<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarterly period ended December 29, 1995
Commission File Number 2-60487
United Grocers, Inc.
(Exact name of registrant as specified in its charter)
Oregon 93-0301970
(State or other jurisdiction of (IRS Employer identification No.)
incorporation or organization)
6433 S.E. Lake Road
Post Office Box 22187, Milwaukie, Oregon 97269
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 833-1000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No [ ].
Indicate the number of shares outstanding for each of the issuer's classes of
common stock, as of the latest practicable date. 644,165 shares of common
stock, $5 par value as of February 8, 1996.
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
The following unaudited consolidated financial statements of United
Grocers, Inc., and subsidiaries for the periods ended December 29, 1995 and
December 30, 1994, include all adjustments which management considers
necessary for a fair presentation of the results for the interim periods.
All adjustments to prior period figures are for the purpose of making the
results comparable and are of a normal recurring nature. Any changes in
accounting methods not of a normal recurring nature are separately disclosed.
In 1993-94 the Company adopted FASB #113 (Accounting for Reinsurance
Contracts). Refer to Part I, Item 2, for a description of the effect of this
change on the balance sheet.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, Grocers Insurance Group, Inc., Grocers
Insurance Agency, Inc., UGIC, Ltd., Grocers Insurance Company (formerly
United Employers Insurance Co.), United Workplace Consultants, Inc., U.G.
Resources, Inc., United Resources, Inc., BAT Enterprises, Inc., Western
Passage Express, Inc., United Store Development, Ltd., Premier Consulting,
Inc. (formerly Employee Management Services, Inc.), Western Security
Services, Inc., Affiliated General Agency, Inc., Rich & Rhine, Inc. and
Northwest Process, Inc. All intercompany balances and transactions have been
eliminated upon consolidation.
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 29, 1995, and September 29, 1995
<TABLE>
<CAPTION>
(Unaudited) (Audited)
ASSETS 12/29/95 09/29/95
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 21,480,744 $ 13,045,456
Investments 43,793,422 40,809,762
Accounts and notes receivable 71,998,428 70,706,409
Inventories 101,958,795 81,477,754
Other current assets 8,762,963 3,870,703
Deferred income taxes 2,537,323 2,537,323
------------ ------------
Total current assets 250,531,675 212,447,047
------------ ------------
NON-CURRENT ASSETS:
Notes receivable 23,243,585 21,950,478
Investment in affiliated companies 8,392,281 8,392,281
Other receivables and investments 8,286,985 6,869,895
Other non-current assets 15,562,919 11,668,590
------------ ------------
Total non-current assets 55,485,770 48,881,244
------------ ------------
PROPERTY, PLANT AND EQUIPMENT -
(Net of accumulated depreciation) 62,397,218 61,127,772
------------ ------------
TOTAL $368,414,663 $322,456,063
============ ============
</TABLE>
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 29, 1995, and SEPTEMBER 29, 1995
(continued)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
LIABILITIES AND MEMBERS' EQUITY 12/29/95 09/29/95
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Notes payable - bank $ 59,200,872 $ 48,515,543
Accounts payable 74,665,499 60,461,117
Insurance reserves 36,500,793 29,958,678
Compensation and taxes payable 2,855,985 3,118,827
Other accrued expenses 3,577,160 3,662,495
Members' patronage payable 650,000 6,646,867
Current installments on
long-term liabilities 6,761,158 7,573,215
------------ ------------
Total current liabilities 184,211,467 159,936,742
------------ ------------
LONG-TERM LIABILITIES 135,963,756 115,623,670
------------ ------------
DEFERRED INCOME TAXES 3,651,247 3,651,247
------------ ------------
DEFERRED INCOME 886,917 886,917
------------ ------------
MEMBERS' EQUITY:
Common stock (Authorized, 10,000,000
shares at $5.00 par value;issued
and outstanding, 660,959 shares at
December 29, 1995 and 619,881 shares
at September 29, 1995) 3,304,795 3,278,315
Additional paid-in capital 24,362,818 23,956,797
Retained earnings 15,589,854 14,923,491
Unrealized gain on investments 443,809 198,884
------------ ------------
Total members' equity 43,701,276 42,357,487
------------ ------------
TOTAL $368,414,663 $322,456,063
============ ============
</TABLE>
<PAGE>
UNITED GROCERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(Unaudited)
Quarter Quarter
Ended Ended
12/29/1995 12/30/1994
------------ ------------
<S> <C> <C>
Net sales and operations $281,391,653 $243,288,734
------------ ------------
Costs and expenses:
Cost of sales 243,513,761 207,493,311
Operating expenses 25,600,739 24,288,709
Selling and administrative expenses 2,745,497 2,370,275
Depreciation 1,557,012 1,387,178
Interest:
Interest expense 3,293,526 2,459,753
Interest income 1,356,670 866,478
------------ ------------
Interest expense, net 1,936,856 1,593,275
------------ ------------
Total cost and expenses 275,353,865 237,132,748
------------ ------------
Income before members' allowances,
patronage dividends and income taxes 6,037,788 6,155,986
Members' allowances 3,784,916 3,866,201
Members' patronage dividends 1,400,000 1,400,000
------------ ------------
Income before income taxes 852,872 889,785
Provision for income taxes 288,204 373,476
------------ ------------
Net Income $ 564,668 $ 516,309
============ ============
</TABLE>
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
----------------------------
December 29 December 30
CASH FLOWS FROM OPERATING ACTIVITIES: 1995 1994
------------ ------------
<S> <C> <C>
Net income $ 564,668 $ 516,309
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation 1,557,012 1,387,178
Provision for doubtful accounts
and notes 504,657 506,992
Patronage dividends payable in
common stock 413,717 793,776
(Gain)loss on sale of assets ( 65,881) ( 67,789)
Decrease (increase) in non-cash
current assets:
Accounts and notes receivable ( 1,292,379) 5,357,990
Inventories ( 20,481,041) ( 3,192,333)
Other current assets ( 6,515,770) ( 9,581,692)
Increase (decrease) in non-cash
current liabilities:
Accounts payable and insurance
reserves 20,746,497 ( 3,892,246)
Compensation and taxes payable ( 262,842) 70,852
Other accrued expenses ( 85,335) 1,072,844
Members' patronage and other
refunds ( 5,996,867) ( 5,955,736)
Decrease (increase) in non-current
other assets ( 5,311,419) ( 852,215)
------------ ------------
Net cash provided by (used in)
operating activities ( 16,224,983) ( 13,836,070)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans to members ( 5,143,948) ( 5,115,806)
Collections on loans to members 447,815 3,609,748
Proceeds from sale of member loans 3,441,566 2,898,369
Sale and redemption of investments 1,175,240 4,433,139
Purchase of investments ( 3,078,587) ( 1,597,437)
Sale of property/plant/equipment 6,423,546 23,546
Purchase-property/plant/equipment ( 9,184,123) ( 2,750,000)
------------ ------------
Net cash provided by (used in)
investing activities ( 5,918,491) 1,501,559
------------ ------------
<PAGE>
UNITED GROCERS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
(Unaudited)
<CAPTION>
Three months ended
----------------------------
December 29 December 30
1995 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 119,000 11,400
Repurchase of common stock 246,404 ( 872,999)
Proceeds of long-term liabilities:
Revolving bank lines of credit 274,200,000 225,900,000
Other loans 3,231,073 4,215,691
Redeemable notes and certificates 3,608,000 3,600,600
Repayment of long-term liabilities:
Revolving bank lines of credit (243,436,557) (209,850,405)
Mortgages and notes ( 2,856,758) ( 4,593,338)
Redeemable notes and certificates ( 4,532,400) ( 5,425,073)
------------ ------------
Net cash provided by (used in)
financing activities 30,578,762 12,985,876
------------ ------------
Net increase (decrease) in cash and
cash equivalents 8,435,288 651,365
Cash and cash equivalents, beginning of year 13,045,456 12,984,028
------------ ------------
Cash and cash equivalents, end of quarter $ 21,480,744 $ 13,635,393
============ ============
</TABLE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Three months ended December 29, 1995 ("1996") compared to three months ended
December 30, 1994 ("1995").
RESULTS OF OPERATIONS
ACQUISITION
During the quarter ended December 29, 1995, the Registrant completed the
purchase of the wholesale grocery operations of Bay Area Foods, Inc., doing
business as Market Wholesale Grocery ("Market Wholesale"). Market Wholesale
activity contained in the December 29, 1995, financial statements includes
assets of $38.2 million, liabilities of $15.0 million and sales of $24.2
million.
OVERVIEW
In 1996, net sales and operations increased 15.7% to $281.4 million.
This compares to a 6.1% increase in 1994 to $243.3 million. Net income
before member allowances, patronage dividends, and income taxes decreased
$0.2 million to $6.0 million (2.1% of sales). This compares to a net income
of $6.2 million (2.5% of sales) in 1995.
During 1996, the increase in net sales and operations was due primarily
to higher unit volume in the distribution segment, offsetting decreased
written premiums in the insurance segment, and lower sales volume from the
retail store operations. Profitability decreased slightly due to the
increased expenses in distribution segment, offset by lower retail store
losses and decreased expense ratios in the insurance segment.
NET SALES AND OPERATIONS
In 1996, distribution segment sales increased 19.4% to $270.2 million.
Warehouse sales increased 1.4% reflecting higher unite volume. Cash & Carry
sales increased 16.2%, due to higher unit volumes (7.0%) and sales at new
units (9.2%), and the acquisitions of Rich & Rhine, Inc., and Market
Wholesale added $33.9 million to distribution segment sales.
Insurance segment's net premiums, commissions and fees decreased 2.0% in
1995 to $5.5 million, primarily due to increased market competition.
COSTS AND EXPENSES
In 1996, total costs and expenses increased $38.2 million to 275.4
million (97.9% of sales). This compares to $237.1 million (97.5% of sales)
in 1995. The components of costs and expenses are outlined below:
<PAGE>
Costs and Expenses as a Percent of Net Sales and Operations:
For the Three months ended:
12/29/95 12/30/94
-------- --------
Cost of Sales 86.5 85.3
Operating expenses 9.1 10.0
Selling and administrative
expenses 1.0 1.0
Depreciation and amortization 0.6 0.6
Interest expense, net 0.7 0.7
Total 97.9 97.5
Cost of sales as a percent of net sales and operations increased to
86.5% in 1996 from 85.3% in 1995 primarily due to a reduction in retail and
equipment sales offset by reduced loss ratios in the insurance segment.
Operating expenses as a percent of net sales and operations decreased
0.9% to 9.1% in 1996 due to decreased operating expenses in the retail store
operations and higher unit volume.
MEMBER ALLOWANCES AND PATRONAGE DIVIDENDS
In 1996, member allowances and patronage dividends were $5.2 million
(1.8% of sales). This compares to $5.3 million (2.2% of sales) in 1995. The
decrease is due to slightly lower member allowances.
NET INCOME AND INCOME TAXES
In 1996, net income after member allowances, patronage dividends, and
before taxes was $0.9 million (0.3% of sales) compared to $0.9 million (0.4%
of sales) in 1995. Net income after taxes was $0.6 million (0.2% of sales)
in 1996 compared to $0.5 million (0.2% of sales) in 1995.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS FROM OPERATING ACTIVITIES
In 1996, the Company used $16.2 million in cash in its operations, an
increase of $2.4 million in cash used compared to 1995. Merchandise
inventory increases from the acquisition of Market Wholesale were offset by
increased payables and insurance reserves.
CASH FLOWS FROM INVESTING ACTIVITIES
In 1996, the Company used $6.0 million in cash in investing activities.
This compares to the $1.5 million in cash provided by investing activities in
1995. The main components of the shift in the cash flow from investing
activities was the $3.2 million decrease in sale of members loans, and a $3.2
million decrease in the sale of investments.
<PAGE>
CASH FLOWS FROM FINANCING ACTIVITIES
In 1996, the Company's financing activities provided $30.6 million in
cash compared to $13.0 million in 1995. Cash was primarily provided through
the utilization of the Company's bank credit lines.
<PAGE>
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. Exhibit 10.1. Amended and Restated Banker's
Acceptance Agreement dated as of November 30, 1995 between the Registrant and
United States National Bank of Oregon, Seattle-First National Bank, and The
Hongkong and Shanghai Banking Corporation, Limited.
(b) Reports on Form 8-K. During the quarter for which this report
is filed, the Registrant filed a current Report on Form 8-K dated December
14, 1995, in connection with its acquisition of the wholesale grocery
operations of Bay Area Foods, Inc.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 12, 1996 UNITED GROCERS, INC.
(Registrant)
By /s/ John W. White
John W. White
Vice President
(Principal Accounting Officer)
<PAGE>
EXHIBIT 10.1
AMENDED AND RESTATED
BANKER'S ACCEPTANCE AGREEMENT
This Amended and Restated Banker's Acceptance Agreement (this
"Agreement") is entered into as of this 30th day of November, 1995, by the
undersigned pursuant to the Amended and Restated Credit Agreement dated as of
May 31, 1995 and amended as of the date hereof (the "Credit Agreement") among
United Grocers, Inc. ("Customer"), United States National Bank of Oregon
("U.S. Bank"), Seattle-First National Bank ("Seafirst"), and The Hongkong and
Shanghai Banking Corporation, Limited ("Hong Kong Bank") (collectively, the
"Banks") and Seafirst as "Agent" for the Banks. This Agreement amends and
restates that certain prior Amended and Restated Banker's Acceptance
Agreement made by and among the parties hereto (other than Hong Kong Bank) as
of May 31, 1995.
In consideration of the Banks accepting in accordance with the Credit
Agreement drafts drawn on the Banks by Customer, Customer hereby agrees as
follows:
1. Credit Agreement. All of the terms of the Credit Agreement are
incorporated herein by this reference. All terms capitalized in this
Agreement shall have the meaning ascribed to such terms in the Credit
Agreement.
2. Warranties. With respect to each draft presented for acceptance,
Customer warrants and agrees that:
(a) Each draft presented for acceptance and discounting will be
an Eligible Draft. "Eligible Draft" means a draft that is eligible for
discount under the Federal Reserve Act (12 U.S.C. Section 372) and is
eligible for purchase under rules and regulations established from time to
time by the Federal Reserve Bank of New York.
(b) The draft will grow out of one or more transactions involving
the importation or exportation of goods or will grow out of one or more
transactions involving the domestic shipment of goods, or the draft will be
secured throughout the life of the draft by warehouse receipts or similar
documents conveying or securing title and covering readily marketable
staples.
(c) Completion of each transaction related to a draft is
anticipated to occur on or before the maturity date of such draft.
(d) The maturity of each draft will be consistent with the period
usually and reasonably necessary to finance transactions of such kind.
(e) Customer holds a sales contract, purchase order or letter of
credit for each transaction underlying the acceptance, and holds shipping
documents conveying or securing title to the goods shipped.
(f) No drafts other than the presented draft have been or shall
be outstanding with respect to goods covered by any presented draft.
(g) The draft is payable in United States dollars and its amount
does not exceed the lesser of the sales price or fair market value of the
goods and the tenor of the draft does not exceed 92 days' sight to run.
(h) If a draft is accepted by the Banks and discounted, the
proceeds will be used solely to finance and consummate the shipping or
storage of the goods.
(i) The information furnished the Banks by Customer upon request
for financing is true and complete.
(j) No security interest in the goods pertaining to the drafts
shall be granted by Customer to any party except the Agent and there will be
no other financing of such goods outstanding during the life of the accepted
draft related thereto.
(k) The face amount of the drafts which Customer may request the
Banks to issue at any one time shall not, in the aggregate, be less than
$3,000,000 and in the aggregate shall be in an integral multiple of
$1,000,000. Each Bank shall issue its drafts in response to a Customer
request in the same proportion that such Bank's Operating Line Commitment
bears to the Total Operating Line Commitment.
3. Requests for Financing. Each request for a draft should be made
to:
Seattle-First National Bank
Seafirst Agency Services
Columbia Seafirst Center
701 Fifth Avenue, 16th Floor
Seattle, WA 98104
Attention: Brenda Little, Agency Officer
or to such other place as Agent may designate. Such requests may be oral,
telephonic, telegraphic, electronic, or in writing in the format described in
Schedule 1 attached hereto. If a request is made orally or by telephonic
communication, written confirmation must be received by Agent at the above
address before 11:00 a.m. of the day on which the oral or telephonic
communication request was made. All requests must be by persons authorized
to make such requests by Customer as shown on
Exhibit B to the Credit Agreement or any substitute or additional personnel
hereafter specified in writing by Customer. The Agent and the Banks may act
in reliance upon any oral, telephonic, or written request believed in good
faith to have been authorized by any of the persons identified on Exhibit B
to the Credit Agreement. The Banks shall not be responsible for (a) any
loss, costs, or expenses incurred by Borrower in connection with any drafts,
documents, or instruments delivered by Borrower to any Bank in connection
herewith; (b) any default, negligence, misfeasance, suspension, insolvency,
or bankruptcy, of any correspondent or agent of any Bank to whom any such
drafts, documents, or instruments may be entrusted; (c) any loss or delay, in
transmission or otherwise, on any such drafts; documents, or instruments or
the proceeds thereof; or (d) any delay, interruption, omission, or error in
transmission or delivery of any message.
4. Completion of Drafts. At Customer's option, by providing the
Banks with presigned, prenumbered but otherwise blank drafts, Customer
authorizes Banks to complete such drafts from time to time on Customer's
behalf in accordance with Customer's instructions. Banks each will
acknowledge receipt of all such incomplete drafts received by it and hold
them in safekeeping prior to completion.
5. Disbursement. Each Bank will deposit the net proceeds of each
draft accepted and discounted by it to Customer's account Number 010-066-1545
with U.S. Bank's Main branch in Portland, or such other account as Customer
may designate in writing. The net proceeds of a draft shall be the face
amount of the draft less the applicable Discount and less the Acceptance
Commission.
6. Payment. Customer agrees to pay Agent at its head office in
Seattle, or such other place as Agent may instruct in United States currency
the following:
(a) the face amount of each draft accepted by any Bank payable on
maturity of the draft in immediately available funds;
(b) the Banks' applicable fees or commissions in effect at the
time of the service for which they are charged, payable on demand;
(c) all costs and expenses, including wire charges, courier
charges, postage, and reasonable attorney fees and legal costs, incurred by
any Bank in connection with any draft accepted by such Bank or in connection
with this Agreement, payable on demand; and
(d) interest on any of the above amounts not paid when due from
the date due until paid at the highest rate permitted by law not exceeding
the Seafirst Prime Rate (changing as the Seafirst Prime Rate changes) plus 2
percent per annum, payable on demand.
7. Covenants. Customer agrees as follows:
(a) To maintain complete and accurate records and books of
account concerning the transactions giving rise to any drafts accepted by a
Bank.
(b) To permit the Agent, the Banks or their respective agents to
examine or inspect Customer's books and records of account at such reasonable
times as they may request.
(c) To provide the Banks with such information as Banks may
reasonably request with respect to the Customer's financial condition, the
transaction giving rise to any draft, or any of the matters provided for
herein.
(d) To procure promptly any necessary licenses for the shipment
of, or for the payment for, the goods constituting the subject matter of the
draft and to comply with all domestic laws, regulations, and orders relating
to the transactions out of which the drafts arise.
(e) To maintain in good condition and repair all goods
constituting the subject matter of the draft and to insure the same, and
Customer's records and writings evidencing or relating to such goods, against
all risks normally insured against in Customer's business or in the
particular transaction or as Banks may reasonably require, and to assign to
or make the loss payable to the Agent or Banks if the Banks so request.
(f) Upon request, to furnish the Banks with such trade documents
and other evidence deemed necessary by the Banks to establish that the
presented draft is an Eligible Draft.
(g) To indemnify the Banks from: (i) all loss or damage to any
Bank arising out of its acceptance of, or any other action taken by any Bank
in connection with, the drafts other than loss or damage resulting from such
Bank's gross negligence or willful misconduct, and (ii) all costs and
expenses (including reasonable legal expenses and attorneys' fees whether on
trial or appeal) arising out of any Bank's acceptance of the drafts or
incident to the collection of amounts owed by Customer on the drafts or the
enforcement of the Banks' rights.
(h) To indemnify the Banks from any penalties and/or reserve
assessments, both current and retroactive, which the Banks or any of them may
from time to time be required to pay by any branch, agency, or department of
the federal government in connection with any draft if the draft is accepted
and it is later determined that such draft is not an Eligible Draft.
8. Events of Default. The occurrence of any of the following shall
constitute an Event of Default:
(a) Customer fails to pay when due any obligation hereunder or
otherwise owing to Seafirst, U.S. Bank or Hong Kong Bank;
(b) Customer breaches any other covenant herein;
(c) Any oral or written representation, warranty, or other
statement made by Customer to the Banks shall prove false or materially
misleading; or
(d) A Default occurs under the Credit Agreement.
Upon any Event of Default, at Agent's option, the Banks may declare any and
all indebtedness owing by Borrower with respect to drafts accepted by the
Banks to be immediately due and payable without notice or demand and/or
exercise any right or remedy available at law and shall have all rights
specified under the Credit Agreement.
9. Authority. The termination of authority granted to any of the
Banks' employees or Customer's employees at any time designated to act for
any purpose on any Bank's behalf or Customer's behalf hereunder, shall not
affect any action taken by such employee prior to receipt by the Banks or by
Customer, as the case may be, of written notice terminating such employee's
authority.
10. Modifications. Customer agrees that in the event of any mutually
agreed modification of the terms of any draft, this Agreement shall be
effective with respect to such draft as modified.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BANKS:
UNITED STATES NATIONAL BANK
OF OREGON
By _________________________
Title ______________________
SEATTLE-FIRST NATIONAL BANK
By _________________________
Title ______________________
THE HONGKONG AND SHANGHAI BANKING CORPORATION,
LIMITED
By
Its
CUSTOMER:
UNITED GROCERS, INC.
By _________________________
Title ______________________
<PAGE>
SCHEDULE 1
Date: ____________
Seattle-First National Bank
Seafirst Agency Services
Columbia Seafirst Center
701 Fifth Avenue, 16th Floor
Seattle, WA 98104
Attention: Brenda Little, Agency Officer
Subject: AMENDED AND RESTATED BANKER'S ACCEPTANCE AGREEMENT
DATED AS OF NOVEMBER ____, 1995
Ladies and Gentlemen:
This confirms our conversation with _____________________ on
_________________, 19__, in which we requested that you execute draft(s) in
your possession in the face amount described below for Seafirst which will be
utilized for the creation of banker's acceptance(s) and that you likewise
instruct United States National Bank of Oregon and The Hongkong and Shanghai
Banking Corporation, Limited to execute drafts in corresponding amounts based
upon their respective percentage interests in the Operating Advances, in
their possession for the same purpose. Said banker's acceptance(s) are to be
discounted with the net proceeds credited to our account no. 010-066-1545
with United States National Bank of Oregon.
These banker's acceptances cover the financing of the [CHOOSE ONE:
imported shipments/exported shipments/domestic shipments] of goods described
below. We certify that no other financing is outstanding on these
transactions. At your request we shall provide you with copies of invoices,
bills of lading, and other pertinent shipping information to evidence the
shipments listed. All shipments are invoiced from our Milwaukee, Oregon,
headquarters.
Amounts: Seafirst $US ______________
Hong Kong Bank $US ______________
U.S. Bank $US ______________
Total Amount: $US
Date:
Maturity:
Tenor: days
All In Rate: percent per annum
US$ Amount Shipped To (State)* Commodity
__________ ___________________ _________
* If shipped within Oregon, city must be specified.
UNITED GROCERS, INC.
By
Authorized Signature
<PAGE>
EXHIBIT B
Officers Authorized to Request Advances
NAME OFFICE
Alan C. Jones, President, Secretary
George P. Fleming, Assistant Secretary
John W. White, Vice President
