UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission File Number 33-57505
Roundy's, Inc.
- -------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-0854535
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23000 Roundy Drive, Pewaukee, Wisconsin 53072
- -------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(414) 547-7999
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at June 29, 1996
- ------------------------------ ----------------------------
Common Stock, $1.25 par value
Class A (Voting) 12,900 Shares
Class B (Non-voting) 1,122,924 Shares
ROUNDY'S, INC.
INDEX
Page No.
--------
PART I. Financial Information:
Consolidated Balance Sheets -
June 29, 1996 and December 30, 1995 3
Statements of Consolidated Earnings -
Thirteen Weeks and Twenty-six Weeks
Ended June 29, 1996 and July 1, 1995 4
Statements of Consolidated Cash Flows -
Twenty-six Weeks Ended June 29, 1996
and July 1, 1995 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
PART II. Other Information 9
SIGNATURES 10
PART I. FINANCIAL INFORMATION
ROUNDY'S, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 29, 1996 and December 30, 1995
June 29, 1996 December 30, 1995
(Unaudited) (Audited)
ASSETS ------------- -----------------
CURRENT ASSETS:
Cash and cash equivalents.............. $ 26,455,800 $ 26,382,000
Notes and accounts receivable, less
allowance for losses, $7,806,500
and $8,431,300, respectively........ 103,938,400 99,727,000
Merchandise inventories............... 164,523,800 163,204,100
Prepaid expenses....................... 3,713,300 5,060,700
Future income tax benefits............. 9,012,500 8,496,800
------------ ------------
Total Current Assets................ 307,643,800 302,870,600
------------ ------------
OTHER ASSETS:
Notes receivable, less allowance
for losses of $4,641,000............ 14,234,100 17,249,100
Deferred expenses and other............. 10,996,700 5,300,600
Other real estate...................... 4,402,600 4,659,400
Deferred income tax benefit............ 2,706,000 2,706,000
------------ ------------
Total Other Assets.................. 32,339,400 29,915,100
------------ ------------
PROPERTY AND EQUIPMENT - Net............ 102,986,200 74,550,900
------------ ------------
$442,969,400 $407,336,600
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt.. $ 3,811,900 $ 3,776,500
Accounts payable....................... 157,696,700 165,539,300
Accrued expenses...................... 44,207,100 42,231,400
Income taxes.......................... 583,600
------------ ------------
Total Current Liabilities 205,715,700 212,130,800
------------ ------------
LONG-TERM DEBT, LESS CURRENT MATURITIES 120,590,900 78,850,200
OTHER LIABILITIES....................... 15,772,200 16,322,500
------------ ------------
Total Liabilities................... 342,078,800 307,303,500
------------ ------------
REDEEMABLE CLASS B COMMON STOCK......... 6,377,600 8,132,000
------------ ------------
STOCKHOLDERS' EQUITY:
Common Stock:
Voting (Class A)..................... 16,100 16,700
Non-Voting (Class B)................. 1,326,700 1,282,400
------------ ------------
Total Common Stock.................. 1,342,800 1,299,100
Amount related to recording minimum
pension liability...................... (283,600) (283,600)
Patronage dividends payable in common
stock.................................. 3,405,000
Additional paid-in capital.............. 24,817,500 21,222,100
Reinvested earnings..................... 69,767,500 66,258,500
------------ ------------
Total............................... 95,644,200 91,901,100
Less Treasury Stock, at cost............ 1,131,200
------------ ------------
Total Stockholders' Equity.......... 94,513,000 91,901,100
------------ ------------
$442,969,400 $407,336,600
See Notes to Consolidated ============ ============
Financial Statements.
<TABLE>
ROUNDY'S, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED EARNINGS
FOR THE THIRTEEN WEEKS AND TWENTY-SIX WEEKS
ENDED JUNE 29, 1996 AND JULY 1, 1995
(UNAUDITED)
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
June 29, 1996 July 1, 1995 June 29, 1996 July 1, 1995
------------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
REVENUES:
Net sales and service fees...........$639,384,500 $619,353,200 $1,253,208,800 $1,209,755,900
Other - net.......................... 1,098,600 1,559,600 1,882,300 2,251,800
------------ ------------ -------------- --------------
640,483,100 620,912,800 1,255,091,100 1,212,007,700
------------ ------------ -------------- --------------
COSTS AND EXPENSES:
Cost of sales........................ 578,585,000 563,109,300 1,135,364,200 1,098,550,500
Operating and administrative......... 54,798,300 50,590,000 108,718,800 101,524,300
Interest............................. 2,138,900 1,988,900 3,942,400 3,920,800
------------ ------------ -------------- --------------
635,522,200 615,688,200 1,248,025,400 1,203,995,600
------------ ------------ -------------- --------------
EARNINGS BEFORE INCOME TAXES......... 4,960,900 5,224,600 7,065,700 8,012,100
PROVISION FOR INCOME TAXES........... 2,021,600 2,129,000 2,879,300 3,264,900
------------ ------------ -------------- --------------
NET EARNINGS.........................$ 2,939,300 $ 3,095,600 $ 4,186,400 $ 4,747,200
============ ============ ============== ==============
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
ROUNDY'S, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED JUNE 29, 1996 AND JULY 1, 1995
(UNAUDITED)
Twenty-six Weeks Ended
June 29, 1996 July 1,1995
------------- -----------
Cash Flows From Operating Activities:
Net earnings.......................... $ 4,186,400 $ 4,747,200
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization......... 7,475,600 6,557,000
Allowance for losses.................. 1,922,800 3,016,700
Gain on sale of assets................ (264,000) (666,300)
(Increase) Decrease in Operating Assets
Net of Effects of Business Acquisition:
Accounts receivable................... (5,234,200) 2,526,500
Merchandise inventories............... 1,680,300 (6,535,900)
Prepaid expenses...................... 1,847,400 1,687,100
Future income tax benefits............ (515,700) (462,100)
Other real estate..................... 256,800 1,756,000
Deferred expenses and other assets.... (154,900) 319,300
Increase (Decrease) in Operating
Liabilities Net of Effects of Business
Acquisition:
Accounts payable...................... (9,642,600) (3,733,300)
Accrued expenses...................... 1,052,700 5,372,400
Income taxes.......................... (583,600) (4,483,200)
Other liabilities..................... (550,300) (49,000)
----------- -----------
Net cash flows provided by (used in)
operating activities.................. 1,476,700 10,052,400
----------- -----------
Cash Flows from Investing Activities:
Capital Expenditures.................. (31,500,000) (8,357,500)
Proceeds from sale of property and
equipment........................... 1,237,800 2,601,500
Payment for business acquisition net of
cash acquired....................... (12,602,900)
Decrease (increase) in notes receivable 3,015,000 (5,623,400)
----------- -----------
Net cash flows provided by (used in)
investing activities.................. (39,850,100) (11,379,400)
----------- -----------
Cash Flows from Financing Activities:
Proceeds from long-term borrowings.... 43,000,000
Principal payments of long-term debt.. (1,259,300) (811,200)
Increase (decrease)in notes payable and
current maturities of long-term debt.. 35,400 (750,000)
Proceeds from sale of common stock.... 498,200 539,900
Common stock purchased................ (3,827,100) (2,455,300)
----------- -----------
Net cash flows provided by (used in)
financing activities.................. 38,447,200 (3,476,600)
----------- -----------
Net Increase (Decrease) in Cash and
Cash Equivalents...................... 73,800 (4,803,600)
Cash and Cash Equivalents,
Beginning of Period................... 26,382,000 40,268,800
----------- -----------
Cash and Cash Equivalents, End of Period $26,455,800 $35,465,200
=========== ===========
Cash paid during the period: - Interest $ 3,810,100 $ 4,027,400
- Income Taxes 4,049,000 8,268,600
See Notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) In the opinion of the Company, the accompanying
consolidated financial statements contain all
adjustments (consisting only of normal recurring
accruals) necessary to present fairly the
financial position as of June 29, 1996 and
December 30, 1995, and the results of operations
for the thirteen and twenty-six weeks ended June
29, 1996 and July 1, 1995 and changes in cash
flows for the twenty-six weeks ended June 29, 1996
and July 1, 1995.
2) The results of operations for the thirteen and
twenty-six weeks ended June 29, 1996 and July 1,
1995 are not necessarily indicative of the results
to be expected for the full fiscal year.
3) Earnings per share are not presented because they
are not deemed to be meaningful.
4) Class B common stock which is subject to
redemption is reflected outside of stockholders'
equity. As of June 29, 1996 and December 30,
1995, 74,899 and 95,502 shares, respectively, were
subject to redemption. The Class B common stock
subject to redemption is payable over a five year
period based upon the book value at the preceding
fiscal year end.
5) During the quarter ended June 29, 1996, the
Company concluded its consolidation of Cardinal
Foods into the Lima Division. The net cost of
this consolidation was $1.5 million.
6) Effective June 22, 1996, the Company purchased a
grocery retailer for approximately $12 million.
The results of this operation will be recorded on
a prospective basis from the date of purchase.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
The following is management's discussion and analysis of
certain significant factors which have affected the
Company's results of operations during the periods included
in the accompanying statements of consolidated earnings.
A summary of the period to period changes in the principal
items included in the statements of consolidated earnings is
shown below:
Comparison of
------------------------------------------------
13 Weeks Ended June 29, 26 Weeks Ended June 29,
1996 & July 1, 1995 1996 & July 1, 1995
------------------------------------------------
Net sales and service fees $20,031,300 3.2 % $43,452,900 3.6 %
Cost of sales 15,475,700 2.8 % 36,813,700 3.4 %
Operating and admin. expenses 4,208,300 8.3 % 7,194,500 7.1 %
Interest expense 150,000 7.5 % 21,600 0.6 %
Earnings before income taxes (263,700) (5.1)% (946,400) (11.8)%
Net sales and service fees increased approximately $20.0
million during the second quarter of 1996 as compared to the
second quarter of 1995. The loss of wholesale customers
resulted in a decrease in sales of approximately $10.5
million. The closing or sale of four Company-owned stores
resulted in a decrease of approximately $2.2 million. New
Company-owned stores resulted in an increase of
approximately $8.7 million. Sales to new and existing
wholesale customers increased $24.0 million.
Net sales and service fees increased approximately $43.5
million during the first and second quarters of 1996 as
compared to the first and second quarters of 1995. The loss
of wholesale customers resulted in a decrease in sales of
approximately $22.6 million. The closing or sale of four
Company-owned stores resulted in a decrease of approximately
$5.2 million. New Company-owned stores resulted in an
increase of approximately $13.6 million. Sales to new and
existing wholesale customers increased $57.7 million.
Cost of sales approximated 90.5% and 90.9% of net sales and
service fees for the thirteen weeks ended June 29, 1996 and
July 1, 1995, respectively. Year-to-date cost of sales
approximated 90.6% and 90.8% of net sales and service fees
for the twenty-six weeks ended June 29, 1996 and July 1,
1995, respectively.
Operating and administrative expenses approximated 8.6% and
8.2% of net sales and service fees for the thirteen weeks
ended June 29, 1996 and July 1, 1995, respectively. Year-to-
date operating and administrative expenses approximated 8.7%
and 8.4% of net sales and service fees for the twenty-six
weeks ended June 29, 1996 and July 1, 1995, respectively.
The increase is primarily due to the costs associated with
the consolidation of Cardinal Foods into the Lima Division
(See Note 5), and an increase in depreciation and
amortization expense.
Interest expense increased primarily as a result of
increased borrowing levels during the twenty-six weeks ended
June 29, 1996 as compared to the twenty-six weeks ended July
1, 1995.
No patronage dividends have been accrued as of June 29,
1996. The Company's By-Laws require that, to the extent
permitted by the Internal Revenue Code, patronage dividends
be paid out of earnings from business done with stockholder-
customers in an amount which will reduce net earnings of the
Company to such amount as will result in a 10 percent
increase in the book value of its common stock.
The income tax rate used for calculating the provision for
income taxes for the interim periods was 40.8% in 1996 and
1995.
Liquidity and Capital Resources
The Company's current ratio was 1.43:1 at year-end and
1.50:1 at June 29, 1996. The consolidated long-term debt to
equity ratio has increased from 0.79:1 at December 30, 1995
to 1.20:1 at June 29, 1996, primarily due to increased
capital expenditures and the business acquisition (See Note 6).
Stockholders' equity, including redeemable common stock,
increased approximately $0.9 million due to reinvested
earnings of $4.2 million, proceeds from the sale of common
stock of $0.5 million and offset by common stock purchases
of $3.8 million.
II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
(a) Matters were submitted to a vote of the holders of the
Company's Class A common stock at the Company's annual
meeting on April 23, 1996. A meeting of the Trustees of
Roundy's, Inc. Voting Trust was also held on April 23, 1996.
(b) At the annual meeting, Gary N. Gundlach was elected as a
retailer director. At the meeting of the Trustees, Brenton
H. Rupple was elected as a non-retailer non-management
director and Gerald F. Lestina as a management director.
All of these votes were unanimous since all of the Class A
common stock is held in a voting trust and the trustees are
required to vote the Class A common stock as a block. The
following directors continue in office: Robert D. Ranus,
Charles R. Bonson, Robert E. Bartels, Lloyd E. Coppersmith,
George C. Kaiser, Patrick D. McAdams and Henry Karbiner, Jr.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
4.16 First Amendment dated May 1, 1996 to Note Agreements dated
December 15, 1991 and Note Agreements dated December 15,
1992 and Note Agreements dated December 22, 1993. FILED
HEREWITH.
4.17 Note Agreement dated May 15, 1996 between Roundy's, Inc. and
The Ohio National Life Insurance, Phoenix American Life
Insurance Company, Provident Mutual Life Insurance,
Providentmutual Life and Annuity Company of America, United
of Omaha Life Insurance Company, John Alden Life Insurance
Company, Oxford Life Insurance Company, The Security Mutual
Life Insurance Company of Lincoln, Nebraska and Woodman
Accident and Life Company. FILED HEREWITH.
(b) Reports on Form 8-K -- There were no reports on Form 8-K
filed for the thirteen weeks ended June 29, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
ROUNDY'S, INC.
---------------------------
(Registrant)
Date: August 13, 1996 ROBERT D. RANUS
--------------- ----------------
Robert D. Ranus
Vice President and
Chief Financial Officer
(Principal Financial Officer)
Roundy's, Inc.
___________________________________
First Amendment
Dated as of May 1, 1996
to
Note Agreements
Dated as of December 15, 1991
and
Note Agreements
Dated as of December 15, 1992
and
Note Agreements
Dated as of December 22, 1993
Roundy's, Inc.
23000 Roundy Drive
Pewaukee, Wisconsin 53072
First Amendment
To
Note Agreements
Dated as of December 15, 1991
and
Note Agreements
Dated as of December 15, 1992
and
Note Agreements
Dated as of December 22, 1993
Dated as of
May 1,1996
To the Holders as
defined hereinbelow
Ladies and Gentlemen:
Reference is made to:
(i) the separate Note Agreements dated as of
December 15, 1991 (the 1991 Note Agreements) between Roundy's,
Inc., a Wisconsin corporation ("the Company"), and each of the
Purchasers named on Schedule I thereto ("the 1991 Holders"),
pursuant to which the Company issued $25,000,000 original
aggregate principal amount of 9.26% Senior Notes due December
1, 2001 (the "1991 Notes");
(ii) the separate Note Agreements dated as of December 15,
1992 (the "1992 Note Agreements") between the Company and each
of the Purchasers named on Schedule I thereto (the "1992
Holders"), pursuant to which the Company issued $11,000,000
original aggregate principal amount of its 8.26% Senior Notes,
Series A due January 15, 2000, $2,000,000 original aggregate
principal amount of its 7.57% Senior Notes, Series B due
January 15, 2003 and $10,000,000 original aggregate principal
amount of its 8.26% Senior Notes, Series C due January 15,
2008 (hereinafter collectively referred to as the 1992 Notes); and
(iii) the separate Note Agreements dated as of
December 22, 1993 (the "1993 Note Agreements") between the
Company and each of the Purchasers named in Schedule I thereto
(the "1993 Holders"), pursuant to which the Company issued
$45,000,000 original aggregate principal amount of its 6.94%
Senior Notes due December 15, 2003 (the "1993 Notes"). The 1991
Note Agreements, the 1992 Note Agreements and the 1993 Note
Agreements are hereinafter sometimes collectively referred to
as the Outstanding Note Agreements. The 1991 Holders, the
1992 Holders and the 1993 Holders (or transferees of such
Holders) are hereinafter sometimes collectively referred to as
the Holders. The 1991 Notes, the 1992 Notes and the 1993
Notes are hereinafter sometimes collectively referred to as
the "Outstanding Notes".
The Company has advised the Holders that the Company intends to
enter into additional Note Agreements (the "1996 Note
Agreements") pursuant to which the Company intends to issue
additional senior notes (the "1996 Senior Notes"). In order to
consummate the transactions contemplated by the 1996 Note
Agreements, the Company requests the amendment of certain
provisions of each of the Outstanding Note Agreements as
hereinafter provided.
Upon your acceptance hereof, this First Amendment shall
constitute a contract between (i) the Company and the 1991
Holders amending the 1991 Note Agreements, (ii) the Company and
the 1992 Holders amending the 1992 Note Agreements, and (iii)
the Company and the 1993 Holders amending the 1993 Note
Agreements, but only in the respects hereinafter set forth:
Section 1. Amendments to the 1991 Note Agreements.
Section 1.1. Section 5.7 of each of the 1991 Note Agreements
shall be and is hereby amended in its entirety to read as follows:
Section 5.7. Consolidated Tangible Net Worth. The Company
will at all times keep and maintain Consolidated Tangible Net
Worth at an amount not less than the sum of (a) $75,000,000
plus (b) 55% of positive Consolidated Net Income on a
cumulative basis for each fiscal year ending on or after
December 28, 1996, provided that for the purposes of the
foregoing calculation, Consolidated Net Income shall be deemed
to be zero (and, accordingly, shall not increase or decrease
the amount of Consolidated Tangible Net Worth required to be
maintained pursuant to this 5.7) for any such fiscal year for
which Consolidated Net Income is a deficit figure.
Section 1.2. Section 5.11 of each of the
1991 Note Agreements shall be and is hereby amended (i) by
deleting of Article VII, Section 7.11(B) from clause (i) of the
first full paragraph thereof, (ii) by changing the reference in
clause (iii) of the first full paragraph thereof from 10% to 5%
and (iii) by revising the penultimate paragraph so that the
same shall read as follows:
The Company will not perform any act or thing,
or commence any corporate action to permit any act or thing,
set forth in clause (a), (b) or (c) above if after giving
effect thereto a Default or Event of Default exists or would
result therefrom or which would constitute a Restricted Payment
(permitted by the proviso of the immediately preceding
paragraph) payable more than 60 days after the date of
declaration or announcement thereof.
Section 1.3. Section 5.14 of each of the
1991 Note Agreements shall be and is hereby amended in its
entirety to read as follows:
Section 5.14. Guaranties. The Company will not, and will
not permit any Restricted Subsidiary to, become or be liable in
respect of any Guaranty except Guaranties (a) by the Company
which are limited in amount to a stated maximum dollar exposure
or which constitute Guaranties of obligations incurred by any
Restricted Subsidiary in compliance with the provisions of this
Agreement, (b) by the Guarantors or any Subsidiary hereafter
becoming a Guarantor pursuant to 5.19, of Funded Debt of the
Company which Funded Debt is otherwise permitted by this
Agreement and (c) of lease obligations of, and loans to,
customers of the Company or any Restricted Subsidiary which are
limited in amount to a stated maximum dollar exposure.
Section 2. Amendments to the 1992 Note Agreements.
Section 2.1. Section 5.7 of each of the
1992 Note Agreements shall be and is hereby amended in its
entirety to read as follows:
Section 5.7. Consolidated Tangible Net Worth. The Company
will at all times keep and maintain Consolidated Tangible Net
Worth at an amount not less than the sum of (a) $75,000,000
plus (b) 55% of positive Consolidated Net Income on a
cumulative basis for each fiscal year ending on or after
December 28, 1996, provided that for the purposes of the
foregoing calculation, Consolidated Net Income shall be deemed
to be zero (and, accordingly, shall not increase or decrease
the amount of Consolidated Tangible Net Worth required to be
maintained pursuant to this 5.7) for any such fiscal year for
which Consolidated Net Income is a deficit figure.
Section 2.2. Section 5.11 of each of the
1992 Note Agreements shall be and is hereby amended (i) by
deleting of Article VII, Section 7.11(B) from clause (i) of the
first full paragraph thereof, (ii) by changing the reference in
clause (iii) of the first full paragraph thereof from 10% to 5%
and (iii) by revising the penultimate paragraph so that the
text shall read as follows:
The Company will not perform any act or thing,
or commence any corporate action to permit any act or thing,
set forth in clause (a), (b) or (c) above if after giving
effect thereto a Default or Event of Default exists or would
result therefrom or which would constitute a Restricted Payment
(permitted by the proviso of the immediately preceding
paragraph) payable more than 60 days after the date of
declaration or announcement thereof.
Section 2.3. Section 5.14 of each of the
1992 Note Agreements shall be and is hereby amended in its
entirety to read as follows:
Section 5.14. Guaranties. The Company will not, and will
not permit any Restricted Subsidiary to, become or be liable in
respect of any Guaranty except Guaranties (a) by the Company
which are limited in amount to a stated maximum dollar exposure
or which constitute Guaranties of obligations incurred by any
Restricted Subsidiary in compliance with the provisions of this
Agreement, (b) by the Guarantors or any Subsidiary hereafter
becoming a Guarantor pursuant to 5.19, of Funded Debt of the
Company which Funded Debt is otherwise permitted by this
Agreement and (c) of lease obligations of, and loans to,
customers of the Company or any Restricted Subsidiary which are
limited in amount to a stated maximum dollar exposure. Section
3. Amendments to the 1993 Note Agreements.
Section 3.1 Section 5.7 of each of the
1993 Note Agreements shall be and is hereby amended in its
entirety to read as follows:
Section 5.7. Consolidated Tangible Net Worth. The Company
will at all times keep and maintain Consolidated Tangible Net
Worth at an amount not less than the sum of (a) $75,000,000
plus (b) 55% of positive Consolidated Net Income on a
cumulative basis for each fiscal year ending on or after
December 28, 1996, provided that for the purposes of the
foregoing calculation, Consolidated Net Income shall be deemed
to be zero (and, accordingly, shall not increase or decrease
the amount of Consolidated Tangible Net Worth required to be
maintained pursuant to this 5.7) for any such fiscal year for
which Consolidated Net Income is a deficit figure.
Section 3.2 Section 5.11 of each of the
1993 Note Agreements shall be and is hereby amended (i) by
deleting of Article VII, Section 7.11(B) from clause (i) of the
first full paragraph thereof and (ii) by changing the reference
in clause (iii) of the first full paragraph thereof from "10% to
5%".
Section 4. Representations and Warranties of the Company.
Section 4.1. To induce the Holders to
execute and deliver this First Amendment (which representations
shall survive the execution and delivery of this First
Amendment), the Company represents and warrants to the Holders,
as true and correct as of the date of execution and delivery of
this First Amendment, that
(a) this First Amendment has been duly
authorized, executed and delivered by it and this First
Amendment constitutes the legal, valid and binding obligation,
contract and agreement of the Company enforceable against it in
accordance with its terms;
(b) each of the Outstanding Note
Agreements, as amended by this First Amendment, constitutes the
legal, valid and binding obligations, contracts and agreements
of the Company enforceable against it in accordance with their
respective terms;
(c) the execution, delivery and
performance by the Company of this First Amendment (i) has been duly
authorized by all requisite corporate action and, if required,
shareholder action, (ii) does not require the consent or
approval of any governmental or regulatory body or agency, and
(iii) will not (A) violate (1) any provision of law, statute,
rule or regulation or its certificate of incorporation or
bylaws, (2) any order of any court or any rule, regulation or
order of any other agency or government binding upon it, or (3)
any provision of any material indenture, agreement or other
instrument to which it is a party or by which its properties or
assets are or may be bound, or (B) result in a breach or
constitute (alone or with due notice or lapse of time or both)
a default under any indenture, agreement or other instrument
referred to in clause (iii)(A)(3) of this 4.1(c);
(d) as of the date hereof after giving
effect to this First Amendment, no Default or Event of Default
has occurred which is continuing; and
(e) no consents or approvals are necessary
from any other holder of any Indebtedness of the Company to
give effect to this First Amendment.
Section 5. Conditions Precedent.
Section 5.1. This First Amendment shall
not become effective until, and shall become effective when,
each and every one of the following conditions shall have been
satisfied:
(a) executed counterparts of this First
Amendment, duly executed by the Company and the holders of at
least 66-2/3% of the outstanding principal amount of the 1991
Notes, the holders of more than 50% of the outstanding
principal amount of the 1992 Notes and the holders of more than
50% of the outstanding principal amount of the 1993 Notes,
shall have been delivered to the Holders;
(b) the representations and warranties of
the Company set forth in 4 hereof are true and correct as of
the date of execution and delivery of this First Amendment;
(c) the Company shall have paid the
reasonable fees and expenses of Chapman and Cutler, counsel to
the Holders, in connection with the negotiation, preparation,
approval, execution and delivery of this First Amendment; and
(d) You shall have received Amendment No. 6
dated as of March 29, 1996 to the Credit Agreement dated as of
March 8, 1989 which shall have been executed and delivered by
the parties thereto and is in full force and effect on terms
satisfactory to the holders of at least 66-2/3% of the
outstanding principal amount of the 1991 Notes, the holders of
more than 50% of the outstanding principal amount of the 1992
Notes and the holders of more than 50% of the outstanding
principal amount of the 1993 Notes.
Upon receipt of all of the foregoing, this First Amendment
shall become effective.
Section 6. Miscellaneous.
Section 6.1. This First Amendment shall
be construed in connection with and as part of each of the
Outstanding Note Agreements, and all terms, conditions and
covenants contained in each of the Outstanding Note Agreements
shall be and remain in full force and effect.
Section 6.2. Any and all notices,
requests, certificates and other instruments executed and
delivered after the execution and delivery of this First
Amendment may refer to the Outstanding Note Agreements without
making specific reference to this First Amendment but
nevertheless all such references shall include this First
Amendment unless the context otherwise requires.
Section 6.3. Except as modified and
expressly amended by this First Amendment, the Outstanding Note
Agreements are in all respects ratified, confirmed and approved
and all of the terms, provisions and conditions thereof shall
be and remain in full force and effect.
Section 6.4. The descriptive headings of
the various Sections or parts of this First Amendment are for
convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
The execution hereof by you shall constitute a contract between
us for the uses and purposes hereinabove set forth, and this
First Amendment to each of the Outstanding Note Agreements may
be executed in any number of counterparts, each executed
counterpart constituting an original, but all together only one
agreement.
Roundy's, Inc.
By EDWARD G KITZ
-------------------------------------------
Its Vice President, Secretary & Treasurer
The execution by each of the following Holders shall constitute
its acceptance of the First Amendment Agreement and its
confirmation that it holds the Outstanding Notes set opposite
its name as of the date of its execution and delivery hereof.
Accepted as of May 1, 1996:
Outstanding Notes
Northwestern National Life $3,200,000
Insurance Company 1991 Notes
By FRANK P. PINTENS
-----------------------------
Its Authorized Representative
United Services Life Insurance $4,800,000
Company 1991 Notes
By FRANK P. PINTENS
_____________________________
Its Assistant Treasurer
Bankers Security Life Insurance $4,000,000
Society 1991 Notes
By JAMES WITTICH
______________________________
Its Vice President
By FRANK P. PINTENS
------------------------------
Its Assistant Treasurer
United of Omaha Life Insurance $3,000,000
Company 1991 Notes
$1,400,000
1992 Notes, Series B
By TROY R. GERHARDT
________________________________
Its 1st Vice President
Massachusetts Mutual Life Insurance $8,500,000
Company (as successor to Connecticut Mutual 1992 Notes, Series C
Life Insurance Company)
By MARY ANN MCCARTHY
________________________________
Its Managing Director
Guarantee Mutual Life Company $2,000,000
1992 Notes, Series A
By STEVEN A SCANIAN
________________________________________
Its Senior Investment Officer-Securities
Provident Mutual Life Insurance $1,500,000
Company of Philadelphia 1992 Notes, Series A
By G. C. LANGE
_______________________________
Its Vice President
Providentmutual Life and Annuity $1,000,000
Company of America 1992 Notes, Series A
By G. C. LANGE
________________________________
Its Vice President
Woodmen Accident and Life Company $3,000,000
1992 Notes, Series A
By ALLEN MCCRAY
____________________________________
Its Vice President & Asst. Treasurer
The Ohio National Life Insurance Company $3,500,000
1992 Notes, Series A
By MICHAEL A. BOEDEKER
__________________________________________
Its Vice President, Fixed Income Securities
The Variable Annuity Life Insurance $20,000,000
Company 1993 Notes
By JULIA S. TUCKER
________________________________
Its Investment Officer
The Life Insurance Company of Virginia $10,000,000
1993 Notes
By CHARLES A KAMINSKI
___________________________________
Its Sr. Vice President, Investments
Phoenix Home Life Mutual Insurance $5,000,000
Company 1993 Notes
By LAWRENCE P. FLEMING
________________________________
Its Vice President
Phoenix American Life Insurance Company $5,000,000
1993 Notes
By LAWRENCE REITMAN
________________________________
Its Vice President
Washington National Insurance Company $3,000,000
1993 Notes
By C. BRUCE DUNN
________________________________
Its Director of Investments
TMG Life Insurance Company $2,000,000
1993 Notes
By
________________________________
Its
Roundy's, Inc.
Note Agreement
Dated as of May 15, 1996
Re: $25,000,000 7.86% Senior Notes
Due May 15, 2006
Table of Contents
(Not a part of the Agreement)
Section Heading Page
Section 1. Description of Notes and Commitment 1
Section 1.1. Description of Notes 1
Section 1.2. Commitment, Closing Date 2
Section 1.3. Other Agreements 2
Section 2. Prepayment of Notes 2
Section 2.1. Required Prepayments 2
Section 2.2. Optional Prepayment with Premium 3
Section 2.3. Prepayment Upon Change of Control 3
Section 2.4. Notice of Optional Prepayments 4
Section 2.5. Application of Prepayments 5
Section 2.6. Direct Payment 5
Section 3. Representations 5
Section 3.1. Representations of the Company 5
Section 3.2. Representations of the Purchaser 5
Section 4. Closing Conditions 7
Section 4.1. Conditions 7
Section 4.2. Waiver of Conditions 9
Section 5. Company Covenants 9
Section 5.1. Corporate Existence, Etc 9
Section 5.2. Insurance 9
Section 5.3. Taxes, Claims for Labor and Materials,
Compliance with Laws 9
Section 5.4. Maintenance, Etc 10
Section 5.5. Nature of Business 10
Section 5.6. Current Ratio 10
Section 5.7. Consolidated Tangible Net Worth 10
Section 5.8. Limitations on Indebtedness 11
Section 5.9. Fixed Charges Coverage Ratio 11
Section 5.10. Limitation on Liens 11
Section 5.11. Restricted Payments 12
Section 5.12. Investments 13
Section 5.13. Mergers, Consolidations and Sales of Assets 15
Section 5.14. Guaranties 16
Section 5.15. Repurchase of Notes 17
Section 5.16. Transactions with Affiliates 17
Section 5.17. Termination of Pension Plans 17
Section 5.18. Reports and Rights of Inspection 17
Section 5.19. Additional Guaranties 20
Section 5.20. Covenant to Secure Notes Equally 20
Section 5.21. ERISA 21
Section 5.22. Compliance with Environmental Laws 21
Section 5.23. Restricted Subsidiaries 21
Section 6. Events of Default and Remedies Therefor 21
Section 6.1. Events of Default 21
Section 6.2. Notice to Holders 23
Section 6.3. Acceleration of Maturities 23
Section 6.4. Rescission of Acceleration 24
Section 6.5. Other Remedies 24
Section 7. Amendments, Waivers and Consents 25
Section 7.1. Consent Required 25
Section 7.2. Solicitation of Holders 25
Section 7.3. Effect of Amendment or Waiver 25
Section 8. Interpretation of Agreement; Definitions 25
Section 8.1. Definitions 25
Section 8.2. Accounting Principles; Construction 34
Section 8.3. Directly or Indirectly 35
Section 9. Miscellaneous. 35
Section 9.1. Registration and Transfer of Notes 35
Section 9.2. Loss, Theft, Etc. of Notes 35
Section 9.3. Expenses, Stamp Tax Indemnity 36
Section 9.4. Powers and Rights Not Waived 36
Section 9.5. Notices 36
Section 9.6. Successors and Assigns 37
Section 9.7. Survival of Covenants and Representations 37
Section 9.8. Maximum Interest Payable 37
Section 9.9. Severability 38
Section 9.10. Governing Law 38
Section 9.11. Captions 38
Section 9.12. Additional Indebtedness 38
Signature 39
Attachments to Note Agreement
Schedule I Names and Addresses of Note Purchasers and
Amounts of Commitments
Schedule II Investments as of March 30, 1996
Exhibit A Form of 7.86% Senior Note, due May 15, 2006
Exhibit B Representations and Warranties of the Company
Exhibit C Description of Special Counsel's Closing
Opinion
Exhibit D Description of Closing Opinion of General
Counsel of the Company
Exhibit E Form of Guaranty
Roundy's, Inc.
23000 Roundy Drive
Pewaukee, Wisconsin 53072
Note Agreement
Re: $25,000,000 7.86% Senior Notes
Due May 15, 2006
Dated as of
May 15, 1996
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, Roundy's, Inc., a Wisconsin corporation (the
"Company", as further defined hereinafter), agrees with you as
follows:
Section 1. Description of Notes and Commitment;.
Section 1.1. Description of Notes;.
The Company will authorize the issue and sale of $25,000,000
aggregate principal amount of its 7.86% Senior Notes (the
"Notes") to be dated the date of issue, to bear interest from
such date at the rate of 7.86% per annum to be expressed to
mature on May 15, 2006, and to be substantially in the form
attached hereto as Exhibit A. The term "Notes" as used herein
shall include each Note delivered pursuant to this Agreement and
the separate agreements with the other purchasers named in
Schedule I hereto and each Note delivered in substitution or
exchange for any such Note pursuant to this Agreement or any of
such agreements. Interest on the Notes shall be payable semi-
annually on the fifteenth day of each May and November in each
year (commencing November 15, 1996) and at maturity and shall
bear interest on overdue principal (including any overdue
required or optional prepayment of principal) and premium, if
any, and (to the extent legally enforceable) on any overdue
installment of interest at the Overdue Rate (hereinafter defined)
after the date due, whether by acceleration or otherwise, until
paid, and shall be computed on the basis of a 360-day year of
twelve 30-day months. The Notes are not subject to prepayment or
redemption at the option of the Company prior to their expressed
maturity dates except on the terms and conditions, in the amounts
and with the premium, if any, set forth in 2 of this Agreement.
You and the other purchasers named in Schedule I hereto are
hereinafter sometimes referred to as the "Purchasers".
Capitalized terms used herein have the meanings specified in
8.1.
The payment of the principal and premium, if any, and interest on
the Notes will be severally guaranteed by Scot Lad Foods, Inc., a
Wisconsin corporation, Cardinal Foods, Inc., a Delaware
corporation, and Shop-Rite, Inc., a Wisconsin corporation, and
each a Subsidiary (collectively, the "Guarantors") for the
benefit of the Purchasers pursuant to a Guaranty Agreement dated
as of May 15, 1996 (as the same may be amended, restated,
supplemented, extended or otherwise modified from time to time,
the "Guaranty") from the Guarantors.
Section 1.2. Commitment, Closing
Date;. Subject to the terms and conditions hereof and on the
basis of the representations and warranties hereinafter set
forth, the Company agrees to issue and sell to you, and you agree
to purchase from the Company, Notes in the principal amount set
forth opposite your name on Schedule I hereto at a price of 100%
of the principal amount thereof on the Closing Date hereinafter
mentioned.
Delivery of the Notes will be made at the offices of Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603, against
payment therefor in Federal Reserve or other funds current and
immediately available at the principal office of Bank One,
Milwaukee, N.A., Milwaukee, Wisconsin 53201, ABA Number 075-
0000l9 for deposit to the Companys Account Number 55000-2011 in
the amount of the purchase price at 10:00 A.M., Chicago time, on
June 12, 1996 (the "Closing Date"). The Notes delivered to you
on the Closing Date will be delivered to you in the form of a
single registered Note in the form attached hereto as Exhibit A
for the full amount of your purchase (unless different
denominations are specified by you), registered in your name or
in the name of your nominee, all as you may specify at any time
prior to the date fixed for delivery.
Section 1.3. Other Agreements;.
Simultaneously with the execution and delivery of this Agreement,
the Company is entering into similar agreements with the other
Purchasers under which such other Purchasers agree to purchase
from the Company the principal amount of Notes set opposite such
Purchasers' names in Schedule I hereto, and your obligation and
the obligations of the Company hereunder are subject to the
execution and delivery of such similar agreements by the other
Purchasers. This Agreement and such similar agreements with the
other Purchasers are herein collectively referred to as the
"Agreements". The obligations of each Purchaser shall be several
and not joint and no Purchaser shall be liable or responsible for
the acts or omissions of any other Purchaser.
Section 2. Prepayment of Notes;.
Section 2.1. Required Prepayments;.
Except as set forth in 2.2 and 2.3, the Notes are not subject
to any prepayment or redemption prior to their express maturity
date. The Company agrees that it will prepay and apply and there
shall become due and payable on the principal indebtedness
evidenced by the Notes, on May 15, in each year, commencing
May 15, 2000 and ending May 15, 2005, an amount equal to the
lesser of (i) $3,571,428.60 or (ii) the principal amount of the
Notes outstanding. The entire remaining principal amount of the
Notes shall become due and payable on May 15, 2006. No premium
shall be payable in connection with any required prepayment made
pursuant to this 2.1. For purposes of this 2.1, any prepayment
of less than all of the outstanding Notes pursuant to 2.2 shall
be applied first to the amount of principal scheduled to remain
unpaid on the maturity date of the Notes, and then to the
remaining scheduled principal prepayments for the Notes in
inverse chronological order. In the event of any purchase or
acquisition of the Notes by the Company or any Restricted
Subsidiary or Affiliate (to the extent permitted by 5.15), the
aggregate amount of each scheduled prepayment pursuant to the
provisions of this 2.1 coming due thereafter shall be reduced by
an amount which bears the same relationship to such scheduled
prepayment as the aggregate amount of Notes being so purchased or
acquired by the Company or any Restricted Subsidiary or Affiliate
bears to the unpaid principal amount of the Notes immediately
prior to such purchase or acquisition, so that the amounts of the
scheduled prepayments on the principal indebtedness evidenced by
each Note remaining outstanding after such purchase or
acquisition shall be unchanged by such purchase or acquisition.
Section 2.2. Optional Prepayment with
Premium;. In addition to the prepayments required by 2.1, upon
compliance with 2.4 the Company shall have the privilege, at any
time and from time to time, of prepaying the outstanding Notes,
either in whole or in part (but if in part then in a minimum
principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof) by payment of the principal amount
of the Notes, or portion thereof to be prepaid, and accrued
interest thereon to the date of such prepayment, together with a
premium equal to the Make-Whole Amount, determined as of five
Business Days prior to the date of such prepayment pursuant to
this 2.2.
Section 2.3. Prepayment Upon Change of
Control;. In the event the Company has knowledge of a Change of
Control or an impending Change of Control, the Company will give
written notice (a "Control Change Notice") of such fact to the
holder of each Note. The Control Change Notice shall be given
not later than three Business Days after the earlier of (a)
receipt of knowledge by the Company of a Change of Control or
impending Change of Control and (b) the Change of Control Date.
The Control Change Notice shall (i) describe the facts and
circumstances of such Change of Control in reasonable detail
(including the Change of Control Date or proposed Change of
Control Date), (ii) make reference to this 2.3 and the rights of
the holder of each Note to require the Company to prepay its
Notes on the terms and conditions provided for herein, (iii)
state that such holder may provide written notice to the Company
of its intent not to have the Notes held by it prepaid (a
"Declaration Notice"), (iv) specify the date by which such holder
must respond to such Control Change Notice pursuant to this 2.3
in order to make such declaration which shall be a date not less
than 50 days after the date of the Control Change Notice, and (v)
specify the date upon which all Notes for which a Declaration
Notice shall not have been received pursuant to the proceeding
clause (iv) shall be immediately due and payable pursuant to the
terms of this 2.3, which date shall be no less than 50 days, and
no more than 60 days, after the date of the Control Change Notice
(the "Change of Control Payment Date").
The Company covenants and agrees to provide copies of each
Declaration Notice received by the Company to each other holder
of a Note immediately upon the Companys receipt of such
Declaration Notice and to prepay in full on the Change of Control
Payment Date all Notes held by each holder which shall not have
delivered a Declaration Notice to the Company. In the event that
a Control Change Notice is given and a holder of Notes fails to
provide a Declaration Notice within the time period set forth
above, the Notes held by such holder shall become due and payable
as a result of such Change of Control.
As used herein, the term "Acquiring Person" shall mean any person
or group (as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder as in effect on the date of this Agreement
(the "Exchange Act")) who or which, together with all affiliates
and associates (as defined in Rule 12b-2 under the Exchange Act)
(i) is on the date of this Agreement not the beneficial owner of
any outstanding Voting Stock of the Company or, if such person or
group is the beneficial owner of such stock, it is either a Major
Holder, the beneficial owner of less than 5% of the outstanding
Voting Stock of the Company, or is not a Control Person, and
(ii) becomes the beneficial owner of more than 40% of the Voting
Stock of the Company.
As used herein, the term "Change of Control" shall mean any event
by which an Acquiring Person has become such.
As used herein, the term "Change of Control Date" shall mean any
date upon which a Change of Control shall occur.
As used herein, the term "Control Person" shall mean (a) any
Person who on the date of this Agreement is both (i) the
beneficial owner of 5% or more of the Voting Stock of the Company
and (ii) an officer or director of the Company and (b) any spouse
or descendant of a Person named in clause (a) who receives from
such Person described in clause (a) 5% or more of such Voting
Stock by gift, inheritance, the laws of intestacy or otherwise
(except for any such spouse or descendant that receives such
Voting Stock in a bona fide purchase at fair market value).
All prepayments of the Notes pursuant to this 2.3 shall be made
by the payment of the aggregate principal amount remaining unpaid
on the Notes to be prepaid and accrued interest thereon to the
date of such prepayment together with a premium equal to the Make-
Whole Amount determined as of five Business Days prior to the
date of such prepayment pursuant to this 2.3. Any prepayment of
less than all of the outstanding Notes made pursuant to this 2.3
shall be applied to the payment in full of the Notes held by the
holders not providing a Declaration Notice, and each scheduled
prepayment pursuant to the provisions of 2.1 coming due
thereafter shall be reduced by an amount which bears the same
relationship to such payment as the aggregate amount being so
applied pursuant to this 2.3 bears to the unpaid principal
amount of the Notes immediately prior to such application, so
that the amounts of the scheduled payments on each Note remaining
outstanding after such application shall be unchanged by such
application.
Section 2.4. Notice of Optional
Prepayments;. The Company will give notice of any prepayment of
the Notes pursuant to 2.2 to each holder thereof not less than
30 days nor more than 60 days before the date fixed for such
optional prepayment specifying (i) such date, (ii) the principal
amount of the holders Notes to be prepaid on such date,
(iii) that a premium may be payable, (iv) the estimated premium,
and (v) the accrued interest applicable to the prepayment. Such
notice of prepayment shall also certify all facts, if any, which
are conditions precedent to any such prepayment. Notice of
prepayment having been so given, the aggregate principal amount
of the Notes specified in such notice, together with accrued
interest thereon and the premium, if any, payable with respect
thereto shall become due and payable on the prepayment date
specified in such notice. Not later than two Business Days prior
to the prepayment date specified in such notice, the Company
shall provide the holder of each Note written notice of the
premium, if any, payable in connection with such prepayment and,
whether or not any premium is payable, a reasonably detailed
computation of the Make-Whole Amount.
Section 2.5. Application of
Prepayments;. All partial prepayments made in accordance with
2.1 and 2.2 shall be applied on all outstanding Notes ratably
in accordance with the unpaid principal amounts thereof.
Section 2.6. Direct Payment;.
Notwithstanding anything to the contrary contained in this
Agreement or the Notes, in the case of any Note owned by you or
your nominee or owned by any subsequent Institutional Holder
which has given written notice to the Company requesting that the
provisions of this 2.6 shall apply, the Company will punctually
pay when due the principal thereof, interest thereon and premium,
if any, due with respect to said principal, without any
presentment thereof, directly to you, to your nominee or to such
subsequent Institutional Holder at your address or your nominees
address set forth in Schedule I hereto or such other address as
you, your nominee or such subsequent Institutional Holder may
from time to time designate in writing to the Company or, if a
bank account with a United States bank is designated for you or
your nominee on Schedule I hereto or in any written notice to the
Company from you, from your nominee or from any such subsequent
Institutional Holder, the Company will make such payments in
immediately available funds to such bank account, marked for
attention as indicated, or in such other manner or to such other
account in any United States bank as you, your nominee or any
such subsequent Institutional Holder may from time to time direct
in writing.
Section 3. Representations;.
Section 3.1. Representations of the
Company;. The Company represents and warrants that all
representations and warranties set forth in Exhibit B hereto are
true and correct as of the Closing Date and are incorporated
herein by reference with the same force and effect as though
herein set forth in full.
Section 3.2. Representations of the
Purchaser;. (a) You represent, and in entering into this
Agreement the Company understands, that you are acquiring the
Notes for the purpose of investment and not with a view to the
distribution thereof, and that you have no present intention of
selling, negotiating or otherwise disposing of the Notes; it
being understood, however, that the disposition of your property
shall at all times be and remain within your control.
(b) You further represent that at least one of
the following statements concerning each source of funds to be
used by you to purchase the Notes is accurate as of the Closing
Date:
(1) the source of funds is an "insurance company general
account" within the meaning of Department of Labor Prohibited
Transaction Exemption ("PTE") 95-60 (issued July 12, 1995) and
the purchase of the Notes by you is eligible for and satisfies
the requirements of PTE 95-60;
(2) all or a part of such funds constitute assets of one or
more separate accounts, trusts or a commingled pension trust
maintained by you, and you have disclosed to the Company the
names of such employee benefit plans whose assets in such
separate account or accounts or pension trusts exceed 10% of the
total assets or are expected to exceed 10% of the total assets of
such account or accounts or trusts as of the date of such
purchase (for the purpose of this clause (2), all employee
benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
(3) all or part of such funds constitute assets of a bank
collective investment fund maintained by you, and you have
disclosed to the Company the names of such employee benefit plans
whose assets in such collective investment fund exceed 10% of the
total assets or are expected to exceed 10% of the total assets of
such fund as of the date of such purchase (for the purpose of
this clause (3), all employee benefit plans maintained by the
same employer or employee organization are deemed to be a single
plan);
(4) all or part of such funds constitute assets of one or
more employee benefit plans, each of which has been identified to
the Company in writing;
(5) you are acquiring the Notes for the account of one or
more pension funds, trust funds or agency accounts, each of which
is a "governmental plan" as defined in Section 3(32) of ERISA;
(6) the source of funds is an "investment fund" managed by
a "qualified professional asset manager"or "QPAM" (as defined in
Part V of PTE 84-14, issued March 13, 1984), provided that no
other party to the transactions described in this Agreement and
no "affiliate" of such other party (as defined in Section V(c) of
PTE 84-14) has at this time, and during the immediately preceding
one year has exercised the authority to appoint or terminate said
QPAM as manager of the assets of any plan identified in writing
pursuant to this clause (6) or to negotiate the terms of said
QPAMs management agreement on behalf of any such identified
plans; or
(7) if you are other than an insurance company, all or a
portion of such funds consists of funds which do not constitute
"plan assets".
The Company shall deliver a certificate on the Closing Date which
certificate shall either state that (i) it is neither a "party in
interest" (as defined in Title I, Section 3(14) of ERISA) nor a
"disqualified person" (as defined in Section 4975(e)(2) of the
Internal Revenue Code of 1986, as amended), with respect to any
plan identified pursuant to paragraphs (2), (3) or (4) above, or
(ii) with respect to any plan identified pursuant to paragraph
(6) above, neither it nor any "affiliate"(as defined in Section
V(c) of PTE 84-14) is described in the proviso to said paragraph
(6). As used in this Section 3.2(b), the terms "separate
account" and "employee benefit plan" shall have the respective
meanings assigned to them in ERISA and the term "plan assets"
shall have the meaning assigned to it in Department of Labor
Regulation 29 C.F.R. 2510.3-101.
Section 4. Closing Conditions;.
Section 4.1. Conditions;. Your
obligation to purchase the Notes proposed to be sold to you on
the Closing Date shall be subject to the performance by the
Company of its agreements hereunder which by the terms hereof are
to be performed at or prior to the time of delivery of the Notes
and to the following further conditions precedent:
(a) Documents and Agreements. You shall
have received the following:
(i) Notes. The Notes to be purchased
by you.
(ii) Company's Closing Certificate. A
certificate dated the Closing Date, signed by the President or a
Vice President of the Company, the truth and accuracy of which
shall be a condition to your obligation to purchase the Notes
proposed to be sold to you, to the effect that
(A) the representations and
warranties of the Company set forth in Exhibit B hereto are true
and correct on and with respect to the Closing Date,
(B) the Company has performed all
of its obligations hereunder and under the other Agreements which
are to be performed on or prior to the Closing Date, and
(C) no Default or Event of Default
has occurred and is continuing.
(iii) Legal Opinions. From Chapman
and Cutler, who are acting as your special counsel in this
transaction, and from Whyte Hirschboeck Dudek S.C., counsel to
the Company, their respective opinions dated the Closing Date, in
form and substance satisfactory to you, and covering the matters
set forth in Exhibits C and D hereto, respectively.
(iv) Guaranty. The Guaranty
substantially in the form of Exhibit E hereto, executed by each
of the Guarantors.
(v) Guarantors' Closing Certificate. A
certificate dated the Closing Date, signed by the President or a
Vice President of each of the Guarantors, the truth and accuracy
of which shall be a condition to your obligation to purchase the
Notes proposed to be sold to you, to the effect that the
representations and warranties of the Guarantors set forth in
Section 3 of the Guaranty are true and correct on and with
respect to the Closing Date.
(vi) Company's Resolutions. Copies of
the resolutions of the Board of Directors of the Company
approving the Agreements and the Notes, and of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Agreements and the Notes,
certified by the Secretary of the Company as of the Closing Date.
(vii) Company's Secretary
Certificate. A certificate of the Secretary of the Company,
dated as of the Closing Date, certifying the names and true
signatures of the officers of the Company authorized to sign the
Agreements and the Notes and the other documents to be delivered
hereunder.
(viii) Company's Charter. Copies of
the Articles of Incorporation of the Company (dated as of a date
within fifteen days prior to the Closing Date) certified by the
Secretary of State of the State of Wisconsin and copies of the
bylaws of the Company.
(ix) Guarantors' Resolutions. Copies of
the resolutions of the Board of Directors of each Guarantor
approving the Guaranty, and of all documents evidencing other
necessary corporate action and governmental approvals, if any,
with respect to the Guaranty, certified by the Secretary of such
Guarantor as of the Closing Date.
(x) Guarantors' Secretary Certificate.
A certificate of the Secretary of each Guarantor, dated as of the
Closing Date, certifying the names and true signatures of the
officers of such Guarantor authorized to endorse the Notes, as
guarantor under the Guaranty and to sign the Guaranty and the
other documents to be delivered thereunder.
(xi) Guarantors' Charter. Copies of the
Articles of Incorporation of each Guarantor (dated as of a date
within fifteen days prior to the Closing Date) certified by the
Secretary of State of the State of such Guarantors incorporation
and copies of the bylaws of each Guarantor.
(xii) Downdate Certificate. A
certificate of the Secretary of the Company and each Guarantor,
dated as of the Closing Date, certifying the prior incumbency of
the officers of the Company and the Guarantors referred to in
clauses (vii) and (x) above, respectively, and as to the
accuracy, as of the Closing Date, of the bylaws of the Company
and the Guarantors and, as of the Closing Date, of the charter
documents of the Company and the Guarantors, referred to in
clauses (viii) and (xi) above, respectively.
(b) Related Transactions. (i) The Company
shall have consummated the sale of the entire principal amount of
the Notes scheduled to be sold on the Closing Date pursuant to
this Agreement and the other agreements referred to in 1.3 and
(ii) the First Amendment shall have been duly executed and
delivered by the parties thereto and shall be in full force and
effect.
(c) Consent of Holders of Other
Indebtedness. On or prior to the Closing Date, any notice,
consent or approval required to be obtained from any holder or
holders of any outstanding Indebtedness of the Company and any
amendments of agreements pursuant to which any Indebtedness may
have been issued which shall be necessary to permit the
consummation of the transactions contemplated hereby shall have
been obtained and all such notices, consents or amendments shall
be reasonably satisfactory in form and substance to you and your
special counsel.
(d) Satisfactory Proceedings. All
proceedings taken in connection with the transactions
contemplated by this Agreement, and all documents necessary to
the consummation thereof, shall be satisfactory in form and
substance to you and your special counsel, and you shall have
received a copy (executed or certified as may be appropriate) of
all legal documents or proceedings taken in connection with the
consummation of said transactions.
Section 4.2. Waiver of Conditions;.
If on the Closing Date the Company fails to tender to you the
Notes to be issued to you on such date or if the conditions
specified in 4.1 have not been fulfilled, you may thereupon
elect to be relieved of all further obligations under this
Agreement. Without limiting the foregoing, if the conditions
specified in 4.1 have not been fulfilled, you may waive
compliance by the Company with any such condition to such extent
as you may in your sole discretion determine. Nothing in this
4.2 shall operate to relieve the Company of any of its
obligations hereunder or to waive any of your rights against the
Company.
Section 5. Company Covenants;.
From and after the Closing Date and continuing so long as any
amount remains unpaid on any Note:
Section 5.1. Corporate Existence,
Etc;. The Company will preserve and keep in full force and
effect, and will cause each Restricted Subsidiary to preserve and
keep in full force and effect, its corporate existence and all
licenses and permits necessary to the proper conduct of its
business; provided, however, that the foregoing shall not prevent
any transaction permitted by 5.13.
Section 5.2. Insurance;. The Company
will maintain, and will cause each Restricted Subsidiary to
maintain, insurance coverage with financially sound and reputable
insurers in such forms and amounts and against such risks as are
customary for corporations of established reputation engaged in
the same or a similar business and owning and operating similar
properties. The Company, upon the request of any Institutional
Holder, will furnish to such Institutional Holder a summary
setting forth the nature and extent of the insurance maintained
pursuant to this 5.2.
Section 5.3. Taxes, Claims for Labor
and Materials, Compliance with Laws;. The Company will pay and
discharge, and will cause each Restricted Subsidiary to pay and
discharge, all lawful taxes, assessments and governmental charges
or levies imposed upon the Company or such Restricted Subsidiary,
respectively, or upon or in respect of all or any part of the
property or business of the Company or such Restricted
Subsidiary, all trade accounts payable, and all claims for work,
labor or materials, which if unpaid might become a Lien upon any
property of the Company or such Restricted Subsidiary all prior
to such taxes, assessments, charges, levies, accounts payable or
claims becoming delinquent or past due and before any penalties
accrue thereon; provided, however, that the Company or such
Restricted Subsidiary shall not be required to pay or discharge
any such tax, assessment, charge, levy, account payable or claim
for so long as (i) the validity, applicability or amount thereof
is being contested in good faith by appropriate actions or
proceedings which will prevent the forfeiture or sale of any
property of the Company or such Restricted Subsidiary, or any
material interference with the use thereof by the Company or such
Restricted Subsidiary, and (ii) the Company or such Restricted
Subsidiary shall set aside on its books reserves deemed by it to
be adequate (which shall be greater than or equal to the amount
of reserves, if any, required under GAAP) with respect thereto.
The Company will promptly comply and will cause each Subsidiary
promptly to comply with all laws, ordinances or governmental
rules and regulations to which it is subject including, without
limitation, the Occupational Safety and Health Act of 1970, as
amended, ERISA, and all laws, ordinances, governmental rules and
regulations relating to environmental protection in all
applicable jurisdictions, the violation of which, individually or
in the aggregate, could materially and adversely affect the
properties, business, prospects, profits or condition of the
Company or the Company and the Restricted Subsidiaries, taken as
a whole, or would result in any Lien not permitted under 5.10.
Section 5.4. Maintenance, Etc;. The
Company will maintain, preserve and keep, and will cause each
Restricted Subsidiary to maintain, preserve and keep, its
properties which are used or useful in the conduct of its
business (whether owned in fee or a leasehold interest) in good
repair and working order and from time to time will make all
necessary repairs, replacements, renewals and additions so that
at all times the efficiency thereof shall be maintained.
Section 5.5. Nature of Business;.
Neither the Company nor any Restricted Subsidiary will engage in
any business if, as a result, the general nature of the business,
taken on a consolidated basis, which would then be engaged in by
the Company and the Restricted Subsidiaries would be
substantially changed from the general nature of the business
engaged in by the Company and the Restricted Subsidiaries on the
date of this Agreement, and as described in the Memorandum.
Section 5.6. Current Ratio;. The
Company will at all times keep and maintain the ratio of
Consolidated Current Assets to Consolidated Current Liabilities
at not less than 1.25 to 1.0.
Section 5.7. Consolidated Tangible Net
Worth;. The Company will at all times keep and maintain
Consolidated Tangible Net Worth at an amount not less than the
sum of (a) $75,000,000 plus (b) 55% of positive Consolidated Net
Income on a cumulative basis for each fiscal year ending on or
after December 28, 1996, provided that for purposes of the
foregoing calculation, Consolidated Net Income shall be deemed to
be zero (and, accordingly, shall not increase or decrease the
amount of Consolidated Tangible Net Worth required to be
maintained pursuant to this 5.7) for any such fiscal year for
which Consolidated Net Income is a deficit figure.
Section 5.8. Limitations on Indebtedness;.
(a) Funded Debt. The Company will keep and
maintain, as of the end of each fiscal quarter, the ratio of
Adjusted Consolidated Funded Debt to Stockholders Equity at not
greater than 1.70 to 1.00.
(b) Priority Debt. The Company will not,
and will not permit any Restricted Subsidiary to, create, incur
or suffer to be incurred or to exist, at any time, Priority Debt
in an aggregate amount exceeding an amount equal to 10% of
Tangible Assets.
(c) Subordination. The Company shall cause
all Funded Debt that is represented or governed by a note, bond
or other instrument or document owing by the Company to any
Subsidiary or by any Guarantor to the Company or to any other
Subsidiary, to be subordinate to the Indebtedness represented by
the Notes or the Guaranty, as applicable, upon terms acceptable
to more than 50% in outstanding aggregate principal amount of the
Notes.
Section 5.9. Fixed Charges Coverage
Ratio;. The Company will keep and maintain the ratio of Net
Income Available for Fixed Charges to Fixed Charges for each
period of four consecutive fiscal quarters of the Company,
commencing with the fiscal quarter of the Company ending June 29,
1996, at not less than 1.40 to 1.0.
`
Section 5.10. Limitation on Liens;.
The Company will not, and will not permit any Restricted
Subsidiary to, create, incur, or suffer to be incurred or to
exist, any Lien on its or their property or assets, whether now
owned or hereafter acquired, or upon any income or profits
therefrom, or transfer any property for the purpose of subjecting
the same to the payment of obligations in priority to the payment
of its or their general creditors, or acquire or agree to
acquire, or permit any Restricted Subsidiary to acquire or agree
to acquire, any property or assets upon conditional sales
agreements or other title retention devices, except:
(a) Liens for property taxes and assessments
or governmental charges or levies and Liens securing claims or
demands of mechanics and materialmen, provided payment thereof is
not at the time required by 5.3;
(b) Liens of or resulting from any judgment
or award, the time for the appeal or petition for rehearing of
which shall not have expired, or in respect of which the Company
or a Restricted Subsidiary shall at any time in good faith be
prosecuting an appeal or proceeding for a review and in respect
of which a stay of execution pending such appeal or proceeding
for review shall have been secured;
(c) Liens incidental to the Company's or
such Restricted Subsidiary's conduct of business or the ownership
of its properties and assets (including Liens in connection with
workers compensation, unemployment insurance and other like laws,
warehousemen's and attorneys' liens and statutory landlords'
liens) and Liens to secure the performance of bids, tenders or
trade contracts, or to secure statutory obligations, surety or
appeal bonds or other Liens of like general nature incurred in
the ordinary course of business and not in connection with the
borrowing of money; provided in each case, the obligation secured
thereby is not overdue or, if overdue, is being contested in good
faith by appropriate actions or proceedings and for which the
Company or such Restricted Subsidiary shall have set aside on its
books, reserves deemed by it to be adequate (which shall be
greater than or equal to the amount of reserves, if any, required
by GAAP);
(d) minor survey exceptions or minor
encumbrances, easements or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or zoning or
other restrictions as to the use of real properties, which are
necessary for the conduct of the activities of the Company or
such Restricted Subsidiary or which customarily exist on
properties of corporations engaged in similar activities and
similarly situated, and which do not in any event materially
impair their use in the operation of the business of the Company
or such Restricted Subsidiary;
(e) Liens securing Indebtedness of a
Restricted Subsidiary to the Company or to a Wholly-owned
Restricted Subsidiary;
(f) Liens existing as of the date of this
Agreement and reflected in Annex B to Exhibit B hereto;
(g) Liens created or extended in connection
with renewing, extending or refunding Indebtedness secured by
Liens permitted by the preceding subsections (a) through (f);
provided (i) the principal amount of Indebtedness so secured
shall not be increased, (ii) no such Lien shall attach to any
property other than the property encumbered by such Lien
immediately prior to such renewal, extension or refunding, and
(iii) all Consolidated Funded Debt and all Current Debt secured
thereby could then be incurred within the limitations provided in
5.8; and
(h) in addition to Liens permitted by
subsections (a) through (g) of this 5.10, Liens on fixed assets
used or intended to be used in carrying on the business of the
Company or such Restricted Subsidiary incurred after the Closing
Date and securing Funded Debt or Current Debt of the Company or
such Restricted Subsidiary incurred within the limitations
provided by 5.8.
Section 5.11. Restricted Payments;.
The Company will not, and will not permit any Restricted
Subsidiary to:
(a) declare or pay any dividends, either in
cash or property, on any shares of its capital stock of any
class, or set apart any sum for such purpose;
(b) directly or indirectly, or through any
Subsidiary, purchase, redeem or retire any shares of its capital
stock of any class or any warrants, rights or options to purchase
or acquire any shares of its capital stock (other than in
exchange for or out of the net cash proceeds to the Company from
the substantially concurrent issue or sale of other shares of
capital stock of the Company or warrants, rights or options to
purchase or acquire any shares of its capital stock); or
(c) make any other payment or distribution,
either directly or indirectly or through any Subsidiary, in
respect of its capital stock;
(such declarations or payments of dividends, purposes,
redemptions or retirements of capital stock and
warrants, rights or options and all such other payments
or distributions being herein collectively called
"Restricted Payments"); provided, however, that, so long
as no Default or Event of Default shall have occurred
and be continuing, the Company may (i) purchase, redeem
or retire, in accordance with the provisions of the By-
laws of the Company as in effect on the date of this
Agreement, shares of its capital stock owned by any
current or former employee, customer, or director, (ii)
sell or exchange shares of capital stock of the Company
to or with any Wholly-owned Subsidiary, and (iii) pay
Patronage Dividends in accordance with Article V of the
By-laws of the Company as in effect on the date of this
Agreement if (y) after giving effect to such payment,
the book value per share of the Company and the
Subsidiaries, on a consolidated basis, is at least 5%
greater than such book value on the last day of the
immediately preceding fiscal year of the Company, and
(z) after giving effect to such Patronage Dividend, not
more than 40% of the aggregate payments of Patronage
Dividends during any fiscal year of the Company shall
have been made in cash.
The Company will not perform any act or thing, or commence any
corporate action to permit any act or thing, set forth in clause
(a), (b) or (c) above if after giving effect thereto a Default or
Event of Default exists or would result therefrom or which would
constitute a Restricted Payment (permitted by the proviso of the
immediately preceding paragraph) payable more than 60 days after
the date of declaration or announcement thereof.
For the purposes of this 5.11, the amount of any Restricted
Payment (permitted by the proviso of the second preceding
paragraph) declared, paid or distributed in property shall be
deemed to be the greater of the book value or fair market value
(as determined in good faith by the Board of Directors of the
Company) of such property at the time of the making of the
Restricted Payment in question.
Section 5.12. Investments;. The
Company will not, and will not permit any Restricted Subsidiary
to, make any Investments, other than:
(a) Investments by the Company or such
Restricted Subsidiary in and to a Wholly-owned Restricted
Subsidiary, including any Investment in a corporation which,
after giving effect to such Investment, will become a Wholly-
owned Restricted Subsidiary;
(b) Investments by any Wholly-owned
Subsidiary in capital stock of the Company;
(c) Investments in commercial paper maturing
in 270 days or less from the date of issuance which, at the time
of acquisition by the Company or such Restricted Subsidiary, is
accorded the highest rating by Moody's Investors Service, Inc. or
other nationally recognized credit rating agency of similar
standing or one of the two highest ratings by Standard & Poors
Corporation;
(d) Investments in direct obligations of the
United States of America or any agency or instrumentality of the
United States of America, the payment or guarantee of which
constitutes a full faith and credit obligation of the United
States of America, in either case, maturing in twelve months or
less from the date of acquisition thereof;
(e) Investments in certificates of deposit
maturing within one year from the date of issuance thereof,
issued by a bank or trust company organized under the laws of the
United States or any state thereof, having capital, surplus and
undivided profits aggregating at least $100,000,000 and whose
long-term certificates of deposit are, at the time of acquisition
thereof by the Company or such Restricted Subsidiary, rated AA or
better by Standard & Poor's Corporation or Aa or better by
Moody's Investors Service, Inc.;
(f) Investments in overnight Eurodollar
obligations which are (i) purchased in the United States and (ii)
issued by a commercial bank that meets the requirements set forth
in 5.12(e);
(g) Investments in any publicly traded
mutual fund, the assets of which consist of either (i) money
market securities or (ii) securities of the type described in
5.12(c) but which may have maturities of three years or less
from the date of acquisition thereof;
(h) Investments existing as of the date of
this Agreement and reflected in Schedule II hereto;
(i) loans or advances in the usual and
ordinary course of business in an aggregate principal amount of
not more than $1,000,000 at any one time outstanding and made to
officers, directors or employees of the Company or such
Restricted Subsidiary for expenses (including moving expenses
related to a transfer) incidental to carrying on the business of
the Company or such Restricted Subsidiary;
(j) receivables arising from the sale of
goods and services in the ordinary course of business of the
Company or such Restricted Subsidiary; and
(k) Investments (in addition to those
permitted by the foregoing provisions of this 5.12), provided
that the aggregate amount of Investments permitted by this
5.12(k) shall not exceed 10% of Tangible Assets at any time.
In valuing any Investments for the purpose of applying the
limitations set forth in this 5.12, such Investments shall be
taken at the original cost thereof, without allowance for any
subsequent write-offs or appreciation or depreciation therein,
but less any amount repaid or recovered on account of capital or
principal.
For purposes of this 5.12, at any time when a corporation
becomes a Restricted Subsidiary, all Investments of such
corporation at such time shall be deemed to have been made by
such corporation, as a Restricted Subsidiary, at such time.
Section 5.13. Mergers, Consolidations
and Sales of Assets;. (a) The Company will not, and will not
permit any Restricted Subsidiary to, (i) consolidate with or be a
party to a merger with any other Person or (ii) sell, lease or
otherwise dispose of, whether in one transaction or a series of
related transactions, all or any substantial part (as defined in
subsection (d) of this 5.13) of the assets of the Company and
the Restricted Subsidiaries; provided, however, that:
(1) any Restricted Subsidiary may merge or
consolidate with or into the Company or any Wholly-owned
Restricted Subsidiary so long as in any merger or consolidation
involving the Company, the Company shall be the surviving or
continuing corporation;
(2) the Company may consolidate or merge
with any other corporation if (i) the surviving or continuing
corporation is organized under the laws of the United States or
any state thereof, (ii) at the time of such consolidation or
merger and after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, (iii) after giving
effect to such consolidation or merger, the surviving or
continuing corporation shall be engaged in substantially the same
line of business in which the Company was engaged immediately
prior thereto, (iv) the surviving or continuing corporation (if
other than the Company) shall expressly assume the covenants and
obligations in the Notes and the Agreements by written agreement
which agreement shall be satisfactory in form and substance to
the holders of at least 66-2/3% in aggregate principal amount of
the outstanding Notes, and (v) after giving effect to such
consolidation or merger the surviving or continuing corporation
would be permitted to incur at least $1.00 of additional
Consolidated Funded Debt under the provisions of 5.8(a); and
(3) any Restricted Subsidiary may sell,
lease or otherwise dispose of all or any substantial part of its
assets to the Company or any Wholly-owned Restricted Subsidiary.
(b) The Company will not permit any Restricted
Subsidiary to issue or sell any shares of stock of any class
(including as "stock" for the purposes of this 5.13, any
warrants, rights or options to purchase or otherwise acquire
stock or other Securities exchangeable for or convertible into
stock) of such Restricted Subsidiary to any Person other than the
Company or a Wholly-owned Restricted Subsidiary, except for the
purpose of qualifying directors, or except in satisfaction of the
validly preexisting preemptive rights of minority shareholders in
connection with the simultaneous issuance of stock to the Company
or a Restricted Subsidiary whereby the Company or such Restricted
Subsidiary maintain at least their same proportionate interest in
such Restricted Subsidiary.
(c) The Company will not sell, transfer or
otherwise dispose of any shares of stock of any Restricted
Subsidiary (except to qualify directors) or any Indebtedness of
any Restricted Subsidiary, and will not permit any Restricted
Subsidiary to sell, transfer or otherwise dispose of (except to
the Company or a Wholly-owned Restricted Subsidiary) any shares
of stock or any Indebtedness of any other Restricted Subsidiary,
unless:
(1) simultaneously with such sale, transfer,
or disposition, all shares of stock and all Indebtedness of such
Restricted Subsidiary at the time owned by the Company and by
every other Restricted Subsidiary shall be sold, transferred or
disposed of as an entirety in a transaction permitted under this
5.13;
(2) the Board of Directors of the Company
shall have determined, as evidenced by a resolution thereof, that
the proposed sale, transfer or disposition of said shares of
stock and Indebtedness is in the best interests of the Company;
(3) said shares of stock and Indebtedness
are sold, transferred or otherwise disposed of to a Person, for
consideration entirely in the form of cash and on terms
reasonably deemed by the Board of Directors of the Company to be
adequate and satisfactory;
(4) the Restricted Subsidiary being disposed
of shall not have any continuing investment in the Company or any
other Restricted Subsidiary not being simultaneously disposed of;
and
(5) such sale or other disposition does not
involve a substantial part (as hereinafter defined) of the assets
of the Company and the Restricted Subsidiaries.
(d) As used in this 5.13, a sale, lease or other
disposition of assets shall be deemed to be a "substantial part"
of the assets of the Company and the Restricted Subsidiaries if
the book value of such assets, when added to the book value of
all other assets, including, without limitation, shares of stock
or Indebtedness, sold, leased or otherwise disposed of by the
Company and the Restricted Subsidiaries during the 12-month
period ending with the date of such sale, lease or other
disposition, exceeds 10% of Tangible Assets, determined as of the
end of the immediately preceding fiscal year of the Company.
Section 5.14. Guaranties;. The Company
will not, and will not permit any Restricted Subsidiary to,
become or be liable in respect of any Guaranties except the
Guaranty and Guaranties (a) by the Company which are limited in
amount to a stated maximum dollar exposure or which constitute
Guaranties of obligations incurred by any Restricted Subsidiary
in compliance with the provisions of this Agreement, (b) by the
Guarantors or any Subsidiary hereafter becoming a Guarantor
pursuant to 5.19, of Funded Debt of the Company which Funded
Debt is otherwise permitted by this Agreement and (c) of lease
obligations of and loans to, customers of the Company or such
Restricted Subsidiary which are limited in amount to a stated
maximum dollar exposure.
Section 5.15. Repurchase of Notes;.
Neither the Company nor any Restricted Subsidiary or Affiliate,
directly or indirectly, may repurchase or make any offer to
repurchase any Notes unless an offer has been made to repurchase
Notes, pro rata, from all holders of the Notes at the same time
and upon the same terms. In case the Company, any Restricted
Subsidiary or Affiliate repurchases or otherwise acquires any
Notes, such Notes shall immediately thereafter be cancelled and
such Notes shall no longer be outstanding for purposes of any
section of this Agreement.
Section 5.16. Transactions with
Affiliates;. The Company will not, and will not permit any
Restricted Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of property
with, or the rendering of any service by or for, any Affiliate),
except in a manner materially consistent with past practices and
in the ordinary course of and pursuant to the reasonable
requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than would be obtained
in a comparable arms-length transaction with a Person other than
an Affiliate.
Section 5.17. Termination of Pension
Plans;. The Company will not and will not permit any Subsidiary
to withdraw from any Multiemployer Plan or permit any employee
benefit plan maintained by it to be terminated if such withdrawal
or termination could result in withdrawal liability (as described
in Part I of Subtitle E of Title IV of ERISA) or the imposition
of a Lien on any property of the Company or any Subsidiary
pursuant to Section 4068 of ERISA.
Section 5.18. Reports and Rights of
Inspection;. The Company will keep, and will cause each
Restricted Subsidiary to keep, proper books of record and account
in which full and correct entries will be made of all dealings or
transactions of, or in relation to, the business and affairs of
the Company or such Restricted Subsidiary, in accordance with
GAAP consistently applied (except for changes disclosed in the
financial statements furnished to you pursuant to this 5.18 and
concurred in by the independent public accountants referred to in
5.18(b) hereof), and will furnish to you so long as you are the
holder of any Note and to each other Institutional Holder of the
then outstanding Notes (in duplicate if so specified below or
otherwise requested):
(a) Quarterly Statements. As soon as
available and in any event within 60 days after the end of each
quarterly fiscal period (except the last) of each fiscal year of
the Company, copies of unaudited:
(1) consolidated and consolidating
balance sheets of the Company and the Restricted Subsidiaries as
of the close of such quarterly fiscal period, setting forth in
comparative form the consolidated and consolidating figures for
the fiscal year of the Company then most recently ended,
(2) consolidated and consolidating
statements of earnings of the Company and the Restricted
Subsidiaries for such quarterly fiscal period and for the portion
of the fiscal year of the Company ending with such quarterly
fiscal period, in each case setting forth in comparative form the
consolidated and consolidating figures for the corresponding
periods of the preceding fiscal year of the Company, and
(3) consolidated statements of cash
flows of the Company and the Restricted Subsidiaries for the
portion of the fiscal year of the Company ending with such
quarterly fiscal period, setting forth in comparative form the
consolidated and consolidating figures for the corresponding
period of the preceding fiscal year of the Company,
all in reasonable detail and certified by the chief financial
officer of the Company as complete and correct and as conforming
to the requirements of quarterly reports to the Securities and
Exchange Commission on Form 10Q promulgated thereby;
(b) Annual Statements. As soon as available
and in any event within 120 days after the close of each fiscal
year of the Company, copies of:
(1) consolidated and consolidating
balance sheets of the Company and the Restricted Subsidiaries as
of the close of such fiscal year, and
(2) consolidated and consolidating
statements of earnings and Stockholders' Equity and consolidated
statements of cash flows of the Company and the Restricted
Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated
and consolidating figures for the preceding fiscal year of the
Company, all in reasonable detail and (i) in the case of the
consolidated statements referred to above, accompanied by an
unqualified report thereon of a firm of independent public
accountants of recognized national standing selected by the
Company, to the effect that the consolidated financial statements
present fairly, in all material respects, the consolidated
financial position of the Company and the Restricted Subsidiaries
as of the end of the fiscal year being reported on and the
consolidated results of the operations and cash flows for said
year in conformity with GAAP and that the examination of such
accountants in connection with such financial statements has been
conducted in accordance with generally accepted auditing
standards and included such tests of the accounting records and
such other auditing procedures as said accountants deemed
necessary in the circumstances and (ii) in the case of the
consolidating statements referred to above, accompanied by a
certificate of the chief financial officer of the Company, to the
effect that such consolidating statements present fairly, in all
material respects, the consolidating financial position of the
Company and the Restricted Subsidiaries as of the end of the
fiscal year being reported on in (i), above, and the
consolidating results of the operations for said year in
conformity to GAAP;
(c) Audit Reports. Promptly upon receipt
thereof, one copy of each interim or special audit made by
independent accountants of the books of the Company or any
Restricted Subsidiary and any management letter received from
such accountants;
(d) SEC and Other Reports. Promptly upon
their becoming available, one copy of each financial statement,
report, notice or proxy statement sent by the Company to
stockholders generally and of each regular or periodic report,
and any registration statement or prospectus, filed by the
Company or any Subsidiary with any securities exchange or the
Securities and Exchange Commission or any successor agency, and
copies of any orders in any investigation or proceeding to which
the Company or any of the Subsidiaries is a party, issued by any
governmental agency, Federal or state, having jurisdiction over
the Company or any of the Subsidiaries;
(e) ERISA Reports. Promptly upon the
occurrence thereof, written notice of (i) a Reportable Event with
respect to any Plan; (ii) the institution of any steps by the
Company, any ERISA Affiliate, the PBGC or any other person to
terminate any Plan; (iii) the institution of any steps by the
Company, any ERISA Affiliate or to the Company's knowledge any
substantial employer (within the meaning of Section 4063 of
ERISA) to withdraw from any Plan; (iv) a non-exempt "prohibited
transaction" within the meaning of Section 406 of ERISA or
Section 4975 of the Code in connection with any Plan; (v) any
material increase in the contingent liability of the Company or
any Restricted Subsidiary with respect to any post-retirement or
post-employment welfare liability; or (vi) the taking of any
action by, or the threatening of the taking of any action by, the
Internal Revenue Service, the Department of Labor or the PBGC
with respect to any of the foregoing;
(f) Officer's Certificates. Together with
each of the financial statements required under subsections (a)
and (b) above, a certificate of an authorized financial officer
of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (i) the
information and, in the case of 5.6 through 5.9, 5.10(g) and
(h), 5.12(k) and 5.13(d) computations (in sufficient detail)
required in order to establish whether the Company was in
compliance with the requirements of 5.6 through 5.17 and 5.19
at the end of the period covered by the financial statements then
being furnished, and (ii) whether there existed as of the date of
such financial statements and whether, to the best of such
officer's knowledge, there exists on the date of the certificate
or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any
such condition or event exists on the date of the certificate,
specifying the nature and period of existence thereof and the
action the Company is taking and proposes to take with respect
thereto;
(g) Accountant's Certificates. Together
with each of the financial statements required under
subsection (b) above, a certificate of the accountants who render
an opinion with respect to such financial statements, stating
that they have reviewed this Agreement and stating further
whether, in making their audit, such accountants have become
aware of any Default or Event of Default under any of the terms
or provisions of this Agreement insofar as any such terms or
provisions pertain to or involve accounting matters or
determinations, and if any such condition or event then exists,
specifying the nature and period of existence thereof;
(h) Unrestricted Subsidiaries. Together
with each of the financial statements required under subsections
(a) and (b) above, financial statements of the character and for
the dates and periods as in said subsections (a) and (b) covering
each Unrestricted Subsidiary (or groups of Unrestricted
Subsidiaries on a consolidated basis); and
(i) Requested Information. With reasonable
promptness, such other data and information as you or any such
Institutional Holder may reasonably request.
Without limiting the foregoing, the Company will permit
you, so long as you are the holder of any Note, and each
Institutional Holder of the then outstanding Notes (or
such Persons as either you or such Institutional Holder
may designate), to visit and inspect, under the Companys
guidance, any of the properties of the Company or any
Restricted Subsidiary, to examine all of their books of
account, records, reports and other papers, to make
copies and extracts therefrom and to discuss their
respective affairs, finances and accounts with their
respective officers, employees, and independent public
accountants (and by this provision the Company
authorizes said accountants to discuss with you the
finances and affairs of the Company and the Restricted
Subsidiaries), all at such reasonable times and as often
as may be reasonably requested. The Company shall not
be required to pay or reimburse you or any such
Institutional Holder for expenses which you or any such
Institutional Holder may incur in connection with any
such visitation or inspection unless such visitation or
inspection is made by you or any such Institutional
Holder in response to the occurrence of a Default or an
Event of Default.
Section 5.19. Additional Guaranties;.
The Company will, not later than any date on which any Subsidiary
delivers a guaranty to any bank signatory to the Credit
Agreement, cause such Subsidiary to join the Guaranty by
executing and delivering a Joinder Agreement substantially in the
form of Annex I to Exhibit E hereto. Commencing with the
delivery of any such joinder by a Subsidiary, the Company will
deliver to you an opinion of counsel satisfactory to you in form
and substance to the effect that the Guaranty has been duly
authorized, executed and delivered by such Subsidiary and
constitutes a legal, valid and binding contract of such
Subsidiary enforceable in accordance with its terms, and covering
such other legal matters as you may reasonably request.
Section 5.20. Covenant to Secure Notes
Equally;. If the Company or any Restricted Subsidiary shall
create or assume any Lien upon any of its property or assets,
whether now owned or hereafter acquired, other than Liens
permitted by 5.10 (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to 7.1)
it will make or cause to be made effective provision whereby the
Notes will be secured by such Lien equally and ratably with any
and all other Indebtedness thereby secured so long as any such
other Indebtedness shall be so secured.
Section 5.21. ERISA;. Each of the
Company and the Subsidiaries will promptly pay and discharge all
obligations and liabilities arising under ERISA of a character
which if unpaid or unperformed might result in the imposition of
a Lien against any of its properties or assets, and the Company
will promptly notify the holder of each Note of (i) the
occurrence of any reportable event (as defined in ERISA) with
respect to a Plan, other than any such event as to which the PBGC
has waived notice by regulation, (ii) receipt of any notice from
the PBGC of its intention to seek termination of any Plan or
appointment of a trustee therefor, (iii) its, any Subsidiary's,
or, to the extent the Company has knowledge thereof, any of its
ERISA Affiliates' intention to terminate or withdraw from any
Plan, and (iv) the occurrence of any event with respect to any
employee benefit plan as defined in Section 3(3) of ERISA which
would reasonably be expected to result in the incurrence by the
Company or any Subsidiary of any material liability, fine or
penalty, or any material increase in the contingent liability of
the Company or any Subsidiary with respect to any post-retirement
on post-employment welfare benefit liability.
Section 5.22. Compliance with
Environmental Laws;. The Company will, and will cause each of
the Subsidiaries and each of their respective Affiliates that are
controlled by the Company or any of the Subsidiaries to, comply
in a timely fashion with, or operate pursuant to valid waivers of
the provisions of, all federal, state and local environmental or
pollution-control laws, regulations, orders and decrees
governing, without limitation, the emission of wastewater
effluent, solid and hazardous waste and air pollution, together
with any other applicable requirements for conducting, on a
timely basis, periodic tests and monitoring for contamination of
ground water, surface water, air and land and for biological
toxicity of the aforesaid, and diligently comply with the
regulations (except to the extent such regulations are waived by
appropriate governmental authorities) of the Environmental
Protection Agency or other relevant federal, state or local
governmental authority except where noncompliance would not
materially adversely affect the business, financial condition or
results of operations of the Company or the Company and the
Restricted Subsidiaries, taken as a whole.
Section 5.23. Restricted Subsidiaries;.
The Company will not permit any Restricted Subsidiary to become
an Unrestricted Subsidiary.
Section 6. Events of Default and Remedies Therefor;.
Section 6.1. Events of Default;. Any
one or more of the following shall constitute an "Event of
Default" as such term is used herein:
(a) Default shall occur in the payment of
interest on any Note when the same shall have become due and such
default shall continue for more than five days; or
(b) Default shall occur in the making of any
required prepayment on any of the Notes as provided in 2.1; or
(c) Default shall occur in the making of any
other payment of the principal of any Note or premium, if any,
thereon at the expressed or any accelerated maturity date or at
any date fixed for prepayment; or
(d) Default shall be made in the payment
when due (whether by lapse of time, by declaration, by call for
redemption or otherwise) of the principal of or interest on, any
Funded Debt or Current Debt (other than the Notes) of the Company
or any Restricted Subsidiary and such default shall continue
beyond the period of grace, if any, allowed with respect thereto;
or
(e) Default or the happening of any event
shall occur under any indenture, agreement or other instrument
under which any Funded Debt or Current Debt (other than the
Notes) of the Company or any Restricted Subsidiary shall be
outstanding or may be issued and such default or event shall
continue for a period of time sufficient to permit the
acceleration of the maturity of any Funded Debt or Current Debt
of the Company or any Restricted Subsidiary outstanding
thereunder; or
(f) Default shall occur in the observance or
performance of any covenant or agreement contained in 5.6
through 5.13, 6.2 or the final paragraph of 5.18; or
(g) Default shall occur in the observance or
performance of any other provision of this Agreement which is not
remedied within 30 days after the earlier of (i) the day on which
any officer of the Company first obtains knowledge of such
default, or (ii) the day on which written notice thereof is given
to the Company by the holder of any Note; or
(h) Any representation or warranty made by
the Company herein, or made by or on behalf of the Company in any
statement or certificate furnished by the Company in connection
with the consummation of the issuance and delivery of the Notes
or furnished by or on behalf of the Company pursuant hereto, is
untrue in any material respect as of the date of the issuance or
making thereof; or
(i) Any representation or warranty made by
any of the Guarantors in the Guaranty, or made by or on behalf of
such Guarantor in any statement or certificate furnished by such
Guarantor in connection with the consummation of the execution
and delivery of the Guaranty, is untrue in any material respect
as of the date of the issuing or making thereof; or
(j) The Guaranty or any guaranty delivered
to the holders of the Notes in accordance with the provisions of
5.19 shall not be valid and enforceable or shall be repudiated
in whole or in part by any guarantor of the Notes thereunder; or
(k) Final judgment or judgments for the
payment of money aggregating in excess of $500,000 is or are
outstanding against the Company or any Restricted Subsidiary or
against any property or assets of either and any one of such
judgments has remained unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of 30 days from the date of its
entry; or
(l) A custodian, liquidator, trustee or
receiver is appointed for the Company or any Restricted
Subsidiary or for the major part of the property of either and is
not discharged within 30 days after such appointment; or
(m) The Company or any Restricted Subsidiary
becomes insolvent or bankrupt, is generally not paying its debts
as they become due or makes an assignment for the benefit of
creditors, or the Company or any Restricted Subsidiary applies
for or consents to the appointment of a custodian, liquidator,
trustee or receiver for the Company or such Restricted Subsidiary
or for the major part of the property of either; or
(n) Bankruptcy, reorganization, arrangement
or insolvency proceedings, or other proceedings for relief under
any bankruptcy or similar law or laws for the relief of debtors,
are instituted by or against the Company or any Restricted
Subsidiary and, if instituted against the Company or any
Restricted Subsidiary, are consented to or are not dismissed
within 60 days after such institution.
Section 6.2. Notice to Holders;. When
(a) any Default or Event of Default has occurred, (b) the holder
of any Note or of any other evidence of Funded Debt or Current
Debt of the Company gives any notice or takes any other action
with respect to a claimed default, (c) any officer of the Company
shall become aware of any action, suit, investigation or
proceeding, pending or threatened, of the kind described in
paragraph 8 of Exhibit B hereto, or (d) a material adverse change
shall occur in the properties, business, prospects, profits or
condition (financial or otherwise) of the Company or the Company
and the Restricted Subsidiaries, taken as a whole, the Company
agrees to give notice within three Business Days of such event to
all holders of the Notes then outstanding.
Section 6.3. Acceleration of
Maturities;. (a) When any Event of Default described in
subsection (a), (b) or (c) of 6.1 has occurred and is
continuing, the holder of any Note (other than the Company, any
Subsidiary or any of their respective Affiliates) that is the
subject of such Event of Default may at its option, by notice in
writing to the Company, declare such Note to be, and such Note
shall thereupon be and become, immediately due and payable,
together with premium, if any, equal to the Make-Whole Amount
with respect to each such Note, and together with interest
accrued thereon, without presentment, demand, protest or other
notice of any kind (including, without limitation, notice of
intent to accelerate and notice of acceleration of maturity), all
of which are hereby waived by the Company, (b) if such event is
an Event of Default specified in clauses (l) through (n) of 6.1
with respect to the Company, all of the Notes at the time
outstanding shall automatically become immediately due and
payable together with premium, if any, equal to the Make-Whole
Amount with respect thereto, and together with interest accrued
thereon, without presentment, demand, protest or notice of any
kind (including, without limitation, notice of intent to
accelerate and notice of acceleration of maturity), all of which
are hereby waived by the Company, and (c) if such event is any
Event of Default, other than those described in clause (b) above,
the holder or holders of at least 25% of the aggregate
outstanding principal amount of the Notes at such time may at its
or their option, by notice in writing to the Company, declare all
of the Notes to be, and all of the Notes shall thereupon be and
become, immediately due and payable together with interest
accrued thereon and, to the maximum extent permitted by
applicable law, together with the premium, if any, equal to the
Make-Whole Amount with respect to each Note, without presentment,
demand, protest or other notice of any kind (including, without
limitation, notice of intent to accelerate and notice of
acceleration of maturity), all of which are hereby waived by the
Company.
Section 6.4. Rescission of
Acceleration;. The provisions of 6.3 are subject to the
condition that if the principal of and accrued interest on all or
any outstanding Notes have been declared immediately due and
payable by reason of the occurrence of any Event of Default
described in subsections (a) through (k), inclusive, of 6.1 or
the occurrence of any Event of Default described in
subsections (l) through (n) with respect to one or more
Restricted Subsidiaries only, the holders of more than 50% in
aggregate principal amount of the Notes then outstanding may, by
written instrument filed with the Company, rescind and annul such
declaration and the consequences thereof, provided that at the
time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered
for the payment of any monies due pursuant to the Notes or any of
the Agreements;
(b) all arrears of interest upon all the
Notes and all other sums payable under the Notes and under the
Agreements (except any principal, interest or premium on the
Notes which has become due and payable solely by reason of such
declaration under 6.3) shall have been duly paid; and
(c) each and every other Default and Event
of Default shall have been made good, cured or waived pursuant to
7.1;
and provided further, that no such rescission and annulment shall
extend to or affect any subsequent Default or Event of Default or
impair any right consequent thereto.
Section 6.5. Other Remedies;. If any
Default or Event of Default shall occur and be continuing, the
holder of any Note may proceed to protect and enforce its rights
under this Agreement, the Guaranty and such Note by exercising
such remedies as are available to such holder in respect thereof
under applicable law, either by suit in equity or by action at
law, or both, whether for specific performance of any covenant or
other agreement contained in this Agreement or the Guaranty or in
aid of the exercise of any power granted in this Agreement or the
Guaranty. No remedy conferred in this Agreement or the Guaranty
upon the holder of any Note is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative
and shall be in addition to every other remedy conferred herein
or now or hereafter existing at law or in equity or by statute or
otherwise.
Section 7. Amendments, Waivers and Consents;.
Section 7.1. Consent Required;. Any
term, covenant, agreement or condition of this Agreement may,
with the consent of the Company, be amended or compliance
therewith may be waived (either generally or in a particular
instance and either retroactively or prospectively), if the
Company shall have obtained the consent in writing of the holders
of more than 50% in aggregate outstanding principal amount of the
Notes; provided that without the written consent of the holders
of all of the Notes then outstanding, no such amendment or waiver
shall be effective (i) which will change the time of payment
(including any prepayment required by 2.1 or 2.3) of the
principal of or the interest on any Note or change the principal
amount thereof or change the rate of interest thereon or the
calculation of premium relating thereto, (ii) which will change
any of the provisions with respect to optional prepayments, (iii)
which will change the percentage of holders of the Notes
specified in 5, 6 or 7, or (iv) which will effect the release
of any of the Guarantors.
Section 7.2. Solicitation of Holders;.
So long as there are any Notes outstanding, the Company will not
solicit, request or negotiate for or with respect to any proposed
waiver or amendment of any of the provisions of this Agreement or
the Notes unless each holder of a Note (irrespective of the
amount of Notes then owned by it) shall be informed thereof by
the Company and shall be afforded the opportunity of considering
the same and shall be supplied by the Company with sufficient
information to enable it to make an informed decision with
respect thereto. The Company will not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any
holder of a Note as consideration for or as an inducement to
entering into by any holder of a Note of any waiver or amendment
of any of the terms and provisions of this Agreement or the Notes
unless such remuneration is concurrently offered, on the same
terms, ratably to the holders of all Notes then outstanding.
Section 7.3. Effect of Amendment or
Waiver;. Any such amendment or waiver shall apply equally to all
of the holders of the Notes and shall be binding upon them, upon
each future holder of any Note and upon the Company, whether or
not such Note shall have been marked to indicate such amendment
or waiver. No such amendment or waiver shall extend to or affect
any obligation not expressly amended or waived or impair any
right consequent thereon.
Section 8. Interpretation of Agreement; Definitions';.
Section 8.1. Definitions;. Unless the
context otherwise requires, the terms hereinafter set forth when
used herein shall have the following meanings and the following
definitions, unless otherwise specified, shall be equally
applicable to both the singular and plural forms of any of the
terms herein defined:
"Acquiring Person" shall have the meaning set forth in 2.3.
"Adjusted Consolidated Funded Debt" shall mean (i) Consolidated
Funded Debt minus (ii) Guaranties, to the extent such Guaranties
constitute Funded Debt, of rentals or lease obligations of, and
loans to, customers of the Company or customers of any Restricted
Subsidiary in an aggregate amount not exceeding $17,500,000 of
obligations thereunder over the term of such Guaranties.
"Adjusted Rentals" shall mean Rentals minus Sublease Rental
Income.
"Affiliate" shall mean any Person (other than a Restricted
Subsidiary) (i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, the Company, (ii) which beneficially owns or holds
5% or more of any class of the Voting Stock of the Company or
(iii) 5% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 5% or more of the equity interest) of
which is beneficially owned or held by the Company or a
Subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Agreement" shall mean this Note Agreement and "Agreements" shall
have the meaning set forth in 1.3.
"Business Day" shall mean any day other than a Saturday, a Sunday
or any other day on which banks in New York City are required by
law to close, or are customarily closed.
"Capitalized Lease" shall mean any lease the obligation for
rentals with respect to which is required to be capitalized on a
consolidated balance sheet of the lessee and its consolidated
subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of
any determination thereof the amount at which the aggregate
rentals due and to become due under all Capitalized Leases under
which such Person is a lessee would be reflected as a liability
on a consolidated balance sheet of such Person.
"Change of Control" shall have the meaning set forth in 2.3.
"Change of Control Date" shall have the meaning set forth in
2.3.
"Closing Date" shall have the meaning set forth in 1.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean Roundy's, Inc., a Wisconsin corporation, and
any Person who succeeds to all, or substantially all, of the
assets and business thereof under the terms of 5.13(a)(2).
"Consolidated Current Assets" and "Consolidated Current
Liabilities" shall mean as of the date of any determination
thereof such assets and liabilities of the Company and the
Restricted Subsidiaries on a consolidated basis as shall be
determined in accordance with GAAP to constitute current assets
and current liabilities, respectively.
"Consolidated Funded Debt" shall mean all Funded Debt of the
Company and the Restricted Subsidiaries, determined on a
consolidated basis after eliminating intercompany items.
"Consolidated Net Income" shall mean for any period the gross
revenues of the Company and the Restricted Subsidiaries for such
period less all expenses and other proper charges (including
taxes on income), determined on a consolidated basis after
eliminating earnings or losses attributable to outstanding
Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other
disposition of Investments or fixed or capital assets which sale
or other disposition is not in the ordinary course of business,
and any taxes on such excluded gains and any tax deductions or
credits on account of any such excluded losses;
(b) net earnings and losses of any
Restricted Subsidiary accrued prior to the date it became a
Restricted Subsidiary;
(c) net earnings and losses of any Person
(other than a Restricted Subsidiary), substantially all the
assets of which have been acquired in any manner by the Company
or any Restricted Subsidiary, realized by such Person, prior to
the date of such acquisition;
(d) net earnings and losses of any Person
(other than a Restricted Subsidiary) with which the Company or a
Restricted Subsidiary shall have consolidated or which shall have
merged into or with the Company or a Restricted Subsidiary, prior
to the date of such consolidation or merger;
(e) net earnings of any Person (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest unless such net earnings
shall have actually been received by the Company or such
Restricted Subsidiary in the form of cash distributions;
(f) any portion of the net earnings of any
Restricted Subsidiary which for any reason is unavailable for
payment of dividends to the Company or any other Restricted
Subsidiary having an equity interest therein;
(g) earnings resulting from any reappraisal,
revaluation or write-up of assets;
(h) any deferred or other credit
representing any excess of the equity in any Subsidiary at the
date of acquisition thereof over the amount invested in such
Subsidiary; and
(i) any gain arising from the acquisition of
any Securities of the Company or any Restricted Subsidiary.
"Consolidated Tangible Net Worth" shall mean as of the date of
any determination thereof Stockholders Equity minus Intangible
Assets.
"Control Change Notice" shall have the meaning set forth in 2.3.
"Control Change Payment Date" shall have the meaning set forth in
2.3.
"Control Person" shall have the meaning set forth in 2.3.
"Credit Agreement" shall mean the Credit Agreement dated as of
March 6, 1989 among the Company, the banks signatories thereto
and The Chase Manhattan Bank (National Association) as Agent, as
amended by an Amendment No. 1 dated as of April 13, 1990, an
Amendment No. 2 dated as of October 9, 1991, an Amendment No. 3
dated as of December 9, 1991, an Amendment No. 4 dated as of
December 14, 1992, an Amendment No. 5 dated as of December 13,
1993 and an Amendment No. 6 dated as of March 29, 1996 and as the
same may hereafter be amended, restated, supplemented, extended
or otherwise modified from time to time, together with any
refinancing thereof or any other note or agreement representing
or governing Indebtedness of the Company similar to the
Indebtedness governed by such Credit Agreement.
"Current Debt" of any Person shall mean as of the date of any
determination thereof (i) all Indebtedness of such Person other
than Funded Debt of such Person and (ii) Guaranties by such
Person of Current Debt of others.
"Declaration Notice" shall have the meaning set forth in 2.3.
"Default" shall mean any event or condition the occurrence of
which would, with the lapse of time or the giving of notice, or
both, constitute an Event of Default.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import,
together with the regulations promulgated thereunder, in each
case as in effect from time to time. References to sections of
ERISA shall be construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business
that is, along with the Company, a member of a controlled group
of corporations or a controlled group of trades or businesses, as
described in Section 414(b) and 414(c), respectively, of the Code
or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in 6.1.
"Exchange Act" shall have the meaning set forth in 2.3.
"First Amendment" shall mean the First Amendment to Note
Agreements dated as of May 1, 1996 between the Company and the
Holders named therein.
"Fixed Charges" for any period shall mean on a consolidated basis
the sum of (i) all Adjusted Rentals (other than Rentals on
Capitalized Leases) payable during such period by the Company and
the Restricted Subsidiaries, and (ii) all Interest Charges on all
Indebtedness (including the interest component of Rentals on
Capitalized Leases) of the Company and the Restricted
Subsidiaries payable or recognizable during such period.
"Funded Debt" of any Person shall mean (i) all Indebtedness of
such Person for borrowed money or which has been incurred in
connection with the acquisition of assets in each case having a
final maturity of one or more than one year from the date of
origin thereof (or which is renewable or extendible at the option
of the obligor for a period or periods more than one year from
the date of origin), not including payments in respect thereof
that are required to be made within one year from the date of any
determination of Funded Debt, (ii) all Indebtedness of such
Person evidenced by notes, bonds, debentures or similar
instruments, not including payments in respect thereof that are
required to be made within one year from the date of any
determination of Funded Debt, (iii) all Capitalized Rentals of
such Person, and (iv) all Guaranties by such Person of
obligations of others of the kind set forth in clauses (i)
through (iii) above.
"GAAP" shall mean at any time generally accepted accounting
principles as in effect at such time in the United States.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person
guaranteeing, or in effect guaranteeing, any Indebtedness,
dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any property or
assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or
obligation, (y) to maintain working capital or any other balance
sheet condition or otherwise to advance or make available funds
for the purchase or payment of such Indebtedness or obligation,
(iii) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the
owner of such Indebtedness or obligation of the ability of the
primary obligor to make payment of the Indebtedness or
obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in
respect thereof. For the purposes of all computations made under
this Agreement, any Guaranties in respect of Indebtedness for
borrowed money shall be deemed to be Indebtedness equal to the
principal amount of such Indebtedness for borrowed money which
has been guaranteed, and any Guaranties in respect of any other
obligation or liability or any dividend shall be deemed to be
Indebtedness equal to the maximum aggregate amount of such
obligation, liability or dividend.
"Guarantors" shall have the meaning set forth in 1.1.
"Guaranty" shall have the meaning set forth in 1.1.
"Indebtedness" of any Person shall mean and include all
obligations of such Person which in accordance with GAAP would be
classified upon a balance sheet of such Person as liabilities of
such Person, and in any event shall include (i) obligations of
such Person for borrowed money or which have been incurred in
connection with the acquisition of property or assets,
(ii) obligations secured by any Lien upon property or assets
owned by such Person, even though such Person has not assumed or
become liable for the payment of such obligations,
(iii) obligations created or arising under any conditional sale
or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights
and remedies of the seller, lender or lessor under such agreement
in the event of default are limited to repossession or sale of
property, (iv) Capitalized Rentals of such Person and
(v) Guaranties of such Person of obligations of others of the
character referred to in this definition.
"Institutional Holder" shall mean any insurance company, bank,
savings and loan association, trust company, investment company,
charitable foundation, employee benefit plan (as defined in
ERISA) or other institutional investor or financial institution.
"Intangible Assets" shall mean as of the date of any
determination thereof the total amount of all assets of the
Company and the Restricted Subsidiaries which are not Tangible
Assets.
"Interest Charges" for any period shall mean all interest and
amortization of debt discount and expense on each particular item
of Indebtedness for which such calculations are being made.
Computations of Interest Charges on a pro forma basis for
Indebtedness having a variable interest rate shall be calculated
at the rate in effect on the date of any determination.
"Investments" shall mean all investments, in cash or by delivery
of property made, directly or indirectly in any Person, whether
by acquisition of shares of capital stock, indebtedness or other
obligations or Securities or by loan, advance, capital
contribution or otherwise; provided, however, that "Investments"
shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.
"Lien" shall mean any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law,
statute or contract, including but not limited to the security
interest or lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights-of-
way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances (including, with respect to stock,
stockholder agreements, voting trust agreements, buy-back
agreements and all similar arrangements) affecting property. For
the purposes of this Agreement, the Company or a Restricted
Subsidiary shall be deemed to be the owner of any property which
it has acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to
the property has been retained by or vested in some other Person
for security purposes and such retention or vesting shall
constitute a Lien.
"Long-Term Lease" shall mean any lease of real or personal
property (other than a Capitalized Lease) having an original
term, including any period for which the lease may be renewed or
extended at the option of the lessor, of more than three years.
"Major Holder" shall have the meaning set forth in Paragraph 20
of Exhibit B hereto.
"Make-Whole Amount" shall mean in connection with any prepayment
or acceleration of the Notes the excess, if any, of (i) the
aggregate present value as of the date of such payment of each
dollar of principal being prepaid (taking into account the
application of such prepayment required by 2.1) and the amount
of interest (exclusive of interest accrued to the date of
payment) that would have been payable in respect of such dollar
if such payment had not been made, determined by discounting such
amounts at the Reinvestment Rate from the respective dates on
which they would have been payable, over (ii) 100% of the
principal amount of the outstanding Notes being prepaid. If the
Reinvestment Rate is equal or higher than 7.86%, the Make-Whole
Amount shall be zero. For purposes of any determination of the
Make-Whole Amount:
"Reinvestment Rate" shall mean 0.60% plus the yield to maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York
City time) on the Business Day next preceding the date upon which
payment of premium is required hereunder with respect to the
outstanding principal amount of the Notes to be prepaid or
accelerated, on the display designated as "Page 678" on the
Telerate Service (or such other display as may replace Page 678
on the Telerate Service) for actively traded U.S. Treasury
securities having a maturity equal to the Weighted Average Life
to Maturity of such outstanding principal as of such date upon
which the payment of premium is required hereunder, or if such
yields shall not be reported as of such time or the yields
reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest
day for which such yields shall have been so reported as of the
Business Day next preceding the date upon which the payment of
premium is required hereunder with respect to such outstanding
principal, in Federal Reserve Statistical Release H.15 (519) (or
any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the
Weighted Average Life to Maturity of such outstanding principal
as of such date upon which the payment of premium is required
hereunder. Such implied yield shall be determined, if necessary,
by (a) converting U.S. Treasury bill quotations to bond-
equivalent yields in accordance with accepted financial practice
and (b) interpolating linearly between reported yields.
"Weighted Average Life to Maturity" of the principal amount of
the Notes being prepaid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing
the then Remaining Dollar-Years of such principal by the
aggregate amount of such principal. The term "Remaining Dollar-
Years" of such principal shall mean the amount obtained by
(i) multiplying (x) the remainder of (1) the amount of principal
that would have become due on each scheduled payment date if such
prepayment had not been made, less (2) the amount of principal on
the Notes scheduled to become due on such date after giving
effect to such prepayment and the application thereof in
accordance with the provisions of 2.1, by (y) the number of
years (calculated to the nearest one-twelfth) which will elapse
between the date of determination and such scheduled payment
date, and (ii) totaling the products obtained in (i).
"Memorandum" shall have the meaning set forth in paragraph 4 of
Exhibit B hereto.
"Minority Interests" shall mean any shares of stock of any class
of a Restricted Subsidiary (other than directors qualifying
shares as required by law) that are not owned by the Company or
one or more of the Restricted Subsidiaries. Minority Interests
shall be valued by valuing Minority Interests constituting
preferred stock at the voluntary or involuntary liquidating value
of such preferred stock, whichever is greater, and by valuing
Minority Interests constituting common stock at the book value of
capital and surplus applicable thereto adjusted, if necessary, to
reflect any changes from the book value of such common stock
required by the foregoing method of valuing Minority Interests in
preferred stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Net Income Available for Fixed Charges" for any period shall
mean the sum of (i) Consolidated Net Income during such period
plus (to the extent deducted in determining Consolidated Net
Income), (ii) all provisions for any Federal, state or other
income taxes made by the Company and the Restricted Subsidiaries
during such period, (iii) Patronage Dividends recognized by the
Company during such period and (iv) Fixed Charges of the Company
and the Restricted Subsidiaries during such period.
"Note Register" shall have the meaning set forth in 9.1.
"Notes" shall have the meaning set forth in 1.1.
"Other Liens" shall have the meaning set forth in 5.20.
"Overdue Rate" shall mean the lesser of (i) the maximum rate
permitted by applicable law and (ii) the greater of (A) 9.86% or
(B) 2% above the rate of interest publicly announced by The Chase
Manhattan Bank (National Association) from time to time as its
Prime Rate, effective as of the effective date of the change of
such Prime Rate, in either case calculated from the date each
overdue payment was due and paid in full.
"Patronage Dividends" means "patronage dividends" as such term is
defined in Section 1388(a) of the Code which patronage dividends
may be excluded from taxable income pursuant to Section 1382(b)
of the Code.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, and a government or agency
or political subdivision thereof.
"Plan" means a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate
or as to which the Company or any ERISA Affiliate contributed or
is a member or otherwise may have any liability.
"Priority Debt" shall mean the sum of (a) all unsecured Current
Debt and Funded Debt of Restricted Subsidiaries plus (b) all
Funded Debt and Current Debt of the Company and the Restricted
Subsidiaries secured by Liens described in 5.10(h); provided
that Guaranties by Restricted Subsidiaries of Funded Debt of the
Company existing on the date of this Agreement (including without
limitation, the Guaranty) shall be deemed not to be Priority
Debt.
"Purchasers" shall have the meaning set forth in 1.1.
The term "rentals" shall mean and include as of the date of any
determination thereof all fixed payments (including as such all
payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable by
any Person, as lessee or sublessee under a lease of real or
personal property, but shall be exclusive of any amounts required
to be paid by such Person (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues. The term "Rentals"
shall mean rentals payable by the Company or a Restricted
Subsidiary.
"Reportable Event" shall have the same meaning as in ERISA.
"Restricted Payments" shall have the meaning set forth in 5.11.
"Restricted Subsidiary" shall mean (a) any Subsidiary (i) which
is organized under the laws of any State of the United States;
(ii) which conducts substantially all of its business and has
substantially all of its assets within the United States; and
(iii) of which more than 80% (by number of votes) of the Voting
Stock is beneficially owned, directly or indirectly, by the
Company and (b) Badger Assurance, Ltd., a Bermuda corporation, so
long as a majority of each class of its capital stock is legally
and beneficially owned by the Company and the Restricted
Subsidiaries.
"Security" shall have the same meaning as in Section 2(l) of the
Securities Act of 1933, as amended.
"Section" or shall refer to sections of this Agreement unless
otherwise specified.
"Stockholders' Equity" shall mean "Stockholders' Equity" as shown
on the consolidated balance sheet of the Company and the
Restricted Subsidiaries in accordance with GAAP, and will
include, but without duplication, redeemable common stock as
shown on the consolidated balance sheet of the Company and its
Restricted Subsidiaries in accordance with the requirements of
the Securities and Exchange Commission.
"Sublease Rental Income" shall mean all rentals received by the
Company and the Restricted Subsidiaries from the sublease by the
Company or any Restricted Subsidiary, as sublessor, of any real
or personal property leased by the Company or any Restricted
Subsidiary, as lessee, to any Person that is not the Company or a
Restricted Subsidiary.
The term "subsidiary" shall mean as to any particular parent
corporation any corporation of which more than 50% (by number of
votes) of the Voting Stock shall be beneficially owned, directly
or indirectly, by such parent corporation. The term "Subsidiary"
shall mean a subsidiary of the Company.
"Tangible Assets" shall mean as of the date of any determination
thereof the total amount of all assets of the Company and the
Restricted Subsidiaries (less depreciation, depletion and other
properly deductible valuation reserves) after deducting good will
patents, trade names, trade marks, copyrights, franchises,
experimental expense, organization expense, unamortized debt
discount and expense, deferred assets other than prepaid
insurance and prepaid taxes, the excess of cost of shares
acquired over book value of related assets, and such other assets
as are properly classified as "intangible assets" in accordance
with GAAP.
"Unrestricted Subsidiary" shall mean any Subsidiary which is not
a Restricted Subsidiary.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall
mean a Subsidiary of which all of the issued and outstanding
shares of stock (except shares required as directors' qualifying
shares) and all Funded Debt and Current Debt shall be owned by
the Company or one or more of its Wholly-owned Subsidiaries.
Section 8.2. Accounting Principles;
Construction';. Where the character or amount of any asset or
liability or item of income or expense is required to be
determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, the
same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with
the requirements of this Agreement. Unless otherwise expressly
provided herein, the term "or" shall mean "and/or".
Section 8.3. Directly or Indirectly;. Where any
provision in this Agreement refers to action to be taken by any
Person, or which such Person is prohibited from taking, such
provision shall be applicable whether the action in question is
taken directly or indirectly by such Person.
Section 9. Miscellaneous.
Section 9.1. Registration and Transfer
of Notes;. The Notes are issuable as registered notes without
coupons in denominations of at least $1,000,000, except as may be
necessary to reflect any principal amount not evenly divisible by
$1,000,000. The Company shall keep at its principal office a
register (the "Note Register") in which the Company shall provide
for the registration of Notes and of transfers of Notes. Upon
surrender for registration of transfer of any Note at the
principal office of the Company, the Company shall at its
expense, execute and deliver one or more new Notes of like tenor
and of a like aggregate principal amount, registered in the name
of such transferee or transferees. At the option of the holder
of any Note, such Note may be exchanged for other Notes of like
tenor and of any authorized denominations, of a like aggregate
principal amount, upon surrender of the Note to be exchanged at
the principal office of the Company. Whenever any Notes are so
surrendered for exchange, the Company shall at its expense,
execute and deliver the Notes that the holder making the exchange
is entitled to receive. Every Note surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer duly executed, by the holder
of such Note or such holders attorney duly authorized in writing.
Any Note or Notes issued in exchange for any Note or upon
transfer thereof shall carry the rights to unpaid interest and
interest to accrue that were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange.
The Person in whose name any registered Note shall be registered
shall be deemed and treated as the owner and holder thereof for
all purposes of this Agreement Payment of or on account of the
principal, premium, if any, and interest on any registered Note
shall be made to or upon the written order of such registered
holder.
Section 9.2. Loss, Theft, Etc. of
Notes;. Upon receipt of evidence satisfactory to the Company of
the loss, theft, mutilation or destruction of any Note, and in
the case of any such loss, theft or destruction upon delivery of
a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such
mutilation upon surrender and cancellation of the Note, the
Company will make and deliver without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen,
destroyed or mutilated Note. If the Purchaser or any subsequent
Institutional Holder is the owner of any such lost, stolen or
destroyed Note, then the affidavit of an authorized officer of
such owner, setting forth the fact of loss, theft or destruction
and of its ownership of such Note at the time of such loss, theft
or destruction shall be accepted as satisfactory evidence thereof
and no further indemnity shall be required as a condition to the
execution and delivery of a new Note other than the written
agreement of such owner to indemnify the Company.
Section 9.3. Expenses, Stamp Tax
Indemnity;. Whether or not the transactions herein contemplated
shall be consummated, the Company agrees to pay directly all of
your out-of-pocket expenses in connection with the preparation,
execution, delivery and administration (expenses in connection
with such administration to be limited to $50,000 in the
aggregate) of this Agreement, the Guaranty, the Notes and each of
the other documents and agreements contemplated hereby or thereby
and the transactions contemplated by any of the foregoing,
including but not limited to the reasonable charges and
disbursements of Chapman and Cutler, your special counsel,
duplicating and printing costs and charges for shipping the
Notes, adequately insured to you at your home office or at such
other place as you may designate, expenses incurred in obtaining
a Private Placement Number from Standard & Poor's Corporation
with respect to the Notes being purchased by you, and all such
expenses relating to any amendment, waiver or consent relating to
the provisions hereof, of the Guaranty or the Notes or of any
other document or agreement contemplated hereby or thereby,
including, without limitation, any amendment, waiver, or consent
resulting from any work-out, renegotiation or restructuring
relating to the performance by the Company or the Guarantors of
its or their obligations under this Agreement, the Guaranty, the
Notes or any other document or agreement contemplated hereby or
thereby. The Company also agrees that it will pay and save you
harmless against any and all liability with respect to stamp and
other taxes, if any, which may be payable or which may be
determined to be payable in connection with the execution and
delivery of this Agreement, the Guaranty, the Notes or any other
document or agreement contemplated hereby or thereby, whether or
not any Notes are then outstanding. The Company agrees to
protect and indemnify you against any liability for any and all
brokerage fees and commissions payable or claimed to be payable
to any Person in connection with the transactions contemplated by
this Agreement, the Guaranty, the Notes or any other document or
agreement contemplated hereby or thereby.
Section 9.4. Powers and Rights Not
Waived; Remedies Cumulative;. No delay or failure on the part
of the holder of any Note in the exercise of any power or right
shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further
exercise thereof, or the exercise of any other power or right,
and the rights and remedies of the holder of any Note are
cumulative to, and are not exclusive of, any rights or remedies
any such holder would otherwise have.
Section 9.5. Notices;. All
communications provided for hereunder shall be in writing and, if
to you, delivered by overnight air courier or by facsimile
communication, in each case addressed to you at your address
appearing on Schedule I hereto or such other address as you or
the subsequent holder of any Note initially issued to you may
designate to the Company in writing, and if to the Company,
delivered by overnight air courier or by facsimile communication,
to the Company at 23000 Roundy Drive, Pewaukee, Wisconsin 53072,
Attention: Treasurer or to such other address as the Company may
in writing designate to you or to a subsequent holder of the Note
or Notes initially issued to you; provided, however, that a
notice to you by overnight air courier shall only be effective if
delivered to you at a street address designated for such purpose
in Schedule I hereto, and a notice to you by facsimile
communication shall only be effective if made by confirmed
transmission to you at a telephone number designated for such
purpose in Schedule I hereto, or, in either case, as you or a
subsequent holder of any Note initially issued to you may
designate to the Company in writing and also provided that any
notice provided by facsimile communication must also be provided
within three days thereafter by overnight air courier, provided
further that if such notice provided by facsimile communication
is not also provided as required by the immediately preceding
proviso, such notice provided by facsimile communication shall
only be effective as of the date and to the extent actually
received.
Section 9.6. Successors and Assigns;.
Agreement shall be binding upon the Company and its successors
and assigns and shall inure to your benefit and to the benefit of
your successors and assigns, including each successive holder or
holders of any Note.
Section 9.7. Survival of Covenants and
Representations;. All covenants, representations and warranties
made by the Company herein and in any certificates delivered
pursuant hereto, whether or not in connection with the Closing
Date, shall survive the closing and the delivery of this
Agreement and the Notes and all such covenants, representations
and warranties with respect to 9.3 shall survive the payment of
the Notes.
Section 9.8. Maximum Interest
Payable;. The Company, you and any other holders of the Notes
specifically intend and agree to limit contractually the amount
of interest payable under this Agreement, the Guaranty, the
Notes, and all other instruments and agreements related hereto
and thereto to the maximum amount of interest lawfully permitted
to be charged under applicable law. Therefore, none of the terms
of this Agreement, the Notes, the Guaranty or any instrument
pertaining to or relating to this Agreement, the Guaranty or the
Notes shall ever be construed to create a contract to pay
interest at a rate in excess of the maximum rate permitted to be
charged under applicable law, and neither the Company, the
Guarantors nor any other party liable or to become liable
hereunder, under the Guaranty, under the Notes or under any other
instruments and agreements related hereto and thereto shall ever
be liable for interest in excess of the amount determined at such
maximum rate, and the provisions of this 9.8 shall control over
all other provisions of this Agreement, the Guaranty, the Notes,
or any other instrument pertaining to or relating to the
transactions herein contemplated. If any amount of interest
taken or received by you or any holder of a Note shall be in
excess of said amount of interest which, under applicable law,
could lawfully have been collected by you or such holder incident
to such transactions, then such excess shall be deemed to have
been the result of a mathematical error by all parties hereto and
shall be refunded promptly by the Person receiving such amount to
the party paying such amount, or, at the option of the recipient
credited ratably against the unpaid principal amount of the Note
or Notes held by you or such holder, respectively. All amounts
paid or agreed to be paid in connection with such transactions
which would under applicable law be deemed "interest" shall, to
the extent permitted by such applicable law, be amortized,
prorated, allocated and spread throughout the full stated term of
this Agreement. "Applicable law" as used in this 9.8 means that
law in effect from time to time which permits the charging and
collection of the highest permissible lawful, nonusurious rate of
interest on the transactions herein contemplated including but
not limited to laws of the State of New York and of the United
States of America, and "maximum rate" as used in this 9.8 means,
with respect to each of the Notes, the maximum lawful nonusurious
rates of interest which under applicable law may be charged to
the Company from time to time with respect to such Notes.
Section 9.9. Severability;. Should
any part of this Agreement for any reason be declared invalid or
unenforceable, such decision shall not affect the validity or
enforceability of any remaining portion, which remaining portion
shall remain in full force and effect as if this Agreement had
been executed with the invalid or unenforceable portion thereof
eliminated and it is hereby declared the intention of the parties
hereto that they would have executed the remaining portion of
this Agreement without including therein any such part, parts or
portion which may, for any reason, be hereafter declared invalid
or unenforceable.
Section 9.10. Governing Law;. This
Agreement and the Notes issued and sold hereunder shall be
governed by and construed in accordance with Illinois law.
Section 9.11. Captions;. The
descriptive headings of the various Sections or parts of this
Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
Section 9.12. Additional Indebtedness;.
Subject to the terms and provisions hereof, the Company may, from
time to time, issue and sell additional senior promissory notes
and may, in connection with the documentation thereof,
incorporate by reference various provisions of this Agreement.
Such incorporation by reference shall not modify, dilute or
otherwise affect the terms and provisions hereof or of the
Guaranty including, without limitation, the priority of the Notes
and the percentage of the Notes required to approve an amendment
or effectuate a waiver under the provisions of 7 or the
percentages of the Notes required to accelerate the Notes or
rescind such an acceleration under the provisions of 6.
The execution hereof by you shall constitute a contract between
us for the uses and purposes hereinabove set forth, and this
Agreement may be executed in any number of counterparts, each
executed counterpart constituting an original but all together
only one agreement.
Roundy's, Inc.
By
--------------------------------
Its
Accepted as of May 15, 1996.
The Ohio National Life Insurance Company
By
Its
Accepted as of May 15, 1996.
Phoenix American Life Insurance Company
By
Its
Accepted as of May 15, 1996.
Provident Mutual Life Insurance Company
By
Its
Accepted as of May 15, 1996.
Providentmutual Life and Annuity Company of America
By
Its
Accepted as of May 15, 1996.
United Of Omaha Life Insurance Company
By
Its
Accepted as of May 15, 1996.
John Alden Life Insurance Company
By
Its
Accepted as of May 15, 1996.
Oxford Life Insurance Company
By John Alden Asset Management Company, Its Investment Manager
By
Its
Accepted as of May 15, 1996.
The Security Mutual Life Insurance Company of Lincoln, Nebraska
By
Its
Accepted as of May 15, 1996.
Woodmen Accident and Life Company
By
Its
Schedule of Purchasers
Aggregate
Principal
Amount of
Notes to be Note
Purchaser Purchased Denomination
The Ohio National Life $5,000,000 $5,000,000
Insurance Company
P. O. Box 237
Cincinnati, Ohio 45201
Attention: Investment Department
Payments
All payments on or in respect of the
Notes to be by bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as "Roundys, Inc., 7.86%
Senior Notes due May 15, 2006,
PPN 779268 C@ 8, principal or
interest") to:
Star Bank, N.A. (ABA #042-0000-13)
Fifth and Walnut Streets
Cincinnati, Ohio 45202
for credit to: The Ohio National
Life Insurance Company
Account Number 910-275-7
Notices
All notices and communications,
including notices with respect to
payments and written confirmation of
each such payment, to be addressed
as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 31-0397080
Aggregate
Principal
Amount of
Notes to be Note
Purchaser Purchased Denomination
Phoenix American Life Insurance $5,000,000 $5,000,000
Company
c/o Phoenix Duff & Phelps, Inc.
56 Prospect Street
Hartford, Connecticut 06115
Attention: Private Placements Division
Telecopier Number: 860-403-5451
Payments
All payments on or in respect of the
Notes to be by bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as "Roundys, Inc., 7.86%
Senior Notes due May 15, 2006,
PPN 779268 C@ 8, principal or
interest") to:
Chase Manhattan Bank, N.A.
New York, New York
ABA #021 000 021
For Income Processing A/C 900 9000 200
for credit to: Phoenix American
Life Insurance Company
Account Number G05465
Notices
All notices and communications,
including notices with respect to
payments and written confirmation of
each such payment, to be addressed
as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-0893662
Aggregate
Principal
Amount of
Notes to be Note
Purchaser Purchased Denomination
$3,500,000 $3,500,000
Provident Mutual Life Insurance
Company
P. O. Box 1717
Valley Forge, Pennsylvania 19482-1717
Attention: Securities Investment Department
Telefacsimile: (610) 407-1322
Payments
All payments on or in respect of the
Notes to be by bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as "Roundys, Inc., 7.86%
Senior Notes due May 15, 2006,
PPN 779268 C@ 8, principal or
interest") to:
PNC Bank (ABA #031-000-053)
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
for credit to: Provident Mutual
Life Insurance Company
Account Number 85-4084-2176
Notices
All notices and communications to be
addressed as first provided above.
In the event that notices/communications
are sent by courier (e.g., Federal Express)
rather than by regular U.S. Postal
Service, the address should be
changed to: 1205 Westlakes Drive,
Berwyn, PA 19312-2405, Attention:
Treasurer.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 23-099-045-0
Aggregate
Principal
Amount of
Notes to be Note
Purchaser Purchased Denomination
Providentmutual Life and Annuity $1,500,000 $1,500,000
Company of America
P.O. Box 1717
Valley Forge, Pennsylvania 19482-1717
Attention: Securities Investment Department
Telefacsimile: (610) 407-1322
Payments
All payments on or in respect of the
Notes to be by bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as "Roundys, Inc., 7.86%
Senior Notes due May 15, 2006,
PPN 779268 C@ 8, principal or
interest") to:
PNC Bank (ABA #031-000-053)
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
for credit to: Providentmutual Life
and Annuity Company of America
Account Number 85-5075-4911
Notices
All notices and communications to be
addressed as first provided above.
In the event that
notices/communications are sent by
courier (e.g., Federal Express)
rather than by regular U.S. Postal
Service, the notices and
communications should be addressed
to: 1205 Westlakes Drive, Berwyn,
Pennsylvania 19312-2405, Attention:
Treasurer.
Name of Nominee in which Notes are to be issued: None.
Taxpayer I.D. Number: 23-1619082
Aggregate
Principal
Amount of
Notes to be Note
Purchaser Purchased Denomination
United of Omaha Life $5,000,000 $5,000,000
Insurance Company
Mutual of Omaha Plaza
Omaha, Nebraska 68175
Attention: Investment Division
Telefacsimile: (402) 351-2913
Confirmation: (402) 351-2583
Payments
All payments on or in respect of the
Notes to be by bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as "Roundys, Inc., 7.86%
Senior Notes due May 15, 2006,
PPN 779268 C@ 8, principal or
interest") to:
First Bank, NA (ABA #1040-0002-9)
17th & Farnam Streets
Omaha, Nebraska 68102
for credit to: United of Omaha Life
Insurance Company
Account Number 1-487-1447-0769
For Payment on: [Name of issue and
PPN Number]
Interest Amount:
Principal Amount:
Payable Date:
Notices
All notices and communications to be
addressed as first provided above,
except notices with respect to
payment and written confirmation of
each such payment, to be addressed:
Attention: Investments/Securities
Accounting.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0322111
Address for delivery of notes:
United of Omaha Life Insurance Company
Mutual of Omaha Plaza
Omaha, Nebraska 68175
Attention: Investments/Securities Accounting
Aggregate
Principal
Amount of
Notes to be Note
Purchaser Purchased Denomination
John Alden Life Insurance $2,000,000 $2,000,000
Company
7300 Corporate Center Drive, 7A24
Miami, Florida 33126-1223
Attention: Investment Department Private Placements
Payments
All payments on or in respect of the
Notes to be by bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as "Roundys, Inc., 7.86%
Senior Notes due May 15, 2006,
PPN 779268 C@ 8, principal or
interest") to:
The Chase Manhattan Bank, N.A.
ABA No. 021 000 021
Chase Account No. 900-9-002206
Sub Account No. 47363300
BNF: Funds Pending DNI/ABS
BNK: Chase Manhattan Bank/SSTO
Please reference CUSIP
description/pay date/principal and
interest amounts.
Notices
All notices and communications with
respect to payments and written
confirmation of each such payment,
to be addressed:
John Alden Life Insurance Company
P. O. Box 020270, 3rd Floor
Miami, Florida 33102-0270
Attention: E. Cabanas, Investment Accounting
Telefacsimile: (305) 715-3815
With copy to:
Private Placements
John Alden Life Insurance Company
P.O. Box 025239, 7th Floor
Miami, Florida 33102-5239
Attention: M. Halligan
Telefacsimile: (305) 715-3957
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0999752
Aggregate
Principal
Amount of
Notes to be Note
Purchaser Purchased Denomination
Oxford Life Insurance Company $1,000,000 $1,000,000
c/o John Alden Asset Management Company
P.O. Box 025239, 7th Floor
Miami, Florida 33102-5239
Attention: M. Halligan
Facsimile: (305) 715-3957
Payments
All payments on or in respect of the
Notes to be by bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as "Roundys, Inc., 7.86%
Senior Notes due May 15, 2006,
PPN 779268 C@ 8, principal or
interest") to:
The Chase Manhattan Bank, N.A.
ABA No. 021 000 021
Chase Account No. 900-9-002206
Sub Account No. 47363300
BNF: Funds Pending DNI/ABS
BNK: Chase Manhattan Bank/SSTO
Please reference CUSIP
description/pay date/principal and
interest amounts.
Notices
All notices and communications with
respect to payments and written
confirmation of each such payment,
to be addressed:
John Alden Asset Management Company
P. O. Box 020270
Miami, Florida 33102-0270
Attention: E. Cabanas, Investment Accounting
Telefacsimile: (305) 715-3815
With copy to:
Private Placements
John Alden Asset Management Company
P.O. Box 025239, 7th Floor
Miami, Florida 33102-5239
Attention: M. Halligan
Telefacsimile: (305) 715-3957
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 86-0216483
Aggregate
Principal
Amount of
Notes to be Note
Purchaser Purchased Denomination
The Security Mutual Life Insurance $1,000,000 $1,000,000
Company of Lincoln, Nebraska
200 Centennial Mall North
Lincoln, Nebraska 68508
Attention: Investment Division
Telephone: (402) 434-9500
Telefacsimile: (402) 434-9599
Payments
All payments on or in respect of the
Notes to be by bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as "Roundy's, Inc., 7.86%
Senior Notes due May 15, 2006,
PPN 779268 C@ 8, principal or
interest") to:
National Bank of Commerce (ABA #1040-00045)
13th and O Streets
Lincoln, Nebraska
for credit to: The Security Mutual
Life Insurance Company of Lincoln, Nebraska
Account Number 40-797-624
Notices
All notices and communications,
including notices with respect to
payments and written confirmation of
each such payment, to be addressed
as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0293990
Aggregate
Principal
Amount of
Notes to be Note
Purchaser Purchased Denomination
Woodmen Accident and Life Company $1,000,000 $1,000,000
P.O. Box 82288
Lincoln, Nebraska 68501
Attention: Securities Division
Telecopy Number: (402) 437-4392
Payments
All payments on or in respect of the
Notes to be by bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as "Roundys, Inc., 7.86%
Senior Notes due May 15, 2006,
PPN 779268 C@ 8, principal or
interest") to:
First Bank National Association
(ABA #1040 000 29)
for credit to: Woodmen Accident and
Life Company
General Fund, Account Number 1-494-0092-9092
Notices
All notices and communications,
including notices with respect to
payments and written confirmation of
each such payment, to be addressed
as first provided above; provided,
however, all notices and
communications delivered by
overnight courier shall be addressed
as follows:
Woodmen Accident and Life Company
1526 K Street
Lincoln, Nebraska 68508
Attention: Securities Division
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0339220
Investments as of March 30, 1996
Investments of the Company and Subsidiaries
A. Roundy's, Inc.
1. Common Stock of Subsidiaries:
Holt Public Storage, Inc. 1,000
Scot Lad Foods, Inc. 7,627,336
Old Time, Inc. 1,000
Kee Wholesale, Inc. 10,000
Ropak, Inc. 225,000
Jondex Corp. 250,000
WFC Foods, Inc. 9,187,500
Badger Assurance, Ltd. 2,120,000
CD of Wisconsin, Inc. 5,301,206
Kee Trans, Inc. 1,000
I.T.A., Inc. 1,000
Midland Grocery of Michigan, Inc. 500
2. Direct Loans and Financing Leases:
Aggregate Amount of 20 Loans and Finance
Leases with Customers (and Others) at 3-
30-96: $7,022,300
3. Guarantees of Customer Loans and Leases:
Aggregate Amount of 8 Guarantees at 3-30-
96: $1,627,000
B. Ropak, Inc.
1. Common Stock of Subsidiaries:
Shop-Rite, Inc. 8,685,869
Insurance Planners, Inc. 30,000
Villard Ave. Shop-Rite, Inc. 10,000
Pick n Save Warehouse Foods, Inc. 10,000
Sheboygan Land Corp, Inc. 1,000
C. Shop-Rite, Inc.
1. Common Stock of Subsidiaries:
The Midland Grocery Company 695,690
D. Scot Lad Foods, Inc.
1. Common Stock of Subsidiaries:
Spring Lake Merchandise, Inc. 501,000
Bonnie Baking Co., Inc. 1,000
Cardinal Foods, Inc. 5,628,895
Scot Lad-Lima, Inc. 100
2. Direct Loans And Financing Leases:
Aggregate Amount of 118 Loans and Finance
Leases With Customers (and Others) at 3-30-96:
$15,043,800
E. Midland Grocery of Michigan, Inc.
1. Direct Loans and Financing Leases:
Aggregate Amount of 10 Loans and Finance
Leases Customers (and Others) at 3-30-96:
$2,483,400
F. Jondex Corp.
1. Direct Finance Leases:
Aggregate Amount of 2 Loans and Finance Leases
with Customers (and Others) at 3-30-96:
$225,400
G. Cardinal Foods, Inc.
1. Common Stock of Subsidiaries:
Midland Grocery Company (Preferred Stock) 210,000
Gardners Food Galleries, Inc.
(Including Treasury Stock of $454,667) (309,667)
Wilsons Cardinal Supermarket, Inc. 330,000
2. Direct Loans and Financing Leases:
Aggregate Amount of 27 Loans and Finance
Leases with Customers (and Others) at 3-30-96:
$6,400,500
3. Guarantees of Customer Loans and Leases:
Aggregate Amount of 8 Guarantees at 3-30-96:
$1,569,400
Roundy's Inc.
7.86% Senior Note
Due May 15, 2006
PPN: 779268 C@ 8
No.
$____________ ____________, ____
Roundy's, Inc., a Wisconsin corporation (the "Company"), for
value received, hereby promises to pay to
or registered assigns
on the fifteenth day of May, 2006
the principal amount of
Dollars $___________
and to pay interest (computed on the basis of a 360-day
year of twelve 30-day months) on the principal amount
from time to time remaining unpaid hereon at the rate of
7.86% per annum from the date hereof until maturity,
payable semi-annually on the fifteenth day of each May
and November in each year (commencing on the first of
such dates after the date hereof) and at maturity. The
Company agrees to pay interest on overdue principal
(including any overdue required or optional prepayment
of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of
interest, at the Overdue Rate (as defined in the Note
Agreements hereinafter referred to) after the due date,
whether by acceleration or otherwise, until paid. Both
the principal hereof, premium, if any, and interest
hereon are payable at the main office of The Chase
Manhattan Bank (National Association) in lawful money of
the United States of America.
This Note is one of the 7.86% Senior Notes, due May 15, 2006, of
the Company in the aggregate principal amount of $25,000,000
(collectively, the "Notes"), issued under and pursuant to the
terms and provisions of the separate Note Agreements, each dated
as of May 15, 1996 (the "Agreements"), entered into by the
Company with the original Purchasers therein referred to and this
Note and the holder hereof are entitled equally and ratably with
the holders of all other Notes outstanding under the Agreements
to all the benefits provided for thereby or referred to therein.
Reference is hereby made to the Agreements for a statement of
such rights and benefits.
This Note and the other Notes outstanding under the Agreements
may be declared due prior to their expressed maturity dates and
certain prepayments are required to be made thereon, all in the
events, on the terms and in the manner and amounts as provided in
the Agreements.
The Notes are not subject to prepayment or redemption at the
option of the Company prior to their expressed maturity dates
except on the terms and conditions and in the amounts and with
the premium, if any, set forth in the Agreements.
The payment of the principal of, premium, if any, and interest on
this Note has been severally guaranteed by Scot Lad Foods, Inc.,
a Wisconsin corporation, Cardinal Foods, Inc., a Delaware
corporation, and Shop-Rite, Inc., a Wisconsin corporation,
pursuant to a Guaranty Agreement dated as of May 15, 1996.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of
the Company duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder of this Note
or its attorney duly authorized in writing. Payment of or on
account of principal, premium, if any, and interest on this Note
shall be made only to or upon the order in writing of the
registered holder.
This Note shall be governed by and construed in accordance with
Illinois law.
Roundy's, Inc.
By
Its
For Value Received, the undersigned Guarantor hereby
unconditionally guarantees severally and not jointly with any
other person the payment of the principal of, the premium (if
any) and the interest on the Note to which this Guaranty is
attached when due under the terms thereof or of the Note
Agreements referred to therein all as more fully provided in such
Note Agreements. The Guarantor hereby agrees that the Note
Agreements and such Note may be modified, amended, and
supplemented in any manner, including the renewal or extension of
any kind of such Note, without consent of the Guarantor, and that
no such modification, amendment, supplement, renewal or extension
and no invalidity of the Note Agreements or of such Note shall
release, affect or impair the liability of the undersigned
hereunder.
Scot Lad Foods, Inc.
By
Its
For Value Received, the undersigned Guarantor hereby
unconditionally guarantees severally and not jointly with any
other person the payment of the principal of, the premium (if
any) and the interest on the Note to which this Guaranty is
attached when due under the terms thereof or of the Note
Agreements referred to therein all as more fully provided in such
Note Agreements. The Guarantor hereby agrees that the Note
Agreements and such Note may be modified, amended, and
supplemented in any manner, including the renewal or extension of
any kind of such Note, without consent of the Guarantor, and that
no such modification, amendment, supplement, renewal or extension
and no invalidity of the Note Agreements or of such Note shall
release, affect or impair the liability of the undersigned
hereunder.
Cardinal Foods, Inc.
By
Its
For Value Received, the undersigned Guarantor hereby
unconditionally guarantees severally and not jointly with any
other person the payment of the principal of, the premium (if
any) and the interest on the Note to which this Guaranty is
attached when due under the terms thereof or of the Note
Agreements referred to therein all as more fully provided in such
Note Agreements. The Guarantor hereby agrees that the Note
Agreements and such Note may be modified, amended, and
supplemented in any manner, including the renewal or extension of
any kind of such Note, without consent of the Guarantor, and that
no such modification, amendment, supplement, renewal or extension
and no invalidity of the Note Agreements or of such Note shall
release, affect or impair the liability of the undersigned
hereunder.
Shop-Rite, Inc.
By
Its
Representations and Warranties
The Company represents and warrants to you as follows:
1. Subsidiaries. Annex 1 attached hereto states
the name of each of the Company's Subsidiaries, its jurisdiction
of incorporation and the percentage of its Voting Stock owned by
the Company or the Subsidiaries. Those Subsidiaries listed in
Section 1 of said Annex 1 constitute Restricted Subsidiaries.
The Company and each Subsidiary has good and marketable title to
all of the shares it purports to own of the stock of each
Subsidiary, free and clear in each case of any Lien. All such
shares have been duly issued and are fully paid and non-
assessable.
2. Corporate Organization and Authority. The
Company, and each Restricted Subsidiary,
(a) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation;
(b) has all requisite power and authority
and all necessary licenses and permits to own and operate its
properties and to carry on its business as now conducted and as
presently proposed to be conducted; and
(c) is duly licensed or qualified and is in
good standing as a foreign corporation in each jurisdiction
wherein the nature of the business transacted by it or the nature
of the property owned or leased by it makes such licensing or
qualification necessary.
3. Cooperative Status. The Company is an
organization operating on a cooperative basis within the meaning
of Subchapter T of the Code and as such may exclude from its
taxable income amounts paid as patronage dividends pursuant to
Section 1382(b) of the Code.
4. Business and Property. You have heretofore
been furnished with a copy of the Memorandum dated April, 1996
(the "Memorandum") prepared by the Company and SPP Hambro & Co.
which generally sets forth the business conducted and proposed to
be conducted by the Company and the Subsidiaries and the
principal properties of the Company and the Subsidiaries.
5. Financial Statements. (a) The consolidated
balance sheets of the Company and its consolidated Subsidiaries
as of the Saturday nearest to December 31 for each of the years
1991 to 1995, both inclusive, and the statements of earnings and
stockholder's equity and cash flows for the fiscal years ended on
said dates, each accompanied by a report thereon containing an
opinion unqualified as to scope limitations imposed by the
Company and otherwise without qualification except as therein
noted, by Deloitte & Touche LLP, have been prepared in accordance
with GAAP consistently applied except as therein noted, are
correct and complete and present fairly the financial position of
the Company and its consolidated Subsidiaries as of such dates
and the results of their operations and changes in their
financial position or cash flows for such periods. The unaudited
consolidated balance sheets of the Company and its consolidated
Subsidiaries as of March 30, 1996, and the unaudited statements
of earnings and Stockholders Equity and cash flows for the 13-
week period ended on such date prepared by the Company have been
prepared in accordance with GAAP consistently applied, are
correct and complete and present fairly the financial position of
the Company and its consolidated Subsidiaries as of such date and
the results of their operations and changes in their financial
position or cash flows for such period.
(b) Since December 30, 1995, there has been no
change in the condition, financial or otherwise, of the Company
and its consolidated Subsidiaries as shown on the consolidated
balance sheet as of such date except changes in the ordinary
course of business, none of which individually or in the
aggregate has been materially adverse.
6. Indebtedness. Annex 2 attached hereto
correctly describes all Current Debt, Funded Debt, Liens securing
Indebtedness, Capitalized Leases and Long-Term Leases of the
Company and the Restricted Subsidiaries outstanding on the date
of the Agreements.
7. Full Disclosure. Neither the financial
statements referred to in paragraph 5 hereof nor the Agreements,
the Memorandum (except for certain industry information contained
on pages 1, 10, 39 through 42, and 49 through 55 of the
Memorandum and Exhibits 5, 6 and 7 to the Memorandum, none of
which the Company participated in preparing) or any other written
statement furnished by or on behalf of the Company to you in
connection with the negotiation of the sale of the Notes,
contains any untrue statement of a material fact or omits a
material fact necessary to make the statements contained therein
or herein not misleading. There is no fact peculiar to the
Company or the Subsidiaries which the Company has not disclosed
to you in writing which materially affects adversely nor, so far
as the Company can now foresee, will materially affect adversely
the properties, business, prospects, profits or condition
(financial or otherwise) of the Company or the Company and the
Restricted Subsidiaries, taken as a whole.
8. Pending Litigation. There is no action,
suit, investigation or proceeding pending or, to the knowledge of
the Company, threatened against or affecting the Company or any
Restricted Subsidiary, or any property or rights of the Company
or any Restricted Subsidiary, in any court or before any
governmental authority of arbitration board or tribunal which
involves the possibility of materially and adversely affecting
the properties, business, prospects, profits or condition
(financial or otherwise) of the Company or the Company and the
Restricted Subsidiaries. There is no action, suit, investigation
or proceeding pending or threatened against or affecting the
Company or any Restricted Subsidiary that purports to affect the
validity or enforceability of this Agreement, the Guaranty or any
Note.
9. Title to Properties. The Company and each
Restricted Subsidiary has good and marketable title in fee simple
(or its equivalent under applicable law) to all material parcels
of real property and has good title to all the other material
items of property it purports to own, including those reflected
in the most recent balance sheet referred to in paragraph 5
hereof, except as sold or otherwise disposed of in the ordinary
course of business and except for Liens permitted by the
Agreements. All leases necessary for the conduct of the
respective businesses of the Company and the Restricted
Subsidiaries are valid and subsisting and are in full force and
effect.
10. Patents and Trademark. The Company and each
Restricted Subsidiary owns or possesses all the patents,
trademarks, trade names, service marks, copyright, licenses,
permits, franchises and rights with respect to the foregoing
necessary for the present and planned future conduct of its
business, without any known conflict with the rights of others.
No violation or default (or waiver thereof that is conditional or
limited in duration) exists under any of the foregoing or of any
agreement related thereto which would materially and adversely
affect the business, prospects, profits, properties or condition
(financial or otherwise) of the Company or the Company and its
Restricted Subsidiaries, taken as a whole.
11. Sale Is Legal and Authorized. The sale of
the Notes and compliance by the Company with all of the
provisions of the Agreements and the Notes:
(a) are within the corporate powers of the
Company;
(b) will not violate any provisions of any
law or any order of any court or governmental authority or agency
and will not conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default
(whether or not such default shall have been waived) under the
Articles of Incorporation or By-laws of the Company or any
indenture or other agreement or instrument to which the Company
is a party or by which it may be bound or result in the
imposition of any Liens or encumbrances on any property of the
Company; and
(c) have been duly authorized by proper
corporate action on the part of the Company (no action by the
stockholders of the Company being required by law, by the
Articles of Incorporation or By-laws of the Company or
otherwise), executed and delivered by the Company and the
Agreements and the Notes constitute the legal, valid and binding
obligations, contracts and agreements of the Company enforceable
in accordance with their respective terms.
12. No Defaults. No Default or Event of Default
has occurred and is continuing. Neither the Company nor any
Restricted Subsidiary is in default in the payment of principal
or interest on any Funded Debt or Current Debt. There exists no
default (or waiver thereof that is conditional or is limited in
duration) under any instrument or agreement under any Funded Debt
or Current Debt, or subject to which any Funded Debt or Current
Debt has been issued, and no event has occurred and is continuing
under the provisions of any such instrument or agreement which
with the lapse of time or the giving of notice, or both, would
constitute an event of default thereunder.
13. Governmental Consent. No approval, consent
or withholding of objection on the part of any regulatory body,
state, Federal or local, is necessary in connection with the
execution and delivery by the Company of the Agreements or the
Notes or compliance by the Company with any of the provisions of
the Agreements or the Notes.
14. Taxes. All tax returns required to be filed
by the Company or any Restricted Subsidiary in any jurisdiction
have, in fact, been filed, and all taxes, assessments, fees and
other governmental charges upon the Company or any Restricted
Subsidiary or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such returns
have been paid. For all taxable years ending on or before
December 31, 1990, the Federal income tax liability of the
Company and the Restricted Subsidiaries has been satisfied and
either the period of limitations on assessment of additional
Federal income tax has expired or the Company and the Restricted
Subsidiaries have entered into an agreement with the Internal
Revenue Service closing conclusively the total tax liability for
the taxable year. The Company does not know of any proposed
additional tax assessment against it or any Restricted Subsidiary
for which adequate provision has not been made on its accounts,
and no material controversy in respect of additional Federal or
state income taxes due since such date is pending or to the
knowledge of the Company threatened. The provisions for taxes on
the books of the Company and each Restricted Subsidiary are
adequate for all open years, and for its current fiscal period.
15. Use of Proceeds. The net proceeds from the
sale of the Notes will be used to finance the purchase of the
Westville facility, to refinance outstanding Indebtedness and for
other corporate purposes. None of the transactions contemplated
in the Agreements (including, without limitation thereof, the use
of proceeds from the issuance of the Notes) will violate or
result in a violation of Section 7 of the Exchange Act, or any
regulation issued pursuant thereto, neither will any of such
transactions violate or result in a violation of, or constitute
this transaction a "purpose credit" within the meaning of
Regulations G, T or X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter III. Neither the Company nor
any Subsidiary owns or intends to carry or purchase any "margin
stock" within the meaning of said Regulation G. None of the
proceeds from the sale of the Notes will be used to purchase, or
refinance any borrowing the proceeds of which were used to
purchase, any "security" within the meaning of the Exchange Act.
16. Private Offering. Neither the Company,
directly or indirectly, nor any agent on its behalf has offered
or will offer the Notes, the Guaranty or any Security similar to
either of them or has solicited or will solicit an offer to
acquire the Notes, the Guaranty or any Security similar to either
of them from or has otherwise approached or negotiated or will
approach or negotiate in respect of the Notes, the Guaranty or
any Security similar to either of them with any Person other than
the Purchasers and not more than 67 other institutional
investors, each of whom was offered the Guaranty and a portion of
the Notes at private sale for investment. Neither the Company,
directly or indirectly, nor any agent on its behalf has offered
or will offer the Notes, the Guaranty or any Security similar to
either of them or has solicited or will solicit an offer to
acquire the Notes, the Guaranty or any Security similar to either
of them from any Person so as to bring the issuance and sale of
the Notes or the Guaranty within the provisions of Section 5 of
the Securities Act of 1933, as amended, or the Blue Sky laws of
any applicable jurisdiction.
17. ERISA. The consummation of the transactions
provided for in the Agreements and compliance by the Company with
the provisions thereof and the Notes issued thereunder will not
involve any prohibited transaction within the meaning of ERISA or
Section 4975 of the Code. Each employee benefit plan complies in
all material respects with all applicable statutes and
governmental rules and regulations, and (a) no Reportable Event
has occurred and is continuing with respect to any Plan,
(b) neither the Company, any ERISA Affiliate nor, to the
knowledge of the Company, any substantial employer (within the
meaning of Section 4063 of ERISA) has withdrawn from any Plan or
Multiemployer Plan or instituted steps to do so, and (c) no steps
have been instituted to terminate any Plan. No condition exists
or event or transaction has occurred in connection with any
employee benefit plan which could result in the incurrence by the
Company or any ERISA Affiliate of any material liability, fine or
penalty. No Plan, nor any trust created thereunder, has incurred
any "accumulated funding deficiency" as defined in Section 302 of
ERISA and Section 412 of the Code nor does the present value of
all benefits vested under all Plans exceed, as of the last annual
valuation date, the value of the assets of the Plans allocable to
such vested benefits. Neither the Company nor any ERISA
Affiliate has any contingent liability with respect to any post-
retirement or post-employment "welfare benefit plan" (as such
term is defined in ERISA) except as has been disclosed in writing
to the Purchasers in footnote 8 to the Companys consolidated
financial statements for the fiscal year ended December 30, 1995.
For purposes of this paragraph, the term "employee benefit plan"
shall have the meaning assigned such term under Section 3(3) of
ERISA.
18. Compliance with Law. Neither the Company nor
any Restricted Subsidiary (a) is in violation of any law,
ordinance, franchise, governmental rule or regulation to which it
is subject; or (b) has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the
ownership of its property or to the conduct of its business which
could have a material adverse effect on the business, prospects,
profits, properties or condition (financial or otherwise) of the
Company or the Company and its Restricted Subsidiaries, taken as
a whole. Neither the Company nor any Restricted Subsidiary is in
default with respect to any order of any court or governmental
authority or arbitration board or tribunal.
19. Compliance with Environmental Laws. The
Company is not in violation of any applicable Federal, state, or
local laws, statutes, rules, regulations or ordinances relating
to public health, safety or the environment, including, without
limitation, relating to releases, discharges, emissions or
disposals to air, water, land or ground water, to the withdrawal
or use of ground water, to the use, handling or disposal of
polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde,
to the treatment, storage, disposal or management of hazardous
substances (including, without limitation, petroleum, crude oil
or any fraction thereof, or other hydrocarbons), pollutants or
contaminants, to exposure to toxic, hazardous or other
controlled, prohibited or regulated substances which violation
could have a material adverse effect on the business, prospects,
profits, properties or condition (financial or otherwise) of the
Company or the Company and the Restricted Subsidiaries, taken as
a whole. The Company does not know of any liability or class of
liability of the Company or any Restricted Subsidiary under the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), or the
Resource Conservation and Recovery Act of 1976, as amended
(42 U.S.C. Section 69001 et seq.).
20. Stockholders. No single Person, or group (as
defined in the Exchange Act), is the beneficial owner of 5% or
more of the Voting Stock of the Company other than Mega Marts,
Inc. (which owns 9.7% of such Voting Stock) (the "Major Holder").
21. Insurance. The Company and each Restricted
Subsidiary currently maintains insurance coverage with
financially sound and reputable insurers in such forms and
amounts and against such risks as are customary for corporations
of established reputation engaged in the same or a similar
business and owning and operating similar properties.
22. Public Utility Holding Company Act;
Investment Company Act. Neither the Company nor any Restricted
Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company" or a "public utility company" as such terms are
defined in the Public Utility Holding Company Act of 1935, as
amended. Neither the Company nor any Restricted Subsidiary is or
is directly or indirectly controlled by or acting on behalf of
any Person that is, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
23. Brokerage. All negotiations relative to this
Agreement and the transactions contemplated hereby have been
carried on by the Company without the intervention of any Person
that might give rise to a valid claim against you for a brokerage
commission or other like payment (other than SPP Hambro & Co.,
the claims of which shall be solely for the account of the
Company); and the Company agrees to indemnify and hold you
harmless from and against any such claims.
24. Labor Matters. No material work stoppage
affecting the Company or any of the Restricted Subsidiaries is
pending or threatened. There is no pending or threatened labor
dispute, arbitration, lawsuit, or administrative proceeding
relating to labor matters or alleged Occupational Safety and
Health Act violations involving the employees of the Company or
any Restricted Subsidiary (excluding routine workers'
compensation claims) that could materially adversely affect the
properties, business, prospects, profits or condition (financial
or otherwise) of the Company or the Company and the Restricted
Subsidiaries taken as a whole.
Subsidiaries of the Company
1. Restricted Subsidiaries:
Percentage of Voting
Jurisdiction of Stock Owned by Company
Name of Subsidiary Incorporation and Each Other Subsidiary
Badger Assurance, Ltd. Bermuda 100% for all subsidiaries
listed.
CD of Wisconsin, Inc. Wisconsin
Holt Public Storage, Inc. Wisconsin
I.T.A., Inc. Wisconsin
Jondex Corp. Wisconsin
Kee Trans, Inc. Wisconsin
Kee Wholesale, Inc. Wisconsin
Old Time, Inc. Wisconsin
Ropak, Inc. Wisconsin
Scot Lad Foods, Inc. Wisconsin
Midland Grocery of Michigan,
Inc. Michigan
WFC Foods, Inc. Illinois
Sheboygan Land Corp. Wisconsin
Insurance Planners, Inc. Wisconsin
Pick n Save Warehouse Foods,
Inc. Wisconsin
Shop-Rite, Inc. Wisconsin
Villard Avenue Shop-Rite, Wisconsin
Inc.
Spring Lake Merchandise, Ohio
Inc.
Bonnie Baking Co., Inc. Indiana
Scot Lad-Lima., Inc. Ohio
Cardinal Foods, Inc. Delaware
Wilsons Cardinal Ohio
Supermarket, Inc.
Gardners Food Galleries, Ohio
Inc.
The Midland Grocery Company Ohio
2. Subsidiaries (Other Than Restricted Subsidiaries):
None
Description of Debt, Liens and
Leases of the Company
1. Current Debt of the Company and its Restricted
Subsidiaries outstanding on March 30, 1996, is as follows: see
attached
2. Funded Debt (other than Capitalized Rentals) of the
Company and its Restricted Subsidiaries outstanding on March 30,
1996, is as follows: see attached
3. Liens securing Indebtedness of the Company and its
Restricted Subsidiaries outstanding on March 30, 1996, is as
follows: see attached
4. Capitalized Leases of the Company and its Restricted
Subsidiaries outstanding on March 30, 1996, is as follows: see
attached
5. Long-Term Leases of the Company and its Restricted
Subsidiaries outstanding on March 30, 1996, is as follows: see
attached
Roundy's, Inc. & Subsidiaries
Rental Payments and Subleasing Rentals
March 30, 1996
Rental Payments Sublease
Division Minimum Contingent Rentals
HOLT-MILW 553,133
MAZOMANIE 702,872 44,805
WESTVILLE 1,736,907
LIMA 220,094 217,041
ELDORADO 124,108 10,500
SOUTH BEND 176,062
CARDINAL FDS 1,417,082 117,567
SPRING LAKE 425,128 12,035
AMA-EVANSVILLE 196,815
MIDLAND-MI 106,274 78,993
RDYS RETAIL 533,404 32,999 86,929
CARDINAL RTL 902,508 265,725
CARD FD GALLERIES 129,395
MICHIGAN RTL 6,300
CORPORATE 52,105
KEE TRANS 1,236,142
JONDEX 26,607,663 389,936 21,192,360
CARDINAL MFL 124,659 13,200
ELDORADO RTL 20,004
Total 35,264,355 422,935 22,045,455
Exhibit C
Description of Special Counsel's Closing Opinion
The closing opinion of Chapman and Cutler, special counsel to the
Purchasers, called for by 4.1 of the Agreements, shall be dated
the Closing Date and addressed to the Purchasers, shall be
satisfactory in form and substance to the Purchasers and shall be
to the effect that:
1. The Company is a corporation, validly
existing and in good standing under the laws of the State of
Wisconsin and has the corporate power and the corporate authority
to execute and deliver the Agreements and to issue the Notes.
2. Each of the Guarantors is a corporation,
validly existing and in good standing under the laws of its state
of incorporation.
3. The Agreements have been duly authorized
by all necessary corporate action on the part of the Company,
have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law).
4. The Notes have been duly authorized by
all necessary corporate action on the part of the Company, have
been duly executed and delivered by the Company and constitute
the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law).
5. The issuance, sale and delivery of the
Notes under the circumstances contemplated by the Agreements does
not, under existing law, require the registration of the Notes
under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of
1939, as amended.
The opinion of Chapman and Cutler shall also state that the
opinion of Whyte Hirschboeck Dudek S.C. it satisfactory in scope
and form to Chapman and Cutler and that, in their opinion, the
Purchasers are justified in relying thereon.
In rendering the opinions set forth in paragraphs 1 and 2 above,
Chapman and Cutler may rely solely upon the opinion of Whyte
Hirschboeck Dudek S.C. and an examination of the respective
charters of the Company and each Guarantor certified by, and a
certificate of good standing of each such Person from, the
Secretary of State of the state of such Persons incorporation,
and upon the By-laws of the Company and each Guarantor. In
rendering the opinions set forth above, Chapman and Cutler may
rely solely upon the opinion of Whyte Hirschboeck Dudek S.C. with
respect to those matters governed by the laws of the State of
Wisconsin.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public
officials and officers of the Company upon the representations
and warranties contained in the Note Agreement (including all
Exhibits and Schedules thereto) and upon the letter of the
placement agent to Chapman and Cutler, relating to the offering
of the Notes and the Guaranty.
Exhibit D
Description of Closing Opinion
of Counsel to the Company
The closing opinion of Whyte Hirschboeck Dudek S.C., counsel to
the Company, which is called for by 4.1 of the Agreements, shall
be dated the Closing Date and addressed to the Purchasers, shall
be satisfactory in scope and form to the Purchasers and shall be
to the effect that:
1. The Company is a corporation, duly
organized, validly existing and in good standing under the laws
of the State of Wisconsin, has corporate power and authority and
is duly authorized to enter into, deliver and perform the
Agreements and to issue the Notes and incur the Indebtedness to
be evidenced thereby and has full corporate power and authority
to conduct the activities in which it is now engaged and is duly
licensed or qualified and is in good standing as a foreign
corporation in each jurisdiction in which the character of the
properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary.
2. Each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and is duly licensed or
qualified and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it or the
nature of the business transacted by it makes such licensing or
qualification necessary and all of the issued and outstanding
shares of capital stock of each such Subsidiary have been duly
issued, are fully paid and nonassessable and are owned by the
Company, by one or more Subsidiaries, or by the Company and one
or more Subsidiaries.
3. Each Agreement has been duly authorized
by all necessary corporate action on the part of the Company,
executed and delivered by the Company and if Wisconsin law were
to be applied thereto, notwithstanding the choice of law
provisions contained therein, would constitute the legal valid
and binding obligation of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally,
and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in
equity or at law).
4. Under Wisconsin choice of law
principles, in a properly presented case, the courts of the State
of Wisconsin, and the courts of the United States of America
sitting in the State of Wisconsin and applying the principles of
conflicts of laws applied by the courts of the State of
Wisconsin, would give effect to the governing law provisions
found in 9.10 of the Agreements, in the Note and in Section 11
of the Guaranty.
5. The Notes have been duly authorized by
all necessary corporate action on the part of the Company, have
been duly executed by authorized officers of the Company, have
been delivered and if Wisconsin law were to be applied thereto,
notwithstanding the choice of law provisions contained therein,
would constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law).
6. The Guaranty has been duly authorized by
all necessary corporate action on the part of each Guarantor, has
been duly executed by an authorized officer of each Guarantor,
has been delivered and if Wisconsin law were to be applied
thereto, notwithstanding the choice of law provisions contained
therein, would constitute the legal valid and binding obligation
of each Guarantor enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors rights generally, and general
principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at
law).
7. No approval, consent, license,
authorization or withholding of objection on the part of, or
filing, registration or qualification with, any governmental
body, Federal, state or local or any other Person, is necessary
in connection with the execution and delivery of the Agreements
or the Notes or the performance by the Company of its obligations
thereunder or the execution and delivery of the Guaranty by the
Guarantors or the performance of their obligations thereunder.
8. The issuance and sale of the Notes and
the execution, delivery and performance by the Company of the
Agreements do not conflict with or result in any breach of any of
the provisions of or constitute a default (whether or not waived)
under or result in the creation or imposition of any Lien upon
any of the property of the Company pursuant to the provisions of
the Articles of Incorporation or By-laws of the Company or any
agreement or other instrument known to such counsel, after due
inquiry, to which the Company is a party or by which the Company
may be bound.
9. The issuance, sale and delivery of the
Notes under the circumstances contemplated by the Agreements
constitutes an exempt transaction under the registration
provisions of the Securities Act of 1933, as amended, and do not,
under existing law, require the registration of the Notes under
the Securities Act of 1933, as amended, or the qualification of
an indenture under the Trust Indenture Act of 1939, as amended.
10. The execution, delivery and performance
by each of the Guarantors of the Guaranty do not conflict with or
result in any breach of any of the provisions of or constitute a
default (whether or not waived) under or result in the creation
or imposition of any Lien upon any of the property of such
Guarantor pursuant to the provisions of the Articles of
Incorporation or By-laws of such Guarantor or any agreement or
other instrument known to such counsel, after due inquiry, to
which such Guarantor is a party or by which such Guarantor may be
bound, other than those certain Note Agreements dated as of
December 15, 1991, between the Company and each of the Purchasers
listed on Schedule I thereto, respectively; those certain Note
Agreements dated as of December 15, 1992, between the Company and
each of the Purchasers listed on Schedule I thereto,
respectively; those certain Note Agreements dated as of
December 22, 1993, between the Company and each of the Purchasers
listed on Schedule I thereto, respectively; and the Credit
Agreement, the applicable provisions of each of which have been
waived.
11. The execution and delivery of the
Guaranty under the circumstances contemplated by the Agreements
constitutes an exempt transaction under the registration
provisions of the Securities Act of 1933, as amended, and does
not, under existing law, require the registration of the Guaranty
under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of
1939, as amended.
12. Neither the Company nor any Restricted
Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company" or a "public utility company" as such terms are
defined in the Public Utility Holding Company Act of 1935, as
amended. Neither the Company nor any Restricted Subsidiary is or
is directly or indirectly controlled by or acting on behalf of
any Person that is, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
13. To the best of such counsel's knowledge
after due inquiry, there are no actions, suits or proceedings
pending or threatened against the Company or any Restricted
Subsidiary at law or in equity, before any arbitrator or before
or by any governmental department, commission, board, bureau,
agency or instrumentality (a) that, if determined adversely and
considered in the aggregate, would adversely affect any action
taken or to be taken by the Company under the Agreements or the
Notes, or by any Guarantor under the Guaranty, or that, if
determined adversely and considered in the aggregate, could
materially and adversely affect the properties, business,
prospects, profits or condition (financial or otherwise) of the
Company or the Company and the Restricted Subsidiaries, taken as
a whole, or (b) that purport to affect the validity or
enforceability of the Agreements, the Guaranty or any Note.
14. On the basis of the first, third and
fourth sentences of Paragraph 15 of Exhibit B to the Agreements,
the extension, arranging and obtaining of the credit represented
by the Notes do not result in any violation of Regulation G, T or
X of the Board of Governors of the Federal Reserve System.
15. Except for the availability of
Section 1382(b) of the United States Internal Revenue Code and
the limitations associated therewith, neither the laws of the
State of Wisconsin nor the Federal laws of the United States of
America imbue the Company with any rights, remedies, privileges,
constraints or liabilities, as a result of the Companys status as
a cooperative under the Code, not otherwise applicable to
corporations organized under the laws of the State of Wisconsin.
The opinion of Whyte Hirschboeck Dudek S.C. shall cover such
other matters relating to the sale of the Notes as the Purchasers
may reasonably request. With respect to matters of fact on which
such opinion is based, such counsel shall be entitled to rely on
appropriate certificates of public officials and officers of the
Company.
Guaranty Agreement
Dated as of May 15, 1996
of
Scot Lad Foods, Inc.
Cardinal Foods, Inc.
And
Shop-Rite, Inc.
Re: $25,000,000 7.86% Senior Notes
Due May 15, 2006
of
Roundy's, Inc.
Exhibit E to Note Agreement
Table of Contents
Page
Section 1. Note Agreements; Etc. 1
Section 2. Guaranty 1
Section 2.1. Guaranty of Payment 1
Section 2.2. Obligations Not Affected 2
Section 2.3. Waiver 4
Section 2.4. Waiver of Subrogation 4
Section 2.5. Continuation of Guaranty, Etc 4
Section 2.6. Legend 5
Section 3. Representations and Warranties 5
Section 3.1. Organization and Qualification 5
Section 3.2. Litigation 5
Section 3.3. No Violations, Etc 6
Section 3.4. Governmental Authorizations 6
Section 3.5. Solvency 6
Section 3.6. Benefit 6
Section 3.7. Private Offering 6
Section 4. Term of Agreement 7
Section 5. Expenses, Etc 7
Section 6. Survival of Representations and Warranties 7
Section 7. Amendments and Waivers 7
Section 8. Notices, Etc 8
Section 9. Waiver of Acceptance 8
Section 10. [Intentionally Blank] 8
Section 11. Miscellaneous 8
Annex 1 - Joinder Agreement 11
Guaranty Agreement
Re: $25,000,000 7.86% Senior Notes
Due May 15, 2006
of Roundy's, Inc.
Guaranty Agreement, dated as of May 15, 1996 (this "Agreement"),
from the undersigned corporations (the "Guarantors"), each a
wholly-owned subsidiary of Roundy's, Inc., a Wisconsin corporation
(the "Company"), for the benefit of The Ohio National Life
Insurance Company, Phoenix American Life Insurance Company,
Provident Mutual Life Insurance Company, Providentmutual Life and
Annuity Company of America, United of Omaha Life Insurance
Company, John Alden Life Insurance Company, Oxford Life Insurance
Company, The Security Mutual Life Insurance Company of Lincoln,
Nebraska, and Woodmen Accident and Life Company (the Purchasers)
and all other Persons (as hereinafter defined) who shall from
time to time become holders of any of the Notes referred to below
(collectively, the "Holders") .
In order to induce the Purchasers to purchase and maintain their
investment in the Notes and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, each Guarantor agrees severally with the Holders as
follows:
Section 1. Note Agreements; Etc..
The Company has entered into separate Note Agreements, each dated
as of May 15, 1996 (as the same from time to time may be amended,
restated, supplemented, extended or otherwise modified, the "Note
Agreements"), between the Company and the respective Purchasers
providing for the issue and sale to the Purchasers of $25,000,000
in aggregate principal amount of the Companys 7.86% Senior Notes,
due May 15, 2006 (together with all renewals, extensions,
modifications and amendments thereof and all notes delivered in
substitution or exchange therefor, the "Notes"). This Agreement
is being entered into pursuant to the Note Agreements and each of
the Guarantors acknowledges that the purchase of the Notes on the
terms set forth in the Note Agreements is and will be of direct
and indirect benefit to such Guarantor. Capitalized terms used
herein without definition have the respective meanings set forth
in the Note Agreements.
Section 2. Guaranty.
Section 2.1. Guaranty of Payment.
(a) Each Guarantor hereby severally, unconditionally and
irrevocably guarantees to each Holder from time to time of any
Notes, the due and punctual payment of the principal of and the
premium, if any, and interest on the Notes, and any additional
amounts payable to any such Holder under the Note Agreements
(including interest at the Overdue Rate on any overdue principal,
premium or interest), when the same shall become due and payable
(whether at the expressed or any accelerated maturity date, at
any date fixed for prepayment or otherwise) and at all times
thereafter (the "Guaranteed Amount"). Such guaranty is an
absolute, unconditional, present and continuing guaranty of
payment and not of collectability and is in no way conditioned or
contingent upon any attempt to collect from the Company or upon
any other condition or contingency. If the Company shall fail to
pay punctually any Guaranteed Amount, when and as the same shall
become due and payable, the Guarantors will upon demand
immediately pay the same to the Holders of the Notes to whom such
payment is payable. Each of the Guarantors additionally hereby
unconditionally and irrevocably guarantees to each Holder the
timely performance of all other obligations of the Company under
the Note Agreements.
(b) As between the Guarantors, each Guarantor
agrees that if any other Guarantor (or any other Subsidiary of
the Company which shall guaranty the Notes pursuant to 5.19 of
the Note Agreements) shall pay any sums on account of the
Guaranteed Amount in excess of such Guarantors Pro Rata Share (as
hereinafter defined) of such sums paid (an "Excess Funding
Guarantor"), each other Guarantor shall, on demand (but subject
to the immediately following sentence), pay to the Excess Funding
Guarantor its proportionate share of such excess amount. The
payment obligation to the Excess Funding Guarantor is subordinate
and subject in right of payment to the prior payment in full of
the obligations of the other Guarantors to the Holders of the
Notes under Section 2.1(a) above, and the Excess Funding
Guarantor shall not exercise any right or remedy with respect to
such excess amount until all the Notes shall have been fully
paid, indefeasibly, and are obligations of the Company under the
Notes and the Note Agreements shall have been duly performed.
The term "Pro Rata Share" shall mean, as of any date of
determination, the percentage of the Guaranteed Amount equal to
the amount that such Guarantors or such other Subsidiarys Net
Assets bears to the amount of the aggregate Net Assets of all
Guarantors and other guaranteeing Subsidiaries.
The term "Net Assets" of any Person shall mean, as at any date of
determination, the excess of the present fair salable value of
such Persons assets over the amount that would be required to pay
the probable liability of such Person on all of its debts
(excluding any amounts payable under this Agreement) as the same
shall become absolute and matured.
(c) In any action or proceeding involving any
state corporate law, or any state or Federal bankruptcy,
insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor or other
Subsidiary hereunder would otherwise be held or determined to be
void, invalid or unenforceable on account of the amount of its
liability under this Agreement, then, notwithstanding any other
provision of this Agreement to the contrary, the amount of such
liability shall, without any further action by such Guarantor or
other Subsidiary, the Holders of the Notes or any other Person,
be automatically limited and reduced to the highest amount which
is valid and enforceable as determined in such action or
proceeding.
Section 2.2. Obligations Not
Affected. The obligations of the Guarantors under this
Agreement shall remain in full force and effect without regard
to, and shall not be impaired or affected by:
(a) any extension or indulgence in respect
of the payment of any Guaranteed Amount or any prepayment of any
part of the principal of any Note or any purchase of any Note; or
(b) any renewal, extension, refunding,
amendment or modification of or addition or supplement to or
deletion from any of the terms of any Note or the Note
Agreements, or any other agreement which may be made relating to
any such instruments; or
(c) any amendment, compromise, release or
consent or other action or inaction in respect of any of the
terms of any Note or the Note Agreements; or
(d) any exercise or non-exercise by any
Holder of any right, power, privilege or remedy under or in
respect of any Note, the Note Agreements or this Agreement or any
waiver of any such right, power, privilege or remedy or of any
default in respect of any Note, the Note Agreements or this
Agreement, or any receipt of any security, failure to perfect a
security interest in, or any release or, any security; or
(e) any bankruptcy, insolvency,
reorganization, arrangement, adjustment, composition,
liquidation, or the like of the Company or any of its
Subsidiaries (including without limitation any of the
Guarantors); or
(f) any limitation of the liability or
recourse of the Company under any of the Notes or of any other
Guarantor hereunder which may now or hereafter be imposed by any
statute, regulation or rule of law, or any invalidity or
unenforceability, in whole or in part, of any of the Notes or the
Note Agreements, or any term thereof; or
(g) any merger or consolidation of the
Company or any of its Subsidiaries into or with any other Person,
or any sale, lease or transfer of any or all of the assets of the
Company or any of its Subsidiaries to any other Person; or
(h) absence of any notice to, or knowledge
by, any of the Guarantors of the existence or occurrence of any
of the matters or events set forth in the foregoing
subdivision (a) through (g); or
(i) any sale, transfer or other disposition
by the Company of any stock of any of the Guarantors; or
(j) the taking or accepting of any other
security or guaranty for, or right or recourse with respect to,
any or all of the Guaranteed Amount; or
(k) any partial release of the liability of
any Guarantor hereunder or of the Company or any other Person
liable, directly or indirectly, for payment or performance of any
or all of the Guaranteed Amount; or
(l) the unenforceability of all or any part
of the Guaranteed Amount against the Company; or
(m) any other circumstance.
Section 2.3. Waiver;. The Guarantors
unconditionally waive:
(a) notice of any of the matters referred to
in Section 2.2 hereof;
(b) all notices which may be required by
statute, rule of law or otherwise, to preserve intact any rights
of any Holder against the Guarantors, including, without
limitation, any demand, presentment and protest, proof of notice
of nonpayment under any of the Notes or the Note Agreements,
notice of intent to accelerate, notice of acceleration, and
notice of any failure on the part of the Company to perform and
comply with any covenant, agreement, term or condition of the
Notes or the Note Agreements;
(c) any right to the enforcement, assertion
or exercise by any Holder of any right, power, privilege or
remedy conferred in the Notes or the Note Agreements, or
otherwise;
(d) any requirement of diligence on the part
of any Holder;
(e) any requirement on the part of any
Holder to mitigate the damages resulting from any default under
the Notes or the Note Agreements; and
(f) any notice of any sale, transfer or
other disposition of any Notes by any Holder.
Section 2.4. Waiver of Subrogation;.
In the event any of the Guarantors shall at any time pay any sums
on account of the Guaranteed Amount or take any other action in
performance of its obligations under this Agreement, such
Guarantor shall have no subrogation or other rights as the holder
of a Note, and each of the Guarantors hereby waives all such
rights of subrogation and all rights of reimbursement or
indemnity whatsoever and all rights of recourse to any security
for any Note until such time as all the Notes shall have been
fully paid, indefeasibly, and are of the obligations of the
Company under the Notes and the Note Agreements shall have been
duly performed. After such payment and performance in full, the
Guarantors may have and exercise any or all such rights as may be
available to them.
Section 2.5. Continuation of Guaranty,
Etc;. The obligations of the Guarantors shall continue to be
effective, or be reinstated, as the case may be, if at any time
any payment of any Guaranteed Amount is rescinded or must
otherwise be restored or returned by any Holder upon the
bankruptcy, insolvency, reorganization, arrangement, adjustment,
composition, liquidation or the like of the Company or any of its
Subsidiaries, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar
officer for, the Company or any of its Subsidiaries or any
substantial part of the property thereof, or otherwise, all as
though such payments had not been made.
Section 2.6. Legend;. Each Guarantor
agrees that upon the request of any Holder it will execute and
attach to the Notes held by such Holder and on any Note issued in
exchange, transfer or replacement of any Note, a Guaranty in the
following form:
For Value Received, the undersigned Guarantor hereby
unconditionally guarantees severally and not jointly with any
other person the payment of the principal of, the premium (if
any) and the interest on the Note to which this Guaranty is
attached when due under the terms thereof or of the Note
Agreements referred to therein all as more fully provided in such
Note Agreements. The Guarantor hereby agrees that the Note
Agreements and such Note may be modified, amended, and
supplemented in any manner, including the renewal or extension of
any kind of such Note, without consent of the Guarantor, and that
no such modification, amendment, supplement, renewal or extension
and no invalidity of the Note Agreements or of such Note shall
release, affect or impair the liability of the undersigned
hereunder.
Notwithstanding any provision hereof to the contrary, no failure
of any Holder so to request that a Guaranty be executed and
attached to any Note, and no failure of a Guarantor to honor any
such request, shall diminish or impair the obligations of any
Guarantor hereunder in any respect.
Section 3. Representations and Warranties;.
Each of the Guarantors severally represents and warrants:
Section 3.1. Organization and
Qualification;. Such Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate
power and authority to own and operate its properties, to carry
on its business as now conducted and as proposed to be conducted,
to enter into this Agreement and to perform all of its
obligations hereunder. Such Guarantor is duly qualified and in
good standing as a foreign corporation duly authorized to do
business in all jurisdictions (other than the jurisdiction of its
incorporation) where its ownership, lease or operation of
property or the conduct of its business requires such
qualification. Such Guarantor has by all necessary corporate
action (all action of shareholders, if any, having been duly
taken) duly authorized the execution and delivery of this
Agreement and the performance of its obligations under this
Agreement. This Agreement constitutes the legal, valid and
binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms.
Section 3.2. Litigation;. There is no
action, proceeding or investigation pending or threatened (or any
basis therefor known to such Guarantor) which questions the
validity or legality of or seeks damages in connection with this
Agreement, or any action taken or to be taken pursuant to this
Agreement, which might result, either in any one case or in the
aggregate, in an impairment of such Guarantors ability to perform
its obligations under this Agreement or in a material adverse
change in the business, operations, properties, or condition
(financial or otherwise) of such Guarantor or of such Guarantor
and its subsidiaries, taken as a whole.
Section 3.3. No Violations, Etc;.
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby nor the
performance by such Guarantor of its obligations hereunder will
result in any violation of or be in conflict with or constitute a
default (whether or not waived) under any term of the articles of
incorporation or by-laws of such Guarantor or any agreement or
instrument to which it is a party or by which it or any of its
properties or assets is bound or any applicable law, ordinance,
rule or regulation or any applicable order of any court,
arbitrator or governmental authority or result in the creation of
(or impose any obligation on such Guarantor to create) any Lien
upon any of the properties or assets of such Guarantor or any of
its subsidiaries.
Section 3.4. Governmental
Authorizations;. No consent, approval or authorization of, or
registration, declaration or filing with, any governmental body
is required on the part of such Guarantor for the valid execution
and delivery of this Agreement by such Guarantor or the
consummation of the transactions contemplated hereby, including
fulfillment of, or compliance by such Guarantor with, the terms
and provisions of this Agreement.
Section 3.5. Solvency;. As of the
Closing Date, and after giving effect to the execution and
delivery of this Agreement by each Guarantor, (a) the aggregate
value of all assets of such Guarantor, whether valued as a going
concern, at fair valuation or at their fair present salable
value, exceeds the amount of all debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities)
of such Guarantor, (b) such Guarantor has and shall have
sufficient assets to pay its existing obligations and liabilities
and all other currently contemplated obligations and liabilities
when due, and (c) such Guarantors assets, property and capital
are reasonably adequate for the business in which such Guarantor
is engaged or proposes to engage. The obligations incurred by
such Guarantor under or pursuant to this Agreement are not being
incurred with actual intent to hinder, delay or defraud existing
or future creditors of the Company or such Guarantor.
Section 3.6. Benefit;. The capital
stock of each Guarantor is owned 100 percent by the Company,
either directly or through one or more Wholly-owned Subsidiaries
of the Company, and each Guarantor will derive substantial
benefit, directly and indirectly, from the purchase of the
initially delivered Notes by the Purchasers and from the making
of the guaranties set forth in this Agreement by the Guarantors.
Section 3.7. Private Offering;.
Neither such Guarantor, directly or indirectly, nor any agent on
its behalf has offered or will offer this Agreement or any
similar Security or has solicited or will solicit an offer to
acquire this Agreement or any similar Security from or has
otherwise approached or negotiated or will approach or negotiate
in respect of this Agreement or any similar Security with any
Person other than the Purchasers and not more than 67 other
institutional investors, each of whom was offered this Agreement
at private sale for investment. Neither such Guarantor, directly
or indirectly, nor any agent on its behalf has offered or will
offer this Agreement or any similar Security or has solicited or
will solicit an offer to acquire this Agreement or any similar
Security from any Person so as to bring the issuance and sale of
this Agreement within the provisions of Section 5 of the
Securities Act of 1933, as amended, or the Blue Sky laws of any
applicable jurisdiction.
Section 4. Term of Agreement;.
This Agreement and all guaranties, covenants and agreements
contained herein shall continue in full force and effect and
shall not be discharged until such time as all the Notes shall
have been fully paid, indefeasibly, and all of the obligations of
the Company under the Notes and the Note Agreements guaranteed
hereunder shall have been duly performed; provided that this
Agreement and all of such guaranties, covenants and agreements
with respect to the obligations of the Company under 9.3 of the
Note Agreements shall survive the payment of the Notes.
Section 5. Expenses, Etc;.
Each of the Guarantors agrees to pay, and save each Holder
harmless against liability for the payment of, all costs and
expenses (including, without limitation, attorneys fees and
expenses) reasonably incurred by or on behalf of such Holder in
enforcing the obligations of the Guarantors under this Agreement.
Each of the Guarantors agrees, at its own expense, to promptly
execute and deliver to each Institutional Holder of the Notes
upon such Institutional Holders request, all such other and
further documents, agreements, and instruments in compliance with
or accomplishment of the agreements of such Guarantor under this
Agreement.
Section 6. Survival of Representations and Warranties;.
All representations and warranties contained in this Agreement or
made in writing by or on behalf of the Guarantors in connection
with the transactions contemplated by this Agreement shall
survive the execution and delivery of this Agreement, any
investigation at any time made by any Purchaser or on its behalf,
the purchase of the Notes under the Note Agreements and any
disposition or payment of the Notes.
Section 7. Amendments and Waivers;.
Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively)
only with the written consent of each of the Guarantors and the
Holders of more than 50% in aggregate outstanding principal
amount of the Notes, excluding any Notes directly or indirectly
owned by the Company or any of its Subsidiaries or Affiliates;
provided that no such amendment or waiver shall, without the
prior written consent of the Holders of all Notes outstanding,
(a) change the time of payment (including any prepayment required
by 2.1 of the Note Agreements) or reduce the amount of any
amount payable hereunder, or (b) change the Guaranteed Amount,
(c) place any conditions or limitations on the obligations of the
Guarantors under this Agreement or in any way render such
obligations revocable by the Guarantors, or (d) reduce the
percentage of the principal amount of the Notes the Holders of
which are required to consent to any such amendment or waiver.
Any amendment or waiver effected in accordance with this
Section 7 shall be binding upon all Holders of the Notes at the
time outstanding, each future Holder of any such Note, and the
Guarantors.
Section 8. Notices, Etc;.
Except as otherwise provided in this Agreement, notices and other
communications under this Agreement shall be in writing and shall
be given in the manner provided in 9.5 of the Note Agreements:
(a) if to the Purchasers or any subsequent
Holder of any Note at its address appearing in Schedule I to the
Note Agreements or such other address as a Holder may designate
to the Company in writing;
(b) if to the Company at its address set
forth in the Note Agreements or to such other address as the
Company may designate in writing; and
(c) if to any Guarantor, c/o Roundys Inc.,
23000 Roundy Drive, Pewaukee, Wisconsin 53072, Attention:
Treasurer or such other address as such Guarantor may designate
in writing.
Section 9. Waiver of Acceptance;.
Each of the Guarantors hereby waives notice of acceptance by the
Purchasers or by any other Holder of the covenants and agreements
of the Guarantors contained herein.
Section 10. [Intentionally Blank].
Section 11. Miscellaneous;.
This Agreement shall be binding upon and inure to the benefit of
and be enforceable against the respective successors and assigns
of the parties hereto, whether so expressed or not, and shall
inure to the benefit of and be enforceable by any Holder. This
Agreement embodies the entire agreement and understanding between
the Guarantors and the Purchasers and supersedes all prior
agreements and understandings relating to the subject matter
hereof. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction or any other provision of
this Agreement. This Agreement shall be construed and enforced
in accordance with and governed by the law of the State of
Illinois. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the
meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
In Witness Whereof, each of the undersigned has caused this
Agreement to be duly executed and delivered by its duly
authorized officer as of the day and year first above written.
Scot Lad Foods, Inc.
By
Name:
Title:
Cardinal Foods, Inc.
By
Name:
Title:
Shop-Rite, Inc.
By
Name:
Title:
Annex 1
Annex 1 - Joinder Agreement
Whereas, the undersigned is a subsidiary of Roundy's Inc., a
Wisconsin corporation (the "Company"), which is a party to
separate Note Agreements, each dated as of May 15, 1996 (the
"Note Agreements"), between the Company and The Ohio National
Life Insurance Company, Phoenix American Life Insurance Company,
Provident Mutual Life Insurance Company, Providentmutual Life and
Annuity Company of America, United of Omaha Life Insurance
Company, John Alden Life Insurance Company, Oxford Life Insurance
Company, The Security Mutual Life Insurance Company of Lincoln,
Nebraska, and Woodmen Accident and Life Company (collectively,
the "Purchasers").
Whereas, pursuant to 5.19 of the Note Agreements, the Company
has agreed to cause the undersigned to join in a certain Guaranty
Agreement dated as of May 15, 1996 (the "Guaranty Agreement")
from the Persons (as defined in the Note Agreements) listed on
the signature page thereof for the benefit of the Purchasers and
the Holders (as defined therein), as the same may have been
amended, restated, supplemented or otherwise modified from time
to time; and
Whereas, the undersigned understands that execution of this
Joinder Agreement is required by 5.19 of the Note Agreements,
and the undersigned has agreed to join in the Guaranty Agreement
by the execution hereof.
Now Therefore, in order that the Company may comply with 5.19 of
the Note Agreements, the undersigned agrees as follows:
1. The undersigned hereby joins in the
Guaranty Agreement and agrees to be bound by all of the terms and
provisions thereof as if the undersigned was an original party
thereto and was included in the definition of "Guarantor" as used
therein.
In Witness Whereof, the undersigned has executed this Agreement
this ______ day of ________________, ______.
[Name]
By
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRADTED FROM ROUNDY'S,
INC. FORM 10-Q FOR THE QUARTER ENDING JUNE 29, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 26,455,800
<SECURITIES> 0
<RECEIVABLES> 103,938,400
<ALLOWANCES> 0
<INVENTORY> 164,523,800
<CURRENT-ASSETS> 307,643,800
<PP&E> 187,754,000
<DEPRECIATION> 84,767,800
<TOTAL-ASSETS> 442,969,400
<CURRENT-LIABILITIES> 205,715,700
<BONDS> 120,590,900
0
0
<COMMON> 1,342,800
<OTHER-SE> 93,170,200
<TOTAL-LIABILITY-AND-EQUITY> 442,969,400
<SALES> 1,253,208,800
<TOTAL-REVENUES> 1,255,091,100
<CGS> 1,135,364,200
<TOTAL-COSTS> 1,135,364,200
<OTHER-EXPENSES> 106,796,000
<LOSS-PROVISION> 1,922,800
<INTEREST-EXPENSE> 3,942,400
<INCOME-PRETAX> 7,065,700
<INCOME-TAX> 2,879,300
<INCOME-CONTINUING> 4,186,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,186,400
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
