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 18, 1997
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 of (I.R.S. Employer
incorporation or organization) Identification Number)
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 18, 1997, Casey's General Stores, Inc. (the "Company") issued
$18,000,000 in aggregate principal amount of 6.55% Senior Notes due December 18,
2003 (the "Senior Notes"), pursuant to the terms of a Note Agreement dated as of
December 1, 1997 (the "Note Agreement") by and among the Company and Principal
Mutual Life Insurance Company, Nippon Life Insurance Company of America and TMG
Life Insurance Company (together, the "Purchasers"). The Company will apply the
proceeds from the sale of the Senior Notes to fund the payment and retirement of
certain outstanding Company indebtedness and the acquisition of additional
computer equipment for Company operations.
The Senior Notes bear interest at the rate of 6.55% per annum prior to
maturity, payable quarterly on the eighteenth day of March, June, September and
December of each year, commencing March 18, 1998, 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 8.55% per annum. The Senior Notes
mature on December 18, 2003.
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 eighteenth day of December in each year, prepayment of
the principal amount of the Senior Notes in the amount of $3,600,000, or such
lesser amount as would constitute payment in full on the Senior Notes,
commencing December 18, 1999 and ending December 18, 2002, inclusive, with the
remaining principal payable at maturity on December 18, 2003 (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
<PAGE>
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.payment at maturity.
In the Note Agreement, the Company makes certain representations and
warranties to the Purchasers 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
Purchasers. 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
Purchasers 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 4.5 and incorporated herein by reference is a
copy of the Note Agreement between the Company and the Purchasers, 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 6.55% 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.
Separately, acting at a special meeting on December 22, 1997, the Board of
Directors of the Company declared a two-for-one stock split in the form of a
100% stock dividend for shareholders of record on February 2, 1998. The shares
being issued as a result of the stock split will be distributed, along with the
previously-authorized cash dividend of 3 cents per pre-split share, on February
16, 1998.
<PAGE>
Item 7. EXHIBITS.
4.5 Note Agreement, dated as of December 1, 1997, among Casey's
General Stores, Inc. and Principal Mutual Life Insurance Company, Nippon
Life Insurance Company of America and TMG Life Insurance Company.
<PAGE>
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 7, 1998 By: /s/ Douglas K. Shull
---------------------------
Douglas K. Shull
Treasurer and Chief Financial
Officer
<PAGE>
EXHIBITS
EXHIBIT DESCRIPTION PAGE
4.5 Note Agreement dated as of December 1, 1997 7
between Casey's General Stores, Inc. and
Principal Mutual Life Insurance Company,
Nippon Life Insurance Company of America
and TMG Life Insurance Company
<PAGE>
CASEY'S GENERAL STORES, INC.
NOTE AGREEMENT
Dated as of December 1, 1997
$18,000,000 Principal Amount
6.55% Senior Notes
Due December 18, 2003
<PAGE>
TABLE OF CONTENTS
Section 1. DESCRIPTION OF NOTES AND COMMITMENT
1.1 Description of Notes
1.2 Commitment; Closing Date
Section 2. PREPAYMENT OF NOTES
2.1 Required Prepayments
2.2 Optional Prepayments
2.3 Notice of Optional Prepayments
2.4 Surrender of Notes on Prepayment or Exchange
2.5 Direct Payment
2.6 Allocation of Payments
2.7 Payments Due on Saturdays, Sundays and Holidays
Section 3. REPRESENTATIONS
3.1 Representations of the Company
3.2 Representations of the Purchasers
Section 4. CLOSING CONDITIONS
4.1 Representations and Warranties
4.2 Legal Opinions
4.3 Events of Default
4.4 Payment of Fees and Expenses
4.5 Accountants' Letter
4.6 Legality of Investment
4.7 Private Placement Number
4.8 Proceedings and Documents
Section 5. INTERPRETATION OF AGREEMENT
5.1 Certain Terms Defined
5.2 Accounting Principles
5.3 Valuation Principles
5.4 Direct or Indirect Actions
Section 6. AFFIRMATIVE COVENANTS
6.1 Corporate Existence
6.2 Insurance
<PAGE>
6.3 Taxes, Claims for Labor and Materials
6.4 Maintenance of Properties
6.5 Maintenance of Records
6.6 Financial Information and Reports
6.7 Inspection of Properties and Records
6.8 ERISA
6.9 Compliance with Laws
6.10 Acquisition and Cancellation of Notes
6.11 Private Placement Number
Section 7. NEGATIVE COVENANTS
7.1 Net Worth
7.2 Indebtedness
7.3 Fixed Charge Ratio
7.4 Liens
7.5 Merger or Consolidation
7.6 Sale of Assets
7.7 Restricted Investments
7.8 Change in Business
7.9 Transactions with Affiliates
7.10 Consolidated Tax Returns
Section 8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1 Nature of Events
8.2 Remedies on Default
8.3 Annulment of Acceleration of Notes
8.4 Other Remedies
8.5 Conduct No Waiver; Collection Expenses
8.6 Remedies Cumulative
8.7 Notice of Default
Section 9. AMENDMENTS, WAIVERS AND CONSENTS
9.1 Matters Subject to Modification
9.2 Solicitation of Holders of Notes
9.3 Binding Effect
<PAGE>
Section 10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND
REPLACEMENT
10.1 Form of Notes
10.2 Note Register
10.3 Issuance of New Notes upon Exchange or Transfer
10.4 Replacement of Notes
Section 11. MISCELLANEOUS
11.1 Expenses
11.2 Notices
11.3 Reproduction of Documents
11.4 Successors and Assigns
11.5 Law Governing
11.6 Headings
11.7 Counterparts
11.8 Reliance on and Survival of Provisions
11.9 Confidential Information
11.10 Integration and Severability
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 6.55% Senior Note, Due December 18, 2003
Exhibit B: Legal Opinions
<PAGE>
CASEY'S GENERAL STORES, INC.
NOTE AGREEMENT
Dated as of December 1, 1997
To the Purchasers 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 $18,000,000 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
6.55% per annum prior to maturity, payable quarterly on the eighteenth day of
March, June, September and December of each year, commencing March 18, 1998, 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 8.55% per
annum, to be expressed to mature on December 18, 2003 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, as the purchasers named in Schedule
I (the "Purchasers"), and you agree to purchase from the Company, Notes in the
aggregate principal amount set forth opposite your names in the attached
Schedule I at a price of 100% of the principal amount thereof. Your obligations
hereunder are several and not joint obligations and each of you shall have no
liability to any Person for the performance or nonperformance by any other
Purchaser hereunder.
<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 18, 1997, or at such
later time or on such later date, not later than 5:00 p.m. Chicago Time, on
December 18, 1997, as may be mutually agreed upon by the Company and each of the
Purchasers (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 UMB Bank, n.a., A.B.A. No. 101000695, for
deposit in the Company's Account No. 9870527502. 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 eighteenth day of December in each year prepayment
of the principal amount of the Notes in the amount of $3,600,000 hereto or such
lesser amount as would constitute payment in full on the Notes, commencing
December 18, 1999 and ending December 18, 2002 inclusive, with the remaining
principal payable at maturity on December 18, 2003. 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 aggregate present value of the amount of principal being prepaid (taking
into account the manner of application of such prepayment required by
<PAGE>
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
(quarterly 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.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.
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
<PAGE>
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.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.
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 and validly existing 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
<PAGE>
and in good standing or existing 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.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 and is
validly existing under the laws of its jurisdiction of incorporation and is duly
licensed or qualified and in good standing or existence 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 or existence 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.
(d) Financial Statements. The consolidated balance sheet of the Company and
its Subsidiaries as of April 30, 1997 and the related consolidated statements of
income, shareholders' equity and cash flows for the year ended April 30, 1997,
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 and its Subsidiaries for and as of
the end of such year. The unaudited consolidated balance sheets of the Company
and its Subsidiaries as of October 31, 1997 and the related unaudited
consolidated condensed statements of income and cash flows for the six months
ended October 31, 1996 and October 31, 1997, 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 as of such dates and the results of their operations and
cash flows for the periods then ended, subject to customary year-end
adjustments.
<PAGE>
(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, 1997 and
in the Company's Quarterly Reports for the quarters ended July 31, 1997 and
October 31, 1997, 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, 1997 there have
been no material adverse changes in the condition, financial or otherwise, of
the Company and its Subsidiaries taken as a whole.ition, 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, 1997 and in
the Company's Quarterly Reports for the quarters ended July 31, 1997 and October
31, 1997, 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.
(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, 1997 and
in the Company's Quarterly Reports for the quarters ended July 31, 1997 and
October 31, 1997, 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) Compliance with ERISA.
<PAGE>
(i) The Company and each ERISA Affiliate have operated and administered
each Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a material adverse effect on the Company's business, properties or
condition, financial or otherwise. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that would reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than
such liabilities or Liens as would not be individually or in the aggregate
material to the Company's business, properties or condition, financial or
otherwise.
(ii) The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in section 3 of ERISA.
(iii) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are material.
(iv) The expected postretirement benefit obligation (determined as of the
last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not material.
(v) The execution and delivery of this Agreement and the issuance and sale
of the Notes hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this Section is made in reliance upon and
subject to (i) the
<PAGE>
accuracy of your representation in Section 3.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you and (ii) the assumption, made solely for the purpose of making such
representation, that Department of Labor Interpretive Bulletin 75-2 with respect
to prohibited transactions remains valid in the circumstances of the
transactions contemplated herein.transactions remains valid in the
circumstances of the transactions contemplated herein.
(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, 1997 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.
(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
<PAGE>
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 Purchasers.
(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.
(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
<PAGE>
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, 1993 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.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
purchasers other than you and the Other Purchasers, each of 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.
(t) Use of Proceeds. The Company will apply the proceeds from the sale of
the Notes to fund the payment and retirement of certain outstanding Company
Indebtedness and the acquisition of additional computer equipment for Company
operations. 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
<PAGE>
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.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, 1997, its Quarterly Reports on Form 10-Q for the
periods ended July 31, 1997 and October 31, 1997 and its Annual Report to
Stockholders for the year ended April 30, 1997, 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.
(x) Environmental Compliance. Other than as disclosed in the Company's
Annual Report on Form 10-K for the year ended April 30, 1997 and in the
Company's Quarterly Reports for the quarters ended July 31, 1997 and October 31,
1997, 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,
<PAGE>
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, 1997 and in the Company's Quarterly Reports for the quarters
ended July 31, 1997 and October 31, 1997, 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. 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.
(z) Sale of Other Notes. Contemporaneously with the Closing the Company
shall sell to the Purchasers and the Purchasers shall purchase the Notes to be
purchased by them at the Closing as specified in Schedule I.
3.2 Representations of the Purchasers.
(a) You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one or
more pension or trust funds and not with a view to the distribution thereof,
provided that the disposition of your or their property shall at all times be
within your or their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
(b) You represent that at least one of the following statements is an
accurate representation as to each source of funds (a 'Source') to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(i) if you are an insurance company, the Source does not include assets
allocated to any separate account maintained by you in which any employee
benefit plan (or its related trust) has any interest, other than a separate
account that is maintained solely in connection with your fixed contractual
obligations under which the amounts
<PAGE>
payable, or credited, to such plan and to any participant or beneficiary of
such plan (including any annuitant) are not affected in any manner by the
investment performance of the separate account; orre not affected in any manner
by the investment performance of the separate account; or
(ii) the Source is either (i) an insurance company pooled separate account,
within the meaning of Prohibited Transaction Exemption ("PTE") 90-1 (issued
January 29, 1990), or (ii) a bank collective investment fund, within the meaning
of the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to the
Company in writing pursuant to this paragraph (ii), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or
(iii) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified professional
asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan's assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I (c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity of
such QPAM and (ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing
pursuant to this paragraph (iii); or
(iv) the Source is a governmental plan; or
(v) the Source is one or more employee benefit plans, or a separate account
or trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this paragraph (v); or
(vi) the Source does not include assets of any employee benefit plan, other
than a plan exempt from the coverage of ERISA; or
(vii) the Source is an "insurance company general account" within the
meaning of PTE 95-60 (issued July 12, 1995) and there is no employee benefit
plan, treating as a single plan all plans maintained by the same employer or
employee organization, with respect to which the amount of general account
reserves and liabilities
<PAGE>
for all contracts held by or on behalf of such plan
exceed ten percent (10%) of the total reserves and liabilities of such general
account (exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement filed with our state of domicile.es)
plus surplus, as set forth in the NAIC Annual Statement filed with our state of
domicile.
As used in this Section 3.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in section 3 of 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 Chief Executive Officer, 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.
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 Chief Executive Officer, 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
<PAGE>
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.
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.
<PAGE>
Closing Date - As defined in Section 1.2.
Code - The Internal Revenue Code of 1986, as amended from time to time, and
the rules and regulations promulgated thereunder from time to time.
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;
(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;
<PAGE>
(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, for periods 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 - The Employment Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.
ERISA Affiliate - Any trade or business (whether or not incorporated) that
is treated as a single employer together with the Company under Section 414 of
the Code.
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
<PAGE>
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 (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.
Multiemployer Plan - Any Plan that is a 'multiemployer plan' (as such term
is defined in Section 4001(a)(3) of ERISA).
Noteholder - Any holder of a Note.
<PAGE>
Notes - As defined in Section 1.1.
PBGC - The Pension Benefit Guaranty Corporation referred to and defined in
ERISA or any successor thereto.
Plan - An "employee benefit plan" (as defined in section 3(3) of ERISA)
that is or, within the preceding five years, has been established or maintained,
or to which contributions are or, within the preceding five years, have been
made or required to be made, by the Company or any ERISA Affiliate or with
respect to which the Company or any ERISA Affiliate may have any liability.
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
<PAGE>
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
(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.
Purchasers - As defined in Section 1.2.
QPAM Exemption - The Prohibited Transaction Class Exemption 84-14 issued by
the United States Department of Labor.
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
<PAGE>
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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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
<PAGE>
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;
(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
<PAGE>
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;
(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
<PAGE>
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
(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. The Company will furnish to you and any other Institutional
Holder promptly, and in any event within five Business Days after a Responsible
Officer becomes aware of any of the following, a written notice setting forth
the nature thereof
<PAGE>
and the action, if any, that the Company or an ERISA Affiliate proposes to
take with respect thereto:
(a) with respect to any Plan, any reportable event, as defined in
section 4043(b) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such regulations as in effect on the
date hereof; or
(b) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to such
Multiemployer Plan; or
(c) any event, transaction or condition that could result in the incurrence
of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV
of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate pursuant to Title I
or IV of ERISA or such penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or Liens then existing,
could reasonably be expected to have a material adverse effect on the Company's
business, properties or condition, financial or otherwise.
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 1997 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
<PAGE>
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.
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 Adjusted 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;
<PAGE>
(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;
(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 November 30, 1997, 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
<PAGE>
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.
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
<PAGE>
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.
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.
<PAGE>
(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;
(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) If (i) any Plan shall fail to satisfy the minimum funding standards of
ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings,
(iii) the aggregate "amount of unfunded benefit liabilities" (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $2,000,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability
of the Company or any Subsidiary thereunder (as used in Section 8.1(h), the
terms "employee benefit plan" and "employee welfare benefit plan" shall have the
respective meanings assigned to such terms in Section 3 of ERISA); and any such
event or events described in clauses (i) through (vi) above, either individually
or together with any other such event or events, could reasonably be expected to
have a material adverse effect; or
(i) The Company or any Subsidiary shall
<PAGE>
(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
(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
<PAGE>
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 (quarterly 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 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
<PAGE>
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.
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
<PAGE>
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.
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 four 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).
<PAGE>
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.
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
<PAGE>
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.
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
<PAGE>
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 Agreement to produce or account for
more than one such counterpart or reproduction thereof permitted by Section
11.3.
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
<PAGE>
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 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/ Clint Woods
Title: Counsel
By: /s/ Christopher J. Henderson
Title: Counsel
NIPPON LIFE INSURANCE COMPANY OF
AMERICA, an Iowa corporation, by
its attorney in fact, Principal
Mutual Life Insurance Company, an
Iowa Corporation
By: /s/ Clint Woods
Title: Counsel
By: /s/ Christopher J. Henderson
Title: Counsel
<PAGE>
TMG LIFE INSURANCE COMPANY,
by The Mutual Group (U.S.), Inc.,
its agent
By: /s/ Michael J. Steppe
Title: Vice President
By: /s/ Robert R. Lapointe
Title: Vice President
<PAGE>
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
Principal Mutual Life Insurance Company $4,000,000
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 61317
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 Accounting - Securities
Reference: Bond No. 1-B 61317
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All payments with respect to the Note are to be made by a 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 No. 014752
Reference: OBI PFGSE(S)B61317()
Tax ID #42-0127290
<PAGE>
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
Principal Mutual Life Insurance Company $10,000,000
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. 16-B 61317
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 Accounting - Securities
Reference: Bond No. 16-B 61317
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All payments with respect to the Note are to be made by a 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
Separate Account No. 032395
Reference: OBI PFGSE(S)B61317()
Tax ID #42-0127290
<PAGE>
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
Nippon Life Insurance Company of America $1,000,000
c/o Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392
All notices with respect to the Note, except with respect to payment should be
sent to:
Nippon Life Insurance Company of America
711 High Street
Des Moines, Iowa 50392-0800
Attn: Investment Department - Securities Division
Reference: Bond No. 500-B 61317
All notices with respect to the Note should be sent to:
Nippon Life Insurance Company of America
c/o Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attn: Investment Accounting - Securities
Reference: Bond No. 500-B 61317
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-8495
<PAGE>
All payments with respect to the Note are to be by wire transfer of
immediately available funds to:
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
ABA 073 000 228
For credit to:
Nippon Life Insurance Company of America
Collection Account No.7069975
Reference: OBI PFGSE(S)B61317()
Tax Identification Number: 04-2509896
<PAGE>
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
TMG LIFE INSURANCE COMPANY $3,000,000
c/o The Mutual Group (U.S.), Inc.
401 North Executive Drive, Suite 300
Brookfield, WI 53008-0500
Attention: Lisa Harris
Phone: (414) 641-4029
Facsimile: (414) 797-2318
All notices with respect to payments on the Note, except with respect to
payment, should be sent to:
Ms. Lisa Harris
The Mutual Group (U.S.), Inc.
401 North Executive Drive, Suite 300
Brookfield, WI 53008-0503
Phone: (414) 641-4029
Facsimile: (414) 797-2318
All notices with respect to payments on the Note should be sent to:
Ms. Lisa Harris
The Mutual Group (U.S.), Inc.
401 North Executive Drive, Suite 300
Brookfield, WI 53008-0503
Phone: (414) 641-4029
Facsimile: (414) 797-2318
<PAGE>
All payments with respect to the Note are to be by bank wire transfer of
immediately available funds to:
Norwest Bank MN, N.A.
ABA: 091000019
Trust Clearing Acct: 08-40-245
Attn: Pam Mistelske
FFC to: 13075700
Name of Nominee in which Notes are to be issued: TMG Life Insurance Company
Taxpayer I.D. Number: #45-0208990
<PAGE>
ANNEX I
SUBSIDIARIES OF THE COMPANY
Percentage of
Jurisdiction Voting Stock
Name of 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*
PAYABLE TO: AMOUNT
Donald Nielsen $57,377.11
Peoples Trust Indianola $2,333,333.32
Iowa State Bank $210,939.65
Jerry D. Stone $153,109.49
Unisys Finance & Leasetec Corp. $750,777.23
Christenson $18,913.06
Nanco $42,997.03
Douglas $7,219.37
Bank Service Department $47,364.75
Walthal $85,149.29
Walthal $79,994.62
King $86,789.98
Haynes $40,247.72
Haynes $40,247.72
Haynes $40,247.72
Edel-Gerlock $44,728.81
Starburst, Inc. $66,191.21
Starburst, Inc. $59,730.30
Four M. Dev. $65,971.09
Hamville, Inc. $67,169.56
Hamville, Inc. $63,139.75
Hamville, Inc. $67,169.56
Canyon Co. $66,473.87
Wagner $76,152.83
Wagner $74,665.96
Carsrud, Inc. $86,838.63
Carsrud, Inc. $86,838.63
Carsrud, Inc. $86,838.63
Neymeyer $62,825.90
Stone $185,150.73
Huff $105,056.97
Huff $131,321.20
Huff $131,321.20
<PAGE>
Huff $131,321.20
Jungman Oil $94,597.84
West Bend Serv $115,598.20
J. & V. Klemm $109,854.87
Buckwood, Inc. $132,646.59
Jon Proehl $132,646.59
Jon Proehl $115,143.90
Jon Proehl $118,166.39
J. &y's Ltd. $141,799.52
J. & K. Cahail $141,799.52
J. & K. Cahail $141,799.52
J. & K. Cahail $141,799.52
J. & K. Cahail $70,899.87
J. & K. Cahial $141,799.52
Doco Ltd. $138,995.43
Donald Peck $126,887.71
Demico Corp. $114,680.94
Demico Corp. $127,490.00
Sully Ent. $94,820.42
Logli $82,451.82
Principal Financial $12,150,786.03
7.70% Senior Notes $21,750,000.00
7.38% Senior Notes $30,000,000.00
Jaak, Inc. $77,074.65
United Missouri Bank $13,125,000.00
--------------
$85,040,352.94
* As of November 30, 1997
<PAGE>
ANNEX III
Description of Liens*
PAYABLE TO: BALANCE PROPERTY ADDRESS
Donald Nielsen $57,377.11 339 S. Lincoln
West Point, NE 68788
Iowa State Bank $210,939.65 110 NE 2nd Street
Earlham, Iowa 50072
State Street
Dexter, Iowa 50070
613 1st Street
Redfield, Iowa 50233
Jerry D. Stone $153,109.49 509 State Street
Guthrie Center, Iowa 50115
119 Spruce
De Soto, Iowa 50069
E. 3rd & Main
Panora, Iowa 50216
Principal Financial $12,150,786.03 Corporate Headquarters
-------------- Ankeny, Iowa 50021
$12,572,212.28
* As of November 30, 1997
<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.
October 1997
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.
Please Note - Actual Policies have not been received and reviewed. EMC has
given written assurance they will provide the coverages herein specified.
<PAGE>
CASEY'S GENERAL STORES, INC.
Account Personnel
ACCOUNT EXECUTIVE DIRECT DIAL NUMBER
Roger Hoyt, CPCU, ARM 237-0117
Michael L. McCoy, CIC 237-0145
Gary Nordquist, CPCU, ARM 237-0123
CLIENT SERVICE REPRESENTATIVE
Deborah Emehiser 237-0132
BONDS
Joyce Herbert, AFSB 237-0103
Nancy Schwarz 237-0109
CLAIMS
Markie Lamer, AIC 237-0108
Debbie Young 237-0141
CLAIMS SPECIALIST
Pat Duff 237-0153
ACCOUNTING
Amy Kuennen 237-0130
LOSS CONTROL SERVICES
Greg Sieck, ALCM 237-0147
(515) 244-0166
National WATS (800) 677-1529
FAX (515) 244-9535
<PAGE>
CASEY'S GENERAL STORES, INC.
NAMED INSUREDS
1. Casey's General Stores, Inc.
2. Casey's Services Company
3. Casey's Marketing Company
4. Casey's General Stores, Inc. - Construction Division and
Consolidated Building Systems, Inc.
5. Broadway Distributing Co., A Partnership
6. Tri-State Stores, Ltd.
7. Impact Stores Corp.
8. Centurion Sales Company, Inc.
9. Casey's Lease Plan Company, A Partnership
10. Amended and Restated Casey's General Stores, Inc. Employee Profit
Sharing and Stock Ownership Plan & Trust
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.
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
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
<PAGE>
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, Inc. All Hired, Borrowed or Leased
P.O. Box 2346 Vehicles
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 & Services All Hired, Borrowed or Leased
P.O. Box 419585 Vehicles
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>
9) Transport International Pool All Hired, Borrowed or Leased
465 N.E. 45th Place Vehicles
Des Moines, IA 50313
10) The UNO-VEN Co. an IL General All Hired, Borrowed or Leased
Partnership Vehicles
3850 West Wilke Road
Arlington Heights, IL 60004
11) Leasetec Corporation Equipment and All Hired,
1401 Pearl Street Borrowed or Leased Vehicles
Boulder, CO 80302
12) Ryder Truck Rental, Inc. All Hired, Borrowed or Leased
2001 Eagle Road Vehicles
Normal, IL 61761
<PAGE>
CASES'S GENERAL STORES, INC.
Real & Personal Property
INSURANCE CO: Federal Insurance Co. (Chubb) POLICY PERIOD: 7-1-97/98
POLICY NO: 50514
PREMISES INSURED
Per attached schedule - Retail Stores (Items 6 through 16) 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 - $32,052,226
SUB-LIMITS
Boiler and Machinery - $10,000,000. Property Damage and Time Element Combined.
Vehicle Property Damage - $4,500,000 On Premises
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
$ 50,000 All Other
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
<PAGE>
CASEY'S GENERAL STORES, INC.
Real & Personal Property (Cont.)
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
$25,000 Extra Expense Inc.
1,000,000 for Loc 1 & 2
$1,500,000 Direct Damage at Loc. 1&
2 Excluding Boiler & Machinery
Breakdown
Fire Department Service Charges - $10,000
Inventory or Appraisal - $10,000
International Air Shipments - $25,000
PERILS INSURED
All Risk - Subject to exclusions, terms & conditions
COINSURANCE CLAUSE
N/A
DEDUCTIBLE - ENDT. # 19
Loc. 1-5 and Loc. 27 $ 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
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
<PAGE>
CASEY'S GENERAL STORES, INC.
Real & Personal Property (Cont.)
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. #7
4. Broad Form Named Insured Endorsement - Endt. #11
5. Brands & Labels - Endt. #8
6. Boiler & Machinery Perils Included - Endt. #10
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
Statement of Values
Loc. Description Building Contents Stock
1. One Convenience Blvd,
Ankeny, IA $15,419,753 $6,074,723 $8,411,244
2. R One Convenience Blvd,
Ankeny, IA Incl. in #1 Incl. Incl. in #1
3. Adam Street & Commerce Road,
Creston, IA 215,195 226,248 265,263
4. 1277-99 NE Broadway,
Des Moines, IA 200,000 N/A N/A
5. R1277-99 NE Broadway,
Des Moines, IA Incl. in #4 N/A N/A
* 6. 511 23rd Ave.,
Council Bluffs, IA 40,000 Nil Nil
* 7. 4008 W. Broadway,
Columbia, MO 129,000 Nil Nil
* 8. 2200 Ballenger,
Columbia, MO 40,000 Nil Nil
* 9. Highway 24 & B Avenue,
Lewistown, IL 40,000 Nil Nil
* 10. 826 Park,
Sheldon, IA 121,800 Nil Nil
* 11. 416 N Pine St.,
Lennox, SD 129,000 Nil Nil
* 12. 102 Loren St.,
Washington, IL 130,000 Nil Nil
* 13. Casey's Suite - Hall of Fame
Knoxville Raceway,
Knoxville, IA Nil $10,000 Nil
* 14. 410 W Main St.,
Richmond, MO Nil Nil Nil
* 15. 1325 Kearney Road,
Excelsior Springs, MO Nil Nil Nil
* 16. 4560 NE 14th St.,
Des Moines, IA
Gena Lamberti Trust 600,000 Nil Nil
* $250,000 DEDUCTIBLE APPLIES AT LOCATIONS #6 THROUGH #16
<PAGE>
CASEY'S GENERAL STORES, INC.
Fine Arts
INSURANCE CO: Federal Insurance Co. (Chubb) POLICY PERIOD: 07-01-97/98
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
DESCRIPTION SERIAL NUMBER VALUE
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
Mobile-Dynamic Performance $5,250
TOTAL: $220,250
<PAGE>
CASEY'S GENERAL STORES, INC.
General Liability
INSURANCE CO: Employers Mutual Casualty Co. POLICY PERIOD: 7-1-97/98
LIMITS OF LIABILITY LIMITS*
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
E) General Aggregate on A, B, C & D $1,750,000
F) Products & Completed Operations
Hazard Aggregate $1,750,000
* Limits are excess of $250,000 SIR
SELF-INSURED RETENTION
$ 250,000 Per Occurrence
$ 250,000 Each Person - Advertising/Personal Injury
$ 5,000,000 Aggregate Retention Combined with Auto Liability
& Workers' Compensation
(Adjustable based on 5.03% of W.C. Payroll -
$99,376,960 Estimated payroll)
SIR is satisfied by damages, additional payments & legal expenses
DEFENSE COST
Right, Not Duty - Unless EMC believes Total Damages, Additional Payments and
Legal Expenses are greater 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 greater
than $250,000 if EMC believes potential Total Injury & Damage amount will not
exceed the SIR.
2. EMC to consult with Casey's prior to settling any suit greater than
$250,000.
COVERAGES
Premises Operations
Independent Contractors
Products & Completed Operations
Liquor Liability
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. Extensions of Personal Injury Liability
11. Products / Completed Operations Hazard Redefined (Products on Premises)
12. Watercraft Endorsement - Owned Watercraft greater than 50'
13. Broad Form Named Insured
14. Amendment of Bodily Injury Definition
15. Volunteer Workers included as Insured Persons
16. Misdelivery of Liquid Products Liability
17. Aggregate Deductible - Combined Coverages
18. Liquor Liability Endorsement
19. Nuclear Energy Liability Exclusion
20. Asbestos Exclusion
21. Contractual Liability - Railroads
<PAGE>
CASEY'S GENERAL STORES, INC.
General Liability (Cont.)
22. Amendment of Pollution Exclusion - Exception for Building Heating Equipment
23. Amendment of Other Insurance Condition (Occurrence Version)
24. Day Care Sexual, Physical, Mental or Emotional Abuse or Molestation
Liability (with Self Insured Retention)
PREMIUM BASIS
Composite Rating Applies 0.993 / 1,000 of Receipts
$1,206,862,000 Receipts
$ 119,927 Premium
Refer to policy for further Terms, Conditions, Exclusion & Limitations.
* Request to remove DMACC Store Exclusion - Not Yet Received.
<PAGE>
CASEY'S GENERAL STORES, INC.
Automobile
INSURANCE CO: Employers Mutual Casualty Co. POLICY PERIOD: 7-1-97/98
LIMITS OF LIABILITY
Bodily Injury and $1,000,000 Each Occurrence
Property Damage Combined
Single Limit
PIP Statutory
Medical Payments $ 5,000 Each Person
Uninsured/Underinsured Motorist $1,000,000 Each Accident
Comprehensive No Coverage
Collision No Coverage
DEDUCTIBLE
1) $250,000 Each Accident
2) $5,000,000 Aggregate Retention Combined with General Liability
& Workers' Compensation
3) Adjustable based on 5.03% of W.C. Payroll - $99,376,960 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) Prejudgment Interest
8) Knowledge of Occurrence
9) Unintentional Failure to Disclose Hazards - Included in General Conditions
10) Broad Form Named Insured
12) Aggregate Deductible - combined coverages
13) Additional Insured - Lessor
14) Employees As Insureds
15) MCS 90 Endorsement
* Change Ordered - Not Yet Received
PREMIUM BASIS
Composite Rating Applies - 502.5866/Power Unit - 358 Power Units - $36,481
Premium
FILLINGS
MSC - 90
Form F
Refer to policy for further terms, conditions, exclusions & limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Workers' Compensation
INSURANCE CO: Employers Mutual Casualty Co. POLICY PERIOD: 7-1-97/98
COVERAGE A
Statutory - In the states of IL, IN, KS, MN, MO, 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
1.06 -1997 Preliminary
ENDORSEMENTS
Other States Insurance: All states except: ME, NV, ND, OH, WA, WY, IA, KS, MO,
and WI
Foreign Coverage Endorsement
Notification of Change in Ownership Endorsement
USL&HW
Voluntary Comp.
Broad Form Named Insured Endorsement
90 Days Notice of Cancellation
Ohio Employers Liability Endorsement
Stop Gap Employers Liability - NV, ND, WA, WV, & WY
Knowledge of Occurrence
Deletion of Employers Liability Exclusion (In Stop Gap EL endorsement)
for members of Flying Crew
Aggregate Deductible - Combined Coverages
Deductible Endorsement
Designated Workplaces Exclusion - Iowa, Wisconsin
Qualified Self-Insurer Exclusion Endorsement
<PAGE>
CASEY'S GENERAL STORES, INC.
Workers' Compensation (Cont.)
PREMIUM BASIS
Per the attached schedule
DEDUCTIBLE
$ 350,000 Each Occurrence
$ 350,000 Each Claim for Disease
$5,000,000 Aggregate Retention Combined with Auto Liability & General
Liability
(Adjustable based on 5.03% of W.C. Payroll - 99,376,960 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
CLASS
CLASSIFICATION CODE PAYROLL
ILLINOIS
Electric Wiring - Within Building & Drivers 5190 $327,559
Contractor-Executive Supervisor Construction
Superintendant 5606 $210,432
Drivers, Chauffeurs and their Helpers Noc 7380 $550,624
Grocery Dealer - Retail & D 8006 $19,586,430
Salespersons - Outside 8742 $985,587
INDIANA
Grocery Dealer - Retail & D 8006 $1,564,921
Salespersons - Outside 8742 $31,000
KANSAS
Electric Wiring - Within Building & Drivers 5190 $123,823
Drivers, Chauffeurs and their Helpers Noc 7380 $196,596
Grocery Dealer - Retail & D 8006 $6,121,823
Salespersons - Outside 8742 $425,810
<PAGE>
CASEY'S GENERAL STORES, INC.
Workers' Compensation Schedule (Cont.)
MINNESOTA
Electric Wiring - Within Building & Drivers 5190 $44,810
Drivers, Chaufeurs and their Helpers Noc 7380 $51,989
Grocery Dealer - Retail & D 8006 $2,341,967
Salespersons - Outside 8742 $156,487
MISSOURI
Grocery Dealer - Retail & D 8006 $18,796,415
Salespersons - Ouside 8742 $1,450,623
Contractor-Exec Supervisor Construction
Superintendant 5606 $161,796
Electric Wiring - Within Building & Drivers 5190 $351,051
Drivers, Chauffeurs and their Helpers Noc 7380 $810,867
NEBRASKA
Drivers, Chaufeurs and their Helpers Noc 7380 $65,812
Grocery Dealer - Retail & D 8006 $2,556,810
Salespersons - Outside 8742 $121,723
SOUTH DAKOTA
Electric Wiring - Within Building & Drivers 5190 $54,911
Grocery Dealer - Retail & D 8006 $1,587,864
<PAGE>
CASEY'S GENERAL STORES, INC.
Workers' Compensation Schedule (Cont.)
Salespersons - Outside 8742 $210,819
<PAGE>
CASEY'S GENERAL STORES, INC.
WISCONSIN WORKERS' COMPENSATION
INSURANCE CO: Employers Mutual Casualty Co. POLICY PERIOD: 7-1-97/98
Coverage A
Statutory - In the state of - Wisconsin
Coverage B
$ 1,000,000 Each Accident
$ 1,000,000 Disease - Policy Limit
$ 1,000,000 Disease - Each Employee
Experience Modification
1.06 1997 Preliminary
Endorsements
Other States Insurance - All States Except ME, NV, ND, OH, WA, WV, WY, IA, IL,
IN, KS, MN, MO, NE, SD
Foreign Coverage Endorsement
Notification of Change in Ownership Endorsement
USL&HW
Voluntary Comp.
Broad Form Named Insured Endorsement
90 Days Notice of Candellation
* Ohio Employers Liability Endorsement
* Stop Gap Employers Liability - NV,ND, WA, WV, WY
Knowledge of Occurrence
* Deletion of Employers Liability Exclusion (In Stop Gap EL endorsement)
for members of Flying Crew
Designated Workplaces Exclustion - IA, KS, MO, IL, IN, MN, NE, SD
<PAGE>
CASEY'S GENERAL STORES, INC.
WISCONSIN WORKERS' COMPENSATION (Cont.)
Premium Basis
CLASSIFICATION CLASS CODE PAYROLL
Drivers, Chauffeurs & their Helpers NOC 7380 If Any
Store - Grocery Retail 8006 $500,000
Salespersons - Outside 8742 If Any
Deductible
None.
Refer to policy for further terms, conditions, exclusions & limitations.
* Correction Ordered - Not Yet Received.
<PAGE>
CASEY'S GENERAL STORES, INC.
Excess Workers' Compensation
INSURANCE CO: Employers Mutual Casualty Co. POLICY PERIOD: 7-1-97/98
Limits of Liability
Workers' Compensation - Statutory
Employers' Liability - $650,000 Each Accident
$650,000 Disease, Excess Employers Liability
$650,000 Aggregate
Self-Insured Retention
Specific Retention - Iowa - Each Accident / Disease $350,000
Aggregate Retention combined with General Liability, Auto Liability and Workers'
Compensation
(Adjustable based on 5.03% of Workers' Compensation Payroll - $99,376,960
Estimated Payroll)
Rate
0.0504 of Estimated Standard Premium
States Insured
Iowa
Other States Coverage
* Requesting Confirmation
USL&HW
* Coverage Ordered - Not yet received.
Other Federal Acts
No Coverage
<PAGE>
CASEY'S GENERAL STORES, INC.
Excess Workers' Compensation (Cont.)
STATE AMENDATORY ENDORSEMENTS
Iowa
VOLUNTARY COMPENSATION
Coverage Ordered - Not yet received.
ALLOCATED LOSS ADJUSTMENT EXPENSE
Satisfy retention & is included within limits
DEFENSE COST
Right, Not Duty
CLAIM REPORTING REQUIREMENTS
50% of SIR
Scheduled Injury
Any accident involving 2 or more employees
PAYMENT BASIS
Indemnity
AIRCRAFT COVERAGE
Included
CANCELLATION
90 Days Notice
<PAGE>
CASEY'S GENERAL STORES, INC.
Excess Workers' Compensation (Cont.)
NOTED CONDITIONS
Broad Form Named Insured
Knowledge of Occurrence
Refer to policy for further terms, conditions, exclusions & limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Excess Workers Compensation Schedule - Iowa Only
Class
Classification Code Payroll
IOWA
Printing 4299 $196,410
Contractor-Executive Supervisor
Construction Superintendant 5606 $275,465
Drivers, Chauffeurs and their Helpers Noc 7380 $2,876,510
Electrical Wiring - Within Building & Drivers 5190 $974,310
Aircraft Operation 7421 $60,000
Grocery Dealer - Retail & D 8006 $23,481,010
Warehousing 8292 $3,165,822
Salespersons - Outside 8742 $2,899,891
Clerical 8810 $6,567,993
<PAGE>
CASEY'S GENERAL STORES, INC.
Aviation
INSURANCE CO: Great American Insurance Co. POLICY PERIOD: 7-1-97/98
POLICY #: GHB0288565-00
I. Aircraft Insured
1. 1983 Cessna 182RG FAA# N6188T
2. 1979 Citation 501 FAA# N2648X
II. Approved Pilots
Cessna - Ron Lamb
Citation - Thomas A. Holmer
III. Open Pilot Warranties
1. Cessna - Ronald Lamb (PVT, ASEL) Pilot who hold a valid private or
commercial pilot certificate with instrument rating, and have a minimum of 500
total logged pilot hours including at least 100 hours in retractable gear
aircraft and * 10 hours in the same make and model aircraft being operated.
2. Citation - Thomas A. Holmer (ATP, SMEL, INST) provided he attend
Simuflite on annual basis. OTHERWISE, Any Airline Transport Pilot with
Multi-Engine and Type Ratings who has 1,000 Total Hours, 2,500 Multi-Engine
Hours, 500 Jet Hours, 50 Hours Make and Model and annual Flight Safety
International or Simuflite in the make and model.
3. Citation - All Other Pilots other than Thomas A. Holmer requires a
Two Man Crew as shown below:
Captain: Commercial Instrument SMEL Type Rated, 3,000 Total
Hours as Pilot in Command, 2,500 Multi-Engine, 500 in Multi-Engine Turbo Jets,
50 Hours in same
Make and Model and having sucessfully completed the Aircraft
Manufacturer's Approved Ground and Flight School
<PAGE>
CASEY'S GENERAL STORES, INC.
Aviation (Cont.)
Co-Pilot: Commercial Instrument SMEL, 1,500 Total Hours as
Pilot in Command, 1,000 Multi-Engine Hours, 100 Multi-Engine Turbo Jet Hours and
have successfully complete the Manufacturer's Approved Ground and Flight School.
IV. Bodily Injury & Property Damage Liability, Medical Payments
A) Limits - Bodily Injury & Property Damage - Including Passengers:
$10,000,000 Each Occurrence - Citation
$ 1,000,000 Each Occurrence - Cessna
Medical Payments - Including Crew: $ 3,000 Each Person / $24,000
Aggregate- Citation
$ 3,000 Each Person / $12,000 Aggregate-
Cessna
B) Deductibles: Nil
C) Usage - Business & Pleasure - Excluding any Usage for which a charge
is made. Reimbursement for Direct Operating Expense is allowed. Business Use
Only
V. Physical Damage
A. Hull Value
1. Cessna 182RG - Self-Insured
2. Citation 501 - $1,475,000
B. Perils Insured
1. All-Risk - Ground and Flight
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.
<PAGE>
CASEY'S GENERAL STORES, INC.
Aviation (Cont.)
2. Total loss - The Insured Hull Value
D. Coinsurance
Nil
E. Deductible
Nil
F. Non-owned Physical Damage
$200,000
VI. Endorsements
Non-Owned Liability including Passengers - $10,000,000 Each Occurrence
* Employees As Insureds
Personal Injury - $1,000,000
Guest Voluntary Settlement Including Crew Members - $100,000 Each Person /
$800,000 Aggr
* Broad Form Named Insured
* 60 Day Notice of Cancellation
Premises Liability - $10,000,000
Personal Effects and Baggage - $5,000 Each Passenger / $40,000 Each Occurrence
Non-Owned Hangars - $50,000
Products Liability For Sale of Aircraft
Search and Rescue - $25,000
Foam - $5,000
Unearned Premium & Physical Damage Total Loss
Damage to Non-Owned Aircraft - $50,000 Limit - $1,000 deductible
Mexico Warning
Spare Parts - $150,000
Rental Expense - Aircraft - 1% of Agreed Value, $200,000 Maximum
7 Day Waiting Period / 60 Day Maximum Limits
Rental Expense - Parts - $50,000 Each Loss / Annual Aggregate
Damage to NonOwned Aircraft - $200,000 Each Occurrence
<PAGE>
CASEY'S GENERAL STORES, INC.
Aviation (Cont.)
Physical Damage Policy Amendment
VI. Territory
USA, Canada, Mexico, Islands of the Caribbean.
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: 10-1-96 to 12-15-97
Named Insured
1. Casey's General Stores, Inc.
2. Casey's Services Company
3. Casey's Marketing Company
4. All subsidiaries of which Casey's owns in excess of 50% of the stock.
5. Newly Acquired/Created Subsidiaries - 60 Day Notice
6. 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
1 Year - 75% additional premium - Insurer cancellation or non-renewal
<PAGE>
CASEY'S GENERAL STORES, INC.
Directors & Officers Liability (Cont.)
Defense Cost
Included within Limits
Right vs. Duty
Special Conditions
1. ERISA Exclusion
2. Insured vs. Insured Exclusion - Exception for Wrongful Discharge,
Discrimination or Sexual Harassment
3. Specific Matter Exclusion
4. Additional Insureds - Bill Walljasper, Doug Beech, Eli Wirtz,
Sam Billmeyer and Julie Jackowski
5. 90 Day Notice of Cancellation
6. Pollution Exclusion - Absolute
7. Allocation Endorsement - S.E.C. Only
8. Marital Status Extension
9. Non-Profit Outside Board Extension
Refer to policy for further terms, conditions, exclusions and limitations.
<PAGE>
CASEY'S GENERAL STORES, INC.
Excess Directors & Officers Liability
INSURANCE CO: Old Republic Insurance Co. POLICY PERIOD:12-15-96/97
POLICY #: DO-8563469
Coverage
Directors and Officers Liability including Company Reimbursement Coverage
Limits of Liability
$ 10,000,000 Maximum Aggregate
Required Underlying Limits of Liability
Lead Directors and Officers Liability $10,000,000 Each Policy Year
Including Company Reimbursement
Rate
Flat Charge
Special Conditions
Deletion of Allocation Wording clarifing that as respects the Cincinnati
SEC Allocation Endorsement, Old Republic covers 100% of Loss, not otherwise
excluded by the contract, resulting from a Securities Action.
Prior and/or Pending Litigation Exclusion as of 12-15-96.
<PAGE>
CASEY'S GENERAL STORES, INC.
Crime
INSURANCE CO: Employers Mutual Casualty Co. POLICY PERIOD: 7-1-97/98
Coverages Limit Deductible
Employee Dishonesty $ 1,000,000 $ 5,000
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
Special Conditions
1. ERISA Compliance
2. 90 Day Notice of Cancellation
3. Applies to Ankeny Corporate Headquarters Only.
Retail stores are Self-Insured
4. Broad Form Named Insured
5. Knowledge of Occurrence Endorsement
<PAGE>
CASEY'S GENERAL STORES, INC.
Fiduciary Liability
INSURANCE CO: Cincinnati Ins. Co. POLICY PERIOD: 10-1-96/99
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.
For your Information:
Cincinnati - does not cover ERISA Section 502 (1) civil penalties but can be
added by endorsement for an additional premium of 10% - 25%
<PAGE>
CASEY'S GENERAL STORES, INC.
Lead Umbrella Liability
INSURANCE CO: Reliance National Indemnity Co. POLICY PERIOD: 7-1-97/00
Limits of Liability
$ 25,000,000 Each Occurrence
25,000,000 P/CO Aggregate
25,000,000 General Aggregate - Not incl. Auto Liab.
Retention Limit
$10,000
Rate
Flat Charge
Defense Cost
In addition to Policy Limits
Special Conditions
Cross Suits Liability Exclusion
MCS 90 Endorsement
90 Day Notice of Cancellation
Broad Form Named Insured - 180 Notice of Newly Acquired or Formed Companies
Uninsured Motorist Coverage Rejection
Additional Insured where required by contract
Broad Form Professional Liability Exclusion
Care, Custody and Control Exclusion
Securities Exclusion
Follow Form Employee Benefit Liability and Liquor Liability
Waiver of Subrogation
Unintentional Errors and Omissions
On-Premises Exception for Products and Completed Operations
Pollution Exclusion with exception for Limited Products Hazard and Limited
Hostile Fire Endorsement and Upset and Overturn of a Motor Vehicle
<PAGE>
CASEY'S GENERAL STORES, INC.
Lead Umbrella Liability (Cont.)
Reinstatement of Annual Aggregate
Three Year Policy Provision Endorsement
<PAGE>
CASEY'S GENERAL STORES, INC.
Lead Umbrella Liability
* Required Underlying Limits
Auto Liability - Employers Mutual Casualty - #1E30368-98 - 07-01-97/98
$ 1,000,000 CSL
General Liability - Employers Mutual Casualty - #1D30368-98 - 07-01-97/98
Each Occurrence: 750,000
Personal Injury & Advertising Injury: 750,000
Products & Compl Ops. Aggregate: 1,750,000
General Aggregate: 1,750,000
Liquor Liability: 750,000
Employee Benefits Liability: 750,000
Employers Liability - Employers Mutual Casualty - #1H30368-98 and #1M30368-98
07-01-97/98
Each Accident: 1,000,000
Disease - Each Employee: 1,000,000
Disease - Policy Aggregate: 1,000,000
Excess Employers Liability - Employers Mutual Casualty - #1N30368-98 -
07-01-97/98
Iowa
Each Accident: 650,000
Disease - Policy Aggregate: 650,000
Aviation Liability - Great American Ins. - #GHB0288565-00 - 07-01-97/98
Each Occurrence - Citation 10,000,000 CSL
Each Occurrence - Cessna 1,000,000 CSL
<PAGE>
CASEY'S GENERAL STORES, INC.
Excess Umbrella Liability
INSURANCE CO: Cincinnati Insurance Co. POLICY PERIOD: 7-1-97/98
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. Pollutant Exclusion
Refer to policy for further terms, conditions, exclusions & limitations.
<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, 1997, 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, 1997, the Company was a party to 79 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 two of the franchise
agreements (the "Covered Franchises") were entered into following the effective
date of Chapter 523H; the remainder were all entered into prior to July 1, 1992.
Certain provisions of the Covered Franchises conflict with the provisions of
Chapter 523H, including those relating to transfer, termination or non-renewal
and encroachment, and therefore may not be valid or enforceable under Chapter
523H.
Chapter 523H was amended during the 1995 legislative session, but several
significant ambiguities and concerns remain. As a result, the Company has
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
60 existing Iowa franchise agreements beyond their stated term on a year-to-year
basis, as permitted under those franchise agreements, but without prejudice to
the Company's other rights contained therein. It is the Company's position that
an authorized year-to-year extension of a pre-July 1, 1992 franchise agreement
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>
A Company franchisee recently filed suit against the Company in the Iowa
District Court for Polk County (Risco, Inc. v. Casey's General Stores, Inc.),
seeking a declaratory judgment to the effect that the location of the
franchisee's store in Slater, Iowa could be moved to another location in that
city under the terms of the existing franchise agreement without a new
"franchise" for such store being created within the meaning of Chapter 523H.
Consistent with the policy described above, the Company has refused to authorize
the change in the location of the franchisee's store on the grounds that the
same may constitute a new franchise subject to Chapter 523H. Limited discovery
is anticipated, with a district court ruling expected in mid-1998.
<PAGE>
EXHIBIT A
CASEY'S GENERAL STORES, INC.
6.55% SENIOR NOTE
Due December 18, 2003
______________
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 ____, 1997
$__________
CASEY'S GENERAL STORES, INC., an Iowa corporation (the "Company), for value
received, hereby promises to pay to ____________________ or registered assigns,
on the eighteenth day of December, 2003, the principal amount of ___________
Dollars ($__________) 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 six and fifty-five hundredths percent
(6.55%) per annum from the date hereof until maturity, payable quarterly on the
eighteenth day of each March, June, September and December in each year,
commencing March 18, 1998, 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 eight and fifty-five hundredths percent
(8.55%) 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.
<PAGE>
This Note is issued under and pursuant to the terms and provisions of a
Note Agreement, dated as of December 1, 1997, 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.
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
December 18 of each year beginning December 18, 1999 and ending December 18,
2002 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.
<PAGE>
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:
Attest:
By: ----------------------------------------
Its: Corporate Secretary
<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 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
5 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 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.
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
<PAGE>
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.
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.
