Shopko Stores Inc – ‘8-K’ for 7/6/99 – EX-1.1

On:  Tuesday, 7/13/99   ·   For:  7/6/99   ·   Accession #:  1077604-99-155   ·   File #:  1-10876

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         6     18K 
 2: EX-1.1      Form of Purchase Agreement                            45    179K 
 3: EX-5.1      Opinion of Godfrey and Kahn                            2      9K 

EX-1.1   —   Form of Purchase Agreement
Exhibit Table of Contents

EX-1.1
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______________________________________________________________________________  
______________________________________________________________________________  

SHOPKO STORES, INC. 
(a Wisconsin corporation) 

3,500,000 Shares of Common Stock  

PURCHASE AGREEMENT  
------------------  

Dated:  July     , 1999                                                         
----                                                  

______________________________________________________________________________  
______________________________________________________________________________  

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Table of Contents 
                                                                            Page
                                                                            ----

SECTION 1.  REPRESENTATIONS AND WARRANTIES...............................    3  

   (a) Representations and Warranties by the Company...................    3
      (i)     Compliance with Registration Requirements................    3
      (ii)    Incorporated Documents...................................    4
      (iii)   Independent Accountants..................................    4
      (iv)    Financial Statements.....................................    4
      (v)     No Material Adverse Change in Business...................    4
      (vi)    Good Standing of the Company.............................    5
      (vii)   Good Standing of Subsidiaries............................    5
      (viii)  Capitalization...........................................    5
      (ix)    Authorization of Agreement...............................    6
      (x)     Authorization and Description of Securities..............    6
      (xi)    Absence of Defaults and Conflicts........................    6
      (xii)   Absence of Labor Dispute.................................    7
      (xiii)  Absence of Proceedings...................................    7
      (xiv)   Accuracy of Exhibits.....................................    7
      (xv)    Possession of Intellectual Property......................    7
      (xvi)   Absence of Further Requirements..........................    8
      (xvii)  Possession of Licenses and Permits.......................    8
      (xviii) Title to Property........................................    8
      (xix)   Compliance with Cuba Act.................................    9
      (xx)    Investment Company Act...................................    9
      (xxi)   Environmental Laws.......................................    9
      (xxii)  Registration Rights......................................    9
 (b)  Officer's Certificates...........................................   10

SECTION 2.  SALE AND DELIVERY TO UNDERWRITERS; CLOSING...................   10  
------------------------------------------              
 (a)  Initial Securities...............................................   10
 (b)  Option Securities................................................   10
 (c)  Payment..........................................................   10
 (d)  Denominations; Registration......................................   11

SECTION 3.  COVENANTS....................................................   11  
---------                                               
 (a)  Compliance with Securities Regulations and Commission Requests...   11
 (b)  Filing of Amendments.............................................   12
 (c)  Delivery of Registration Statements..............................   12
 (d)  Delivery of Prospectuses.........................................   12
 (e)  Continued Compliance with Securities Laws........................   12
 (f)  Blue Sky Qualifications..........................................   13
 (g)  Rule 158.........................................................   13
 (h)  Use of Proceeds..................................................   13

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(i)  Listing..  The Company will use its best efforts to maintain the     
listing of the Common Stock (including the Securities) on the New York    
 Stock Exchange........................................................   13
 (j)  Restriction on Sale of Securities................................   13
 (k)  Reporting Requirements...........................................   14

SECTION 4.  PAYMENT OF EXPENSES..........................................   14  
-------------------                                     
 (a)  Expenses.........................................................   14
 (b)  Termination of Agreement.........................................   14

SECTION 5.  CONDITIONS OF UNDERWRITERS' OBLIGATIONS......................   15  
---------------------------------------                 
 (a)  Effectiveness of Registration Statement..........................   15
 (b)  Opinions of Counsel for Company..................................   15
 (c)  Opinion of Counsel for Underwriters..............................   15
 (d)  Officers' Certificates...........................................   16
 (e)  Accountant's Comfort Letter......................................   16
 (f)  Bring-down Comfort Letter........................................   16
 (g)  Approval of Listing..............................................   16
 (h)  Conditions to Purchase of Option Securities......................   16
      (i)   Officers' Certificates.....................................   16
      (ii)  Opinions of Counsel for Company............................   17
      (iii) Opinion of Counsel for Underwriters........................   17
      (iv)  Bring-down Comfort Letter..................................   17
 (i)  Additional Documents.............................................   17
 (j)  Termination of Agreement.........................................   17

SECTION 6.  INDEMNIFICATION..............................................   17  
---------------                                         
 (a)  Indemnification of Underwriters..................................   17
 (b)  Indemnification of Company, Directors and Officers...............   18
 (c)  Actions against Parties; Notification............................   19
 (d)  Settlement without Consent if Failure to Reimburse...............   19

SECTION 7.  CONTRIBUTION.................................................   19  
------------                                            

SECTION 8.  REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY  21  
      --------------------------------------------------------------

SECTION 9.  TERMINATION OF AGREEMENT.....................................   22  
------------------------                                
 (a)  Termination; General.............................................   22
 (b)  Liabilities......................................................   22

SECTION 10.  DEFAULT BY ONE OR MORE OF THE UNDERWRITERS..................   22  
------------------------------------------            

SECTION 11.  NOTICES.....................................................   23  
-------                                               

SECTION 12.  PARTIES.....................................................   23  
-------                                               

SECTION 13.  GOVERNING LAW AND TIME......................................   23  
----------------------                                

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SECTION 14.  EFFECT OF HEADINGS..........................................   23  
------------------                                    

SCHEDULES                                                             
        Schedule A - List of Underwriters.........................   Sch A-1
        Schedule B - Pricing Information..........................   Sch B-1

EXHIBITS                                                              
        Exhibit A-1    Form of Opinion of Godfrey & Kahn, S.C.....       A-1
        Exhibit A-2    Form of Opinion of Richard D. Schepp.......       A-5
        Exhibit B      Form of Comfort Letter.....................       C-1

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SHOPKO STORES, INC. 
(a Wisconsin corporation) 

3,500,000 Shares of Common Stock
(Par Value $.01 Per Share)

PURCHASE AGREEMENT

                                                       July ____, 1999

MERRILL LYNCH & CO.                                                             
Merrill Lynch, Pierce, Fenner & Smith                                           
Incorporated                                                  
Banc of America Securities LLC                                                  
Robert W. Baird & Co. Incorporated                                              
William Blair & Company, L.L.C.                                                 
as Representatives of the several Underwriters                              

c/o     Merrill Lynch & Co.                                                     
Merrill Lynch, Pierce, Fenner & Smith                           
Incorporated                                        
North Tower                                                     
World Financial Center                                          
New York, New York  10281-1209                                  

Ladies and Gentlemen:                                                           

    ShopKo Stores, Inc., a Wisconsin corporation (the "Company"), confirms its
agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith       
Incorporated ("Merrill Lynch") and each of the other Underwriters named in      
Schedule A hereto (collectively, the "Underwriters", which term shall also      
include any underwriter substituted as hereinafter provided in Section 10       
hereof), for whom Merrill Lynch, Banc of America Securities LLC, Robert W. Baird
& Co. Incorporated and William Blair & Company, L.L.C. are acting as            
representatives (in such capacity, the "Representatives"), with respect to the  
issue and sale by the Company and the purchase by the Underwriters, acting      
severally and not jointly, of the respective numbers of shares of Common Stock, 
par value $.01 per share, of the Company ("Common Stock") set forth in said     
Schedule A, and with respect to the grant by the Company to the Underwriters,   
acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of 525,000 additional shares of Common Stock to     
cover over-allotments, if any.  The aforesaid 3,500,000 shares of Common Stock  
(the "Initial Securities") to be purchased by the Underwriters and all or any   
part of the 525,000 shares of Common Stock subject to the option described in   
Section 2(b) hereof (the "Option Securities") are hereinafter called,           
collectively, the "Securities".                                                 

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The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after  
this Agreement has been executed and delivered.                                 

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-79763) covering the 
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses and   
the related preliminary prospectus supplement or supplements.  Promptly after   
execution and delivery of this Agreement, the Company will either (i) prepare   
and file a prospectus supplement and prospectus in accordance with the          
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the       
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of 
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations, (ii) if the Company has   
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare 
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b), or (iii) if the Company has elected to rely upon Rule 415  
("Rule 415") of the 1933 Act Regulations, prepare and file a prospectus         
supplement and prospectus in accordance with the provisions of Rule 415 and     
424(b).  The information included in the prospectus supplement and prospectus or
in such Term Sheet, as the case may be, that was omitted from such registration 
statement at the time it became effective but that is deemed to be part of such 
registration statement at the time it became effective (a) pursuant to paragraph
(b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to   
paragraph (d) of Rule 434 is referred to as "Rule 434 Information."  Each       
prospectus, together with any related prospectus supplement, used before such   
registration statement became effective, and any prospectus, together with any  
related prospectus supplement, that omitted, as applicable, the Rule 430A       
Information or the Rule 434 Information or that was captioned "Subject to       
Completion," that was used after such effectiveness and prior to the execution  
and delivery of this Agreement, is herein called, together with the documents   
incorporated or deemed to be incorporated by reference therein, a "preliminary  
prospectus."  Such registration statement, as amended (if applicable), including
the exhibits thereto, schedules thereto, if any, the documents incorporated by  
reference therein, at the time it became effective and including the Rule 430A  
Information and the Rule 434 Information, as applicable, is herein called the   
"Registration Statement."  Any registration statement filed pursuant to Rule    
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)    
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement.  The final prospectus and 
final prospectus supplement relating to the Securities, including the documents 
incorporated or deemed to be incorporated by reference therein, in the form     
first furnished to the Underwriters for use in connection with the offering of  
the Securities are herein called, collectively, the "Prospectus."  For purposes 
of this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to  
any of the foregoing shall be deemed to include the copy filed with the         
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval    
system ("EDGAR").                                                               

    All references in this Agreement to financial statements and schedules and
other information which is "contained," "described," "disclosed," "included" or 
"stated" in the                                                                 

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Registration Statement, any preliminary prospectus or the Prospectus (or other  
references of like import) shall be deemed to mean and include all such         
financial statements and schedules and other information which is incorporated  
or deemed to be incorporated by reference in the Registration Statement, any    
preliminary prospectus or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement,   
any preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the 1933 Act or the Securities Exchange Act of 
1934, as amended (the "1934 Act"), which is incorporated or deemed to be        
incorporated by reference in the Registration Statement, such preliminary       
prospectus or the Prospectus, as the case may be.                               

Section 1.  Representations and Warranties.                           

(a)    Representations and Warranties by the Company. The Company     
represents and warrants to each Underwriter as of the date hereof, as of the    
Closing Time referred to in Section 2(c) hereof, and as of each Date of         
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each      
Underwriter, as follows:                                                        

           (i)   Compliance with Registration Requirements.  The Company meets
-----------------------------------------   
    the requirements for use of Form S-3 under the 1933 Act. Each of the
     Registration Statement and any Rule 462(b) Registration Statement has
    become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)  
Registration Statement has been issued under the 1933 Act and no
       proceedings for that purpose have been instituted or are pending or, to
     the knowledge of the Company, are contemplated by the Commission, and
        any request on the part of the Commission for additional information has
been complied with.                                             

           At the respective times the Registration Statement, any
    Rule 462(b) Registration Statement and any post-effective amendments
    thereto became effective and at the Closing Time (and, if any Option
    Securities are purchased, at the Date of Delivery), the Registration
        Statement, the Rule 462(b) Registration Statement and any amendments and
     supplements thereto complied and will comply in all material respects
      with the requirements of the 1933 Act and the 1933 Act Regulations and
      the 1939 Act and the rules and regulations of the Commission under the
       1939 Act (the "1939 Act Regulations"), and did not and will not contain
       an untrue statement of a material fact or omit to state a material fact
 required to be stated therein or necessary to make the statements
    therein not misleading. Neither the Prospectus nor any amendments or
       supplements thereto (including any prospectus wrapper), at the time the
    Prospectus or any such amendment or supplement was issued and at the
      Closing Time (and, if any Option Securities are purchased, at the Date
        of Delivery), included or will include an untrue statement of a material
        fact or omitted or will omit to state a material fact necessary in order
       to make the statements therein, in the light of the circumstances under
      which they were made, not misleading. If Rule 434 is used, the Company
      will comply with the requirements of Rule 434 and the Prospectus shall
     not be "materially different", as such term is used in Rule 434, from
    the prospectus included in the Registration Statement at the time it
       became effective. The representations and warranties in this subsection
shall                                                           

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not apply to statements in or omissions from the Registration   
    Statement or Prospectus made in reliance upon and in conformity with
  information furnished to the Company in writing by any Underwriter
        through Merrill Lynch expressly for use in the Registration Statement or
Prospectus.                                                     

               Each preliminary prospectus and the prospectus filed as part of
the Registration Statement as originally filed or as part of any
    amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
 complied when so filed in all material respects with the 1933 Act
        Regulations and each preliminary prospectus and the Prospectus delivered
to the Underwriters for use in connection with this offering was
     identical to the electronically transmitted copies thereof filed with
   the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.                                                 

           (ii)    Incorporated Documents.  The documents incorporated
----------------------          
       or deemed to be incorporated by reference in the Registration Statement
     and the Prospectus, at the time they were or hereafter are filed with
      the Commission, complied and will comply in all material respects with
the requirements of the 1933 Act, the 1934 Act and the rules and
        regulations of the Commission thereunder (the "1934 Act Regulations") as
     applicable, and, when read together with the other information in the
       Prospectus, at the time the Registration Statement became effective, at
        the time the Prospectus was issued, at the Closing Time and at each Date
        of Delivery, if any, did not and will not contain an untrue statement of
      a material fact or omit to state a material fact required to be stated
      therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.

               (iii)   Independent Accountants.  The accountants who certified
-----------------------         
 the financial statements and supporting schedules included in the
Registration Statement and the Prospectus are independent public
     accountants as required by the 1933 Act and the 1933 Act Regulations.

       (iv)    Financial Statements.  The financial statements
--------------------            
        included and incorporated by reference in the Registration Statement and
      the Prospectus, together with the related schedules and notes, present
 fairly the financial position of the Company and its consolidated
  subsidiaries at the dates indicated and the statement of earnings,
       shareholders' equity and cash flows of the Company and its consolidated
      subsidiaries for the periods specified; said financial statements have
been prepared in conformity with generally accepted accounting  
        principles ("GAAP") applied on a consistent basis throughout the periods
involved. The supporting schedules included in the Registration 
       Statement and the Prospectus present fairly in accordance with GAAP the
      information required to be stated therein. The selected financial data
       included and incorporated by reference in the Prospectus present fairly
the information shown therein and have been compiled on a basis 
     consistent with that of the audited financial statements included and
incorporated by reference in the Registration Statement and the 
Prospectus.                                                     

          (v)     No Material Adverse Change in Business.  Since the
      --------------------------------------
respective                                                      

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        dates as of which information is given in the Registration Statement and
    the Prospectus, except as otherwise stated or described therein, (A)
        there has been no material adverse change in the condition, financial or
        otherwise, or in the earnings, business affairs or business prospects of
      the Company and its subsidiaries considered as one enterprise, whether
      or not arising in the ordinary course of business (a "Material Adverse
 Effect"), (B) there have been no transactions entered into by the
    Company or any of its subsidiaries, other than those in the ordinary
       course of business, which could have a Material Adverse Effect, and (C)
        there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.          

           (vi)    Good Standing of the Company.  The Company has been
----------------------------    
        duly organized and is validly existing as a corporation in good standing
    under the laws of the State of Wisconsin and has corporate power and
     authority to own, lease and operate its properties and to conduct its
     business as described in the Prospectus and to enter into and perform
       its obligations under this Agreement; and the Company is duly qualified
        as a foreign corporation to transact business and is in good standing in
        each other jurisdiction in which such qualification is required, whether
   by reason of the ownership or leasing of property or the conduct of
 business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.         

              (vii)   Good Standing of Subsidiaries.  Each subsidiary of the
-----------------------------   
       Company (each a "Subsidiary" and, collectively, the "Subsidiaries") has
    been duly organized and is validly existing as a corporation in good
     standing under the laws of the jurisdiction of its incorporation, has
      corporate power and authority to own, lease and operate its properties
      and to conduct its business as described in the Prospectus and is duly
      qualified as a foreign corporation to transact business and is in good
      standing in each jurisdiction in which such qualification is required,
        whether by reason of the ownership or leasing of property or the conduct
    of business, except where the failure so to qualify or to be in good
 standing would not result in a Material Adverse Effect; except as
        otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such Subsidiary has been duly 
       authorized and validly issued, is fully paid and non-assessable (except
      by reason of Wisconsin Statute (S) 180.0622(2)(b)) and is owned by the
Company, directly or through subsidiaries, free and clear of any
        security interest, mortgage, pledge, lien, encumbrance, claim or equity;
     none of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any  
       securityholder of such Subsidiary. The only subsidiaries of the Company
      are the subsidiaries listed on Exhibit 21.1 to the Company's Form 10-K
for the year ended January 30, 1999.                            

   (viii)  Capitalization.  The authorized, issued and
--------------                  
outstanding capital stock of the Company is as set forth in the 
    Prospectus under the heading "Description of Common Stock - General"
     (except for subsequent issuances, if any, pursuant to this Agreement,
       pursuant to reservations, agreements or employee benefit plans referred
      to in the Prospectus (or a document incorporated by reference therein)
or pursuant to the exercise of convertible securities or options
referred to in the Prospectus). The shares of                   

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  issued and outstanding capital stock of the Company have been duly
   authorized and validly issued and are fully paid and non-assessable
       (except by reason of Wisconsin Statute (S) 180.0622(2)(b)); none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any      
securityholder of the Company.                                  

            (ix)    Authorization of Agreement.  This Agreement has been
--------------------------      
duly authorized, executed and delivered by the Company.         

        (x)     Authorization and Description of Securities. The
           -------------------------------------------
 Securities have been duly authorized for issuance and sale to the
      Underwriters pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
     consideration set forth herein, will be validly issued and fully paid
and non-assessable (except by reason of Wisconsin Statute (S)   
     180.0622(2)(b)); the Common Stock conforms to all statements relating
        thereto contained in the Prospectus and such description conforms to the
       rights set forth in the instruments defining the same; no holder of the
        Securities will be subject to personal liability by reason of being such
       a holder (except by reason of Wisconsin Statute (S)180.0622(2)(b)); and
        the issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.            

       (xi)    Absence of Defaults and Conflicts.  Neither the
 ---------------------------------
  Company nor any of its subsidiaries is in violation of its charter
or by-laws or in default in the performance or observance of any
       obligation, agreement, covenant or condition contained in any contract,
   indenture, mortgage, deed of trust, loan or credit agreement, note,
     lease or other agreement or instrument to which the Company or any of
       its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any 
  subsidiary is subject (collectively, "Agreements and Instruments")
    except for such defaults that would not result in a Material Adverse
     Effect; and the execution, delivery and performance of this Agreement
       and the consummation of the transactions contemplated herein and in the
     Registration Statement and the Prospectus (including the issuance and
       sale of the Securities and the use of the proceeds from the sale of the
   Securities as described in the Prospectus under the caption "Use of
       Proceeds") and compliance by the Company with its obligations hereunder
      have been duly authorized by all necessary corporate action and do not
        and will not, whether with or without the giving of notice or passage of
    time or both, conflict with or constitute a breach of, or default or
       (except as disclosed in the Registration Statement) Repayment Event (as
    defined below) under, or result in the creation or imposition of any
      lien, charge or encumbrance upon any property or assets of the Company
     or any subsidiary pursuant to, the Agreements and Instruments (except
for such conflicts, breaches or defaults or liens, charges or   
     encumbrances that would not result in a Material Adverse Effect), nor
 will such action result in any violation of the provisions of the
     charter or by-laws of the Company or any subsidiary or any applicable
      law, statute, rule, regulation, judgment, order, writ or decree of any
     government, government instrumentality or court, domestic or foreign,
      having jurisdiction over the Company or any subsidiary or any of their
assets, properties or                                           

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  operations. As used herein, a "Repayment Event" means any event or
   condition which gives the holder of any material note, debenture or
     other evidence of material indebtedness (or any person acting on such
   holder's behalf) the right to require the repurchase, redemption or
        repayment of all or a portion of such indebtedness by the Company or any
subsidiary.                                                     

            (xii)   Absence of Labor Dispute.  No labor dispute with the
------------------------        
      employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
        existing or imminent labor disturbance by the employees of any of its or
 any subsidiary's principal suppliers, manufacturers, customers or
        contractors, which, in either case, may reasonably be expected to result
in a Material Adverse Effect.                                   

          (xiii)  Absence of Proceedings.  There is no action, suit,
----------------------          
      proceeding, inquiry or investigation before or brought by any court or
     governmental agency or body, domestic or foreign, now pending, or, to
  the knowledge of the Company, threatened, against or affecting the
   Company or any subsidiary, which is required to be disclosed in the
  Registration Statement and the Prospectus (other than as disclosed
       therein), or which might reasonably be expected to result in a Material
       Adverse Effect, or which might reasonably be expected to materially and
   adversely affect (A) the properties or assets of the Company or any
      subsidiary or (B) the consummation of the transactions contemplated by
     the Company or the performance of the Company's obligations under the
      Purchase Agreement; the aggregate of all pending legal or governmental
   proceedings to which the Company or any subsidiary is a party or of
     which any of their respective property or assets is the subject which
   are not described in the Registration Statement and the Prospectus,
       including ordinary routine litigation incidental to the business, could
  not reasonably be expected to result in a Material Adverse Effect.

        (xiv)   Accuracy of Exhibits.  There are no contracts or
--------------------            
documents which are required to be described in the Registration
    Statement, the Prospectus or the documents incorporated by reference
 therein or to be filed as exhibits thereto which have not been so
described and filed as required.                                

             (xv)    Possession of Intellectual Property.  The Company and
   -----------------------------------
    its subsidiaries own or possess, or can acquire on reasonable terms,
        adequate patents, patent rights, licenses, inventions, copyrights, know-
     how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
     trademarks, service marks, trade names or other intellectual property
 (collectively, "Intellectual Property") necessary to carry on the
     business now operated by them, and neither the Company nor any of its
 subsidiaries has received any notice or is otherwise aware of any
       infringement of or conflict with asserted rights of others with respect
   to any Intellectual Property or of any facts or circumstances which
       would render any Intellectual Property invalid or inadequate to protect
   the interest of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any           

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     unfavorable decision, ruling or finding) or invalidity or inadequacy,
      singly or in the aggregate, would result in a Material Adverse Effect.

            (xvi)   Absence of Further Requirements.  No filing with, or
------------------------------- 
authorization, approval, consent, license, order, registration, 
  qualification or decree of, any court or governmental authority or
     agency is necessary or required for the performance by the Company of
       its obligations hereunder, in connection with the offering, issuance or
        sale of the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already
 obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and will be obtained in a timely manner or as may be
required under state securities laws.                           

            (xvii)  Possession of Licenses and Permits.  The Company and
  ----------------------------------
        its subsidiaries possess such permits, licenses, approvals, consents and
      other authorizations (collectively, "Governmental Licenses") issued by
       the appropriate federal, state, local or foreign regulatory agencies or
     bodies necessary to conduct the business now operated by them and the
        absence of which, singly or in the aggregate, would result in a Material
       Adverse Effect; the Company and its subsidiaries are in compliance with
        the terms and conditions of all such Governmental Licenses, except where
      the failure so to comply would not, singly or in the aggregate, have a
       Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such    
        Governmental Licenses or the failure of such Governmental Licenses to be
      in full force and effect would not, singly or in the aggregate, have a
Material Adverse Effect; and neither the Company nor any of its 
   subsidiaries has received any notice of proceedings relating to the
   revocation or modification of any such Governmental Licenses which,
      singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.   

            (xviii) Title to Property.  The Company and its subsidiaries
-----------------               
        have good and marketable title to all real property owned by the Company
    and its subsidiaries and good title to all other properties owned by
    them, in each case, free and clear of all mortgages, pledges, liens,
    security interests, claims, restrictions or encumbrances of any kind
      except such as (a) are described in the Registration Statement and the
      Prospectus or (b) do not, singly or in the aggregate, affect the value
       of such property or interfere with the use made and proposed to be made
      of such property by the Company or any of its subsidiaries in a manner
    that would have a Material Adverse Effect; and all of the leases and
 subleases of the Company and its subsidiaries and under which the
    Company or any of its subsidiaries holds properties described in the
        Prospectus are in full force and effect, and neither the Company nor any
subsidiary has any notice of any claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any  
   subsidiary under any of the leases or subleases mentioned above, or
        affecting or questioning the rights of the Company or such subsidiary to
      the continued possession of the leased or subleased premises under any
     such lease or sublease except to the extent that the failure to be in
       full force and effect, or any such claim, would have a Material Adverse
Effect.                                                         

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           (xix)   Compliance with Cuba Act.  The Company has complied
------------------------        
   with, and is and will be in compliance with, the provisions of that
       certain Florida act relating to disclosure of doing business with Cuba,
      codified as Section 517.075 of the Florida statutes, and the rules and
  regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.                                                      

             (xx)    Investment Company Act.  The Company is not, and upon
----------------------          
      the issuance and sale of the Securities as herein contemplated and the
        application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" within the meaning of the  
Investment Company Act of 1940, as amended (the "1940 Act").    

       (xxi)   Environmental Laws.  Except as described in the
------------------              
  Registration Statement and the Prospectus and except as would not,
    singly or in the aggregate, result in a Material Adverse Effect, (A)
      neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
        administrative order, consent, decree or judgment, relating to pollution
  or protection of human health, the environment (including, without
    limitation, ambient air, surface water, groundwater, land surface or
       subsurface strata) or wildlife, including, without limitation, laws and
       regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous   
     substances, petroleum or petroleum products (collectively, "Hazardous
 Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
       Materials (collectively, "Environmental Laws"), (B) the Company and its
    subsidiaries have all permits, authorizations and approvals required
       under any applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or threatened      
      administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,  
      investigation or proceedings relating to any Environmental Law against
     the Company or any of its subsidiaries and (D) there are no events or
       circumstances that might reasonably be expected to form the basis of an
      order for clean-up or remediation, or an action, suit or proceeding by
      any private party or governmental body or agency, against or affecting
      the Company or any of its subsidiaries relating to Hazardous Materials
or any Environmental Laws.                                      

        (xxii)  Registration Rights.  Except as disclosed in the
-------------------             
     Registration Statement, there are no persons with registration rights
     or other similar rights to have any securities registered pursuant to
 the Registration Statement or otherwise registered by the Company
under the 1933 Act.                                             

               The representations in paragraphs (vii), (viii) and (x) regarding
       the non-assessibility of securities are subject to the applicability of
Wisconsin Statute (S) 180.0622(2)(b).                           

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      (b)     Officer's Certificates.  Any certificate signed by any officer
of the Company or any of its subsidiaries delivered to the Representatives or   
to counsel for the Underwriters shall be deemed a representation and warranty   
by the Company to each Underwriter as to the matters covered thereby.           

Section 2.      Sale and Delivery to Underwriters; Closing.     
          ------------------------------------------

    (a)     Initial Securities.  On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set  
forth, the Company agrees to sell to each Underwriter, severally and not        
jointly, and each Underwriter, severally and not jointly, agrees to purchase    
from the Company, at the price per share set forth in Schedule B, the number of 
Initial Securities set forth in Schedule A opposite the name of such            
Underwriter, plus any additional number of Initial Securities which such        
Underwriter may become obligated to purchase pursuant to the provisions of      
Section 10 hereof.                                                              

(b)     Option Securities.  In addition, on the basis of the    
representations and warranties herein contained and subject to the terms and    
conditions herein set forth, the Company hereby grants an option to the         
Underwriters, severally and not jointly, to purchase up to an additional 525,000
shares of Common Stock at the price per share set forth in Schedule B, less an  
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities. 
The option hereby granted will expire 30 days after the date hereof and may be  
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and           
distribution of the Initial Securities upon notice by the Representatives to the
Company setting forth the number of Option Securities as to which the several   
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any     
event prior to the Closing Time, as hereinafter defined. If the option is       
exercised as to all or any portion of the Option Securities, each of the        
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of  
Initial Securities set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Initial Securities, subject in each case to such   
adjustments as the Representatives in their discretion shall make to eliminate  
any sales or purchases of fractional shares.                                    

    (c)     Payment.  Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Fried, 
Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, New York, or at
such other place as shall be agreed upon by the Representatives and the Company,
at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after   
4:30 P.M. (Eastern time) on any given day) business day after the date hereof   
(unless postponed in accordance with the provisions of Section 10), or such     
other time not later than ten business days after such date as shall be agreed  
upon by the Representatives and the Company (such time and date of payment and  
delivery being herein called "Closing Time").                                   

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In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery  
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives  
and the Company, on each Date of Delivery as specified in the notice from the   
Representatives to the Company.                                                 

Payment shall be made to the Company by wire transfer of immediately  
available funds to a bank account designated by the Company against delivery to 
the Representatives for the respective accounts of the Underwriters of          
certificates for the Securities to be purchased by them.  It is understood that 
each Underwriter has authorized the Representatives, for its account, to accept 
delivery of, receipt for, and make payment of the purchase price for, the       
Initial Securities and the Option Securities, if any, which it has agreed to    
purchase.  Merrill Lynch, individually and not as representative of the         
Underwriters, may (but shall not be obligated to) make payment of the purchase  
price for the Initial Securities or the Option Securities, if any, to be        
purchased by any Underwriter whose funds have not been received by the Closing  
Time or the relevant Date of Delivery, as the case may be, but such payment     
shall not relieve such Underwriter from its obligations hereunder.              

    (d)  Denominations; Registration.  Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and           
registered in such names as the Representatives may request in writing at least 
one full business day before the Closing Time or the relevant Date of Delivery, 
as the case may be.  The certificates for the Initial Securities and the Option 
Securities, if any, will be made available for examination and packaging by the 
Representatives in The City of New York not later than 10:00 A.M. (Eastern      
time on the business day prior to the Closing Time or the relevant Date of      
Delivery, as the case may be.                                                   

Section 3.  Covenants.  The Company covenants with each Underwriter as
---------                                     
follows:                                                                        

(a) Compliance with Securities Regulations and Commission Requests.   
The Company, subject to Section 3(b), will comply with the requirements of      
Rule 430A, Rule 434 or Rule 415, as applicable, and will notify the             
Representatives immediately, and confirm the notice in writing, (i) when any    
post-effective amendment to the Registration Statement or any Rule 462(b)       
Registration Statement shall become effective, or any Prospectus, any supplement
to the Prospectus, any Term Sheet or any amended Prospectus shall have been     
filed, (ii) of the receipt of any comments from the Commission, (iii) of any    
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and    
(iv) of the issuance by the Commission of any stop order suspending the         
effectiveness of the Registration Statement or of any order preventing or       
suspending the use of any preliminary prospectus, or of the suspension of the   
qualification of the Securities for offering or sale in any jurisdiction, or of 
the initiation or threatening of any proceedings for any of such purposes.  The 
Company will promptly effect the filings necessary pursuant to Rule 424(b) and  
will take such steps as it deems necessary to ascertain promptly whether the    
form of prospectus or Term Sheet, as the case may be, transmitted for filing    
under Rule 424(b) was received for filing by the Commission and, in the event   
that it was not, it will                                                        

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promptly file such prospectus or Term Sheet, as the case may be.  The Company   
will make every reasonable effort to prevent the issuance of any stop order     
and, if any stop order is issued, to obtain the lifting thereof at the earliest 
possible moment.                                                                

(b)  Filing of Amendments.  The Company will give the Representatives 
notice of its intention to file or prepare any amendment to the Registration    
Statement (including any filing underRule 462(b)), any Term Sheet or any        
amendment, supplement or revision to either the prospectus included in the      
Registration Statement at the time it became effective or to the Prospectus,    
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the   
Representatives with copies of any such documents a reasonable amount of time   
prior to such proposed filing or use, as the case may be, and will not file or  
use any such document to which the Representatives or counsel for the           
Underwriters shall object; provided, however, that the foregoing provision shall
not obligate the Company to provide the Representative with copies of any       
document filed pursuant to the 1934 Act prior to such filing if such filing     
occurs after the Closing Time.                                                  

(c) Delivery of Registration Statements.  The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without   
charge, signed copies of the Registration Statement as originally filed and of  
each amendment thereto (including exhibits filed therewith or incorporated by   
reference therein and documents incorporated or deemed to be incorporated by    
reference therein) and signed copies of all consents and certificates of        
experts, and will also deliver to the Representatives, without charge, a        
conformed copy of the Registration Statement as originally filed and of each    
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the          
Underwriters will be identical to the electronically transmitted copies thereof 
filed with the Commission pursuant to EDGAR, except to the extent permitted by  
Regulation S-T.                                                                 

(d)  Delivery of Prospectuses.  The Company has delivered to each     
Underwriter, without charge, as many copies of each preliminary prospectus or   
preliminary prospectus supplement as such Underwriter reasonably requested, and 
the Company hereby consents to the use of such copies for purposes permitted by 
the 1933 Act. The Company will furnish to each Underwriter, without charge,     
during the period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the Prospectus (as amended or     
supplemented) as such Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be         
identical to the electronically transmitted copies thereof filed with the       
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. 

 (e) Continued Compliance with Securities Laws.  The Company will comply
with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act   
Regulations and the 1939 Act and the 1939 Act Regulations so as to permit the   
completion of the distribution of the Securities as contemplated in this        
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act or the 1934 Act to be delivered in connection with sales of the    
Securities, any event shall occur or condition shall exist as a result of which 
it is necessary,                                                                

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in the opinion of counsel for the Underwriters or for the Company, to amend the 
Registration Statement or amend or supplement the Prospectus in order that the  
Prospectus will not include any untrue statements of a material fact or omit to 
state a material fact necessary in order to make the statements therein not     
misleading in the light of the circumstances existing at the time it is         
delivered to a purchaser, or if it shall be necessary, in the opinion of such   
counsel, at any such time to amend the Registration Statement or amend or       
supplement the Prospectus in order to comply with the requirements of the 1933  
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be 
necessary to correct such statement or omission or to make the Registration     
Statement or the Prospectus comply with such requirements, and the Company will 
furnish to the Underwriters such number of copies of such amendment or          
supplement as the Underwriters may reasonably request.                          

  (f)  Blue Sky Qualifications.  The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and   
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such 
qualifications in effect for a period of not less than one year from the later  
of the effective date of the Registration Statement and any Rule 462(b)         
Registration Statement; provided, however, that the Company shall not be        
obligated to file any general consent to service of process or to qualify as a  
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing        
business in any jurisdiction in which it is not otherwise so subject. In each   
jurisdiction in which the Securities have been so qualified, the Company will   
file such statements and reports as may be required by the laws of such         
jurisdiction to continue such qualification in effect for a period of not less  
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.                                                  

   (g)  Rule 158.  The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its           
securityholders as soon as practicable an earnings statement for the purposes   
of, and to provide the benefits contemplated by, the last paragraph of Section  
11(a) of the 1933 Act.                                                          

(h)  Use of Proceeds.  The Company will use the net proceeds received 
by it from the sale of the Securities in the manner specified in the Prospectus 
under "Use of Proceeds".                                                        

(i) Listing.  The Company will use its best efforts to maintain the   
listing of the Common Stock (including the Securities) on the New York Stock    
Exchange.                                                                       

 (j) Restriction on Sale of Securities.  During a period of 90 days from
the date of this Agreement, the Company will not, without the prior written     
consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell,      
contract to sell, sell any option or contract to purchase, purchase any option  
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of CommonStock or any securities convertible   
into or exercisable or exchangeable for Common Stock or file any registration   
statement under the 1933 Act with respect to any of the foregoing or (ii) enter 
into any swap or any other agreement or any                                     

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transaction that transfers, in whole or in part, directly or indirectly, the    
economic consequence of ownership of the Common Stock, whether any such swap or 
transaction described in clause (i) or(ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing      
sentence shall not apply to (A) the Securities to be sold hereunder, (B) options
to purchase Common Stock granted pursuant to existing employee benefit plans of 
the Company referred to in the Prospectus and Common Stock issuable upon the    
exercise of options outstanding on the date of this Agreement and (C) Common    
Stock issued to satisfy obligations under acquisition agreements outstanding on 
the date hereof to the extent such agreements allow such obligations to be      
satisfied in Common Stock.                                                      

(k)  Reporting Requirements.  The Company, during the period when the 
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will 
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act           
Regulations.                                                                    

Section 4.  Payment of Expenses.                                      
-------------------                           

(a)  Expenses.  The Company will pay all expenses incident to the     
performance of its obligations under this Agreement, including (i) the          
preparation, printing and filing of the Registration Statement (including       
financial statements and exhibits) as originally filed and of each amendment    
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be  
required in connection with the offering, purchase, sale, issuance or delivery  
of the Securities, (iii) the preparation, issuance and delivery of the          
certificates for the Securities to the Underwriters, including any stock or     
other transfer taxes and any stamp or other duties payable upon the sale,       
issuance or delivery of the Securities to the Underwriters, (iv) the fees and   
disbursements of the Company's outside counsel, accountants and other advisors, 
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the reasonable 
fees and disbursements of outside counsel for the Underwriters in connection    
therewith and in connection with the preparation of the Blue Sky Survey and any 
supplement thereto, (vi) the printing and delivery to the Underwriters of copies
of each preliminary prospectus, any Term Sheets and of the Prospectus and any   
amendments or supplements thereto, (vii) the preparation, printing and delivery 
to the Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and expenses of any transfer agent or registrar for the         
Securities, (ix) the filing fees incident to, and the reasonable fees and       
disbursements of outside counsel to the Underwriters in connection with, the    
review by the National Association of Securities Dealers, Inc. (the "NASD") of  
the terms of the sale of the Securities and (x) the fees and expenses incurred  
in connection with the listing of the Securities on the New York Stock Exchange;
provided, that the aggregate amount of expenses payable by the Company to       
counsel for the Underwriters pursuant to (v) and (ix) above shall not exceed    
$15,000.                                                                        

(b)  Termination of Agreement.  If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section       
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their   
out-of-pocket expenses, including the                                           

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reasonable fees and disbursements of counsel for the Underwriters.              

  Section 5.  Conditions of Underwriters' Obligations.  The obligations of
---------------------------------------       
the several Underwriters hereunder are subject to the accuracy of the           
representations and warranties of the Company contained in Section 1 hereof or  
in certificates of any officer of the Company or any subsidiary of the Company  
delivered pursuant to the provisions hereof, to the performance by the Company  
of its covenants and other obligations hereunder, and to the following further  
conditions:                                                                     

   (a) Effectiveness of Registration Statement.  The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at   
Closing Time no stop order suspending the effectiveness of the Registration     
Statement shall have been issued under the 1933 Act or proceedings therefor     
initiated or threatened by the Commission, and any request on the part of the   
Commission for additional information shall have been complied with to the      
reasonable satisfaction of counsel to the Underwriters. A prospectus containing 
the Rule 430A Information shall have been filed with the Commission in          
accordance with Rule 424(b) (or a post-effective amendment providing such       
information shall have been filed and declared effective in accordance with the 
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule  
434 and Rule 424(b) or, if the Company has elected to rely on Rule 415, the     
final prospectus supplement relating to the Securities and, if required by Rule 
424(b), the related final prospectus shall have been filed with the Commission  
in accordance with Rule 424(b).                                                 

(b)  Opinions of Counsel for Company.  At Closing Time, the           
Representatives shall have received the favorable opinions, dated as of Closing 
Time, of Godfrey & Kahn, S.C., counsel for the Company in the form set forth in 
Exhibit A-1 hereto and Richard D. Schepp, Esq., General Counsel of the Company  
in the form set forth in Exhibit A-2 hereto.Such letters shall be in form and   
substance satisfactory to counsel for the Underwriters. The Representatives     
shall receive signed or reproduced copies of such letters for each of the other 
Underwriters.                                                                   

(c) Opinion of Counsel for Underwriters.  At Closing Time, the        
Representatives shall have received the favorable opinion, dated as of Closing  
Time, of Fried, Frank, Harris, Shriver & Jacobson, counsel for the Underwriters,
together with signed or reproduced copies of suchletter for each of the other   
Underwriters with respect to the matters set forth in clauses (i), (ii), (iv),  
(v) (solely as to preemptive or other similar rights arising by operation of law
or under the charter or by-laws of the Company), (vii) through (ix), inclusive, 
(xi), (xii) (solely as to the information in the Prospectus under "Description  
of Common Stock") and the penultimate paragraph of Exhibit A-1 hereto. In giving
such opinion such counsel may rely, as to all matters governed by the laws of   
jurisdictions other than the law of the State of New York, the federal law of   
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Representatives. Fried, Frank,      
Harris, Shriver & Jacobson may rely on the opinion of Godfrey & Kahn, S.C. with 
respect to matters governed by Wisconsin law. Such counsel may also state that, 
insofar as such opinion involves factual matters, they have relied, to the      
extent they deem proper, upon certificates of officers of the Company and its   
subsidiaries and certificates of public officials.                              

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   (d)  Officers' Certificates.  At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is  
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the 
Company and its subsidiaries considered as one enterprise, whether or not       
arising in the ordinary course of business, and the Representatives shall have  
received a certificate of the President, the Senior Vice President or a Vice    
President of the Company and of the chief financial or chief accounting officer 
of the Company, dated as of Closing Time, to the effect that (i) there has been 
no such material adverse change, (ii) the representations and warranties in     
Section 1(a) hereof are true and correct with the same force and effect as      
though expressly made at and as of Closing Time, (iii) the Company has complied 
with all agreements and satisfied all conditions on its part to be performed or 
satisfied at or prior to Closing Time, and (iv) no stop order suspending the    
effectiveness of the Registration Statement has been issued and no proceedings  
for that purpose have been instituted or are pending or are contemplated by the 
Commission.                                                                     

 (e)  Accountant's Comfort Letter.  At the time of the execution of this
Agreement, the Representatives shall have received from Deloitte & Touche LLP a 
letter dated such date, substantially in the form of Exhibit C hereto and       
otherwise in form and substance satisfactory to the Representatives, together   
with signed or reproduced copies of such letter for each of the other           
Underwriters containing statements and information of the type ordinarily       
included in accountants' "comfort letters" to underwriters with respect to the  
financial statements and certain financial information contained in the         
Registration Statement and the Prospectus.                                      

(f)  Bring-down Comfort Letter.  At Closing Time, the Representatives 
shall have received from Deloitte & Touche LLP a letter, dated as of Closing    
Time, to the effect that they reaffirm the statements made in the letter        
furnished pursuant to subsection (e) of this Section, except that the specified 
date referred to shall be a date not more than three business days prior to     
Closing Time.                                                                   

    (g)  Approval of Listing.  At Closing Time, the Securities shall have been
approved for listing on the New York Stock Exchange, subject only to official   
notice of issuance.                                                             

 (h) Conditions to Purchase of Option Securities.  In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase  
all or any portion of the Option Securities, the representations and warranties 
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and     
correct as of each Date of Delivery and, at the relevant Date of Delivery, the  
Representatives shall have received:                                            

        (i)    Officers' Certificates.  Certificates, dated such Date of
----------------------                    
   Delivery, of the President, the Senior Vice President or a Vice President
  of the Company and of the chief financial or chief accounting officer of
    the Company confirming that the certificates delivered at the Closing Time
    pursuant to Section 5(d) hereof remain true and correct as of such Date of
Delivery.                                                             

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        (ii)  Opinions of Counsel for Company.  The favorable opinion of
-------------------------------             
   Godfrey & Kahn, S.C., counsel for the Company, in the form of Exhibit A-1
hereto and the favorable opinion of Richard D. Schepp, Esq., General  
     Counsel of the Company, in the form of Exhibit A-2 hereto, and in each case
   in form and substance satisfactory to counsel for the Underwriters, dated
     such Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinions
required by Section 5(b) hereof.                                      

         (iii) Opinion of Counsel for Underwriters.  The favorable opinion
-----------------------------------         
    of Fried, Frank, Harris, Shriver & Jacobson, counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be  
    purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(c) hereof.                              

          (iv) Bring-down Comfort Letter.  A letter from Deloitte & Touche
  LLP, in form and substance satisfactory to the Representatives and dated
    such Date of Delivery, substantially in the same form and substance as the
  letter furnished to the Representatives pursuant to Section 5(f) hereof,
   except that the "specified date" in the letter furnished pursuant to this
 paragraph shall be a date not more than five days prior to such Date of
Delivery.                                                             

   (i)  Additional Documents.  At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and  
opinions as they may require for the purpose of enabling them to pass upon the  
issuance and sale of the Securities as herein contemplated, or in order to      
evidence the accuracy of any of the representations or warranties, or the       
fulfillment of any of the conditions, herein contained; and all proceedings     
taken by the Company in connection with the issuance and sale of the Securities 
as herein contemplated shall be satisfactory in form and substance to the       
Representatives and counsel for the Underwriters.                               

(j)  Termination of Agreement.  If any condition specified in this    
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option           
Securities, on a Date of Delivery which is after the Closing Time, the          
obligations of the several Underwriters to purchase the relevant Option         
Securities, may be terminated by the Representatives by notice to the Company at
any time at or prior to Closing Time or such Date of Delivery, as the case may  
be, and such termination shall be without liability of any party to any other   
party except as provided in Section 4 and except that Sections 1, 6, 7 and 8    
shall survive any such termination and remain in full force and effect.         

Section 6.  Indemnification.                                          
---------------                               

   (a) Indemnification of Underwriters.  The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any        
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of   
the 1934 Act as follows:                                                        

          (i)     against any and all loss, liability, claim, damage and expense
 whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact                                   

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contained in the Registration Statement (or any amendment thereto),   
including the Rule 430A Information and the Rule 434 Information, if  
 applicable, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
  therein not misleading or arising out of any untrue statement or alleged
    untrue statement of a material fact included in any preliminary prospectus
     or the Prospectus (or any amendment or supplement thereto), or the omission
     or alleged omission therefrom of a material fact necessary in order to make
    the statements therein, in the light of the circumstances under which they
were made, not misleading;                                            

   (ii)     against any and all loss, liability, claim, damage and
     expense whatsoever, as incurred, to the extent of the aggregate amount paid
    in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim 
  whatsoever based upon any such untrue statement or omission, or any such
 alleged untrue statement or omission; provided that (subject to Section
     6(d) below) any such settlement is effected with the written consent of the
Company; and                                                          

(iii)    against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by 
Merrill Lynch), reasonably incurred in investigating, preparing or    
     defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim    
  whatsoever based upon any such untrue statement or omission, or any such
   alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;                                  

provided, however, that this indemnity agreement shall not apply to any loss,   
--------  -------                                                               
liability, claim, damage or expense to the extent arising out of any untrue     
statement or omission or alleged untrue statement or omission made in reliance  
upon and in conformity with written information furnished to the Company by any 
Underwriter through Merrill Lynch expressly for use in the Registration         
Statement (or any amendment thereto), including the Rule 430A Information and   
the Rule 434 Information, if applicable, or any preliminary prospectus or the   
Prospectus (or any amendment or supplement thereto).                            

   (b) Indemnification of Company, Directors and Officers.  Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any, 
who controls the Company within the meaning of Section 15 of the 1933 Act or    
Section 20 of the 1934 Act against any and all loss,liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section, 
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any      
amendment thereto), including the Rule 430A Information and the Rule 434        
Information, if applicable, or any preliminary prospectus or the Prospectus (or 
any amendment or supplement thereto) in reliance upon and in conformity with    
written information furnished to the Company by such Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment         

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thereto) or such preliminary prospectus or the Prospectus (or any amendment or  
supplement thereto).                                                            

  (c) Actions against Parties; Notification.  Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of 
any action commenced against it in respect of which indemnity may be sought     
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not         
materially prejudiced as a result thereof and in any event shall not relieve it 
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,   
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in  
the case of parties indemnified pursuant to Section 6(b) above, counsel to the  
indemnified parties shall be selected by the Company. An indemnifying party may 
participate at its own expense in the defense of any such action; provided,     
                                                            --------
however, that counsel to the indemnifying party shall not (except with the      
-------                                                                         
consent of the indemnified party) also be counsel to the indemnified party.     
In no event shall the indemnifying parties be liable for fees and expenses of   
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or        
separate but similar or related actions in the same jurisdiction arising out of 
the same general allegations or circumstances. No indemnifying party shall,     
without the prior written consent of the indemnified parties, settle or         
compromise or consent to the entry of any judgment with respect to any          
litigation, or any investigation or proceeding by any governmental agency or    
body, commenced or threatened, or any claim whatsoever in respect of which      
indemnification or contribution could be sought under this Section 6 or Section 
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an         
unconditional release of each indemnified party from all liability arising out  
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by  
or on behalf of any indemnified party.                                          

 (d) Settlement without Consent if Failure to Reimburse.  If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party     
agrees that it shall be liable for any settlement of the nature contemplated by 
Section 6(a)(ii) effected without its written consent if(i) such settlement is  
entered into more than 45 days after receipt by such indemnifying party of the  
aforesaid request, (ii) such indemnifying party shall have received notice of   
the terms of such settlement at least 30 days prior to such settlement being    
entered into and (iii) such indemnifying party shall not have reimbursed such   
indemnified party in accordance with such request prior to the date of such     
settlement.                                                                     

   Section 7.  Contribution.  If the indemnification provided for in Section
------------                                  
6 hereof is for any reason unavailable to or insufficient to hold harmless an   
indemnified party in respect of any losses, liabilities, claims, damages or     
expenses referred to therein, then each indemnifying party shall contribute to  
the aggregate amount of such losses, liabilities, claims, damages and expenses  
incurred by such indemnified party, as incurred, (i) in such proportion as is   
appropriate to reflect the relative benefits received by the Company on the one 
hand and the Underwriters on                                                    

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the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable    
law, in such proportion as is appropriate to reflect not only the relative      
benefits referred to in clause (i) above but also the relative fault of the     
Company on the one hand and of the Underwriters on the other hand in connection 
with the statements or omissions which resulted in such losses, liabilities,    
claims, damages or expenses, as well as any other relevant equitable            
considerations.                                                                 

The relative benefits received by the Company on the one hand and the 
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective         
proportions as the total net proceeds from the offering of the Securities       
pursuant to this Agreement (before deducting expenses) received by the Company  
and the total underwriting discount received by the Underwriters, in each case  
as set forth on the cover of the prospectus supplement, or, if Rule 434 is used,
the corresponding location on the Term Sheet, bear to the aggregate initial     
public offering price of the Securities as set forth on such cover.             

   The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether 
any such untrue or alleged untrue statement of a material fact or omission or   
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or by the Underwriters on the other hand and the        
parties' relative intent, knowledge, access to information and opportunity to   
correct or prevent such statement or omission.                                  

The Company and the Underwriters agree that it would not be just and  
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such        
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7.  The aggregate    
amount of losses, liabilities, claims, damages and expenses incurred by an      
indemnified party and referred to above in this Section 7 shall be deemed to    
include any legal or other expenses reasonably incurred by such indemnified     
party in investigating, preparing or defending against any litigation, or any   
investigation or proceeding by any governmental agency or body, commenced or    
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.                                      

   Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total    
price at which the Securities underwritten by it and distributed to the public  
were offered to the public exceeds the amount of any damages which such         
Underwriter has otherwise been required to pay by reason of any such untrue or  
alleged untrue statement or omission or alleged omission.                       

 No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.                        

For purposes of this Section 7, each person, if any, who controls an  
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of   
the 1934 Act shall have the same                                                

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rights to contribution as such Underwriter, and each director of the Company,   
each officer of the Company who signed the Registration Statement, and each     
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to            
contribution as the Company. The Underwriters' respective obligations to        
contribute pursuant to this Section 7 are several in proportion to the number of
Initial Securities set forth opposite their respective names in Schedule A      
hereto and not joint.                                                           

    Section 8. Representations, Warranties and Agreements to Survive Delivery.
               -------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted    
pursuant hereto shall remain operative and in full force and effect, regardless 
of any investigation made by or on behalf of any Underwriter or controlling     
person, or by or on behalf of the Company, and shall survive delivery of the    
Securities to the Underwriters.                                                 

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Section 9.  Termination of Agreement.                                 
------------------------                      

(a)  Termination; General.  The Representatives may terminate this    
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the   
respective dates as of which information is given in the Prospectus, any        
material adverse change in the condition, financial or otherwise, or in the     
earnings, business affairs or business prospects of the Company and its         
subsidiaries considered as one enterprise, whether or not arising in the        
ordinary course of business, or (ii) if there has occurred any material adverse 
change in the financial markets in the United States or the international       
financial markets, any outbreak of hostilities or escalation thereof or other   
calamity or crisis or any change or development involving a prospective change  
in national or international political, financial or economic conditions, in    
each case the effect of which is such as to make it, in the judgment of the     
Representatives, impracticable to market the Securities or to enforce contracts 
for the sale of the Securities, or (iii) if trading in any securities of the    
Company has been suspended or materially limited by the Commission or the New   
York Stock Exchange, or if trading generally on the American Stock Exchange or  
the New York Stock Exchange or in the Nasdaq National Market has been suspended 
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by 
such system or by order of the Commission, the National Association of          
Securities Dealers, Inc. or any other governmental authority, or (iv) if a      
banking moratorium has been declared by either Federal or New York authorities. 

(b)  Liabilities.  If this Agreement is terminated pursuant to this   
Section, such termination shall be without liability of any party to any other  
party except as provided in Section 4 hereof, and provided further that         
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force  
and effect.                                                                     

  Section 10.  Default by One or More of the Underwriters.  If one or more
------------------------------------------  
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement  
(the "Defaulted Securities"), the Representatives shall have the right, within  
24 hours thereafter, to make arrangements for one or more of the non-defaulting 
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the  
terms herein set forth; if, however, the Representatives shall not have         
completed such arrangements within such 24-hour period, then:                   

        (i) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-   
   defaulting Underwriters shall be obligated, severally and not jointly, to
   purchase the full amount thereof in the proportions that their respective
    underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or                                   

      (ii) if the number of Defaulted Securities exceeds 10% of the number
     of Securities to be purchased on such date, this Agreement or, with respect
     to any Date of Delivery which occurs after the Closing Time, the obligation
of the Underwriters to                                                

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   purchase and of the Company to sell the Option Securities to be purchased
 and sold on such Date of Delivery, shall terminate without liability on
the part of any non-defaulting Underwriter.                           

No action taken pursuant to this Section shall relieve any defaulting 
Underwriter from liability in respect of its default.                           

    In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing 
Time, which does not result in a termination of the obligation of the           
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the    
right to postpone the Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required   
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person        
substituted for an Underwriter under this Section 10.                           

Section 11.  Notices.  All notices and other communications hereunder 
-------                                     
shall be in writing and shall be deemed to have been duly given if mailed or    
transmitted by any standard form of telecommunication. Notices to the           
Underwriters shall be directed to the Representatives at North Tower, World     
Financial Center, New York, New York 10281-1201, attention of Amy Lane and Perry
Hall; and notices to the Company shall be directed to the Company at ShopKo     
Stores, Inc., 700 Pilgrim Way, P.O. Box 19060, Green Bay, WI 54307, attention of
Mr. Paul H. Freischlag, Jr., Senior Vice President and Chief Financial Officer, 
with a copy to Richard D. Schepp, Esq., Senior Vice President and General       
Counsel.                                                                        

  Section 12.  Parties.  This Agreement shall each inure to the benefit of
-------                                     
and be binding upon the Underwriters and the Company and their respective       
successors. Nothing expressed or mentioned in this Agreement is intended or     
shall be construed to give any person, firm or corporation, other than the      
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their    
heirs and legal representatives, any legal or equitable right, remedy or claim  
under or in respect of this Agreement or any provision herein contained. This   
Agreement and all conditions and provisions hereof are intended to be for the   
sole and exclusive benefit of the Underwriters and, the Company and their       
respective successors, and said controlling persons and officers and directors  
and their heirs and legal representatives, and for the benefit of no other      
person, firm or corporation. No purchaser of Securities from any Underwriter    
shall be deemed to be a successor by reason merely of such purchase.            

   Section 13.  GOVERNING LAW AND TIME.  THIS AGREEMENT SHALL BE GOVERNED BY
----------------------                      
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  SPECIFIED  
TIMES OF DAY REFER TO NEW YORK CITY TIME.                                       

   Section 14.  Effect of Headings.  The Article and Section headings herein
------------------                          
and the Table of Contents are for convenience only and shall not affect the     
construction hereof.                                                            

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     If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this      
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.                  

     Very truly yours,

       SHOPKO STORES, INC.

By:         
                              ------------------------------------
           William J. Podany
                               President and Chief Executive Officer

CONFIRMED AND ACCEPTED,                                                         
as of the date first above written:                                             

MERRILL LYNCH & CO.                                                             
MERRILL LYNCH, PIERCE, FENNER & SMITH                                           
INCORPORATED                                          
BANC OF AMERICA SECURITIES LLC                                                  
ROBERT W. BAIRD & CO. INCORPORATED                                              
WILLIAM BLAIR & COMPANY, L.L.C.                                                 

By: MERRILL LYNCH, PIERCE, FENNER & SMITH                                       
INCORPORATED                                      

By:                                                                             
---------------------------------                                         
Authorized Signatory                                                  

  For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.                                                              

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SCHEDULE A

                                                               Number of
                                                              Initial Securities
                           Name of Underwriter                ------------------
-------------------       

Merrill Lynch, Pierce, Fenner & Smith                                           
Incorporated..............................................                
Banc of America Securities LLC...............................                   
Robert W. Baird &  Co. Incorporated..........................                   
William Blair & Company, L.L.C...............................                   

                                                                 ---------

Total........................................................       3,500,000   
                                                                 =========
Sch. A-1  

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SCHEDULE B

SHOPKO STORES, INC. 

3,500,000 Shares of Common Stock
(Par Value $.01 Per Share)

       1.  The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $     .            

         2.  The purchase price per share for the Securities to be paid by the
   several Underwriters shall be $    , being an amount equal to the initial
  public offering price set forth above less $    per share; provided that
   the purchase price per share for any Option Securities purchased upon the
  exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but not 
payable on the Option Securities.                                     

Sch. C-1  

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                                                                     Exhibit A-1

FORM OF OPINION OF GODFREY & KAHN, S.C. 
TO BE DELIVERED PURSUANT TO 
SECTION 5(b)

      (i)  The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Wisconsin (meaning  
in Wisconsin that such corporation has filed its most recent annual report and  
has not filed articles of dissolution).                                         

  (ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the          
Prospectus; and the Company has corporate power and authority to enter into     
and perform its obligations under the Purchase Agreement.                       

     (iii)  The capital stock of the Company conforms as to legal matters to
the description thereof set forth in the Prospectus under the caption           
"Description of Common Stock--General"; the shares of issued and outstanding    
capital stock of the Company, including the Securities to be purchased by the   
Underwriters from the Company, have been duly authorized and validly issued and 
are fully paid and non-assessable (subject to Wisconsin Statute (S)             
180.0622(2)(b)); and none of the outstanding shares of capital stock of the     
Company was issued in violation of the preemptive rights of any securityholder  
of the Company arising from any law, statute, rule, regulation or the Company's 
charter or bylaws or, to our best knowledge, other similar rights of any        
securityholder of the Company.                                                  

    (iv) The Securities have been duly authorized for issuance and sale to
the Underwriters pursuant to the Purchase Agreement and, when issued and        
delivered by the Company pursuant to the Purchase Agreement against payment of  
the consideration set forth in the Purchase Agreement, will be validly issued   
and fully paid and non-assessable (subject to Wisconsin Statute (S)             
180.0622(2)(b)) and no holder of the Securities is or will be subject to        
personal liability by reason of being such a holder (subject to Wisconsin       
Statute (S) 180.0622(2)(b)).                                                    

(v)  The issuance and sale of the Securities by the Company is not
subject to preemptive rights of any securityholder of the Company arising from  
any law, statute, rule, regulation or the Company's charter or bylaws or, to our
best knowledge, other similar rights of any securityholder of the Company.      

     (vi) Each corporate Subsidiary listed on Schedule A to this opinion has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its business  
as described in the Prospectus; except as otherwise disclosed in the            
Registration Statement and the Prospectus, all of the issued and outstanding    
capital stock of each Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable (subject, in the case of a Wisconsin corporation, 
to Wisconsin Statute (S) 180.0622(2)(b)) and, to the best of our knowledge, is  
owned by the Company, directly or                                               

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through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of capital   
stock of any Subsidiary was issued in violation of the preemptive rights of any 
securityholder of such Subsidiary arising from any law, statute, rule,          
regulation or the Company's charter or bylaws or, to our best knowledge, similar
rights of any securityholder of such Subsidiary.                                

  (vii)  The Purchase Agreement has been duly authorized, executed and
delivered by the Company.                                                       

(viii)  The Registration Statement, including any Rule 462(b)     
Registration Statement, has been declared effective under the 1933 Act; any     
required filing of the Prospectus pursuant to Rule 424(b) has been made in the  
manner and within the time period required by Rule 424(b); and, to the best of  
our knowledge, no stop order suspending the effectiveness of the Registration   
Statement or any Rule 462(b) Registration Statement has been issued under the   
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.                                                

     (ix) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as           
applicable, the Prospectus and each amendment or supplement to the Registration 
Statement and Prospectus as of their respective effective or issue dates (other 
than the financial statements and supporting schedules included therein or      
omitted therefrom, as to which we need express no opinion) complied as to form  
in all material respects with the requirements of the 1933 Act and the 1933 Act 
Regulations.                                                                    

      (x) If Rule 434 has been relied upon, the Prospectus was not "materially
different," as such term is used in Rule 434, from the prospectus included in   
the Registration Statement at the time it became effective.                     

     (xi) The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable statutory requirements, with any   
applicable requirements of the charter and by-laws of the Company and the       
requirements of the New York Stock Exchange.                                    

   (xii)  The information in the Prospectus under "Description of Common
Stock" and "Certain United States Federal Income Tax Consequences" and in the   
Registration Statement under Item 15, to the extent that it constitutes matters 
of law, summaries of legal matters, the Company's charter and bylaws or legal   
proceedings, or legal conclusions, has been reviewed by us and is correct in all
material respects.                                                              

      (xiii)  All descriptions in the Registration Statement and Prospectus of
contracts and other documents to which the Company or any of its subsidiaries is
a party are accurate in all material respects.                                  

   (xiv)  To our knowledge, neither the Company nor any subsidiary is in
violation of its charter or by-laws and no default by the Company or any        
subsidiary exists in the due performance or observance of any obligation,       
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument that is filed or   

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incorporated by reference as an exhibit to the Registration Statement or listed 
on Schedule B to this opinion (the "Material Contracts"), other than such       
defaults which, singly or in the aggregate, would not result in a Material      
Adverse Effect.                                                                 

       (xv) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than under the 1933 Act and the 1933 Act     
Regulations, which have been obtained, or as may be required under the          
securities or blue sky laws of the various states, as to which we need express  
no opinion) is necessary or required in connection with the due authorization,  
execution and delivery of the Purchase Agreement or for the offering, issuance  
or sale of the Securities.                                                      

  (xvi)  The execution, delivery and performance by the Company of the
Purchase Agreement and the consummation by the Company of the transactions      
contemplated in the Purchase Agreement and in the Registration Statement and the
Prospectus (including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus under   
the caption "Use Of Proceeds") and compliance by the Company with its           
obligations under the Purchase Agreement do not and will not, whether with or   
without the giving of notice or lapse of time or both, conflict with or         
constitute a breach of, or default or (except as disclosed in the Registration  
Statement) Repayment Event (as defined in Section 1(a)(xi) of the Purchase      
Agreement) under or result in the creation or imposition of any lien, charge or 
encumbrance upon any property or assets of the Company or any subsidiary        
pursuant to any of the Material Contracts (except for such conflicts, breaches  
or defaults or liens, charges or encumbrances that would not, singly or in the  
aggregate, have a Material Adverse Effect), nor will such action result in any  
violation of the provisions of the charter or by-laws of the Company or any     
subsidiary or any applicable law, statute, rule or regulation known to us.      

(xvii)  The documents incorporated by reference in the Prospectus 
(other than the financial statements and supporting schedules therein or omitted
therefrom, as to which we express no opinion), when they became effective or    
were filed with the Commission, as the case may be, complied as to form in all  
material respects with the requirements of the 1933 Act or the 1934 Act, as     
applicable, and the rules and regulations of the Commission thereunder.         

(xviii)  The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds       
therefrom as described in the Prospectus will not be, an "investment company"   
within the meaning of the Investment Company Act of 1940, as amended (the       
"1940 Act").                                                                    

  Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A    
Information and Rule 434 Information (if applicable), (except for financial     
statements and schedules and other financial data included therein or omitted   
therefrom, as to which we make no statement), at the time such Registration     
Statement or any such amendment became effective, contained an untrue statement 
of a material fact or omitted to state a material fact required to be stated    
therein or necessary to make the statements therein not misleading or that the  
Prospectus or any amendment or supplement thereto (except for financial         
statements and schedules and other financial data                               

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included therein or omitted therefrom, as to which we need make no statement),  
at the time the Prospectus was issued, at the time any such amended or          
supplemented prospectus was issued or at the Closing Time, included or includes 
an untrue statement of a material fact or omitted or omits to state a material  
fact necessary in order to make the statements therein, in the light of the     
circumstances under which they were made, not misleading.                       

    In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on           
certificates of responsible officers of the Company and public officials and    
such opinions shall have such other customary limitations and qualifications as 
are acceptable to counsel for the Underwriters. Such opinion shall not state    
that it is to be governed or qualified by, or that it is otherwise subject to,  
any treatise, written policy or other document relating to legal opinions,      
including, without limitation, the Legal Opinion Accord of the ABA Section of   
Business Law (1991). The opinion will state that all opinions as to the non-    
assessability of securities will be subject to Wisconsin Statute                
(S)180.0622(2)(b).                                                              

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Schedule A
----------

SVS Trucking, Inc.                                                              
ProVantage Holdings, Inc.                                                       
ShopKo Ventures-Duluth, Inc.                                                    
ShopKo Properties, Inc.                                                         
Penn-Daniels, Incorporated                                                      
ProVantage Health Services, Inc.                                                
ParMark Corporation                                                             
PVHS, Inc.                                                                      
ProVantage Prescription Management Services L.L.C.                              
Bravell, Inc.                                                                   
ProVantage Mail Services, Inc.                                                  
ProVantage Vision Management Services, Inc.                                     
ProVMed, LLC                                                                    

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Schedule B
----------

1.   Agreement and Plan of Merger, dated as of May 10, 1999, by and among ShopKo
Stores, Inc., ShopKo Merger Corp. and Pamida Holdings Corporation.    

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                                                                     Exhibit A-2

FORM OF OPINION OF RICHARD D. SCHEPP
TO BE DELIVERED PURSUANT TO 
SECTION 5(b)

  (i)  To the best of my knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or 
any subsidiary is a party, or to which the property of the Company or any       
subsidiary is subject, before or brought by any court or governmental agency or 
body, domestic or foreign, of the type required to be disclosed in the          
Registration Statement which is not so disclosed, or which might reasonably be  
expected to result in a Material Adverse Effect or which might reasonably be    
expected to materially and adversely affect the consummation of the transactions
contemplated by the Company or the performance of the Company's obligations     
under the Purchase Agreement.                                                   

     (ii)  The execution, delivery and performance of the Purchase Agreement
and the consummation of the transactions contemplated in the Purchase Agreement 
and in the Registration Statement (including the issuance and sale of the       
Securities and the use of the proceeds from the sale of the Securities as       
described in the Prospectus under the caption "Use Of Proceeds") and compliance 
by the Company with its obligations under the Purchase Agreement, do not and    
will not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default under or result in the      
creation or imposition of any lien, charge or encumbrance upon any property or  
assets of the Company or any of its subsidiaries pursuant to any judgment,      
order, writ or decree, known to me, of any government instrumentality or court, 
domestic or foreign, having jurisdiction over the Company or any of its         
subsidiaries or any of their respective properties, assets or operations.       

    (iii)  The information in the prospectus supplement under the sections
entitled "Business--Government Regulation" and "Business--Legal Proceedings,"   
to the extent that it constitutes matters of law, summaries of legal matters,   
the Company's charter and bylaws or legal proceedings, has been reviewed by     
me and is correct in all material respects.                                     

      (iv)  The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such             
qualification is required, whether by reason of the ownership or leasing of     
property or the conduct of business, except where the failure so to qualify or  
to be in good standing would not result in a Material Adverse Effect.           

(v)  Each corporate Subsidiary is duly qualified as a foreign     
corporation to transact business and is in good standing in each jurisdiction   
in which such qualification is required, whether by reason of the ownership     
or leasing of property or the conduct of business, except where the failure so  
to qualify or to be in good standing would not result in a Material Adverse     
Effect.                                                                         

     (vi)  To the best of my knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as   
required.                                                                       

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     (vii)  To the best of my knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments      
required to be described or referred to in the Registration Statement or        
Prospectus or to be filed as exhibits to the Registration Statement other than  
those described or referred to therein or filed or incorporated by reference as 
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.                                                       

(viii)  To the best of my knowledge, except as described in the   
Registration Statement, there are no persons with registration rights or other  
similar rights to have any securities registered pursuant to the Registration   
Statement or otherwise registered by the Company under the 1933 Act.            

 (ix)  To my knowledge, no default by the Company nor any subsidiary
exists in the due performance or observance of any obligation, agreement,       
covenant or condition contained in any contract, indenture, mortgage, loan      
agreement, note, lease or other agreement or instrument that is described or    
referred to in the Registration Statement or the Prospectus, other than such    
defaults, which, singly or in the aggregate, would not result in a Material     
Adverse Effect.                                                                 

     Nothing has come to my attention that would lead me to believe that the
Registration Statement or any amendment thereto, including the Rule 430A        
Information and Rule 434 Information (if applicable), (except for financial     
statements and schedules and other financial data included therein or omitted   
therefrom, as to which I need make no statement), at the time such Registration 
Statement or any such amendment became effective, contained an untrue statement 
of a material fact or omitted to state a material fact required to be stated    
therein or necessary to make the statements therein not misleading or that the  
Prospectus or any amendment or supplement thereto (except for financial         
statements and schedules and other financial data included therein or omitted   
therefrom, as to which I need make no statement), at the time the Prospectus was
issued, at the time any such amended or supplemented prospectus was issued or at
the Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the        
statements therein, in the light of the circumstances under which they were     
made, not misleading.                                                           

    In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on           
certificates of responsible officers of the Company and public officials and    
such opinions shall have such other customary limitations and qualifications as 
are acceptable to counsel for the Underwriters. Such opinion shall not state    
that it is to be governed or qualified by, or that it is otherwise subject to,  
any treatise, written policy or other document relating to legal opinions,      
including, without limitation, the Legal Opinion Accord of the ABA Section of   
Business Law (1991).                                                            

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                                                                       Exhibit C

[Form of Comfort Letter of Deloitte & Touche] 

July __, 1999                                                                   

Merrill Lynch & Co.                                                             
Merrill Lynch, Pierce, Fenner & Smith Incorporated                              
Banc of America Securities LLC                                                  
Robert W. Baird & Co. Incorporated                                              
William Blair & Company, L.L.C.                                                 
as Representatives of the several Underwriters                                
c/o  Merrill Lynch & Co.                                                        
Merrill Lynch, Pierce, Fenner & Smith Incorporated                              
North Tower                                                                     
World Financial Center                                                          
New York, New York  10281-1209                                                  

Ladies and Gentlemen:                                                           

          We have audited the consolidated balance sheets of ShopKo Stores, Inc.
and subsidiaries (the "Company") as of January 30, 1999 and January 31, 1998 and
the related consolidated statements of earnings, shareholders' equity and cash  
flows for the year (52 weeks) ended January 30, 1999, the year (49 weeks) ended 
January 31, 1998 and for the year (52 weeks) ended February 22, 1997.  The above
mentioned financial statements are included in the registration statement (No.  
333-79763) on Form S-3 filed by the Company with the Securities and Exchange    
Commission.  We also audited the consolidated financial statement schedule      
included in the Company's Form 10-K for the year ended January 30, 1999 (the    
"Form 10-K").  Our report with respect to the financial statements referenced   
above is included and incorporated by reference in the registration statement,  
and our report with respect to the consolidated financial statement schedule is 
included in the Form 10-K and incorporated by reference in the registration     
statement.  The registration statement as amended through the date hereof is    
herein referred to as the Registration Statement.                               

In connection with the Registration Statement:              

      1. We are independent certified public accountants with respect to
          the Company within the meaning of the Securities Act of 1933, as
           amended (the "1933 Act"), and the published rules and regulations
thereunder.                                           

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       2. In our opinion, the audited consolidated financial statements of
    the Company audited by us and included and incorporated by
          reference in the Registration Statement comply as to form in all
          material respects with the applicable accounting requirements of
          the 1933 Act and the Securities Exchange Act of 1934, as amended
   (the "1934 Act"), and the published rules and regulations
       thereunder. In addition, the consolidated financial statement
            schedule included in the Form 10-K, when considered in relation to
       the basic consolidated financial statements taken as a whole,
           present fairly in all material respects the information set forth
therein.                                              

        3. We have not audited any financial statements of the Company as of
             any date or for any period subsequent to January 30, 1999. Although
             we have conducted an audit for the year ended January 30, 1999, the
            purpose (and therefore the scope) of the audit was to enable us to
     express our opinion on the Company's consolidated financial
            statements as of January 30, 1999 and for the year then ended, but
            not on the financial statements for any interim period within that
             year. Therefore, we are unable to and do not express any opinion on
           the unaudited consolidated balance sheet as of May 1, 1999 or the
       unaudited consolidated statements of earnings, cash flows and
            shareholders' equity for the fiscal quarters ended May 1, 1999 and
    May 2, 1998, included and incorporated by reference in the
          Registration Statement, or on the financial position, results of
   operations or cash flows as of any date or for any period
subsequent to January 30, 1999.                       

        4. For purposes of this letter, we have read the 1999 minutes of all
            meetings of the stockholders and board of directors and committees
          of the board of directors of the Company and its subsidiaries as
          set forth in the minute books at _______, 1999, officials of the
         Company having advised us that the minutes of all such meetings
             through that date were set forth therein; we have carried out other
             procedures with respect to the Company to [cut-off date] as follows
             (our work did not extend to the period from [cut-off date] to [date
within three business days of pricing]).              

       5. With respect to the fiscal quarters ended May 1, 1999 and May 2,
1998, we have                                         

            a. Performed the procedures specified by the American Institute of
              Certified Public Accountants for a review of interim financial
               information as described in Statement on Auditing Standards No.
              71, Interim Financial Information ("SAS 71"), on the Company's
              unaudited consolidated balance sheet as of May 1, 1999 and the
           related unaudited consolidated statements of earnings, cash
                flows and shareholders' equity for the fiscal quarters ended May
1, 1999 and May 2, 1998, and                    

  b. Inquired of certain officials of the Company who have
               responsibility for financial and accounting matters whether (1)
    the unaudited consolidated balance sheet and related
   consolidated statements of earnings, cash flows and
              shareholders' equity referred to in 5a above are in conformity
with generally accepted accounting              

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                principles applied on a basis substantially consistent with that
               of the audited consolidated financial statements of the Company
            included in the Registration Statement, and (2) comply as to
            form in all material respects with the applicable accounting
        requirements of the 1933 Act and the published rules and
regulations thereunder.                         

         c. On the basis of procedures described in paragraphs 5a and 5b
              above, nothing came to our attention that caused us to believe
                that the financial statements described in paragraph 5a above do
       not comply as to form in all material respects with the
               applicable accounting requirements of the 1933 Act and the 1933
               Act regulations or any material modifications should be made to
           such financial statements for them to be in conformity with
generally accepted accounting principles.       

         6. [If the Company's monthly financials for June are completed before
            we price] With respect to the months ended June ___, 1999 and June
___, 1998, we have:                                   

          a. Read the unaudited financial statements for June of both 1999
         and 1998 furnished to us by the Company, officials of the
              Company having advised us that no such financial statements as
               of any date or for any period subsequent to June ___, 1999 were
              available. The financial information for June is incomplete in
                that it omits the statement of cash flows and other disclosures.

  b. Inquired of certain officials of the Company who have
         responsibility for financial and accounting matters as to
               whether the unaudited financial statements referred to under 6a
              above are stated on a basis substantially consistent with that
              of the audited financial statements of the Company included in
the Registration Statement.                     

             c. On the basis of the procedures described in paragraphs 6a and 6b
              above, nothing came to our attention that caused us to believe
              that (i) on June ___, 1999 there was any change in the capital
         stock, increase in long-term obligations or total current
            liabilities, or decrease in total assets, working capital or
         total shareholders' equity of the Company in each case as
                compared with the amounts shown in the May 1, 1999 balance sheet
                included in the Registration Statement or (ii) during the period
             from May 1, 1999 to June ___, 1999 there was any decrease, as
                compared with the corresponding period in the preceding year, in
           total revenues, net sales, income from operations, earnings
              before income taxes, net earnings before extraordinary item or
          net earnings, except in all instances for any increases or
        decreases that the Registration Statement discloses have
occurred or may occur.                          

      7. [If June financials are available] As mentioned under 6a above,
           Company officials have advised us that no financial statements as
        of any date or for any period subsequent to June ___, 1999 are
       available. Accordingly, the procedures carried out by us with
         respect to changes in financial statement items after June ___,
1999 have,                                            

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             of necessity, been even more limited than those with respect to the
     periods referred to in 6 above. We have inquired of certain
            officials of the Company who have responsibility for financial and
          accounting matters whether (i) on [cut-off date], 1999 there was
            any change in the capital stock, increase in long-term obligations
            or total current liabilities, or decrease in total assets, working
           capital or total shareholders' equity of the Company in each case
             as compared with the amounts shown in the May 1, 1999 balance sheet
           included in the Registration Statement, or (ii) during the period
             from May 1, 1999 to [cut-off date], 1999 there was any decrease, as
          compared with the corresponding period in the preceding year, in
            total revenues, net sales, income from operations, earnings before
     income taxes, net earnings before extraordinary item or net
           earnings.. On the basis of these inquiries and our reading of the
             minutes as described in 4 above, nothing came to our attention that
          caused us to believe that there was any such change, increase or
          decrease, except in all instances for any increases or decreases
        that the Registration Statement discloses have occurred or may
occur.                                                

  7. [If no June financials are available] As mentioned under 6a
    above, Company officials have advised us that no financial
          statements as of any date or for any period subsequent to May 1,
           1999 are available. Accordingly, the procedures carried out by us
           with respect to changes in financial statement items after May 1,
            1999 have, of necessity, been more limited than those with respect
            to the periods referred to in 5 above. We have inquired of certain
            officials of the Company who have responsibility for financial and
          accounting matters whether (i) on [cut-off date], 1999 there was
            any change in the capital stock, increase in long-term obligations
            or total current liabilities, or decrease in total assets, working
           capital or total shareholders' equity of the Company in each case
             as compared with the amounts shown in the May 1, 1999 balance sheet
           included in the Registration Statement, or (ii) during the period
             from May 1, 1999 to [cut-off date], 1999 there was any decrease, as
          compared with the corresponding period in the preceding year, in
            total revenues, net sales, income from operations, earnings before
     income taxes, net earnings before extraordinary item or net
           earnings.. On the basis of these inquiries and our reading of the
             minutes as described in 4 above, nothing came to our attention that
          caused us to believe that there was any such change, increase or
          decrease, except in all instances for any increases or decreases
        that the Registration Statement discloses have occurred or may
occur.                                                

     8. Based upon the procedures set forth above and a reading of the
         Selected Historical Consolidated Financial Data included in the
          Registration Statement and a reading of the financial statements
          from which such data were derived, nothing came to our attention
             that caused us to believe that the Selected Historical Consolidated
             Financial Data included in the Registration Statement do not comply
 as to form in all material respects with the disclosure
          requirements of Item 301 of Regulation S-K of the 1933 Act, that
      the amounts included in the Selected Historical Consolidated
            Financial Data are not in agreement with the corresponding amounts
             in the audited consolidated financial statements for the respective
      periods or that the financial statements not included in the
             Registration Statement from which certain of such data were derived
  are not in conformity with generally accepted accounting
principles.                                           

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9. We have compared the information included in or incorporated by    
        reference in the Registration Statement under selected captions with the
    disclosure requirements of Regulation S-K of the 1933 Act and on the
        basis of limited procedures nothing came to our attention that caused us
  to believe that this information does not comply as to form in all
        material respects with the disclosure requirements of Items 302 and 402,
respectively, of Regulation S-K.                                

  10. For purposes of this letter, we have also read the items identified by
you on the attached copies of certain pages of the Registration 
  Statement and documents incorporated by reference therein and have
   performed the following procedures, which were applied as indicated
with respect to the letters explained below:                    

 A. Compared the dollar amounts, descriptions and numbers with the
     related information shown in the Company's audited consolidated
           financial statements or the notes thereto, for the respective periods
and found them to be in agreement, rounded as appropriate.

       B. Agreed to or recomputed based upon information contained within this
registration statement.                                   

 C. Compared the dollar amounts, descriptions and numbers with the
          related information included in the Company's unaudited consolidated
           financial statements or the notes thereto, for the respective periods
and found them to be in agreement, rounded as appropriate.

     D. Compared the dollar amounts, percentages, descriptions and numbers
           with supporting schedules or report provided or prepared by employees
    in the Company's accounting department and found them to be in
           agreement. Amounts appearing in such schedule or report were compared
          with accounting records of the Company and found to be in agreement.

E. Recalculated for mathematical accuracy and found to be in    
     agreement. The amounts or percentages were derived from amounts
         included in the Company's audited consolidated financial statements
or the notes thereto for the periods indicated.           

F. Recalculated for mathematical accuracy and found to be in    
     agreement. The amounts or percentages were derived from amounts
           included in the Company's unaudited consolidated financial statements
for the fiscal quarters indicated.                        

G. Compared the dollar amounts, descriptions and number with the
   supporting board of directors minutes and found them to be in
agreement.                                                

        H. Compared the dollar amounts, descriptions and numbers with the Pamida

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        Holdings Corporation financial statements for the period indicated
and found them to be in agreement.                        

I. Compared the amount with the ProVantage Health Services, Inc.
  ("ProVantage") financial statements for the period indicated
          contained in amendment No. 3 to Form S-1 registration statement (No.
       333-71743) filed by ProVantage and found them to be in agreement,
rounded as appropriate.                                   

      J. Compared with a schedule or report prepared by ProVantage and found
           them to be in agreement. Amounts appearing in such schedule or report
         were compared with accounting records of ProVantage and found to be
in agreement, rounded as appropriate.                     

    K. Compared the dollar amounts, percentages, descriptions and number
     with the supporting schedules or report provided or prepared by
           employees in the Company's accounting department and found them to be
     in agreement. Amounts appearing in such schedule or report were
       compared or reconciled with accounting records of the Company and
found to be in agreement.                                 

    L. We compared the information included under the heading "Ratios of
         Earnings to Fixed Charges" with the requirements of Regulation S-K,
           Item 503(d). We also inquired of certain officials of the Company who
           have responsibility for financial and accounting matters whether this
          information conforms with the disclosure requirements of Item 503(d)
         of Regulation S-K. Nothing came to our attention as a result of the
          foregoing procedures that caused us to believe that this information
         does not conform with the disclosure requirements of Item 503(d) of
Regulation S-K.                                           

       M. Recalculated for mathematical accuracy and found to be in agreement,
          the amounts or percentages were derived from amounts included in the
      Company's audited consolidated financial statements or the notes
      thereto for the periods indicated and the unaudited consolidated
      financial statements or the notes thereto for the fiscal quarter
indicated.                                                

11. Our audit of the financial statements for the periods referred to in
       the introductory paragraph of this letter were comprised of audit tests
and procedures deemed necessary for the purpose of expressing an
       opinion on such financial statements taken as a whole.  For neither the
     periods referred to therein nor any other period did we perform audit
     tests for the purpose of expressing an opinion on individual balances
of accounts or summaries of selected transactions such as those 
enumerated above and, accordingly, we do not express an opinion 
thereon.                                                        

12. It should be understood that we make no representations regarding   
       questions of legal interpretation or regarding the sufficiency for your
 purposes of the procedures enumerated above and referenced in the
attached marked pages of the Registration Statement; also, such 
procedures would not necessarily reveal any material            

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     misstatement of the amounts or percentages listed in the Registration
       Statement. Further, we have addressed ourselves solely to the foregoing
data as set forth in the Registration Statement and make no     
 representations regarding the adequacy of disclosure or regarding
whether any material facts have been omitted.                   

13. This letter is solely for the information of the addressees and to  
assist the underwriters in conducting and documenting their     
  investigation of the affairs of the Company in connection with the
      offering of common stock covered by the Registration Statement, and it
      is not to be used, circulated, quoted or otherwise referred to for any
 purpose, including but not limited to the purchase or sale of the
      common stock, nor is it to be filed with or referred to in whole or in
     part in the Registration Statement or any other document, except that
       reference may be made to it in the Purchase Agreement or in any list of
closing documents pertaining to the offering of the common stock
covered by the Registration Statement.                          

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
Filed on:		7/13/99
For Period End:		7/6/99							11-K,  8-K/A,  SC 13D/A,  SC 14D1/A
		5/10/99		36
		5/1/99		40		42			10-Q
		1/30/99		9		40			10-K405
		5/2/98		40					10-Q
		1/31/98		39					10-K
		2/22/97		39					10-K405,  11-K
									List all Filings