1
LOAN AND LETTER OF CREDIT
REIMBURSEMENT AGREEMENT
among
UNITOG COMPANY,
UNITOG RENTAL SERVICES, INC.,
and
UNITED MISSOURI BANK, N.A.,
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
NBD BANK, N.A.
and
UNITED MISSOURI BANK, N.A.
as Agent
Dated September 10, 1993
2
TABLE OF CONTENTS
PAGE
SECTION 1
Definitions 2
1.1 Accounting Terms 2
1.2 Defined Terms 2
1.3 Singular and Plural 10
SECTION 2
The Loans 10
2.1 Credit 10
2.2 The Revolving Credit Loans 11
2.2.1 The Revolving Credit Commitments 11
2.2.2 Method of Borrowing 11
2.2.3 Interest on the Revolving Credit
Loans 18
2.2.4 Payments; Mandatory Prepayment of
Revolving Credit Loans 19
2.2.5 Use of Proceeds of Revolving Credit
Loans 19
2.2.6 Revolving Credit Commitment Fee 20
2.2.7 Calculation of Interest 21
2.2.8 Manner of Payment - Prepayments 21
2.2.9 Procedures for Electing Optional
Rates 22
2.2.10 Banking Day 27
2.2.11 Extension of Revolving Credit Maturity
Date 27
SECTION 3
The Letter of Credit 28
3.1 The Letter of Credit 28
3.2 Payment and Reimbursement 28
3.2.1 Payment 28
3.2.2 Reimbursement 29
3.3 Commission 32
3.4 Additional Amounts Payable 33
3.5 Risk of Misuse of the Letter of Credit 34
3.6 Replacement of the Letter of Credit; Cancellation 36
3.7 Letter of Credit Participation 36
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3.8 Alternative Reimbursement of Letter of Credit
Draw 37
SECTION 4
Representations and Warranties 39
4.1 Organization 39
4.2 Authorization; No Conflict 39
4.3 Validity and Binding Nature 40
4.4 Financial Statements 40
4.5 Litigation and Contingent Liabilities 41
4.6 Liens 42
4.7 Employee Benefit Plans 42
4.8 Investment Company Act 43
4.9 Regulation U 43
4.10 Notices 43
SECTION 5
Affirmative Covenants of the Borrowers 43
5.1 Corporate Existence 43
5.2 Reports, Certificates and Other Information 43
5.2.1 Annual Statements and Form 10-K 43
5.2.2 Quarterly Statements and Form 10-Q 44
5.2.3 Certificates 45
5.2.4 Orders 45
5.2.5 Notice of Default or Litigation 45
5.2.6 Other Information 46
5.2.7 Securities Filings 46
5.2.8 Name; Principal Office 46
5.3 Books, Records, Quarterly Meetings and
Inspections 47
5.4 Insurance 47
5.5 Taxes and Liabilities 48
5.6 Compliance with Legal and Regulatory Requirements 48
5.7 Financial Covenants 49
5.7.1 Current Ratio 49
5.7.2 Capitalization Ratio 49
5.7.3 Consolidated Stockholders' Equity 49
5.7.4 Fixed Charge Coverage Ratio 50
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5.8 Employee Benefit Plans 50
5.9 Compliance with Term Loan Documents 50
5.10 Hazardous Substances 50
5.11 Subsidiaries 52
SECTION 6
Negative Covenants of the Borrowers 52
6.1 Liens 53
6.2 Guarantees, Loans or Advances 55
6.3 Mergers, Consolidations, Sales or Acquisitions 56
6.4 Margin Stock 58
6.5 Other Agreements 59
6.6 Judgments 59
6.7 Amendments to Term Loan Documents 59
6.8 Debt 59
6.9 Performance of Obligations for Credit Enhanced
Notes 60
SECTION 7
Conditions of Lending 60
7.1 No Default 60
7.2 Documents to be Furnished at Closing 60
7.3 Documents to be Furnished at Time of Each Advance
and Upon Election for the Installment Loan 64
SECTION 8
Events of Default 64
8.1 Nonpayment of the Loans, Etc. 64
8.2 Nonpayment of Other Loans from Banks 64
8.3 Nonpayment of Term Loan Obligations 65
8.4 Nonpayment of Other Indebtedness for Borrowed
Money 65
8.5 Bankruptcy, Insolvency, Etc. 65
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8.6 Violation of Negative and Affirmative Covenants
and Noncompliance With Other Provisions of this
Agreement or Other Loan Documents 66
8.7 Warranties and Representations 67
SECTION 9
Effect of Event of Default 67
9.1 Automatic Acceleration 67
9.2 Other Remedies 68
9.2.1 Acceleration of the Loans 68
9.2.2 Remedies Cumulative 68
SECTION 10
The Agent 69
10.1 Appointment 69
10.2 Powers 69
10.3 General Immunity 69
10.4 No Responsibility for Loans, Recitals, Etc. 70
10.5 Right to Indemnity 70
10.6 Action on Instructions of Banks 70
10.7 Employment of Agents and Counsel 70
10.8 Reliance on Documents 71
10.9 May Treat Payee as Owner 71
10.10 Agent's Reimbursement 71
10.11 Rights as a Lender 71
10.12 Bank Credit Decision 72
10.13 Successor Agent 72
10.14 Distribution of Information 73
10.15 Application of Proceeds 74
10.16 Agent's Fee 75
10.17 Issues Requiring Decisions by Banks 75
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SECTION 11
Ratable Payments 76
SECTION 12
General Provisions 77
12.1 Waiver; Amendments 77
12.2 Notices 77
12.3 Costs, Expenses and Taxes 78
12.4 Captions 79
12.5 Governing Law 79
12.6 Successors and Assigns 79
12.7 Counterparts 80
12.8 Contribution, Etc. 80
12.9 Several Obligations 81
12.10 Indemnification 81
12.11 Incorporation by Reference 82
12.12 Right of Set-Off 82
12.13 Interest Rate Limitation 83
12.14 Severability 83
12.15 Provisions Regarding Indenture 84
12.16 Statutory Statement 87
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Exhibits
A Application for Advance
B Officer's Certificate
C Revolving Credit Note
D Letter of Credit
E Installment Note
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LOAN AND LETTER OF CREDIT
REIMBURSEMENT AGREEMENT
THIS AGREEMENT, dated as of the 10th day of September, 1993, is made by
and between UNITOG COMPANY, a Delaware corporation (the "Company"), UNITOG
RENTAL SERVICES, INC., a California corporation ("Rental") (Company and Rental
being sometimes collectively referred to herein as the "Borrowers" or
individually as a "Borrower"), UNITED MISSOURI BANK, N.A., Kansas City,
Missouri, a national banking association ("UMB"), ▇▇▇▇▇▇ TRUST AND SAVINGS
BANK, Chicago, Illinois, an Illinois banking corporation ("▇▇▇▇▇▇"), NBD BANK,
N.A., Detroit, Michigan, a national banking association ("NBD") (UMB, ▇▇▇▇▇▇
and NBD being sometimes collectively referred to herein as the "Banks" or
individually as a "Bank"), and UNITED MISSOURI BANK, N.A., Kansas City,
Missouri, a national banking association, as agent for the Banks herein (in
such capacity, the "Agent").
WHEREAS, the Borrowers have requested a total credit facility of up to
$50,763,458 in revolving loans and letters of credit; and
WHEREAS, the Banks are willing to extend such credit facility to the
Borrowers on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein contained, the parties mutually agree as follows:
SECTION 1
Definitions
1.1 Accounting Terms. All accounting and financial terms used herein
are used with the meanings such terms are given in accordance with GAAP,
except as may be otherwise specifically provided in this Agreement.
1.2 Defined Terms. As used herein:
"Advance" means a disbursement of proceeds of the Revolving Credit
Loans.
"Agent" means United Missouri Bank, N.A., Kansas City, Missouri, in
its capacity as agent for the Banks hereunder, and any successor Agent
appointed pursuant to this Agreement.
"Agreement" means this Loan and Letter of Credit Reimbursement
Agreement, as amended from time to time.
"Applicable Margin" shall be determined by reference to the
following table:
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Applicable Applicable
Margin for Margin for
Capitalization Prime Rate LIBOR
Ratio Advances Advances
Less than or equal
to 50% 0 bp 75 bp
Greater than 50% 0 bp 100 bp
The adjustment (upwards or downwards, as appropriate), if any, to the
Applicable Margin shall be calculated as of the last day of the immediately
preceding fiscal quarter and shall be effective two (2) business days after
delivery of required financial statements and Officer's Certificate to Agent.
No decrease in rate shall occur if there exists a Default or Event of Default
on the date on which such decrease would otherwise become effective until such
time as the Default or Event of Default has been cured or waived.
"Application for Advance" or "Application" means the written
application of the Borrowers for an Advance, which Application shall be in the
form of Exhibit A attached hereto.
"Authorized Officer" means the Chairman of the Board, the President,
the Chief Executive Officer, the Chief Financial Officer, the Treasurer, the
Assistant to the Treasurer, the Secretary, the Controller, the Treasury
Manager and the Senior Financial Analyst or such other officer or employee of
a Borrower whose authority to perform acts to be performed only by an
Authorized Officer under the terms of this Agreement is evidenced to the Agent
by a certified copy of an appropriate resolution of the Board of Directors of
such Borrower.
"Banking Day" means a day on which the principal offices of the
Agent and the Banks are open for the purpose of conducting substantially all
of their business activities, and, for purposes of Section 2.2.9, shall also
be a day on which dealings in U.S. dollar deposits are carried on in the
London interbank market and banks are open for business in London.
"Banks" shall have the meaning ascribed in the preamble.
"Borrower" or "Borrowers" shall have the meaning ascribed in the
preamble.
"Capitalization Ratio" means Consolidated long-term debt (interest
bearing obligations with maturities in excess of one year) of the Company
divided by total Consolidated Stockholders' Equity plus long-term debt.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means a Bank's Revolving Credit Commitment.
"Company" shall have the meaning ascribed in the preamble.
"Compliance Certificate" means a certificate signed by an Authorized
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Officer showing the calculations of the financial covenants specified in
Section 5.7 and containing the certification that the Company is in compliance
with such financial covenants.
"Consolidated Stockholders' Equity" means the Consolidated
Stockholders' Equity of the Company, determined in accordance with GAAP, shown
on the balance sheets furnished to the Banks from time to time pursuant to
Section 5.2.
"Credit Enhanced Notes" means the Borrowers' Seventeen Million
Dollars ($17,000,000) 9.68% Fixed Rate Credit Enhanced Notes Due December 1,
1998, issued pursuant to the Indenture.
"Default" means any event specified in Section 8, which is not
initially an Event of Default, but which would, if uncured, become an Event of
Default with the giving of notice or the passage of time or both.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Default" shall have the meaning ascribed in Section 8.
"Fixed Charge Coverage Ratio" means the sum of earnings before
interest, taxes, amortization expense, and rent expense, divided by the sum of
interest expense and rent expense.
"GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any agency, body, commission,
court or department thereof, whether federal, state, local or foreign.
"▇▇▇▇▇▇" shall have the meaning ascribed in the preamble.
"Hazardous Substance" means any hazardous or toxic substance
regulated by any federal, state or local statute or regulation applicable to
the Borrowers or their Subsidiaries, including, but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act and the Toxic Substance Control Act, or
by any Governmental Authority having jurisdiction over the Borrowers or their
Subsidiaries and over the control of any such substance including, but not
limited to, the United States Environmental Protection Agency.
"Indenture" means the Trust Indenture dated as of December 1, 1988,
executed by the Borrowers and the Trustee relative to the Credit Enhanced
Notes, as amended.
"Letter of Credit" shall have the meaning ascribed in Section 3 and
shall be deemed to include any renewal, replacement, substitution, extension
or modification thereof.
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"LIBOR" means the arithmetic average of rates at which deposits in
U.S. dollars are offered by leading banks for the applicable LIBOR Interest
Period in the London interbank market two (2) Banking Days prior to the
commencement of any LIBOR Interest Period, as reasonably determined by the
Agent.
"LIBOR Interest Period" means a period commencing on any date a
Permissible Increment of a Loan or Loans is converted or renewed to an
Optional Rate Portion, and ending, as selected by the Borrowers, on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter; provided, that, if a LIBOR Interest Period would end on a
day that is not a Banking Day, such LIBOR Interest Period shall be extended to
the next Banking Day unless such Banking Day would fall in the next calendar
month, in which event such LIBOR Interest Period shall end on the immediately
preceding Banking Day.
"Loan Documents" means this Agreement, the Notes and any other
documents or instruments now or hereafter executed and delivered by or on
behalf of the Borrowers to the Banks or to the Agent to further evidence or
govern the Obligations.
"Loans" means the Revolving Credit Loans.
"NBD" shall have the meaning ascribed in the preamble.
"Notes" means the Revolving Credit Notes.
"Obligations" means (i) all obligations of the Borrowers to the
Banks of every type and description, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, on
account of the Loans, including, without limitation, any Advances made
pursuant to any discretionary extension of the Commitment by the Banks beyond
the Revolving Credit Maturity Date or pursuant to any other amendment of the
Loan Documents, and whether or not contemplated by the Borrowers or the Banks
as of the date of this Agreement, (ii) the Borrowers' duty to reimburse the
Banks, as the case may be, for all amounts paid by the Banks in honoring
drafts under the Letter of Credit, including the installment loan described in
Section 3.8 hereof, if applicable, or the documentary trade and standby
letters of credit described in Section 2.2.2(b) and the Borrowers' duty to pay
the Banks, as the case may be, the fees and commissions required hereunder for
issuing the Letter of Credit and such other letters of credit, (iii) all other
commitment fees and similar charges provided for in the Loan Documents, and
(iv) all other obligations arising under the Loan Documents including, without
limitation, all costs of collection and enforcement of any and all of the Loan
Documents, including reasonable attorneys' fees and expenses (to the extent
permitted by applicable law).
"Officer's Certificate" means a certificate in the form of Exhibit B
attached hereto and incorporated herein by reference.
"Optional Rate" means the LIBOR plus the Applicable Margin.
"Optional Rate Portion" means any Loan or portion thereof which
bears interest with reference to an Optional Rate on any given day.
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"Permissible Increment" shall have the meaning ascribed in Section
2.2.9(iv).
"Permitted Encumbrances" shall have the meaning ascribed in Section
6.1.
"Person" means and includes an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
Governmental Authority.
"Plan" shall have the meaning ascribed in ERISA.
"Prepayment Premium" shall have the meaning ascribed in Section
2.2.9(vii).
"Prime Rate" means the variable interest prime rate as published
from time to time in the Wall Street Journal, such rate to change
contemporaneously with each change in such established and quoted rate. In
the event that the Wall Street Journal is no longer published, then "Prime
Rate" shall mean the variable interest rate equal at all times to the rate of
interest established and quoted by UMB on any day as its prime rate.
"Pro Rata Share" means, for any Bank, when used with reference to
any aggregate or total amount, an amount equal to the product of (i) such
aggregate or total amount, times (ii) a fraction the numerator of which shall
be such Bank's Commitment and the denominator of which shall be the aggregate
of all Commitments.
"Quarterly Commission Due Date" shall have the meaning ascribed in
Section 3.3.
"Rental" shall have the meaning ascribed in the preamble.
"Revolving Credit Commitments" means the revolving credit
commitments of the Banks, more particularly described in Section 2.2.1, in the
respective amounts of (i) Fourteen Million Dollars ($14,000,000), in the case
of UMB, and (ii) Ten Million Five Hundred Thousand Dollars ($10,500,000), in
the case of ▇▇▇▇▇▇, and (iii) Ten Million Five Hundred Thousand Dollars
($10,500,000), in the case of NBD.
"Revolving Credit Loans" shall have the meaning ascribed in Section
2.2.1 and shall be deemed to include any extensions or renewals thereof.
"Revolving Credit Maturity Date" means September_9, 1996, or as
otherwise extended, if extended.
"Revolving Credit Notes" shall have the meaning ascribed in Section
2.2.2 and shall be deemed to include any renewals, extensions, replacements
and modifications thereof.
"Secured Obligations" means all obligations of the Borrowers in
connection with the Term Loan.
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"Stated Amount" means, as of any date such amount is to be
determined, the maximum amount available to draw under the Letter of Credit,
assuming compliance with all conditions for drawing under the Letter of
Credit.
"Subsidiary" means any corporation, partnership, joint venture or
other business entity over which a Person exercises control, provided that it
shall be conclusively presumed that the Person exercises effective control
over any such entity 51% or more of the equity interest of which is owned by
the Person, directly or indirectly.
"Term Loan" means the indebtedness of the Borrowers evidenced by the
Credit Enhanced Notes.
"Term Loan Documents" means the Credit Enhanced Notes, the
Indenture, and any mortgages and/or deeds of trust and all other documents and
instruments now or hereafter executed by or on behalf of either Borrower to
evidence, govern or secure the Term Loan, including any amendments thereof,
but excluding the Placement Agency Agreement between the Borrowers and Bank
One, Indianapolis, national association.
"Trustee" shall mean the trustee under the Indenture.
"UMB" shall have the meaning ascribed in the preamble.
1.3 Singular and Plural. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the defined terms.
SECTION 2
The Loans
2.1 Credit. Subject to the terms and conditions of this Agreement, the
Banks will make the Loans described in this Section 2 to the Borrowers.
2.2 The Revolving Credit Loans. Subject to the terms and conditions of
this Agreement, the Banks will make revolving credit loans to the Borrowers as
follows:
2.2.1 The Revolving Credit Commitments. Subject to the conditions
of Section 7, from the date hereof to the Revolving Credit Maturity Date
including any extension thereof, the Banks agree to make Advances
(collectively, the "Revolving Credit Loans") or to provide the other financial
accommodations described in this Section 2.2 to the Borrowers from time to
time in an aggregate amount not to exceed at any one time outstanding the
aggregate Revolving Credit Commitments. Each Advance shall be made by the
Banks concurrently and in accordance with its Pro Rata Share.
2.2.2 Method of Borrowing.
(a) Revolving Credit Loans. The Obligation of the Borrowers
to repay Revolving Credit Loans shall be evidenced by promissory notes (the
"Revolving Credit Notes") of the Borrowers in the form of Exhibit C payable to
each of the Banks in accordance with the amount of their respective Revolving
Credit Commitments. So long as no Default or Event of Default shall have
occurred and be continuing, and until the Revolving Credit Maturity Date
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including any extension thereof, the Borrowers may borrow, repay and reborrow
under the Revolving Credit Notes on any Banking Day, provided that no
borrowing may cause the outstanding principal balance of the Revolving Credit
Loans and the documentary trade and standby letters of credit issued pursuant
to Section 2.2.2(b) hereof to exceed the aggregate Revolving Credit
Commitments or may result in a Default or an Event of Default. As the
Borrowers desire to obtain Revolving Credit Loans hereunder, the Company, as
agent for the Borrowers and which is hereby designated as agent for the
Borrowers for such purpose, shall give the Agent notice of the Borrowers'
intention to borrow pursuant to the Revolving Credit Commitments by not later
than 10:00 A.M. (Kansas City, Missouri time) on the proposed date of
borrowing. As soon as practicable after receipt of a borrowing notice but in
no event later than 11:00 A.M. (Kansas City, Missouri time), the Agent shall
give the Banks telephonic notice of the same. By 12:00 Noon (Kansas City,
Missouri time) on each such borrowing date, each Bank severally agrees to make
its Pro Rata Share of the Advance of the Revolving Credit Loans then being
made to the Borrowers by making it available to the Agent, either by wire
transfer to Agent's main office in Kansas City, Missouri, or by deposit to any
correspondent account, if any, which Agent may maintain with such Bank. The
Agent will make the funds so received from the Banks immediately available to
the Borrowers in the manner provided below. Each Advance under the Revolving
Credit Loans will be conditioned upon delivery (which delivery may be made by
telex, telecopier or facsimile transmission) to the Agent by the Borrowers of
an Application for Advance provided that the Agent may, in its sole
discretion, make a disbursement upon the verbal request of the Borrowers made
telephonically by an Authorized Officer. The Agent may rely on any such
verbal request which shall have been received by it in good faith from a
Person reasonably believed to be an Authorized Officer. Each such verbal
request shall be promptly confirmed by a duly executed Application for
Advance. Subject to the provisions of Section 2.2.9, all borrowings and
reborrowings shall be in amounts of not less than One Hundred Thousand Dollars
($100,000). Repayments may be in any amount except (i) mandatory prepayment
of the Revolving Credit Loans as required by Section 2.2.4 and (ii) repayment
of the entire principal balance of the Revolving Credit Loans. Upon
compliance with all conditions of lending stated in this Agreement applicable
to the Revolving Credit Loans, the Agent shall disburse the amount of the
requested Advance to the Borrowers by depositing the same in the Company's
account at UMB, and the Borrowers hereby authorize the disbursement of
Advances of the Revolving Credit Loans in such manner. All Advances by the
Banks and payments by the Borrowers shall be recorded by the Banks on their
books and records, and the principal amount outstanding from time to time,
plus interest payable thereon, shall be determined by reference to the books
and records of the Banks. Such books and records shall be rebuttably presumed
to be correct as to such matters.
(b) Documentary Trade and Standby Letters of Credit.
Subject to the terms and conditions hereof, the Revolving Credit Commitments,
at the option of the Borrowers, may also be utilized in the form of
documentary trade and stand-by letters of credit issued by UMB for the account
of a Borrower. Immediately upon issuance of each such letter of credit, the
Agent shall notify the Banks of the amount and type of the same. Each such
documentary trade letter of credit shall have an expiration date not later
than the first to occur of (i) one hundred twenty (120) days from the date of
issuance, or (ii) one (1) day before the Revolving Credit Maturity Date. Each
such standby letter of credit shall have an expiration date not later than the
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first to occur of (i) one (1) year from the date of issuance, or (ii) one (1)
day before the Revolving Credit Maturity Date. The aggregate of such
documentary trade and standby letters of credit outstanding at any time shall
not exceed Five Million Dollars ($5,000,000) and, when taken together with the
aggregate principal amount of Revolving Credit Loans then outstanding, shall
at no time exceed the aggregate Revolving Credit Commitments. Each
documentary trade or standby letter of credit issued pursuant to this Section
2.2.2(b) shall count against and reduce the Revolving Credit Commitments by
the amount of such letter of credit outstanding unless and until such letter
of credit expires by its terms or otherwise terminates, in which event the
Revolving Credit Commitments shall be reinstated by the amount of such letter
of credit. The amount of any documentary trade or standby letter of credit
outstanding at any time for all purposes hereof shall be the maximum amount
which could be drawn thereunder under any circumstances from and after the
date of determination. Each such documentary trade and standby letter of
credit shall conform to the general requirements of UMB for the issuance of
such credits, as to form and substance, and shall be a letter of credit which
UMB may lawfully issue. If and to the extent a drawing is at any time made
under any such letter of credit, UMB shall immediately notify the Borrowers of
such draw and the amount of such draw shall automatically become an Advance
under the Revolving Credit Loans, and the Borrowers, ▇▇▇▇▇▇ and NBD hereby
irrevocably authorize UMB to refinance, without notice to the Borrowers,
▇▇▇▇▇▇ or NBD, the reimbursement Obligation of the Borrowers arising out of
any such drawing into Revolving Credit Loans, evidenced by the Revolving
Credit Notes and for all purposes under, on and subject to the terms and
conditions of this Agreement, but without regard to the conditions precedent
to making an Advance under the Revolving Credit Loans or to any requirement of
this Agreement that each Revolving Credit Loan be in a minimum amount or
Permissible Increment. This Agreement and the other Loan Documents shall
supersede any terms of any letter of credit applications or other documents
which are irreconcilably inconsistent with the terms hereof or thereof. For
administrative convenience UMB shall issue the documentary trade and standby
letters of credit for the account of the Banks pursuant to the arrangements
set forth below, and, accordingly, the outstanding portion of each such letter
of credit shall be deemed to utilize a Pro Rata Share of the Revolving Credit
Commitment of each Bank. The Borrowers agree to pay to the Banks upon the
issuance of each documentary trade and standby letter of credit, in addition
to and not as part of the compensation described in Section 2.2.6, letter of
credit fees computed at a rate equal to the Applicable Margin for LIBOR
Advances multiplied by the face amount of each documentary trade letter of
credit or the face amount of each standby letter of credit, as the case may
be, and further multiplied by a fraction the numerator of which shall equal
the number of months for which the letter of credit is issued and the
denominator of which shall be 12 (subject to a minimum fee in each case of One
Hundred Dollars ($100)). Sixty percent (60%) of any documentary trade or
standby letter of credit fee for servicing totaling in amount $500 or less
shall be retained by UMB and the balance of such fee will be allocated between
the remaining Banks in accordance with their respective Pro Rata Shares and
will be remitted by UMB to ▇▇▇▇▇▇ and NBD promptly upon receipt; provided,
however, that in the event at any time an aggregate face amount of $1,000,000
or more exists for letters of credit each having face amounts of not more than
$67,000, all such fees for all such letters of credit in excess of the
aggregate of $1,000,000 shall be allocated between the Banks in accordance
with their respective Pro Rata Shares. If any documentary trade or standby
letter of credit fee for servicing exceeds $500, UMB shall retain $500; and
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the balance of such fee will be allocated between the Banks in accordance with
their respective Pro Rata Shares and will be remitted by UMB to ▇▇▇▇▇▇ and NBD
promptly upon receipt. The Borrowers hereby authorize UMB to collect such
fees by deducting the amount thereof from the account of either Borrower at
UMB, advising the Borrowers to that effect. The letters of credit described
in this Section 2.2.2 are distinct from, and unrelated to, the Letter of
Credit and shall be differentiated in all respects under this Agreement.
Notwithstanding anything stated to the contrary in this
Agreement in the event payment of the Obligations is accelerated because of
the occurrence of an Event of Default, the Banks shall not renew any
outstanding letters of credit issued pursuant to this Section 2.2.2.
2.2.3 Interest on the Revolving Credit Loans. The principal amount
of the Revolving Credit Loans outstanding from time to time shall bear
interest until maturity of the Revolving Credit Notes at a rate per annum
equal to the Prime Rate plus the Applicable Margin, except that at the option
of the Borrowers, exercised as provided in Section 2.2.9, interest may accrue
prior to maturity on any Permissible Increment of any Advance or on any
Permissible Increment of the outstanding balance of the Revolving Credit Loans
as to which no Optional Rate has previously been elected, at an Optional Rate
for a period of one, two, three, or six months. At the expiration of such
Optional Rate on such Permissible Increment, unless, in each case, the
Borrowers exercise the Optional Rate as provided in Section 2.2.9, interest
shall again accrue at the Prime Rate plus the Applicable Margin. After
maturity, whether by acceleration or otherwise, or during the continuance of
any Event of Default, and until cure or payment in full, the Revolving Credit
Loans shall bear interest at Two Percent (2%) per annum above the rate
otherwise then in effect. Accrued interest to the first day of each January,
April, July and October shall be due and payable on each such day prior to
maturity for all Loans bearing interest at the Prime Rate plus Applicable
Margin. For all Loans bearing interest at LIBOR plus Applicable Margin which
have an initial maturity of three (3) months or longer, all interest accrued
to the first day of each January, April, July and October shall be due and
payable on each such day, with the balance of accrued interest payable upon
the termination of the LIBOR Interest Period. Interest shall be due and
payable at maturity for all Loans bearing interest at LIBOR plus the
Applicable Margin which have a maturity of less than three (3) months. After
maturity, interest shall be payable on all Loans as accrued and without
demand.
2.2.4 Payments; Mandatory Prepayment of Revolving Credit Loans.
The Borrowers shall promptly pay to the Agent, on demand, any amount by which
the aggregate outstanding principal amount of the Revolving Credit Loans
exceeds the Revolving Credit Commitments. All payments of principal and
interest on the Revolving Credit Loans shall be made by the Borrowers to the
Agent at its main office in Kansas City, Missouri, by 10:00 A.M. (Kansas City
time) on the date when due, and shall be applied pro rata between the Banks in
accordance with the outstanding principal amounts of the Revolving Credit
Notes held by them. Each payment delivered to the Agent for the account of
any Bank shall be delivered by the Agent for the account of such Bank no later
than 12:00 Noon (Kansas City, Missouri time) on the same day.
2.2.5 Use of Proceeds of Revolving Credit Loans. Advances of the
Revolving Credit Loans may be used (i) to fund acquisitions, (ii) to provide
17
credit enhancement for interest and principal obligations in connection with
the Credit Enhanced Notes, (iii) to meet ongoing working capital requirements
of the Borrowers and (iv) for other corporate purposes not prohibited by this
Agreement.
2.2.6 Revolving Credit Commitment Fee. The Borrowers shall pay to
the Agent, for the ratable account of the Banks, commencing December 15, 1993,
and continuing on the fifteenth (15th) day of each March, June, September and
December thereafter, so long as the Revolving Credit Commitments are
outstanding, a commitment fee equal to twenty-five (25) basis points
calculated on the average daily unused portion of the Revolving Credit
Commitments during the immediately preceding three (3) month period ending
December 1, March 1, June 1 or September 1; provided, however, the aggregate
Revolving Credit commitment fee payable under this Agreement shall not exceed
Fifty Thousand Dollars ($50,000) in any trailing four (4) fiscal quarter
period. Effective as of the relevant payment date, the Obligation to pay the
commitment fee shall be an absolute, joint and several Obligation of the
Borrowers, not subject to cancellation or reduction for any reason, including,
without limitation, termination, in whole or in part, of the Revolving Credit
Commitments, and, once paid, the commitment fee shall be non-refundable. The
Agent is hereby authorized by the Borrowers to automatically debit any of the
Borrowers' accounts with the Agent for the payment of any commitment fee due
and payable hereunder. The Revolving Credit commitment fee shall be allocated
between the Banks according to their Pro Rata Shares and will be remitted to
▇▇▇▇▇▇ and NBD by the Agent promptly upon receipt.
Borrowers and ▇▇▇▇▇▇ agree that facility and other fees collected by
▇▇▇▇▇▇ under that certain First Amended and Restated Loan and Letter of Credit
Agreement between the Borrowers, ▇▇▇▇▇▇ and other parties dated October 25,
1990, will be retained by ▇▇▇▇▇▇ except that the unexpired portion of the
annual revolving credit commitment fee thereunder paid in December 1992 on the
revolving credit thereunder shall be refunded by ▇▇▇▇▇▇. The amount of such
refund shall not exceed $6,200 with the actual amount of refund to be
calculated pursuant to the following formula: $30,000,000 x 31.25% x 25 bp x
(unexpired days between the Closing Date and December 1, 1993/360). Such
refund will be made via offsetting reductions in the amount of future
Revolving Credit Commitments fee or quarterly Letter of Credit Commission
payments made to ▇▇▇▇▇▇ beginning in March, 1994.
2.2.7 Calculation of Interest. Interest on each of the Loans shall
be calculated based upon use of a fraction, the numerator of which being the
actual number of days elapsed and the denominator of which is 365.
2.2.8 Manner of Payment - Prepayments. All payments of principal
and interest on the Loans shall be payable at the principal office of the
Agent in Kansas City, Missouri, in funds available for the Agent's immediate
use at that city, and no payment will be considered to have been made until
received in such funds. Any of the Loans may be prepaid, in whole or in any
amount, without premium or penalty at any time, subject to Section 2.2.9(vii).
2.2.9 Procedures for Electing Optional Rates. Optional Rates may
be elected only in accordance with the following procedures and subject to the
above-described and the following conditions:
(i) No Optional Rate may be elected at any time a Default
18
or an Event of Default shall have occurred and is continuing.
(ii) The Borrowers shall notify the Agent of its election
or renewal of an Optional Rate prior to 2:00 P.M. (Kansas City, Missouri time)
not less than three (3) Banking Days prior to the commencement of a LIBOR
Interest Period specifying (a) the election or renewal date, (b) the amount of
the Loan (or Loans taken together) elected or renewed which amount shall be in
a Permissible Increment, and (c) the duration of the LIBOR Interest Period
selected to apply thereto. The Agent shall immediately notify the Banks
whenever an Optional Rate is selected by the Borrowers.
(iii) An election of an Optional Rate may be communicated to
the Agent only by an Authorized Officer of the Company. Such election may be
communicated by telephone or by telex, facsimile machine or other form of
written electronic communication, or by a writing delivered to the Agent. The
Borrowers shall confirm in writing any election communicated by telephone and
such written confirmation shall be signed by an Authorized Officer. The Agent
shall be entitled to rely on any verbal communication of the election of an
Optional Rate which is received by a designated employee of the Agent from
anyone reasonably believed in good faith by such employee to be an Authorized
Officer of the Company.
(iv) No Optional Rate for any Loan may be elected except,
in each case, in "Permissible Increments" which shall mean a minimum principal
amount of One Million Dollars ($1,000,000), and minimum increments of One
Hundred Thousand Dollars ($100,000) above One Million Dollars ($1,000,000).
(v) Notwithstanding any other provision of this Agreement,
in the event that by reason of circumstances affecting the interbank
eurodollar market, adequate and reasonable means do not exist for ascertaining
the LIBOR for any LIBOR Interest Period, the Agent shall forthwith give notice
of such determination, confirmed in writing, to the Borrowers and the Banks.
If such notice is given, then all Loans being renewed at the Optional Rate or
being requested at the Optional Rate shall, at the Borrower's election, bear
interest at the Prime Rate plus the Applicable Margin or at a rate equal to
the then current average yield on United States Treasury bills adjusted to a
maturity of a duration equal to the applicable LIBOR Interest Period (except
if the applicable LIBOR Interest Period is of two (2) months duration, then
adjusted to a one (1) month maturity), as published by Bloomberg or a like
publication, plus 45 bp plus the Applicable Margin for LIBOR Advances.
(vi) If any law or any governmental regulation, guideline
or order or interpretation or application thereof by any Governmental
Authority charged with the interpretation or administration thereof or
compliance with any request or directive of any central bank or other
Governmental Authority whether or not having the force of law (i) imposes,
modifies or deems applicable any reserve, special deposit or similar
requirement against assets held by, credit extended by, deposits with or for
the account of, or other acquisition of funds by, any Bank with respect to any
optional Rate Advance under the Agreement, or (ii) imposes upon any Bank any
other condition or expense with respect to any Optional Rate Advance under
this Agreement, or the making, maintenance or funding of any part of the
proceeds of an Optional Rate Advance; and the result of any of the foregoing
is to increase the cost to, reduce the income receivable by, or impose any
expense upon any Bank with respect to the outstanding balance of the Loans
19
bearing interest at the Optional Rate or the making, maintenance or funding of
any part thereof by an amount which the Bank deems to be material, the Bank
shall from time to time notify the Borrowers (which notification shall be made
reasonably promptly after discovery by the Bank of the causing circumstances)
of the amount determined in good faith (using any commonly accepted methods
employed in good faith) by the Bank (which determination shall be conclusive)
to be necessary to compensate the Bank in connection with the Optional Rate
Advances to the Borrowers for such increase in cost, reduction in income or
additional expense. Such amount shall be due and payable by the Borrowers to
the Bank thirty (30) Banking Days after such notice is given.
(vii) In the event any Bank shall incur any loss, cost or
expense (including, without limitation, any loss (including loss of profit),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired or contracted to be acquired by such Bank to
fund or maintain its part of any Optional Rate Portion or the relending or
reinvesting of such deposits or other funds or amounts paid or prepaid to such
Bank) as a result of:
(a) any payment of an Optional Rate Portion on a date
other than the last day of the then applicable LIBOR Interest Period for any
reason, whether before or after default, and whether or not such payment is
required by any provisions of this Agreement; or
(b) any failure by the Borrowers to create, borrow,
continue or effect by conversion an Optional Rate Portion on the date
specified in a notice given pursuant to this Agreement;
then, upon the demand of such Bank, the Borrowers shall pay to the Bank
such amount as will reimburse such Bank for such loss, cost or expense
("Prepayment Premium"). If a Bank requests such a reimbursement, it shall
provide to the Borrowers a certificate setting forth the computation of the
loss, cost or expense giving rise to the request for reimbursement in
reasonable detail and such certificate shall be rebuttably presumed to be
correct if reasonably determined.
Notwithstanding any provision of this Agreement to the contrary, each
Bank shall be entitled to fund and to maintain its funding of all or any part
of its Notes in any manner it sees fit, it being understood, however, that to
the extent any Bank is matching funds in any manner (whether or not in the
LIBOR Eurodollar market) that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Optional Rate Portion during each LIBOR Interest Period
applicable thereto through the purchase of deposits in the relevant interbank
market in the amount of its share of such Optional Rate Portion, having a
maturity corresponding to such LIBOR Interest Period, and bearing an interest
rate equal to the Optional Rate for such LIBOR Interest Period.
If at the time of any voluntary or mandatory prepayment of any portion of
the principal of any Loan, interest accrues at both an Optional Rate or Rates
and at a Prime Rate on portions of a Loan or Loans, then any prepayment of
principal will be applied first to the portion of a Loan or Loans on which
interest accrues at the Prime Rate and next to the portion or portions at
which interest accrues at an Optional Rate or Rates, and if interest accrues
on a Loan or Loans at more than one Optional Rate, first to that portion or
20
those portions on which interest accrues at a rate or rates which results in
no Prepayment Premium or the lowest Prepayment Premium or Premiums. The Agent
will notify the Borrowers and obtain their approval prior to any application
of any prepayment which would result in any Prepayment Premium.
(viii) Also notwithstanding any provision of this Agreement
to the contrary, (a) no Optional Rate may be selected for any Loan if the
interest period applicable thereto would extend beyond the Revolving Credit
Maturity Date including any extensions thereof, in the case of Revolving
Credit Loans and (b) all Optional Rates shall remain fixed throughout the
relevant LIBOR Interest Period.
2.2.10 Banking Day. If any installment of principal or interest on
any Loan becomes due and payable on a day other than a Banking Day, the
maturity of the installment of principal or interest shall be extended to the
next succeeding Banking Day, and interest shall be payable during such
extension of maturity.
2.2.11 Extension of Revolving Credit Maturity Date. The Borrowers
shall have the right to request two (2) 1-year extensions of the Revolving
Credit Maturity Date. Each such request must be in writing and must be
delivered to the Agent at least sixty (60) days prior to the date which is two
(2) years prior to the Revolving Credit Maturity Date in effect upon the date
of receipt of such notice by the Agent. The Banks, in their sole discretion,
may accept or reject any such request for an extension of the Revolving Credit
Maturity Date. In order for any such an extension to be accepted, all of the
Banks must agree to the extension. The Agent shall give written notice to the
Borrowers of the Banks' acceptance or rejection of the request for any such
extension within forty-five (45) days of receipt by the Agent of the
Borrowers' request for any such extension; provided, however, failure of the
Agent to give any such notice to the Borrowers shall impose no liability on
the Agent or the Banks.
SECTION 3
The Letter of Credit
3.1 The Letter of Credit. Subject to the fulfillment of all the terms
and conditions stated in Section 7 applicable to the issuance of the Letter of
Credit, NBD will open and deliver as of the Closing Date its irrevocable
direct pay letter of credit effective on November 30, 1993 (the "Letter of
Credit") for the account of the Borrowers and in favor of the Trustee for the
benefit of the holders of the Credit Enhanced Notes in the Stated Amount of
Fifteen Million Seven Hundred Sixty-Three Thousand Four Hundred Fifty-Eight
Dollars ($15,763,458). The Letter of Credit will be available to draw to pay
the principal portion of and all accrued interest on the Credit Enhanced
Notes, is in the form attached as Exhibit D and will be subject to the terms
stated therein. The Letter of Credit is issued subject to the terms and
conditions of this Agreement and the Term Loan Documents.
21
3.2 Payment and Reimbursement.
3.2.1 Payment. NBD shall honor draws made by the Trustee, for the
account of the Borrowers, directly to pay principal and/or interest on the
Credit Enhanced Notes as each installment thereof becomes due, all in
accordance with the terms and provisions of the Letter of Credit. In
addition, the Borrowers shall have the right, upon prior written notice to the
Agent, to cause the Trustee to make a conforming draw of the Stated Amount, or
such lesser amount as may be directed by the Borrowers, in order to make
optional redemption payments on the Credit Enhanced Notes pursuant to Section
3.01(a) of the Indenture and to provide for the payment of the Credit Enhanced
Notes pursuant to Section 8.01(a)(ii) of the Indenture; provided, however, in
the event of any payment pursuant to Section 8.01(a)(ii), the Borrowers shall
provide satisfactory evidence to the Banks that concurrently with such
payment, the Borrowers will provide such additional funds necessary in order
that all mortgages and security interests will be promptly released by the
Trustee; provided, further, in no event shall this Obligation be deemed a
condition precedent to any draw on the Letter of Credit. All payments made by
NBD under the Letter of Credit shall be made from funds of NBD or from funds
obtained by NBD from ▇▇▇▇▇▇ and UMB, as provided in Section 3.7, and in
no event shall such payment be made with funds obtained from either Borrower
or any Subsidiary of a Borrower.
3.2.2 Reimbursement. Unless an election is made by Borrowers
pursuant to the provisions of Section 3.8, NBD shall automatically convert the
Obligations of the Borrowers arising out of any drawing under the Letter of
Credit into Revolving Credit Loans by giving notice thereof to the Agent if
such conversion does not cause the outstanding principal amount of the
Revolving Credit Loans to exceed the aggregate Revolving Credit Commitments,
and the Borrowers hereby irrevocably authorize the Agent, upon receipt of such
notice from NBD, to convert without notice to the Borrowers the Obligations of
the Borrowers arising out of any such drawing into Revolving Credit Loans on
and subject to the terms and conditions of this Agreement, but without regard
to the conditions precedent to making any such Revolving Credit Loans and any
requirement of this Agreement that each Revolving Credit Loans be in a minimum
Permissible Increment. In the event the amount of a drawing in the Stated
Amount under the Letter of Credit would cause the Revolving Credit Loans to
exceed the aggregate Revolving Credit Commitments, the Borrowers shall
automatically be deemed to have made an election pursuant to Section 3.8
hereof and the full amount of such drawing shall automatically be converted
into the installment loan provided for in Section 3.8 hereof, but without
regard to the conditions precedent to making such installment loan pursuant to
Section 3.8 hereof. In the event any drawing under the Letter of Credit in an
amount less than the Stated Amount would cause the Revolving Credit Loans to
exceed the aggregate Revolving Credit Commitments, the Borrowers shall
immediately reimburse the Banks for the amount of such drawing in excess of
the Revolving Credit Commitments. Nothing in this Section 3.2.2 shall be
deemed to constitute a waiver of Default or Event of Default caused by the
failure to satisfy any of the conditions precedent to making Revolving Credit
Loans or an installment loan pursuant to Section 3.8 or otherwise. The
Obligations of the Borrowers under this Section 3.2.2 shall be absolute,
unconditional and irrevocable and shall be paid and performed strictly in
accordance with the terms of this Agreement under all circumstances
whatsoever, including, without limitation, the following circumstances:
22
(a) Any lack of validity or enforceability of the
Letter of Credit or any other Term Loan Document;
(b) Any amendment or waiver of or consent to
departure from the terms of the Letter of Credit or any of the Term Loan
Documents;
(c) The existence of any claim, setoff, defense or
other right which either Borrower may have at any time against the Trustee,
any transferee of the Letter of Credit, any holder of a Credit Enhanced Note,
NBD or any other person, whether in connection with the Loan Documents, the
Letter of Credit or the Term Loan Documents or any unrelated transaction;
(d) Any statement, draft or other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect, or any statement therein being untrue or
inaccurate in any respect whatsoever;
(e) The surrender or impairment of any security, if
any, for the performance or observance of the terms of the Loan Documents, the
Letter of Credit or the Term Loan Documents; or
(f) The voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all the assets
of either Borrower, the receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition with
creditors or readjustment or other similar proceedings affecting either
Borrower or any of the assets of either of them, or any allegation or contest
of the validity of this Agreement, any of the Loan Documents or any of the
Term Loan Documents, in any such proceeding; or
(g) Any other circumstances, happening or omission
whatsoever, whether or not similar to any of the foregoing, including, without
limitation, those matters described in Section 3.5.
3.3 Commission. At the end of each three month period, so long as the
Letter of Credit is outstanding (each of such anniversaries being hereafter
referred to as "Quarterly Commission Due Date"), the Borrowers, jointly and
severally, agree to pay to NBD a commission for the Letter of Credit for the
prior three months computed at a rate equal to the Applicable Margin for LIBOR
Advances (the "Commission Rate") multiplied by the Stated Amount as of the
date of calculation multiplied by three (3) months divided by twelve (12)
months with the first such commission being due and payable on March 1, 1994;
provided, however, that the commission paid as of any Quarterly Commission Due
Date shall not be refundable to the Borrowers, for any reason, including,
without limitation, any reduction in the Stated Amount or the cancellation of
the Letter of Credit. If the Letter of Credit is transferred to a new
beneficiary pursuant to the terms thereof (other than a Person into which the
Trustee may be merged or converted), then the Borrowers, jointly and
severally, promise to pay to NBD promptly upon its demand a transfer fee in
the amount of $500.00. Whenever any payment to be made hereunder shall be
stated to be due on a day which is not a Banking Day, such payment may be made
on the next succeeding Banking Day, and such extension of time shall in each
case be included in the computation of such payment.
23
3.4 Additional Amounts Payable. If any change in or the enactment,
adoption or judicial or administrative interpretation of any law, regulation,
treaty, guideline or directive (including, without limitation, Regulation O of
the Board of Governors of the Federal Reserve System) either (i) subjects any
Bank to any additional tax, duty, charge, deduction or withholding with
respect to the Letter of Credit or any participation therein or any amount
paid by the Banks thereunder or received by the Banks under this Agreement
because of the Letter of Credit (other than a tax measured by the net or gross
income of the Banks), or (ii) imposes or increases any reserve, special
deposit, or similar requirement on account of the Letter of Credit or any
participation therein, or (iii) imposes increased minimum capital requirements
on any Bank on account of its issuing or participating in the Letter of
Credit, and if any of the foregoing (A) results in an increase to any Bank in
the cost of maintaining the Letter of Credit or any participation therein, or
making any payment on account of the Letter of Credit or any participation
therein, (B) reduces the amount of any payment receivable by the Banks under
this Agreement with respect to the Letter of Credit, (C) requires the Banks to
make any payment calculated by reference to the gross amount of any sum
received or paid by the Banks pursuant to the Letter of Credit or any
participation therein (other than a tax measured by the Banks' gross or net
income) or (D) reduces the rate of return on the Banks' capital, the Borrowers
shall pay to NBD for the account of the Banks, as additional compensation for
the Letter of Credit, such amount as will compensate the Banks for such
increased cost, payment or reduction. Within 30 days after (i) the initial
demand therefor and (ii) presentation by NBD of a certificate to the Borrowers
containing a statement of the cause of such increased cost, payment or
reduction and a calculation of the amount thereof (which statement and
calculation shall be rebuttably presumed to be correct), the Borrowers shall
pay the additional amount payable measured from the date such change,
enactment, adoption or interpretation first affects the relevant Bank to the
date of the next Quarterly Commission Due Date with respect to the Letter of
Credit. Thereafter, the additional amount payable shall be reflected by an
increase in the quarterly commissions payable with respect to the Letter of
Credit pursuant to Section 3.3 and shall be payable, in arrears, on the dates
such quarterly commissions are due pursuant to Section 3.3.
3.5 Risk of Misuse of the Letter of Credit. The parties benefitted by
the Letter of Credit shall be deemed to be the agents of the Borrowers, and,
except as expressly set forth herein, the Borrowers assume all risk for their
acts, omissions or misrepresentations. NBD shall not be responsible for the
validity, sufficiency, truthfulness or genuineness of any document required to
draw under the Letter of Credit even if such document should in fact prove to
be in any or all respects invalid, insufficient, fraudulent or forged,
provided only that the document appears on its face to be in accordance with
the terms of the Letter of Credit and provided NBD is not grossly negligent or
engaging in willful misconduct, or for failure of any draft to bear reference
or adequate reference to the Letter of Credit or failure of any Person to note
the amount of any draft on the Letter of Credit or to surrender or take up the
Letter of Credit, each of which provisions may be waived by NBD, or for
errors, omissions, interruptions, or delays in transmission or delivery of any
messages or documents. Without limiting the generality of the foregoing, the
Borrowers agree that any action taken by NBD under or in connection with the
Letter of Credit, if taken in good faith and without gross negligence, shall
be binding upon the Borrowers and shall not put NBD under any resulting
liability to the Borrowers, and the Borrowers likewise agree as to any
24
omission unless in breach of good faith or grossly negligent. NBD is
expressly authorized to honor any request for payment which is made under and
in compliance with the terms of the Letter of Credit without regard to and
without any duty on its part to inquire into the existence of any disputes or
controversies between the Borrowers and the beneficiary of the Letter of
Credit or any other Person or into the respective rights, duties or
liabilities of any of them or whether any facts or occurrences represented in
any of the documents presented under the Letter of Credit are true and
correct. No Person, other than the parties hereto, shall have any rights of
any nature under this Agreement or by reason hereof, except to the extent that
the Trustee is expressly granted rights and imposed responsibilities
hereunder, and to that end, the Trustee is hereby made a third party
beneficiary of this Agreement.
3.6 Replacement of the Letter of Credit; Cancellation. The Borrowers
may at any time obtain the cancellation of the Letter of Credit and its return
to NBD by furnishing a replacement letter of credit to the Trustee or by full
redemption or defeasance of the Credit Enhanced Notes from Available Moneys
(as defined in the Indenture), from proceeds of the Letter of Credit or any
additional letter of credit required with respect to a defeasance of the
Credit Enhanced Notes in a manner provided for in the Indenture.
Notwithstanding the foregoing, the Letter of Credit may not be canceled
prior to the payment in full or the defeasance of the Credit Enhanced Notes,
unless the Borrowers provide NBD with the prior written consent to such
cancellation and to the replacement letter of credit, as the case may be, by
such holders of Credit Enhanced Notes as may be required under the Indenture,
if any.
3.7 Letter of Credit Participation. ▇▇▇▇▇▇ hereby agrees to purchase a
thirty percent (30%) participation and UMB hereby agrees to purchase a forty
percent (40%) participation in the Letter of Credit. Such participation shall
be funded by ▇▇▇▇▇▇ and by UMB by funding their respective Pro Rata Share upon
any drawing under the Letter of Credit not immediately reimbursed by the
Borrowers; and thereupon ▇▇▇▇▇▇ and UMB shall be entitled to, and NBD shall
remit to ▇▇▇▇▇▇ and UMB, ▇▇▇▇▇▇' and UMB's Pro Rata Shares of any amounts
received by NBD in reimbursement of such drawing. Notwithstanding the
previous sentence, NBD shall retain for itself the full amount of the transfer
fees described in Section 3.3 hereof. NBD shall furnish to ▇▇▇▇▇▇ and to UMB,
each time the Letter of Credit, or any replacement thereof is issued, expires
or is drawn under (whether in whole or in part) and not immediately reimbursed
by the Borrowers, a participation certificate showing the Stated Amount of the
Letter of Credit and the amount of ▇▇▇▇▇▇' and UMB's participation therein.
The Letter of Credit commissions provided for in Section 3.3 and any
additional amount payable pursuant to Section 3.4 shall be allocated between
the Banks in proportion to their respective participations in the Letter of
Credit (whether or not funded) and will be remitted to ▇▇▇▇▇▇ and UMB promptly
by NBD upon receipt.
The obligations of ▇▇▇▇▇▇ and UMB to participate in the Letter of Credit
shall be absolute, unconditional and irrevocable under all circumstances
whatsoever, including, without limitation, the circumstances set forth in
Section 3.2.2(a) through (g) hereof.
25
3.8 Alternative Reimbursement of Letter of Credit Draw. Unless
otherwise automatically elected by the Borrowers pursuant to Section 3.2.2
hereof, as an alternative to automatic conversion, as required by Section
3.2.2, of any draw under the Letter of Credit in the full Stated Amount, but
only in the full Stated Amount of the Letter of Credit, the Borrowers may, at
their election, if they are in full and complete compliance with the terms of
this Agreement, on the date on which they are advised of any such drawing on
the Letter of Credit by NBD, advise the Agent in writing that the Borrowers
elect to convert the entire amount of such drawing into an installment loan
obligation payable over a term of four (4) years in equal quarterly payments
of principal calculated on a seven (7) year amortization of such principal
amount and a final principal payment in the amount of the remaining
outstanding principal loan amount. Such installment loan shall bear interest
payable quarterly in arrears on the same date as each principal payment is due
and at a rate per annum equal to the 3-month LIBOR rate, as reported in the
Wall Street Journal, plus the Applicable Margin for LIBOR Advances plus 25
basis points, adjusted each ninety (90) days. Upon receipt by the Agent of
notice of any such election by the Borrowers and notes executed by the
Borrowers payable to each of the Banks in the form of Exhibit E attached
hereto in each Bank's respective amount of participation in the Stated Amount
of the Letter of Credit on the date of the draw, the Agent shall notify the
Banks of such election and ▇▇▇▇▇▇ and NBD shall each, upon receipt of such
notification, immediately transfer to the Agent by wire transfer or deposit to
any correspondent account which Agent may maintain with such Bank an amount
equal to thirty percent (30%) of the principal amount of the draw under the
Letter of Credit as provided above in this Section 3.8 and UMB shall
immediately transfer forty percent (40%) of such amount to the Agent. Upon
receipt of all such transfers from ▇▇▇▇▇▇, NBD and UMB, the Agent will
immediately transfer the aggregate of such amount to NBD in full reimbursement
of the draw on the Letter of Credit. The Agent shall handle the notes in the
form of Exhibit E attached hereto and all collections thereon in the same
manner as provided in this Agreement for collections on Revolving Credit Loans
as respects the Banks.
SECTION 4
Representations and Warranties
To induce the Banks to make the Loans, to issue the Letter of Credit,
and, if applicable to make the installment loan provided for in Section 3.8
hereof, the Borrowers represent and warrant to the Banks that, effective as of
the Closing Date:
4.1 Organization. Each Borrower and each of its Subsidiaries is a
corporation organized, existing and in good standing under the laws of its
state of incorporation. Each Borrower and each of its Subsidiaries is
qualified to do business in every jurisdiction in which: (i) the nature of the
business conducted or the character or location of the properties owned or
leased or the residence or activities of employees make such qualification
necessary, and (ii) failure so to qualify might impair title to material
properties or the right to enforce material contracts against others or result
in exposure to material liability in such jurisdiction.
4.2 Authorization; No Conflict. The execution and delivery of the Loan
Documents, the borrowings hereunder, the execution and delivery of the Term
Loan Documents to which the Borrowers are a party, and the performance by the
26
Borrowers of the Obligations and the Secured Obligations are within their
corporate powers, have been duly authorized by all necessary corporate action
and do not contravene or conflict with any provision of law or the articles of
incorporation or by-laws of either Borrower or of any material agreement
binding upon either Borrower or its property.
4.3 Validity and Binding Nature. The Loan Documents and the Term Loan
Documents to which the Borrowers are a party are the legal, valid and binding
obligations of the Borrowers, enforceable against the Borrowers in accordance
with their respective terms, except to the extent that enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and other
laws enacted for the relief of debtors generally and other laws affecting the
enforcement of creditors' rights generally and by equitable principles which
affect the availability of specific performance as a remedy.
4.4 Financial Statements. The Company has delivered to the Banks its
Consolidated audited annual financial statements as of January 31, 1993 for
the fiscal year of the Company then ended and its quarterly Consolidated
(unaudited) financial statements as of August_1, 1993. Such statements have
been prepared in accordance with GAAP consistently applied and present fairly
the financial condition of the Company, on a Consolidated basis, as of the
date thereof and the results of its operations, on a Consolidated basis, for
the period covered thereby and since the date of such statements, except as
disclosed in writing to the Banks, there has been no material adverse change
in the Consolidated financial condition of the Company or in the results of
its operations. For purposes of this representation, and only for this
representation, a material adverse change in the Consolidated financial
condition of the Company or in the results of its operations means a decrease
in Consolidated Stockholders' Equity of the Company in excess of ten percent
(10%) of the Company's Consolidated Stockholders' Equity, calculated as of the
last financial report issued by the Company to the Banks in accordance with
Section 5.2 hereof.
4.5 Litigation and Contingent Liabilities. No litigation, arbitration
proceedings, proceedings of any Governmental Authority or other contingent
liabilities, including but not limited to, environmental liabilities, are
pending or, to the knowledge of the Borrowers, threatened against either
Borrower which are reasonably likely to materially and adversely affect the
financial condition or continued operations of the Company and its
Subsidiaries taken as a whole, nor does either Borrower have, to their
respective knowledge, any such liabilities not provided for or disclosed to
the Banks or in the financial statements referred to in Section 4.4.
For purposes of this representation, and only for this representation,
any event described in this Section 4.5 shall not be deemed to have a material
and adverse effect on the financial condition or continued operations of the
Company and its Subsidiaries taken as a whole unless it is reasonably likely
that the Borrowers' expense with respect to such matter would cause a decrease
in Consolidated Stockholders' Equity of the Company in excess of ten percent
(10%) of the Company's Consolidated Stockholders' Equity, calculated as of the
last financial report issued by the Company to the Banks in accordance with
Section 5.2 hereof.
4.6 Liens. None of the assets of either Borrower is or will become
27
subject to any mortgage, pledge, title retention lien, or other lien,
encumbrance or security interest except Permitted Encumbrances.
4.7 Employee Benefit Plans. Each Plan maintained by either Borrower is
in material compliance with ERISA, the Code, and all applicable rules and
regulations adopted by Governmental Authorities pursuant thereto, and the
Borrowers have filed all reports and returns required to be filed by ERISA,
the Code and such rules and regulations. The Borrowers have no knowledge that
any Plan maintained by either Borrower, or any trust created thereunder, has
incurred any material "accumulated funding deficiency" as defined in Section
302 of ERISA, nor that the present value of all benefits vested under all
Plans exceed by a material amount, as of the last annual valuation date, the
value of the assets of the Plans allocable to such vested benefits. The
Borrowers have no knowledge that any "reportable event" as defined in ERISA
has occurred with respect to any Plan maintained by either Borrower. Banks
acknowledge that this representation does not cover any multi-employer pension
plans to which the Company or any Subsidiaries contribute.
4.8 Investment Company Act. Neither Borrower is an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
4.9 Regulation U. Neither Borrower is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose
of purchasing or carrying margin stock within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System.
4.10 Notices. The Borrowers have given all notices required by this
Agreement to the Agent.
SECTION 5
Affirmative Covenants of the Borrowers
Until all Obligations terminate or are paid and satisfied in full, and so
long as the Letter of Credit or any of the Commitments is outstanding, each
Borrower agrees that it will strictly observe, and will cause each of its
Subsidiaries to strictly observe, the following covenants, unless at any time
the Banks otherwise expressly consent in writing which consent shall not be
unreasonably withheld:
5.1 Corporate Existence. Each Borrower will preserve its corporate
existence.
5.2 Reports, Certificates and Other Information. The Borrowers will
furnish to the Banks copies of the following:
5.2.1 Annual Statements and Form 10-K. As soon as available and in
any event within One Hundred Twenty (120) days after the close of each fiscal
year, financial statements of the Company for such fiscal year prepared and
presented in accordance with GAAP on a Consolidated basis, setting forth in
comparative form corresponding figures for the preceding fiscal year,
accompanied by the audit report as to the Consolidated statements, unqualified
as to scope, of KPMG Peat Marwick, or other independent certified public
accountants reasonably acceptable to the Agent. As soon as it is filed with
the Securities and Exchange Commission, a copy of the Company's report on Form
28
10-K for its immediately preceding fiscal year.
5.2.2 Quarterly Statements and Form 10-Q. As soon as available and
in any event within forty-five (45) days after the end of each of the first
three (3) quarterly fiscal periods, a copy of the interim financial statements
of the Company, consisting at a minimum of
(i) a Consolidated balance sheet as of the end of each
quarterly accounting period, and
(ii) a Consolidated statement of income for each quarterly
accounting period and for that portion of the fiscal year then elapsed,
setting forth in each case in comparative form the corresponding figures for
the corresponding dates and periods of the preceding fiscal year, all in
reasonable detail and accompanied by the written representation of the chief
financial officer of the Company that such financial statements have been
prepared in accordance with GAAP (except that they need not reflect
adjustments normally made at year end), consistently applied (except for
changes in which the independent accountants of the Company report upon), and
present fairly the Consolidated financial position of the Company and the
results of its operation as of the dates of such statements and for the fiscal
periods then ended. As soon as filed with the Securities and Exchange
Commission, a copy of the Company's report on Form 10-Q for its immediately
preceding fiscal quarter.
5.2.3 Certificates. (i) Beginning on the 15th day of October,
1993, and on the 15th day of each month thereafter, an Officer's Certificate,
and (ii) within forty-five (45) days after the end of each of the first three
quarterly fiscal periods and within one hundred twenty (120) days after the
end of each annual fiscal period, a Compliance Certificate, and (iii) within
one hundred twenty (120) days after the end of each annual fiscal period an
annual auditors certificate based upon their audit and signed by the
Borrowers' independent certified public accountants.
5.2.4 Orders. Within thirty (30) days after entry thereof, notice
of any adverse final order exceeding $1,000,000 entered in any proceedings to
which either Borrower or any other Subsidiary is a party, issued by any
Governmental Authority, and if the Agent or any Bank should so request, copies
of any such order.
5.2.5 Notice of Default or Litigation. Immediately upon learning
of the occurrence of (a) a Default or an Event of Default or (b) any adverse
determination in any litigation, arbitration proceeding or proceeding of any
Governmental Authority or the occurrence of any other event which is
reasonably likely to materially and adversely affect the financial condition
or continued operations of the Company and its Subsidiaries taken as a whole,
written notice thereof describing the same and the steps being taken with
respect thereto.
For purposes of giving the notice required for events described in
subsection (b) of this Section 5.2.5, and only for the purpose of giving such
notice, any event described in such subsection (b) shall not be deemed to have
a material and adverse effect on the financial condition or continued
operations of the Company and its Subsidiaries taken as a whole unless it is
reasonably likely that the Borrowers' expense with respect to such matter
29
would cause a decrease in Consolidated Stockholders' Equity of the Company in
excess of ten percent (10%) of the Company's Consolidated Stockholders' Equity
calculated as of the last financial report issued by the Company to the Banks
in accordance with Section 5.2 hereof.
5.2.6 Other Information. From time to time such other information
concerning the Borrowers and its Subsidiaries as the Agent or any Bank may
reasonably request.
5.2.7 Securities Filings. Contemporaneously with the filing of the
same, all filings of the Company with the Securities and Exchange Commission
or with any state's securities commission.
5.2.8 Name; Principal Office. Not less than 30 days prior written
notice of any change by the Borrowers or any of their Subsidiaries of (i)
their name or (ii) the location of their principal office. The principal
offices of both Borrowers are located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as of the date of this Agreement.
5.3 Books, Records, Quarterly Meetings and Inspections. The Borrowers
will maintain, and will cause each Subsidiary to maintain, complete and
accurate books and records, and permit access thereto by the Agent or any Bank
for purposes of inspection, audit, and copying (except work papers of
independent certified public accountants, unless the consent of such
accountants is first obtained); and the Borrowers will permit, and will cause
each Subsidiary to permit, the Agent or any Bank to inspect their properties
and operations at all reasonable times, to ask questions and receive answers
to inquiries about their affairs, finances and accounts and to have the
cooperation of the Borrowers and their Subsidiaries in connection therewith.
The Borrowers will meet with the Agent and the Banks not less often than
every ninety (90) days on a mutually convenient date to discuss the financial
condition and business operations of the Borrowers and such other matters
pertaining to the Borrowers and their Subsidiaries requested by the Agent and
the Banks from time to time.
5.4 Insurance. In addition to the insurance required by any other Loan
Documents, if any, and the Term Loan Documents, the Borrowers and each
Subsidiary will maintain such insurance as may be required by law and such
other insurance, to such extent and against such hazards and liabilities, as
is customarily maintained by companies similarly situated.
5.5 Taxes and Liabilities. Each Borrower will pay, and will cause each
of its Subsidiaries to pay, when due all taxes, license fees, assessments and
all other liabilities which are reasonably likely, if not paid, to materially
and adversely affect the financial condition or continued operations of the
Company and its Subsidiaries taken as a whole, except such of the foregoing as
are being contested in good faith and by appropriate proceedings and for which
appropriate reserves have been established.
For purposes of this covenant, and only for purposes of this covenant,
any liability shall not be deemed to have a material and adverse effect on the
financial condition or continued operations of the Company and its
Subsidiaries taken as a whole unless it is reasonably likely that the
Borrowers' expense with respect thereto would cause a decrease in the
Consolidated Stockholders' Equity of the Company in excess of ten percent
30
(10%) of the Company's Consolidated Stockholders' Equity, calculated as of the
last financial report issued by the Company to the Banks in accordance with
Section 5.2 hereof.
5.6 Compliance with Legal and Regulatory Requirements. The Borrowers
will maintain, and will cause each Subsidiary to maintain, material compliance
with the applicable provisions of all federal and state statutes and
regulations and any orders of Governmental Authorities issued thereunder where
the failure to so comply is reasonably likely to materially and adversely
affect the financial condition or continued operations of the Company and its
Subsidiaries taken as a whole.
For purposes of this covenant, and only for purposes of this covenant, a
failure to comply with applicable provisions of all federal and state statutes
and regulations and any orders of Governmental Authorities issued thereunder
shall not be deemed to have a material and adverse effect on the financial
condition or continued operations of the Company and its Subsidiaries taken as
a whole unless it is reasonably likely that the Borrowers' expense with
respect thereto would cause a decrease in the Consolidated Stockholders'
Equity of the Company in excess of ten percent (10%) of the Company's
Consolidated Stockholders' Equity, calculated as of the last financial report
issued by the Company to the Banks in accordance with Section 5.2 hereof.
5.7 Financial Covenants. The Company shall observe the following
financial covenants:
5.7.1 Current Ratio. The Company shall maintain the ratio of its
Consolidated current assets to its Consolidated current liabilities at not
less than 1.50 to 1.00.
5.7.2 Capitalization Ratio. The Company shall maintain a
Capitalization Ratio of not more than sixty percent (60%).
5.7.3 Consolidated Stockholders' Equity. The Company shall
maintain a minimum Consolidated Stockholders' Equity of at least $50,000,000
at all times. Such minimum Consolidated Stockholders' Equity requirement
shall be increased on the last day of each fiscal year by an amount equal to
fifty percent (50%) of the Company's consolidated positive net earnings for
such fiscal year with the first increase to occur on January 30, 1994. Such
required increase in Consolidated Stockholders' Equity shall be cumulative.
5.7.4 Fixed Charge Coverage Ratio. The Company shall maintain a
Fixed Charge Coverage Ratio of not less than 2.25 to 1.0.
5.8 Employee Benefit Plans. The Borrowers and each of their
Subsidiaries will maintain each Plan maintained by them in material compliance
with ERISA, the Code, and all rules and regulations of Governmental
Authorities pursuant thereto and file all reports required to be filed
pursuant to ERISA, the Code, and such rules and regulations with respect to
each Plan maintained by them; provided, however, that this Section 5.9 shall
not prevent either Borrower or any Subsidiary from amending, terminating,
deleting or otherwise changing any Plan in accordance with applicable law.
Banks acknowledge that this covenant does not cover any multi-employer
pension plans to which the Company or any Subsidiaries contribute.
31
5.9 Compliance with Term Loan Documents. Each Borrower will observe and
comply with and perform each and all of its obligations under the Term Loan
Documents.
5.10 Hazardous Substances. The Borrowers will cause any Hazardous
Substances which are now or may hereafter be used or generated in the
operations of either Borrower or any Subsidiary to be accounted for and
disposed of and not released on any premises owned or occupied by or under
lease to either Borrower or any Subsidiary other than in material compliance
with all applicable federal, state and local laws and regulations where the
failure to comply is reasonably likely to materially and adversely affect the
financial condition or continued operations of the Borrowers and the
Subsidiaries taken as a whole.
For purposes of this covenant, and only for this covenant, a failure to
comply with applicable federal, state and local laws and regulations shall not
be deemed to have a material and adverse effect on the financial condition or
continued operations of the Company and its Subsidiaries taken as a whole
unless it is reasonably likely that the Borrowers' expense with respect to
such failure to comply would cause a decrease in Consolidated Stockholders'
Equity of the Company in excess of ten percent (10%) of the Company's
Consolidated Stockholders' Equity, calculated as of the last financial report
issued by the Company to the Banks in accordance with Section 5.2 hereof.
The Borrowers will notify the Agent and the Agent will promptly remit
such notice to Banks immediately upon obtaining knowledge that:
(i) any premises which have at any time been owned or occupied
by or have been under lease to the Borrowers or any Subsidiary are the subject
of an environmental investigation (other than normal monitoring) by any
Governmental Authority, the purpose of which investigation is to quantify the
levels of Hazardous Substances located on such premises, or
(ii) either Borrower or any Subsidiary have been named as a
potentially responsible party for the possible contamination of any real
property or ground water with Hazardous Substances, including, but not limited
to the contamination of past and present waste disposal sites.
If either Borrower or any Subsidiary is notified of any event described
at item (ii) above, the Borrowers shall (unless they reasonably deem it
unnecessary) immediately engage, or cause the appropriate Subsidiary to
engage, a reputable firm or firms of engineers or environmental consultants
appropriately certified or otherwise qualified to determine as quickly as
practical the extent of contamination, and the Agent shall be provided with a
copy of any report prepared by any such firm or by any Governmental Authority
as to such matters as soon as any such report becomes available to the
Borrowers, unless to provide such report would in the Borrowers' reasonable
judgment jeopardize a claim of attorney-client privilege as to such report.
The Agent shall immediately provide a copy of such report to Banks.
5.11 Subsidiaries. Borrowers will notify Agent and Agent will promptly
remit such notice to Banks if (i) Rental, Holden Manufacturing Co. or Unitog
De Honduras, S.A. cease to be Subsidiaries of the Company; (ii) Unitog
Distributing Company, Inc. or Textile Enterprises, Inc. cease to be
Subsidiaries of Rental; or (iii) Borrowers create or acquire any Subsidiaries.
32
SECTION 6
Negative Covenants of the Borrowers
Until all Obligations of the Borrowers terminate or are paid and
satisfied in full, and so long as the Letter of Credit or any of the
Commitments is outstanding under this Agreement, each Borrower agrees that it
will strictly observe, and cause each of its Subsidiaries to strictly observe,
the following covenants, unless at any time the Banks otherwise expressly
consent in writing:
6.1 Liens. Neither Borrower nor any of its Subsidiaries will create or
suffer to exist, or permit any of its Subsidiaries to create or suffer to
exist, any mortgage, pledge, title retention lien or other lien, encumbrance
or security interest or any assignment or discount of accounts, with or
without recourse (all of which are hereafter referred to in this subsection as
a "lien" or "liens") with respect to any property or assets now owned or
hereafter acquired except:
(i) liens in favor of the Banks or the Agent created pursuant to
the requirements of this Agreement, if any, or otherwise, or liens created
pursuant to any Term Loan Document;
(ii) any lien or deposit with any Governmental Authority required
or permitted to qualify a Borrower or a Subsidiary of a Borrower to conduct
business or exercise any privilege, franchise or license, or to maintain
self-insurance or to obtain the benefits of or secure obligations under any
law pertaining to workmen's compensation, unemployment insurance, old age
pensions, social security or similar matters, or any similar lien or deposit
arising in the ordinary course of business, provided that appropriate reserves
are established with respect to obligations secured by any such liens;
(iii) any mechanic's, workmen's, repairmen's, carrier's,
warehousemen's or other like liens arising in the ordinary course of business,
or deposits to obtain the release of such liens or any such liens as are being
contested in good faith and are appropriately reserved for;
(iv) easements, licenses, minor irregularities in title or minor
encumbrances on or over any real property which do not materially detract from
the value of such property or its usefulness in the business of the Borrower
or such Subsidiary or minor statutory liens in favor of landlords;
(v) liens for taxes and governmental charges not yet due or being
contested in good faith and for which appropriate reserves have been
established;
(vi) liens or deposits to obtain any stay or discharge in any legal
or administrative proceeding or liens created by or resulting from any
litigation or legal proceeding which is being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established; provided that the aggregate amount of liabilities of the Company
and its Subsidiaries secured by the liens or deposits permitted under this
clause (vi), including interest and penalties thereon, if any, shall not be in
excess of $10,000,000 at any one time outstanding;
(vii) capitalized leases encumbering only the property so leased;
33
and
(viii) leasehold interests in property of the Company or any of its
Subsidiaries that is leased or subleased under a lease or sublease not
prohibited by Section 6.3 hereof; and
(ix) liens created by any Subsidiary as security for indebtedness
owing by such Subsidiary to the Company or any other Subsidiary; and
(x) those liens currently outstanding in favor of Bank One,
Indianapolis, N.A. pursuant to that certain First Amended and Restated Loan
and Letter of Credit Agreement between the Borrowers, Bank One, Indianapolis,
N.A. and other parties dated October 25, 1990, such liens to be released
pursuant to Amendment No. 4 to such agreement;
(collectively, "Permitted Encumbrances").
6.2 Guarantees, Loans or Advances. Neither Borrower will be, nor permit
any of its Subsidiaries to be, a guarantor or surety of, or otherwise be
responsible in any manner (whether by agreement to purchase any obligations,
stock, assets, goods or services, or to supply or advance any funds, assets,
goods or services, or otherwise) with respect to any undertaking of any other
Person, or make or permit to exist any loans or advances to any other Person,
except for (i) ▇▇▇▇▇▇▇ money deposits made in connection with the acquisition
of property, (ii) extensions of credit or credit accommodations to customers
or vendors made by the Borrowers and their Subsidiaries in the ordinary course
of its business as now conducted, (iii) reasonable salary advances to
employees and other advances to agents and employees for anticipated expenses
to be incurred on behalf of a Borrower or its Subsidiaries in the course of
discharging its assigned duties, (iv) reasonable advances and loans to
employees for expenses incurred related to transfers and relocations of such
employees, (v) extensions of credit or credit accommodations made in
connection with any sales, transfers, conveyances or leases of assets of the
Company and Subsidiaries that are not prohibited pursuant to Section 6.3
hereof, and (vi) other loans, advances and guarantees outstanding at any time
in an aggregate amount not exceeding $1,000,000. The provisions of this
Section 6.2 shall not prohibit loans between the Borrowers and any of their
Subsidiaries or guarantees by the Borrowers or any of their Subsidiaries of
their respective Obligations.
6.3 Mergers, Consolidations, Sales or Acquisitions. Neither Borrower
will, nor permit any of its Subsidiaries to, be a party to any consolidation
or to any merger, unless the surviving entity is one of the Borrowers or, in
the case of a Subsidiary, the Subsidiary, and such Borrower or Subsidiary, as
the case may be, is controlled by its existing shareholder(s) as of the date
of this Agreement. Neither Borrower will sell, transfer, convey or lease, or
permit any of its Subsidiaries to sell, transfer, convey or lease, except in
the ordinary course of business, more than ten percent (10%) of the total
assets of the Company and Subsidiaries on a consolidated basis in any twelve
month period unless such sales are made at arms length for fair market value
and all of the proceeds thereof are reinvested in the Borrowers' business;
provided, however, if such proceeds are not so reinvested within twelve (12)
months of the date of receipt all such proceeds not reinvested must be paid in
reduction of long-term debt (interest-bearing obligations with maturities in
excess of one year), but nothing herein shall apply to cause the Borrower to
34
incur a prepayment premium or penalty. Neither Borrower will make, or permit
any of its Subsidiaries to make, any acquisition of the assets of, or
investment in, any Person except Persons operating within the lines of
business currently being conducted by either of the Borrowers or any
Subsidiary. Neither Borrower will, or permit any of its Subsidiaries to,
acquire any real or personal property except real or personal property to be
used in the ordinary course of the acquirer's business. Notwithstanding
anything stated in this Section 6.4, the Company may invest in any of the
following from time to time:
(a) Certificates of deposit and banker's acceptances
with final maturities of one year or less issued by U.S. or Canadian
commercial banks having capital and surplus in excess of $100,000,000;
(b) Commercial paper with a minimum rating of A1 or
P1 by Standard & Poors Corporation or ▇▇▇▇▇'▇ Investors Services,
respectively;
(c) Direct obligations of the United States or
United States agency obligations with a maturity of one year or less;
(d) Money market preferred stock rated A or above by
Standard & Poors Corporation or ▇▇▇▇▇'▇ Investors Services;
(e) Tax exempt bonds, rated at least A by Standard &
Poors Corporation or by ▇▇▇▇▇'▇ Investors Services; and
(f) Equity securities listed on National Exchanges to
the extent the aggregate investment in equity securities does not exceed Five
Million Dollars ($5,000,000) at any time; and
(g) Equity or debt securities received with respect
to services rendered by either Borrower or any Subsidiary in the ordinary
course of business, but only in settlement of obligations owed to either
Borrower or any Subsidiary which the obligor could not pay in the ordinary
course of its business.
Notwithstanding anything to the contrary herein, no transaction otherwise
permitted to be conducted by the Borrowers or their Subsidiaries under this
Section 6.4 shall be permitted unless no Default or Event of Default shall
then exist and, after giving effect to the transaction, no Default or Event of
Default shall be occasioned thereby.
6.4 Margin Stock. Neither Borrower will use or cause the proceeds of
the Loans to be used, either directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, as amended from time to time.
6.5 Other Agreements. Neither Borrower will enter into any material
agreement containing any provision which would be violated or breached in
material respect by the performance of any Secured Obligation.
6.6 Judgments. Neither Borrower will permit, or allow any of its
Subsidiaries to permit, any uninsured judgment or monetary penalty rendered
35
against it in any judicial or administrative proceeding in an amount in excess
of $1,000,000 to remain unsatisfied for a period in excess of 45 days unless
such judgment or penalty is being contested in good faith by appropriate
proceedings and execution upon such judgment has been stayed, and unless an
appropriate reserve has been established or for which appropriate bonding has
been obtained with respect thereto.
6.7 Amendments to Term Loan Documents. Neither Borrower will suffer or
permit or will permit any Subsidiary to suffer or permit any amendment, change
or modification of, or any waiver of any provision of, or grant any consent in
respect of, any of the Term Loan Documents except with the prior written
consent of the Banks, which consent shall not be unreasonably withheld except
no such consent shall be required to obtain the release or reduction in amount
of any collateral held with respect to the Term Loan Documents.
6.8 Debt. Neither Borrower will incur nor permit to exist, or allow any
Subsidiary to incur or permit to exist, any indebtedness for borrowed money
with a right to payment senior or prior in right to payment of Borrowers'
Obligations hereunder except for indebtedness in connection with Permitted
Encumbrances.
6.9 Performance of Obligations for Credit Enhanced Notes. The Borrowers
shall perform all matters provided by the Indenture and the other Term Loan
Documents, and neither Borrower will assign or delegate to any other Person
any of the Borrower's obligations under the Indenture, the Credit Enhanced
Notes, the Letter of Credit, the Loan Documents or any of the Term Loan
Documents.
SECTION 7
Conditions of Lending
The obligation of the Banks to make any Advance under the Revolving
Credit Loans and the installment loan provided for in Section 3.8 hereof shall
be subject to fulfillment of each of the following conditions precedent:
7.1 No Default. No Default, or Event of Default, shall have occurred
and be continuing, and the representations and warranties of the Borrowers
contained in Section 4 shall be true and correct in all material respects as
of the date of this Agreement and as of the date of each Advance, and as of
the date the installment loan provided for in Section 3.8 hereof is to be
made if requested by the Borrowers except that after the date of this
Agreement, the representations contained in Section 4.4 will be construed so
as to refer to the latest financial statements furnished to the Agent by the
Borrowers pursuant to the requirements of this Agreement.
7.2 Documents to be Furnished at Closing. The Agent shall have
received prior to or contemporaneously with the execution of this Agreement,
the following, each duly executed, to the extent execution is required, and in
form and substance satisfactory to the Agent:
(i) The Loan Documents;
(ii) Copies of the Term Loan Documents;
(iii) A certified copy of Resolutions of the Boards of Directors
36
of each of the Borrowers authorizing the execution, delivery and performance,
respectively, of the Loan Documents and any other documents provided for in
this Agreement to which either Borrower is a party;
(iv) A certificate of the Secretary or any Assistant Secretary of
each Borrower certifying the names of the officer, officers, employee or
employees authorized to sign, respectively, the Loan Documents and any other
documents provided for in this Agreement to which either Borrower is a party,
together with a sample of the true signature of each such officer or employee.
(v) Confirmation, to include written documentation thereof,
satisfactory to the Agent in its sole discretion, of (a) the payment of all
outstanding obligations of the Borrowers under that certain First Amended and
Restated Loan and Letter of Credit Reimbursement Agreement (the "Reimbursement
Agreement") dated October 25, 1990, as later amended from time to time, by and
between the Borrowers, Bank One, Indianapolis, National Association and others
(the parties hereto expressly acknowledge that the letter of credit issued by
Bank One under the Reimbursement Agreement pursuant to the Indenture shall
remain outstanding until November 30, 1993 and that certain documentary and
standby letters of credit shall remain in place after the date hereof), (b)
the release or agreement by Bank One to release its liens and security
interests encumbering any asset of the Borrowers or any of their Subsidiaries
under or pursuant to such Reimbursement Agreement or otherwise except as
otherwise expressly permitted hereunder, the parties hereto expressly
acknowledging that all liens and security interests granted under the
Indenture shall remain in place, and (c) execution of Amendment Number 4 to
the Reimbursement Agreement.
(vi) A copy of the Articles of Incorporation of each Borrower and
a copy of the By-Laws of each Borrower, certified as complete and correct by
the Secretary or any Assistant Secretary of such Borrower, as appropriate;
(vii) A favorable written opinion of counsel for each of the
Borrowers addressed to the Agent in form and substance and issued by a law
firm acceptable to the Banks to the effect that each of the Borrowers and each
of their respective Subsidiaries, except Unitog De Honduras, S.A., are
corporations duly existing and in good standing under the laws of their
respective jurisdictions of incorporation; each of the Borrowers and each of
their respective Subsidiaries are qualified to do business as a foreign
corporation and are in good standing in every jurisdiction where the failure
to be so qualified would have a material adverse effect on the Company and the
Subsidiaries as a whole; that the Borrowers have full power to execute,
deliver and perform their obligations under this Agreement and the Notes; that
such actions have been duly authorized by all necessary corporate action of
each of the Borrowers, and are not in conflict with the charter or bylaws of
either of the Borrowers; that this Agreement and the Notes evidencing
indebtedness hereunder when executed and delivered by each of the Borrowers
will be the legal and binding obligations of each of the Borrowers, subject to
bankruptcy, general equitable principles and other similar laws affecting the
enforcement of creditors' rights generally; and that such counsel knows of no
litigation or other proceeding or contingent liabilities pending or threatened
against either of the Borrowers of the kind referred to in Section 4.5 hereof;
(viii) An opinion of the General Counsel of the Company stating
that to the best of such counsel's knowledge and belief the execution,
37
delivery and performance of this Agreement by the Borrowers are not in
conflict with any material agreement binding upon either of the Borrowers; and
to the best of such counsel's knowledge and belief, without undertaking any
specific due diligence with respect thereto, such counsel is not aware of any
material defects in title to any properties owned by either Borrower or any
Subsidiary or any liens on such properties other than Permitted Encumbrances
hereunder.
(ix) A certificate or other evidence satisfactory to the Agent
that the insurance required hereunder to be maintained by the Borrowers and
their Subsidiaries is in full force and effect;
(x) Such other documents as the Agent may reasonably require.
7.3 Documents to be Furnished at Time of Each Advance and Upon
Election for the Installment Loan. The Agent shall have received prior to
making each Advance of proceeds of the Revolving Credit Loans and upon any
election of the Borrowers for the installment loan provided for in Section 3.8
hereof, each duly executed and currently dated, unless waived at the Agent's
discretion, an Application for Advance or a written election for the
installment loan.
SECTION 8
Events of Default
Each of the following shall constitute an Event of Default under this
Agreement:
8.1 Nonpayment of the Loans, Etc. The failure by the Borrowers to pay
when due whether by acceleration or otherwise (i) any amount payable under the
terms of the Notes or (ii) any reimbursement Obligation relative to the Letter
of Credit or the installment note provided for in Section 3.8 hereof or (iii)
any other Obligation when due.
8.2 Nonpayment of Other Loans from Banks. The failure by either
Borrower or any of its Subsidiaries to pay when due, or within any applicable
grace or cure period, any amount payable to the Banks under the terms of any
other promissory note payable to, or agreement with, any Bank, which failure
results in an acceleration of such obligation or a cancellation of such
agreement.
8.3 Nonpayment of Term Loan Obligations. The failure by the Borrowers
to pay when due or within any applicable grace or cure period any amount
payable under the terms of any Term Loan Document, which failure results in an
acceleration of such obligation or a cancellation of such agreement.
8.4 Nonpayment of Other Indebtedness for Borrowed Money. The failure by
either Borrower or any of its Subsidiaries to pay when due, whether by
acceleration or otherwise, or within any applicable grace or cure period, any
other indebtedness for borrowed money or default in the performance or
observance of any obligation or condition with respect to any such other
indebtedness if such nonpayment or default causes such indebtedness to be
accelerated prior to its maturity, unless the Borrower or such Subsidiary is
contesting the existence of such default in good faith and by appropriate
proceedings which prevent foreclosure or levy upon the assets of such Borrower
38
or such Subsidiary.
8.5 Bankruptcy, Insolvency, Etc. Either Borrower or any of its
Subsidiaries (i)(A) having an order for relief entered with respect to it
under the Federal Bankruptcy Code, (B) not paying or admitting in writing its
inability to pay, its debts generally as they become due, (C) making an
assignment for the benefit of creditors, (D) applying for, seeking, consenting
to or acquiescing in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of its
property, (E) instituting any proceeding seeking an order for relief under the
Federal Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent,
or seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or failing to
file an answer or other pleading denying the material allegations of any such
proceeding filed against it, or (F) either of the Borrowers suspends
operations as presently conducted or discontinues doing business as an ongoing
concern; or (ii) without the application, approval or consent of either
Borrower or any of its Subsidiaries, (A) a receiver, trustee, examiner,
liquidator or similar official being appointed for such Borrower or such
Subsidiary or any substantial part of its property, or (B) a proceeding
described in item (i) being instituted against either Borrower or any
Subsidiary, and such appointment continuing undischarged or such proceeding
continuing undismissed or unstayed for a period of sixty (60) consecutive
days.
8.6 Violation of Negative and Affirmative Covenants and Noncompliance
With Other Provisions of this Agreement or Other Loan Documents. Failure of
either Borrower to comply with or perform any provision of the Loan Documents
(which failure does not constitute an Event of Default under any of the
preceding provisions of this Section 8) and continuance of such failure for
thirty (30) days after notice thereof from the Agent; provided, however, that
(i) if such failure is susceptible to cure within a reasonable time, without
harm or jeopardy of harm to the interests of the Banks by the passage of time,
but not within thirty (30) days, and (ii) if the Borrowers commence cure
within the initial thirty (30) day period and proceed diligently and in good
faith thereafter, the Borrowers shall have such reasonable additional time,
not exceeding sixty (60) additional days, to effect cure.
8.7 Warranties and Representations. Any warranty or representation made
by either Borrower to the Banks or the Agent in any Loan Document, or any
schedule, certificate, financial statement, report, notice, or other writing
required to be provided to the Banks or the Agent hereunder (after reasonable
opportunity, not exceeding ten (10) days, to the Borrowers to provide
explanation) is false or misleading in any material respect when made.
39
SECTION 9
Effect of Event of Default
9.1 Automatic Acceleration. If any Event of Default described in
Section 8.5 shall occur, the Commitments of the Banks to make, renew or
convert Advances of the Loans and to make the installment loan provided for in
Section 3.8 hereof shall automatically terminate, repayment of the Loans shall
immediately be accelerated and the Notes and the Loans evidenced thereby and
such installment loan if it has been made, and all other Obligations of the
Borrowers to the Banks shall become immediately due and payable, all without
notice, election or action of any kind on the part of the Banks or the Agent
on November 20, 1995.
9.2 Other Remedies. When any other Event of Default has occurred and is
continuing, the Banks may cause the Agent to take any or all of the following
actions and, if so directed by the Banks, the Agent shall take the action
directed:
9.2.1 Acceleration of the Loans. After ten (10) days written
notice thereof, the Banks may terminate the Commitments and the obligation to
make the installment loan provided for in Section 3.8, may accelerate payment
of the Loans and such installment loan if it has been made, may cause NBD to
cause the Trustee to accelerate payment of the Credit Enhanced Notes and to
draw on the Letter of Credit, and may declare the Notes, the installment note
if issued, and all other Obligations due and payable, whereupon repayment of
the Loans and such installment loan if it has been made shall be accelerated
and the Notes and the Loans evidenced thereby, and the reimbursement
Obligation relative to the Letter of Credit when drawn upon or such
installment loan if it has been made, and all other Obligations of the
Borrowers to the Banks shall become immediately due and payable, all without
presentment, demand, protest, further notice, election or any further action
of any kind on the part of the Banks or the Agent.
9.2.2 Remedies Cumulative. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be available to
the Agent and the Banks until the Obligations have been fully and finally
paid. All provisions hereof unless otherwise expressly terminated by the
provisions hereof or by action of the Banks pursuant hereto shall survive and
remain in full force and effect until all Obligations of the Borrowers have
been paid in full.
SECTION 10
The Agent
10.1 Appointment. United Missouri Bank, N.A., Kansas City, Missouri is
hereby appointed Agent hereunder and under the other Loan Documents, and each
of the Banks irrevocably authorizes the Agent to act as the Agent for such
Bank. The Agent agrees to act as such upon the express conditions contained
in this Section 10. The duties of the Agent shall be administrative in
nature, and the Agent shall not have a fiduciary relationship in respect of
any Bank by reason of this Agreement.
10.2 Powers. The Agent shall have and may exercise such powers
hereunder and under the other Loan Documents as are specifically delegated to
the Agent by the terms hereof and thereby, together with such powers as are
reasonably incidental thereto. The Agent shall have no implied duties to the
40
Banks, or any obligation to the Banks to take any action hereunder or
thereunder except any action specifically provided by this Agreement or the
other Loan Documents to be taken by the Agent.
10.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Banks or any Bank for any
action taken or omitted to be taken by it or them hereunder or under the Loan
Documents or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct.
10.4 No Responsibility for Loans, Recitals, Etc. The Agent shall not be
responsible to the Banks for any recitals, reports, statements, warranties or
representations herein or in the other Loan Documents or any Loans hereunder
or be bound to ascertain or inquire as to the performance or observance of any
of the terms of this Agreement or the other Loan Documents.
10.5 Right to Indemnity. The Agent shall be fully justified in failing
or refusing to take any action hereunder or under the other Loan Documents
unless it shall first be indemnified to its satisfaction by the Banks pro rata
against any and all liability and expense which may be incurred by it or by
reason of taking or continuing to take any such action.
10.6 Action on Instructions of Banks. The Agent shall, in all cases,
act or refrain from acting, and be fully protected in acting or refraining
from acting, hereunder or under the other Loan Documents in accordance with
written instructions signed by the Banks and such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Banks
and on all holders of the Notes.
10.7 Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Banks, except as to money
or security received by it or its authorized agents, for the default or
misconduct of any such agents or attorney-in-fact selected by it with
reasonable care. The Agent shall be entitled to advice of counsel concerning
all matters pertaining to the agency hereby created and its duties hereunder.
10.8 Reliance on Documents. The Agent shall be entitled to rely upon
any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and
believed to have been signed or sent by the proper Person and, with respect to
legal matters, upon the opinion of counsel selected by the Agent.
10.9 May Treat Payee as Owner. The Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof shall have been filed
with the Agent. Any request, authority or consent of any Person, who at the
time of making such request or giving such authority or consent is the holder
of any Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in exchange
therefor.
10.10 Agent's Reimbursement. Each Bank agrees to reimburse the Agent its
Pro Rata Share of any expense, not reimbursed by the Borrowers, incurred by
the Agent on behalf of the Banks in connection with the administration and
41
enforcement of the Loan Documents.
10.11 Rights as a Lender. With respect to its obligations to make Loans
hereunder, Loans made by it and the Notes issued to it, the Agent shall have
the same rights and powers hereunder as any Bank and may exercise the same as
though it were not the Agent, and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include the Agent in its individual capacity.
The Agent may accept deposits from, lend money to, and generally engage in
any kind of banking or trust business with the Borrowers and their
Subsidiaries as if it were not the Agent.
10.12 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on the financial statements referred to in Section 4.4, and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement or the other Loan Documents. The
Agent makes no representation or warranty of any kind with respect to the
validity, enforceability, legality or sufficiency of any Loan Document or any
of the other documents referred to or contemplated herein or therein.
10.13 Successor Agent. The Agent may resign at any time by giving
written notice to the Banks and the Borrowers and may be removed at any time
with or without cause by unanimous vote of the Banks. Upon any such
resignation or removal, the Banks shall have the right to appoint, on behalf
of the Borrowers and the Banks, a successor Agent, subject to the approval of
the Borrowers and UMB. If no successor Agent shall have been so appointed by
the Banks and shall have accepted such appointment within thirty (30) days
after the retiring Agent's giving notice of resignation, then: (i) if an
amount of the Loans is then payable to UMB which is greater than any amount
payable to any other Bank, UMB may appoint, on behalf of the Borrowers and the
Banks, a successor Agent, subject to the approval of the Borrowers; or (ii) if
the amount of the Loans then payable to UMB is not greater than the amount
then payable to any other Bank, the Borrowers may appoint, on behalf of the
Borrowers and the Bank, a successor Agent, subject to the approval of UMB.
UMB shall remain as Agent until such time as a successor Agent is approved by
the necessary parties and accepts such appointment. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 10
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder.
10.14 Distribution of Information. The Borrowers authorize the Agent,
and the Agent shall discuss with and furnish to the Banks all financial
statements, audit reports, notices and other information pertaining to the
Borrowers and their Subsidiaries whether such information was provided by the
Borrowers or prepared or obtained by the Agent. Neither the Agent nor any of
its employees, officers, directors or agents makes any representation or
warranty, regarding any audit reports or other analyses of the Borrowers' or
42
their Subsidiaries' condition which the Agent may distribute, whether such
information was provided by the Borrowers or prepared or obtained by the
Agent, nor shall the Agent nor any of its employees, officers, directors or
agents be liable to any Person receiving a copy of such reports of analyses
for any inaccuracy or omission contained in or relating thereto.
10.15 Application of Proceeds. Notwithstanding any contrary provision of
any other Loan Document, after the occurrence of an Event of Default and
acceleration of the Obligations, collections on the Loans, shall be applied by
the Agent to payment of the Obligations in the following order unless a court
of competent jurisdiction shall otherwise direct:
(a) FIRST, to payment of all costs and expenses of the Agent and
the Banks incurred in connection with the preservation, collection and
enforcement of the Obligations;
(b) SECOND, to the payment of that portion of the Obligations
constituting accrued and unpaid interest and fees, pro rata between the Banks
in accordance with their Pro Rata Shares;
(c) THIRD, to payment of the principal amount of the Obligations,
pro rata between the Banks in accordance with their Pro Rata Share;
(d) FOURTH, to payment of any other Obligations not referred to
above to the Agent or the Banks as may be properly payable; and
(e) FIFTH, the balance, if any, after all of the Obligations have
been satisfied, shall be deposited by the Agent into the Company's general
operating account with UMB.
10.16 Agent's Fee. The Borrowers agree to pay to the Agent, solely for
the benefit of the Agent and not to be shared by the Banks, an annual fee of
Twelve Thousand Five Hundred Dollars ($12,500) to be unconditionally payable
on December 1, 1993 and conditionally thereafter on each December 1 while this
Agreement continues in effect if the average outstanding amount of all Loans
during the twelve (12) months immediately preceding the December 1 on which
payment of the fee is due equals or exceeds Five Million Dollars ($5,000,000).
10.17 Issues Requiring Decisions by Banks. All issues which require a
decision by the Banks hereunder must be approved by all of the Banks;
provided, however, if all of the Banks cannot agree on any issue requiring
their agreement within ten (10) days after the Agent has given written notice
to the Banks of the issue requiring a decision, then, if the Banks then
holding a majority in amount of outstanding principal of the Loans agree on
the issue in question when such Banks include the Agent, the Agent shall have
the right, but shall not be obligated, to decide the issue for all of the
Banks and proceed thereafter accordingly, including without limitation the
right to sign amendments, modifications, waivers and consents, and shall have
no liability in connection therewith to the Banks except in the event of the
Agent's gross negligence or willful misconduct. Notwithstanding the
foregoing, all of the Banks must approve any decision in respect to (i) the
amount or due dates of the Loans or the installment loan provided for in
Section 3.8 hereof, (ii) the interest and fees to be paid by Borrowers
hereunder, (iii) the financial covenants set forth in Section 5.7 hereof, or
(iv) the negative pledge contained in Section 6.1 hereof. The Commitment of
43
any Bank may not be increased without its consent.
In the event Borrowers desire to issue industrial revenue bonds for the
acquisition or construction of facilities to be used in their business
operations, the Banks hereby authorize Agent, at its sole discretion, to waive
any provisions hereof for any such industrial revenue bonds up to the amount
of Seven Million Dollars ($7,000,000) during any rolling three (3) year period
provided that the sole security for the repayment of such industrial revenue
bond is the Borrowers' interest in the facility acquired or constructed
thereby.
SECTION 11
Ratable Payments
In case at any time any Bank, whether by setoff or otherwise, has payment
made to it upon its Notes in a greater proportion than received by any other
Bank under its Notes, or receives any other payment on the Obligations in
greater proportion than such Bank is entitled to receive, such Bank so
receiving such greater proportionate payment agrees to promptly purchase a
portion of the Obligations held by the other Banks so that after such purchase
each Bank will hold its ratable proportion of the Loans.
SECTION 12
General Provisions
12.1 Waiver; Amendments. No delay on the part of any Bank or the Agent,
or any holder of the Notes in the exercise of any right, power or remedy under
the Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise by any of them of any right, power or remedy preclude any
other or further exercise thereof, or the exercise of any other right, power
or remedy. No amendment, modification or waiver of, or consent or decision
with respect to any of the provisions of any Loan Document or otherwise of the
Obligations shall be effective unless such amendment, modification, waiver or
consent is in writing and signed by the Banks, except as otherwise provided in
Section 10.17 hereof. No amendment of any provision of this Agreement
relating to the Agent shall be effective without the written consent of the
Agent.
12.2 Notices. Any notice hereunder to the Borrowers or the Banks shall
be in writing and, if delivered by hand shall be deemed to have been given
when delivered and, if mailed, shall be deemed to have been given five (5)
days after the date when sent by registered or certified mail, postage
prepaid, and addressed to a Borrower, the Agent, or a Bank (or other holder)
at its address shown below, or at such other address as such party may, by
written notice to the other parties to this Agreement, have designated as its
address for such purpose. The addresses referred to are as follows:
44
As to UMB United Missouri Bank, N.A.
or the Agent: ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Commercial Loan Department
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Watson, Ess, ▇▇▇▇▇▇▇▇ & Enggas
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
As to ▇▇▇▇▇▇: ▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇ and
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
As to NBD: NBD Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Commercial Loan Department
As to Company c/o Unitog Company
or Rental: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esquire
c/o Unitog Company
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
12.3 Costs, Expenses and Taxes. Each Borrower agrees to pay or
reimburse the Agent or Banks, as the case may be, on demand for all reasonable
out-of-pocket costs and expenses (including, without limitation, reasonable
attorneys' fees and legal expenses) incurred by: (i) the Agent in connection
with the negotiation, preparation and documentation of the Loan Documents and
the documentation and closing of the Loans; and (ii) the Agent and/or Banks in
connection with the enforcement of the Loan Documents, and such other
instruments or documents as may be given as an incident to this Agreement or
the Obligations following a Default or Event of Default. All Obligations
provided for in this Section shall survive any termination of this Agreement.
12.4 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
12.5 Governing Law. The Loan Documents and the Letter of Credit are
made under and will be governed by the laws of the State of Missouri and the
State of Michigan, respectively, (i) except to the extent that conflict of law
rules of Missouri or Michigan, as the case may be, would require the
substantive rules of law of any other jurisdiction to be applied and (ii)
except to the extent that the Letter of Credit is subject to the Uniform
Customs and Practices for Documentary Credits (1983 Revision) International
Chamber of Commerce Publication No. 400.
45
12.6 Successors and Assigns. This Agreement shall be binding upon the
Borrowers, the Banks and the Agent and their respective successors and
assigns, and shall inure to the benefit of the Borrowers and the Banks, the
Agent and the respective successors and assigns of their entire interests,
except that neither Borrower shall have the right to assign its rights under
this Agreement. Each Bank may assign its rights and obligations to any other
lender subject to the prior approval of the Company provided any such
assignment is in an amount of at least Ten Million Dollars ($10,000,000);
provided, however, UMB, so long as it remains the Agent, may not assign or
otherwise participate any part of its rights and obligations hereunder except
for participations in any amount to affiliates of UMB.
12.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute but one
Agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Agreement shall be effective when it has been
executed by the Borrowers, the Banks and the Agent and each party has notified
the Agent by telex or telephone that it has taken such action.
12.8 Contribution, Etc. Each of the Borrowers acknowledges that the
other Borrower is part of a Consolidated group of companies and that its
financial strength is interdependent upon the financial strength of the
Consolidated group as a whole. Therefore, each Borrower acknowledges and
agrees that the Obligations are supported by adequate consideration,
regardless of the amount of Advances or other benefits actually received by
such Borrower under the Loan Documents and the Term Loan Documents. In the
event either Borrower makes any payment under the Loan Documents or the Term
Loan Documents which exceeds the amount of funds actually received, directly
or indirectly, by such Borrower thereunder, such Borrower shall be entitled to
contribution and reimbursement from the other Borrower, pro rata, on the basis
of funds actually received and shall be entitled to recover such amounts by
available legal means. After (but only after) full payment of the Obligations
and until such recovery is made, such Borrower shall be deemed subrogated to
the rights and interests of the Banks under the Loan Documents. Such rights
of contribution, reimbursement and subrogation shall be and remain at all
times junior, subordinate, inferior and subject to the right and interests of
the Banks under the Loan Documents and shall not affect or impair in any way
the joint, several, personal and unconditional Obligation of each Borrower to
fully pay or perform each of the Obligations.
12.9 Several Obligations. The respective obligations of the Banks
hereunder are several and not joint, and no Bank shall be the partner or agent
of the other (except to the extent to which the Agent is authorized to act as
such). The failure of any Bank to perform any of its obligations hereunder
shall not relieve any other Bank from any of its obligations hereunder. All
Obligations of the Borrowers are joint and several.
12.10 Indemnification. Except as otherwise provided herein, the
Borrowers jointly and severally agree to indemnify the Agent and each Bank,
and each successor and assign (including any authorized purchaser of a
participation in any of the Obligations), its directors, officers, employees,
attorneys and agents, on demand and to the fullest extent permitted by law
against any and all liabilities, damages, judgments, suits and claims (and the
reasonable costs and legal fees related thereto) of any kind or nature
whatsoever imposed on, incurred by or asserted against the Agent or any of the
46
Banks arising under or in connection with the Loan Documents; provided,
however, the Borrowers will not be obligated to indemnify the Agent or any
Bank hereunder to the extent any claims or liabilities result from the Agent's
or such Bank's negligence or willful misconduct. The Obligations of the
Borrowers under this Section shall survive the termination of this Agreement.
12.11 Incorporation by Reference. Each of the other Loan Documents is
hereby made subject to all of the terms, covenants, conditions, obligations,
stipulations and agreements contained in this Agreement to the same extent and
effect as if fully set forth therein, and this Agreement is hereby made
subject to all of the terms, covenants, conditions, obligations, stipulations
and agreements contained in the other Loan Documents to the same extent and
effect as if fully set forth herein. All Exhibits hereto are incorporated
herein by reference. All representations and warranties of the Borrowers
contained herein in Section 4 shall survive the delivery of the Letter of
Credit and have been or will be relied upon by the Agent and the Banks
notwithstanding any investigation made by or on behalf of them.
12.12 Right of Set-Off. Upon the occurrence and during the continuance
of any Event of Default hereunder, the Banks are hereby authorized at any time
and from time to time, without notice to the Borrowers (any requirement for
such notice being expressly waived by the Borrowers) to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by the Borrowers to or
for the credit or the account of the Banks against any and all of the
Obligations of the Borrowers now or hereafter existing under this Agreement,
irrespective of whether or not the Banks shall have made any demand hereunder
and although such obligations may be contingent and unmatured.
12.13 Interest Rate Limitation. Notwithstanding any provisions of this
Agreement or any of the Loan Documents, in no event shall the amount of
interest paid or agreed to be paid by the Borrowers exceed an amount computed
at the highest rate of interest permissible under applicable law. If, from
any circumstances whatsoever, fulfillment of any provision of this Agreement
or any Loan Document at the time performance of such provision shall be due,
shall involve exceeding the interest rate limitation validly prescribed by law
which a court of competent jurisdiction may deem applicable hereto, then, ipso
facto, the Obligations to be fulfilled shall be reduced to an amount computed
at the highest rate of interest permissible under applicable law, and if for
any reason whatsoever the Banks shall ever receive as interest an amount which
would be deemed unlawful under such applicable law, such interest shall be
automatically applied to the payment of principal of the amounts outstanding
hereunder (whether or not then due and payable) and not to the payment of
interest, or shall be refunded to the Borrowers if such principal and all
other obligations of the Borrowers to the Banks have been paid in full.
12.14 Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
47
12.15 Provisions Regarding Indenture.
(a) The parties acknowledge that Section 2.10 of the Indenture
requires, among other things, the consent of the Credit Bank (as defined in
the Indenture) and ▇▇▇▇▇▇ to the release of certain collateral held to secure
the Credit Enhanced Notes. Each of the Banks hereby absolutely,
unconditionally and irrevocably consents to the release of all collateral held
to secure the Credit Enhanced Notes and each Bank agrees to promptly execute
and deliver upon the request of the Borrowers at any time all such documents
and instruments as may be necessary or appropriate (as determined in the
reasonable discretion of the Borrowers) to evidence to the satisfaction of any
Person, including, without limitation, the Trustee, the consent of the Banks
to such release and to effect such release.
(b) The parties acknowledge that Section 2.10 of the Indenture
provides a mechanism by which the Borrowers can grant Additional Collateral
(as defined in the Indenture) to secure the Borrowers' obligations under this
Agreement and under the Indenture in order to obtain the release of other
collateral. Each of the Banks hereby absolutely, unconditionally and
irrevocably waives all rights with respect to any Additional Collateral
(whether now existing or hereafter arising) to the extent granted under the
terms of the Indenture and agrees to promptly execute and deliver all such
documents and instruments as may be necessary or appropriate (as determined in
the reasonable discretion of the Borrowers) to evidence to the satisfaction of
any Person, including, without limitation, the Trustee, the release by the
Banks of the Additional Collateral.
(c) Each of the Banks hereby absolutely, unconditionally and
irrevocably waives its rights to approve any Mortgages as provided in the
second paragraph of Section 2.10 of the Indenture, and each Bank agrees to
execute and deliver upon the request of the Borrowers at any time all such
documents and instruments as may be necessary or appropriate (as determined in
the reasonable discretion of the Borrowers) to evidence to the satisfaction of
any Person, including, without limitation, the Trustee, such waiver.
(d) In the event that any of the Banks shall at any time obtain or
receive any mortgage, deed of trust, security interest or other interest of
any type in or to any of the properties or assets of any Borrower or
Subsidiary of any Borrower by virtue of any Term Loan Documents then (i) such
mortgage, deed of trust, security interest or other interest shall be, without
any further action on the part of any Bank, the Borrowers or any Subsidiary of
Borrower, automatically and unconditionally canceled, terminated, released and
rendered void; and (ii) each Bank shall promptly execute and deliver to the
Borrowers such documents and instruments as may be necessary or appropriate
(as determined in the Buyer's reasonable discretion) to evidence such
cancellation, termination and release.
(e) Upon any payment in full of the Credit Enhanced Notes, whether
by a draw on the Letter of Credit or from Available Moneys or otherwise, the
Credit Enhanced Notes shall be canceled and marked paid and each Bank agrees
that it will have no right of subrogation or substitution with respect to the
Credit Enhanced Notes or any collateral or assets held in connection
therewith, and the Banks shall not be deemed a purchaser of a participation
interest in the Credit Enhanced Notes.
48
(f) Anything in this Agreement to the contrary notwithstanding,
the terms of this Section 12.15 shall survive the termination or expiration of
this Agreement for any reason, and all obligations of the Banks under this
Section 12.15 shall be absolute, unconditional and irrevocable obligations and
the Banks may not refuse to perform any such obligation for any reason or in
any circumstance, including, without limitation, the occurrence or
continuation of a Default, Event of Default, acceleration of the Loans or
cancellation of the Obligations.
[THIS SECTION INTENTIONALLY LEFT BLANK]
12.16 Statutory Statement. (Mo. Rev. Stat. e432.045)
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING PAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH
DEBT ARE NOT ENFORCEABLE. TO PROTECT BORROWERS AND BANKS FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING AND THE DOCUMENTS REFERRED TO HEREIN,
WHICH ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers duly authorized as of the date first above
written.
UNITOG COMPANY UNITOG RENTAL SERVICES, INC.
By:/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By:/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief
Financial Officer Financial Officer
UNITED MISSOURI BANK, ▇.▇. ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
Individually and as Agent
By:/s/ ▇. ▇▇▇▇▇▇ By:/s/ ▇▇▇ ▇. ▇▇▇▇▇
Vice President
NBD BANK, N.A.
BY:/S/ ▇. ▇. ▇▇▇▇▇▇▇▇
49
AMENDMENT NO. 1
to LOAN AND LETTER OF CREDIT
REIMBURSEMENT AGREEMENT
This Amendment No. 1 is made as of the 29th day of December, 1994 among
Unitog Company, a Delaware corporation (the "Company"), Unitog Rental
Services, Inc., a California corporation ("Rental") (Company and Rental being
sometimes collectively referred to herein as the "Borrowers" or individually
as a "Borrower"), UMB Bank, n. a., Kansas City, Missouri, a national banking
association ("UMB"), ▇▇▇▇▇▇ Trust and Savings Bank, Chicago, Illinois, an
Illinois banking corporation ("▇▇▇▇▇▇"), NBD Bank, n.a., Detroit, Michigan, a
national banking association ("NBD") (UMB, ▇▇▇▇▇▇ and NBD being sometimes
collectively referred to herein as the "Banks" or individually as a "Bank")
and UMB Bank, n.a., Kansas City, Missouri, a national banking association, as
agent for the Banks herein (in such capacity, the "Agent").
RECITALS
WHEREAS, as of September 10, 1993, the Borrowers, the Banks and the Agent
entered into a Loan and Letter of Credit Reimbursement Agreement (the "Loan
Agreement"), pursuant to which the Banks provided to the Borrowers revolving
loans of up to Thirty-Five Million Dollars ($35,000,000) and issued the Letter
of Credit and provided certain other accommodations.
WHEREAS, the Letter of Credit was issued to Peoples Bank & Trust Company
as trustee (the "Trustee") under a Trust Indenture (the "Indenture") dated as
of December 1, 1988, for the purpose of securing certain notes (the "Notes")
issued by the Borrowers pursuant to the Indenture.
WHEREAS, the Trustee and the holders of the Notes have agreed to waive
the requirement that the Notes be secured by the Letter of Credit, as
specifically set forth in Amendment No. 2 to Trust Indenture, dated December
29, 1994.
WHEREAS, the parties desire to amend the Loan Agreement to reflect the
elimination of the Letter of Credit and to reflect certain other changes.
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, the parties mutually agree as follows:
1. Consent to the Amendment to Trust Indenture. Each of the Banks
consents to the execution by the Borrowers of Amendment No. 2 to Trust
Indenture, dated as of December 29, 1994, among the Borrowers and the Trustee.
2. Amendment to Section 3 of the Loan Agreement. Section 3 of the Loan
Agreement is deleted in its entirety and replaced with the following:
"Section 3
Cancellation of the Letter of Credit; Installment Loan
3.1 Cancellation of the Letter of Credit. Each of the Banks consents to
the cancellation and return of the Letter of Credit and agrees that all
obligations of the Borrowers with respect to the Letter of Credit are
terminated including, without limitation, the obligation of the Borrowers to
50
pay any commission in connection with the issuance or maintenance of the
Letter of Credit.
3.2 Installment Loan. If the Borrowers are in full and complete
compliance with the terms of this Agreement, upon the written election of the
Borrowers to the Agent, the Banks agree to loan to the Borrowers an amount
equal to the then outstanding principal balance of the Credit Enhanced Notes,
plus accrued interest thereon to the date of redemption, which loan shall be
used by the Borrowers for the sole purpose of redeeming the Credit Enhanced
Notes in full. Such loan shall be an installment loan obligation payable over
a term of four (4) years in equal quarterly payments of principal calculated
on a seven (7) year amortization of such principal amount and a final
principal payment in the amount of the remaining outstanding principal loan
amount. Such installment loan shall bear interest payable quarterly in
arrears on the same date as each principal payment is due and at a rate per
annum equal to the 3-month LIBOR rate, as reported in the Wall Street Journal,
plus the Applicable Margin for LIBOR Advances plus 25 basis points, adjusted
each ninety (90) days. Upon receipt by the Agent of notice of any such
election by the Borrowers, the Agent shall immediately notify the Banks of
such election. Three (3) Banking Days after receipt of such notification,
▇▇▇▇▇▇ and NBD shall each transfer to the Agent by wire transfer or deposit to
any correspondent account which Agent may maintain with such Bank an amount
equal to thirty percent (30%) of the principal amount of the loan as provided
above in this Section 3.2 and UMB shall immediately transfer forty percent
(40%) of such amount to the Agent. Upon receipt by the Agent of notes
executed by the Borrowers in the form of Exhibit E attached hereto payable to
each of the Banks in each Bank's Pro Rata Share of such loan, the Agent shall
disburse the amount of the loan to the Borrowers by depositing the same in the
Company's account at UMB, and the Borrowers hereby authorize the disbursement
of the loan in such manner. The Agent shall handle the notes in the form of
Exhibit E attached hereto and all collections thereon in the same manner as
provided in this Agreement for collections on Revolving Credit Loans as
respects the Banks."
3. References to Installment Loan. Each reference in the Loan Agreement
to the installment loan provided for in Section 3.8 shall be amended to mean
and refer to the installment loan provided for in Section 3.2 of the Loan
Agreement.
4. Amendment to Section 9.2.1. Section 9.2.1 of the Loan Agreement is
amended by deleting therefrom the phrase "may cause NBD to cause the Trustee
to accelerate payment of the Credit Enhanced Notes and to draw on the Letter
of Credit."
5. Amendment to Exhibit E. Exhibit E to the Loan Agreement is deleted
in its entirety and replaced by Exhibit E, attached hereto and incorporated
herein by reference.
6. Representations and Warranties. The Borrowers hereby represent and
warrant that:
(a) The representations and warranties contained in the Loan
Agreement and in each certificate or document furnished by the Borrowers and
delivered therewith are true and correct in all material respects on and as of
the date hereof as though made on and as of the date hereof;
2
51
(b) No Event of Default, and to the Borrower's knowledge no event
which with the passage of time or the giving of notice or both could become an
Event of Default, exist on the date hereof, and no offsets or defenses exist
against their obligations under the Loan Agreement or the documents delivered
in connection therewith;
(c) This Amendment has been duly authorized, executed and delivered so
as to constitute the legal, valid and binding obligation of the Borrowers,
enforceable in accordance with its terms, except as the same may be limited by
applicable bankruptcy insolvency, reorganization, moratorium or other similar
laws affecting creditor's rights generally and general principles of equity;
(d) The execution, delivery and performance of this Amendment will not
violate any applicable provision of law or judgment, order or regulation of any
court or of any public or governmental agency or authority nor conflict with or
constitute a breach of or a default under any instrument to which the Borrowers
are a party or by which the Borrowers or the Borrower's properties is bound nor
result in the creation of any lien, charge or encumbrance upon any assets of
the Borrowers.
7. Miscellaneous.
(a) The laws of the State of Missouri shall govern this Amendment.
(b) This Amendment shall be binding on the parties hereto and their
respective successors and assigns, and shall inure to the benefit of the
parties hereto.
(c) This Amendment may be executed in any number of counterparts, all
of which when taken together shall constitute but one agreement and any of the
parties hereto may execute this Amendment by signing any such counterpart.
(d) Section captions used in this Amendment are for convenience only
and shall not affect the construction of this Amendment.
(e) Capitalized terms used herein and not specifically herein defined
shall have the meanings ascribed in the Loan Agreement.
3
52
IN WITNESS WHEREOF, the Borrowers, the Banks and the Agent have caused
this Amendment No. 1 to be executed by their respective officers duly
authorized as of the date first above written.
UNITOG COMPANY
By:/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice President
Finance & Administration & Chief
Financial Officer
UNITOG RENTAL SERVICES, INC.
By:/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice President
Finance & Administration & Chief
Financial Officer
UMB BANK, N.A.
Individually and as Agent
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
NBD BANK, N.A.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
▇▇▇▇▇▇ TRUST & SAVINGS BANK
By:/s/ ▇▇▇ ▇. ▇▇▇▇▇
Vice President
4
53
EXHIBIT E
$_______________ Kansas City, Missouri
and Interest ___________, 199__
FOR VALUE RECEIVED, the undersigned each (the "undersigned" means each
maker and each jointly and severally agrees to all the provisions hereunder)
promise(s) to pay to the order of __________________________ (hereinafter
called "Bank"), at its main office, the principal sum of ____________________
Dollars in quarterly installments of principal payable as follows:
$______________ on the _____________ day of _________________________,
19___ and $_____________ on the ______________ day of each succeeding quarter
thereafter until _________________, on which date all unpaid principal and
accrued interest shall be due and payable in full. Interest on the unpaid
principal balance shall accrue from the date hereof at the rate as provided in
that certain Loan and Letter of Credit Reimbursement Agreement ("Agreement")
between undersigned, the Bank and others dated September 10, 1993, the
provisions of which are incorporated herein by reference. Accrued interest
shall be due and payable on each date a principal payment is due. If any of
said principal installments or accrued interest thereon is not paid when due,
then all remaining installments plus accrued interest thereon shall, subject
to the terms of the Agreement, immediately become due and payable. Unless
provided in the Agreement to the contrary, each payment shall be applied first
to payment of accrued interest, and then to reduction of the principal sum.
This note shall bear interest after maturity at an annual rate two percent
(2%) above the rate otherwise then in affect until paid in full or cured.
This note may be prepaid in whole or in part at any time without premium or
penalty.
Upon the occurrence of any of the events of default defined in Section 8
of the Agreement, then this note and all other obligations of each of the
undersigned to the holder shall, subject to the provisions of Section 9 of the
Agreement, immediately become due and payable in full in accordance with the
terms of said Agreement.
To the extent (if any) permitted by applicable law, the undersigned
agrees to pay all expenses of the holder in collecting this note, including
reasonable attorney's fees. the interpretation of this instrument and the
rights and remedies of the parties hereto shall be governed by the law of
Missouri. The undersigned warrant(s) and represent(s) that all loan proceeds
of the indebtedness evidenced hereby are to be used exclusively for business
purposes of the undersigned.
Demand for payment, notice of nonpayment, protest, notice of dishonor,
diligence and suit are hereby waived by all parties liable hereon.
Any failure by the holder hereof to exercise any right hereunder shall
not be construed as a waiver of the right to exercise the same or any other
right at any other time and from time to time thereafter.
5
54
UNITOG COMPANY
By:________________________________
Title:_____________________________
UNITOG RENTAL SERVICES, INC.
By:________________________________
Title:_____________________________
6
55
AMENDMENT NO. 2
TO LOAN AND LETTER OF CREDIT
REIMBURSEMENT AGREEMENT
THIS AMENDMENT NO. 2 ("Amendment") is made as of the 9th day of
November, 1995, among UNITOG COMPANY, a Delaware corporation (the "Company"),
UNITOG RENTAL SERVICES, INC., a California corporation ("Rental") (Company and
Rental being sometimes collectively referred to herein as the "Borrowers" or
individually as a "Borrower"), UMB Bank, n.a., Kansas City, Missouri, a
national banking association ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, Chicago, Illinois,
an Illinois banking corporation ("▇▇▇▇▇▇"), NBD BANK, Detroit, Michigan, a
Michigan banking corporation ("NBD") (UMB, ▇▇▇▇▇▇ and NBD being sometimes
collectively referred to herein as the "Banks" or individually as a 'Bank") and
UMB Bank, n.a., Kansas City, Missouri, a national banking association, as agent
for the Banks herein (in such capacity, the "Agent").
RECITALS
WHEREAS, the Borrowers, the Banks and the Agent entered into a Loan and
Letter of Credit Reimbursement Agreement (the "Agreement") dated September 10,
1993, the terms of which were modified and amended by Amendment No. 1 to Loan
and Letter of Credit Reimbursement Agreement "Amendment No. 1") dated December
29, 1994 executed by the Borrowers, the Banks and the Agent (the Agreement, as
modified and amended by Amendment No. 1, herein the "Loan Agreement"); and
WHEREAS, pursuant to the Loan Agreement the Banks provided to the
Borrowers revolving loans of up to Thirty-Five Million Dollars ($35,000,000)
and an installment loan; and
WHEREAS, the parties desire to amend the Loan Agreement to allow for
revolving loans of up to Fifty Million Dollars ($50,000,000), to delete the
provision for an installment loan, and to make certain other changes.
NOW, THEREFORE, in consideration of the promises and the mutual
promises contained herein, the parties mutually agree as follows:
1. Amendment to Section 1.2 of the Loan Agreement. Section 1.2
of the Loan Agreement is amended as follows:
(a) The definition of "Applicable Margin" is amended by
inserting the following at the end thereof:
56
"Except as to the Optional Rate Portion of any loan or Loans then outstanding.
effective December 1, 1995, the Applicable Margin and the Revolving Credit
Commitment Fee shall be determined by reference to the following table:
Applicable Applicable Revolving
Margin for Margin for Credit
Capitalization Prime Rate LIBOR Commitment
Ratio Advances Advances Fee
------------ -------- -------- ---------
Less than or (75) ▇▇ ▇▇ ▇▇ ▇▇.▇ ▇▇
equal to 35%
Greater than (50) bp 50 bp 18.75 bp
35% and up to and
equal to 50%
Greater than ▇ ▇▇ ▇▇ ▇▇ ▇▇ bp
50% and up to and
equal to 55%
Greater than ▇ ▇▇ ▇▇▇ ▇▇ ▇▇ bp
55% and up to and
equal to 60%
As to the Optional Rate Portion of any Loan or Loans outstanding on December 1,
1995, after the expiration of the LIBOR interest Period for such Optional Rate
Portion, the Applicable Margin shall be determined by reference to the
foregoing table.
(b) The amounts of the revolving credit commitments of the Banks set forth
in the definition of "Revolving Credit Commitments" are deleted and replaced
with the following: (i) Twenty Million Dollars ($20,000,000), in the case of
UMB, and (ii) Fifteen Million Dollars ($15,000,000), in the case of ▇▇▇▇▇▇, and
(iii) Fifteen Million Dollars ($15,000,000) in, the case of NBD.
(c) The following defined terms are inserted:
"Federal Funds Rate" means, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or if such rate is not so published for any day which
is a Business Day, the average of the quotations at approximately 10 a.m.
(Kansas City, Missouri time) on such day of such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by the
Agent in its sole discretion.
57
"Industrial Development Bonds" shall mean any bond issued by or on
behalf of a political subdivision the interest on which is excludable from
gross income for federal income tax purposes on the date such obligations were
issued.
2. Amendment of Section 2.2.2(b). Section 2.2.2(b) of the Loan
Agreement is amended to delete the aggregate limitation on the amount of
documentary trade and standby letters of credit that may be outstanding at any
time and to change the manner in which the letter of credit fees payable by
Borrowers is calculated, as follows:
(a) The Five Million Dollar ($5,OOO,OOO) limitation on
the aggregate amount of documentary trade and standby letters of credit
outstanding at any time is deleted.
(b) Commencing from the date of this Amendment, the
letter of credit fees to be paid by Borrowers upon the issuance of each
documentary trade and standby letter of credit shall be computed at a rate
equal to the greater of either (i) the Applicable Margin for LIBOR Advances
minus 25 bp or (ii) 25 bp, multiplied by the face amount of each documentary
trade letter of credit or the face amount of each standby letter of credit, as
the case may be, and further multiplied by a fraction the numerator of which
shall equal the number of days for which the letter of credit is issued and the
denominator of which shall be 365 (subject to a minimum fee in each case of One
Hundred Dollars ($100)).
(c) Except as hereby modified and amended, all of the
terms, conditions and covenants contained in Section 2.2.2(b) of the Loan
Agreement shall remain in full force end effect.
3. Amendment of Section 2.2.3. Section 2.2.3 of the Loan Agreement is
amended by deleting the first sentence of such section in its entirety and
replacing such sentence with the following:
"The principal amount of the Revolving Credit Loans outstanding from
time to time shall bear interest until maturity of the Revolving
Credit Loans at a rate per annum equal to the Prime Rate plus the
Applicable Margin, provided, however, that if such calculation results
in a yield that is less than the Federal Funds Rate on any given date,
interest shall accrue on such day on the principal amount of the
Revolving Credit Loans outstanding on such day at the Federal Funds
Rate, adjusted daily, plus the Applicable Margin for LIBOR Advances;
notwithstanding the foregoing, at the option of the Borrowers,
exercised as provided in Section 2.2.9, interest may accrue prior to
maturity on any Permissible Increment of any Advance or on any
Permissible Increment of the outstanding balance of the Revolving
Credit Loans as to which no Optional Rate has previously been elected,
at an Optional Rate for a period of one, two, three, or six months."
58
4. Amendment of Section 2.2.6. Section 2.2.6 of the Loan
Agreement is amended to change the manner in which the commitment fee is
calculated and to delete the cap on such commitment fees, as follows:
(a) Commencing with the commitment fee due March 15,
1996, the Revolving Credit commitment fee to be paid by Borrowers shall equal
the Revolving Credit Commitment Fee calculated on the average daily unused
portion of the Revolving Credit Commitments during the immediately preceding
three (3) month period ending December 1, March 1, June 1 or September 1, based
on the actual number of days elapsed and a 365 day year, and the Fifty Thousand
Dollar ($50,000) maximum aggregate Revolving Credit commitment fee payable
under the Loan Agreement is deleted.
(b) Except as hereby modified and amended, all of the
terms, conditions and covenants contained in Section 2.2.6 of the Loan
Agreement shall remain in full force and effect.
5. Amendment of Section 2.2.7. Section 2.2.7 of the Loan
Agreement is deleted in its entirety and replaced with the following:
"2.2.7 Calculation of Interest. Interest on each of the Revolving
Credit Loans bearing interest at LIBOR plus Applicable Margin on LIBOR Advances
shall be calculated based upon the use of a fraction, the numerator of which
being the actual number of days elapsed and the denominator of which is 360.
Interest on all other Revolving Credit Loans shall be calculated based upon a
fraction, the numerator of which being the actual number of days elapsed and
the denominator of which is 365."
6. Amended and Restated Master Credit Revolving Note. Borrowers
agree to execute and deliver to each of the Banks an Amended and Restated
Master Revolving Credit Note ("Amended Note") in the form of Exhibit C attached
hereto and incorporated herein by reference payable to each of the Banks in
accordance with the amount of their respective Revolving Credit Commitments as
increased hereunder. Following the execution and delivery of the Amended Note
to each Bank, the Amended Note shall evidence all the indebtedness evidenced by
Master Revolving Credit Note executed and delivered to such Bank by Borrower
dated September 10, 1993, which shall then be marked "Modified pursuant to that
certain Amended and Restated Master Revolving Credit Note, dated [the date
hereof]" and returned to Borrowers. Exhibit C to the Loan Agreement shall be
deleted and replaced in its entirety by Exhibit C hereto.
7. Deleting of Section 3. Section 3 of the Loan Agreement is
deletion in its entirety.
8. References to Installment Loan. Each reference in the Loan
Agreement to the installment loan provided for in Section 3 shall be deleted.
9. Amendment to Section 6.1 of the Loan Agreement. Section 6.1
of the Loan Agreement is amended by inserting the following after subparagraph
(x) and immediately prior to the last Line of Section 6.1:
59
"(xi) liens securing Industrial Development Bonds or a reimbursement
obligation with respect to a letter of credit, insurance or other credit
enhancement securing such Industrial Development Bonds, provided that any such
lien encumbers only the project or property that is the subject of the
Industrial Development Bond and no other assets of Borrowers or their
Subsidiaries.
10. Amendment to Section 6.2 of the Loan Agreement. Section 6.2
of the Loan Agreement is amended by deleting the last sentence of such section
in its entirety and replacing such sentence with the following:
"The provisions of this Section 6.2 shall not prohibit loans between
the Borrowers and any of their Subsidiaries or guarantees by the
Borrowers or any of their Subsidiaries of their respective
obligations."
11. Amendment to Section 8.4 of the Loan Agreement. Section 8.4 of
the Loan Agreement is amended by inserting the following at the end of such
Section 8.4:
"Notwithstanding the foregoing, it is expressly agreed among Banks and
Borrowers that a default resulting in acceleration of the indebtedness
under any instrument(s) or document(s) evidencing or executed in
connection with the following Industrial Development Bonds caused by a
transfer of the property that is the subject of such Industrial
Development Bond to a Borrower, a Subsidiary, or others, or by the
merger of a Subsidiary and a Borrower, shall not constitute an Event
of Default hereunder:
(i) $3,000,000 Michigan Strategic Fund Variable Rate
Demand Limited Obligation Revenue Bonds, Series 1995
(Mechanics Uniform Rental Co. Project);
(ii) $2,595,000 Michigan Strategic Fund Revenue Refunding
Bonds for Small Businesses (loan repayment My
guaranteed by the United States Small Business
Administration), 1992 Series A-1 (Ace-Tex Corporation
Project); and
(iii) Michigan Job Development Authority Revenue Bonds for
Snuff Business (loan repayment fully guaranteed by the
United States Small Business Administration), 1979
Series A- I (Ace Wiping Cloth Project).
12. No Other Modifications. Except as hereby modified and
amended, all of the terms, conditions and covenants contained in the Loan
Agreement shall remain in full force and effect.
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13. Representations and Warranties. The Borrowers hereby
represent and warrant that:
(a) The representations and warranties contained in the
Loan Agreement and in each certificate or document furnished by the Borrowers
and delivered therewith are true and correct in all material respects on and as
of the date hereof as though made on and as of the date hereof;
(b) No Event of Default, and to the Borrower's knowledge
no event which with the passage of time or the giving of notice or both could
become an Event of Default, exists on the date hereof, and no offsets or
defenses exist against their obligations under the Loan Agreement or the
documents delivered in connection therewith;
(c) This Amendment has been duly authorized, executed and
delivered so as to constitute the legal, valid and binding obligation of the
Borrowers, enforceable in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditor's rights generally and general principles
of equity;
(d) The execution, delivery and performance of this
Amendment will not violate any applicable provision of law or judgment, order
or regulation of any court or of any public or governmental agency or authority
nor conflict with or constitute a breach of or a default under any instrument
to which the Borrowers are a party or by which the Borrowers or the Borrower's
properties is bound nor result in the creation of any hen, charge or
encumbrance upon any assets of the Borrowers.
14. Miscellaneous.
(a) The laws of the State of Missouri shall govern this
Amendment.
(b) This Amendment shall be binding on the parties hereto and
their respective successors and assigns, and shall inure to the benefits of the
parties hereto.
(c) This Amendment may be executed in any number of
counterparts, all of which when taken together shall constitute but one
agreement and any of the parties hereto may execute this Amendment by signing
any such counterpart.
(d) Section captions used in this Amendment are for
convenience only and shall not affect the construction of this Amendment.
(e) Capitalized terms used herein and not specifically
herein defined shall have the meanings ascribed in the Loan Agreement.
15. Statutory Statement. (Mo. Rev. Stat. e 432.045)
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ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING PAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW
SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT BORROWERS AND BANKS FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING AND THE DOCUMENTS REFERRED TO HEREIN,
WHICH ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
[THIS SPACE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Borrowers, the Banks and the Agent have caused
this Amendment No. 2 to be executed by their respective officers duly
authorized as of the date first above written.
UNITOG COMPANY
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial officer
UNITOG RENTAL SERVICES, INC.
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
UMB BANK,, N.A.
Individually and as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
NBD BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
