
Securities will be in definitive form, in such denominations and
registered in such names as CSFBC requests upon reasonable notice
prior to such Optional Closing Date and will be made available for
checking and packaging at the above office of Cravath, Swaine and
Moore, at a reasonable time in advance of the such Optional Closing
Date.
4. Offering by Underwriters. It is understood that the
several Underwriters propose to offer the U.S.
Securities for sale to the public as set forth in the U.S.
Prospectus.
5. Certain Agreements of the Company and the Selling
Stockholders. The Company and, as applicable, each Selling
Stockholder agree with the several Underwriters that:
(a) If the Effective Time is prior to the execution and
delivery of this Agreement, the Company will file the Prospectuses
with the Commission pursuant to and in accordance with subparagraph
E - 12
Page 20 of 42
EXHIBIT 2
(Continued)
(1) (or, if applicable and if consented to by CSFBC, subparagraph
(4)) of Rule 424(b) not later than the earlier of (A) the second
business day following the execution and delivery of this Agreement
or (B) the fifth business day after the Effective Date. The
Company will advise CSFBC promptly of any such filing pursuant to
Rule 424(b).
(b) The Company will advise CSFBC promptly of any
proposal to amend or supplement the registration statement as filed
or the related prospectus or the Registration Statement or either
of the Prospectuses and will not effect such amendment or
supplementation without CSFBC's prior consent; and the Company will
also advise CSFBC promptly of the effectiveness of the Registration
Statement (if the Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation
of the Registration Statement or either of the Prospectuses and of
the institution by the Commission of any stop order proceedings in
respect of the Registration Statement and will use its best efforts
to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the
Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter, Manager or dealer, any
event occurs as a result of which either or both of the
Prospectuses as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
is necessary at any time to amend either or both of the
Prospectuses to comply with the Act, the Company will promptly
notify CSFBC and each Selling Stockholder of such event and will
promptly prepare and, in the case of the U.S. Prospectus, file with
the Commission, at its own expense, an amendment or supplement
which will correct such statement or omission or an amendment which
will effect such compliance. Neither CSFBC's consent to, nor the
Underwriter's delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in
Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make
generally available to its security holders an earnings statement
covering a period of at least 12 months beginning after the
Effective Date which will satisfy the provisions of Section 11(a)
of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
E - 13
Page 21 of 42
EXHIBIT 2
(Continued)
fiscal quarter following the fiscal quarter that includes the
Effective Date, except that, if such fourth fiscal quarter is the
last quarter of the Company's fiscal year, "Availability Date"
means the 90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives
copies of the Registration Statement (four of which will be signed
and will include all exhibits), each preliminary prospectus
relating to the U.S. Securities, and, so long as delivery of a
prospectus relating to the Offered Securities is required to be
delivered under the Act in connection with sales by any Underwriter
or dealer, the U.S. Prospectus and all amendments and supplements
to such documents, in each case as soon as available and in such
quantities as CSFBC requests. The Company will pay the expenses of
printing and distributing all such documents.
(f) The Company will arrange for the qualification of
the Offered Securities for sale under the laws of such
jurisdictions in the United States and Canada as CSFBC designates
and will continue such qualifications in effect so long as required
for the distribution.
(g) During the period of five years hereafter, the
Company will furnish to the Representatives and, upon request, to
each of the other Underwriters, as soon as practicable after the
end of each fiscal year, a copy of its annual report to
stockholders for such year; and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission
under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information
concerning the Company as CSFBC may reasonably request.
(h) The Company will indemnify and hold harmless the
Underwriters against any documentary, stamp or similar issuance
tax, including any interest and penalties, on the creation,
issuance and sale of the Offered Securities and on the execution
and delivery of this Agreement. All payments to be made by the
Company hereunder shall be made without withholding or deduction or
on account of any present or future taxes, duties or governmental
charges whatsoever unless the Company is compelled by law to deduct
or withhold such taxes, duties or charges. In that event, the
Company shall pay such additional amounts as may be necessary in
order that the net amounts received after such withholding or
deduction shall equal the amounts that would have been received if
no withholding or deduction had been made.
E - 14
Page 22 of 42
EXHIBIT 2
(Continued)
(i) The Company and each Selling Stockholder will not,
and the Company and each corporate Selling Stockholder will not
allow any of their respective subsidiaries or affiliates to, offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or cause to be filed with the Commission a registration
statement under the Act relating to, or announce any offering of,
any additional shares of its Securities or securities convertible
or exchangeable into or exercisable for any shares of Securities
without the prior written consent of CSFBC for a period of, in the
case of the Company and Chemed Corporation ("Chemed"), 120 days
and, in the case of each Selling Stockholder other than Chemed, 90
days after the date of the initial public offering of the Offered
Securities, except that the Company may issue and sell Securities
(or options exercisable for Securities) pursuant to any employee or
non-employee director stock option or stock ownership plan of the
Company and the Company may issue Securities or any securities
convertible into or exchangeable for, or exercisable into shares of
Securities pursuant to the terms of any securities outstanding at
the date hereof or other obligations binding upon the Company and
in effect at the date hereof. Such restriction shall not apply to
shares of Common Stock offered by the Company as consideration for
a merger or other stock-based acquisition.
(j) The Company will reimburse the Underwriters (if and
to the extent incurred by them) for any travel expenses of the
Company's officers and employees and other expenses of the Company
in connection with attending or hosting meetings with prospective
purchasers of the Offered Securities.
(k) The Company and Chemed agree with the several
Underwriters that the Company and Chemed will pay all expenses
incident to the performance of the obligations of the Company and
each Selling Stockholder under this Agreement and will, jointly and
severally, reimburse the Underwriters (if and to the extent
incurred by them) for any filing fees and other expenses (including
fees and disbursements of counsel) incurred by them in connection
with qualification of the Offered Securities for sale under the
laws of such jurisdictions in the United States and Canada as CSFBC
designates and the printing of memoranda relating thereto, for the
filing fee of the National Association of Securities Dealers, Inc.
relating to the Offered Securities and for expenses incurred in
distributing preliminary prospectuses and the Prospectuses
(including any amendments and supplements thereto) to the
Underwriters. The parties agree that Doane and Medisave will pay
their respective legal fees.
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Page 23 of 42
EXHIBIT 2
(Continued)
(l) Each Selling Stockholder agrees to deliver to the
Representatives on or prior to the Closing Date a properly
completed and executed United States Treasury Department Form W-9
(or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the
U.S. Finn Securities on the First Closing Date and the U.S.
Optional Securities to be purchased on each Optional Closing Date
will be subject to the accuracy of the representations and
warranties on the part of the Company and of the Selling
Stockholders herein, to the accuracy of the statements of officers
of the Company and the Selling Stockholders made pursuant to the
provisions hereof, to the performance by the Company and by the
Selling Stockholders of their respective obligations hereunder and
to the following additional conditions precedent:
(a) The Representatives shall have received a letter,
dated the date of delivery thereof (which, if the Effective Time is
prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time is
subsequent to the execution and delivery of this Agreement, shall
be prior to the filing of the amendment or post-effective amendment
to the registration statement to be filed shortly prior to the
Effective Time), of Price Waterhouse LLP confirming that they are
independent public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and
stating to the effect set forth in Schedule C hereto.
(b) If the Effective Time is not prior to the execution
and delivery of this Agreement, the Effective Time shall have
occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or such later date as shall have been consented to
by CSFBC. If the Effective Time is prior to the execution and
delivery of this Agreement, the U.S. Prospectus shall have been
filed with the Commission in accordance with the Rules and
Regulations and Section 5(a) of this Agreement. Prior to such
Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of
the Company or the Representatives, shall be contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting
E - 16
Page 24 of 42
EXHIBIT 2
(Continued)
particularly the business or properties of the Company or its
subsidiaries which, in the judgment of a majority in interest of
the Underwriters including the Representatives, materially impairs
the investment quality of the Offered Securities; (ii) any
downgrading in the rating of any debt securities of the Company by
any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than
an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating);
(iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading
of any securities of the Company on any exchange or in the over-
the-counter market; (iv) any banking moratorium declared by Federal
or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration
of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a
majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment
for the U.S. Securities.
(d) The Representatives shall have received an opinion,
dated such Closing Date, of Thompson, Hine and Flory, counsel for
the Company, to the effect that:
(i) the Company has been duly incorporated and is
an existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectuses; and the Company is duly qualified to do business as
a foreign corporation in good standing in all other jurisdictions
in which its ownership or leasing of property or the conduct of its
business requires such qualification other than jurisdictions in
which the failure to so qualify would not have a material adverse
effect on the Company and its subsidiaries taken as one enterprise;
(ii) each subsidiary of the Company has been duly
incorporated and is an existing corporation in good standing under
the laws of the jurisdiction of its incorporation, with corporate
power and authority to own its properties and conduct its business
as described in the Prospectuses; and each subsidiary of the
Company is duly qualified to do business as a foreign corporation
E - 17
Page 25 of 42
EXHIBIT 2
(Continued)
in good standing in all other jurisdictions in which its ownership
or leasing of property or the conduct of its business requires such
qualification other than jurisdictions in which the failure to so
qualify would not have a material adverse effect on the Company and
its subsidiaries taken as one enterprise; all of the issued and
outstanding capital stock of each subsidiary of the Company has
been duly authorized and validly issued and is, to such counsel's
knowledge, fully paid and nonassessable; and the capital stock of
each subsidiary owned by the Company, directly or through
subsidiaries, is owned free and clear of any perfected security
interests, and, to such counsel's knowledge, free and clear of any
other security interests, claims, liens, encumbrances and defects;
(iii) the Company's authorized capital stock is as
set forth in the Prospectus under "Description of Capital Stock--
General"; the Offered Securities delivered on such Closing Date and
all other outstanding shares of the Common Stock of the Company
have been duly authorized and validly issued, are, to such
counsel's knowledge, fully paid and nonassessable and conform to
the description thereof contained in the Prospectuses; the Offered
Securities are duly authorized for listing, subject to official
notice of issuance, on the Stock Exchange; the certificates for the
Offered Securities are in valid form; and the stockholders of the
Company have no preemptive rights or similar rights with respect to
the Offered Securities;
(iv) no consent, approval, authorization or order
of, or filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by
this Agreement or the Subscription Agreement in connection with the
issuance or sale of the Offered Securities by the Company, except
such as have been obtained and made under the Act and such as may
be required under state securities laws;
(v) the execution, delivery and performance of this
Agreement and the Subscription Agreement and the issuance and sale
of the Offered Securities will not result in a breach or violation
of any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over
the Company or any subsidiary of the Company or any of their
properties, or any agreement or instrument known to such counsel to
which the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the
charter or by-laws of the Company or any such subsidiary, and the
Company has full power and authority to authorize, issue and sell
E - 18
Page 26 of 42
EXHIBIT 2
(Continued)
the Offered Securities as contemplated by this Agreement and the
Subscription Agreement, respectively;
(vi) the Registration Statement was declared
effective under the Act as of the date and time specified in such
opinion, the Prospectuses either were filed with the Commission
pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein or were included in the
Registration Statement (as the case may be), and, to the best of
the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has
been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act; and such
counsel do not know of any legal or governmental proceedings
required to be described in the Registration Statement or the
Prospectuses which are not described as required or of any
franchises, contracts or documents of a character required to be
described in the Registration Statement or the Prospectuses or to
be filed as exhibits to the Registration Statement which are not
described and filed as required;
(vii) to the best knowledge of such counsel, there
is no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries or to which any of
the properties of the Company or any of its subsidiaries is subject
that is required to be disclosed in the Registration Statement
which is not adequately disclosed in the Prospectuses;
(viii) this Agreement and the Subscription
Agreement have been duly authorized, executed and delivered by the
Company;
(ix) the statements in the Prospectuses under the
headings "Description of Capital Stock" and "Tax Considerations"
fairly summarize, in all material respects, the matters therein
described; and
(x) to such counsel's knowledge, no holders of
securities of the Company have rights to the registration of such
securities.
In giving their opinion, Thompson, Hine and Flory shall
additionally state that although they are not passing upon, and do
not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement
or the Prospectuses (except as set forth in paragraph (ix) under
E - 19
Page 27 of 42
EXHIBIT 2
(Continued)
Section 6(d) hereof) and they have not made any independent check
or verification thereof, they have participated in conferences with
officers and other representatives of the Company, counsel for the
Company, and representatives of the independent public accountants
for the Company, at which conferences the contents of the
Registration Statement and the Prospectuses were discussed and, on
the basis of the foregoing, (x) no facts have come to their
attention that would lead them to believe that the Registration
Statement and the U.S. Prospectus, and each amendment or supplement
thereto (except the financial statements contained therein), as of
their respective effective or issue dates, did not comply as to
form in all material respects with the requirements of the Act and
the Rules and Regulations; and (y) such counsel have no reason to
believe that either the Registration Statement or either of the
Prospectuses, or any such amendment or supplement, as of their
respective effective or issue dates or as of such Closing Date,
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
(e) The Representatives shall have received opinions,
dated such Closing Date, of Kevin McNamara, as counsel for Chemed,
Richard P. Adcock, Esq., General Counsel for Medisave and Hillis
Clark Martin and Peterson and Ogden Murphy Wallace, as counsel for
Doane, to the effect, with respect to such Selling Stockholders,
that:
(i) each Selling Stockholder had valid and
unencumbered title to the Selling Stockholder Securities and had
full right, power and authority to sell, assign, transfer and
deliver the Selling Stockholder Securities hereunder and under the
Subscription Agreement; and the several Underwriters have upon
receipt of such share certificates acquired valid and unencumbered
title to the Selling Stockholder Securities purchased by them from
each Selling Stockholder hereunder;
(ii) no consent, approval, authorization or order
of, or filing with, any governmental agency or body or any court is
required to be obtained or made by the Selling Stockholder for the
consummation of the transactions contemplated by this Agreement,
the Subscription Agreement and the Custody Agreement in connection
with the sale of the Selling Stockholder Securities, except such as
have been obtained and made under the Act and such as may be
required under state securities laws;
(iii) in the case of counsel for Chemed, the
execution, delivery and performance of this Agreement, the
E - 20
Page 28 of 42
EXHIBIT 2
(Continued)
Subscription Agreement and the Custody Agreement, and the
consummation of the transactions herein and therein contemplated
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any
rule, regulation or order of any governmental agency or body of any
court having jurisdiction over Chemed or any of its properties or
any agreement or instrument to which Chemed is a party or by which
Chemed is bound or to which any of the properties of Chemed is
subject, or the charter or by-laws of Chemed; and
(iv) each of this Agreement, the Subscription
Agreement and the Custody Agreement, has been duly authorized,
executed and delivered by the Selling Stockholder.
(t) The Representatives shall have received an opinion,
dated such Closing Date, of Reed Smith Shaw and McClay, healthcare
counsel for the Company, to the effect as follows:
(i) the issuance, sale and delivery of the Common
Stock of the Company pursuant to this Agreement and the
Subscription Agreement does not require any consent of any
healthcare agency or other healthcare regulatory body of any State
in which the Company or any of its subsidiaries operate or any
Federal Medicare or Medicaid laws and regulations; and
(ii) the statements in the Prospectus under the
caption "Business--Reimbursement and Billing" and "Government
Regulation" insofar as they purport to constitute summaries of
healthcare laws, regulations, policies and interpretation, are
accurate and fairly present the legal issues purported to be
described therein, and such counsel are not aware of any other
healthcare laws, rules, regulations, policies or interpretations
which are material to the operations of the Company and its
subsidiaries which have not been adequately and accurately
disclosed in the Prospectus.
(g) The Representatives shall have received from
Cravath, Swaine and Moore, counsel for the Underwriters, such
opinions and letters, dated such Closing Date, with respect to the
incorporation of the Company, the validity of the Offered
Securities delivered on such Closing Date, the Registration
Statement, the Prospectuses and other related matters as the
Representatives may require, and the Company and each Selling
Stockholder shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters.
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EXHIBIT 2
(Continued)
(h) The Representatives shall have received a
certificate, dated such Closing Date, of the President or any Vice-
President and a principal financial or accounting officer of the
Company in which such officers, to the best of their knowledge
after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are
true and correct, that the Company has complied with all agreements
and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date, that no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission and that,
subsequent to the date of the most recent financial statements in
the Prospectuses, there has been no material adverse change in the
financial position or results of operation of the Company and its
subsidiaries except as set forth in or contemplated by the
Prospectuses or as described in such certificate.
(i) The Representatives shall have received a letter,
dated such Closing Date, of Price Waterhouse LLP, which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not
more than five days prior to such Closing Date for the purpose of
this subsection.
(j) On such Closing Date, the Managers shall have
purchased the International Firm Securities or the International
Optional Securities, as the case may be, pursuant to the
Subscription Agreement.
(k) The Company and the Selling Stockholders will
furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the
Representatives reasonably request.
7. Indemnification and Contribution. (a) The Company and
Chemed will, jointly and severally, indemnify and hold harmless
each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, either of the Prospectuses, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
E - 22
Page 30 of 42
EXHIBIT 2
(Continued)
to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company and
Chemed will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and
in conformity with written information furnished to the Company by
any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only information
furnished by any Underwriter consists of the information described
as such in subsection (c) below.
(b) Each Selling Stockholder severally agrees to
indemnify and hold harmless the Company, each of its directors,
each of its officers who signs the Registration Statement, each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls the Company or any
Underwriter within the meaning of either the Act or the Exchange
Act and each other Selling Stockholder to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only
with reference to written information furnished to the Company by
or on behalf of such Selling Stockholder specifically for use in
the preparation of the documents referred to in the foregoing
indemnity, it being understood and agreed that such information
with respect to Doane and Medisave consists of their names and
their respective share amounts under the caption "Selling
Stockholders" in the Prospectuses. This indemnity agreement will
be in addition to any liability which any Selling Stockholder may
otherwise have.
(c) Each Underwriter will severally and not jointly
indemnify and hold harmless the Company and the Selling
Stockholders against any losses, claims, damages or liabilities to
which the Company or the Selling Stockholders may become subject,
under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, either of
the Prospectuses, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon
the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
E - 23
Page 31 of 42
EXHIBIT 2
(Continued)
statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company
by such Underwriter through the Representatives specifically for
use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company or the Selling Stockholders in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by
any Underwriter consists of the following information in the U.S.
Prospectus furnished on behalf of each Underwriter: the last
paragraph at the bottom of the cover page concerning the terms of
the offering by the Underwriters, the legend concerning over-
allotments and stabilizing on the inside front cover page, the
concession and reallowance figures appearing in the paragraph under
the caption "Underwriting" and the information furnished on behalf
of CSFBC, Montgomery Securities or William Blair and Company as the
case may be, in the last paragraph under the caption
"Underwriting".
(d) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under subsection (a), (b) or (c)
above, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a), (b) or (c) above. In
case any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified
E - 24
Page 32 of 42
EXHIBIT 2
(Continued)
party from all liability on any claims that are the subject matter
of such action.
(e) If the indemnification provided for in this Section
is unavailable or insufficient to hold harmless an indemnified
party under subsection (a), (b) or (c) above, then each
indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in subsection (a), (b) or (c)
above (i) in such proportion between the Company and the
Underwriters as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one
hand (as to which the Company is Responsible) and the Underwriters
on the other from the offering of the U.S. Securities or (ii) if
the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, the Selling Stockholders and the
Underwriters, respectively, in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations.
The relative benefits received by the Company, the Selling
Stockholders and the Underwriters shall be deemed to be in the same
proportion as the total net proceeds from the offering of the U.S.
Securities (before deducting expenses) received by the Company and
the Selling Stockholders bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault
shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholders or
the Underwriters and the parties, relative intent, knowledge,
access to information and opportunity to correct or prevent such
untrue statement or omission. For purposes of the preceding
sentence, the relative fault of Doane and Medisave shall be
determined solely with reference to the written information
furnished to the Company by them or on their behalf specifically
for use in the documents referred to in subsection (a) above. The
amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of
this subsection (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim
which is the subject of this subsection (e). Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required
to contribute any amounts in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and
E - 25
Page 33 of 42
EXHIBIT 2
(Continued)
distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The
Underwriters, obligations in this subsection (e) to contribute are
several in proportion to their respective underwriting obligations
and not joint. The Selling Stockholders' obligations in this
subsection (e) to contribute are several and not joint.
(f) The obligations of the Company and the Selling
Stockholders under this Section shall be in addition to any
liability which the Company and the Selling Stockholders may
otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any
liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each director
of the Company, to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or
Underwriters default in their obligations to purchase U.S.
Securities hereunder on either the First or any Optional Closing
Date and the aggregate number of shares of U.S. Securities that
such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of U.S.
Securities that the Underwriters are obligated to purchase on such
Closing Date, CSFBC may make arrangements satisfactory to the
Company and the Selling Stockholders for the purchase of such U.S.
Securities by other persons, including any of the Underwriters, but
if no such arrangements are made by such Closing Date the non-
defaulting Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the U.S.
Securities that such defaulting Underwriters agreed but failed to
purchase on such Closing Date. If any Underwriter or Underwriters
so default and the aggregate number of shares of U.S. Securities
with respect to which such default or defaults occur exceeds 10% of
the total number of shares of U.S. Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements
satisfactory to CSFBC, the Company and the Selling Stockholders for
the purchase of such U.S. Securities by other persons are not made
within 36 hours after such default, this Agreement will terminate
E - 26
Page of 34 of 42
EXHIBIT 2
(Continued)
without liability on the part of any non-defaulting Underwriter,
the Company or the Selling Stockholders, except as provided in
Section 9 (provided that if such default occurs with respect to
U.S. Optional Securities after the First Closing Date, this
Agreement will not terminate as to the U.S. Firm Securities or any
U.S. Optional Securities purchased prior to such termination). As
used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its
default.
9. Survival of Certain Representations and Obligations.
The respective indemnities, agreements, representations, warranties
and other statements of the Company or its officers, of the Selling
Stockholders and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the Selling
Stockholders, the Company or any of their respective
representatives, officers or directors or any controlling person,
and will survive delivery of and payment for the U.S. Securities.
If this Agreement is terminated pursuant to Section 8 or if for any
reason the purchase of the U.S. Securities by the Underwriters is
not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by
them pursuant to Section 5 and the respective obligations of the
Company and the Underwriters pursuant to Section 7 shall remain in
effect and if any U.S. Securities have been purchased hereunder the
representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect. If the purchase of
the U.S. Securities by the Underwriters is not consummated for any
reason other than solely because of the termination of this
Agreement pursuant to Section 8 or the occurrence of any event
specified in clause (iii), (iv), or (v) of Section 6(c), the
Company and Chemed will, jointly and severally, reimburse the
Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection
with the offering of the U.S. Securities.
10. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or
telegraphed and confirmed to the Representatives, c/o CS First
Boston Corporation, Park Avenue Plaza, New York, NY 10055,
Attention: Investment Banking Department--Transactions Advisory
Group, or, if to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 2800 Chemed Center, 255 East
Fifth Street, Cincinnati, Ohio 45202, Attention: Cheryl D. Hodges;
E - 27
Page of 35 of 42
EXHIBIT 2
(Continued)
or, if sent to the Selling Stockholders, will be mailed, delivered
or telegraphed and confirmed to (i) as to Chemed, Chemed Center,
255 East Fifth Street, Cincinnati, Ohio 45202, attention: Kevin
McNamara; (ii) as to Medisave, 1148 Broadway Plaza, Tacoma,
Washington 98402, attention: General Counsel; (iii) as to Doane,
4238 95th Avenue, N.B., Bellevue, Washington 98004, with a copy to
Ross Jacobson, Ogden Murphy Wallace, 2100 Westlake Center Tower,
1601 Fifth Avenue, Seattle, Washington 98101; provided, however,
that any notice to an Underwriter pursuant to Section 7 will be
mailed, delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons
referred to in Section 7, and no other person will have any right
or obligation hereunder.
12. Representation of Underwriters. The Representatives will
act for the several Underwriters in connection with this financing,
and any action under this Agreement taken by the Representatives
jointly or by CSFBC will be binding upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one
and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York,
without regard to principles of conflicts of laws.
15. Evergreen Transaction. Nothing contained in this
agreement shall modify any of the representations or indemnities
contained in the Acquisition Agreement dated September 2, 1994,
among Omnicare, Doane, Medisave, Jack W. Armstrong and R. Alan
Bell.
Each of the Company and the Selling Stockholders hereby
submits to the non-exclusive jurisdiction of the Federal and state
courts in the Borough of Manhattan in The City of New York in any
suit or proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby.
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to us the
Company of the counterparts hereof, whereupon it will become a
E - 28
Page 36 of 42
EXHIBIT 2
(Continued)
binding agreement between the Company and the several Underwriters
in accordance with its terms.
Very truly yours,
OMNICARE, INC.
By JOEL F. GEMUNDER
Name: JOEL F. GEMUNDER
Title: PRESIDENT OF OMNICARE
CHEMED CORPORATION
By: EDWARD L. HUTTON
Name: EDWARD L. HUTTON
Title: CEO AND CHAIRMAN OF CHEMED
Richard L. Doane
By: CHERYL D. HODGES
Name: CHERYL D. HODGES
Title: ATTORNEY-IN-FACT
MEDISAVE PHARMACIES, INC.
By: CHERYL D. HODGES
Name: CHERYL D. HODGES
Title: ATTORNEY-IN-FACT
The foregoing Underwriting Agreement is hereby confirmed and
accepted as of the date first above written.
CS FIRST BOSTON CORPORATION MONTGOMERY SECURITIES WILLIAM BLAIR AND
COMPANY
Acting on behalf of themselves and as the Representatives of the
several Underwriters.
By CS FIRST BOSTON CORPORATION
By: F. PERKINS HIXSON, JR.
Name: F. PERKINS HIXSON, JR.
E - 29
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EXHIBIT 2
(Continued)
SCHEDULE A
Number of
Underwriter U.S. Firm Securities
CS First Boston Corporation.......... 626,668
Montgomery Securities................ 626,666
William Blair and Company.............. 626,666
Wertheim Schroder and
Co. Incorporated..................... 200,000
McDonald and Company Securities, Inc... 200,000
Sutro and Co. Incorporated............. 200,000
Tucker Anthony Incorporated.......... 200,000
Volpe, Welty and Company............... 200,000
Total................ 2,880,000
E - 30
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EXHIBIT 2
(Continued)
SCHEDULE B
Number of
Selling Stockholder U.S. Firm Securities
Chemed Corporation....... 1,040,000
Richard L. Doane......... 549,222
Medisave Pharmacies, Inc. 207,785
Total........... 1,797,007
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EXHIBIT 2
(Continued)
SCHEDULE C
Letter of Independent Public Accountants
Referred to in Section 6(a)
(i) in their opinion the financial statements, including
the financial statement schedules, examined by them and included in
the Registration Statement comply in form in all material respects
with the applicable accounting requirements of the Act and the
Rules and Regulations with respect to registration statements on
Form S-3;
(ii) on the basis of a reading of the latest available
interim financial statements of the Company, inquiries of officials
of the Company who have responsibility for financial and accounting
matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements included in
the Registration Statement do not comply in form in all material
respects with the applicable accounting requirements of the Act and
the Rules and Regulations or are not in conformity with generally
accepted accounting principles;
(B) at the date of the latest available interim
financial information read by such accountants, or at a subsequent
specified date not more than five days prior to the date of this
Agreement, there was any change in the common stock or any increase
in short-term obligations or long-term obligations of the Company
and its subsidiaries consolidated or any decrease in consolidated
net current assets or stockholder's equity, as compared with
amounts shown on the latest balance sheet included in the
Prospectus, except in all instances for changes or increases or
decreases which the Registration Statement discloses have occurred
or may occur; or
(C) for the period from the closing date of the
latest income statement included in the Prospectus to the closing
date of the latest available income statement read by such
accountants, there were any decreases, as compared with the
corresponding period of the previous year and, to the extent
possible, with the period of corresponding length beginning on the
first day of the last completed quarter included in the latest
income statement included in the Prospectus, in consolidated net
sales, or income from operations, or in the total or per share
amounts of consolidated income from continuing operations or net
income, except in all instances for changes or decreases which the
E - 32
Page 40 of 42
EXHIBIT 2
(Continued)
Registration Statement discloses have occurred or may occur;
(D) the financial and other information appearing
in the Prospectus under the captions "Selected Financial Data" for
the nine month periods ended September 30, 1994, and 1993 and the
three year period ended December 31, 1993, incorporated by
reference into the Registration Statement do not comply in form in
all material respects with the applicable accounting requirements
of the Act and the Rules and Regulations;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which are described in such letter;
and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Registration Statement and, to the
extent possible, with the period of corresponding length beginning
on the first day of the last completed quarter included in the
latest income statement included in the Prospectus, (in each case
to the extent that such dollar amounts, percentages and other
financial information are derived from the general accounting
records of the Company and its subsidiaries subject to the internal
controls of the Company's accounting system or are derived directly
from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have
found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
E - 33
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EXHIBIT 99
CONTACT: Timothy S. O'Toole FOR IMMEDIATE RELEASE
(513) 762-6702
CHEMED COMPLETES OMNICARE SECONDARY OFFERING
--------------------------------------------
CINCINNATI, OHIO, DECEMBER 1, 1994 -- Chemed
Corporation (NYSE:CHE) today announced that it has completed the
sale of 1,570,000 shares of its Omnicare Inc. (NYSE:OCR) holdings
in a secondary public offering of 4,140,000 Omnicare shares. The
public offering took place on November 22, 1994, at $39.50 per
share. Of the 4,140,000 shares sold, 540,000 shares pertain to
the exercise of an over-allotment option by the underwriters.
Gross proceeds of $62 million from the sale are
expected to yield cash proceeds of approximately $41 million for
Chemed after expenses and taxes. Chemed expects to realize an
aftertax gain of approximately $21 million, or approximately
$2.10 per share, as a result of the sale.
The sale of these shares reduces Chemed's ownership
position in Omnicare to 727,000 shares, or 5.8% on a primary
basis. Based on yesterday's closing price of $41.63 per share,
Chemed's remaining Omnicare holdings have a market value of $30.3
million, representing an unrealized pretax gain of $21.4 million
on its investment.
Chemed Corporation, headquartered in Cincinnati, is a
diversified public corporation with strategic positions in
medical and dental supply manufacturing and distribution for the
private-practice market, home healthcare services, and hospice
care; plumbing, drain cleaning, and appliance and air-
conditioning repair and maintenance through the sale of service
contracts; and sanitary maintenance products and services.
E - 1
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