SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 28, 1995
Commission File Number 0-12788
CASEY'S GENERAL STORES, INC.
(Exact name of registrant as specified in its charter)
IOWA 42-0935283
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
ONE CONVENIENCE BLVD., ANKENY, IOWA
(Address of principal executive offices)
50021
(Zip Code)
(515) 965-6100
(Registrant's telephone number, including area code)
NONE
(Former name, former address if changed since last report)
<PAGE
ITEM 5. OTHER EVENTS.
On December 28, 1995, Casey's General Stores, Inc. (the
"Company") issued $30,000,000 in aggregate principal amount of
7.38% Senior Notes due December 28, 2020 (the "Senior Notes"),
pursuant to the terms of a Note Agreement dated as of December 1,
1995 (the "Note Agreement") by and between the Company and
Principal Mutual Life Insurance Company (the "Purchaser"). The
Company will apply the proceeds from the sale of the Senior Notes
to fund new construction and remodeling of Company stores,
including land and equipment acquisitions for Company stores.
The Senior Notes bear interest at the rate of 7.38% per
annum prior to maturity, payable semi-annually on the
twenty-eighth day of June and December of each year, commencing
June 28, 1996, and at maturity, and bear interest on overdue
principal (including any overdue required or optional
prepayment), premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the rate
of 9.38% per annum. The Senior Notes mature on December 28,
2020.
In addition to the payment of all outstanding principal of
the Senior Notes at maturity, and regardless of the amount of
Senior Notes which may be outstanding from time to time, the
Company shall prepay and there shall become due and payable on
the twenty-eighth day of June and December in each year,
prepayment of the principal amount of the Senior Notes in the
amount of $1,428,571.43, or such lesser amount as would
constitute payment in full on the Senior Notes, commencing
December 28, 2010 and ending June 28, 2020, inclusive, with the
remaining principal payable at maturity on December 28, 2020 (the
"Required Prepayments"). Each such Required Prepayment shall be
at a price of 100% of the principal amount prepaid, together with
interest accrued thereon to the date of prepayment.
Upon notice as provided in the Note Agreement, the Company
may at any time prepay the Senior Notes, in whole or in part, at
any time, in an amount of not less than $1,000,000 or in integral
multiples of $100,000 in excess thereof (the "Optional
Prepayments"). Each Optional Prepayment shall be at a price of
(i) 100% of the principal amount to be prepaid, plus interest
accrued thereon to the date of prepayment, if the Reinvestment
Yield (as defined in the Note Agreement) on the applicable
Determination Date (as defined in the Note Agreement), equals or
exceeds the interest rate payable on or in respect of the Senior
Notes, or (ii) 100% of the principal amount to be prepaid, plus interest
accrued thereon to the date of prepayment, plus a premium, if the
Reinvestment Yield on such Determination Date is less than the interest
rate payable on or in respect of the Senior Notes. The premium shall equal
(X) the aggregate present value of the amount of principal being prepaid
and the present value of the amount of interest (exclusive of interest
accrued to the date of prepayment) which would have been payable in
respect of such principal absent such prepayment, determined by
discounting each such amount utilizing an interest factor equal
to the Reinvestment Yield, less (Y) the principal amount to be
prepaid. Any Optional Prepayment of less than all of the Senior
Notes outstanding shall be applied to reduce, pro rata, each of
the Required Prepayments and the final payment at maturity.
<PAGE>
In the Note Agreement, the Company makes certain
representations and warranties to the Purchaser and, while any of
the Senior Notes are outstanding, agrees to comply with certain
affirmative covenants addressing, among other matters, the
maintenance of corporate existence, insurance, properties and
records and the provision of certain financial information and
reports to the Purchaser. The Company also agrees to be bound by
certain negative covenants while the Senior Notes are outstanding
addressing, among other matters, the net worth, indebtedness and
fixed charge ratio to be maintained while the Senior Notes are
outstanding, additional Liens (as defined in the Note Agreement),
mergers or consolidations, sale of assets and restricted
investments. Upon the occurrence of an Event of Default (which,
as more fully defined in the Note Agreement, would include, among
other matters, nonpayment of the principal of or interest on the
Senior Notes or a breach of any of the foregoing covenants), the
Purchaser may declare the entire principal amount of the Senior
Notes, together with the premium described in the Note Agreement
and all accrued interest, to be immediately due and payable.
Attached hereto as Exhibit 4.4 and incorporated herein by
reference is a copy of the Note Agreement between the Company and
the Purchaser, and the Annexes and Exhibits thereto, as follows:
Annex I - Subsidiaries; Annex II - Existing Indebtedness of the
Company; Annex III - Description of Liens; Annex IV - Schedule of
Insurance; Annex V - Iowa Franchise Law Disclosure; Exhibit A -
Form of 7.38% Senior Note; and Exhibit B - Statement Regarding
Legal Opinions. The foregoing description of the Senior Notes is
qualified in its entirety by reference to the Note Agreement and
the form of Senior Note described therein.
In conjunction with the issuance of the Senior Notes on
December 28, 1995, the Company, the Purchaser and Nippon Life
Insurance Company of America (together with the Purchaser,
hereinafter referred to as the "Original Purchasers") also
entered into a First Amendment to Note Agreement dated as of
December 1, 1995 (the "First Amendment"), amending the Note
Agreement dated as of February 1, 1993 (the "Original Agreement")
between the Company and the Original Purchasers pursuant to which
$30,000,000 in principal amount of 7.70% Senior Notes due
December 15, 2004 were issued. The First Amendment corrects an
ambiguity in Section 7.6 of the Original Agreement and modifies
two of the investment covenants included in Section 7.7 of the
Original Agreement. Attached hereto as Exhibit 4.3(a) and
incorporated herein by reference is a copy of the First Amendment
between the Company and the Original Purchasers. The foregoing
description of the First Amendment is qualified in its entirety
by reference to the full text of said First Amendment.
<PAGE>
Item 7. EXHIBITS.
<TABLE>
<CAPTION>
<C> <S>
4.3(a) First Amendment to Note Agreement, dated as of December
1, 1995, between Casey's General Stores, Inc., Principal Mutual
Life Insurance Company and Nippon Life Insurance Company of
America.
4.4 Note Agreement, dated as of December 1, 1995, between
Casey's General Stores, Inc. and Principal Mutual Life Insurance
Company.
</TABLE>
SIGNATURE
Pursuant to the requirements of Section 12 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.
CASEY'S GENERAL STORES, INC.
Date: January 5, 1996 By: /s/ Douglas K. Shull
------------------------
Douglas K. Shull
Treasurer and Chief Financial
Officer
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
<C> <S> <C>
4.3(a) First Amendment to Note Agreement 6
dated as of December 1, 1995
between Casey's General Stores,
Inc., Principal Mutual Life Insurance
Company and Nippon Life Insurance
Company of America
4.4 Note Agreement dated as of 9
December 1, 1995 between Casey's
General Stores, Inc. and Principal
Mutual Life Insurance Company
<PAGE>
FIRST AMENDMENT TO NOTE AGREEMENT
Reference is hereby made to that Note Agreement dated as of
February 1, 1993 (the "Original Agreement"), between Casey's
General Stores, Inc. (the "Company"), Principal Mutual Life
Insurance Company and Nippon Life Insurance Company of America
(collectively, the "Purchasers"). This First Amendment to Note
Agreement is hereinafter referred to as the "First Amendment."
WHEREAS, the Company has requested that the Purchasers agree
to certain amendments to the Original Agreement in order to
provide consistency with other financing documents; and
WHEREAS, the Purchasers have agreed to grant such
amendments.
IT IS THEREFORE AGREED THAT:
1. DEFINITIONS.
(a) All defined terms herein shall have the meanings
assigned to such terms in the Original Agreement.
2. AMENDMENTS.
(a) Section 7.6 of the Original Agreement is amended by
inserting the word "Net" in the ninth line between the words
"Consolidated" and "Tangible."
(b) Section 7.7(a) of the Original Agreement is amended by
deleting such paragraph in its entirety and inserting in lieu
thereof the following:
"(a) Investments in a single issuer (other than the
United States government or any agency or instrumentality
thereof) shall not exceed the greater of (i) eight percent (8%)
of the amount of total Investments of the Company and its
Subsidiaries or (ii) $2,500,000."
(c) Section 7.7(b) of the Original Agreement is amended by
deleting such paragraph in its entirety and inserting in lieu
thereof the following:
<PAGE>
"(b) Investments in any single money market fund
permitted by paragraph (e) of the definition of Permitted
Investments shall not exceed the greater of (i) 20% of the amount
of total Investments of the Company and its Subsidiaries or (ii)
$2,500,000."
3. REPRESENTATIONS AND WARRANTIES.
In order to induce the Purchasers to enter into this First
Amendment to Note Agreement, the Company confirms that, except as
disclosed in the Form 10-K dated April 30, 1995 and the Forms
10-Q for the quarters ending July 31, 1995 and October 31, 1995,
each of the representations and warranties set forth in (a) the
Original Agreement and (b) that Note Agreement dated as of
December 1, 1995 between Principal Mutual Life Insurance Company
and the Company (the "1995 Agreement") is true and correct as of
the date hereof and that no Event of Default under the Original
Agreement (which has not been cured pursuant to amendments made
hereunder) or the 1995 Agreement has occurred and is continuing.
4. COUNTERPARTS.
This First Amendment to Note Agreement may be executed by
the parties hereto individually, or in any combination of the
parties hereto in several counterparts, all of which taken
together shall constitute one and the same First Amendment to
Note Agreement.
5. RATIFICATION AND ACKNOWLEDGMENT.
All of the representations, warranties, provisions,
covenants, terms and conditions of the Agreement shall remain
unaltered and in full force and effect and, as amended hereby,
the Agreement is in all respects agreed to, ratified and
confirmed by the Company. The Company acknowledges and agrees
that the amendments granted herein shall not be construed as
establishing a course of conduct on the part of the Purchasers
upon which the Company may rely at any time in the future.
6. REFERENCE TO AND EFFECT ON THE AGREEMENT.
Upon the effectiveness of this First Amendment to Note
Agreement, each reference in the Original Agreement and in other
documents describing or referencing this Amendment to "this
Agreement," "hereunder," "hereof," "herein," or words of like
import referring to the Original Agreement, shall mean and be a
reference to the Original Agreement, as amended hereby.
<PAGE>
Dated as of this 1st day of December, 1995.
CASEY'S GENERAL STORES, INC.
By: /s/ Donald F. Lamberti
------------------------
Its: Chief Executive Officer
ATTEST:
By: /s/ John G. Harmon
-------------------
Its: Secretary
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By: /s/ Jon M. Davidson
-------------------
Its: Assistant Director-
Securities Investment
By: /s/ Christopher J. Henderson
----------------------------
Its: Counsel
NIPPON LIFE INSURANCE COMPANY OF AMERICA
By: /s/ Jon M. Davidson
-------------------
Its: Assistant Director-
Securities Investment
By: /s/ Christopher J. Henderson
----------------------------
Its: Counsel
<PAGE>
CASEY'S GENERAL STORES, INC.
NOTE AGREEMENT
Dated as of December 1, 1995
$30,000,000 Principal Amount
7.38% Senior Notes
Due December 28, 2020
<PAGE>
TABLE OF CONTENTS
</TABLE>
<TABLE>
<CAPTION>
PAGE
<C> <S> <C>
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT
1.1 Description of Notes 1
1.2 Commitment; Closing Date 1
SECTION 2. PREPAYMENT OF NOTES
2.1 Required Prepayments 2
2.2 Optional and Other Prepayments 2
2.3 Notice of Optional Prepayments 3
2.4 Surrender of Notes on Prepayment
or Exchange 3
2.5 Direct Payment 3
2.6 Allocation of Payments 4
2.7 Payments Due on Saturdays, Sundays
and Holidays 4
SECTION 3. REPRESENTATIONS
3.1 Representations of the Company 4
3.2 Representations of the Purchaser 10
SECTION 4. CLOSING CONDITIONS
4.1 Representations and Warranties 11
4.2 Legal Opinions 11
4.3 Events of Default 11
4.4 Payment of Fees and Expenses 11
4.5 Accountants' Letter 11
4.6 Legality of Investment 12
4.7 Private Placement Number 12
4.8 Proceedings and Documents 12
<PAGE>
SECTION 5. INTERPRETATION OF AGREEMENT
5.1 Certain Terms Defined 12
5.2 Accounting Principles. 18
5.3 Valuation Principles 18
5.4 Direct or Indirect Actions 18
SECTION 6. AFFIRMATIVE COVENANTS
6.1 Corporate Existence 19
6.2 Insurance 19
6.3 Taxes, Claims for Labor and Materials 19
6.4 Maintenance of Properties 19
6.5 Maintenance of Records 19
6.6 Financial Information and Reports 20
6.7 Inspection of Properties and Records 22
6.8 ERISA 22
6.9 Compliance with Laws 23
6.10 Acquisition of and Cancellation
of Notes 23
6.11 Private Placement Number 24
SECTION 7. NEGATIVE COVENANTS
7.1 Net Worth 24
7.2 Funded Debt 24
7.3 Fixed Charge Ratio 24
7.4 Liens 24
7.5 Merger or Consolidation 25
7.6 Sale of Assets 25
7.7 Restricted Investments 26
7.8 Change in Business 26
7.9 Transactions with Affiliates 26
7.10 Consolidated Tax Returns 26
<PAGE>
SECTION 8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1 Nature of Events 26
8.2 Remedies on Default 28
8.3 Annulment of Acceleration of Notes 29
8.4 Other Remedies 29
8.5 Conduct No Waiver; Collection Expenses 29
8.6 Remedies Cumulative 30
8.7 Notice of Default 30
SECTION 9. AMENDMENTS, WAIVERS AND CONSENTS
9.1 Matters Subject to Modification 31
9.2 Solicitation of Holders of Notes 31
9.3 Binding Effect 31
SECTION 10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE
AND REPLACEMENT
10.1 Form of Notes 31
10.2 Note Register 31
10.3 Issuance of New Notes upon Exchange
or Transfer 31
10.4 Replacement of Notes 32
SECTION 11. MISCELLANEOUS
11.1 Expenses 32
11.2 Notices 32
11.3 Reproduction of Documents 33
11.4 Successors and Assigns 33
11.5 Law Governing; Consent to Jurisdiction 33
11.6 Headings 33
11.7 Counterparts 33
11.8 Reliance on and Survival of Provisions 33
11.9 Confidential Information 33
11.10 Integration and Severability 34
<PAGE>
Annex I: Subsidiaries
Annex II: Existing Indebtedness
Annex III: Description of Liens
Annex IV: Schedule of Insurance
Annex V: Iowa Franchise Law Disclosure
Exhibit A: Form of 7.38% Senior Note, Due December 28, 2020
Exhibit B: Legal Opinions
<PAGE>
CASEY'S GENERAL STORES, INC.
NOTE AGREEMENT
Dated as of December 1, 1995
To the Purchaser Named
in Schedule I Hereto
Ladies and Gentlemen:
CASEY'S GENERAL STORES, INC., an Iowa corporation (the
"Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT
1.1 DESCRIPTION OF NOTES. The Company has authorized the
issuance and sale of $30,000,000 aggregate principal amount of
its Senior Notes (the "Notes"), to be dated the date of issuance,
to bear interest from such date at the rate of 7.38% per annum
prior to maturity, payable semi-annually on the twenty-eighth day
of June and December of each year, commencing June 28, 1996, and
at maturity, to bear interest on overdue principal (including any
overdue required or optional prepayment), premium, if any, and
(to the extent legally enforceable) on any overdue installment of
interest at the rate of 9.38% per annum, to be expressed to
mature on December 28, 2020 and to be substantially in the form
attached as Exhibit A. The term "Notes" as used herein shall
include each Note delivered pursuant to this Note Agreement (the
"Agreement") and each Note delivered in substitution or exchange
therefor and, where applicable, shall include the singular number
as well as the plural. Any reference to you in this Agreement
shall in all instances be deemed to include any nominee of yours
or any separate account or other person on whose behalf you are
purchasing Notes.
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 aggregate principal amount set forth opposite your name in
the attached Schedule I at a price of 100% of the principal
amount thereof.
<PAGE>
Delivery of and payment for the Notes shall be made at the
offices of Gardner, Carton & Douglas, 321 North Clark Street,
Quaker Tower, Chicago, Illinois 60610, at 9:00 a.m., Chicago
Time, on December 20, 1995, or at such later time or on such
later date, not later than 5:00 p.m. Chicago Time, on December
31, 1995, as may be mutually agreed upon by the Company and the
Purchaser (the "Closing Date"). The Notes will be delivered to
you in fully registered form, issued in your name or in the name
of your nominee. Delivery of the Notes to you on the Closing
Date shall be against payment of the purchase price thereof in
Federal Funds or other funds in U.S. dollars immediately
available at the principal office of Norwest Bank Iowa, National
Association, A.B.A. No. 073000228, for deposit in the Company's
Account No. 000529. If on the Closing Date the Company shall
fail to tender the Notes to you, you shall be relieved of all
remaining obligations under this Agreement. Nothing in the
preceding sentence shall relieve the Company of any liability
occasioned by such failure to deliver the Notes.
SECTION 2. PREPAYMENT OF NOTES
2.1 REQUIRED PREPAYMENTS. In addition to payment of all
outstanding principal of the Notes at maturity and regardless of
the amount of Notes which may be outstanding from time to time,
the Company shall prepay and there shall become due and payable
on the twenty-eighth day of June and December in each year
prepayment of the principal amount of the Notes in the amount of
$1,428,571.43 hereto or such lesser amount as would constitute
payment in full on the Notes, commencing December 28, 2010 and
ending June 28, 2020 inclusive, with the remaining principal
payable at maturity on December 28, 2020. Each such prepayment
shall be at a price of 100% of the principal amount prepaid,
together with interest accrued thereon to the date of prepayment.
2.2 OPTIONAL PREPAYMENTS. (a) Upon notice as provided in
Section 2.3, the Company may, at any time, prepay the Notes, in
whole or in part, at any time, in an amount of not less than
$1,000,000 or in integral multiples of $100,000 in excess thereof
at the price set forth in Section 2.2(b).
(b) Each prepayment made pursuant to paragraph (a) of this
Section 2.2 shall be at a price of (i) 100% of the principal
amount to be prepaid, plus interest accrued thereon to the date
of prepayment, if the Reinvestment Yield, on the applicable
Determination Date, equals or exceeds the interest rate payable on or in
respect of the Notes, or (ii) 100% of the principal
amount to be prepaid, plus interest accrued thereon to the date
of prepayment, plus a premium, if the Reinvestment Yield, on such
Determination Date, is less than the interest rate payable on or
in respect of the Notes. The premium shall equal (x) the
<PAGE>
aggregate present value of the amount of principal being prepaid
(taking into account the manner of application of such prepayment
required by Section 2.2(c)) and the present value of the amount
of interest (exclusive of interest accrued to the date of
prepayment) which would have been payable in respect of such
principal absent such prepayment, determined by discounting
(semi-annually on the basis of a 360-day year composed of twelve
30-day months) each such amount utilizing an interest factor
equal to the Reinvestment Yield, less (y) the principal amount to
be prepaid.
(c) Any prepayment pursuant to Section 2.2(a) of less than
all of the Notes outstanding shall be applied, to reduce, pro
rata, each of the prepayments and the final payment at maturity
required by Section 2.1.
(d) Except as provided in Section 2.1 and this Section 2.2,
the Notes shall not be prepayable in whole or in part.
2.3 NOTICE OF OPTIONAL PREPAYMENTS. The Company shall give
notice of any optional prepayment of the Notes to each holder of
the Notes not less than 30 days nor more than 60 days before the
date fixed for prepayment, specifying (i) such date, (ii) the
principal amount of the holder's Notes to be prepaid on such
date, (iii) the date as of which the premium, if any,
will be calculated and (iv) the accrued interest applicable to
the prepayment. Notice of optional prepayment having been so
given, the aggregate principal amount of the Notes specified in
such notice, together with the premium, if any, and accrued
interest thereon shall become due and payable on the prepayment
date specified in such notice.
The Company also shall give notice to each holder of the
Notes by telecopy, telegram, telex or other same-day written
communication, as soon as practicable but in any event not later
than two business days prior to the optional prepayment date, of
the premium, if any, applicable to such prepayment and the
details of the calculations used to determine the amount of such
premium.
<PAGE>
2.4 SURRENDER OF NOTES ON PREPAYMENT OR EXCHANGE. Subject
to Section 2.5, upon any partial optional prepayment of a Note
pursuant to this Section 2 or partial exchange of a Note pursuant
to Section 10.3, such Note may, at the option of the holder
thereof, (i) be surrendered to the Company pursuant to Section
10.3 in exchange for a new Note equal to the principal amount
remaining unpaid on the surrendered Note, or (ii) be made
available to the Company for notation thereon of the portion of
the principal so prepaid or exchanged. In case the entire
principal amount of any Note is prepaid or exchanged, such Note
shall, at the written request of the Company, be surrendered to
the Company for cancellation and shall not be reissued, and no
Note shall be issued in lieu of such Note.
2.5 DIRECT PAYMENT. Notwithstanding any other provision
contained in the Notes or this Agreement, the Company will pay
all sums becoming due on each Note held by you or any subsequent
Institutional Holder by wire transfer of immediately available
federal funds to such account as you or such subsequent
Institutional Holder has designated in Schedule I, or as you or
such subsequent Institutional Holder may otherwise designate by
written notice to the Company, in each case without presentment
and without notations being made thereon, except that any such
Note so paid or prepaid in full shall, at the written request of
the Company, be surrendered to the Company for cancellation. Any
wire transfer shall identify such payment in the manner set forth
in Schedule I and shall identify the payment as principal,
premium, if any, and/or interest. You and any subsequent
Institutional Holder of a Note to which this Section 2.5 applies
agree that, before selling or otherwise transferring any such
Note, you or it will make a notation thereon of the aggregate
amount of all payments of principal theretofore made and of the
date to which interest has been paid.
2.6 ALLOCATION OF PAYMENTS. If less than the entire
principal amount of all the Notes outstanding is to be paid, the
Company will prorate the aggregate principal amount to be paid
among the outstanding Notes in proportion to the unpaid
principal.
2.7 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. In
any case where the date of any required prepayment of the Notes
or any interest payment date on the Notes or the date fixed for
any other payment of any Note or exchange of any Note is a
Saturday, Sunday or a legal holiday or a day on which banking institutions
in Des Moines, Iowa are authorized by law to close, then such payment,
prepayment or exchange need not be made on such date but may be made on
the next preceding business day which is not a Saturday, Sunday or a
legal holiday or a day on which banking institutions in Des Moines, Iowa
are authorized by law to close, with the same force and effect as if made
on the due date.
<PAGE>
SECTION 3. REPRESENTATIONS
3.1 REPRESENTATIONS OF THE COMPANY. As an inducement to,
and as part of the consideration for, your purchase of the Notes
pursuant to this Agreement, the Company represents and warrants
to you as follows:
(a) CORPORATE ORGANIZATION AND AUTHORITY. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Iowa, has all requisite corporate
power and authority to own and operate its properties, to carry
on its business as now conducted and as presently proposed to be
conducted, to enter into and perform the Agreement and to issue
and sell the Notes as contemplated in the Agreement.
(b) QUALIFICATION TO DO BUSINESS. The Company is duly
licensed or qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction where
the nature of the business transacted by it or the character of
its properties owned or leased makes such qualification or
licensing necessary.
(c) SUBSIDIARIES. The Company has no Subsidiaries, as
defined in Section 5.1, except those listed in Annex I, which
correctly sets forth the jurisdiction of incorporation and the
percentage of the outstanding Voting Stock of each Subsidiary
which is owned, of record or beneficially, by the Company and/or
one or more Subsidiaries. Each Subsidiary has been duly
organized, is validly existing and is in good standing under the
laws of its jurisdiction of incorporation and is duly licensed or
qualified and in good standing as a foreign corporation in each
other jurisdiction where the nature of the business transacted by
it or the character of its properties owned or leased makes such
qualification or licensing necessary, except where the failure to
be so licensed or qualified or in good standing would not,
individually or in the aggregate, materially and adversely affect the
condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole. A list of those jurisdictions
wherein each Subsidiary is qualified to do business is set forth
in Annex I. Each Subsidiary has full corporate power and
authority to own and operate its properties and to carry on its
business as now conducted and as presently proposed to be
conducted. The Company and each Subsidiary have good and
marketable title to all of the shares they purport to own of the
capital stock of each Subsidiary, free and clear in each case of
any lien or encumbrance, and all such shares have been duly
issued and are fully paid and nonassessable.
<PAGE>
(d) FINANCIAL STATEMENTS. The balance sheet of the Company
as of April 30, 1995 and the related statements of income,
shareholders' equity and cash flows for the year ended April 30,
1995, accompanied by the report and unqualified opinion of KPMG
Peat Marwick LLP, independent certified public accountants,
copies of which have heretofore been delivered to you, were
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved
(except as otherwise noted therein) and present fairly the
financial condition and results of operations and cash flows of
the Company for and as of the end of such year. The unaudited
balance sheets of the Company (and its Subsidiaries for the
period commencing May 1, 1995) as of April 30, 1995 and October
31, 1995 and the related unaudited condensed statements of income
and cash flows for the six months ended October 31, 1994 and
October 31, 1995, copies of which have heretofore been delivered
to you, were prepared in accordance with generally accepted
accounting principles and present fairly the financial condition
of the Company (and its Subsidiaries commencing May 1, 1995) as
of such dates and the results of their operations and cash flows
for the periods then ended, subject to customary year-end
adjustments.
(e) NO CONTINGENT LIABILITIES OR ADVERSE CHANGES. Except
as disclosed in the Company's Annual Report on Form 10-K for the
year ended April 30, 1995 and in the Company's Quarterly Reports
for the quarters ended July 31, 1995 and October 31, 1995, the
Company and its Subsidiaries have no contingent liabilities which
are material to the Company and its Subsidiaries taken as a whole
other than as indicated on the financial statements described in
the foregoing paragraph (d) of this Section 3.1, and since April
30, 1995 there have been no material adverse changes in the
condition, financial or otherwise, of the Company and its Subsidiaries
taken as a whole.
(f) NO PENDING LITIGATION OR PROCEEDINGS. Except as
disclosed in the Company's Annual Report on Form 10-K for the
year ended April 30, 1995 and in the Company's Quarterly Reports
for the quarters ended July 31, 1995 and October 31, 1995, there
are no actions, suits or proceedings pending or threatened
against or affecting the Company and its Subsidiaries, at law or
in equity or before or by any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which might result, either
individually or in the aggregate, in any material adverse change
in the business, properties, operations or condition, financial
or otherwise, of the Company and its Subsidiaries taken as a
whole or on the Company's ability to perform its obligations
under this Agreement or the Notes.
<PAGE>
(g) COMPLIANCE WITH LAW. (i) Neither the Company nor any
of its Subsidiaries is: (x) in default with respect to any
order, writ, injunction or decree of any court to which it is a
named party; or (y) except as disclosed in the Company's Annual
Report on Form 10-K for the year ended April 30, 1995 and in the
Company's Quarterly Reports for the quarters ended July 31, 1995
and October 31, 1995, and in Annex V hereto, in default under any
law, rule, regulation, ordinance or order relating to the
businesses of the Company and its Subsidiaries (including, but
not limited to, its franchise arrangements), the sanctions and
penalties resulting from which defaults described in clauses (x)
and (y) might have a material adverse effect on the business,
properties, operations, assets or condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole
or on the Company's ability to perform its obligations under this
Agreement or the Notes.
(ii) Neither the Company nor any Subsidiary nor any
Affiliate of the Company is an entity defined as a "designated
national" within the meaning of the Foreign Assets Control
Regulations, 31 C.F.R. Chapter V, or for any other reason,
subject to any restriction or prohibition under, or is in
violation of, any Federal statute or Presidential Executive
Order, or any rules or regulations of any department, agency or
administrative body promulgated under any such statute or Order,
concerning trade or other relations with any foreign country or
any citizen or national thereof or the ownership or operation of
any property.
(h) PENSION REFORM ACT OF 1974. Based upon the
representations of the Purchaser set forth in Section 3.2,
neither the purchase of the Notes by you nor the consummation of
any of the other transactions contemplated by this Agreement is
or will constitute a "prohibited transaction" within the meaning
of Section 4975 of the Internal Revenue Code of 1986, as amended
(the "Code"), or Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). The Internal Revenue
Service has issued a favorable determination letter with respect
to each "employee pension benefit plan," as defined in Section 3
of ERISA, established, maintained or contributed to by the
Company (except for any Plan which is unfunded and maintained
primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees) (a
"Plan") that the same is qualified under Section 401(a) and
related provisions of the Code and that each related trust or
custodial account is exempt from taxation under Section 501(a) of
the Code. All Plans of the Company and its Subsidiaries comply
in all material respects with ERISA and other applicable laws.
There exist with respect to the Company and its Subsidiaries no
"multi-employer plans," as defined in the Multi-employer Pension
Plan Amendments Act of 1980, for which a material withdrawal or
termination liability may be incurred. There exist with respect
to all Plans or trusts established or maintained by the Company
and its Subsidiaries: (i) no material accumulated funding
deficiency within the meaning of ERISA; (ii) no termination of
any Plan or trust which would result in any material liability to
the Pension Benefit Guaranty Corporation ("PBGC") or any
<PAGE>
"reportable event," as that term is defined in ERISA, which is
likely to constitute grounds for termination of any Plan or trust
by the PBGC; and (iii) no "prohibited transaction," as that term
is defined in ERISA, which is likely to subject any Plan, trust
or party dealing with any such Plan or trust to any material tax
or penalty on prohibited transactions imposed by Section 4975 of
the Code.
(i) TITLE TO PROPERTIES. The Company and each of its
Subsidiaries has (i) good title in fee simple or its equivalent
under applicable law to all the real property owned by it and
(ii) good title to all other Property owned by it, in each case
free from all Liens except (x) those securing Indebtedness of the
Company and each of its Subsidiaries, which are listed in the
attached Annex III and (y) other Liens that would be permitted
pursuant to Section 7.4.
(j) LEASES. The Company and each Subsidiary enjoy peaceful
and undisturbed possession under all leases under which the
Company or any Subsidiary is a lessee or is operating. None of
such leases contains any provision which might materially and
adversely affect the operation or use of the property so leased.
All of such leases are valid and subsisting and the Company and
its Subsidiaries are not in default with respect to any such
leases.
(k) FRANCHISES, PATENTS, TRADEMARKS AND OTHER RIGHTS. The
Company and its Subsidiaries have all franchises, permits,
licenses and other authority necessary to carry on their
businesses as now being conducted and as proposed to be
conducted, and are not in default under any of such franchises,
permits, licenses or other authority which are material to their
business, Properties, operations or condition, financial or
otherwise of the Company and its Subsidiaries taken as a whole.
The Company and its Subsidiaries own or possess all patents,
trademarks, service marks, trade names, copyrights, licenses and
rights with respect to the foregoing necessary for the present
conduct of their businesses, without any known conflict with the
rights of others which might result in any material adverse
change in the business, Properties, operations or condition,
financial or otherwise of the Company and its Subsidiaries taken
as a whole.
(l) FRANCHISE AGREEMENTS. Except as disclosed in the
Company's Annual Report on Form 10-K for the year ended April 30,
1995 and in Annex V hereto, all franchise agreements between the
Company and its Subsidiaries and their respective franchisees are
valid and subsisting and the Company and its Subsidiaries are not
in default under any such franchise agreements.
<PAGE>
(m) STATUS OF NOTES AND SALE OF NOTES. The Agreement and
the Notes have been duly authorized on the part of the Company,
have been duly executed and delivered by an authorized officer of
the Company and constitute the legal, valid and binding
obligations of the Company, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought
in equity or at law. The sale of the Notes and compliance by the
Company with all of the provisions of this Agreement and of the Notes
(i) are within the corporate powers of the Company, (ii)
have been duly authorized by proper corporate action, (iii) are
legal, (iv) will not violate any provisions of any law or
regulation or order of any court, governmental authority or
agency and (v) will not result in any breach of any of the
provisions of, or constitute a default under, or result in the
creation of any Lien on any property of the Company or its
Subsidiaries under the provisions of, any charter document,
by-law, loan agreement or other agreement or instrument to which
the Company or its Subsidiaries is a party or by which they or
their Property may be bound.
(n) NO DEFAULTS. No event has occurred and no condition
exists which, upon the issuance of the Notes, would constitute an
Event of Default, or with the lapse of time or the giving of
notice or both would become an Event of Default, under this
Agreement. The Company and its Subsidiaries are not in default
under any charter document, by-law, loan agreement or other
material agreement or material instrument to which the Company or
any Subsidiary is a party or by which they or their Property may
be bound, nor has the Company or any Subsidiary obtained at any
time in the last 24 months any waivers with respect to any
defaults under any loan agreements or other material agreements
or instruments other than those waivers that have previously been
disclosed to the Purchaser.
(o) GOVERNMENTAL CONSENT. Neither the nature of the
Company and its Subsidiaries, their businesses or Properties, nor
any relationship between the Company, any Subsidiary and any
other Person, nor any circumstances in connection with the offer,
issue, sale or delivery of the Notes is such as to require a
consent, approval or authorization of, or withholding of
objection on the part of, or filing, registration or
qualification with, any governmental authority on the part of the
Company or any Subsidiary in connection with the execution and
delivery of this Agreement or the offer, issue, sale or delivery
of the Notes.
<PAGE>
(p) TAXES. All tax returns required to be filed by the
Company or any Subsidiary in any jurisdiction have been filed or
appropriate extensions have been filed with respect thereto, and
all taxes, assessments, fees and other governmental charges upon
the Company or any Subsidiary or upon any of their Properties,
income or franchises, which are due and payable, have been paid
timely or within appropriate extension periods or are being contested
in good faith by appropriate proceedings. The Company
does not know of any proposed additional tax assessment against
it or any Subsidiary for which adequate provision has not been
made on its books. The federal income tax liability of the
Company and its Subsidiaries has been finally determined by the
Internal Revenue Service and satisfied for all taxable years up
to and including the taxable year ended April 30, 1991 and no
controversy in respect of additional taxes due since such date is
pending or to the Company's knowledge threatened. The provisions
for taxes on the books of the Company and its Subsidiaries are
adequate for all open years and for the current fiscal period.
(q) STATUS UNDER CERTAIN STATUTES. Neither the Company nor
any Subsidiary is: (i) a "public utility company" or a "holding
company," or an "affiliate" or a "subsidiary company" of a
"holding company," or an "affiliate" of such a "subsidiary
company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended, or (ii) a "public utility" as
defined in the Federal Power Act, as amended, or (iii) an
"investment company" or an "affiliated person" thereof or an
"affiliated person" of any such "affiliated person," as such
terms are defined in the Investment Company Act of 1940, as
amended.
(r) PRIVATE OFFERING. Neither the Company nor any
Subsidiary nor any Affiliate nor agent of the Company or any
Subsidiary or any Affiliate has offered any of the Notes or any
similar security of the Company or any Subsidiary for sale to, or
solicited offers to buy any thereof from, or otherwise approached
or negotiated with respect thereto with, any prospective
purchaser other than the Purchaser, which was offered all or a
portion of the Notes at private sale for investment. Neither the
Company nor anyone acting on its authorization will offer the
Notes or any part thereof or any similar securities for issue or
sale to, or solicit any offer to acquire any of the same from,
anyone so as to bring the issuance and sale of the Notes within
the provisions of Section 5 of the Securities Act.
(s) EFFECT OF OTHER INSTRUMENTS. Neither the Company nor
any Subsidiary is bound by any agreement or instrument or subject
to any charter or other corporate restriction which materially
and adversely affects the business, properties, operations, or
condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole or the Company's ability to perform
its obligations under this Agreement or the Notes.
<PAGE>
(t) USE OF PROCEEDS. The Company will apply the proceeds
from the sale of the Notes to fund new construction and
remodeling of Company stores, including land and equipment
acquisitions for Company stores. None of the transactions
contemplated in this Agreement (including, without limitation
thereof, the use of the proceeds from the sale of the Notes) will
violate or result in a violation of Section 7 of the Exchange
Act, or any regulations issued pursuant thereto, including,
without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System (12 C.F.R., Chapter II).
Neither the Company nor any Subsidiary owns or intends to carry
or purchase any "margin stock" within the meaning of Regulation
G, and none of the proceeds from the sale of the Notes will be
used to purchase or carry or refinance any borrowing the proceeds
of which were used to purchase or carry any "margin stock" or
"margin security" in violation of Regulations G, T, U or X.
(u) CONDITION OF PROPERTY. All of the facilities of the
Company and its Subsidiaries are in sound operating condition and
repair except for facilities being repaired in the ordinary
course of business or facilities which individually or in the
aggregate are not material to the business, properties,
operations, or condition, financial or otherwise, of the Company
and its Subsidiaries taken as a whole.
(v) BOOKS AND RECORDS. The Company and each of its
Subsidiaries (i) maintains books, records and accounts in
reasonable detail which accurately and fairly reflect its
transactions and business affairs, and (ii) maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that transactions are executed in accordance with
management's general or specific authorization and to permit
preparation of financial statements in accordance with generally
accepted accounting principles.
(w) FULL DISCLOSURE. Neither the Company's Annual Report
on Form 10-K for the year ended April 30, 1995, its Quarterly
Reports on Form 10-Q for the periods ended July 31, 1995 and
October 31, 1995 and its Annual Report to Stockholders for the
year ended April 30, 1995, the financial statements referred to
in paragraph (d) of this Section 3.1, nor this Agreement, nor any
other statement or document furnished by the Company to you in
connection with the negotiation of the sale of the Notes, taken
together, contain any untrue statement of a material fact or omit
a material fact necessary to make the statements contained therein or
herein not misleading in light of the circumstances
under which they were made. There is no fact known, or which,
with reasonable diligence would be known, by the Company which
the Company has not disclosed to you in the aforementioned
documents or in writing which has a material adverse effect on
or, so far as the Company can now foresee, will have a material
adverse effect on the business, Property, operations or
condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole or the ability of the Company to
perform its undertakings under and in respect of this Agreement
and the Notes.
<PAGE>
(x) ENVIRONMENTAL COMPLIANCE. Other than as disclosed in
the Company's Annual Report on Form 10-K for the year ended April
30, 1995 and in the Company's Quarterly Reports for the quarters
ended July 31, 1995 and October 31, 1995, the Company and each of
its Subsidiaries (i) is in compliance in all material respects
with all applicable environmental, transportation, health and
safety statutes and regulations, including, without limitation,
regulations promulgated under the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., and (ii) has not
acquired, incurred or assumed, directly or indirectly, any
material contingent liability in connection with the release or
storage of any toxic or hazardous waste or substance into the
environment. Other than as disclosed in the Company's Annual
Report on Form 10-K for the year ended April 30, 1995 and in the
Company's Quarterly Reports for the quarters ended July 31, 1995
and October 31, 1995, neither the Company nor any Subsidiary has
acquired, incurred or assumed, directly or indirectly, any
material contingent liability in connection with a release or
other discharge of any hazardous, toxic or waste material,
including petroleum, on, in, under or into the environment
surrounding any property owned, used or leased by it.
(y) OUTSTANDING INDEBTEDNESS. Except as set forth in Annex
II, the Company and its Subsidiaries have no outstanding
Indebtedness. There exists no default under the provisions of
any instrument evidencing such Indebtedness or of any agreement
relating thereto.
3.2 REPRESENTATIONS OF THE PURCHASER. As an inducement to,
and as part of the Company's consideration for the sale of the
Notes pursuant to this Agreement, you represent, and in entering
into this Agreement the Company understands, that (i) you are an
Institutional Holder, (ii) you are acquiring Notes for the purpose of
investment and for your own account and not with a view to the
distribution thereof; provided that the disposition
of your property shall at all times be and remain within your
control, subject, however, to compliance with Federal and state
securities laws. You acknowledge that the Notes have not been
registered under the Securities Act or the laws of any state and
you understand that the Notes must be held indefinitely unless
they are subsequently registered under the Securities Act or an
exemption from such registration is available. You have been
advised that the Company does not contemplate registering, and is
not legally required to register, the Notes under the Securities
Act or applicable state law.
<PAGE>
You further represent that either: (i) no part of the funds
to be used by you to purchase the Notes will constitute assets
allocated to any separate account maintained by you; or (ii) no
part of the funds to be used by you to purchase the Notes will
constitute assets allocated to any separate account maintained by
you such that the application of such funds will constitute a
prohibited transaction under Section 406 of ERISA; or (iii) all
or a part of such funds will constitute assets of one or more
separate accounts 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 exceed 10% of the total
assets or are expected to exceed 10% of the total assets of such
account or accounts as of the date of such purchase and the
Company has advised you in writing that the Company is not a
party-in-interest nor are the Notes employer securities with
respect to the particular employee benefit plans disclosed to the
Company by you as aforesaid (for the purpose of this clause
(iii), all employee benefit plans maintained by the same employer
or employee organization are deemed to be a single plan). As
used herein, the terms "separate account," "party-in-interest,"
"employer securities," and "employee benefit plan" have the
meanings assigned to them in ERISA.
SECTION 4. CLOSING CONDITIONS
Your obligation to purchase the Notes on the Closing Date
shall be subject to the performance by the Company of its
agreements hereunder which are to be performed at or prior to the
time of delivery of the Notes, and to the following conditions to
be satisfied on or before the Closing Date:
4.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company contained in this Agreement or
otherwise made in writing in connection herewith shall be true
and correct on or as of the Closing Date and the Company shall
have delivered to you a certificate to such effect, dated the
Closing Date and executed by the President or the chief financial
officer of the Company.
4.2 LEGAL OPINIONS. You shall have received from Gardner,
Carton & Douglas, who is acting as your special counsel in this
transaction, and from Ahlers, Cooney, Dorweiler, Haynie, Smith &
Allbee, P.C., special counsel for the Company, their respective
opinions, dated as of such Closing Date, in form and substance
satisfactory to you and covering substantially the matters set
forth or provided in the attached Exhibit B.
<PAGE>
4.3 EVENTS OF DEFAULT. No event shall have occurred and be
continuing on the Closing Date which would constitute an Event of
Default, as defined in Section 8.1, or with notice or lapse of
time or both would become such an Event of Default, and the
Company shall have delivered to you a certificate to such effect,
dated the Closing Date and executed by the President or the chief
financial officer of the Company.
4.4 PAYMENT OF FEES AND EXPENSES. The Company shall have
paid all reasonable fees, expenses, costs and charges, including
the fees and expenses of your special counsel, incurred by you
through the Closing Date and incident to the proceedings in
connection with, and transactions contemplated by, this Agreement
and the Notes.
4.5 ACCOUNTANTS' LETTER. You shall have received a letter
from the Company's independent certified public accountants
acknowledging that you may rely on their opinion accompanying the
audited financial statements referred to in Section 3.1(d).
4.6 LEGALITY OF INVESTMENT. Your acquisition of the Notes
shall constitute a legal investment as of the Closing Date under
the laws and regulations of each jurisdiction to which you may be
subject (without resort to any "basket" or "leeway" provision
which permits the making of an investment without restriction as
to the character of the particular investment being made), and
such acquisition shall not subject you to any penalty or other
onerous condition in or pursuant to any such law or regulation.
4.7 PRIVATE PLACEMENT NUMBER. A private placement number
shall have been obtained from Standard & Poor's Corporation.
4.8 PROCEEDINGS AND DOCUMENTS. All proceedings taken in
connection with the transactions contemplated by this Agreement,
and all documents necessary to the consummation of such
transactions shall be satisfactory in form and substance to you
and your special counsel, and you and your special counsel shall
have received copies (executed or certified as may be
appropriate) of all legal documents or proceedings which you and
they may reasonably request.
SECTION 5. INTERPRETATION OF AGREEMENT
5.1 CERTAIN TERMS DEFINED. The terms hereinafter set forth
when used in this Agreement shall have the following meanings:
AFFILIATE - Any Person (other than a 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 any Subsidiary or
(iii) 5% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 5% 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
securities, by contract or otherwise.
<PAGE>
AGREEMENT - As defined in Section 1.1.
CAPITALIZED LEASE - Any lease the obligation for Rentals
with respect to which, in accordance with generally accepted
accounting principles, would be required to be capitalized on a
balance sheet of the lessee or for which the amount of the asset
and liability thereunder, as if so capitalized, would be required
to be disclosed in a note to such balance sheet.
CLOSING DATE - As defined in Section 1.2.
CODE - As defined in Section 3.1(h).
CONSOLIDATED ADJUSTED NET INCOME - For any period, the gross revenues
of the Company and its 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
any Property;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary accrued prior
to the date it became a Subsidiary;
(d) net earnings and losses of any corporation (other than
a Subsidiary), substantially all the assets of which have been
acquired in any manner by the Company or any Subsidiary, realized
by such corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other than
a Subsidiary) with which the Company or a Subsidiary shall have
consolidated or which shall have merged into or with the Company
or a Subsidiary prior to the date of such consolidation or
merger;
(f) net earnings of any business entity (other than a
Subsidiary) in which the Company or any Subsidiary has an
ownership interest unless such net earnings shall have actually
been received by the Company or such Subsidiary in the form of
cash distributions or readily marketable securities;
(g) any portion of the net earnings of any Subsidiary which
for any reason is unavailable for payment of dividends to the
Company or any other Subsidiary;
<PAGE>
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) 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;
(j) any gain arising from the acquisition of any securities
of the Company or any Subsidiary;
(k) any reversal of any contingency reserve, except to the extent
that provision for such contingency reserve shall have
been made from income arising during such fiscal period or during
the period consisting of the four consecutive fiscal quarters
immediately following the end of such fiscal period; and
(l) any other extraordinary gain.
CONSOLIDATED CURRENT LIABILITIES - The current liabilities
of the Company and its Subsidiaries determined in accordance with
generally accepted accounting principles.
CONSOLIDATED INCOME AVAILABLE FOR FIXED CHARGES - For any
period, the sum (without duplication) of (i) Consolidated
Adjusted Net Income for such period, plus (ii) (to the extent
deducted in determining Consolidated Adjusted Net Income), all
provisions for any federal, state, or other income taxes made by
the Company and its Subsidiaries during such period and (iii)
Consolidated Fixed Charges for such period.
CONSOLIDATED FIXED CHARGES - Except as provided in the
succeeding sentence, for any period, the sum of (i) interest
expense on all Indebtedness (including the interest component of
Rentals under Capitalized Leases and capitalized interest), of
the Company and its Subsidiaries on a consolidated basis for such
period plus (ii) Rentals of the Company and its Subsidiaries
under all leases other than Capitalized Leases for such period.
For purposes of the calculation set forth in the preceding
sentence, until February 1, 1996, all interest income of the
Company and its Subsidiaries, determined in accordance with
generally accepted accounting principles, earned during any
applicable period shall reduce, on a dollar for dollar basis, the
amount of interest expense described in (i) of the preceding
sentence.
CONSOLIDATED INDEBTEDNESS. All Indebtedness outstanding as
of any date of the Company and its Subsidiaries on a consolidated
basis.
CONSOLIDATED NET TANGIBLE ASSETS - The total assets of the
Company and its Subsidiaries determined in accordance with
generally accepted accounting principles minus (i) all goodwill,
trade names, trademarks, patents, organization expense,
unamortized debt discount and similar intangibles properly
classified as "intangibles" in accordance with generally accepted
accounting principles and (ii) Consolidated Current Liabilities.
<PAGE>
CONSOLIDATED TANGIBLE NET WORTH - Stockholders' equity of
the Company and its Subsidiaries on a consolidated basis,
determined in accordance with generally accepted accounting
principles less all goodwill, trade names, trademarks, patents,
organization expense, unamortized debt discount and similar
intangibles properly classified as intangibles in accordance with
generally accepted accounting principles.
CONSOLIDATED TOTAL CAPITALIZATION - The sum of (i)
Consolidated Tangible Net Worth and (ii) Consolidated
Indebtedness.
DEFAULT - An event or condition the occurrence or existence
of which would, with the lapse of time or the giving of notice or
both, become an Event of Default.
DETERMINATION DATE - The day 2 days before the date fixed
for a prepayment pursuant to a notice required by Sections 2.2(b)
or 2.3 or the day 2 days before the date of declaration pursuant
to Section 8.2.
ERISA - As defined in Section 3.1(h).
EVENT OF DEFAULT - As defined in Section 8.1.
EXCHANGE ACT - The Securities Exchange Act of 1934, as
amended, and as it may be further amended from time to time.
FUNDED DEBT - All Indebtedness owed or guaranteed which by
its terms matures more than one year from its date of creation or
which may be renewed or extended at the option of the obligor for
more than a year from such date, whether or not theretofore
renewed or extended, including current maturities of such
obligations.
GUARANTIES - All obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit
or collection) of a Person guaranteeing or, in effect,
guaranteeing any Indebtedness, dividend or other obligation, of
any other Person 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 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, or
<PAGE>
(iv) otherwise to assure the owner of the Indebtedness or obligation
against loss in respect thereof. For the purposes of all computations made
under this Agreement, a Guaranty in respect of any 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 a Guaranty 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.
INDEBTEDNESS - (i) All items of borrowed money, including
Capitalized Leases, which in accordance with generally accepted
accounting principles would be included in determining total
liabilities as shown on the liability side of a balance sheet as
of the date at which Indebtedness is to be determined, plus (ii)
all Guaranties (other than Guaranties of Indebtedness of the
Company by a Subsidiary or of a Subsidiary by the Company),
letters of credit and endorsements (other than of notes, bills
and checks presented to banks for collection or deposit in the
ordinary course of business), in each case to support
Indebtedness of other Persons.
INSTITUTIONAL HOLDER - Any bank, trust company, insurance
company, pension fund, mutual fund or other similar financial
institution, including, without limiting the foregoing, any
"qualified institutional buyer" within the meaning of Rule 144A
under the Securities Act, which is or becomes a holder of any
Note.
INVESTMENTS - All investments made, in cash or by delivery
of property, 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.
LIEN - Any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind, including any agreement to grant any
of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or
agreement to file any financing statement under the Uniform
Commercial Code of any jurisdiction in connection with any of the
foregoing.
<PAGE>
NOTEHOLDER - Any holder of a Note.
NOTES - As defined in Section 1.1.
PBGC - As defined in Section 3.1(h).
PLAN - As defined in Section 3.1(h).
PERSON - Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
PERMITTED INVESTMENTS - Any Investment consisting solely of
the following:
(a) Investments made in the ordinary course of business in
Property and assets to be used in the ordinary course of business
of the Company and its Subsidiaries;
(b) Investments in direct obligations of the United States
or any instrumentality or agency thereof the obligations of which
are fully guaranteed by the government of the United States;
(c) Investments in certificates of deposit and banker's
acceptances issued by a bank 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 corporate debt is, at the time of acquisition thereof
by the Company, accorded a rating of "A" or better by Moody's
Investors Service, Inc., or "A" or better by Standard & Poor's
Corporation;
(d) Investments in debt securities issued by any
corporation organized under the laws of the United States or any
state thereof whose long-term corporate debt is, at the time of
acquisition thereof, accorded a rating of "A" or better by
Moody's Investors Service, Inc. or "A" or better by Standard &
Poor's Corporation;
(e) Investments in commercial paper issued by any corporation
organized under the laws of the United States or any
state thereof, rated in the highest category by Moody's Investors
Service, Inc. or Standard & Poor's Corporation;
(f) Investments in money market funds registered under the
Investment Company Act of 1940 which invest in securities which,
in the aggregate, have an average rating of "A" or better (or an
equivalent) by Moody's Investors Services, Inc. or Standard &
Poor's Corporation;
(g) Investments in tax-exempt municipal obligations issued
by governmental entities located in the United States maturing
not more than one year from the date of issue and which bear at
least a "VMIG-1" by Moody's Investors Services, Inc. or "A-1" by
Standard & Poor's Corporation rating; and
<PAGE>
(h) Investments in tax-exempt municipal obligations issued
by governmental entities located in the United States maturing
more than one year from the date of issue and which bear at least
a rating of "A-" or better by Moody's Investors Services, Inc. or
"A-" or better by Standard & Poor's Corporation.
PROPERTY - Any real or personal or tangible or intangible
asset.
REINVESTMENT YIELD - The sum of (i) the yield set forth on
page "USD" of the Bloomberg Financial Markets Service at 11:00
a.m., Central Time on the Determination Date opposite the
maturity of the U.S. Treasury Security corresponding to the
Weighted Average Life to Maturity, rounded to the nearest month
(or, in the absence of availability of the Bloomberg Financial
Markets Service, the arithmetic mean of the rates, published for
the 5 business days preceding the applicable Determination Date,
in the weekly statistical release designated H.15 (519) (or any
successor publication) of the Board of Governors of the Federal
Reserve System under the caption "U.S. Government
Securities-Treasury Constant Maturities" opposite the maturity
corresponding to the Weighted Average Life to Maturity, rounded
to the nearest month) of the principal amount of the Notes to be
prepaid, plus (ii) .50 of 1% with respect to Notes to be prepaid
pursuant to Section 2.2(a) or Notes the payment of which has been
accelerated with premium pursuant to Section 8.2. If no maturity
exactly corresponding to such rounded Weighted Average Life to
Maturity shall appear therein, yields for the two most closely
corresponding published maturities (one of which occurs prior and the
other subsequent to the Weighted Average Life to Maturity)
shall be calculated pursuant to the foregoing sentence and the
Reinvestment Yield shall be interpolated from such yields on a
straight-line basis (rounding in each of such relevant periods,
to the nearest month).
RENTALS - As of the date of any determination thereof, all
fixed payments (including all payments which the lessee is
obligated to make to the lessor on termination of the lease or
surrender of the property) payable by the Company or a
Subsidiary, as lessee or sublessee under a lease of real or
personal property, but exclusive of any amounts required to be
paid by the Company or a Subsidiary (whether or not designated as
rents or additional rents) on account of maintenance, repairs,
insurance, taxes, assessments, amortization 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.
RESPONSIBLE OFFICER - Any Senior Financial Officer or any
other officer of the Company with responsibility for the
administration of the relevant portion of this Agreement.
<PAGE>
SECURITIES ACT - The Securities Act of 1933, as amended, and
as it may be further amended from time to time.
SENIOR FINANCIAL OFFICER - The chief financial officer,
principal accounting officer, treasurer or comptroller of the
Company.
SUBSIDIARY - Any corporation of which more than 50% of the
outstanding shares of Voting Stock are owned or controlled by the
Company or one or more Subsidiaries.
VOTING STOCK - Capital stock of any class of a corporation
having power to vote for the election of members of the board of
directors of such corporation, or persons performing similar
functions (whether or not at the time stock of any class shall
have or might have special voting powers or rights by reason of
the happening of any contingency).
WEIGHTED AVERAGE LIFE TO MATURITY - As applied to any
prepayment of principal of the Notes, at any date, the number of
years obtained by dividing (a) the then outstanding principal
amount of the Notes to be prepaid into (b) the sum of the products
obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity, or other
required payment, including payment at final maturity, foregone
by such prepayment by (ii) the number of years (calculated to the
nearest 1/12th) which will elapse between such date and the
making of such payment.
WHOLLY-OWNED - When applied to a Subsidiary, any Subsidiary
100% of the Voting Stock of which is owned by the Company and/or
its Wholly-Owned Subsidiaries.
Terms which are defined in other Sections of this Agreement
shall have the meanings specified therein.
5.2 ACCOUNTING PRINCIPLES. 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
generally accepted accounting principles in force at the time of
determination, except where such principles are inconsistent with
the requirements of this Agreement.
5.3 VALUATION PRINCIPLES. Except where indicated expressly
to the contrary by the use of terms such as "fair value," "fair
market value" or "market value," each asset, each liability and
each capital item of any Person, and any quantity derivable by a
computation involving any of such assets, liabilities or capital
items, shall be taken at the net book value thereof for all
purposes of this Agreement. "Net book value", with respect to
any asset, liability or capital item of any Person shall mean the
amount at which the same is recorded or, in accordance with
generally accepted accounting principles, should have been
recorded in the books of account of such Person, as reduced by
any reserves which have been or, in accordance with generally
accepted accounting principles, should have been set aside with
respect thereto, without giving effect to any write-up,
write-down or write-off, relating thereto which was made after
the date of this Agreement.
<PAGE>
5.4 DIRECT OR INDIRECT ACTIONS. 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 6. AFFIRMATIVE COVENANTS
The Company agrees that, for so long as any amount remains
unpaid on any Note:
6.1 CORPORATE EXISTENCE. The Company will maintain and
preserve, and will cause each Subsidiary to maintain and
preserve, its corporate existence and right to carry on its
business and use, and cause each Subsidiary to use, its best
efforts to maintain, preserve, renew and extend all of its
rights, powers, privileges and franchises necessary to the proper
conduct of its business; provided, however, that the foregoing
shall not prevent any transaction permitted by Sections 7.5 or
7.6.
6.2 INSURANCE. The Company will insure and keep insured at
all times all of its properties and all of its Subsidiaries'
properties which are of an insurable nature and of the character
usually insured by companies operating similar properties,
against loss or damage by fire and from other causes customarily
insured against by companies engaged in similar businesses in
such amounts as are usually insured against by such companies.
The Company also will maintain for itself and its Subsidiaries at
all times with financially sound and reputable insurers adequate
insurance against loss or damage from such hazards and risks to
the person and property of others as are usually insured against
by companies operating properties similar to the properties of
the Company and its Subsidiaries. All such insurance shall be
carried with financially sound and reputable insurers accorded a
rating of A-XII or better by A.M. Best Company, Inc.
Notwithstanding the foregoing, the Company's self-insurance
program with respect to property damage and workers compensation,
as described in Annex IV hereto, shall satisfy the requirements
of this Section 6.2. A summary of insurance presently in force
is contained in the attached Annex IV.
6.3 TAXES, CLAIMS FOR LABOR AND MATERIALS. The Company
will pay and discharge when due, and will cause each Subsidiary
to pay and discharge when due, all taxes, assessments and
governmental charges or levies imposed upon it or its property or
assets, or upon properties leased by it (but only to the extent
required to do so by the applicable lease), prior to the date on
which penalties attach thereto, and all lawful claims which, if
unpaid, might become a Lien upon its property or assets, provided that
neither the Company nor any Subsidiary shall be required to
pay any such tax, assessment, charge, levy or claim, the payment
of which is being contested in good faith and by proper
proceedings that will stay the forfeiture or sale of any property
and with respect to which adequate reserves are maintained in
accordance with generally accepted accounting principles.
6.4 MAINTENANCE OF PROPERTIES. The Company will maintain,
preserve and keep, and will cause each Subsidiary to maintain,
preserve and keep, its properties (whether owned in fee or a
leasehold interest) in good repair and working order, ordinary
wear and tear excepted, and from time to time will make all
necessary repairs, replacements, renewals and additions.
<PAGE>
6.5 MAINTENANCE OF RECORDS. The Company will keep, and
will cause each Subsidiary to keep, at all times proper books of
record and account in which full, true 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 Subsidiary, in
accordance with generally accepted accounting principles
consistently applied throughout the period involved (except for
such changes as are disclosed in such financial statements or in
the notes thereto and concurred with by the independent certified
public accountants), and the Company will, and will cause each
Subsidiary to, provide reasonable protection against loss or
damage to such books of record and account.
6.6 FINANCIAL INFORMATION AND REPORTS. The Company will
furnish to you and to any other Institutional Holder (in
duplicate if you or such other holder so request), the following:
(a) As soon as available and in any event within 60 days
after the end of each of the first three quarterly accounting
periods of each fiscal year of the Company, a consolidated
balance sheet of the Company and its Subsidiaries as of the end
of such period and consolidated statements of earnings and cash
flows of the Company and its Subsidiaries for the periods
beginning on the first day of such fiscal year and the first day
of such quarterly accounting period and ending on the date of
such balance sheet, setting forth in comparative form the
corresponding consolidated figures for the corresponding periods
of the preceding fiscal year, all in reasonable detail prepared
in accordance with generally accepted accounting principles
consistently applied throughout the period involved (except for
changes disclosed in such financial statements or in the notes thereto and
concurred with by the Company's independent certified
public accountants) and certified by the chief financial officer
or chief accounting officer of the Company (i) outlining the
basis of presentation, and (ii) stating that the information
presented in such statements presents fairly the financial
condition of the Company and its Subsidiaries and the results of
operations for the period, subject to customary year-end audit
adjustments; provided that so long as the Company shall file a
quarterly report on Form 10-Q or any similar form with the
Securities and Exchange Commission or any successor agency which
contains the information set forth in this paragraph (a) (except
that the balance sheet need not be in comparative form), the
requirements of this paragraph (a) shall be satisfied by
forwarding Form 10-Q to the holder of the Notes within such
60-day period;
<PAGE>
(b) As soon as available and in any event within 120 days
after the last day of each fiscal year a consolidated and a
consolidating balance sheet of the Company and its Subsidiaries
as of the end of such fiscal year and the related audited
consolidated and consolidating statements of earnings,
stockholders' equity and cash flows for such fiscal year, in each
case setting forth in comparative form figures for the preceding
fiscal year, all in reasonable detail, prepared in accordance
with generally accepted accounting principles consistently
applied throughout the period involved (except for changes
disclosed in such financial statements or in the notes thereto
and concurred with by independent certified public accountants)
and accompanied by a report as to the consolidated balance sheet
and the related consolidated statements of KPMG Peat Marwick LLP
or any firm of independent public accountants of recognized
national standing selected by the Company to the effect that such
financial statements have been prepared in conformity with
generally accepted accounting principles and present fairly, in
all material respects, the financial condition of the Company and
its Subsidiaries and that the examination of such financial
statements by such accounting firm has been made in accordance
with generally accepted auditing standards; provided that so long
as the Company shall file an annual report on Form 10-K or any
similar form with the Securities and Exchange Commission or any
successor agency which contains the information set forth in this
paragraph (b), the requirements of this paragraph (b) shall be
satisfied by forwarding Form 10-K to the holder of the Notes
within such 120-day period;
(c) Together with the financial statements delivered
pursuant to paragraphs (a) and (b) of this Section 6.6, a
certificate of the chief financial officer or chief accounting
officer, (i) to the effect that such officer has re-examined the
terms and provisions of this Agreement and that at the date of
such certificate, during the periods covered by such financial
reports and as of the end of such periods, the Company is not, or
was not, in default in the fulfillment of any of the terms,
covenants, provisions and conditions of this Agreement and that
no Event of Default, or event which, with the lapse of time or
the giving of notice, or both, would become an Event of Default,
is occurring or has occurred as of the date of such certificate,
during such periods and as of the end of such periods, or if the
signer is aware of any such default, event or Event of Default,
he shall disclose in such statement the nature thereof, its
period of existence and what action, if any, the Company has
taken or proposes to take with respect thereto, and (ii) stating
whether the Company is in compliance with Sections 7.1 through
7.10 and setting forth, in sufficient detail, the information and
computations required to establish whether or not the Company was
in compliance with the requirements of Sections 7.1, 7.2, 7.3,
7.4 and 7.6 during the periods covered by the financial reports
then being furnished and as of the end of such periods;
<PAGE>
(d) Together with the financial reports delivered pursuant
to paragraph (b) of this Section 6.6, a certificate of the
independent certified public accountants (i) stating that in
making the examination necessary for expressing an opinion on
such financial statements, nothing came to their attention that
caused them to believe that there is in existence or has occurred
any Event of Default hereunder, or any event (the occurrence of
which is ascertainable by accountants in the course of normal
audit procedures) which, with the lapse of time or the giving of
notice, or both, would become an Event of Default hereunder or,
if such accountants shall have obtained knowledge of any such
event or Event of Default, describing the nature thereof and the
length of time it has existed and (ii) acknowledging that holders
of the Notes may rely on their opinion on such financial
statements;
(e) Within 15 days after any vice president or internal
counsel of the Company obtains knowledge thereof, notice of any
litigation not fully covered by insurance or any governmental
proceeding pending against the Company or any Subsidiary in which
the damages sought exceed $2,000,000 or which might otherwise materially
adversely affect the business, property, operations or
condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole;
(f) As soon as available, copies of each financial
statement, notice, report and proxy statement which the Company
shall furnish to its stockholders generally; copies of each
registration statement and periodic report which the Company may
file with the Securities and Exchange Commission, and any other
similar or successor agency of the Federal government
administering the Securities Act, the Exchange Act or the Trust
Indenture Act of 1939, as amended; copies of each report relating
to the Company or its securities which the Company may file with
any securities exchange on which any of the Company's securities
may be registered; copies of any orders in any proceedings in
which a claim exceeds $2,000,000 or in which the Company's
liability may exceed $2,000,000 to which the Company or any of
its Subsidiaries is a party, issued by any governmental agency,
Federal or state, having jurisdiction over the Company or any of
its Subsidiaries; and, except at such times as the Company is a
reporting company under Section 13 or 15(d) of the Exchange Act
or has complied with the requirements for the exemption from
registration under the Exchange Act set forth in Rule 12g-3-2(b),
such financial or other information as any holder of the Notes
may reasonably determine is required to permit such holder to
comply with the requirements of Rule 144A under the Securities
Act in connection with the resale by it of the Notes;
(g) As soon as available, a copy of each other report
submitted to the Company or any Subsidiary by independent
accountants retained by the Company or any Subsidiary in
connection with any interim or special audit made by them of the
books of the Company or any Subsidiary; and
<PAGE>
(h) Such additional information as you or such other
Institutional Holder of the Notes may reasonably request
concerning the Company and its Subsidiaries.
6.7 INSPECTION OF PROPERTIES AND RECORDS. The Company will
allow, and will cause each Subsidiary to allow, any
representative of you or any other Institutional Holder, so long
as you or such other Institutional Holder holds any Note, at your
expense, to visit and inspect any of its properties, to examine
its books of record and account and to discuss its affairs,
finances and accounts with its officers and its public accountants
(and upon 24 hours notice to the Company, the Company
shall authorize such accountants to discuss with you or such
Institutional Holder its affairs, finances and accounts), all at
such reasonable times and as often as you or such Institutional
Holder may reasonably request. So long as an Event of Default or
an event which, with the passage of time or the giving of notice,
or both, would become an Event of Default has occurred and is
continuing, the Company agrees to pay the costs of any
inspections made pursuant to this Section 6.7.
6.8 ERISA. (a) The Company agrees that all assumptions and
methods used to determine the actuarial valuation, if any, of
employee benefits, both vested and unvested, under any Plan of
the Company or any Subsidiary, and each such Plan, whether now
existing or adopted after the date hereof, will comply in all
material respects with ERISA and other applicable laws.
(b) The Company will not at any time permit any Plan
established, maintained or contributed to by it or any Subsidiary
or "affiliate" (as defined in Section 407(d)(7) of ERISA) to:
(i) engage in any "prohibited transaction" as such
term is defined in Section 4975 of the Code or in Section 406 of
ERISA;
(ii) incur any "accumulated funding deficiency" as such
term is defined in Section 302 of ERISA, whether or not waived;
or
(iii) be terminated under circumstances which are
likely to result in the imposition of a lien on the property of
the Company or any Subsidiary pursuant to Section 4068 of ERISA,
if and to the extent such termination is within the control of
the Company; if the event or condition described in clauses (i),
(ii) or (iii) above is likely to subject the Company or any
Subsidiary or ERISA affiliate to a liability.
(c) Upon the request of you or any other Institutional
Holder, the Company will furnish a copy of the annual report of
each Plan (Form 5500) required to be filed with the Internal
Revenue Service. Copies of annual reports shall be delivered no
later than 30 days after the later of the date such report has
been filed with the Internal Revenue Service or the date the copy
is requested.
<PAGE>
(d) Promptly upon the occurrence thereof, the Company will
give you and each other Institutional Holder written notice of
(i) a reportable event with respect to any Plan; (ii) the
institution of any steps by the Company, any Subsidiary, any
ERISA affiliate, the PBGC or any other person to terminate any
Plan; (iii) the institution of any steps by the Company, any
Subsidiary, or any ERISA affiliate to withdraw from any Plan;
(iv) a prohibited transaction in connection with any Plan; (v)
any material increase in the contingent liability of the Company
or any Subsidiary with respect to any post-retirement welfare
liability; or (vi) the taking of any action by the Internal
Revenue Service, the Department of Labor or the PBGC with respect
to any of the foregoing which, in any of the events specified
above, would result in any material liability of the Company or
any of its Subsidiaries.
6.9 COMPLIANCE WITH LAWS. The Company will comply, and
will cause each Subsidiary to comply, with all laws, rules and
regulations relating to its or their respective businesses, other
than laws, rules and regulations the failure to comply with which
or the sanctions and penalties resulting therefrom, individually
or in the aggregate, would not have a material adverse effect on
the business, property, operations, or condition, financial or
otherwise, of the Company or such Subsidiary, and would not
result in the creation of a Lien which, if incurred in the
ordinary course of business, would not be permitted by Section
7.4 on any of the property of the Company or any Subsidiary;
provided, however, that the Company and its Subsidiaries shall
not be required to comply with laws, rules and regulations the
validity or applicability of which are being contested in good
faith by the Company or, in the case of Chapter 523H of the 1995
Code of Iowa, as amended, by other parties, and by appropriate
proceedings; provided that the failure to comply with such laws,
rules or regulations would not have a material adverse effect on
the business, properties, operations, assets or condition,
financial or otherwise, of the Company and its Subsidiaries taken
as a whole.
6.10 ACQUISITION AND CANCELLATION OF NOTES. (a) Neither the
Company nor any Subsidiary or Affiliate, directly or indirectly,
will repurchase or offer to repurchase or offer to repurchase any
Notes unless the offer is made to purchase Notes pro rata from
all holders at the same time and on the same terms.
(b) The Company will forthwith cancel any Notes in any manner or
at any time acquired by the Company or any Subsidiary
or Affiliate and such Notes shall not be deemed to be outstanding
for any of the purposes of this Agreement or the Notes.
<PAGE>
6.11 PRIVATE PLACEMENT NUMBER. The Company consents to the
filing of copies of this Agreement with Standard & Poor's
Corporation and the National Association of Insurance
Commissioners to obtain a private placement number.
SECTION 7. NEGATIVE COVENANTS
The Company agrees that, for so long as any amount remains
unpaid on any Note:
7.1 NET WORTH. The Company will not, as of the end of any
fiscal quarter, permit its Consolidated Tangible Net Worth to be
less than (a) $75,000,000 plus (b) 30% of Consolidated Net Income
(which for purposes of this clause (b) shall not be less than
zero) after January 31, 1993.
7.2 INDEBTEDNESS. The Company will not permit, as of the
end of any fiscal quarter, Consolidated Indebtedness to exceed
65% of Consolidated Total Capitalization.
7.3 FIXED CHARGE RATIO. The Company will not, as of the
end of any fiscal quarter, permit the ratio of Consolidated
Income Available for Fixed Charges to Consolidated Fixed Charges
for the twelve preceding fiscal quarters, calculated on an
aggregate basis for said period, to be less than 1.5 to 1.0.
7.4 LIENS. Neither the Company nor any Subsidiary will
cause or permit or hereafter agree or consent to cause or permit
in the future (upon the happening of a contingency or otherwise),
any of its Property, whether now owned or subsequently acquired,
to be subject to a Lien except:
(a) Liens securing the payment of taxes, assessments or
governmental charges or levies or the demands of suppliers,
mechanics, repairmen, workmen, materialmen, carriers,
warehousers, landlords and other like Persons, or similar
statutory Liens, provided that (i) such Liens do not in the
aggregate materially reduce the value of any Properties subject
to the Liens or materially interfere with their use in the
ordinary conduct of the Company's or any Subsidiaries business,
(ii) all claims which such Liens secure are not delinquent or are
being actively contested in good faith and by appropriate
proceedings and (iii) adequate reserves have been established
therefor on the books of the Company;
(b) Liens incurred or deposits made in the ordinary course
of business (i) in connection with worker's compensation,
unemployment insurance, social security and other like laws, or
(ii) to secure the performance of letters of credit, bids,
tenders, sales contracts, leases, statutory obligations, surety,
appeal and performance bonds and other similar obligations, in
each case not incurred in connection with the borrowing of money,
the obtaining of advances or the payment of the deferred purchase
price of Property otherwise than permitted by paragraph (e)
below;
<PAGE>
(c) Attachment, judgment and other similar Liens arising in
connection with court proceedings, provided that (i) execution
and other enforcement are effectively stayed, (ii) all claims
which the Liens secure are being actively contested in good faith
and by appropriate proceedings and (iii) adequate reserves have
been established therefor on the books of the Company, if
required by generally accepted accounting principles;
(d) Liens existing as of December 1, 1995, which Liens are
set forth in Annex III hereto; and
(e) Other Liens securing Indebtedness incurred after the
date hereof; provided that the Indebtedness secured by such Liens
shall not exceed the lesser of the cost or fair market value of
the Property; and provided, further, that the aggregate amount of
such Indebtedness secured by Liens permitted by this subparagraph
(e), shall not, in the aggregate, exceed twenty-five percent
(25%) of Consolidated Tangible Net Worth.
7.5 MERGER OR CONSOLIDATION. The Company will not, and
will not permit any Subsidiary to, merge or consolidate with any
other Person, except that:
(a) The Company may consolidate with or merge into any
Person or permit any other Person to merge into it, provided that
immediately after giving effect thereto,
(i) The Company is the successor corporation or, if
the Company is not the successor corporation, the successor
corporation is a corporation organized under the laws of a state of the
United States of America or the District of Columbia and
shall expressly assume in writing the Company's obligations under
the Notes and this Agreement; and
(ii) There shall exist no Event of Default or event
which, with the passage of time or giving of notice, or both,
would constitute an Event of Default;
(b) Any Subsidiary may (i) merge into the Company or
another Wholly-Owned Subsidiary or (ii) sell, transfer or lease
all or any part of its assets to the Company or to another
Wholly-Owned Subsidiary or (iii) merge into any Person which, as
a result of such merger, concurrently becomes a Subsidiary,
provided in each such instance that there shall exist no Event of
Default or event which, with the passage of time or giving of
Notice, or both, would constitute an Event of Default.
7.6 SALE OF ASSETS. During any twelve month period, the
Company will not, and will not permit any Subsidiary to, sell,
lease, transfer or otherwise dispose of any assets, in one or a
series of transactions, other than in the ordinary course of
business, to any Person, other than to the Company or a
Wholly-Owned Subsidiary (collectively a "Disposition"), if after
giving effect to such Disposition, the aggregate book value of
all Dispositions made during such twelve month period would
exceed ten percent (10%) of Consolidated Net Tangible Assets as
of the end of the immediately preceding fiscal quarter.
<PAGE>
7.7 RESTRICTED INVESTMENTS. The Company shall not, nor
shall it permit any Subsidiary to, make any Investments except
Investments in Permitted Investments which comply with each of
the following portfolio requirements:
(a) Investments in a single issuer (other than the United
States government or any agency or instrumentality thereof) shall
not exceed the greater of (i) eight percent (8%) of the amount of
total Investments of the Company and its Subsidiaries or (ii)
$2,500,000;
(b) Investments in any single money market fund permitted
by paragraph (e) of the definition of Permitted Investments shall
not exceed the greater of (i) 20% of the amount of total
Investments of the Company and its Subsidiaries or (ii)
$2,500,000;
(c) No more than 50% of total Investments of the Company
and its Subsidiaries shall mature more than one year from the
date of acquisition thereof; and
(d) No more than 25% of total Investments of the Company
and its Subsidiaries shall have maturities of 18 months to three
(3) years from the date of acquisition thereof.
Notwithstanding the foregoing, in the event that Investments of
the Company and its Subsidiaries are less than $1,000,000 in the
aggregate, the foregoing portfolio requirements as set forth in
subparagraph (a) through (d) above shall not apply.
7.8 CHANGE IN BUSINESS. Neither the Company nor any
Subsidiary (whether now existing or hereafter acquired or
organized) will engage in any business substantially different
from the business presently conducted by the Company and its
Subsidiaries.
7.9 TRANSACTIONS WITH AFFILIATES. The Company will not,
and will not permit any Subsidiary to, enter into any transaction
(including the furnishing of goods or services) with an Affiliate
except in the ordinary course of business as presently conducted
and on terms and conditions no less favorable to the Company or
such Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate.
7.10 CONSOLIDATED TAX RETURNS. The Company will not file,
or consent to the filing of, any consolidated Federal income tax
return with any Person other than a Subsidiary, except to the
extent that the Company is required under the Code to do
otherwise.
<PAGE>
SECTION 8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1 NATURE OF EVENTS. An "Event of Default" shall exist if
any one or more of the following occurs:
(a) Default in the payment of interest on any of the Notes
when due and such default shall continue for a period of three
days;
(b) Default in the payment of the principal of any of the
Notes or the premium thereon, if any, at maturity, upon acceleration of
maturity or at any date fixed for prepayment;
(c) Default shall occur (i) in the payment of the principal
of, premium, or interest on any other Indebtedness of the Company
or its Subsidiaries, aggregating in excess of $2,000,000 as and
when due and payable (whether by lapse of time, declaration, call
for redemption or otherwise), (ii) under any mortgage, agreement
or other instrument of the Company or any Subsidiary securing
such Indebtedness or under or pursuant to which such Indebtedness
aggregating in excess of $2,000,000 is issued, (iii) under any
leases other than Capitalized Leases of the Company or any
Subsidiary, with aggregate Rentals in excess of $2,000,000 or
(iv) with respect to any combination of the foregoing involving
Indebtedness and/or Rentals aggregating in excess of $2,000,000
regardless of whether such defaults would be Events of Default
hereunder, and (x) any such defaults with respect to the payment
of money shall continue, unless waived, beyond the period of
grace, if any, allowed with respect thereto and, (y) solely in
the case of any default not involving the payment of money, the
sums due thereunder shall have been accelerated and such
acceleration shall not have been annulled;
(d) Default in the observance or performance of Sections
7.1, 7.2, 7.3, 7.5, 7.6, 7.8, 7.9 and 7.10 and Section 8.7.
(e) Default in the observance or performance of any other
covenant or provision of this Agreement which default is not
remedied within 30 days after the earlier of the date (a) a
Responsible Officer of the Company knew of such default or (b) on
which written notice of such default is provided to the Company
by any Noteholder;
<PAGE>
(f) Any representation or warranty made by the Company in
this Agreement, or made by the Company in any written statement
or certificate furnished by the Company in connection with the
issuance and sale of the Notes or furnished by the Company
pursuant to this Agreement, proves incorrect in any material
respect as of the date of the issuance or making thereof;
(g) Any judgments, writs or warrants of attachment or any
similar processes individually or in the aggregate in excess of
$2,000,000 shall be entered or filed against the Company or any
Subsidiary or against any property or assets of either and remain
unpaid, unvacated, unbonded or unstayed (through appeal or
otherwise) for a period of 60 days after the Company or any
Subsidiary receives notice thereof;
(h) The Company or any Subsidiary shall incur a "Distress
Termination" (as defined in Title IV of ERISA) of any Plan or any
trust created thereunder which results in material liability to
the PBGC, the PBGC shall institute proceedings to terminate any
Plan or any trust created thereunder, or a trustee shall be
appointed by a United States District Court pursuant to Section
4042(b) of ERISA to administer any Plan or any trust created
thereunder; or
(i) The Company or any Subsidiary shall
(i) generally not pay its debts as they become due or
admit in writing its inability to pay its debts generally as they
become due;
(ii) file a petition in bankruptcy or for
reorganization or for the adoption of an arrangement under the
Federal Bankruptcy Code, or any similar applicable bankruptcy or
insolvency law, as now or in the future amended (herein
collectively called "Bankruptcy Laws"), or an answer or other
pleading admitting or failing to deny the material allegations of
such a petition or seeking, consenting to or acquiescing in
relief provided for under the Bankruptcy Laws;
(iii) make an assignment of all or a substantial
part of its property for the benefit of its creditors;
(iv) seek or consent to or acquiesce in the appointment
of a receiver, liquidator, custodian or trustee of it or for all
or a substantial part of its property;
(v) be finally adjudicated a bankrupt or insolvent;
(vi) be subject to the entry of a court order, which
shall not be vacated, set aside or stayed within 30 days from the
date of entry, appointing a receiver, liquidator, custodian or
trustee of it or for all or a substantial part of its property,
or entering of an order for relief pursuant to an involuntary
case, or effecting an arrangement in, bankruptcy or for a
reorganization pursuant to the Bankruptcy Laws or for any other
judicial modification or alteration of the rights of creditors;
or
<PAGE>
(vii) be subject to the assumption of custody or
sequestration by a court of competent jurisdiction of all or a substantial
part of its property, which custody or sequestration
shall not be suspended or terminated within 30 days from its
inception.
8.2 REMEDIES ON DEFAULT. When any Event of Default
described in paragraphs (a) through (h) of Section 8.1 has
happened and is continuing, the holder or holders of at least 25%
in principal amount of the Notes then outstanding may by notice
to the Company declare the entire principal, together with the
premium set forth below, and all interest accrued on all Notes to
be, and such Notes shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other notice
of any kind, all of which are expressly waived. Notwithstanding
the foregoing, when (i) any Event of Default described in
paragraphs (a) or (b) of Section 8.1 has happened and is
continuing, any holder may by notice to the Company declare the
entire principal, together with the premium set forth below, and
all interest accrued on the Notes then held by such holder to be,
and such Notes shall thereupon become, forthwith due and payable,
without any presentment, demand, protest or other notice of any
kind, all of which are expressly waived and (ii) where any Event
of Default described in paragraph (i) of Section 8.1 has
happened, then all outstanding Notes shall immediately become due
and payable without presentment, demand or notice of any kind.
Upon the Notes or any of them becoming due and payable as
aforesaid, the Company will forthwith pay to the holders of such
Notes the entire principal of and interest accrued on such Notes,
plus a premium in the event that the Reinvestment Yield shall, on
the Determination Date, be less than the interest rate payable on
or in respect of the Notes. Such premium shall equal (x) the
aggregate present value of the principal so accelerated and the
aggregate present value of the interest which would have been
payable in respect of such principal absent such accelerated
payment, determined by discounting (semi-annually on the basis of
a 360-day year composed of twelve 30-day months) each such amount
utilizing an interest factor equal to the Reinvestment Yield,
less (y) the principal amount to be accelerated.
8.3 ANNULMENT OF ACCELERATION OF NOTES. The provisions of
Section 8.2 are subject to the condition that if the principal of
and accrued interest on the Notes have been declared immediately
due and payable by reason of the occurrence of any Event of
Default described in paragraphs (a) through (h), inclusive, of
Section 8.1, the holder or holders of 66-2/3% in aggregate
principal amount of the Notes then outstanding may, by written instrument
furnished to the Company, rescind and annul such
declaration and the consequences thereof, provided that (i) at
the time such declaration is annulled and rescinded no judgment
or decree has been entered for the payment of any monies due
pursuant to the Notes or this Agreement, (ii) all arrears of
interest upon all the Notes and all other sums payable under the
<PAGE>
Notes and under this Agreement (except any principal, interest or
premium on the Notes which has become due and payable solely by
reason of such declaration under Section 8.2) shall have been
duly paid and (iii) each and every other Event of Default shall
have been cured or waived; 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.
8.4 OTHER REMEDIES. Subject to the provisions of Section
8.3, if any Event of Default shall be continuing, any holder of
Notes may enforce its rights by suit in equity, by action at law,
or by any other appropriate proceedings, whether for the specific
performance (to the extent permitted by law) of any covenant or
agreement contained in this Agreement or in the Notes or in aid
of the exercise of any power granted in this Agreement, and may
enforce the payment of any Note held by such holder and any of
its other legal or equitable rights.
8.5 CONDUCT NO WAIVER; COLLECTION EXPENSES. No course of
dealing on the part of any holder of Notes, nor any delay or
failure on the part of any holder of Notes to exercise any of its
rights, shall operate as a waiver of such rights or otherwise
prejudice such holder's rights, powers and remedies. If the
Company fails to pay, when due, the principal of, or the interest
on, any Note, or fails to comply with any other provision of this
Agreement, the Company will pay to each holder, to the extent
permitted by law, on demand, such further amounts as shall be
sufficient to cover the reasonable cost and expenses, including
but not limited to reasonable attorneys' fees, incurred by such
holders of the Notes in collecting any sums due on the Notes or
in otherwise enforcing any of their rights.
8.6 REMEDIES CUMULATIVE. No right or remedy conferred upon
or reserved to any holder of Notes under this Agreement is
intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to every
other right or remedy given under this Agreement or now or
hereafter existing under any applicable law. Every right and remedy
given by this Agreement or by applicable law to any holder
of Notes may be exercised from time to time and as often as may
be deemed expedient by such holder, as the case may be.
8.7 NOTICE OF DEFAULT. With respect to Events of Default
or claimed defaults, the Company will give the following notices:
(a) The Company promptly will furnish to each holder of a
Note notice in writing by registered or certified mail, return
receipt requested, of the occurrence of an Event of Default or a
Default. Such notice shall specify the nature of such default,
the period of existence thereof and what action the Company has
taken or is taking or proposes to take with respect thereto.
(b) If the holder of any Note or of any other evidence of
Indebtedness of the Company or any Subsidiary gives any notice or
takes any other action with respect to a claimed default, the
Company will forthwith give written notice to the extent of the
Company's knowledge thereof to each holder of the then
outstanding Notes, describing the notice or action and the nature
of the claimed default.
<PAGE>
SECTION 9. AMENDMENTS, WAIVERS AND CONSENTS
9.1 MATTERS SUBJECT TO MODIFICATION. 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 holder or holders of at
least 66-2/3% in aggregate principal amount of outstanding Notes;
provided, however, that, without the written consent of the
holder or holders of all of the Notes then outstanding, no such
waiver, modification, alteration or amendment shall be effective
which will (i) change the time of payment (including any required
prepayment) of the principal of or the interest on any Note, (ii)
reduce the principal amount thereof or the premium, if any, or
reduce the rate of interest thereon, (iii) change any provision
of any instrument affecting the preferences between holders of
the Notes or between holders of the Notes and other creditors of
the Company, or (iv) change any of the provisions of Section 8.1,
Section 8.2, Section 8.3 or this Section 9.
For the purpose of determining whether holders of the requisite
principal amount of Notes have made or concurred in any
waiver, consent, approval, notice or other communication under
this Agreement, Notes held in the name of, or owned beneficially
by, the Company, any Subsidiary or any Affiliate thereof, shall
not be deemed outstanding.
9.2 SOLICITATION OF HOLDERS OF NOTES. 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 the Notes (irrespective of the
amount of Notes then owned by it) shall concurrently 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. Executed or true and correct copies of any
waiver or consent effected pursuant to the provisions of this
Section 9 shall be delivered by the Company to each holder of
outstanding Notes forthwith following the date on which the same
shall have been executed and delivered by the holder or holders
of the requisite percentage of outstanding Notes. 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 the Notes as
consideration for or as an inducement to the entering into by any
holder of the Notes of any waiver or amendment of any of the
terms and provisions of this Agreement unless such remuneration
is concurrently paid, on the same terms, ratably to each holder
of the then outstanding Notes.
9.3 BINDING EFFECT. Any such amendment or waiver shall
apply equally to all 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 related thereto.
<PAGE>
SECTION 10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE
AND REPLACEMENT
10.1 FORM OF NOTES. The Notes initially delivered under
this Agreement will be in the form of two fully registered Notes
in the form attached as Exhibit A. The Notes are issuable only
in fully registered form and in denominations of at least $1,000,000
(or the remaining outstanding balance thereof, if less than $1,000,000).
10.2 NOTE REGISTER. The Company shall cause to be kept at
its principal office a register (the "Note Register") for the
registration and transfer of the Notes. The names and addresses
of the holders of Notes, the transfer thereof and the names and
addresses of the transferees of the Notes shall be registered in
the Note Register. The Company may deem and treat the person in
whose name a Note is so registered as the holder and owner
thereof for all purposes and shall not be affected by any notice
to the contrary, until due presentment of such Note for
registration of transfer as provided in this Section 10.
10.3 ISSUANCE OF NEW NOTES UPON EXCHANGE OR TRANSFER. Upon
surrender for exchange or registration of transfer of any Note at
the office of the Company designated for notices in accordance
with Section 11.2, the Company shall execute and deliver, at its
expense, one or more new Notes of any authorized denominations
requested by the holder of the surrendered Note, each dated the
date to which interest has been paid on the Notes so surrendered
(or, if no interest has been paid, the date of such surrendered
Note), but in the same aggregate unpaid principal amount as such
surrendered Note, and registered in the name of such person or
persons as shall be designated in writing by such holder. Every
Note surrendered for registration of transfer shall be duly
endorsed, or be accompanied by a written instrument of transfer
duly executed, by the holder of such Note or by his attorney duly
authorized in writing. The Company may condition its issuance of
any new Note in connection with a transfer by any Person on
compliance by the transferee with the representations required
under Section 3.2, by Institutional Holders on compliance with
Section 2.5 and on the payment to the Company of a sum sufficient
to cover any stamp tax or other governmental charge imposed in
respect of such transfer.
<PAGE>
10.4 REPLACEMENT 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, without charge to the holder thereof,
will make and deliver a new Note, of like tenor in lieu of such
lost, stolen, destroyed or mutilated Note. If any such lost, stolen or
destroyed Note is owned by you or any other Institutional Holder,
then the affidavit of an authorized officer of such owner setting forth
the fact of loss, theft or destruction and of its ownership of the 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
a written agreement of such owner (in form reasonably
satisfactory to the Company) to indemnify the Company.
SECTION 11. MISCELLANEOUS
11.1 EXPENSES. Whether or not the purchase of Notes herein
contemplated shall be consummated, the Company agrees to pay
directly all reasonable expenses in connection with the
preparation, execution and delivery of this Agreement and the
transactions contemplated by this Agreement, including, but not
limited to, out-of-pocket expenses, filing fees of Standard &
Poor's Corporation in connection with obtaining a private
placement number, charges and disbursements of special counsel,
photocopying and printing costs and charges for shipping the
Notes, adequately insured, to you at your home office or at such
other address as you may designate, and all similar expenses
(including the reasonable fees and expenses of counsel) relating
to any amendments, waivers or consents in connection with this
Agreement or the Notes, including, but not limited to, any such
amendments, waivers or consents resulting from any work-out,
renegotiation or restructuring relating to the performance by the
Company of its obligations under this Agreement and the Notes.
The Company also agrees that it will pay and save you harmless
against any and all liability with respect to stamp and other
documentary 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 or the Notes (but not in connection
with a transfer of any Notes), whether or not any Notes are then
outstanding. The obligations of the Company under this Section
11.1 shall survive the retirement of the Notes.
<PAGE>
11.2 NOTICES. Except as otherwise expressly provided
herein, all communications provided for in this Agreement shall
be in writing and delivered or sent by registered or certified
mail, return receipt requested, or by overnight courier (i) if to
you, to the address set forth below your name in Schedule I, or
to such other address as you may in writing designate, (ii) if to any other
holder of the Notes, to such address as the holder may
designate in writing to the Company, and (iii) if to the Company,
to Casey's General Stores, Inc., One Convenience Boulevard,
Ankeny, Iowa 50021, Attention: Treasurer, or to such other
address as the Company may in writing designate.
11.3 REPRODUCTION OF DOCUMENTS. This Agreement and all
documents relating hereto, including, without limitation, (i)
consents, waivers and modifications which may hereafter be
executed, (ii) documents received by you at the closing of the
purchase of the Notes (except the Notes themselves), and (iii)
financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process, and you may
destroy any original document so reproduced. The Company agrees
and stipulates that any such reproduction which is legible shall
be admissible in evidence as the original itself in any judicial
or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in
the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence; provided that nothing herein
contained shall preclude the Company from objecting to the
admission of any reproduction on the basis that such reproduction
is not accurate, has been altered or is otherwise incomplete.
11.4 SUCCESSORS AND ASSIGNS. This Agreement will inure to
the benefit of and be binding upon the parties hereto and their
respective successors and assigns.
11.5 LAW GOVERNING. This Agreement shall be governed by and
construed in accordance with the laws of the State of Iowa. No
provision of this Agreement may be waived, changed or modified,
or the discharge thereof acknowledged, orally, except by an
agreement in writing signed by the party against whom the
enforcement of any waiver, change, modification or discharge is
sought.
11.6 HEADINGS. The headings of the sections and subsections
of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11.7 COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed
an original, but all such counterparts shall together
constitute one and the same instrument, and it shall not be
necessary in making proof of this Agreeme nt to produce or
account for more than one such counterpart or reproduction
thereof permitted by Section 11.3.
<PAGE>
11.8 RELIANCE ON AND SURVIVAL OF PROVISIONS. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant to this Agreement, whether or not in
connection with a closing, (i) shall be deemed to have been relied upon
by you, notwithstanding any investigation heretofore or hereafter made by
you or on your behalf and (ii) shall survive the delivery of this
Agreement and the Notes.
11.9 CONFIDENTIAL INFORMATION. For the purposes of this
Section 11.9, "CONFIDENTIAL INFORMATION" means information
delivered to you by or on behalf of the Company or any Subsidiary
in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that
was clearly marked or labeled or otherwise adequately identified
when received by you as being confidential information of the
Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise
known to you prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by
you or any person acting on your behalf, (c) otherwise becomes
known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to
you under Section 6.6(e) that are otherwise publicly available.
You will maintain such Confidential Information in accordance
with procedures adopted by you in good faith to protect
confidential information of third parties delivered to you,
provided that you may deliver or disclose Confidential
Information to (i) your directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment
represented by your Notes), (ii) your financial advisors and
other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the
terms of this Section 11.9, (iii) any other holder of any Note,
(iv) any Institutional Investor to which you sell or offer to
sell such Note or any part thereof or any participation therein
(if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of
this Section 11.9), (v) any Person from which you offer to
purchase any security of the Company (if such Person has agreed in writing
prior to its receipt of such Confidential Information
to be bound by the provisions of this Section 11.9), (vi) any
federal or state regulatory authority having jurisdiction over
you, (vii) the National Association of Insurance Commissioners or
any similar organization, or any nationally recognized rating
agency that requires access to information about your investment
portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate, (w) to effect
compliance with any law, rule, regulation or order applicable to
you, (x) in response to any subpoena or other legal process, (y)
in connection with any litigation to which you are a party or (z)
if an Event of Default has occurred and is continuing, to the
extent you may reasonably determine such delivery and disclosure
to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this
<PAGE>
Agreement. Each holder of a Note, by its acceptance of a Note,
will be deemed to have agreed to be bound by and to be entitled
to the benefits of this Section 11.9 as though it were a party to
this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this
Agreement or requested by such holder (other than a holder that
is a party to this Agreement or its nominee), such holder will
enter into an agreement with the Company embodying the provisions
of this Section 11.9.
11.10 INTEGRATION AND SEVERABILITY. This Agreement
embodies the entire agreement and understanding between you and
the Company, and supersedes all prior agreements and
understandings relating to the subject matter hereof. In case
any one or more of the provisions contained in this Agreement or
in any Note, or application thereof, shall be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this
Agreement and in any Note, and any other application thereof,
shall not in any way be affected or impaired thereby.
<PAGE>
IN WITNESS WHEREOF, the Company and the Purchaser have
caused this Agreement to be executed and delivered by their
respective officer or officers thereunto duly authorized.
CASEY'S GENERAL STORES, INC.
By: /s/ Donald F. Lamberti
------------------------
Title: Chief Executive Officer
ATTEST:
By: /s/ John G. Harmon
--------------------
Title: Secretary
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Jon M. Davidson
--------------------
Title: Assistant Director-
Securities Investment
By: /s/ Christopher J. Henderson
----------------------------
Title: Counsel
<PAGE>
SCHEDULE I
Principal Amount of Notes to be Purchased
NAME AND ADDRESS PRINCIPAL AMOUNT
OF PURCHASER OF NOTES
Principal Mutual Life Insurance Company $30,000,000
711 High Street
Des Moines, Iowa 50392
All notices with respect to the Note, except with respect to
payment, should be sent to:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392-0800
Attn: Investment Department-Securities Division
Reference: Bond No. 1-B-60636
All notices with respect to payments on the Note should be sent
to:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392-0960
Attn: Investment Department-Accounting & Treasury
Reference: Bond No. 1-B-60636
All payments with respect to the Note are to be by bank wire
transfer of immediately available funds to:
Norwest Bank Iowa, N.A.
7th and Walnut Street
Des Moines, Iowa 50309
ABA No. 073-000-228
For credit to:
Principal Mutual Life Insurance Company
Account #014752
Reference: OBI *07*S*60636@
Tax ID #42-0127290
<PAGE>
ANNEX I
SUBSIDIARIES OF THE COMPANY
PERCENTAGE OF
VOTING STOCK
NAME OF JURISDICTION OF QUALIFIED TO OWNED BY
SUBSIDIARY INCORPORATION DO BUSINESS IN COMPANY
- ---------- --------------- -------------- --------------
Casey's Services Iowa Iowa, Illinois, 100%
Company Missouri,
Kansas, Minnesota,
Wisconsin, Indiana,
South Dakota,
Nebraska
Casey's Marketing Iowa Iowa, Missouri, 100%
Company Wisconsin,
Indiana
<PAGE>
ANNEX II
EXISTING INDEBTEDNESS*
</TABLE>
<TABLE>
<CAPTION>
PAYABLE TO AMOUNT
<S> <C>
Donald Nielsen $75,745.81
Peoples Trust Indianola $3,333,333.20
Iowa State Bank $290,884.78
Jerry D. Stone $211,178.49
Unisys Finance & Leasetec Corp. $2,096,775.32
Bank Service Department $19,621.35
Jetter $6,166.58
Sterling $1,763.34
Newman $5,681.12
Christenson $47,011.84
Douglas $95,719.05
Stewart $114,259.26
Nanco $68,848.98
Douglas $45,006.40
Carlson $98,733.29
Bank Service Department $67,899.88
Walthal $99,967.23
Walthal $95,126.02
Evans $93,755.58
King $97,600.90
Haynes $67,957.85
Haynes $67,957.85
Haynes $67,957.85
Edel-Gerlock $69,465.18
Starburst, Inc. $93,318.57
Starburst, Inc. $84,987.39
Four M. Dev. $92,411.02
Hamville, Inc. $93,413.53
Hamville, Inc. $87,838.81
Hamville, Inc. $93,413.53
Canyon Co. $90,627.23
Wagner $103,134.39
<PAGE>
Wagner $100,269.75
Carsrud, Inc. $112,074.77
Carsrud, Inc. $112,074.77
Carsrud, Inc. $112,074.77
Neymeyer $83,156.66
Stone $205,575.39
Huff $131,588.17
Huff $164,485.26
Huff $164,485.26
Huff $164,485.26
Jungman Oil $118,468.28
West Bend Serv $138,493.22
J. & V. Klemm $131,705.64
R. & D. Sellon $158,534.86
Jon Proehl $158,534.86
Jon Proehl $137,691.71
Jon Proehl $140,640.08
Casey's Ltd. $168,767.99
Casey's Ltd. $168,767.99
Casey's Ltd. $168,767.99
J. & K. Cahail $168,767.99
J. & K. Cahail $84,384.09
J. & K. Cahial $168,767.99
Doco Ltd. $164,775.01
Donald Peck $150,429.31
Demico Corp. $135,254.40
Demico Corp. $150,338.42
Sully Ent. $109,898.71
Logli $120,213.03
Principal Financial $14,353,674.96
7.70% Senior Notes $27,750,000.00
Jaak, Inc. $97,155.06
United Missouri Bank $61,294.38
United Missouri Bank $6,562,500.00
Norwest Bank Iowa $2,750,000.00
$63,645,657.65
</TABLE>
* As of November 30, 1995
<PAGE>
ANNEX III
DESCRIPTION OF LIENS*
<TABLE>
<CAPTION>
PAYABLE TO: BALANCE PROPERTY ADDRESS
<S> <C> <S>
Donald Nielsen $75,745.81 339 S. Lincoln
West Point, NE 68788
Iowa State Bank $290,884.78 110 NE 2nd Street
Earlham, Iowa 50072
State Street
Dexter, Iowa 50070
613 1st Street
Redfield, Iowa 50233
Jerry D. Stone $211,178.49 509 State Street
Guthrie Center, Iowa 50115
119 Spruce
De Soto, Iowa 50069
E. 3rd & Main
Panora, Iowa 50216
Principal $14,353,674.96 Corporate Headquarters
Financial -------------- Ankeny, Iowa 50021
$14,931,484.04
</TABLE>
* As of November 30, 1995
<PAGE>
ANNEX IV
SCHEDULE OF INSURANCE
SELF-INSURANCE
I. Workers' Compensation
- As set forth in this Annex IV, the Company self-insures
its Workers' Compensation coverage for the states of Iowa,
Missouri, and Kansas. Iowa has a $350,000 retention level and
both Missouri and Kansas have a $275,000 retention level. Excess
insurance has been purchased for each state over those retention
levels.
II. Property Coverage
- Outside of the scheduled property locations described
in this Annex IV, all Company locations are self-insured.
III. Physical Damage
- All of the physical damage to the Company's automobile
and truck fleet is self-insured.
INSURANCE SUMMARY
Attached
<PAGE>
Insurance Summary
Prepared
For
CASEY'S GENERAL STORES, INC.
Presented By:
Roger A. Hoyt, CPCU, ARM
Michael L. McCoy, CIC
Gary Nordquist, CPCU
Account Executives
LaMair-Mulock-Condon Co.
September 1995
This is a general description of the policies. It is not
intended to replace the insurance contract. Please refer to the
actual policy for contractual wording and coverage provisions.
In the event of any differences or ambiguities between the above
and the policy wording, the policy wording shall prevail.
<PAGE>
CASEY'S GENERAL STORES
NAMED INSUREDS
1. Casey's General Stores, Inc.
2. Casey's General Stores, Inc. - Construction Division and
Consolidated Building Systems, Inc.
3. Broadway Distributing Co., A Partnership
4. Tri-State Stores, Ltd.
5. Impact Stores Corp.
6. Centurion Sales Company, Inc.
7. Casey's Lease Plan Company, A Partnership
8. Amended and Restated Casey's General Stores, Inc. Employee
Profit Sharing and Stock Ownership Plan & Trust
9. Casey's Services Company
10. Casey's Marketing Company
11. The Named Insured includes all subsidiaries, affiliated,
associated, controlled or allied companies, corporation or firms
as now or hereafter constituted for which the Named Insured has
responsibility for placing insurance and for which similar
coverage is not otherwise more specifically provided. GL - AL -
WC - Aviation - Lead UL
<PAGE>
CASEY'S GENERAL STORES, INC.
Real & Personal Property
INSURANCE CO: Federal Insurance Co. (Chubb)
POLICY PERIOD: 7-1-95/96
PREMISES INSURED
Per attached schudule - Retail Stores (Items 6 through 32) on
schedule are subject to a $250,000 Deductible. All other retail
stores are self-insured.
PROPERTY COVERED
Real & Personal Property per the attached schedule. Excludes
underground tanks and their contents. Refer to policy for
additional property excluded.
AMOUNT OF INSURANCE
Per attached statement of values
Blanket Loss Limit per occurrence - $31,500,000
SUB-LIMITS
Vehicle Property Damage - $4,500,000 On Premises - Loc. 1 & 2
Only
Flood - $10,000,000 Per Occurrence and Aggregate - Loc. 1 & 2 -
Endt. #3
Flood - $1,000,000 Per Occurrence and Aggregate - Loc. 3
Earthquake - $10,000,000 Per Occurrence and Aggregate - Loc. 1 &
2 - Endt. #2
Earthquake - $1,000,000 Per Occurrence and Aggregate - Loc. 3
Newly Acquired Property - $1,000,000 Real Property 60 Days
Reporting
$ 250,000 Personal Property
Unscheduled Location - $250,000 30 Days Reporting
Transit - $100,000 Per Unit/$250,000 Per Occurrence.
$1,000 in custody salespeople or shipped by U.S. Mail -
Registered Mail Only
Exhibition Floater - $100,000
Extra Expense - $1,000,000 Ankeny Only - 50% Monthly Limitation -
Endt. #20
$ 50,000 All Other
<PAGE>
CASEY'S GENERAL STORES, INC.
Real & Personal Property (Cont.)
Accounts Receivable - $1,000,000
Valuable Papers - $1,000,000
Builders Risk - $500,000 Any one site. $100,000 In Transit -
Endt. #1
$500,000 Aggregate Per Occurrence
Debris Removal
Scheduled Locations - 20% of Loss + Deductible + $250,000
Maximum
180 Day Reporting Requirement
Unscheduled Locations - $25,000
Pollution Clean Up - $25,000 Per Occ./$50,000 Agg - 180 Day
Reporting Requirement
Consequential Loss/Service Interruption - $50,000 Direct Damage
-Endt #19
$25,000 Extra Expense Inc. 1,000,000 for Loc 1 & 2*
$1,500,000 Direct Damage at Loc. 1& 2
Including Boiler & Machinery Breakdown*
Fire Department Service Charges - $10,000
Inventory or Appraisal - $10,000
International Air Shipments - $25,000
*Correction Requested
PERILS INSURED
All Risk - Subject to exclusions, terms & conditions
COINSURANCE CLAUSE
N/A
DEDUCTIBLE -ENDT. # 18
Loc. 1-5 $ 10,000
Other Locations - Retail Stores $ 250,000
Flood & Earthquake $ 25,000
Transit & Exhibition Floater $ 5,000
Shipments via Registered Mail $ 500
Builders Risk $ 10,000
<PAGE>
CASEY'S GENERAL STORES, INC.
Real & Personal Property (Cont.)
VALUATION
EDP Hardware - Replacement Cost
EDP Software - Reproduction Cost
Valuable Papers - Reproduction Cost
Real Property - Replacement Cost Including Building Ordinance
Coverage
Finished Stock - Selling Price
Personal Property of Others - Legal Liability plus your cost of
labor & material
All Other - Replacement Cost
TERMS & CONDITIONS
1. Agreed Amount Included in Form
2. Unintentional Errors and Omissions - Included in Form
3. 90 Day Notice of Cancellation - Endt. #8
4. Broad Form Named Insured Endorsement - Endt. #18
5. Brands & Labels - Endt. #9
6. Boiler & Machinery Perils Included - Endt. #11
NOTED CONDITIONS
Non-Reporting
Contractors Equipment Exclusion - Endt. #6
Liability of Motor Carrier Exclusion - Endt. #6
Warehousmen's Liability - Endt. #6
Inflatable structure and their contents excluded - Endt. #6
Underground Tanks and their contents excluded - Endt. #6
Note Vacancy Provisions - No coverage for freezing or leakage if
heat is not maintained. No coverage for vandalism or theft if a
burglary alarm system is not maintained.
Refer to policy for further terms, conditions, exclusions &
limitations.
<PAGE>
CASEY'S GENERAL STORES
<TABLE>
<CAPTION>
LOC. DESCRIPTION BUILDING CONTENTS STOCK
<C> <S> <C> <C> <C>
1. One Convenience Blvd, $15,419,753 $6,074,723 8,411,244
Ankeny, Iowa
2. R One Convenience Blvd, Incl. in #1 Incl. Incl. in #1
Ankeny, Iowa
3. Adam Street & Commerce Rd, 215,195 226,248 265,263
Creston, Iowa
4. 1277-99 NE Broadway, 200,000 N/A N/A
Des Moines, Iowa
5. R1277-99 NE Broadway, Incl. in #4 N/A N/A
Des Moines, Iowa
* 6. 600 N. Walnut, Carroll, IA 40,000 Nil Nil
* 7. 511 23rd Ave., 40,000 Nil Nil
Council Bluffs, Iowa
* 8. Hwy 218, Nashua, IA 50658 40,000 Nil Nil
* 9. 902 Fairground, 40,000 Nil Nil
Higginsville, MO
* 10. Hwy 137, Eddyville, IA 52553 40,000 Nil Nil
* 12. 1011 E. Chaperal, 40,000 Nil Nil
Columbia, MO
* 13. 4008 W. Broadway, 129,000 Nil Nil
Columbia, MO
* 14. I-44 East Bus Loop, 40,000 Nil Nil
Mt. Vernon, MO
* 15. East Broadway & Walnut, 40,000 Nil Nil
Ashland, MO
* 16. 1430 Grant St., 65,000 Nil Nil
Bettendorf, IA
* 17. Highway 24 & B Avenue, 40,000 Nil Nil
Lewistown, IL
* 18. 2112 Main St., 40,000 Nil Nil
Lexington, MO
* 19. 1522 S 6th St., 126,500 Nil Nil
Beatrice, NE
* 20. 308 S Oak St., 146,000 Nil Nil
California, MO
* 21. 301 Main St., 146,000 Nil Nil
Steelville, MO
* 22. 826 Park, Sheldon, IA 121,800 Nil Nil
* 23. 416 N Pine St., Lennox, SD 129,000 Nil Nil
PAGE>
LOC. DESCRIPTION BUILDING CONTENTS STOCK
<C> <S> <C> <C> <C>
* 24. 102 Loren St., 130,000 Nil Nil
Washington, IL
* 25. Main St. & Hwy 20, Alden, IA 125,000 Nil Nil
* 26. 1325 Kearney Road, Nil Nil Nil
Excelsior Springs, MO
* 27. 410 W Main St., Richmond, MO Nil Nil Nil
* 28. 400 W Washington, Nil Nil Nil
Mt. Pleasant, IA
* 29. 121 Main St., Maxwell, IA 167,000 Nil Nil
30. 2860 NE 46th & Broadway, 350,000 Incl. Nil
Des Moines, IA
* 31. Casey's Suite - Hall of Fame
Knoxville Raceway, Nil $10,000 Nil
Knoxville, IA
* 32. 4560 NE 14th St., Des Moines, IA
Gena Lamberti Trust 600,000 Nil Nil
* $250,000 DEDUCTIBLE APPLIES AT LOCATIONS #6 THROUGH #32
(Except Loc 30 has a $10,000 ded.)
</TABLE>
<PAGE>
CASEY'S GENERAL STORES, INC.
Fine Arts
INSURANCE CO: Federal Insurance Co. (Chubb)
POLICY PERIOD: 7-01-95/96 POLICY #: 50514
PREMISES INSURED
Anywhere within coverage territory.
TERRITORY
Anywhere within or in transit within & between, the continental
limits of the United States of America, Hawaii, Puerto Rico and
Canada.
PROPERTY COVERED
Scheduled Fine Arts
AMOUNT OF INSURANCE
Per attached schedule
PERILS INSURED
Risk of Direct Physical Loss subject to policy terms, conditions
& exclusions.
DEDUCTIBLE
$2,500
VALUATION
Agreed Value Per Schedule
COINSURANCE
Nil
<PAGE>
CASEY'S GENERAL STORES, INC.
Fine Arts Schedule
<TABLE>
<CAPTION>
DESCRIPTION SERIAL NUMBER VALUE
<S> <C> <C>
Quantum Physics 1990 $25,000
Casey's Trio 1990 $75,000
Children Playing (Bronze) $75,000
Casey's Village (Jo Myers Walker) $25,000
Horse & Rider (Remington) $5,000
Miscellaneous Fine Arts Items $10,000
TOTAL $215,000
</TABLE>
<PAGE>
CASEY'S GENERAL STORES, INC.
General Liability
INSURANCE CO: St. Paul Fire & Marine Ins. Co.
POLICY PERIOD: 7-1-95/96
<TABLE>
<CAPTION>
LIMITS OF LIABILITY LIMITS*
<S> <C> <S>
A) Bodily Injury and Property Damage $ 750,000 Per Occurrence
B) Personal Injury & Advertising Injury $ 750,000 Per Person
C) Medical Payments $ 5,000 Per Person
D) Fire Legal $ 750,000 Per Fire
General Aggregate on A, B, C & D $ 2,750,000
Products & Completed Operations
Hazard Aggregate $ 1,750,000
</TABLE>
* Limits are excess of $250,000 SIR
SELF-INSURED RETENTION
$ 250,000 Each Event
$ 250,000 Each Person - Advertising/Personal Injury
$ 3,100,000 Aggregate Retention Combined with Auto Liability &
Workers' Compensation
(Adjustable based on 13.96% of W.C. Payroll -
$22,200,831 Estimated payroll)
SIR is satisfied by damages, additional payments & legal expenses
DEFENSE COST
Right, Not Duty - Unless St. Paul believes Total Damages,
Additional Payments and Legal Expenses are > than $250,000
then Right and Duty.
In addition to Limits
Satisfy SIR
No Pro-Rating
<PAGE>
CASEY'S GENERAL STORES, INC.
General Liability (Cont.)
SETTLEMENT AUTHORITY
1. Casey's Permission Required for all Settlements and Expenses
< than $250,000 if St. Paul believes potential Total Injury &
Damage amount will not exceed the SIR.
2. St. Paul to consult with Casey's prior to settling any suit
> than $250,000.
COVERAGES
Premises Operations
Independent Contractors
Products & Completed Operations
** Liquor Liability
** Correction Requested
SPECIAL CONDITIONS
1. General Aggregate Applies Per Location
2. Additional Insureds - Managers or Lessor's of Premises - Per
attached schedule
3. Additional Insured - Described Persons or Organization - Per
attached schedule
4. Fellow Employee - Managers & Supervisors and/or Executive
Officers - BI & PI
5. Employment Related Practices Exclusion
6. Engineer's Professional Liability Endorsement
7. Knowledge of Occurrence
8. Unintentional Failure to Disclose Hazards - Included in
General Conditions
9. 90 Day Notice of Cancellation
10. Contract Liability Endorsement - PI & AI
11. Products On Your Premises
12. Described Premises Exclusion - DMACC Store
13. Watercraft Endorsement - Owned Watercraft < than 50'
14. Broad Form Named Insured
15. Amendment of Bodily Injury Definition
<PAGE>
CASEY'S GENERAL STORES, INC.
General Liability (Cont.)
16. Employees as Protected Persons
17. Volunteer Workers included as Insured Persons
18. Wrongful Delivery at Liquid Products Liability - Change ordered
PREMIUM BASIS
Composite Rating Applies - .188/1,000 of Receipts
$ 862,650,000 Receipts
$ 162,178 Premium
$ 122,524 Minimum Premium
Refer to policy for further Terms, Conditions, Exclusion &
Limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Automobile
INSURANCE CO: St. Paul Fire & Marine Ins. Co.
POLICY PERIOD: 7-1-95/96
<TABLE>
<CAPTION>
LIMITS OF LIABILITY
<S> <C> <S>
Bodily Injury and $ 1,000,000 Each Occurrence
Property Damage Combined Single Limit
PIP Statutory
Medical Payments $ 2,000 Each Person
Uninsured/
Underinsured Motorist $ 1,000,000 Each Accident
Comprehensive No Coverage
Collision No Coverage
</TABLE>
DEDUCTIBLE
1) $250,000 Each Accident
2) $3,100,000 Aggregate Retention Combined with General
Liability & Workers' Compensation
3) Adjustable based on 13.96% of W.C. Payroll - $22,200,831
Estimated Payroll.
4) Policy Limits are Reduced by Deductible Payments.
Deductible Payments for Additional Payments will not
Reduce Policy Limits.
DEFENSE COSTS
Satisfy Deductible
Provided in Addition to Limit
<PAGE>
CASEY'S GENERAL STORES, INC.
Automobile (Cont.)
SPECIAL CONDITIONS
1) Hired and Non-Owned Auto Coverage - No Coverage for Hired
Auto Physical Damage
2) Fellow Employee Exclusion Deleted
3) Pollution Liability Broadened Coverage for Owned Autos
4) Additional Insured - UNO-Ven Company
5) 90 Day Notice of Cancellation
*6) Executive Officers as Insureds
*7) Employees as Insureds
8) Prejudgment Interest
9) Knowledge of Occurrence
10) Unintentional Failure to Disclose Hazards - Included in
General Conditions
11) Broad Form Named Insured
*12) Volunteers as Insureds
13) Gas Pump Endorsement
*Correction Requested
PREMIUM BASIS
Composite Rating Applies - 170.47/Power Unit - 250 Power Units -
$42,618 Premium
Minimum Premium - $42,212
FILLINGS
Form F - Bodily Injury & Property Damage - IL, KS, MN, NE, SD, MO, IA
MSC - 90
Refer to policy for further terms, conditions, exclusions &
limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Crime
INSURANCE CO: USF&G
POLICY PERIOD: 7-1-95/96 POLICY #: 20-0060-11-48-92-0
<TABLE>
<CAPTION>
COVERAGES LIMIT DEDUCTIBLE
<S> <C> <C>
Employee Dishonesty $ 1,000,000 $ 2,500
Money and Securities - Inside No Coverage
Money and Securities - Outside No Coverage
Forgery & Alterations No Coverage
Computer Fraud No Coverage
Computer Crime No Coverage
Kidnap & Ransom - Extortion No Coverage
</TABLE>
SPECIAL CONDITIONS
1. ERISA Compliance
2. 90 Day Notice of Cancellation
3. Applies to Ankeny corporate headquarters only.
Retail stores are self-insured
<PAGE>
CASEY'S GENERAL STORES, INC.
Aviation
INSURANCE CO: National Union Fire Ins. Co. (AIG)
POLICY PERIOD: 7-1-95/96 POLICY #: AV322-74-93-02
I. AIRCRAFT INSURED
1. 1983 Cessna 182RG FAA# N6188T
2. 1979 Citation 501 FAA# N2648X
II. APPROVED PILOTS
Cessna - Ron Lamb
Don Lamberti (Requested - Not Yet Received)
Citation - Thomas A. Holmer
III. OPEN PILOT WARRANTIES
1. Cessna - Any Pilot with a private or commercial certificate
& single engine land & instrument ratings having 750
logged pilot In command hrs. of which 100 hrs. are
logged in aircraft having retractable landing gear &
50 hrs. are logged in a Cessna 182RG model aircraft.
2. Citation - Any commercial or airline transport rated
pilot with multi-engine and instrument rating properly
certificated by the FAA having a minimum of 3,000 logged
pilot in command hours, 1,500 hours of which have been
in multi-engine aircraft, 500 hours in turbine powered
aircraft, including not less than 100 hours in Cessna
Citation 501 model aircraft and has successfully
completed a full motion type simulator based training
school for the make and model aircraft insured.
<PAGE>
CASEY'S GENERAL STORES, INC.
Aviation (cont.)
IV. BODILY INJURY & PROPERTY DAMAGE LIABILITY, MEDICAL
PAYMENTS
A)* Limits - Bodily Injury & Property Damage -
Including Passengers: $10,000,000 Each Occurrence
Medical Payments - Including Crew: $ 3,000 Each Person
$12,000 Each Occurrence - Cessna
$21,000 Each Occurrence - Citation
B) Deductibles: Nil
C) Usage - Business & Pleasure - No Hired Charters Allowed.
Reimbursement of Expenses Permitted.
* Correction Ordered
V. PHYSICAL DAMAGE
A. HULL VALUE
1. Cessna 182RG - Self-Insured
2. Citation 501 - $1,475,000
B. PERILS INSURED
1. All-Risk, Not in Motion
C. VALUATION
1. Partial loss - Cost to repair with material of like
kind & quality. Excluding overtime labor plus the cost of the
least expensive means of transporting the replacement parts.
2. Total loss - The Insured Hull Value
<PAGE>
CASEY'S GENERAL STORES, INC.
Aviation (cont.)
D. COINSURANCE
Nil
E. DEDUCTIBLE
$500 - Nil
F. NON-OWNED PHYSICAL DAMAGE
Not Included
V. ENDORSEMENTS BROAD COVERAGE ENDT
* Non-Owned Liability Territory - Western Hemisphere -
Employees as Insureds Premises excl. Cuba -
Premises Liability
* Fellow Employee Baggage - 5,000 - Excl. Charter/Air
Taxi
* Contractual Liability Hangors - 100,000
* Foreign Coverage Products
* Personal Injury S & R - 25,000
* Guest Voluntary Settlement Foam - 2,500
* Breach of Warranty Auto Inc. Hull - 25%, 2,000,000 max.
* Waiver of Subrogation 30 day notice
Broad Form Named Insured Airworthiness Cert. Excl. deleted
60 Day Notice of Cancellation Unearned Premium & Physical Damage
* Time Element Total Loss
Excl. Charter/ Air Taxi
* Corrections Requested
Refer to policy for further terms, conditions, exclusions &
limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Workers' Compensation
INSURANCE CO: St. Paul Fire & Marine Ins. Co.
POLICY PERIOD: 7-1-95/96
COVERAGE A
Statutory - In the states of IL, MN, NE, & SD
COVERAGE B - EMPLOYER'S LIABILITY
$ 1,000,000 Each Accident
$ 1,000,000 Disease - Policy Limit
$ 1,000,000 Disease - Each Employee
EXPERIENCE MODIFICATION
1.87 - Preliminary
ENDORSEMENTS
Foreign Coverage Endorsement
Notification of Change in Ownership Endorsement
USL&HW
Voluntary Comp.
FELA
Broad Form Named Insured Endorsement
90 Days Notice of Cancellation
Ohio Employers Liability Endorsement
Stop Gap Employers Liability - NV, ND, WA, WV, WY & OH
Knowledge of Occurrence
Deletion of Employers Liability Exclusion for membert of Flying
Crew
PREMIUM BASIS
Per the attached schedule
<PAGE>
CASEY'S GENERAL STORES, INC.
Workers' Compensation (cont'd)
DEDUCTIBLE
$ 500,000 Each Occurrence
$ 500,000 Each Claim for Disease
$3,100,000 Aggregate Retention Combined with Auto Liability &
General Liability (Adjustable based on 13.96% of W.C.
Payroll - 22,200,831 Estimated payroll)
Deductible is applicable to Claim Settlement & Allocated Loss
Adjustment Expense.
Refer to policy for further terms, conditions, exclusions &
limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Workers' Compensation Schedule
<TABLE>
<CAPTION>
CLASSIFICATION CLASS CODE PAYROLL
<S> <C> <C>
Illinois
Electric Wiring -
Within Building & Drivers 5190 $ 200,210
Contractor-Executive Supervisor
Construction Superintendant 5606 $ 184,309
Drivers, Chauffeurs and their
Helpers Noc 7380 $ 490,900
Grocery Dealer - Retail & D 8006 $ 14,900,904
Salespersons - Outside 8742 $ 810,658
Minnesota
Electric Wiring - Within Building
& Drivers 5190 $ 35,423
Drivers, Chaufeurs and their
Helpers Noc 7380 $ 34,900
Grocery Dealer - Retail & D 8006 $ 1,725,623
Salespersons - Outside 8742 $ 125,090
Nebraska
Drivers, Chaufeurs and their
Helpers Noc 7380 $ 55,000
Grocery Dealer - Retail & D 8006 $ 2,001,024
Salespersons - Outside 8742 $ 99,604
<PAGE>
CASEY'S GENERAL STORES, INC.
Workers' Compensation Schedule (con't)
CLASSIFICATION CLASS CODE PAYROLL
South Dakota
Electric Wiring - Within Building
& Drivers 5190 $ 43,942
Grocery Dealer - Retail & D 8006 $ 1,320,620
Salespersons - Outside 8742 $ 172,624
</TABLE>
<PAGE>
CASEY'S GENERAL STORES, INC.
Excess Workers' Compensation
INSURANCE CO: National Union Fire Ins. Co.
POLICY PERIOD: 7-1-95/96 POLICY #: 415 66 67
LIMITS OF LIABILITY
Workers' Compensation - Statutory
Employers' Liability - $1,000,000 Each Accident
$1,000,000 Policy Aggregate - Disease
(Including Defense Costs)
SELF-INSURED RETENTION
Specific Excess - Iowa - Each Accident $350,000
Disease - Each Employee $350,000
KS/MO - Each Accident $275,000
Disease - Each Employee $275,000
Aggregate Excess - Not Applicable - No Aggregate Coverage
RATE
0.100/100 of payroll, Minimum Premium - $58,000
STATES INSURED
IA, KS, & MO
OTHER STATES COVERAGE
No Coverage
USL&HW
No Coverage
OTHER FEDERAL ACTS
No Coverage
<PAGE>
CASEY'S GENERAL STORES, INC.
Excess Workers' Compensation (Cont.)
VOLUNTARY COMPENSATION
Coverage Included
DEFENSE COST
1. Right, not Duty to Defend
2. Defense cost satisfy retention & are included within limits
3. Defense cost includes Allocated Loss Adjustment Expense.
CLAIM REPORTING REQUIREMENTS
50% of SIR or Scheduled Injury
PAYMENT BASIS
Indemnity
AIRCRAFT COVERAGE
Limited to scheduled aircraft only:
* 1987 Piper Malibu
1983 Cessna 182RG
1979 Citation 501
60 Day Notice Required for Newly Acquired Aircraft.
* Deletion of the Malibu requested not yet received
CANCELLATION
90 Days Notice
NOTED CONDITIONS
Refer to policy for further terms, conditions, exclusions &
limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Lead Umbrella Liability
INSURANCE CO: National Union Fire Ins. Co.
POLICY PERIOD: 7-1-95/96 POLICY #: BE309-41-73
<TABLE>
<CAPTION>
LIMITS OF LIABILITY
<C> <S>
$ 25,000,000 Each Occurrence
25,000,000 P/CO Aggregate
25,000,000 General Aggregate - Not incl. Auto Liab.
</TABLE>
RETENTION LIMIT
$10,000
RATE
Flat Charge
SPECIAL CONDITIONS
Pollution Exclusion
Cross Suits Endorsement
MCS 90 Endorsement
90 Day Notice of Cancellation
Broad Form Named Insured
Refer to policy for further terms, conditions, exclusions &
limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Lead Umbrella Liability
* Required Underlying Limits
<TABLE>
<CAPTION>
AUTO LIABILITY
<S> <C> <C>
$ 1,000,000 CSL
GENERAL LIABILITY
Each Occurrence: 750,000 X/S 250,000 SIR
PI & AI: 750,000 X/S 250,000 SIR
P. & CO. Aggregate: 1,750,000 X/S 250,000 SIR
General Aggregate: 2,750,000 X/S 250,000 SIR
Liquor Liability: 750,000 X/S 250,000 SIR
EMPLOYERS LIABILITY
IL, MN, NE & SD
Each Accident: 1,000,000
Disease - Each Employee: 1,000,000
Disease - Policy Aggregate: 1,000,000
* EMPLOYERS LIABILITY
IA, KS, MO
Each Accident: 1,000,000
Disease - Policy Aggregate: 1,000,000
AVIATION LIABILITY
Each Occurrence: 10,000,000 CSL
</TABLE>
* Correction requested
<PAGE>
CASEY'S GENERAL STORES, INC.
Excess Umbrella Liability
INSURANCE CO: Cincinnati Insurance Co.
POLICY PERIOD: 7-1-95/96 POLICY #: EXL 4383722
LIMITS OF LIABILITY
$ 25,000,000 Each Occurrence
$ 25,000,000 Aggregate - As defined by the Lead
Umbrella Policy
REQUIRED UNDERLYING LIMITS OF LIABILITY
Lead Umbrella Liability $ 25,000,000 Per Occurrence
$ 25,000,000 Annual Aggregate
RATE
Flat Charge
SPECIAL CONDITIONS
1. Absolute Pollution Exclusion
* 2. 90 Day Notice of Cancellation
Refer to policy for further terms, conditions, exclusions &
limitations.
* Correction Requested
<PAGE>
CASEY'S GENERAL STORES, INC.
Fiduciary Liability
INSURANCE CO: Cincinnati Ins. Co.
POLICY PERIOD: 10-1-93/96
NAMED INSURED
1. Sole Sponsor of Designated Plan's
2. Past, present or future directors, officers or employees of
the sole sponsor while acting as fiduciary
3. Estates, heirs and legal reprsentatives of #2 above
LIMITS OF LIABILITY
1. Trustee & Fiduciary Liability - $5,000,000 per claim & aggregate
2. Employee Benefit Liability - Included
SIR/DEDUCTIBLE
- - 0 -
DESIGNATED PLANS
1. Casey's General Stores, Inc. 401K Plan
2. Casey's General Stores, Inc. Employee Stock Ownership Plan - ESOP
3. Casey's General Stores, Inc. Group Health Insurance Plan
4. Casey's General Stores, Inc. Company Paid $10,000 Term Life
Insurance Plan
5. Casey's General Stores, Inc. Company Paid $50,000 Term Life
Insurance Plan
6. Casey's General Stores, Inc. Company Flexible Spending Program
7. Casey's General Stores, Inc. Company Long Term Disability Plan
RETROACTIVE DATE
Not Applicable. Excludes Wrongful Acts committed prior to policy
inception date of which the insureds have knowledge.
DISCOVERY PERIOD
12 months - 30% additional premium - Insurers cancellation or
non-renewal.
<PAGE>
CASEY'S GENERAL STORES, INC.
Fiduciary Liability (Cont.)
OMNIBUS ENDORSEMENT
Not included. Includes all future plans subject to 60 day
written notice.
NON-PECUNIARY DAMAGES
Silent
WAIVER OF RECOURSE
Silent
DEFENSE COST
Included within Limits
Right not Duty
SPECIAL CONDITIONS
Financial Review Endorsement
20% Civil Penalty Endorsement
90 Day Notice of Cancellation
30 Day Notice Required - Reporting of Claims
Discovery Period Included
Non-Imputation - Exclusions Only
Amendatory Endorsement - Bill Walljasper as Ins. rep.
Refer to policy for further terms, conditions, exclusions &
limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Directors & Officers Liability
INSURANCE CO: Cincinnati Ins. Co.
POLICY PERIOD: 10-1-95/96
NAMED INSURED
1. Casey's General Stores, Inc.
2. All subsidiaries of which Casey's owns in excess of 50% of
the stock.
3. Newly Acquired/Created Subsidiaries - 60 Day Notice
4. Past, current & future Directors & Officers of the above.
LIMITS OF LIABILITY
1. Directors & Officers Liability - $10,000,000 Per Claim &
Aggregate
2. Company Reimbursement - Included
RETENTION
Per Director or Officer - 0 per loss
Maximum all Directors or Officers - 0 aggregate
Corporate Reimbursement - $100,000 per loss
COINSURANCE
None
RETROACTIVE DATE
None - Application warrants no known claims - excepting specific
matter exclusion.
DISCOVERY PERIOD
90 Days - 30% additional premium - Insurer cancellation or
non-renewal
DEFENSE COST
Included within Limits
Right vs. Duty
<PAGE>
CASEY'S GENERAL STORES, INC.
Directors & Officers Liability (con't)
SPECIAL CONDITIONS
1. ERISA Exclusion
2. Failure to Maintain Insurance Exclusion
3. Insured vs. Insured Exclusion - Exception for Wrongful Discharge
4. Specific Matter Exclusion
5. Additional Insureds - Bill Walljasper, Doug Beech, Eli
Wirtz, Sam Billmeyer and Julie Jackowski
6. 90 Day Notice of Cancellation
7. Pollution Exclusion - Absolute
Refer to policy for further terms, conditions, exclusions & limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Schedule of Additional Insureds
Additional Insured - Managers or Lessors of Premises
1) Jerry D. Stone
Route 1 - Box 109
Earlham, IA 50072
2) Richard and/or Dorothy Sellon
1941 South 21st Street
Rogers, AR 72756
3) J & B Stores, Inc.
<PAGE>
CASEY'S GENERAL STORES, INC.
Schedule of Additional Insureds
Additional Insured - Designated Person or Organization
1) Clark Oil & Refining 2) Clark Oil & Refining Corp.
P.O. Box 81 8182 Maryland Avenue
Hartford, IL 62048 St. Louis, MO 63105-3721
3) Clark Oil & Refining 4) Edward L. Huss
7022 S. Silco Lane 304 Sugar Creek Cr.
Bartonville, IL 61607 Perry, IA 50220
5) J & B Stores, Inc. 6) John E. Proehl, Inc.
5238 NW 2nd Avenue P.O. Box 215
Des Moines, IA 50313 Westbrook, MN 56183
7) M D Haynes 83 Revocable Trust 8) Martin Oil
D K Haynes 83 Revocable Trust Marketing Ltd.
4202 Arizona Circle P.O. Box 298
Ames, IA 50010 Blue Island, IL 60406
9) Sinclair Oil Corporation 10) Jerry D. Stone
3401 Fairbanks Avenue 300 Walnut - #158
P.O. Box 6247 Des Moines, IA 50309-2243
Kansas City, MO 66106
11) The UNO-VEN Co. an IL General 12) Western Petroleum Company
Partnership 9531 West 78th Street
3850 W. Wilke Road Eden Prairie, MN 55344
Arlington Heights, IL 60004
13) City of Ames 14) City of Columbia
Ames, IA 50010 701 East Broadway
Columbia, MO 65201
<PAGE>
CASEY'S GENERAL STORES, INC.
Schedule of Additional Insureds (con't)
Additional Insured - Designated Person or Organization
15) City of Greenville 16) City of Taylorville
Municipal Corp Office of City Clerk
% Tom Mier - City Attorney 115 North Main
315 West College Avenue Taylorville, IL 62568
17) Koch Refining Company 18) Village of Tampico
4100 Elm Street 104 W. Market Street
Bettendorf, IA 52722-6429 Tampico, IL 61283-0217
19) Don Peck 20) Westinghouse Credit Corp.
21) Sinclair Oil Terminal
Box 1446
Fort Madison, IA 52627
<PAGE>
CASEY'S GENERAL STORES, INC.
Schedule of Additional Insureds
Additional Insured - Lessor
1) Effingham Truck Sales, Inc. All Leased or Rented Vehicles
Box 840
Effingham, IL 62401
2) Gelco Truck Leasing All Hired, Borrowed or Leased
Gelco & Subsidiaries Vehicles
P.O. Box 1044
Chesterfield, MO 63006-1044
3) National Lease of KS City, All Hired, Borrowed or Leased
Inc. Vehicles
P.O. Box 2346
Kansas City, KS 66110
4) Ruan Leasing All Hired, Borrowed or Leased
1800 East 18th Vehicles
Des Moines, IA 50316
5) Ruan Leasing Company All Hired, Borrowed or Leased
706 West Tampa Vehicles
Springfield, MO 65802
6) Ryder Commercial Leasing All Hired, Borrowed or Leased
& Service Vehicles
P.O. Box 419585
Kansas City, MO 64141
7) Ryder Tryck Rental All Hired, Borrowed or Leased
P.O. Box 419585 Vehicles
Kansas City, MO 64141
8) Stepco Leasing, Ltd. All Hired, Borrowed or Leased
22570 W. Hwy 60
Grayslake, IL 60030
<PAGE>
CASEY'S GENERAL STORES, INC.
Schedule of Additional Insureds (con't)
Additional Insured - Lessor
9) Transport International Pool All Hired, Borrowed or Leased
465 N.E. 45th Place Vehicles
Des Moines, IA 50313
10) The UNO-VEN Co. All Hired, Borrowed or Leased
an IL General Vehicles
Partnership
3850 West Wilke Road
Arlington Heights, IL 60004
11) Leasetec Corporation Equipment and All Hired, Borrowed
1401 Pearl Street or Leased Vehicles
Boulder, CO 80302
12) Ryder Truck Rental, Inc. All Hired, Borrowed or Leased
2001 Eagle Road Vehicles
Normal, IL 61761
<PAGE>
ANNEX V
IOWA FRANCHISE LAW DISCLOSURE
During the 1992 legislative session, the Iowa General
Assembly enacted legislation relating to franchise agreements and
their enforcement and establishing certain duties and limitations
on franchisors. The legislation, currently set forth in Chapter
523H, Code of Iowa, 1995, as amended ("Chapter 523H"), became
effective on July 1, 1992, and purports to apply to all new or
existing franchises that are operated in the State of Iowa after
the effective date, including those of the Company. Subsequent
judicial rulings in cases brought by other Iowa franchisors have
held, however, that Chapter 523H does not apply to any franchises
entered into prior to its July 1, 1992 effective date.
As of December 1, 1995, the Company was a party to 89
franchise agreements entered into with respect to Casey's stores
being owned and operated by franchisees in the State of Iowa. Of
that number, only 2 of the franchise agreements were entered into
following the effective date of Chapter 523H (the "Covered
Franchises"); the remainder were all entered into prior to July
1, 1992. Certain provisions of the Covered Franchises conflict
with the provisions of Chapter 523H. As such, certain
contractual provisions of the Covered Franchises, including those
relating to transfer, termination or non-renewal and
encroachment, may not be valid or enforceable under Chapter 523H.
1. Chapter 523H includes the following provisions, among
others, regarding the transfer of a franchise:
a. A franchisee may transfer a franchise business,
provided that the transferee satisfies the reasonable current
qualifications of the franchisor for new franchisees. A
reasonable current qualification for a new franchisee is a
qualification ba se d upon a legitimate business reason. If the
proposed transferee does not meet the reasonable current qualifications of
the franchisor, the franchiser may refuse to permit the transfer,
provided that the refusal of the franchisor to consent to the transfer
is not arbitrary or capricious.
b. A franchisee may transfer the franchisee's interest in a
franchise, for the unexpired term of the franchise agreement, and a
franchisor shall not require the franchisee or the transferee to
enter into a new or different franchise agreement as a condition
of the transfer.
<PAGE>
c. A franchisor shall not transfer its interest in a
franchise unless the franchisor makes reasonable provision for
the performance of the franchisor's obligations under the
franchise agreement by the transferee.
d. A franchisor, after a transfer of a franchise, shall
not seek to enforce any covenant of the transferred franchise
against the transferor which prohibits the transferor from
engaging in any lawful occupation or enterprise, except for the
enforcement of a contractual covenant against the transferor not
to exploit the franchisor's trade secrets or intellectual
property rights.
e. The following occurrences shall not be considered
transfers requiring the consent of the franchisor under a
franchise agreement:
1. The succession of ownership of a franchise upon
the death or disability of a franchisee or the owner of a
franchise, to the surviving spouse, heir or a partner active in
the management of the franchisee.
2. Incorporation of a proprietorship franchisee.
3. A transfer within an existing ownership group of a
franchise provided that more than fifty percent of the franchise
is held by persons who meet the franchisor's reasonable current
qualifications for franchisees.
4. A transfer of less than a controlling interest in
the franchise to the franchisee's spouse or child or children,
provided that more than fifty percent of the entire franchise is
held by those who meet the franchisor's reasonable current
qualifications.
5. A transfer of less than a controlling interest in the
franchise to an employee stock ownership plan, or employee
incentive plan, provided that more than fifty percent of the
entire franchise is held by those who meet the franchisor's
reasonable current qualifications for franchisees.
6. A grant or retention of a security interest in the
franchised business or its assets, or an ownership interest in
the franchisee.
<PAGE>
2. Chapter 523H imposes a requirement for good cause in
terminations of franchises prior to the expiration date of the
franchise agreement. Good cause is defined to be cause based
upon a legitimate business reason, and includes the failure of a
franchisee to comply with any material lawful requirement of the
franchise agreement, provided that the termination by the
franchisor is not arbitrary or capricious. Chapter 523H further
provides that a franchisor may terminate a franchise upon written
notice and without an opportunity to cure under the following
circumstances:
a. The franchisee or the business to which the
franchise relates is declared bankrupt or judicially determined
to be insolvent.
b. All or a substantial part of the assets of the
franchise or the business to which the franchise relates are
assigned to or for the benefit of any creditor.
c. The franchisee voluntarily abandons the franchise.
d. The franchisor and franchisee agree in writing to
terminate the franchise.
e. The franchisee knowingly makes any material
misrepresentations or knowingly omits to state any material facts
relating to the acquisition or ownership or operation of the
franchise business.
f. After three material breaches of a franchise
agreement occurring within a twelve-month period, for which the
franchisee has been given notice and an opportunity to cure, the
franchisor may terminate upon any subsequent material breach
within the twelve-month period without providing an opportunity
to cure, provided the action is not arbitrary and capricious.
g. The franchised business or business premises of
the franchisee are lawfully seized, taken over, or foreclosed by
a government authority or official.
h. The franchisee is convicted of a felony or any
other criminal misconduct which materially and adversely affects
the operation, maintenance or goodwill of the franchise.
i. The franchisee operates the franchised business in
a manner that imminently endangers the public health and safety.
3. Chapter 523H further provides that a franchisor shall
not refuse to renew a franchise unless the franchisee has been
notified of the franchisor's intent at least six months prior to
the expiration date and one of the following circumstances exist:
<PAGE>
a. Good cause exists for termination (defined as
"cause based on a legitimate business reason").
b. The franchisor and franchisee agree not to renew
the franchise.
c. The franchisor completely withdraws from directly
or indirectly distributing its products or services in the
geographic market served by the franchisee.
4. Chapter 523H further provides that if a franchisor
develops, or grants to a franchisee the right to develop, a new
outlet or location which sells essentially the same goods or
services under the same trademark, service mark, trade name, logo
type or other commercial symbol as an existing franchisee and the
new outlet or location has an adverse effect on the gross sales
of the existing franchisee's outlet or location, the existing
adversely affected franchisee has a cause of action for monetary
damages (limited to no more than three years of proven loss
profits attributable to certain compensable sales), unless any of
the following apply:
(a) The franchisor has first offered the new outlet or
location to the existing franchisee on the same basic terms and
conditions available to the other potential franchisee, or, if
the new outlet or location is to be owned by the franchisor, on
the terms and conditions that would ordinarily be offered to a
franchisee for a similarly situated outlet or location.
(b) The adverse impact on the existing franchisee's
annual gross sales, based on a comparison to the annual gross
sales from the existing outlet or location during the
twelve-month period immediately preceding the opening of the new
outlet or location, is determined to have been less than five
percent during the first twelve months of operation of the new
outlet or location.
(c) The existing franchisee, at the time the
franchisor develops, or grants to a franchisee the right to
develop, a new outlet or location is not in compliance with the
franchisor's then current reasonable criteria for eligibility for
a new franchise.
(d) The franchisor has established that it has (i) a
formal procedure for hearing and acting upon claims by an
existing franchisee with regard to a decision by the franchisor
to develop, or grant to a franchisee the right to develop, a new
outlet or location prior to the opening of the same and (ii) a
reasonable formal procedure for awarding compensation or other
form of consideration to a franchisee to offset all or a portion
of the franchisee's loss profits caused by the establishment of
the new outlet or location.
<PAGE>
Chapter 523H was amended during the 1995 legislative
session, but several significant ambiguities and concerns remain.
As a result, the Company recently determined not to grant any new
Iowa franchises until further amending legislation is enacted or
other favorable court rulings are rendered. Until that time, the
Company intends to take such further actions as its existing Iowa
franchise agreements may permit. Such actions have included the
continuation of a number of existing Iowa franchise agreements
beyond their stated term on a year-to-year basis, to the extent
provided in the franchise agreement, but without prejudice to the
Company's other rights contained therein. It is the Company's
position that such an extension does not represent a new
"franchise" within the meaning of Chapter 523H, but there are no
provisions in Chapter 523H which expressly so state, nor have
there been any judicial rulings directly addressing that
interpretation. To the extent such an extension is determined to
constitute a new franchise subject to Chapter 523H, the
legislation may preclude the enforcement of those provisions of
the franchise agreement that conflict therewith.
<PAGE>
EXHIBIT A
CASEY'S GENERAL STORES, INC.
7.38% SENIOR NOTE
Due December 28, 2020
______________
THIS NOTE MAY BE SUBJECT TO A HOME OFFICE PAYMENT AGREEMENT
AND ACCORDINGLY ANY PROSPECTIVE PURCHASER SHOULD FIRST VERIFY THE
UNPAID PRINCIPAL AMOUNT WITH THE COMPANY.
______________
Registered Note No. R-___ December 28, 1995
$__________
CASEY'S GENERAL STORES, INC., an Iowa corporation (the
"Company), for value received, hereby promises to pay to
____________________ or registered assigns, on the twenty-eighth
day of December, 2020, the principal amount of ___________
Dollars ($__________) 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
seven and thirty-eight hundredths percent (7.38%) per annum from
the date hereof until maturity, payable semi-annually on the
twenty-eighth day of each June and December in each year,
commencing June 28, 1996, and at maturity, and to pay interest on
overdue principal, premium and (to the extent legally
enforceable) on any overdue installment of interest at the rate
of nine and thirty-eight hundredths percent (9.38%) per annum
after maturity or the due date thereof, whether by acceleration
or otherwise, until paid. Payments of the principal of, the
premium, if any, and interest on this Note shall be made in
lawful money of the United States of America in the manner and at
the place provided in Section 2.5 of the Note Agreement
hereinafter defined.
This Note is issued under and pursuant to the terms and
provisions of a Note Agreement, dated as of December 1, 1995, entered
into by the Company with the Purchaser named in Schedule
I thereto (the "Note Agreement"), and this Note and any holder
hereof are entitled to all of the benefits and are bound by the
terms provided for by such Note Agreement or referred to therein.
The provisions of the Note Agreement are incorporated in this
Note to the same extent as if set forth at length herein.
<PAGE>
As provided in the Note Agreement, upon surrender of this
Note for registration of transfer, duly endorsed or accompanied
by a written instrument of transfer duly executed by the
registered holder hereof or his attorney duly authorized in
writing, a new Note for a like unpaid principal amount will be
issued to, and registered in the name of, the transferee upon the
payment of the taxes or other governmental charges, if any, that
may be imposed in connection therewith. The Company may treat
the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to
the contrary.
This Note may be declared due prior to its expressed
maturity date, voluntary prepayments may be made hereon and
certain prepayments are required to be made hereon all in the
events, on the terms and in the manner as provided in the Note
Agreement. Such prepayments include certain required prepayments
on June 28 and December 28 of each year beginning December 28,
2010 and ending June 28, 2020 and certain optional prepayments
with a premium.
Should the indebtedness represented by this Note or any part
thereof be collected in any proceeding provided for in the Note
Agreement or be placed in the hands of attorneys for collection,
the Company agrees to pay, in addition to the principal, premium,
if any, and interest due and payable hereon, all reasonable costs
of collecting this Note, including reasonable attorneys' fees and
expenses.
This Note and the Note Agreement are governed by and
construed in accordance with the laws of the State of Iowa.
CASEY'S GENERAL STORES, INC.
By:----------------------------
Its:
<PAGE>
EXHIBIT B
LEGAL OPINIONS
A. The opinion of Gardner, Carton & Douglas, special
counsel for the Purchaser, shall be to the effect that:
1. The Company is a corporation organized and validly
existing in good standing under the laws of the State of Iowa,
with all requisite corporate power and authority to carry on its
business as now conducted, to enter into and perform the
Agreement and to issue and sell the Notes.
2. The Agreement has been duly authorized by proper
corporate action on the part of the Company, has been duly
executed and delivered by an authorized officer of the Company
and constitutes the legal, valid and binding agreement of the
Company, enforceable in accordance with its terms, except to the
extent that enforcement of the Agreement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application relating to or affecting the
enforcement of the rights of creditors or by equitable
principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
3. The Notes have been duly authorized by proper corporate
action on the part of the Company, have been duly executed and
delivered by an authorized officer of the Company and constitute
the legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, except to the extent
that enforcement of the Notes may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws of general application relating to or affecting the
enforcement of the rights of creditors or by equitable
principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
4. Based upon the representations set forth in the
Agreement, the offering, sale and delivery of the Notes do not
require the registration of the Notes under the Securities Act of
1933, as amended, nor the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
5. The issuance and sale of the Notes and compliance with
the terms and provisions of the Notes and the Agreement will not
conflict with or result in any breach of any of the provisions of
the Certificate of Incorporation or By-Laws of the Company.
<PAGE>
The opinion of Gardner, Carton & Douglas also shall state that
the opinion of Ahlers, Cooney, Dorweiler, Haynie, Smith & Allbee,
P.C., counsel for the Company, delivered to you pursuant to the
Agreement, is satisfactory in form and scope to Gardner, Carton &
Douglas, and, in their opinion, the Purchaser and it are
justified in relying thereon and shall cover such other matters
relating to the sale of the Notes as the Purchaser may reasonably
request. Gardner, Carton & Douglas may rely, as to matters of
Iowa law, on the opinion of Ahlers, Cooney, Dorweiler, Haynie,
Smith & Allbee, P.C.
B. The opinion of Ahlers, Cooney, Dorweiler, Haynie, Smith
& Allbee, P.C., counsel for the Company, shall cover all matters
specified in clauses 1 through 6 set forth above and also shall
be to the effect that:
1. The Company has full corporate power and authority to
conduct the activities in which it is now engaged and own its
property.
2. Each Subsidiary of the Company is a corporation duly
organized and validly existing in good standing under the laws of
its jurisdiction of incorporation, and each has all requisite
corporate power and authority to carry on its business as now
conducted and own its property.
3. Each of the Company and its Subsidiaries is duly
qualified or licensed and in good standing as a foreign
corporation authorized to do business in each jurisdiction where
the nature of the business transacted by it or the character of
its properties owned or leased makes such qualification or
licensing necessary except where failure to so qualify would not,
individually or in the aggregate, have a material adverse affect
on its business, properties, or condition, financial or
otherwise.
4. No authorization, approval or consent of any
governmental or regulatory body is necessary or required in
connection with the lawful execution and delivery by the Company
of the Agreement or the lawful offering, issuance and sale of the Notes,
and no designation, filing, declaration, registration and/or
qualification with any governmental authority is required
by the Company in connection with such offer, issuance and sale.
<PAGE>
5. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Agreement will not
conflict with, or result in any breach or violation of any of the
provisions of, or constitute a default under, or result in the
creation of any Lien on the property of the Company or any
Subsidiary pursuant to, (i) the provisions of the Certificate of
Incorporation or other charter document or by-laws of the Company
or any Subsidiary or any loan agreement under which the Company
or any Subsidiary is bound, or other agreement or instrument
known to such counsel (after due inquiry) to which the Company or
any Subsidiary is a party or by which any of them or their
property is bound or (ii) any Iowa law (including usury laws) or
regulation, order, writ, injunction or decree of any court or
governmental authority applicable to the Company known to such
counsel.
6. There are no actions, suits or proceedings pending or,
to the best of such counsel's knowledge after due inquiry,
threatened against, or affecting the Company or its Subsidiaries,
at law or in equity or before or by any Federal, state, municipal
or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which are likely
to result, either individually or in the aggregate, in any
material adverse change in the business, properties, operations
or condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole.
7. All of the issued and outstanding shares of capital
stock of each Subsidiary have been duly and validly issued, are
fully paid and nonassessable and, to the knowledge of such
counsel, are owned by the Company free and clear of any Lien.
8. The issuance of the Notes and the use of the proceeds
of the sale of the Notes do not violate or conflict with
Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System (12 C.F.R., Chapter II).
9. Neither the Company nor any Subsidiary is: (i) a
"public utility company" or a "holding company," or an
"affiliate" or a "subsidiary company" of a "holding company," or
an "affiliate" of such a "subsidiary company," as such terms are defined
in the Public Utility Holding Company Act of 1935, as
amended, or (ii) a "public utility" as defined in the Federal
Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such
"affiliated person," as such terms are defined in the Investment
Company Act of 1940, as amended.
<PAGE>
The opinion of Ahlers, Cooney, Dorweiler, Haynie, Smith & Allbee,
P.C. shall cover such other matters relating to the sale of the
Notes as the Purchaser 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 and with respect to matters
governed by the laws of any jurisdiction other than the United
States of America and the State of Iowa, such counsel may rely
upon the opinions of counsel deemed (and stated in their opinion
to be deemed) by them to be competent and reliable.
