<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
--------------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-11556
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UNI-MARTS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 25-1311379
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
477 East Beaver Avenue, State College, PA 16801-5690
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(Address of principal executive offices) (Zip Code)
(8l4) 234-6000
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
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6,870,222 Common Shares were outstanding at February 5, 1999.
This Document Contains 52 Pages.
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UNI-MARTS, INC. AND SUBSIDIARY
INDEX
PART I. FINANCIAL INFORMATION
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PAGE(S)
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
December 31, 1998 and September 30, 1998 3-4
Condensed Consolidated Statements of Operations -
Quarters Ended December 31, 1998 and January 1, 1998 5
Condensed Consolidated Statements of Cash Flows -
Quarters Ended December 31, 1998 and January 1, 1998 6-7
Notes to Condensed Consolidated Financial Statements 8-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-14
PART II. OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K 14-15
Exhibit Index 17
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 31, September 30,
1998 1998
------------ -------------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,035,234 $ 5,838,318
Accounts receivable - less allowances of
$428,100 and $384,900 2,600,580 2,296,187
Tax refunds receivable 1,416,363 1,416,363
Inventories 11,325,080 10,628,307
Prepaid and current deferred taxes 1,865,708 1,975,802
Property held for sale 1,275,196 1,729,598
Prepaid expenses and other 913,852 929,304
Loan due from officer - current portion 60,000 200,000
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TOTAL CURRENT ASSETS 21,492,013 25,013,879
PROPERTY, EQUIPMENT AND IMPROVEMENTS -
at cost, less accumulated depreciation and
amortization of $49,154,000 and
$47,978,600 63,452,634 63,960,971
LOAN DUE FROM OFFICER 400,000 450,800
NET INTANGIBLE AND OTHER ASSETS 5,665,433 5,582,989
----------- -----------
TOTAL ASSETS $91,010,080 $95,008,639
=========== ===========
</TABLE>
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UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
<TABLE>
<CAPTION>
December 31, September 30,
1998 1998
------------ -------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 9,060,421 $11,120,972
Gas taxes payable 2,303,845 2,324,299
Accrued expenses 4,129,189 5,304,579
Credit line payable 3,500,000 3,500,000
Current maturities of long-term debt 914,292 1,107,818
Current obligations under capital leases 70,810 70,810
----------- -----------
TOTAL CURRENT LIABILITIES 19,978,557 23,428,478
LONG-TERM DEBT, less current maturities 33,888,858 33,846,812
OBLIGATIONS UNDER CAPITAL LEASES,
less current maturities 457,518 474,826
DEFERRED TAXES 3,916,200 4,131,400
DEFERRED INCOME AND OTHER LIABILITIES 2,995,865 3,086,948
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, par value $.10 per share:
Authorized 15,000,000 shares
Issued 7,316,797 and 7,316,797
shares, respectively 731,680 731,680
Additional paid-in capital 24,172,637 24,189,258
Retained earnings 7,593,457 7,882,583
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32,497,774 32,803,521
Less treasury stock, at cost - 448,183
and 455,545 shares of Common Stock,
respectively ( 2,724,692) ( 2,763,346)
----------- -----------
29,773,082 30,040,175
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $91,010,080 $95,008,639
=========== ===========
</TABLE>
See notes to consolidated financial statements
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UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED
December 31, January 1,
1998 1998
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<S> <C> <C>
REVENUES:
Merchandise sales $35,398,487 $45,254,511
Gasoline sales 25,321,375 36,380,554
Other income 429,163 556,236
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61,149,025 82,191,301
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COSTS AND EXPENSES:
Cost of sales 43,969,762 61,563,443
Selling 13,217,278 16,696,761
General and administrative 1,779,847 1,711,451
Depreciation and amortization 1,572,661 1,585,349
Interest 1,008,903 1,125,740
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61,548,451 82,682,744
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LOSS BEFORE INCOME TAXES ( 399,426) ( 491,443)
INCOME TAX BENEFIT ( 110,300) ( 217,200)
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NET LOSS ($ 289,126) ($ 274,243)
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NET LOSS PER SHARE ($ 0.04) ($ 0.04)
=========== ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 6,865,537 6,655,275
=========== ============
</TABLE>
See notes to consolidated financial statements
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UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED
December 31, January 1,
1998 1998
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and others $60,619,378 $80,009,909
Cash paid to suppliers and employees ( 62,816,193) ( 78,884,923)
Net receipts for sales and purchases
of trading equity securities 0 715,908
Dividends and interest received 58,966 21,251
Interest paid ( 954,038) ( 1,104,223)
Income taxes received 5,194 503,790
----------- ------------
NET CASH (USED) PROVIDED BY OPERATING
ACTIVITIES ( 3,086,693) 1,261,712
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts from sale of capital assets 558,892 1,671
Purchase of property, equipment and
improvements ( 1,001,177) ( 929,932)
Note receivable from officer 50,800 ( 15,544)
Cash advanced for intangible and other
assets ( 94,066) ( 13,419)
Cash received for intangible and other
assets 5,374 165,347
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NET CASH USED IN INVESTING ACTIVITIES ( 480,177) ( 791,877)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under revolving credit agreement 0 ( 2,000,000)
Principal payments on debt ( 236,214) ( 1,909,587)
Proceeds from issuance of common stock 0 55,000
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NET CASH USED BY FINANCING ACTIVITIES ( 236,214) ( 3,854,587)
----------- -----------
NET DECREASE IN CASH ( 3,803,084) ( 3,384,752)
CASH:
Beginning of period 5,838,318 5,993,388
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End of period $ 2,035,234 $ 2,608,636
=========== ===========
</TABLE>
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UNI-MARTS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED
December 31, January 1,
1998 1998
------------ ------------
<S> <C> <C>
RECONCILIATION OF NET LOSS TO NET CASH (USED)
PROVIDED BY OPERATING ACTIVITIES:
NET LOSS ($ 289,126) ($ 274,243)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
(USED) PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 1,572,661 1,585,349
Net unrealized holding loss on trading
securities 378 116,540
Gain on sale of trading equity securities 0 ( 81,573)
Loss on sale of capital assets and other 69,302 31,956
Changes in assets and liabilities:
(Increase) decrease in:
Trading equity securities 0 267,602
Accounts receivable ( 304,393) ( 1,660,200)
Inventories ( 696,773) 4,303,788
Prepaid expenses 13,842 107,058
Increase (decrease) in:
Accounts payable and accrued expenses ( 3,256,395) ( 3,204,590)
Deferred income taxes and other
liabilities ( 196,189) 70,025
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TOTAL ADJUSTMENTS TO NET LOSS ( 2,797,567) 1,535,955
---------- ----------
NET CASH (USED) PROVIDED BY OPERATING
ACTIVITIES ($3,086,693) $1,261,712
========== ==========
</TABLE>
See notes to consolidated financial statements
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<PAGE>
UNI-MARTS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. FINANCIAL STATEMENTS:
The consolidated balance sheet as of December 31, 1998, the
consolidated statements of operations and the consolidated statements
of cash flows for the quarters ended December 31, 1998 and January 1,
1998 have been prepared by Uni-Marts, Inc. (the "Company") without
audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the
financial position of the Company at December 31, 1998 and the
results of operations and cash flows for all periods presented have
been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is
suggested that these consolidated financial statements be read in
conjunction with the financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1998. Certain reclassifications have been made
to the September 30, 1998 financial statements to conform to
classifications used in fiscal year 1999. The results of operations
for the interim periods are not necessarily indicative of the results
to be obtained for the full year.
B. INTANGIBLE AND OTHER ASSETS:
Intangible and other assets consist of the following:
December 31, September 30,
1998 1998
------------ -------------
Goodwill $5,803,443 $5,803,443
Lease acquisition costs 827,465 827,465
Other intangible assets 61,060 91,879
Other assets 1,603,135 1,428,071
---------- ----------
8,295,103 8,150,858
Less accumulated amortization 2,629,670 2,567,869
---------- ----------
$5,665,433 $5,582,989
========== ==========
Goodwill represents the excess of costs over the fair value of net
assets acquired in business combinations and is amortized on a
straight-line basis over periods of 13 to 40 years. Lease
acquisition costs are the bargain element of acquired leases and are
being amortized on a straight-line basis over the related lease
terms. It is the Company's policy to periodically review and
evaluate the recoverability of the intangible assets by assessing
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current and future profitability and cash flows and to determine
whether the amortization of the balances over their remaining lives
can be recovered through expected future results and cash flows.
C. SHORT-TERM CREDIT FACILITIES:
The Company has two short-term credit facilities, one of which has
only a $2.7 million letter of credit outstanding at December 31,
1998. This letter of credit expires on June 30, 1999. The second
short-term credit facility is a secured $10.0 million revolving line
of credit facility with $3.0 million available for letters of credit.
At December 31, 1998, borrowings of $3.5 million were outstanding.
This facility is renewable annually and bears interest at a floating
rate of LIBOR plus 2.75%. The interest rate at December 31, 1998 was
8.37%. Management expects to replace the expiring letter of credit
from the new facility in June 1999.
D. LONG-TERM DEBT:
December 31, September 30,
1998 1998
------------ -------------
Mortgage Loan. Principal and interest will
be paid in 235 monthly installments. The
interest rate at December 31, 1998 was
9.08%. $34,043,695 $34,140,001
Equipment Loan. Principal and interest are
paid in monthly installments. The loan
expires in 2001. The interest rate at
December 31, 1998 was 9.5%. 541,869 594,309
Mortgage Loan Payable. Principal and interest
are paid in monthly installments. The loan
expires in 2010. The interest rate at
December 31, 1998 was 8.5%. 217,586 220,320
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34,803,150 34,954,630
Less current maturities 914,292 1,107,818
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$33,888,858 $33,846,812
=========== ===========
The mortgage loans are collateralized by $47,255,100 of property, at cost.
E. RELATED PARTY TRANSACTION:
In January 1999, the Company's Board of Directors approved the
refinancing of a note receivable from the Company's Chief Executive
Officer and Chairman of the Board. The note, when amended, will bear
interest at the brokerage call rate plus 0.5% and will require
payments of $60,000 plus interest on November 1, 1999, 2000, 2001,
2002 and 2003. A final payment of $300,000 is due on November 1,
2004.
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F. NEW ACCOUNTING PRONOUNCEMENTS:
Effective October 1, 1998, the Company adopted Statement Nos. 130 and
132 of the Financial Accounting Standards Board ("FASB"). FASB
Statement No. 130, "Reporting Comprehensive Income," was adopted
although the Company had no transactions involving other
comprehensive income in any of the periods presented. FASB Statement
No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits," was adopted by the Company although its
prior disclosures were in compliance with this statement.
The Financial Accounting Standards Board issued Statement No. 131,
"Disclosures about Segments of an Enterprise and Related
Information," in June 1997. The Statement establishes standards for
the way public business enterprises report information about
operating segments in annual financial statements and requires that
those enterprises report selected information about operating
segments in interim financial reports issued to stockholders. It
also establishes standards for related disclosures about products and
services, geographic areas and major customers. The Company is not
required to adopt this standard until the end of fiscal year 1999. At
this time, the Company has not determined the impact this standard
will have on the Company's financial statements but does not expect
the effect to be material.
In June 1998, the Financial Accounting Standards Board issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities." The Statement establishes accounting and reporting
standards for derivative instruments. The Company is not required to
adopt this standard until fiscal year 2000 but expects that the
adoption will have a minimal effect on the Company's financial
statements.
G. CONTINGENCIES:
Litigation -- The Company is involved in litigation and other legal
matters which have arisen in the normal course of business. Although
the ultimate results of these matters are not currently determinable,
management does not expect that they will have a material adverse
effect on the Company's consolidated financial position, results of
operations or cash flows.
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<PAGE>
ITEM 2.
UNI-MARTS, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
<TABLE>
Set forth below are selected unaudited consolidated financial data of the
Company for the periods indicated:
<CAPTION>
QUARTER ENDED
December 31, January 1,
1998 1998
------------ ----------
<S> <C> <C>
Revenues:
Merchandise sales 57.9% 55.0%
Gasoline sales 41.4 44.3
Other income 0.7 0.7
Total revenues 100.0 100.0
----- -----
Cost of sales 71.9 74.9
----- -----
Gross profit:
Merchandise (as a percentage of
merchandise sales) 37.1 34.3
Gasoline (as a percentage of
gasoline sales) 14.3 12.5
Total gross profit 28.1 25.1
Costs and expenses:
Selling 21.6 20.3
General and administrative 2.9 2.1
Depreciation and amortization 2.6 1.9
Interest 1.6 1.4
Total expenses 28.7 25.7
----- -----
Loss before income taxes ( 0.6) ( 0.6)
Income tax benefit ( 0.2) ( 0.3)
----- -----
Net loss ( 0.4)% ( 0.3)%
===== =====
OPERATING DATA (CONVENIENCE STORES ("C-STORES") ONLY):
Average, per store, for stores open two
full comparable periods:
Merchandise sales $ 127,734 $ 122,895
Gasoline sales $ 124,851 $ 134,430
Gallons of gasoline sold 161,993 137,027
Total gallons of gasoline sold 32,448,761 36,131,585
Gross profit per gallon of
gasoline $ 0.109 $ 0.122
C-Stores at beginning of period 256 384
C-Stores added 0 0
C-Stores closed 1 96
C-Stores converted to Choice
locations 1 1
C-Stores at end of period 254 287
Company-operated stores 243 264
Franchisee-operated stores 11 23
Choice Cigarette Discount Outlets 21 18
Locations with self-service gasoline 203 217
</TABLE>
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RESULTS OF OPERATIONS:
Matters discussed below should be read in conjunction with "Statements of
Operations Data" and "Operating Data (Convenience Stores Only)" on the
preceding pages. Certain statements contained in this report are forward
looking, such as statements regarding the Company's plans and strategies or
future financial performance. Although the Company believes that its
expectations are based on reasonable assumptions within the bounds of its
knowledge, investors and prospective investors are cautioned that such
statements are only projections and that actual events or results may
differ materially from those expressed in any such forward-looking
statements. In addition to the factors discussed elsewhere in this report,
the Company's actual consolidated quarterly or annual operating results
have been affected in the past, or could be affected in the future, by
additional factors, including, without limitation, general economic,
business and market conditions; environmental, tax and tobacco legislation
or regulation; volatility of gasoline prices, margins and supplies;
merchandising margins; customer, traffic; weather conditions; labor costs
and the level of capital expenditures.
QUARTERS ENDED DECEMBER 31, 1998 AND JANUARY 1, 1998
- ----------------------------------------------------
Total revenues in the quarter ended December 31, 1998 were $61.2 million, a
decline of $21.0 million, or 25.6%, from total revenues of $82.2 million in
the quarter ended January 1, 1998. This decline is primarily the result of
the Company's termination of its relationship with Getty Petroleum Corp.
and its affiliates ("Getty") in December 1997 at which time the Company
returned control of 96 convenience stores to Getty. An additional nine
stores reverted to Getty control in January 1998. The Company operated 21
Choice Cigarette Discount Outlets ("Choice") at December 31, 1998 (18 at
January 1, 1998) and merchandise sales discussed herein include sales of
tobacco products at these locations. Merchandise sales declined by $9.9
million, or 21.8%, from $45.3 million in the first quarter of fiscal year
1998 to $35.4 million in the first quarter of fiscal year 1999. This
decline is also primarily due to the loss of sales at the stores returned
to Getty. At stores open during the first quarter of both fiscal years,
merchandise sales increased 3.9%. Gasoline sales were $25.3 million in the
first quarter of fiscal year 1999 compared to $36.4 million in the first
quarter of fiscal year 1998, a decline of $11.1 million, or 30.4%. Most of
this decline is due to a $0.22 decline per gallon in retail gasoline prices
as well as 3.7 million fewer gallons sold in the current year due largely
to the return of stores to Getty. At stores open during the first quarter
of both fiscal years, gallons of gasoline sold increased 18.2%. Other
income declined by $127,000.
Gross profits on merchandise sales decreased $2.4 million, or 15.4%, in the
first quarter of fiscal year 1999 due primarily to the lower merchandise
sales volume. In the first quarter of fiscal year 1999, gross profits on
merchandise sales were $13.1 million, compared to $15.5 million in the
preceding fiscal year's first quarter. Gasoline gross profits were $3.6
million in the first quarter of fiscal year 1999 compared to $4.5 million
in the same quarter of fiscal year 1998, a decline of $926,000, or 20.4%.
This decrease is due to fewer gallons sold at fewer stores in operation and
lower gross profits per gallon sold due to competitive pressures.
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Selling expenses were $13.2 million in the first quarter of fiscal year
1999 compared to $16.7 million in the same quarter of fiscal year 1998.
This decline of $3.5 million, or 20.8%, is largely the result of fewer
stores in operation in the current year. General and administrative
expense in the current year increased by $68,000, or 4.0%, from the first
quarter of fiscal year 1998 due to staffing increases and higher salary
levels and professional fees. Depreciation and amortization expense
remained relatively level in the first quarter of the two fiscal years.
Interest expense declined by $117,000, or 10.4%, due to lower borrowing
levels.
The Company incurred a pre-tax loss of $399,000 in the quarter ended
December 31, 1998 compared to a pre-tax loss of $491,000 in the comparable
quarter of the prior year. The Company recorded an income tax benefit of
$110,000 in the current year compared to a benefit of $217,000 in the first
quarter of fiscal year 1998. The income tax benefit is proportionally
lower in the current year due to state income tax limitations for
utilization of net operating losses. The net loss for the first quarter of
fiscal year 1999 was $289,000, or $0.04 per share, compared to a net loss
of $274,000, or $0.04 per share in the prior fiscal year's first quarter.
LIQUIDITY AND CAPITAL RESOURCES:
Most of the Company's sales are for cash and its inventory turns over
rapidly. As a result, the Company's daily operations do not generally
require large amounts of working capital. From time to time, the Company
utilizes substantial portions of its cash to acquire and construct new
stores and renovate existing locations.
On December 30, 1998, the Company entered into a $10.0 million revolving
credit facility with a bank, with $3.0 million available for letters of
credit. The Company utilized $3.5 million of this facility to repay its
existing revolving credit facility and property loan. The Company intends
to utilize this facility to replace its outstanding $2.7 million letter of
credit which expires on June 30, 1999.
Capital requirements for debt service and capital leases for the remainder
of fiscal year 1999 are approximately $600,000, and capital expenditures of
approximately $7.0 million for remodeling costs and upgrades of
gasoline-dispensing equipment are anticipated. Funds for renovations of
stores and equipment replacement will be supplied from available cash from
operations. Management believes that cash presently available, expected
available cash generated from operations and cash from the Company's
revolving line of credit and new equipment financing will be sufficient to
fulfill its cash requirements for the foreseeable future.
THE YEAR 2000 ("Y2K") PROBLEM:
Update on the Company's Y2K Program:
- -----------------------------------
The Company is continuing to identify and correct Y2K problems in its
mainframe computer applications software and the Company anticipates
completion of this phase in April 1999. Testing and modification of
mainframe computer hardware and systems software has been completed.
Personal computer hardware and software located in the corporate offices
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has been tested and any needed modifications or replacement are underway.
Testing of personal computer hardware and software located in stores and
regional offices remains to be completed. Other date-sensitive hardware
utilized by the Company will be tested and replaced or modified as
necessary. The Company has also begun the process of identifying suppliers
of goods and services whose Y2K failure could be disruptive to the
Company's business and soliciting written statements from them regarding
the status of their Y2K compliance. The Company still anticipates the
completion of its Y2K program with testing and contingency planning in June
1999. Total costs are not expected to exceed $400,000.
Risks/Contingency Plans:
- -----------------------
Based on its assessment and corrective efforts to date, the Company does
not expect material difficulties with the Y2K problem in its internal
computer systems. In addition, the Company does not expect material Y2K
problems with other date-sensitive hardware or materially disruptive Y2K
failures of its suppliers of merchandise and services. The Company's
stores are geographically dispersed, and it has a diverse supplier base.
Although the Company has a diverse supplier base, it does deal with a
limited number of large suppliers whose Y2K failure could have a material
effect on the Company's business. The Company believes that it could
easily find alternative suppliers and that these factors will moderate any
material adverse effects of the Y2K problem. In management's opinion, the
largest risks facing the Company are the inability of some of the Company's
stores to process retail sales transactions or obtain merchandise to sell.
The Company expects to develop appropriate contingency plans pending the
outcome of future events.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
3.1 Amended and Restated Certificate of Incorporation of the Company
(Filed as Exhibit 3.1 to the Company's Quarterly Report on Form
10-Q for the period ended March 30, 1995 and incorporated herein
by reference thereto).
3.2 By-Laws of the Company (Filed as Exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the period ended March 30,
1995 and incorporated herein by reference thereto).
4.1 Form of the Company's Common Stock Certificate (Filed as Exhibit
4.3 to the Company's Quarterly Report on Form 10-Q for the
period ended April 1, 1993, File No. 1-11556, and incorporated
herein by reference thereto).
10.1 Uni-Marts, Inc. Amended and Restated Equity Compensation Plan
(Filed as Exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the period ended March 30, 1995 and incorporated herein
by reference hereto).
10.2 Uni-Marts, Inc. Retirement Savings & Incentive Plan (Filed as
Exhibit 4.2 to the Company's Registration Statement on Form S-8,
File No. 33-9807, filed on July 10, 1991, and incorporated
herein by reference thereto).
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10.3 Form of Indemnification Agreement between Uni-Marts, Inc. and
each of its Directors (Filed as Exhibit A to the Company's
Definitive Proxy Statement for the February 25, 1988 Annual
Meeting of Stockholders, File No. 0-15164, and incorporated
herein by reference thereto).
10.4 Uni-Marts, Inc. Deferred Compensation Plan (Filed as Exhibit
10.8 to the Annual Report of Uni-Marts, Inc. on Form 10-K for
the year ended September 30, 1990, File No. 0-15164, and
incorporated herein by reference thereto).
10.5 Uni-Marts, Inc. Executive Annual Bonus Plan.
10.6 Uni-Marts, Inc. Performance Unit Plan (Filed as Exhibit 10.9 to
the Annual Report of Uni-Marts, Inc. on Form 10-K for the year
ended September 30, 1994 and incorporated herein by reference
thereto).
10.7 Composite copy of Change in Control Agreements between
Uni-Marts, Inc. and its executive officers (Filed as Exhibit
10.10 to the Annual Report of Uni-Marts, Inc. on Form 10-K for
the year ended September 30, 1994 and incorporated herein by
reference thereto).
10.8 Uni-Marts, Inc. 1996 Equity Compensation Plan (Filed as
Exhibit A to the Company's Definitive Proxy Statement for the
February 22, 1996 Annual Meeting of Stockholders and
incorporated herein by reference thereto).
10.9 Amendment 1998-1 to the Uni-Marts, Inc. Equity Compensation Plan
(Filed as Exhibit 10.10 to the Annual Report of Uni-Marts, Inc.
on Form 10-K for the year ended September 30, 1998 and
incorporated herein by reference thereto).
10.10 Amended and Restated Note between Henry D. Sahakian and
Uni-Marts, Inc. dated January 7, 1998 (Filed as Exhibit 10.16 to
the Company's Annual Report on Form 10-K for the period ended
September 30, 1997 and incorporated herein by reference
thereto).
10.11 Loan Agreement between FFCA Acquisition Corporation and
Uni-Marts, Inc. dated June 30, 1998 (filed as Exhibit 10.10 to
the Company's Quarterly Report on Form 10-Q for the period
ended on July 2, 1998 and incorporated herein by reference
thereto).
10.12 Revolving Loan Agreement between FFCA Acquisition Corporation
and Uni-Marts, Inc. dated June 30, 1998 (filed as Exhibit 10.11
to the Company's Quarterly Report on Form 10-Q for the period
ended on July 2, 1998 and incorporated herein by reference
thereto).
10.13 Revolving Credit Loan Agreement between U.S. Bank and
Uni-Marts, Inc. dated December 30, 1998.
11 Statement regarding computation of per share earnings (loss).
27 Financial Data Schedule.
(b) REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K during the quarter
ended December 31, 1998.
-15-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Uni-Marts, Inc.
------------------------------------
(Registrant)
Date February 16, 1999 /S/ HENRY D. SAHAKIAN
------------------- -------------------------------------
Henry D. Sahakian
Chairman of the Board
(Principal Executive Officer)
Date February 16, 1999 /S/ J. KIRK GALLAHER
------------------- -------------------------------------
J. Kirk Gallaher
Executive Vice President, Director
and Chief Financial Officer
(Principal Accounting Officer)
(Principal Financial Officer)
-16-
<PAGE>
UNI-MARTS, INC. AND SUBSIDIARY
EXHIBIT INDEX
Number Description Page(s)
- ------ ----------- -------
10.5 Executive Annual Bonus Plan. 18-21
10.13 Revolving Credit Loan Agreement between U.S.
Bank and Uni-Marts, Inc. 22-50
11 Statement regarding computation of per
share earnings (loss). 51
27 Financial Data Schedule. 52
-17-
<PAGE> 18
UNI-MARTS, INC.
EXECUTIVE ANNUAL BONUS PLAN
I. PURPOSE. The purpose of the Uni-Marts, Inc. Executive Annual Bonus
Plan (formerly called the Annual Bonus Plan and hereinafter the "Plan")
is to provide a means whereby Uni-Marts, Inc. (the "Company") may (i)
provide incentives and rewards to all key employees of the Company, by
making part of each such individual's pay dependent upon the financial
success of the Company, (ii) attract and retain persons of outstanding
executive ability as key employees of the Company and motivate such key
employees to exert their best efforts on behalf of the Company, and (iii)
make the Company's compensation programs competitive with those of other
similar employers. The "Effective Date" of the Plan was October 1, 1993.
Effective October 1, 1998, the Plan is amended and restated as
follows:
II. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee (the "Committee") of the Board of directors of the Company (the
"Board"). The Committee shall have full power and authority to interpret
the Plan, make factual determinations, and to prescribe, amend and
rescind any rules, forms or procedures as it deems necessary or
appropriate for the proper administration of the Plan and to make any
other determinations and take such other actions as it deems necessary or
advisable in carrying out its duties under the Plan. All decisions and
determinations by the Committee shall be final, conclusive and binding on
the Company, all Participants, and any other persons having or claiming
an interest hereunder.
III. PARTICIPATION. For each fiscal year of the Company (the "Plan
Year"), the Committee shall determine, taking into account the
recommendati on of the Chief Executive Offic er of the Company, each
key employee of the Company who will participate in the Plan
(a "Participant"). In determining whether to recommend that an
individual become a Participant under the Plan, the Committee shall take into
consideration the key employee's present and potential contribution to the
success of the Company and such other factors as the
Committee may in its sole discretion deem proper and relevant. The
Committee may determine to recommend that a key employee become a
Participant after the beginning of a Plan Year in which case the employee
shall first be eligible for an Award for the full quarters commencing
immediately after such individual becomes a Participant; in such case,
the Award for the Plan Year shall be prorated based on the number of
complete quarters during which the Participant was eligible for an Award,
but all other terms of the Plan shall apply.
IV. DETERMINATION OF AWARD.
4.1 FINANCIAL CRITERIA. As soon as practicable, but in any event
within 30 days after the start of each Plan Year, the Committee shall
determine the financial criteria which will be the basis for the Awards
for such Plan Year and communicate such criteria to all Participants.
The financial criteria will be based on earnings per common share
("EPS"), and a schedule will be created that will equate to percentages
<PAGE> 19
of base salary to be awarded at specified levels of EPS above a threshold
level (below that threshold level no bonus will be awarded) and up to a
target level of EPS. If EPS exceeds the target level, a further pool
shall be created equal to the percentage of the excess specified by the
Committee and such amount shall be allocated among the Participants and
other levels of officers of the Company in such percentages as were set
by the Committee in the schedule. An example of the financial criteria
and the method for determining individual Awards based upon that criteria
is set forth on Exhbit A hereto. For the purposes of the Plan, EPS shall
mean basic earnings per share before extraordinary items and accounting
changes as determined under generally accepted accounting principles.
4.2 CALCULATION OF AWARD. For each Plan Year, the Committee shall
calculate the amount of Award based upon the financial criteria set by
the Committee and the actual Company financial results for the full Plan
Year.
4.3 ANNOUNCEMENT OF AWARD. Results for each Plan Year will be
announced by the Committee to all Participants immediately following the
announcement of the Company's financial results for the Plan Year,
normally within 30 days following the end of such Plan Year.
V. PAYMENT OF AWARD
5.1 ANNUAL AWARDS. The Committee shall authorize Awards to be made
for the full Plan Year if the financial criteria have been satisfied for
the full Plan Year. Any positive Award shall be paid to each Participant
promptly after authorization.
5.2 WITHHOLDING TAX. Notwithstanding any other provision of this
Plan, the Company shall be entitled to withhold from, or in respect of,
any Award to be made an amount sufficient to satisfy all federal, state
and local tax withholding requirements relating thereto.
VI. TERMINATION OF EMPLOYMENT. If, during a Plan Year, a Participant
ceases to be employed by the Company for any reason other than "cause,"
as determined by the Committee in its sole discretion, the Award payment
otherwise due under this Plan, if any, for that Plan Year will be
multiplied by the percentage of the Plan Year during which the
Participant was in the employ of the Company and such amount shall be
paid when all other Award payments are made for that Plan Year.
VII. GENERAL PROVISIONS.
7.1 TRANSFERABILITY. No Award under this Plan shall be
transferred, assigned, pledged or encumbered by the Participant. In the
event of a Participant's death during employment with the Company,
payments of any unpaid Award(s) shall be made to the Participant's
estate.
7.2 UNFUNDED ARRANGEMENT. The Plan is an unfunded incentive
compensation arrangement. Nothing contained in the Plan, and no action
2
<PAGE> 20
taken pursuant to the Plan, shall create or be construed to create a
trust of any kind. A Participant's right to receive an Award
shall be no greater than the right of an unsecured general creditor of
the Company. All Awards shall be paid from the general funds of the
Company, and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such Awards.
7.3 NO RIGHTS TO EMPLOYMENT. Nothing in this Plan, and no action
taken pursuant hereto, shall confer upon any Participant the right to
continue in the employ of the Company, or affect the right of the Company
to terminate the Participant's employment at any time for cause
or for no cause whatsoever.
7.04 ADJUSTMENT FOR NON-RECURRING ITEMS, ETC. Notwithstanding
anything herein to the contrary, if the Company's financial performance
is affected by any event that is of a non-recurring nature, the Committee
in its sole discretion may make such adjustments in the financial
criteria as it shall determine to be equitable and appropriate in order
to make the calculations of Awards, as nearly as may be practicable,
equivalent to the calculation that would have been made
without regard to such event. In the event of a significant change of
the business or assets of the Company under circumstances involving an
acquisition or a merger, consolidation or similar transaction, the
Committee shall, in good faith, recommend to the Board for approval such
revisions to the financial criteria and the other terms and conditions
used in calculating Awards for the then current Plan Year as it
reasonably deems appropriate in light of any such change.
7.05 NOTICES. Any notice hereunder to be given to the Company
shall be in writing and shall be delivered in person to the Secretary of
the Company, or shall be sent by registered mail, return receipt
requested, to the Secretary of the Company at the Company's executive
offices, and any notice hereunder to be given to the Participant shall be
in writing and shall be delivered in person to the Participant, or shall
be sent by registered mail, return receipt requested, to the Participant
at his last address as shown in the employment records of the Company.
Any notice duly mailed in accordance with the preceding sentence shall be
deemed given on the date postmarked.
7.06 APPLICABLE LAW. The Plan shall be construed and governed in
accordance with the laws of the Commonwealth of Pennsylvania.
7.07 TERMINATION AND AMENDMENT OF THE PLAN. The Board reserves the
right to amend, suspend, or terminate the Plan at any time; provided,
however, that any amendment, suspension or termination shall not
adversely affect the rights of Participants to receive Awards
calculated for a completed quarter.
7.08 MISCELLANEOUS.
(a) If the Company shall find that any person to whom any payment
is payable under this Plan is unable to care for his affairs because of
3
<PAGE> 21
illness or accident, or is a minor, any payment due (unless a prior claim
therefor shall have been made by a duly appointed guardian, committee or
other legal representative) may be paid to the spouse, a child, a parent,
or a brother or sister, or to any person deemed by the Company to have
incurred expense for such person otherwise entitled to payment, in such
manner and proportions as the Company may determine. Any such payment
shall be a complete discharge of the liabilities of the Company under
this Plan.
(b) This Plan shall be binding upon and inure to the benefit of the
Company, its successors and assigns and the Participant and his heirs,
executors, administrators and legal representatives.
4
<PAGE> 22
REVOLVING CREDIT LOAN AGREEMENT
-------------------------------
THIS REVOLVING CREDIT LOAN AGREEMENT is made on this 30th day of
December, 1998, by and between:
UNI-MARTS, INC., a Delaware Corporation, organized and existing
under the laws of the State of Delaware, and its subsidiary
(hereinafter sometimes called "Borrower/s" or "Borrowers")
AND
U. S. BANK, a state banking association (hereinafter sometimes
called "Lender");
NOW, THEREFORE, in consideration of the premises hereinafter
contained, the parties hereto agree as follows:
ARTICLE 1 - DEFINITIONS AND CONSTRUCTION
----------------------------------------
Section 1.1. The following words and terms shall have the meanings,
respectively, specified hereinbefore:
(a) Borrower/s: (see above)
(b) Borrowers: (see above)
(c) Lender: (see above)
Section 1.2. In addition to other words and terms defined elsewhere
in this Revolving Credit Loan Agreement, the following words and terms
shall have the following meanings, respectively, unless the context
hereof otherwise clearly requires.
"Advance" shall mean such amounts as Borrower/s may draw from time
to time prior to the Termination Date under the Line established pursuant
to this Agreement. This shall mean any amount drawn or drafted against
the Letter of Credit.
1
<PAGE> 23
"Affiliate" shall have the meaning ascribed to such term in Section
4.7.
"Agreement" shall mean this Revolving Credit Loan Agreement as the
same may from time to time be amended or supplemented.
"Authorized Officers" shall mean the officers or agents of
borrower/s listed in Exhibit "A" attached to this Agreement.
"Availability Report" shall mean a report signed by Authorized
Officer setting forth the believed remaining balance on the line.
"Banking Day" shall mean a day upon which the general banking office
of Lender is open for business between 9:00 a.m. and 4:00 p.m.
"Code" shall mean the Uniform Commercial Code as enacted in the
Commonwealth of Pennsylvania at Title 13 of the Pennsylvania Consolidated
Statutes.
"Commitment Fee/s" shall mean a fee, payable in accordance with the
following terms;
(a) 0.50% of $7,000,000: one time fee; $5,000 paid upon the
execution of the commitment letter and balance due at closing;
(b) 0.75% of up to $3,000,000: annual fee regarding Letter of
Credit paid quarterly in arrears on the outstanding amount of the Letter
of Credit; and
(c) 0.25% of the average unused portion of the $7,000,000 Line
of Credit calculated quarterly in arrears.
"Commitment Letter" shall mean that certain letter between Borrower
and Lender dated December 16, 1998 whereby Bank committed to this Loan
and Borrower accepted the terms.
"Confirmation" shall mean a written notice in the form set forth as
Exhibit B attached to this Agreement.
2
<PAGE> 24
"Debt" shall mean:
(a) The principal, interest, and any other sums due or to
become due under the Note and all renewals, extensions, or modifications
of the Note;
(b) All other sums, together with appropriate interest
thereon, due or becoming due and payable by Debtor under this Agreement,
the other Loan Documents, and any other agreements for security or
otherwise executed by Borrowers to secure its indebtedness or
performance described in this Agreement, including, but not limited to,
fees, charges, costs, expenses, and reasonable attorneys' fees incurred
under the Loan Documents;
(c) The observance and performance by Borrower of all of its
conditions, obligations, covenants, promises and agreements contained in
this Agreement and the ot her Loan Documents; and
(d) Such additional sum or sums or future advances, with
interest thereon, together with all costs and expenses related thereto,
as may be hereafter advanced by Lender to Borrower in accordance with
this Agreement or any other Loan Document.
(e) The additional sums either committed or advanced pursuant
to the sublimit Letter of Credit.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Event of Default" shall mean any one of the events enumerated in
Article 6.
"Fiscal Year" shall mean Borrowers' accounting year.
"GAAP" means generally accepted accounting principles.
"IRC" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder, including any amendments and successor
provisions thereto.
"Letter of Credit" shall mean an Irrevocable Letter of Credit in an
amount up to $3,000,000 to be issued by Lender on behalf of Borrower to
secure Borrower's workers' compensation obligations. The Letter of
credit will be subject to the limitations and conditions set forth herein
and is a sublimit to the Maximum Drawable Amount.
3
<PAGE> 25
"Line" shall mean the revolving credit loan as set forth in Article
2.
"Loan Documents" shall mean this Agreement, the Commitment Letter,
the Note, the Security Agreement, the UCC-1 Financing Statements, any and
all documents contemplated under any of the foregoing and all statements
and affidavits required by any of the Loan Documents.
"Maximum Drawable Amount" shall mean $10,000,000.00, including the
value of the sublimit Letter of Credit.
"Note" shall mean the note entitled "Revolving Credit Note" of even
date herewith evidencing Borrower's indebtedness, as the same may from
time to time be amended or supplemented. The Note shall contain certain
Interest Rate Reduction Criteria as set forth in the Note.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Plan" shall mean any employee pension plan maintained by Borrowers
or any Affiliate.
"Security Agreement" shall mean that certain Agreement whereby
Borrower gives to Lender a Security Interest as defined herein.
"Security Interest" shall mean that certain First Priority security
interest granted by Borrower to Lender in Borrower's accounts receivable
and inventory and all associated rights and all cash and non-cash
proceeds of the foregoing, including insurance proceeds.
"Termination Date" shall mean December 31, 1999, or the annual
anniversary date of this Agreement if renewed by Lender. If the sublimit
Letter of Credit is issued by Bank, it may have a maturity date not to
extend beyond June 30, 2000.
"UCC-1 Financings Statements" shall mean the financing statements
which the Lender may from time to time reasonably require in order to
4
<PAGE> 26
perfect its Security Interests in collateral described in this Agreement,
and the Security Agreement.
Section 1.3. In this Agreement (except as otherwise expressly
provided for or unless the context otherwise requires), (i) the singular
shall include the plural, and the plural shall include the singular, and
defined terms may be used in the singular or the plural, (ii) the use of
any gender (including male, female, and asexual) includes all other
genders, (iii) the terms "hereof", "herein", "hereto", "hereby",
"hereunder" and "herewith" refer to this entire Agreement, (iv) the term
"hereafter" means after the date of execution of this Agreement, and the
term "heretofore" means before the date of execution of this Agreement,
(v) each particular use of the term "hereinbefore" refers to all the
agreement preceding that particular use of the term "hereinbefore", and
each particular use of the term "hereinafter" refers to all of the
Agreement following that particular use of the term "hereinafter", (vi)
all references to particular Articles or Sections are references to the
Articles or Sections of this Agreement, (vii) all accounting terms used
herein and not specifically defined herein shall be construed in
accordance with GAAP, (viii) time is of the essence hereunder, (ix) any
time given herein shall be deemed to be prevailing time in Johnstown,
Pennsylvania, and (x) headings used herein are intended for convenience
only and shall not affect the meaning or construction hereof.
ARTICLE 2 - ADVANCES
--------------------
Section 2.1. Subject to the terms and conditions of this Agreement,
prior to the Termination Date and so long as no Event of Default shall
5
<PAGE> 27
have occurred which remains uncured, Borrower may borrow, repay, and
reborrow Advances as Borrower may from time to time request from Lender
to and including the Maximum Drawable Amount, subject to the Letter of
Credit limits on Advances, and, provided, nonetheless, that Lender may,
in its sole discretion, from time to time, and at any time, elect not to
make any Advances, any Advance, or any part of any Advance or Advances
which will cause the aggregate outstanding amount of Advances to exceed
the Maximum Drawable Amount and if any Event of Default has occurred and
remains uncured.
Section 2.2. Borrower hereby authorizes Lender to make Advances for
the benefit of Borrower as directed by Borrower, upon receipt of
information as to the amount of the Advance requested and as to
Borrower's direction for payment thereof, which information shall be
communicated to Lender by telephone from any one of the Authorized
Officers, and Borrower further agrees to confirm such telephone
information by delivering on the date of such telephone information a
Confirmation and an Availability Report to Lender by first class mail and
by telecopier transmission. Any request for an Advance, by whatever
means communicated to Lender, which is received by Lender after 1:00 p.m.
on any day and/or on a day which is not a Banking Day, shall be deemed
received on the first Banking Day thereafter.
Section 2.3. Advances may only be made to Borrower.
Section 2.4. The Advances shall be evidenced as provided in the
Note and in the Agreement.
Section 2.5. The Advances shall be repaid, and interest on the
Advances shall accrue and be repaid, as provided in the Note.
6
<PAGE> 28
Section 2.6. Advances may at Borrower's election be repaid, in
whole or in part, at any time and from time to time prior to the
Termination Date (unless the Note matures prior to the Termination Date,
whether by acceleration or otherwise), upon payment to Lender from
Borrower or any other service. Any repayment, by whatever means
forwarded to Lender, which is received by Lender after 1:00 p.m. on any
day and/or on a day which is not a Banking Day, shall be deemed received
on the first Banking Day thereafter.
Section 2.7. All payments of principal and/or interest on the Note
shall be made in immediately available funds, or by wire, at the Main
Office of Lender, Main and Franklin Streets, Johnstown, Pennsylvania,
prior to 1:00 p.m. on the date due; funds which are immediately
available to Lender and which are received after that time shall be
deemed to have been received by Lender on the first Banking Day
thereafter; and funds which are received on any day and which are not
immediately available to Lender shall be deemed received by Lender on the
earliest Banking Day thereafter upon which such funds are immediately
available to Lender. The above provisions of this Section 2.7 shall not
affect Borrowers' obligation to pay when due all amounts payable by
Borrower under the Note.
Section 2.8. The Lender agrees to provide to Borrower as a
sublimit to the Maximum Drawable Amount, a Letter of Credit upon request
up to a maximum amount of $3,000,000, but only if the Note has unused
available funds equal to the Letter of Credit to be issued. At no time
during the term of the Loan or Note may the Letter of Credit amount and
advances on the Note exceed $10,000,000 in the aggregate and at no time
shall the Letter of credit exceed $3,000,000. The maturity date of the
Letter of Credit shall not extend beyond June 30, 2000.
7
<PAGE> 29
ARTICLE 3 - CONDITIONS OF LENDING
---------------------------------
Section 3.1. Lender's obligations under this Agreement are
conditioned upon Borrower furnishing Lender with the following, each duly
executed and dated as of the date of this Agreement, and with each being
in form and substance satisfactory to Lender, to wit:
(a) A copy, duly certified by Borrower's secretary, of (i) the
resolutions of such Borrower's officers authorizing the borrowings
hereunder and the execution and delivery of this Agreement, the Note, and
the other Loan Documents, (ii) a resolution of Borrower appointing and
authorizing an Authorized Officer/s for Borrower, (iii) all documents
evidencing other necessary corporate action, and (iv) all approvals or
consents, if any, with respect to this Agreement, the Note, and the other
Loan Documents.
(b) A certificate of such Borrower's secretary certifying the
names of the Officer/s authorized to sign this Agreement, the Note, and
all other documents and certificates to be delivered by Borrower
hereunder, together with the true signatures of such officers.
(c) The Note, Security Agreement and UCC-1 Financing
Statements.
(d) The opinion of Saul, Ewing, Remick & Saul, LLP,
Borrower's counsel, addressed to Lender, to the effect that, based upon
such counsel's review of the books and records of Borrower and inquiry
with the officers and employees of Borrower: (i) as to the compliance
with the matters set forth in this Loan Agreement; and (ii) the Loan
Documents are the legal and binding obligations of Borrower which are
enforceable in accordance with their terms.
8
<PAGE> 30
(e) Payment of fees, costs, and expenses incurred as required
by Section 8.8 or otherwise herein.
(f) All required statements, affidavits and financing
documents.
(g) Affidavit that Borrower has not had any material adverse
financial change since submission of its financials to Bank.
(h) Affidavit that Borrower is not involved in any material
litigation as of date of closing.
(i) The Security Interests defined herein have been filed and
perfected as First Priority liens on the security described in the
Security Agreement in Pennsylvania, New York, Delaware, Virginia and
Maryland.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES
------------------------------------------
Borrower represents and warrants as follows:
Section 4.1. Borrower, Uni-Marts, Inc., is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and is qualified to do business in the Commonwealth of
Pennsylvania and the States of New York, Delaware, Virginia and Maryland.
Borrower has all necessary permits, licenses, certifications and
qualifications to conduct its business as it is presently being
conducted, and has complied in all material respects with all
applicable requirements of the United States and the Commonwealth of
Pennsylvania and the States of New York, Delaware, Virginia and Maryland,
and their respective agencies and instrumentalities, to operate its
facilities as they are presently being operated.
9
<PAGE> 31
Section 4.2. The execution, delivery, and performance by Borrower
of this Agreement, the Note, and the other Loan Documents are within
Borrower's powers, have been duly authorized by all necessary action of
Borrower's officers, and do not contravene Borrower's Articles of
Incorporation and Bylaws, or, any law, rule, regulation, order or
judgment applicable to Borrower, or any agreement or contractual
restriction binding on or affecting Borrower or any of its properties.
Section 4.3. No authorization, approval or other action by,
and no notice to or filing with, any governmental authority, regulatory
body or court is required for the due execution, delivery and performance
by Borrower of this Agreement, the Note, and the other Loan Documents,
except such as have been obtained.
Section 4.4. This Agreement, the Note, and the other Loan
Documents are the legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with its terms,
subject to the application by a court of general principles of equity and
to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally.
Section 4.5. Except as disclosed to Lender in writing prior to
the date of execution and delivery hereof, there is no pending action or
proceeding before any court, governmental agency or arbitrator against or
involving Borrower and, to the best knowledge of Borrower, there is no
threatened action or proceeding affecting Borrower before any court,
governmental agency or arbitrator which, in any case, might materially
and adversely affect the financial condition or operations of Borrower,
or the validity or enforceability of this Agreement, the Note, and the
other Loan Documents.
10
<PAGE> 32
Section 4.6. To the best of Borrower's knowledge, Borrower is
not in any material way in breach of or in default under (a) any
applicable law or administrative regulation of the States of
Pennsylvania, Maryland, New York, Virginia and Delaware or the United
States or any applicable judgment or decree; (b) any material contracts,
including franchise agreements; or (c) any material loan agreement,
indenture, lease, sublease, bond, note, resolution, agreement or other
instrument to which it is a party or otherwise subject, and no event has
occurred and is continuing which, with the passage of time or the giving
of notice or both, would constitute a material event of default by
Borrower under any such instrument except for violations, if any, which
Borrower has disclosed to Lender in writing and are proceeding in good
faith to remove or correct.
Section 4.7. To the best of Borrower's knowledge, no Plan which is
subject to Part 3 of Title I of ERISA has an accumulated funding
deficiency (as defined in Section 302(a) of ERISA), no reportable event
(as defined in Section 4043 of ERISA) has occurred with respect to any
employee pension plan maintained for employees of Borrower or any
Affiliate and covered by Title IV of ERISA, no liability has been
asserted against Borrower or any Affiliate by the Pension Benefit
Guaranty Corporation ("PBGC") or by a trustee appointed pursuant to
Section 4042(b) or (c) of ERISA, and no lien has been attached and no
person has threatened to attach a lien to any of Borrower's or any
Affiliate's property as a result of failure to comply with ERISA or as a
result of the termination of any employee pension plan covered by Title
IV of ERISA. Each employee pension plan (as defined in Section 3(2) of
ERISA) maintained for employees of Borrower or any Affiliate which is
11
<PAGE> 33
intended to be qualified under Section 401(a) of the IRC, including all
amendments to such plan or to any trust agreement, group annuity or
insurance contract or other governing instrument, is the subject of a
favorable determination by the Internal Revenue Service with respect to
its qualification under Section 401(a) of the IRC. With respect to any
multiemployer pension plan (as defined in Section 3(37) of ERISA) to
which Borrower or any Affiliate is or has been required to contribute
subsequent to September 5, 1980, (i) no withdrawal liability (within the
meaning of Section 4201 of ERISA) has been incurred by Borrower or any
Affiliate, (ii) no withdrawal liability has been asserted against
Borrower or any Affiliate by a sponsor or an agent of a sponsor of any
such multiemployer plan, (iii) no such multiemployer pension plan is in
reorganization (as defined in Section 4241(a) of ERISA), and (iv) neither
Borrowers nor any Affiliate have any unfulfilled obligation to contribute
to any such multiemployer pension plan. As used in this Agreement,
"Affiliate" means (i) any corporation included with Borrower in a
controlled group of corporations within the meaning of Section 414(b)
of the IRC, (ii) any trade or business (whether or not incorporated or
for profit) which is under common control with Borrower within the
meaning of Section 414(c) of the IRC, (iii) any member of an affiliated
service group of which Borrower is a member within the meaning of Section
414(m) of the IRC, and (iv) any other entity treated as being under
common control with Borrower under Section 414(o) of the IRC.
Section 4.8. Borrower will provide Lender with the following
statements and/or affidavits at the time of closing:
(a) Disclosure of the record stock holdings of the executive
officers and directors of Borrower;
(b) List of subsidiaries of Borrower;
12
<PAGE> 34
(c) Affidavit that financial statements and financial
information provided represents a full and complete disclosure of the
financial condition of Borrower as of the dates of said financial
information and the period of time covered thereby;
(d) Affidavit that Borrower is current on all tax liabilities;
(e) Affidavit that Borrower is not in default on any other
loans or obligations;
(f) Affidavit that Borrower's franchise agreements, patents,
trademark, licenses and/or service marks are valid and in existence;
(g) Statement and supporting documentation that Borrower is
in compliance with federal and state environmental regulations regarding
underground storage tanks.
(h) Proof of insurance on all pledged inventory collateral
naming Lender as additional insured and if self insured, a copy of the
self insurance agreement naming Lender as insured.
(i) Statement that to the best of Borrower's knowledge the
employee plans and benefit arrangements are in compliance with federal
and state laws, including labor laws.
(j) Other representations and warranties as the Bank deems
appropriate.
ARTICLE 5 -- AFFIRMATIVE AND NEGATIVE COVENANTS
-----------------------------------------------
Until the Debt is paid and satisfied in full, Borrower covenants
that, except to the extent Lender shall otherwise consent in writing,
each of the following covenants shall be performed and
complied with by Borrower as indicated:
13
<PAGE> 35
Section 5.1. Borrower will maintain its existence, rights, and
privileges and their qualification to do business in the Commonwealth of
Pennsylvania, and States of New York, Delaware, Virginia and Maryland and
will not dissolve or otherwise dispose of all or substantially
all of its assets and will not consolidate with or merge into another
entity or permit one or more other entities to consolidate with or merge
into it; except that Borrower may consolidate with or merge into another
corporation or partnership or permit another corporation or partnership
to consolidate with or merge into it, provided that (a) either (i) the
resulting or surviving corporation or partnership is an organization
organized and existing under the laws of one of the states of the
United States and is qualified to do business in the Commonwealth of
Pennsylvania and States of New York, Delaware, Virginia and Maryland and
the resulting or surviving organization, if other than Borrower, delivers
to Lender at the time of such consolidation or merger a written
instrument by which it assumes all of the obligations of Borrower under
this Agreement, the Note, and the other Loan Documents and agrees to be
bound by all of the terms hereof or (ii) the resulting or surviving
organization is a business entity organized and existing under either the
laws of Commonwealth of Pennsylvania, or States of New York, Delaware or
Maryland, which shall be subject to Lender's prior written approval of
such merger or consolidation which shall not be unreasonably withheld,
and (b) such consolidation or merger shall not result in an immediate or
projected violation of any other provision of this Agreement.
Section 5.2. Borrower will comply in all material respects
with all applicable laws, rules, regulations and orders of any
governmental authority the noncompliance with which could materially and
adversely affect its operations or condition, except for any such laws,
14
<PAGE> 36
rules, regulations and orders which the Borrower is contesting in good
faith by appropriate proceedings and the noncompliance with which during
such contest would not materially and adversely affect Borrower's
operations or financial condition if the result of such contest were
adverse to Borrower.
Section 5.3. Borrower will maintain or cause to be maintained
(i) hazard insurance with fire and extended coverage on the Inventory
subject to the Security Interest, and (ii) comprehensive general
liability insurance. Each of the policies described in the preceding
sentence or self insurance agreements shall be in form, amounts and
substance and with insurance companies satisfactory to Lender, containing
fifteen (15) day notification of cancellation or change in coverage
clauses in favor of Lender. Borrowers will maintain such other insurance
with responsible and reputable insurance companies in such amounts and
covering such risks as are customarily maintained by entities similar to
Borrower or as Lender may reasonably require by written notice to
Borrower. Borrower shall furnish to Lender, upon written request, full
information as to all insurance carried by it.
Section 5.4. Borrower will comply with all of its covenants
and agreements under the Loan Documents, as the same may hereafter be
amended or supplemented from time to time, and comply with, or cause to
be complied with, all material requirements and conditions of all
contracts and insurance policies which relate to Borrower.
Section 5.5. Borrower will, at any reasonable time and from
time to time, permit Lender or its agents or representatives to examine
and visit the properties of, Borrower, and to discuss the affairs,
finances and accounts of Borrower with the executive officers and
accountants of Borrower.
15
<PAGE> 37
Section 5.6. Borrower will keep proper books of record and
account, in which full and correct entries shall be made of financial
transactions and the assets and operations of Borrower in accordance with
GAAP, and have a complete audit of such books of record and account made
by certified public accountants for each Fiscal Year.
Section 5.7. Borrower will maintain and preserve all of its
properties in good working order and condition, ordinary wear and tear
excepted; not permit, commit or suffer any waste of any of its
properties; not use or permit the use of any of its properties for any
unlawful purpose or permit any nuisance to exist thereon.
Section 5.8. Borrower will furnish or cause to be furnished to
Lender the following (in accordance with GAAP, if applicable, and in such
number of copies as Lender may reasonably request for itself):
(a) Borrower will provide draft audit of FYE 1998
financial statement which substantially conforms with financial
statements provided by Borrower or a letter from the Borrower's CPA
indicating that the financial statements provided by the Borrower
substantially conform with the draft audit.
(b) Borrower will provide annual budget with quarterly
budget updates and quarterly actual financials, comparing actual results
to budget.
(c) As soon as available and in any event within 60 days
after the close of each quarter of each Fiscal Year, audited (form 10-Q)
consolidated financial statements for Borrower and its subsidiaries,
including a balance sheet, financial statements and related statements of
income as of the end of such quarters, which shall be prepared by
Borrower's management and which shall be certified and signed by
Borrower's chief financial officer/s;
16
<PAGE> 38
(d) As soon as available and in any event within 120 days
after the close of each Fiscal Year, audited (form 10-K) consolidated
financial statements for Borrower and its subsidiaries, including a
balance sheet and related statements of income and of cash flows as of
the end of such Fiscal Year and for such Fiscal Year;
(e) Upon receipt thereof by Borrower, copies of any
letter or report with respect to the management, operations or properties
of Borrower submitted to Borrower by their accountants in connection with
any annual or interim audit of Borrower's accounts, and a copy of
any written response of Borrower to any such letter or report;
(f) As soon as possible and in any event within 30 days
after receipt of notice thereof, notice of any pending or threatened
litigation, investigation or other proceeding involving Borrower (i)
which could have a material adverse effect on the operations or financial
condition of Borrower or (ii) wherein the potential damages, in the
reasonable judgment of Borrower based upon the advice of counsel
experienced in such matters, are not fully covered by the insurance
policies maintained by Borrower (except for the deductible amounts
applicable to such policies);
(g) As soon as possible, notice of any material adverse
change in the operations or financial condition of Borrower/s;
(h) As soon as possible and in any event within 15 days
after the occurrence of each Event of Default or each event which, with
the giving of notice or lapse of time or both, would reasonably be
expected to constitute an Event of Default, a statement of an officer of
the Borrower/s setting forth the details of such Event of Default or
event and the action which Borrower/s proposes to take with respect
thereto;
17
<PAGE> 39
(i) Such other information respecting the operations and
properties, financial or otherwise, of Borrower/s as Lender may from time
to time reasonably request.
(j) Borrower must furnish quarterly a non-default
certificate from an officer of Borrower and an annual non-default
certificate from the Borrower's CPA regarding the following items:
1. Borrower is maintaining a debt service coverage
ratio, defined as Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) (minus) unfunded capital expenditures divided by
current maturities of long term debt and capitalized leases plus
interest, of 1.10 to 1.00.
2. Borrower is maintaining a maximum debt to tangible
net worth ratio of 3.00 to 1.00.
3. Borrower is maintaining a minimum tangible net worth
of $24,000,000.00.
(k) Furnish any and all documentation to Bank that is sent
to stockholders and/or the SEC.
(l) Execute and comply with a Year 2000 Compliance
Agreement as prepared by Bank.
Section 5.9. Neither Borrower nor any of their Affiliates will (i)
voluntarily terminate any employee pension plan covered by Title IV of
ERISA, so as to cause material liability of Borrower to PBGC or to a
trustee appointed pursuant to Section 4042(b) or (c) of ERISA; (ii) enter
into any Prohibited Transaction (as defined in Section 4975 of the IRC or
in Section 406 of ERISA) involving an employee benefit plan within the
meaning of Section 3(3) of ERISA which may result in material liability
of Borrower to the Internal Revenue Service or the United States
Department of Labor; (iii) cause the occurrence of any Reportable Event
18
<PAGE> 40
(as defined in Title IV of ERISA) which may result directly or indirectly
in material liability of Borrowers to the PBGC, the Internal Revenue
Service or the United States Department of Labor; (iv) permit the
occurrence of any event or the existence of any condition which may
result in material withdrawal liability (within the meaning of Section
4201 of ERISA) of Borrower or any Affiliate to any multiemployer pension
plan (as defined in Section 3(37) of ERISA); or (v) allow or suffer to
exist any other event or condition known to Borrower/s or any Affiliate
with respect to an employee benefit plan within the meaning of Section
3(3) of ERISA which may result in material liability of Borrower/s to
PBGC, the Internal Revenue Service or the United States Department of
Labor. Borrower/s will give prompt written notice to the Lender of (1)
each Prohibited Transaction, Reportable Event or event or condition
described in clause (v) of the preceding sentence, relating to an
employee benefit plan maintained for employees of Borrower or any of its
Affiliates within the meaning of Section 3(3) of ERISA, (2) any
notification of assessment of withdrawal liability (within the
meaning of Section 4201 of ERISA) received by Borrower or any of its
Affiliates from any multiemployer pension plan (as defined in Section
3(37) of ERISA), and (3) any lien arising under Section 302(f) of ERISA
in favor of any employee pension plan maintained for employees of
Borrower or any of its Affiliates which is subject to Part 3 of Title I
of ERISA.
Section 5.10. Borrower shall not permit any change (except for
change arising from resignation, death, incompetency or operation of law)
in the officers of the corporation.
Section 5.11. Borrower shall pay all Commitment Fees and fees and
costs defined herein at or before the time of closing.
19
<PAGE> 41
Section 5.12. Borrower agrees that at some time during the term of
the Line they will bring the outstanding balance of said Line down to a
balance of $3,000,000 or less for a period of 30 consecutive days.
Failure to do so by Borrower will be considered an Event of Default.
ARTICLE 6 - EVENTS OF DEFAULT
-----------------------------
Section 6.1. If one or more of the following Events of Default
occur:
(a) Borrower/s make an assignment for the benefit of its
creditors, becomes insolvent or admits in writing its inability to pay
its debts as they become due; or
(b) Borrower/s file a voluntary petition in bankruptcy or files
a petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief
under any present or future statute, law, or regulation not stayed or
removed within sixty (60) days; or
(c) Borrower/s file an answer admitting or not contesting the
material allegations of any petition filed in any action commenced
against Borrower/s in bankruptcy or seeking the relief described in
Section 6.1(b), or any such action shall not have been stayed or
dismissed within sixty (60) days after it is commenced; or
(d) Borrower/s, or any of its directors, officers or
shareholders take any action looking to the dissolution or liquidation of
Borrower/s; or
(e) Borrower/s apply for, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator is appointed and is not
stayed or discharged within sixty (60) days after being appointed; or
20
<PAGE> 42
(f) Any garnishment proceeding over $100,000.00 by attachment,
levy, or otherwise is instituted against any deposit balance maintained,
or any property deposited, with Lender by Borrower/s (subject,
nonetheless, to the right of Borrower/s to contest by proper legal
proceedings duly prosecuted any such garnishment proceeding through and
until a final, nonappealable order either dismissing or confirming the
garnishment, and Borrower/s so contesting any such garnishment proceeding
shall have set up on its books such reserve with respect thereto as shall
be dictated by sound accounting practices);
THEN, this Agreement shall immediately and automatically be in
default, any obligation that Lender has under the Agreement or otherwise
to make any further Advances to or for the benefit of Borrower or grant
the Letter of Credit shall immediately and automatically terminate
and the principal of, and interest on, the Note and all other Debt shall
immediately be due and payable without necessity of demand, presentment,
protest, notice of dishonor, notice of default, or any other notice
whatsoever. If the Letter of Credit has already been issued, it shall
not be revoked until it terminates by expiration of time.
Section 6.2. If one or more of the following Events of Default
occur:
(a) Default by Borrower/s in the payment of principal of, or
interest on, the Note, or in the repayment of Advances, or in the payment
of the servicing fee or in the payment of items of expense or other
charges as to be paid by Borrower/s pursuant to the Agreement, when due
and payable, and continuance thereof for ten (10) days after written
notice thereof or for ten (10) days after bills therefor are sent to
Borrower/s, whichever last occurs; or
21
<PAGE> 43
(b) Any court shall render a final judgment or judgments
against Borrower/s from which no appeal is timely taken in an aggregate
amount greater than One Hundred Thousand Dollars ($100,000) in excess of
any insurance protecting against the liability on which such judgment or
judgments are based and such judgment or judgments shall not be
satisfactorily stayed, discharged, vacated, or set aside within thirty
(30) days after the entry thereof, or any property of Borrower's pledged
as security herein shall be liened or attached under a claim or claims in
an aggregate amount greater than One Hundred Thousand Dollars ($100,000)
in excess of any insurance protecting against the liability on which such
lien or attachment is based and such lien or attachment shall not be
released or provided for to the satisfaction of Lender within thirty (30)
days after the property is liened or attached; or
(c) Borrower/s shall fail to take, or cause to be taken,
corrective measures reasonably satisfactory to Lender within sixty (60)
days after written notice to Borrower/s with respect to any litigation or
any judicial or administrative proceedings pending or threatened against
Borrower/s, the outcome of which, in the reasonable judgment of Lender,
would materially adversely affect the financial condition of Borrower/s,
its business, its management, or its property including the Collateral;
or
(d) The PBGC shall make a determination that there has occurred
an event or condition which constitutes grounds under ERISA for the
termination of, or for the appointment of a trustee to administer, any
Plan (subject, nonetheless, to the right of Borrower/s to contest and
stay by proper legal proceedings duly prosecuted any such determination
through and until a final, nonappealable order either dismissing or
confirming the determination, and Borrower/s so contesting any such
22
<PAGE> 44
determination shall have set up on its books such reserve with respect
thereto as shall be dictated by sound account practices); or
(e) Default in the performance of any agreement, covenant, or
obligation of Borrower set forth in this Agreement, the Note, the
Commitment Letter, the Letter of Credit or any other Loan Document which
default does not constitute a specific event of default set forth
in Section 6.1, and continuance thereof for thirty (30) days after
written notice thereof from Lender, provided, however, that in the event
that such default cannot be cured within such thirty (30) day period,
Borrower/s shall not be deemed to be in default hereunder so long as
Borrower/s undertakes and diligently pursues all action necessary to cure
such default within a reasonable time; or
(f) Default in the payment or performance of any obligation for
borrowed money, for which Borrower/s is/are liable (directly, by
assumption, as guarantor, or otherwise) or in the payment or performance
of any obligation secured by any mortgage, note, pledge, charge, security
interest, lien, or other encumbrance with respect to any property of
Borrower/s and continuance thereof for more than the permitted period of
grace, if any; or
(g) Any representation or warranty made by Borrower/s herein is
untrue in any material respect or any certificate, schedule, statement,
affidavit, report, notice, or writing furnished or made to Lender in
connection with the transactions contemplated by this Agreement is untrue
in any material respect on the date as of which the facts set forth
therein are stated or certified; or
(h) The filing or entry of any state, federal, or local tax
lien, which would attach to any of the Collateral which is not cleared
within thirty (30) days or adequate protection given to Lender; or
23
<PAGE> 45
(i) The calling or drafting on the Letter of Credit provided
Borrower is also in default on any requirements of its workers'
compensation obligations, as required by State and
Federal law.
THEN, Lender, at its option, may immediately declare this Agreement
in default, may terminate any obligation that Lender has under this
Agreement or otherwise to make any further Advances to or for the benefit
of Borrower/s and/or may declare the principal of, and interest on,
the Note and/or all other Debt immediately due and payable, whereupon the
Debt shall immediately become due and payable without necessity of
demand, presentment, protest, notice of dishonor, notice of default or
any other notice whatsoever.
ARTICLE 7 - REMEDIES
--------------------
Section 7.1. Upon the occurrence of Event of Default, Lender may
exercise any, some, or all of its remedies provided in this Agreement and
in the other Loan Documents or provided at law or in equity, and the
failure of Lender to do any act or to exercise any remedy shall not be
deemed a waiver thereof.
Section 7.2. No failure on the part of the Lender to exercise, and
no delay in exercising, any right hereunder, under the Note, or under the
Loan Documents, shall operate as a waiver thereof; and no single or
partial exercise of any right hereunder shall preclude any other or
further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
available under any other document or at law or in equity.
24
<PAGE> 46
ARTICLE 8 - GENERAL
-------------------
Section 8.1. Lender shall be entitled to act on the instructions of
anyone identifying himself as an Authorized Officer, and Borrower shall
be bound thereby in the same manner as if the person was actually an
Authorized Officer. Borrower hereby agrees to indemnify and hold
Lender harmless from any and all claims, damages, liabilities, losses,
costs, and expenses (including reasonable attorneys' fees) which may
arise or be created by the acceptance of instructions from anyone Lender
reasonably belives is an Authorized Officer.
Section 8.2. Any irreconcilable conflict between the Note and any
other Loan Document shall be governed by and resolved in favor of the
terms of the Note.
Section 8.3. No waiver of, or consent with respect to, any
provision of this Agreement, the Note, or the other Loan Documents shall
in any event be effective unless the same shall be in writing and signed
by Lender, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
Section 8.4. All notices and other communications provided for
hereunder shall be in writing and sent by United States certified or
registered mail, return receipt requested, or by telegraph, telex,
telecopier, or bonded private delivery service, addressed as follows:
If to Lender:
U. S. Bank
Attn: Brian S. Bowser
Main and Franklin Streets
Johnstown, PA 15901
Attention: Brian Bowser
25
<PAGE> 47
with copy to:
Timothy C. Leventry, Esquire
Leventry Law Office
1405 Eisenhower Boulevard
Richland Square I, Suite 200
Johnstown, PA 15904
If to Borrowers:
Uni-Marts, Inc.
Attn: J. Kirk Gallaher, CFO
477 East Beaver Avenue
State College, PA 16801-5690
with copy to:
Thomas K. Pasch, Esquire
Saul, Ewing, Remick & Saul, LLP
Centre Square West, 38th Floor
1500 Market Street
Philadelphia, PA 19102
Any party hereto may change the address to which notices to it are
to be sent by written notice given to the other persons listed in this
Section. All notices shall, when mailed as aforesaid, be effective on
the date indicated on the return receipt, and all notices given by other
means shall be effective when received.
Section 8.5. This Agreement shall inure to the benefit of and shall
be binding upon the parties hereto and their respective successors and
assigns. The Borrower/s may not assign its rights under this Agreement
without the prior written consent of Lender. Borrower/s and Lender
intend that no other person shall have any claim or interest under this
Agreement or right of action hereon or hereunder.
Section 8.6. All covenants made by Borrower/s herein and in any
document delivered pursuant hereto shall survive the delivery of this
Agreement.
26
<PAGE> 48
Section 8.7. The execution hereof by each party hereto shall
constitute a contract between them for the uses and purposes herein set
forth, and this Agreement may be executed in any number of counterparts,
with each executed counterpart constituting an original and all
counterparts together constituting one agreement.
Section 8.8. Borrower agrees to pay on demand all costs and
expenses of Lender in connection with the preparation, execution, and
delivery of this Agreement, the Note, the other Loan Documents, and any
other documents that may be delivered in connection with this Agreement,
the Note, the Loan Documents, or any amendments thereto, including,
without limitation, the reasonable fees and expenses of counsel for
Lender with respect thereto and with respect to advising Lender as to its
rights and responsibilities under this Agreement, the Note, the
Loan Documents, and such other documents, and all costs and expenses, if
any, including without limitation reasonable counsel fees and expenses of
Lender, in connection with the enforcement of this Agreement, the Note,
and other Loan Documents. In addition, the Borrower/s shall pay any
and all filing fees, stamp and other taxes and fees payable or determined
to be payable in connection with the Note, the Loan Documents, Security
Interests and such other documents and agrees to indemnify and to hold
Lender harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such taxes and
fees; provided the Lender promptly notifies the Borrower/s of any such
taxes and fees.
Section 8.9 This Agreement may be amended by an instrument in
writing executed and delivered by Borrower/s to Lender and then approved
by Lender.
27
<PAGE> 49
Section 8.10. If any provision hereof or of the other Loan
Documents is found by a court of competent jurisdiction to be prohibited
or unenforceable in any jurisdiction, it shall be ineffective as to such
jurisdiction only to the extent of such prohibition or unenforceability,
and such prohibition or unenforceability shall not invalidate the balance
of such provision as to such jurisdiction to the extent it is not
prohibited or unenforceable, nor invalidate such provision in any
other jurisdiction, nor invalidate the other provisions hereof, all of
which shall be liberally construed in favor of Lender in order to effect
the provisions of this Agreement and the Note.
Section 8.11. Taken together with the other Loan Documents, this
Agreement is a complete memorandum of the agreement of Borrower/s and
Lender. Waivers or modifications of any provision hereof must be in
writing signed by the party to be charged with the effect
thereof.
Section 8.12. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Pennsylvania without
reference to its principles of conflicts of law. The parties consent to
Centre County, Pennsylvania and the U.S. District Court for the
Middle District of Pennsylvania as being the courts of jurisdiction.
Section 8.13. No affirmative or negative covenant, representation,
warranty, condition, or term contained in this Agreement or in any other
Loan Document shall be deemed to be waived by Lender unless and until a
prior written approval expressly referring to such waiver is obtained
from Lender.
Section 8.14. Borrower/s have reviewed the Loan Documents with
counsel of its choice, and Borrower/s are not entitled to any inference
28
<PAGE> 50
or construction against Lender because of Lender's preparation of the
Loan Documents.
EXECUTED, intending to be legally bound, as of the date first above
written.
LENDER:
U. S. BANK
/S/ TIMOTHY L. LEVENTRY, LL.,M. /S/ BRIAN S. BOWSER
____________________________ By:_____________________________________
Brian S. Bowser, Asst. Vice President
BORROWER:
ATTEST: UNI-MARTS, INC.
/S/ HARRY A. MARTIN /S/ J. KIRK GALLAHER
____________________________ By:_____________________________________
Secretary J. Kirk Gallaher
Executive Vice President
29
<PAGE> 51
EXHIBIT (11)
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS (LOSS):
(A) Computation of the weighted average number of shares of common stock
outstanding for the periods indicated:
<TABLE>
<CAPTION>
WEIGHTED
SHARES OF NUMBER OF DAYS NUMBER OF NUMBER OF SHARES
COMMON STOCK OUTSTANDING SHARE DAYS OUTSTANDING
------------ -------------- ---------- ----------------
<S> <C> <C> <C> <C>
Quarter Ended December 31, 1998
- -------------------------------
October 1 - December 31 6,861,252 92 631,235,184
Shares Issued 7,363 Various 394,247
--------- -----------
6,868,615 631,629,431 6,865,537
========= =========== =========
Quarter Ended January 1, 1998
- -----------------------------
October 1 - January 1 6,646,677 93 618,140,949
Shares Issued 22,838 Various 799,637
--------- -----------
6,669,515 618,940,586 6,655,275
========= =========== =========
</TABLE>
(B) Computation of Earnings (Loss) Per Share:
Computation of earnings (loss) per share is net earnings (loss) divided
by the weighted average number of shares of common stock outstanding for
the periods indicated:
QUARTER ENDED
December 31, January 1,
1998 1998
------------ ----------
Basic:
Weighted average number of shares
of common stock outstanding 6,865,537 6,655,275
---------- ----------
Net loss ($ 289,126) ($ 274,243)
---------- ----------
Net loss per share ($ 0.04) ($ 0.04)
========== ==========
Assuming dilution:
Weighted average number of shares
of common stock outstanding 6,865,537 6,655,275
Net effect of dilutive stock
options-not included if the
effect was antidilutive 0 0
---------- ----------
Total 6,865,537 6,655,275
---------- ----------
Net loss ($ 289,126) ($ 274,243)
---------- ----------
Net loss per share ($ 0.04) ($ 0.04)
========== ==========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET DATED DECEMBER 31, 1998 AND THE STATEMENT OF OPERATIONS FOR THE FISCAL
QUARTER ENDED DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000805020
<NAME> UNI-MARTS, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,035,234
<SECURITIES> 0
<RECEIVABLES> 3,028,680
<ALLOWANCES> 428,100
<INVENTORY> 11,325,080
<CURRENT-ASSETS> 21,632,013
<PP&E> 112,606,634
<DEPRECIATION> 49,154,000
<TOTAL-ASSETS> 91,010,080
<CURRENT-LIABILITIES> 19,978,557
<BONDS> 34,346,376
0
0
<COMMON> 731,680
<OTHER-SE> 29,041,402
<TOTAL-LIABILITY-AND-EQUITY> 91,010,080
<SALES> 60,719,862
<TOTAL-REVENUES> 61,149,025
<CGS> 43,969,762
<TOTAL-COSTS> 61,548,451
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 39,000
<INTEREST-EXPENSE> 1,008,903
<INCOME-PRETAX> (399,426)
<INCOME-TAX> (110,300)
<INCOME-CONTINUING> (289,126)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (289,126)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
