1
Unitog Company
and
Unitog Rental Services, Inc.
Note Agreement
Dated as of October 15, 1995
Re: $40,000,000 6.83% Senior Notes
Due October 31, 2005
2
Table of Contents
(Not a part of the Agreement)
Section Heading Page
Section 1. Description of Notes and Commitment 1
Section 1.1. Description of Notes 1
Section 1.2. Commitment, Closing Date 2
Section 1.3. Interest Rate Adjustment 2
Section 2. Prepayment of Notes 2
Section 2.1. Required Prepayments 2
Section 2.2. Optional Prepayment With Premium 3
Section 2.3. Notice of Optional Prepayments 3
Section 2.4. Application of Prepayments 4
Section 2.5. Direct Payment 4
Section 3. Representations 4
Section 3.1. Representations of the Constituent Companies 4
Section 3.2. Representations of the Purchaser 4
Section 4. Closing Conditions 5
Section 4.1. Conditions 5
Section 4.2. Waiver of Conditions 6
Section 5. Constituent Company Covenants 7
Section 5.1. Corporate Existence, Etc 7
Section 5.2. Insurance 7
Section 5.3. Taxes, Claims for Labor and Materials;
Compliance with Laws 7
Section 5.4. Maintenance, Etc 8
Section 5.5. Nature of Business 8
Section 5.6. Current Ratio 8
Section 5.7. Consolidated Stockholders' Equity 8
Section 5.8. Fixed Charges Coverage Ratio 8
Section 5.9. Limitations on Indebtedness 8
Section 5.10. Limitation on Liens 10
Section 5.11. Restricted Payments 12
Section 5.12. Investments 13
Section 5.13. Mergers, Consolidations and Sales of Assets 14
Section 5.14. Repurchase of Notes 18
Section 5.15. Transactions with Affiliates 19
Section 5.16. Multiemployer Plan Liability and Termination
of Pension Plans 19
Section 5.17. Reports and Rights of Inspection 19
Section 5.18. Additional Constituent Companies 22
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Section 5.19. Contribution and Conveyance 23
Section 5.20. Prohibition of Extension of the Lincoln National Liens 23
Section 5.21. Prohibition of Change in Fiscal Year 23
Section 6. Events of Default and Remedies Therefor 23
Section 6.1. Events of Default 23
Section 6.2. Notice to Holders 25
Section 6.3. Acceleration of Maturities 25
Section 6.4. Rescission of Acceleration 25
Section 7. Amendments, Waivers and Consents 26
Section 7.1. Consent Required 26
Section 7.2. Solicitation of Holders 26
Section 7.3. Effect of Amendment or Waiver 27
Section 8. Interpretation of Agreement; Definitions 27
Section 8.1. Definitions 27
Section 8.2. Accounting Principles 37
Section 8.3. Directly or Indirectly 37
Section 9. Miscellaneous 37
Section 9.1. Registered Notes 37
Section 9.2. Exchange of Notes 38
Section 9.3. Loss, Theft, Etc. of Notes 38
Section 9.4. Expenses, Stamp Tax Indemnity 38
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative 39
Section 9.6. Notices 39
Section 9.7. Successors and Assigns 39
Section 9.8. Survival of Covenants and Representations 39
Section 9.9. Severability 39
Section 9.10. Governing Law 40
Section 9.11. Submission to Jurisdiction. 40
Section 9.12. Captions 40
Signature 41
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Attachments to Note Agreement:
Schedule I - Name and Address of Purchaser and Amount of Commitment
Schedule II - Specified Indebtedness; Liens; Capitalized Leases; Subsidiaries
Exhibit A - Form of 6.83% Senior Note
Exhibit B - Representations and Warranties of the Constituent Companies
Exhibit C - Description of Special Counsel's Closing Opinion
Exhibit D - Description of Closing Opinion of Outside Counsel to the
Constituent Companies
Exhibit E - Description of Closing Opinion of the General Counsel for the
Constituent Companies
Exhibit F - Form of Joinder Agreement
Exhibit G - Form of Additional Constituent Company Counsel Opinion
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Unitog Company
000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Unitog Rental Services, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Note Agreement
Re: $40,000,000 6.83% Senior Notes
Due October 31, 2005
Dated as of
October 15, 1995
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, Unitog Company, a Delaware corporation (the "Parent"),
and Unitog Rental Services, Inc., a California corporation ("Rental", together
with the Parent and Subsidiaries fulfilling the requirements of e5.18 after
the date hereof, being hereinafter collectively referred to as the
"Constituent Companies" and individually as a "Constituent Company"), jointly
and severally agree with you as follows:
Section 1. Description of Notes and Commitment;.
Section 1.1. Description of Notes;. The Constituent Companies will
authorize the issue and sale of $40,000,000 aggregate principal amount of
their 6.83% Senior Notes (the "Notes") to be dated the date of issue, to bear
interest from such date at the rate of 6.83% per annum, payable quarterly on
each January thirty-first, April thirtieth, July thirty-first and October
thirty-first in each year (commencing January 31, 1996) and at maturity and to
bear interest on overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the Overdue Rate after
the date due, whether by acceleration or otherwise, until paid, to be
expressed to mature on October 31, 2005, and to be substantially in the form
attached hereto as Exhibit A. Interest on the Notes shall be computed on the
basis of a 360-day year of twelve 30-day months. If any amount of principal,
premium or interest on or in respect of the Notes becomes due and payable on
any date which is not a Business Day, such amount shall be payable on the
immediately succeeding Business Day. The Notes are not subject to prepayment
or redemption at the option of the Constituent Companies prior to their
expressed maturity dates except on the terms and conditions and in the amounts
and with the premium, if any, set forth in e2 of this Agreement. The term
"Notes" as used herein shall include each Note delivered pursuant to this
Agreement. You are hereinafter sometimes referred to as the "Purchaser". The
terms which are capitalized herein shall have the meanings set forth in e8.1
unless the context shall otherwise require.
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Section 1.2. Commitment, Closing Date;. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Constituent Companies agree to issue and sell to
you, and you agree to purchase from the Constituent Companies, Notes in the
principal amount set forth opposite your name on Schedule I hereto at a price
of 100% of the principal amount thereof on the Closing Date hereafter
mentioned.
Delivery of the Notes will be made at the offices of Xxxxxxx and Xxxxxx,
000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, against payment therefor in
Federal Reserve or other funds current and immediately available at United
Missouri Bank, Kansas City, Missouri, ABA #000000000, Acct. #9870515318 in the
amount of the purchase price at 10:30 A.M., New York, New York time, on
October 31, 1995 or such later date (not later than November 1, 1995) as shall
mutually be agreed upon by the Constituent Companies and the Purchaser (the
"Closing Date"). The Notes delivered to you on the Closing Date will be
delivered to you in the form of a single registered Note in the form attached
hereto as Exhibit A for the full amount of your purchase (unless different
denominations are specified by you), registered in your name or in the name of
such nominee, as may be specified in Schedule I attached hereto and in
substantially the form attached hereto as Exhibit A.
Section 1.3. Interest Rate Adjustment;. (a) If for any reason whatsoever
on January 26, 1997, the ratio of Consolidated Specified Indebtedness to the
sum of (i) Consolidated Specified Indebtedness plus (ii) Consolidated
Stockholders' Equity exceeds 0.45 to 1.0, the Notes shall bear interest at the
rate of 6.88% per annum from and after January 26, 1997.
(b) Within one hundred twenty (120) days following January 26, 1997 the
Constituent Companies shall notify the holders of the Notes in writing, sent
in the manner provided in e9.6, of their failure to meet such requirement as
provided in e1.3(a) or of their ability to meet said requirement, which
written notice shall be accompanied by a certificate of a Responsible Officer
of each Constituent Company reasonably satisfactory to the holders of the
Notes, setting forth in sufficient detail the computation of the calculation
described in e1.3(a), and certifying the interest rate to be payable in
respect of the Notes in consequence thereof from and after January 26, 1997.
In the event that the interest rate borne by the Notes is adjusted pursuant
to this e1.3 on and as of January 26, 1997, the Constituent Companies shall on
the first Interest Payment Date following the delivery of the notice required
by this e1.3(b) pay to the holders of the Notes the accrued but unpaid
interest from January 26, 1997 to the Interest Payment Date immediately
preceding the date of delivery of such notice.
Section 2. Prepayment of Notes;.
Section 2.1. Required Prepayments;. In addition to paying the entire
outstanding principal amount and the interest due on the Notes on the maturity
date thereof, the Constituent Companies agree that on the thirtieth day of
April and the thirty-first day of October in each year, commencing October 31,
1999 and ending April 30, 2005, both inclusive, it will prepay and apply and
there shall become due and payable on the principal indebtedness evidenced by
the Notes an amount equal to the following:
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Date of Required Payment Principal Amount of
Required Prepayment
October 31, 1999 $3,076,920
April 30, 2000 $3,076,920
October 31, 2000 $3,076,920
April 30, 2001 $3,076,920
October 31, 2001 $3,076,920
April 30, 2002 $3,076,920
October 31, 2002 $3,076,920
April 30, 2003 $3,076,920
October 31, 2003 $3,076,920
April 30, 2004 $3,076,920
October 31, 2004 $3,076,920
April 30, 2005 $3,076,920
The entire remaining principal amount of the Notes shall become due and
payable on October 31, 2005. No premium shall be payable in connection with
any required prepayment made pursuant to this e2.1.
In the event that the Constituent Companies shall prepay less than all of
the Notes pursuant to e2.2 hereof, the amounts of the prepayments required by
this e2.1 shall be reduced by an amount which is the same percentage of such
required prepayment as the percentage that the principal amount of Notes
prepaid pursuant to e2.2 is of the aggregate principal amount of outstanding
Notes immediately prior to such prepayment.
c2.Section 2.2. Optional Prepayment With Premium;. In addition to the
payments required by e2.1, upon compliance with e2.3, the Constituent
Companies shall have the privilege at any time and from time to time of
prepaying the outstanding Notes, either in whole or in part (but if in part
then in a minimum principal amount of $1,000,000 and in multiples of $100,000)
by payment of the principal amount of the Notes, or portion thereof to be
prepaid, and accrued interest thereon to the date of such prepayment, together
with a premium equal to the Make-Whole Amount, determined as of two Business
Days prior to the date of such prepayment pursuant to this e2.2.
c2.Section 2.3. Notice of Optional Prepayments;. The Constituent Companies
will give written notice of any prepayment of the Notes pursuant to e2.2 to
each holder thereof not less than 30 days nor more than 60 days before the
date fixed for such optional prepayment specifying (a) such date, (b) the
principal amount of the holder's Notes to be prepaid on such date, (c) that a
premium may be payable, (d) the date when such premium will be calculated and
the name of the Computing Holder to make such calculation, and (e) the accrued
interest applicable to the prepayment. Such notice of prepayment shall also
certify all facts, if any, which are conditions precedent to any such
prepayment. The notice to the Computing Holder shall set forth in addition to
the foregoing information the names and addresses of, and the respective
principal amounts of the Notes held by, the other holders of the Notes.
Notice of prepayment having been so given, the aggregate principal amount of
the Notes specified in such notice, together with accrued interest thereon and
the premium, if any, payable with respect thereto shall become due and
payable on the prepayment date specified in said notice. The Computing Holder
shall give written notice by facsimile communication to the Parent and each
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other holder of the Notes, on the second Business Day preceding the date for
such prepayment, of the amount of the Make-Whole Amount in respect of the
Notes held by it and such other holders, which notice shall set forth in
reasonable detail the computation thereof. The Make-Whole Amount set forth in
such notice shall be binding on the Constituent Companies and each other
holder of the Notes absent manifest error.
c2.Section 2.4. Application of Prepayments;. All partial prepayments shall
be applied on all outstanding Notes ratably in accordance with the unpaid
principal amounts thereof.
c2.Section 2.5. Direct Payment;. Notwithstanding anything to the contrary
contained in this Agreement or the Notes, in the case of any Note owned by you
or your nominee or owned by any subsequent Institutional Holder which has
given written notice to the Constituent Companies requesting that the
provisions of this e2.5 shall apply, the Constituent Companies will punctually
pay when due the principal thereof, interest thereon and premium, if any, due
with respect to said principal, without any presentment thereof, directly to
you, to your nominee or to such subsequent Institutional Holder at your
address or your nominee's address set forth in Schedule I hereto or such other
address as you, your nominee or such subsequent Institutional Holder may from
time to time designate in writing to the Constituent Companies or, if a bank
account with a United States bank is designated for you or your nominee on
Schedule I hereto or in any written notice to the Constituent Companies from
you, from your nominee or from any such subsequent Institutional Holder, the
Constituent Companies will make such payments in immediately available funds
to such bank account, no later than 12:00 p.m. New York, New York, time on the
date due, marked for attention as indicated, or in such other manner or to
such other account in any United States bank as you, your nominee or any such
subsequent Institutional Holder may from time to time direct in writing. If
for any reason whatsoever the Constituent Companies do not make any such
payment by such 12:00 p.m. transmittal time, such payment shall be deemed to
have been made on the next following Business Day and such payment shall bear
interest at the Overdue Rate as provided herein.
Section 3. Representations;.
c2.Section 3.1. Representations of the Constituent Companies;. Each of the
Constituent Companies represents and warrants that all representations and
warranties set forth in Exhibit B are true and correct as of the date hereof
and are incorporated herein by reference with the same force and effect as
though herein set forth in full.
c2.Section 3.2. Representations of the Purchaser;. (a) You represent, and
in entering into this Agreement the Constituent Companies understand, that you
are acquiring the Notes for the purpose of investment and not with a view to
the distribution thereof, and that you have no present intention of selling,
negotiating or otherwise disposing of the Notes; it being understood, however,
that the disposition of your property shall at all times be and remain within
your control.
(b) You further represent that the source of funds to be used by you to
purchase the Notes is an "insurance company general account" within the
meaning of Department of Labor Prohibited Transaction Exemption ("PTE") 95-60
(issued July 12, 1995) and the purchase of the Notes by you is eligible for
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and satisfies the requirements of PTE 95-60.
Section 4. Closing Conditions;.
c2.Section 4.1. Conditions;. Your obligation to purchase the Notes on the
Closing Date shall be subject to the performance by the Constituent Companies
of their agreements hereunder which by the terms hereof are to be performed at
or prior to the time of delivery of the Notes and to the following further
conditions precedent:
(a) Closing Certificate. You shall have received a certificate dated
the Closing Date, signed by the President or a Vice President of each of the
Constituent Companies, the truth and accuracy of which shall be a condition to
your obligation to purchase the Notes proposed to be sold to you and to the
effect that (1) the representations and warranties of the Constituent
Companies set forth in Exhibit B hereto are true and correct on and with
respect to the Closing Date, (2) the Constituent Companies have performed all
of their obligations hereunder which are to be performed on or prior to the
Closing Date, and (3) no Default or Event of Default has occurred and is
continuing.
(b) Legal Opinions; Expenses. You shall have received from Xxxxxxx and
Xxxxxx, who are acting as your special counsel in this transaction, from Xxxxx
Xxxx, outside counsel for the Constituent Companies, and from Xxxxxx X.
Xxxxxx, Esq., Vice President and General Counsel for the Constituent
Companies, their respective opinions dated the Closing Date, in form and
substance satisfactory to you, and covering the matters set forth in Exhibits
C, D and E, respectively, hereto. The reasonable fees and expenses of Xxxxxxx
and Xxxxxx shall be paid on the Closing Date by the Constituent Companies.
(c) Constituent Companies' Existence and Authority. On or prior to the
Closing Date, you shall have received, in form and substance reasonably
satisfactory to you and your special counsel, such documents and evidence with
respect to the Constituent Companies as you may reasonably request in order to
establish the existence and good standing of each of the Constituent Companies
and the authorization of the transactions contemplated by this Agreement.
(d) Related Transactions. The Constituent Companies shall have
consummated the sale of the entire principal amount of the Notes scheduled to
be sold on the Closing Date pursuant to this Agreement.
(e) Private Placement Number. On or prior to the Closing Date, special
counsel to the Purchaser shall have duly made the appropriate filings with
Standard & Poor's CUSIP Service Bureau, as agent for the National Association
of Insurance Commissioners, in order to obtain a private placement number for
the Notes.
(f) Funding Instructions. You shall have received written
instructions executed by a Responsible Officer of the Parent directing the
manner of the payment of funds and setting forth (1) the name of the
transferee bank, (2) such transferee bank's ABA number, (3) the account name
and number into which the purchase price for the Notes is to be deposited, and
(4) the name and telephone number of the account representative responsible
for verifying receipt of such funds.
(g) Legality of Investment. The Notes to be purchased by you shall be a
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legal investment for you under the laws of each jurisdiction to which you may
be subject (without resort to any so-called "basket provisions" to such laws).
(h) Purchase Permitted by Applicable Laws. The purchase of and payment
for the Notes to be purchased by you on the Closing Date on the terms and
conditions herein provided (including the use of the proceeds of the Notes by
the Constituent Companies and their Subsidiaries) shall not violate any
applicable law or governmental regulation (including, without limitation,
Regulations G, T and X of the Board of Governors of the Federal Reserve
System) and shall not subject you to any tax, penalty, liability or other
onerous condition under or pursuant to any applicable law or governmental
regulation relating to the extension of credit, and you shall have received
such certificates or other evidence as you may request to establish compliance
with this condition.
(i) Environmental Information. You shall have received such available
information regarding environmental matters reasonably requested by you or
your special counsel.
(j) Satisfactory Proceedings. All proceedings taken in connection with
the transactions contemplated by this Agreement, and all documents necessary
to the consummation thereof, shall be satisfactory in form and substance to
you and your special counsel, and you shall have received a copy (executed or
certified as may be appropriate) of all legal documents or proceedings taken
in connection with the consummation of said transactions.
c2.Section 4.2. Waiver of Conditions;. If on the Closing Date the
Constituent Companies fail to tender to you the Notes to be issued to you on
such date or if the conditions specified in e4.1 have not been fulfilled, you
may thereupon elect to be relieved of all further obligations under this
Agreement. Without limiting the foregoing, if the conditions specified in
e4.1 have not been fulfilled, you may waive compliance by the Constituent
Companies with any such condition to such extent as you may in your sole
discretion determine. Nothing in this e4.2 shall operate to relieve the
Constituent Companies of any of their obligations hereunder or to waive any of
your rights against the Constituent Companies.
Section 5. Constituent Company Covenants;.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
c2.Section 5.1. Corporate Existence, Etc;. (a) Each of the Constituent\
Companies will preserve and keep in full force and effect its corporate
existence, provided that the foregoing shall not prevent any transaction
permitted by e5.13. Each of the Constituent Companies will preserve and keep
in full force and effect all licenses and permits necessary to the proper
conduct of its business, the failure of which to preserve and keep would be
reasonably likely to materially and adversely affect the properties, business,
prospects or financial condition of the Parent and its Subsidiaries taken as a
whole.
(b) Each of the Constituent Companies will cause each of its
Subsidiaries to preserve and keep in full force and effect such Subsidiary's
corporate existence and all licenses and permits necessary to the proper
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conduct of its business the failure of which to preserve and keep such
corporate existence or licenses and permits would be reasonably likely to
materially and adversely affect the properties, business, prospects or
financial condition of the Parent and its Subsidiaries taken as a whole,
provided that the foregoing shall not prevent any transaction permitted by
e5.13.
c2.Section 5.2. Insurance;. Each of the Constituent Companies will
maintain, and will cause each of its Subsidiaries to maintain, insurance
coverage by financially sound and reputable insurers and in such forms and
amounts and against such risks as are customary for corporations of
established reputation engaged in the same or a similar business and owning
and operating similar properties.
c2.'Section 5.3. Taxes, Claims for Labor and Materials; Compliance with
Laws';. (a) Each of the Constituent Companies will promptly pay and
discharge, and will cause each of its Subsidiaries promptly to pay and
discharge, all lawful taxes, assessments and governmental charges or levies
imposed upon such Constituent Company or such Subsidiaries, respectively, or
upon or in respect of all or any part of the property or business of
such Constituent Company or such Subsidiaries, all trade accounts payable in
accordance with usual and customary business terms, and all claims for work,
labor or materials, which if unpaid might become a Lien upon any property of
such Constituent Company or such Subsidiaries; provided that no Constituent
Company nor any Subsidiary shall be required to pay any such tax, assessment,
charge, levy, account payable or claim if (1) the validity, applicability or
amount thereof is being contested in good faith by appropriate actions or
proceedings which will prevent the forfeiture or sale of any property of such
Constituent Company or such Subsidiary or any material interference with the
use thereof by such Constituent Company or such Subsidiary, and (2) such
Constituent Company or such Subsidiary shall set aside on its books, reserves
deemed by it to be adequate with respect thereto.
(b) Each of the Constituent Companies will promptly comply and will
cause each of its Subsidiaries to comply with all laws, ordinances or
overnmental rules and regulations to which it is subject, including, without
limitation, the Occupational Safety and Health Act of 1970, as amended, ERISA
and all Environmental Laws, the violation of which would be reasonably likely
to materially and adversely affect the properties, business, prospects, or
financial condition of the Parent and its Subsidiaries taken as a whole.
c2.Section 5.4. Maintenance, Etc;. Each of the Constituent Companies will
maintain, preserve and keep, and will cause each of its Subsidiaries to
maintain, preserve and keep, its properties which are used or useful in the
conduct of its business (whether owned in fee or a leasehold interest) in good
repair and working order and from time to time will make all necessary
repairs, replacements, renewals and additions so that such properties are
suitable for the operation of its business.
c2.Section 5.5. Nature of Business;. None of the Constituent Companies nor
any Subsidiary will engage in any business if, as a result, the general nature
of the business, taken on a consolidated basis, which would then be engaged in
by the Constituent Companies and their Subsidiaries would be substantially
changed from the general nature of the business engaged in by the Constituent
Companies and their Subsidiaries on the date of this Agreement.
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c2.Section 5.6. Current Ratio;. The Parent will at all times keep and
maintain the ratio of Consolidated Current Assets to Consolidated Current
Liabilities at not less than 1.25 to 1.00.
c2.Section 5.7. Consolidated Stockholders' Equity;. The Parent will at all
times keep and maintain Consolidated Stockholders' Equity at an amount not
less than the sum of (a) $48,000,000 plus (b) 50% of Consolidated Net Earnings
for each fiscal quarter ending after August 1, 1993 and prior to the date of
determination thereof computed on a cumulative basis, provided that for
purposes of the foregoing calculation, Consolidated Net Earnings shall be
deemed to be zero for any fiscal quarter period for which Consolidated Net
Earnings is less than or equal to zero.
c2.Section 5.8. Fixed Charges Coverage Ratio;. The Parent will keep and
maintain as of the end of each fiscal quarter of the Parent the ratio of Net
Earnings Available for Fixed Charges to Fixed Charges for the period of four
consecutive fiscal quarters then ending at not less than 2.00 to 1.00.
c2.Section 5.9. Limitations on Indebtedness;. (a) The Parent will at all
times keep and maintain the ratio of Consolidated Funded Debt to Consolidated
Total Capitalization at not more than 0.6 to 1.0.
(b) The Parent will at all times keep and maintain the ratio of
Consolidated Specified Indebtedness to Consolidated Stockholders' Equity at
not more than 2.5 to 1.0.
(c) The Parent and its Subsidiaries will not create, assume, guarantee
or otherwise incur or in any manner be or become liable in respect of any
Indebtedness secured by Liens permitted by e5.10(l), unless at the time of
creation, issuance, assumption, guarantee or incurrence thereof and after
giving effect thereto and to the application of the proceeds thereof the sum
of (1) all Indebtedness of the Parent and its Subsidiaries secured by Liens
permitted by e5.10(l) plus (2) all Specified Indebtedness incurred by
Non-Obligor Subsidiaries pursuant to e5.9(d)(6) (other than Specified
Indebtedness of such Non-Obligor Subsidiary which is included in clause (1)
immediately above) shall not exceed:
(i) 15% of Consolidated Stockholders' Equity, at any time prior to the
release of the Lincoln National Liens; and
(ii) 25% of Consolidated Stockholders' Equity, at all times after the
release of the Lincoln National Liens.
(d) The Constituent Companies will not permit any Non-Obligor Subsidiary
to, create, assume, guarantee or otherwise incur or in any manner be or become
liable in respect of any Specified Indebtedness, except:
(1) Capitalized Leases entered into the normal and ordinary course of
the business of such Non-Obligor Subsidiary;
(2) Specified Indebtedness owed to a Constituent Company or to a
Wholly-owned Subsidiary;
(3) Indebtedness in connection with or related to Industrial Development
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Bonds or a reimbursement obligation with respect to a letter of credit,
insurance or other credit enhancement securing such Industrial Development
Bonds;
(4) Specified Indebtedness assumed at the time of acquisition or purchase
of any business entity, so long as such Specified Indebtedness was not
incurred, extended or renewed in contemplation of such acquisition or
purchase;
(5) Specified Indebtedness secured by Liens permitted by e5.10 (a)
through (k); and
(6) Other Specified Indebtedness; provided that at the time of creation,
issuance, assumption, guarantee or incurrence thereof and after giving effect
thereto and to the application of the proceeds thereof the sum of (i) all
Specified Indebtedness incurred pursuant to this e5.9(d)(6) plus (ii) all
Indebtedness of the Parent and its Subsidiaries secured by Liens permitted by
e5.10(l) (other than Specified Indebtedness of a Non-Obligor Subsidiary which
is included in clause (i) immediately above) shall not exceed:
(A) 15% of Consolidated Stockholders' Equity, at any time prior to the
release of the Lincoln National Liens; and
(B) 25% of Consolidated Stockholders' Equity, at all times after the
release of the Lincoln National Liens.
(e) The renewal, extension or refunding of any Indebtedness secured by
Liens, Funded Debt or Specified Indebtedness, issued, incurred or outstanding
pursuant to this e5.9 shall constitute the issuance of additional Indebtedness
secured by Liens, Funded Debt or Specified Indebtedness which is, in turn,
subject to the limitations of the applicable provisions of this e5.9.
(f) Any corporation which becomes a Subsidiary after the date hereof
shall for all purposes of this e5.9 be deemed to have created, assumed or
incurred at the time it becomes a Subsidiary all Indebtedness secured by
Liens, Funded Debt or Specified Indebtedness of such corporation existing
immediately after it becomes a Subsidiary.
c2.Section 5.10. Limitation on Liens;. Each of the Constituent Companies
will not, and will not permit any of its Subsidiaries to, create or incur, or
suffer to be incurred or to exist, any Lien on its or their property or
assets, whether now owned or hereafter acquired, or upon any income or profits
therefrom, or transfer any property for the purpose of subjecting the same to
the payment of obligations in priority to the payment of its or their general
creditors, or acquire or agree to acquire, or permit any of its Subsidiaries
to acquire, any property or assets upon conditional sales agreements or other
title retention devices, except:
(a) Liens for property taxes and assessments or governmental charges or
levies, provided that payment thereof is not at the time required by e5.3;
(b) Liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in
respect of which a Constituent Company or Subsidiary shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in respect of
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which a stay of execution pending such appeal or proceeding for review shall
have been secured; provided in each case, such Constituent Company or
Subsidiary shall set aside on its books adequate reserves with respect
thereto;
(c) Liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall have expired; provided that
the aggregate amount of such judgments or awards shall not exceed $10,000,000
in the aggregate at any one time outstanding and each such judgment and award
shall be discharged within 60 days of the creation thereof;
(d) Liens incidental to the conduct of business or the ownership of
properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws, warehousemen's,
carrier's and attorneys' liens and statutory landlords' liens), Liens securing
claims or demands of mechanics, workmen, repairmen and materialmen, and Liens
to secure the performance of bids, tenders or trade contracts, or to secure
statutory obligations, surety or appeal bonds or other Liens of like general
nature, in any such case incurred in the ordinary course of business and not
in connection with the borrowing of money and which do not in the aggregate
materially impair the use of any property which is material to the business
and operations of the Parent and its Subsidiaries, taken as a whole, provided
in each case, the obligation secured is not overdue or, if overdue, is being
contested in good faith by appropriate actions or proceedings and such
Constituent Company or Subsidiary, as the case may be, shall have set aside on
its books adequate reserves with respect thereto;
(e) Survey exceptions or encumbrances, easements or reservations,
covenants, conditions, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use of real
properties, which do not individually or in the aggregate materially impair
the use of properties which are material to the operation of the business of
the Parent and its Subsidiaries taken as a whole;
(f) Liens securing Indebtedness of a Subsidiary to any Constituent
Company or to another Wholly-owned Subsidiary;
(g) the Lincoln National Liens;
(h) 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;
(i) Liens existing as of the Closing Date and described on Schedule II
hereto;
(j) Liens created or incurred after the Closing Date given to secure the
payment of the purchase price incurred in connection with the acquisition or
construction of fixed assets useful and intended to be used in carrying on the
business of a Constituent Company or a Subsidiary, including Liens in
connection with Capitalized Leases and Liens existing on fixed assets at the
time of acquisition or construction thereof or at the time of acquisition by
such Constituent Company or Subsidiary of any business entity then owning such
fixed assets, whether or not such existing Liens were given to secure the
consideration for the fixed assets to which they attach so long as they were
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not incurred, extended or renewed in contemplation of such acquisition,
provided that (1) the Lien shall attach solely to the fixed assets acquired or
constructed and, if required by the terms of the instrument originally
creating such Lien, other property which after the Closing Date is an
improvement to or is acquired for specific use in connection with such fixed
asset which is the subject of such Lien; (2) such Lien shall have been created
or incurred within 360 days of the date of acquisition or construction, (3) at
the time of acquisition or construction of such fixed assets, the aggregate
amount remaining unpaid on all Indebtedness secured by Liens on such fixed
assets, whether or not assumed by such Constituent Company or Subsidiary,
shall not exceed an amount equal to 100% of the fair market value at the time
of acquisition or construction of such fixed assets (as determined in good
faith by the Board of Directors of such Constituent Company or Subsidiary),
(4) in the case of the creation or incurrence of any Capitalized Lease, the
fixed asset which is the subject thereof if previously owned by a Constituent
Company or Subsidiary shall have been sold or otherwise disposed of within the
limitations provided in e5.13(b)(2), and (5) all such Indebtedness shall have
been incurred within the applicable limitations provided in e5.9;
(k) leases or subleases of property owned by any Constituent Company or
Subsidiary wherein such Constituent Company or Subsidiary is the lessor
thereunder; provided that any such lease is entered into within the applicable
limitations of e5.13(b); and
(l) Liens created or incurred after the Closing Date given to secure
Indebtedness of the Parent or any of its Subsidiaries in addition to the Liens
permitted by the preceding clauses (a) through (k) hereof, provided that all
Indebtedness secured by such Liens shall have been incurred within the
applicable limitations provided in e5.9.
c2.Section 5.11. Restricted Payments;. (a) None of the Constituent
Companies will except as hereinafter provided:
(1) Declare or pay any dividends, either in cash or property, on any
shares of its capital stock (excluding, without limitation, Specified
Preferred Stock) of any class (except dividends or other distributions which
are payable only to another Constituent Company or are payable solely in
shares of capital stock (other than in shares of Specified Preferred Stock));
(2) Directly or indirectly, or through any Subsidiary or through any
Affiliate of such Constituent Company, purchase, redeem or retire any shares
of its capital stock of any class or any warrants, rights or options to
purchase or acquire any shares of its capital stock; provided that Rental may
purchase, redeem or retire any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of capital stock
owned by the Parent; or
(3) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock (other
than in respect of Specified Preferred Stock), except to another Constituent
Company;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such
other payments or distributions being herein collectively called "Restricted
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Payments"), if after giving effect thereto the aggregate amount of Restricted
Payments made during the period after August 1, 1993 to and including the date
of the making of the Restricted Payment in question by all of the Constituent
Companies would exceed the sum of (i) $14,000,000 plus (ii) 50% of
Consolidated Net Earnings for such period, computed on a cumulative basis for
said entire period (or if such Consolidated Net Earnings is a negative figure,
then minus 100% of such negative figure), plus (iii) the aggregate amount of
net cash proceeds received by the Constituent Companies from the issue or sale
of shares of capital stock (including the re-issuance of treasury stock but
excluding the issuance of Specified Preferred Stock) of Constituent Companies
during such period to Persons other than a Constituent Company or a
Subsidiary.
(b) The Constituent Companies will not declare any dividend which
constitutes a Restricted Payment payable more than 60 days after the date of
declaration thereof.
(c) For the purposes of this e5.11, the amount of any Restricted Payment
declared, paid or distributed in property shall be deemed to be the greater of
the book value or fair market value (as determined in good faith by the Board
of Directors of the relevant Constituent Company) of such property at the time
of the making of the Restricted Payment in question.
(d) The Constituent Companies will not authorize or make a Restricted
Payment if after giving effect to the proposed Restricted Payment a Default or
Event of Default would exist.
c2.Section 5.12. Investments;. Each of the Constituent Companies will
not, and will not permit any of its Subsidiaries to, make any Investments,
other than:
(a) Investments in and to Subsidiaries, including any Investment in a
corporation which, after giving effect to such Investment, will become a
Subsidiary;
(b) Investments in commercial paper maturing in 270 days or less from
the date of issuance which, at the time of acquisition by the Constituent
Companies or any Subsidiary, is accorded a rating of "A-1+" by Standard &
Poor's Corporation or "P-1" by Xxxxx'x Investors Service, Inc.;
(c) Investments in direct obligations of the United States of America or
any agency or instrumentality of the United States of America, the payment or
guarantee of which constitutes a full faith and credit obligation of the
United States of America, in either case, maturing in twelve months or less
from the date of acquisition thereof;
(d) Investments in certificates of deposit maturing within one year
from the date of issuance thereof, issued by a bank or trust company organized
under the laws of the United States or any state thereof, having capital,
surplus and undivided profits aggregating at least $100,000,000 and rated "B+"
or better by Sheshunoff Information Services, Inc.;
(e) Investments in money market mutual funds investing in Securities
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described in clauses (b), (c) or (d) of this e5.12 which in any such case
would be classified as a current asset in accordance with GAAP and which are
managed by a fund manager having at least $2,500,000,000 under management;
(f) Investments in (i) Federally tax-exempt municipal Securities
maturing in twelve months or less from the date of acquisition by the
Constituent Companies or any Subsidiary thereof and which, at the time of
acquisition, are rated "A" or better by Standard & Poor's Corporation or "A2"
or better by Xxxxx'x Investors Service, Inc.; or (ii) mutual funds or
investment trusts investing in Federally tax-exempt municipal Securities
which, at the time of acquisition by the Constituent Companies or any
Subsidiary thereto, are rated "A" or better by Standard & Poor's Corporation
or "A2" or better by Xxxxx'x Investors Service, Inc.; provided that (1) such
Investment is a marketable and highly liquid Investment as evidenced by the
general trading of such Investment on an established financial market; (2) the
ability of the Constituent Companies to purchase and sell such Investment
shall not be contractually restricted in any manner; (3) the original amount
of such Investment shall not be subject to any risk whatsoever as represented
by such mutual fund or investment trust other than the bankruptcy of such
mutual fund or investment trust; (4) the fund or trust is managed by a manager
having at least $2,500,000,000 under management; and (5) such Investment shall
not exceed a term of 60 days;
(g) Investments in money market preferred stock rated "A" or better by
Standard & Poor's Corporation or "A2" or better by Xxxxx Investors Service,
Inc.; and
(h) Other Investments (in addition to those permitted by the foregoing
provisions of this e5.12), provided that (1) all such other Investments shall
not at any time exceed 20% of Total Assets and (2) after giving effect to such
other Investments, no Default or Event of Default shall have occurred and be
continuing.
In valuing any Investments for the purpose of applying the limitations
set forth in this e5.12, such Investments shall be taken at the book value
thereof.
For purposes of this e5.12, at any time when a corporation becomes a
Subsidiary, all Investments of such corporation at such time shall be deemed
to have been made by such corporation, as a Subsidiary, at such time. Any
continuing Investment by any Constituent Company or Subsidiary in any entity
which ceases to be a Subsidiary pursuant to a merger or consolidation under
e5.13(a)(4) or a sale or other disposition of Subsidiary Stock under e5.13(c)
shall be deemed to be incurred by the relevant Constituent Company or
Subsidiary on the date such entity ceases to be a Subsidiary and shall be
subject to the limitations of this e5.12.
c2.Section 5.13. Mergers, Consolidations and Sales of Assets;. (a) Each
of the Constituent Companies will not, and will not permit any of its
Subsidiaries to, consolidate with or be a party to a merger with any other
corporation, or sell, lease or otherwise dispose of all or substantially all of
its assets; provided that:
(1) any Subsidiary may merge or consolidate with or into any of the
Constituent Companies or any Wholly-owned Subsidiary and any Constituent
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Company may merge or consolidate with or into any other Constituent Company,
so long as in any merger or consolidation involving a Constituent Company, a
Constituent Company shall be the surviving or continuing corporation;
(2) the Parent may consolidate or merge with any other corporation if
(i) the corporation which results from such merger or consolidation (the
"surviving corporation") is the Parent or (ii) (A) greater than 50% of the
Voting Stock of the surviving corporation is owned and continues for one year
thereafter to be owned by a Specified Group, (B) the surviving corporation is
organized under the laws of any State of the United States or the District of
Columbia, (C) the due and punctual payment of the principal of and premium, if
any, and interest on all of the Notes, according to their tenor, and the due
and punctual performance and observation of all of the covenants in the Notes
and this Agreement to be performed or observed by the Parent are expressly
assumed in writing by the surviving corporation and the surviving corporation
shall furnish the holders of the Notes an opinion of counsel satisfactory to
such holders to the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal, valid and
binding contract and agreement of the surviving corporation enforceable in
accordance with its terms, except as enforcement of such terms may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles, and (D) at the time of such consolidation or merger and
immediately after giving effect thereto, no Default or Event of Default would
exist;
(3) the Parent may sell or otherwise dispose of all or substantially all
of its assets to any Person for consideration which represents the fair market
value at the time of such sale or other disposition if (i) greater than 50% of
the Voting Stock of the acquiring Person is owned and continues for one year
thereafter to be owned by a Specified Group, (ii) the surviving corporation is
a corporation organized under the laws of any State of the United States or
District of Columbia, (iii) the due and punctual payment of the principal of
and premium, if any, and interest on all the Notes, according to their tenor,
and the due and punctual performance and observance of all of the covenants in
the Notes and in this Agreement to be performed or observed by the Parent are
expressly assumed in writing by the acquiring corporation and the acquiring
corporation shall furnish the holders of the Notes an opinion of counsel
satisfactory to such holders to the effect that the instrument of assumption
has been duly authorized, executed and delivered and constitutes the legal,
valid and binding contract and agreement of such acquiring corporation
enforceable in accordance with its terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles, and (iv) at the time of such sale or disposition
and immediately after giving effect thereto, no Default or Event of Default
would exist;
(4) any Non-Obligor Subsidiary may merge or consolidate with or into any
other corporation, provided in the case of any such merger or consolidation
which transaction shall include a sale, transfer or other disposition by the
Parent and/or its Subsidiaries of any shares of stock of such Non-Obligor
Subsidiary, such disposition of shares of stock shall be subject to the
limitations of, and the Assigned Value of such stock shall be included in the
computations set forth in, e5.13(b)(2);
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(5) any Non-Obligor Subsidiary may sell, lease or otherwise dispose of
all or substantially all of its assets to any of the Constituent Companies or
any Wholly-owned Subsidiary;
(6) (x) any Non-Obligor Subsidiary may sell, lease or otherwise dispose
of all or substantially all of its assets to a Person or Persons (other than a
Constituent Company or a Wholly-owned Subsidiary and other than to a Special
Subsidiary pursuant to and in accordance with the terms of clause (y) below),
provided that such sale, lease or other disposition shall be subject to the
limitations of, and the net book value of such assets shall be included in the
computations set forth in, e5.13(b)(2) and (y) any Non-Obligor Subsidiary may
sell, lease or otherwise dispose of all or substantially all of its assets to
a Special Subsidiary, provided that such sale, lease or other disposition
shall be subject to the limitations of, and the Stipulated Value of such
assets shall be included in the computations set forth in, e5.13(b)(2);
(7) any other corporation may consolidate into or merge into Rental if
(i) the surviving or continuing corporation is Rental, (ii) at the time of
such consolidation or merger and immediately after giving effect thereto, no
Default or Event of Default would exist, (iii) immediately after giving effect
to such consolidation or merger the Parent shall continue to own 100% of the
stock of Rental, and (iv) all Indebtedness, Liens and Investments of such
corporation shall be deemed to be created, assumed or incurred by Rental at
the time of such consolidation or merger; and
(8) the Constituent Companies may sell or otherwise dispose of or cause
its Subsidiaries to sell or otherwise dispose of the wiping cloth business
acquired pursuant to the Ace-Tex Acquisition; provided, that such sale or
disposition is completed within thirty (30) days of the Ace-Tex Acquisition
(the "Permitted Ace-Tex Disposition").
Computations deemed made pursuant to e5.13(a)(4) and (a)(6) shall include
dispositions made pursuant to e5.13(b)(2) and e5.13(c)(3) and computations
pursuant to e5.13(b)(2) and e5.13(c)(3) shall include dispositions deemed made
pursuant to e5.13(a)(4) and (a)(6).
(b) Each of the Constituent Companies will not, and will not permit any
of its Subsidiaries to, sell, lease, transfer, abandon or otherwise dispose
of, assets (except assets sold, leased, transferred, abandoned or otherwise
disposed of in the ordinary course of business for fair market value (provided
that such fair market value requirement shall not be applicable to assets
sold, leased, transferred or otherwise disposed of to the Parent or a
Subsidiary in the ordinary course of business) and except as provided in
e5.13(a)(3)); provided that the foregoing restrictions do not apply to:
(1) (i) the sale, lease, transfer or other disposition of assets of a
Constituent Company to another Constituent Company or of a Non-Obligor
Subsidiary to any of the Constituent Companies or a Wholly-Owned Subsidiary and
(ii) the Permitted Ace-Tex Disposition; or
(2) the sale, lease, transfer or other disposition of such assets for
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cash or other property (including the assumption of debt) to a Person or
Persons if all of the following conditions are met:
(i) such assets (valued at net book value) do not, together with
all other assets of the Constituent Companies and their Subsidiaries
previously disposed of during the immediately preceding 12 month period (other
than in the ordinary course of business or pursuant to e5.13(a)(3) or
e5.13(a)(5) or e5.13(b)(1)), including assets deemed disposed of pursuant to
e5.13(a)(4) and (a)(6), exceed 20% of Total Assets;
(ii) the sale is for fair value and is in the best interests of
such Constituent Company or Subsidiary, such determination of fair value to be
made in good faith by (x) a Responsible Officer of such Constituent Company or
Subsidiary if such assets have a presumptive fair value of less than
$5,000,000 or if such assets, when considered together with assets sold or to
be sold in any related sale or sales or have a presumptive fair value of less
than $5,000,000 in the aggregate or (y) under any other circumstance, by the
Board of Directors of the Constituent Company or Subsidiary; and
(iii) immediately after the consummation of the transaction and
after giving effect thereto, no Default or Event of Default would exist.
Computations pursuant to this e5.13(b)(2) shall include dispositions made
pursuant to e5.13(c)(3) and deemed made pursuant to e5.13(a)(4) and (a)(6) and
computations pursuant to e5.13(c)(3) shall include dispositions made pursuant
to this e5.13(b)(2) and deemed made pursuant to e5.13(a)(4) and (a)(6).
(c) Each of the Constituent Companies will not, and will not permit any
of its Subsidiaries to, sell, pledge or otherwise dispose of any shares of the
stock (including as "stock" for the purposes of this Section any options or
warrants to purchase stock or other Securities exchangeable for or convertible
into stock) of a Subsidiary (said stock, options, warrants and other
Securities herein called "Subsidiary Stock"), nor will any Subsidiary issue,
sell, pledge or otherwise dispose of any shares of its own Subsidiary Stock,
provided that the foregoing restrictions do not apply to:
(1) the issue of directors qualifying shares; or
(2) the issue of Subsidiary Stock to any of the Constituent Companies or
a Wholly-Owned Subsidiary; and
(3) the sale or other disposition of Subsidiary Stock in any Non-Obligor
Subsidiary if all of the following conditions are met:
(i) the Assigned Value of such Subsidiary Stock of such Non-Obligor
Subsidiary does not, together with all other Subsidiary Stock in Non-Obligor
Subsidiaries of the Constituent Companies and their Subsidiaries previously
disposed of during the immediately preceding 12-month period (other than in
the ordinary course of business or pursuant to e5.13(c)(1) or (c)(2)), exceed
20% of Total Assets;
(ii) the sale is for fair value and is in the best interests of
such Constituent Company or Subsidiary, such determination of fair value to be
made in good faith by (x) a Responsible Officer of such Constituent Company or
Subsidiary if such Subsidiary Stock has a presumptive fair value of less than
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$5,000,000 or if such Subsidiary Stock, when considered together with assets
sold or to be sold in any related sale or sales or has a presumptive fair
value of less than $5,000,000 in the aggregate or (y) under any other
circumstance, by the Board of Directors of such Constituent Company or
Subsidiary;
(iii) immediately after the consummation of the transaction and
after giving effect thereto, such Subsidiary shall have no Indebtedness of any
of the Constituent Companies or of any Subsidiary; and
(iv) immediately after the consummation of the transaction and
after giving effect thereto, no Default or Event of Default would exist.
Computations pursuant to this e5.13(c)(3) shall include dispositions made
pursuant to e5.13(b)(2) and deemed made pursuant to e5.13(a)(4) and (a)(6),
and computations pursuant to e5.13(b)(2) shall include dispositions made
pursuant to this e5.13(c)(3).
(d) Any Indebtedness of any Constituent Company or Subsidiary owed to
any entity which ceases to be a Subsidiary pursuant to merger or consolidation
under e5.13(a)(4) or a sale or other disposal of Subsidiary Stock under
e5.13(c) shall be deemed to be incurred by the relevant Constituent Company or
Subsidiary on the date such entity ceases to be a Subsidiary and shall be
subject to the limitations set forth in e5.9.
c2.Section 5.14. Repurchase of Notes;. None of the Constituent Companies
nor any Subsidiary, directly or indirectly, may repurchase or make any offer
to repurchase any Notes unless an offer has been made to repurchase Notes, pro
rata, from all holders of the Notes at the same time and upon the same terms.
In case any Constituent Companies or any Subsidiary repurchases or otherwise
acquires any Notes, such Notes shall immediately thereafter be canceled and
no Notes shall be issued in substitution therefor. Without limiting the
foregoing, upon the purchase or other acquisition of any Notes by any
Constituent Companies or Subsidiary, such Notes shall no longer be outstanding
for purposes of any section of this Agreement relating to the taking by the
holders of the Notes of any actions with respect hereto, including, without
limitation, e6.3, e6.4 and e7.1.
c2.Section 5.15. Transactions with Affiliates;. The Constituent Companies
will not, and will not permit any Subsidiary to, enter into or be a party to
any transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), unless such transaction or
arrangement is entered into pursuant to the reasonable requirements of such
Constituent Company's or such Restricted Subsidiary's business and upon fair
and reasonable terms no less favorable to such Constituent Company or such
Subsidiary than would obtain in a comparable arm's-length transaction with a
Person other than an Affiliate.
c2.Section 5.16. Multiemployer Plan Liability and Termination of Pension
Plans;. The Constituent Companies will not and will not permit any ERISA
Affiliate to withdraw from any Multiemployer Plan if such withdrawal could
result in withdrawal liability (as described in Part 1 of Subtitle E of Title
IV of ERISA) which would be reasonably likely to materially and adversely
affect the properties, business, prospects or financial condition of the
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Parent and its Subsidiaries taken as a whole. Each Constituent Company and
any ERISA Affiliate will not permit any employee benefit plan maintained by it
to be terminated if such termination would result in the imposition of a Lien
on any property of the Constituent Company or any ERISA Affiliate pursuant to
Section 4068 of ERISA.
c2.Section 5.17. Reports and Rights of Inspection;. Each of the
Constituent Companies will keep, and will cause each of its Subsidiaries to
keep, proper books of record and account in which full and correct entries
will be made of all dealings or transactions of, or in relation to, the
business and affairs of such Constituent Company or Subsidiary, in accordance
with GAAP consistently applied (except for changes disclosed in the financial
statements furnished to you pursuant to this e5.17 and concurred in by the
independent public accountants referred to in e5.17(b) hereof), and the Parent
will furnish to you so long as you are the holder of any Note and to each
other Institutional Holder of the then outstanding Notes (in duplicate if so
specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and in any event within
45 days after the end of each quarterly fiscal period (except the last) of the
Parent of each fiscal year, copies of:
(1) the consolidated balance sheets of the Parent and its
Subsidiaries as of the close of such quarterly fiscal period, setting forth in
comparative form the consolidated figures for the fiscal year then most
recently ended;
(2) the consolidated statements of earnings of the Parent and its
Subsidiaries for such quarterly fiscal period and for the portion of the
fiscal year ending with such quarterly fiscal period, in each case setting
forth in comparative form the consolidated figures for the corresponding
periods of the preceding fiscal year;
all in reasonable detail and certified by an authorized financial officer of
the Parent as being prepared in accordance with GAAP consistently applied and
as presenting fairly in all material respects the financial position of the
Parent and its Subsidiaries on a consolidated basis, provided that the Parent
may satisfy its requirements under this e5.17(a) by the delivery within the
time period described hereinabove of its quarterly reports on form 10-Q as
filed with the Securities and Exchange Commission;
(b) Annual Statements. As soon as available and in any event within 120
daysafter the close of each fiscal year of the Parent, copies of:
(1) the consolidated balance sheet of the Parent and its
Subsidiaries as of the close of such fiscal year, and (2) the
consolidated statement of earnings and retained earnings and cash flows of the
Parent and its Subsidiaries for such fiscal year, in each case setting forth
in comparative form the consolidated figures for the preceding fiscal year, all
in reasonable detail and accompanied by a report thereon of a firm of
independent public accountants of recognized national standing selected by the
Parent to the effect that the consolidated financial statements present fairly,
in all material respects, the
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consolidated financial position of the Parent and its Subsidiaries as of the
end of the fiscal year being reported on and the consolidated results of the
operations and cash flows for said year in conformity with GAAP and that the
examination of such accountants in connection with such financial statements
has been conducted in accordance with generally accepted auditing standards,
provided that the Parent may satisfy its requirements under this e5.17(b) by
the delivery within the time period described hereinabove of its annual
reports on form 10-K as filed with the Securities and Exchange Commission;
(c) Additional Statements and Reconciliation. Within the periods
provided in paragraphs (a) and (b) above, (1) such financial statements as are
required to be delivered pursuant to paragraphs (a) and (b) above prepared in
conformity with Frozen GAAP and (2) a statement in reasonable detail and
certified as complete and correct by an authorized financial officer of the
Parent reconciling the statements provided pursuant to paragraphs (a) and (b)
above and the statements delivered pursuant to this paragraph (c) and
providing a detailed explanation of the differences between the same;
(d) Annual Consolidating Schedules. As soon as available and in any
event within 120 days after the close of each fiscal year of the Parent copies
of the consolidating balance sheet and statement of earnings of the Parent and
its Subsidiaries for such fiscal year all in reasonable detail and certified
by an authorized financial officer of the Parent as being prepared in
accordance with GAAP consistently applied and as presenting fairly in all
material respects the financial position of the Parent and its Subsidiaries on
a consolidated basis;
(e) SEC and Other Reports. Promptly upon their becoming available, one
copy of each financial statement, report, notice or proxy statement sent by
the Parent to stockholders generally and of each regular or periodic report,
and any registration statement or prospectus filed by any Constituent Company
or any Subsidiary with any securities exchange or the Securities and Exchange
Commission or any successor agency, and copies of any orders in any
proceedings to which any Constituent Company or any Subsidiary is a party,
issued by any governmental agency, Federal or state, having jurisdiction over
such Constituent Company or Subsidiary, if such order could have a material
adverse effect on the properties, business, prospects or financial condition
of the Parent and its Subsidiaries taken as a whole;
(f) Officer's Certificates. Within the periods provided in paragraphs
(a) and (b) above, a certificate of the chief financial officer of the Parent
stating that such officer has reviewed the provisions of this Agreement and
setting forth: (1) the information and computations (in sufficient detail)
required in order to establish whether the Constituent Companies and their
Subsidiaries were in compliance with the requirements of e5.6 through e5.13 at
the end of the period covered by the financial statements then being
furnished, and (2) whether there existed as of the date of such financial
statements and whether, to the best of such officer's knowledge, there exists
on the date of the certificate or existed at any time during the period
covered by such financial statements any Default or Event of Default and, if
any such condition or event exists on the date of the certificate, specifying
the nature and period of existence thereof and the action the Constituent
Companies are taking and propose to take with respect thereto;
(g) Accountant's Certificates. Within the period provided in paragraph
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(b) above, (i) a certificate of the accountants who render an opinion with
respect to such financial statements, stating that they have reviewed this
Agreement and stating further whether, in making their audit, such accountants
have become aware of any Default or Event of Default under any of the terms or
provisions of this Agreement insofar as any such terms or provisions pertain
to or involve accounting matters or determinations, and if any such condition
or event then exists, specifying the nature and period of existence thereof
and (ii) a certificate of such accountants indicating that they have audited
the annual reconciliation of consolidated financial statements prepared in
accordance with Frozen GAAP to the consolidated financial statements prepared
in accordance with GAAP and in their opinion the adjustments made are
presented fairly in all material respects in accordance with this Agreement;
and
(h) Requested Information. With reasonable promptness, such other data
and information as you or any such Institutional Holder may reasonably
request.
Without limiting the foregoing, the Constituent Companies will permit you, so
long as you are the holder of any Note, and each Institutional Holder of 5% or
more of the aggregate principal amount of the Notes then outstanding (or such
Persons as either you or such Institutional Holder may reasonably designate),
to visit and inspect, under the Constituent Companies' guidance, any of the
properties of any Constituent Company or any Subsidiary, to examine all of
their books of account, records, reports and other papers, to make copies and
extracts therefrom and to discuss their respective affairs, finances and
accounts with their respective officers, employees, and, upon notification to
the Chief Financial Officer of the Parent, independent public accountants (and
by this provision each Constituent Company authorizes said accountants to
discuss with you the finances and affairs of such Constituent Company and
its Subsidiaries) all at such reasonable times and as often as may be
reasonably requested. Any visitation shall be at the sole expense of you or
such Institutional Holder, unless a Default or Event of Default shall have
occurred and be continuing or the holder of any Note or of any other evidence
of Indebtedness of the Constituent Companies or any Subsidiary gives any
written notice or takes any other action with respect to a claimed default, in
which case, any such visitation or inspection shall be at the sole expense of
the Constituent Companies.
c2.Section 5.18. Additional Constituent Companies;. Any Non-Obligor
Subsidiary may become a Constituent Company upon the delivery to all of the
holders of the Notes each of the following items:
(a) an executed Joinder Agreement in the form attached hereto as Exhibit
F;
(b) a certificate of the Secretary (or equivalent) of such Non-Obligor
Subsidiary certifying (1) the names and true signatures of the incumbent
officers of such Non-Obligor Subsidiary authorized to sign the Joinder
Agreement, (2) the By-Laws of such Non-Obligor Subsidiary as in effect on the
date of such certification, (3) the resolutions of such Non-Obligor
Subsidiary's Board of Directors approving and authorizing the execution,
delivery and performance of the Joinder Agreement, (4) that there has been no
change in the Articles of Incorporation (or equivalent) or By-Laws of such
Non-Obligor Subsidiary since the date of the review thereof by counsel
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providing the opinion described in clause (e) below, and (5) that such
Non-Obligor Subsidiary is in good standing in its state of incorporation and
in each other state in which it is qualified to do business;
(c) a good standing certificate or like certificate from the appropriate
governmental official of the jurisdiction of incorporation of such Non-Obligor
Subsidiary;
(d) the Articles of Incorporation (or equivalent) of such Non-Obligor
Subsidiary recently certified by the Secretary of State (or equivalent) of the
jurisdiction of incorporation of such Non-Obligor Subsidiary; and
(e) an opinion of counsel satisfactory to you in the form attached
hereto as Exhibit G.
Upon receipt by the holders of the Notes of all of the foregoing items
properly completed and duly executed, such Non-Obligor Subsidiary shall be
deemed to be a Constituent Company for the purposes hereof, subject to all of
the terms, conditions and provisions hereof and of each of the Notes as if it
were an original party hereto and thereto.
c2.Section 5.19. Contribution and Conveyance;. Each of the Constituent
Companies acknowledges that each of the other Constituent Companies 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. Each of the Constituent Companies further acknowledges that its joint
and several obligations under the Agreements is a necessary condition to the
Constituent Companies receiving any funds from the issue of the Notes.
Therefore, each of the Constituent Companies acknowledges and agrees that the
Notes are supported by adequate consideration and that each has received a
substantial benefit from the Notes, regardless of the amount of funds actually
received by such Constituent Company under the Agreements. In the event a
Constituent Company makes any payment under the Agreements which exceeds the
amount of funds actually received, directly or indirectly, by such Constituent
Company thereunder, such Constituent Company shall be entitled to contribution
and reimbursement from each of the other Constituent Companies, 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
Notes and until such recovery is made, such Constituent Company shall be
deemed subrogated to the rights and interests of the Purchasers under the
Agreements. 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 Purchasers under the Agreements and shall not
affect or impair in any way the joint, several, personal and unconditional
obligation of each Constituent Company to fully pay each of the Notes and to
perform all its other obligations under the Agreements.
c2.Section 5.20. Prohibition of Extension of the Lincoln National Liens;.
The Constituent Companies will not agree to any extension, renewal or
refunding of any lien securing the Lincoln National Indebtedness, whether or
not in connection with the extension, renewal or refunding of the Lincoln
National Indebtedness; provided that the Constituent Companies may substitute
collateral for the collateral securing the Lincoln National Indebtedness in
accordance with and pursuant to the terms of the Trust Indenture evidencing
the Lincoln National Indebtedness so long as the fair market value of such
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substitute collateral is similar to the fair market value of the collateral
being released with respect to the Lincoln National Indebtedness determined on
the date of such substitution (hereinafter referred to as the "Lincoln
National Liens").
c2.Section 5.21. Prohibition of Change in Fiscal Year;. The Constituent
Companies will not, and will not permit any of their Subsidiaries to, change
their fiscal year-ends for accounting purposes unless each Constituent Company
and Subsidiary concurrently changes its fiscal year end to the same date and
the Parent provides 60 days prior written notice of such change to each of the
holders of the Notes.
Section 6. Events of Default and Remedies Therefor;.
c2.Section 6.1. Events of Default;. Any one or more of the following
shall constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note when the
same shall have become due and such default shall continue for more than five
Business Days; or
(b) Default shall occur in the making of any required prepayment on any
of the Notes as provided in e2.1; or
(c) Default shall occur in the making of any other payment of the
principal of any Note or premium, if any, thereon at the expressed or any
accelerated maturity date or at any date fixed for prepayment; or
(d) Default shall occur in the observance or performance of any other
provision of this Agreement which is not remedied within 30 days after the
earlier of (1) the day on which any of the Constituent Companies first knows
of such default, or (2) the day on which written notice thereof is given to
the Constituent Companies by the holder of any Note; or
(e) Default or the happening of any event shall occur under any
indenture, agreement or other instrument under which any Indebtedness for
borrowed money of any Constituent Company or any Subsidiary (other than the
Notes) is outstanding in excess of the lesser of (1) 10% of Consolidated
Stockholders' Equity or (2) $10,000,000 and such default or event shall have
resulted in the acceleration of the maturity of such Indebtedness; or
(f) Any representation or warranty made by a Constituent Company
herein, or made by a Constituent Company in any written statement or
certificate furnished by such Constituent Company in connection with the
consummation of the issuance and delivery of the Notes or furnished by a
Constituent Company pursuant hereto, is untrue in any material respect as of
the date of the issuance or making thereof; or
(g) Final uninsured judgment or judgments for the payment of money
aggregating in excess of $10,000,000 is or are outstanding against the
Constituent Companies or their Subsidiaries or against any property or assets
of either and any one of such judgments has remained unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period of 60 days from the
date of its entry; or
(h) A custodian, liquidator, trustee or receiver is appointed for any
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Constituent Company or Subsidiary or for the major part of the property of
such Constituent Company or Subsidiary and is not discharged within 60 days
after such appointment; or
(i) Any Constituent Company or Subsidiary becomes insolvent or bankrupt,
is generally not paying its debts as they become due or makes an assignment
for the benefit of creditors, or any Constituent Company or Subsidiary applies
for or consents to the appointment of a custodian, liquidator, trustee or
receiver for such Constituent Company or Subsidiary or for the major part of
the property of such Constituent Company or Subsidiary; or
(j) Bankruptcy, reorganization, arrangement or insolvency proceedings,
or other proceedings for relief under any bankruptcy or similar law or laws
for the relief of debtors, are instituted by or against any of the Constituent
Companies or any Subsidiary and, if instituted against any of the Constituent
Companies or any Subsidiary, are consented to or are not dismissed within 60
days after such institution.
c2.Section 6.2. Notice to Holders;. When any Event of Default described in
the foregoing e6.1 has occurred, or if the holder of any Note or of any other
evidence of Indebtedness for borrowed money of the Constituent Companies gives
any notice or takes any other action with respect to a claimed default, the
Constituent Companies agree to give notice within three Business Days of such
event to all holders of the Notes then outstanding.
c2.Section 6.3. Acceleration of Maturities;. When any Event of Default
described in paragraph (a), (b) or (c) of e6.1 has happened and is continuing,
any holder of any Note may, by notice in writing sent in the manner provided
in e9.6 hereof to the Constituent Companies, declare the entire principal and
all interest accrued on such Note to be, and such Note shall thereupon become
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event
of Default described in paragraphs (a) through (g), inclusive, of said e6.1
has happened and is continuing, the holder or holders of greater than 50% of
the principal amount of Notes at the time outstanding may, by notice in
writing in the manner provided in e9.6 to the Constituent Companies, declare
the entire principal and all interest accrued on all Notes to be, and all
Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. When any Event of Default described in paragraph
(h), (i) or (j) of e6.1 has occurred, then all outstanding Notes shall
immediately become due and payable without presentment, demand or notice of
any kind. Upon the Notes becoming due and payable as a result of any Event of
Default as aforesaid, the Constituent Companies will forthwith pay to the
holders of the Notes the entire principal and interest accrued on the Notes
and, to the extent not prohibited by applicable law, an amount as liquidated
damages for the loss of the bargain evidenced hereby (and not as a penalty)
equal to the Make-Whole Amount, determined as of the date on which the Notes
shall so become due and payable. No course of dealing on the part of the
holder or holders of any Notes nor any delay or failure on the part of any
holder of Notes to exercise any right shall operate as a waiver of such right
or otherwise prejudice such holder's rights, powers and remedies. The
Constituent Companies further agree, to the extent permitted by law, to pay to
the holder or holders of the Notes all costs and expenses incurred by them in
the collection of any Notes upon any default hereunder or thereon, including
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reasonable compensation to such holder's or holders' attorneys for all
services rendered in connection therewith.
c2.Section 6.4. Rescission of Acceleration;. The provisions of e6.3 are
subject to the condition that if the principal of and accrued interest on all
or any outstanding Notes have been declared immediately due and payable by
reason of the occurrence of any Event of Default described in paragraphs (a)
through (g), inclusive, of e6.1, the holders of 66-2/3% in aggregate principal
amount of the Notes then outstanding may, by written instrument filed with the
Constituent Companies, rescind and annul such declaration and the consequences
thereof, provided that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely by
reason of such declaration under e6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall have been
made good, cured or waived pursuant to e7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right
consequent thereto.
Section 7. Amendments, Waivers and Consents;.
c2.Section 7.1. Consent Required;. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Constituent
Companies, be amended or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), if the
Constituent Companies shall have obtained the consent in writing of the
holders of at least 66-2/3% in aggregate principal amount of outstanding
Notes; provided that without the written consent of the holders of all of the
Notes then outstanding, no such amendment or waiver shall be effective (a)
which will change the time of payment (including any prepayment required by
e2.1) of the principal of or the interest on any Note or change the principal
amount thereof or change the rate of interest thereon, or (b) which will
change any of the provisions with respect to optional prepayments, or (c)
which will change the percentage of holders of the Notes required to consent
to any such amendment or waiver of any of the provisions of this e7 or e6.
c2.Section 7.2. Solicitation of Holders;. So long as there are any Notes
outstanding, the Constituent Companies will not solicit, request or negotiate
for or with respect to any proposed waiver or amendment of any of the
provisions of this Agreement or the Notes unless each holder of Notes
(irrespective of the amount of Notes then owned by it) shall be informed
thereof by the Constituent Companies and shall be afforded the opportunity of
considering the same and shall be supplied by the Constituent Companies with
sufficient information to enable it to make an informed decision with respect
thereto. The Constituent Companies will not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any holder of Notes as consideration
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for or as an inducement to entering into by any holder of Notes of any waiver
or amendment of any of the terms and provisions of this Agreement or the Notes
unless such remuneration is concurrently offered, on the same terms, ratably
to the holders of all Notes then outstanding. Promptly and in any event
within 30 days of the date of execution and delivery of any such waiver or
amendment, the Constituent Companies shall provide a true, correct and
complete copy thereof to each of the holders of the Notes.
c2.Section 7.3. Effect of Amendment or Waiver;. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon each of the
Constituent Companies, whether or not such Note shall have been marked to
indicate such amendment or waiver. No such amendment or waiver shall extend
to or affect any obligation not expressly amended or waived or impair any
right consequent thereon.
Section 8. Interpretation of Agreement; Definitions';.
c2.Section 8.1. Definitions;. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
"Ace-Tex Acquisition" shall mean the acquisition by either Constituent
Company or any of their Wholly-owned Subsidiaries of all of the issued and
outstanding capital stock of Ace-Tex Corporation, a Michigan corporation.
"Affiliate" shall mean any Person (other than a Subsidiary) (a) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, any of the Constituent
Companies, (b) which beneficially owns or holds 10% or more of any class of
the Voting Stock of any of the Constituent Companies, (c) 10% or more of the
Voting Stock (or in the case of a Person which is not a corporation, 10% or
more of the equity interest) of which is beneficially owned or held by any of
the Constituent Companies or any Subsidiary or (d) each executive officer and
director of such Person whether or not included within the meaning of clauses
(a), (b) or (c) above. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"Assigned Value" shall mean the amount of stock which is the subject of
the transaction expressed as a percentage of the total stock of such entity
times the net book value of all assets of such entity as the net book value of
such assets is determined in accordance with GAAP.
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which banks in Kansas City, Missouri or New York, New York are required
by law to close or are customarily closed.
"Capitalized Lease" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance sheet
of the lessee and its subsidiaries in accordance with Frozen GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
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determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person in accordance with Frozen GAAP.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. ee9601 et seq., and any future
amendments.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
regulations from time to time promulgated thereunder.
"Computing Holder" shall mean, as of the date of the related notice of
optional prepayment delivered pursuant to e2.3, the holder of Notes with the
highest aggregate principal amount outstanding then being prepaid which holder
is willing to act in such capacity. In case two or more holders of Notes
would, by reason of holding Notes in the same aggregate principal amount
outstanding, qualify as the Computing Holder as aforesaid as of any date of
determination, the Computing Holder shall be the qualifying holder or holders
as mutually determined by all such qualifying holders. For purposes of this
definition Notes held by a holder and one or more of its affiliates shall be
deemed to be held by a single holder.
"Consolidated Current Assets" and "Consolidated Current Liabilities"
shall mean as of the date of any determination thereof such assets and
liabilities of the Parent and its Subsidiaries on a consolidated basis as
shall be determined in accordance with Frozen GAAP to constitute current
assets and current liabilities, respectively, including without limitation,
the current portion of any long-term Indebtedness and the current portion of
any amounts due with respect to Specified Preferred Stock.
"Consolidated Funded Debt" shall mean, as of the date of determination
thereof, all Funded Debt of the Parent and its Subsidiaries, determined on a
consolidated basis eliminating intercompany items.
"Consolidated Net Earnings" for any period shall mean the consolidated
net earnings of the Parent and its Subsidiaries for such period, determined on
a consolidated basis eliminating intercompany items in accordance with Frozen
GAAP, but excluding in any event:
(a) net earnings and losses of any Subsidiary accrued prior to the date
it became a Subsidiary except such net earnings or losses which were actually
included within "Consolidated Net Earnings" prior to the time such entity
became a Subsidiary; and
(b) any extraordinary gains or losses included in consolidated net
earnings in accordance with Frozen GAAP.
"Consolidated Specified Indebtedness" shall mean, as of the date of any
determination thereof, the Specified Indebtedness of the Parent and its
Subsidiaries on a consolidated basis eliminating intercompany items.
"Consolidated Stockholders' Equity" shall mean, as of the date of any
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determination thereof, the Stockholders' Equity of the Parent and its
Subsidiaries on a consolidated basis eliminating intercompany items.
"Consolidated Total Capitalization" shall mean, as of the date of any
determination thereof, the sum of Consolidated Stockholders' Equity plus
Consolidated Funded Debt.
"Constituent Companies" shall mean, collectively, (a) the Parent, (b)
Unitog Rental Services, Inc., a California corporation, (c) any other
Subsidiary which has satisfied the requirements of e5.18 and (d) any Person
who succeeds to all, or substantially all, of the assets and business of any
such party.
"Credit Agreement" shall mean that certain Bank Credit Agreement dated as
of September 10, 1993, as amended by the Amendment No. 1 to Loan and Letter of
Credit Reimbursement Agreement dated as of December 29, 1994 among the Parent,
Unitog Rental Services, Inc., the financial institutions which are from time
to time parties thereto, United Missouri Bank of Kansas City, as agent, as the
same may be amended or modified from time to time, and any credit facility or
agreement in replacement of, renewal of or expansion of that certain Bank
Credit Agreement described above.
"Current Management Team" shall mean those officers of the Parent which
qualify as an "Executive Officer" as defined in Rule 501(f) of the Securities
Act of 1933, as amended, as of the date of the relevant consolidation or
merger pursuant to e5.13(a).
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"Environmental Law" shall mean any international, federal, state or local
statute, law, regulation, order, consent decree, judgment, permit, license,
code, common law, treaty, convention, ordinance or other requirement relating
to the environment, including, without limitation, those relating to releases,
discharges or emissions to air, water, land or groundwater, to the withdrawal
or use of groundwater, to the use and handling of polychlorinated biphenyls or
asbestos, to the disposal, treatment, storage or management of hazardous or
solid waste, or Hazardous Substances or crude oil or any fraction thereof, or
to exposure to toxic or hazardous materials, to the handling, transportation,
discharge or release of gaseous or liquid Hazardous Substances and any
regulation, order, or notice issued pursuant to such law, statute or
ordinance, in each case applicable to the property of the Constituent
Companies and its Subsidiaries or the operation, construction or modification
of any thereof, including without limitation the following: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
and the Hazardous and Solid Waste Amendments of 1984, the Hazardous Materials
Transportation Act, as amended, the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1976, the Safe Drinking Water Control Act,
the Clean Air Act of 1966, as amended, the Toxic Substances Control Act of
1976, the Occupational Safety and Health Act of 1977, as amended, the
Emergency Planning and Community Right-to-Know Act of 1986, the National
Environmental Policy Act of 1975, the Oil Pollution Act of 1990 and any
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similar or implementing state law, and any state statute and any further
amendments to these laws providing for financial responsibility for cleanup or
other actions with respect to the release or threatened release of Hazardous
Substances or crude oil or any fraction thereof, and all rules and regulations
promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that is,
along with any of the Constituent Companies, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
section 414(b) and 414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in e6.1.
"Fixed Charges" for any period shall mean on a consolidated basis the sum
of (a) all Rentals (other than Rentals on Capitalized Leases) expensed during
such period by the Parent and its Subsidiaries, and (b) all Interest Expense
on all Indebtedness (including the interest component of Rentals on
Capitalized Leases) of the Parent and its Subsidiaries.
"Frozen GAAP" shall mean generally accepted accounting principles in
existence as of August 1, 1993.
"Funded Debt" of any Person shall mean (a) all Indebtedness of such
Person (1) for borrowed money, (2) which has been incurred in connection with
the acquisition of assets and is classified as long-term debt in accordance
with Frozen GAAP, including, without limitation, Purchase Money Indebtedness
or (3) Specified Preferred Stock, in each case having a final maturity of one
or more than one year from the date of origin thereof (or which is renewable
or extendible at the option of the obligor for a period or periods more than
one year from the date of origin), excluding all payments in respect thereof
that are required to be made within one year from the date of any
determination of Funded Debt and that shall constitute a current liability of
the obligor under Frozen GAAP, (b) all Capitalized Rentals (excluding current
maturities) of such Person, and (c) all Guaranties (excluding current
maturities) by such Person of Funded Debt of others.
"GAAP" shall mean generally accepted accounting principles in existence
from time to time.
"Governmental Approval" shall mean any written permit, license, variance,
certification, consent, no-action letter, clearance, exemption or other
approval granted by a Governmental Authority.
"Governmental Authority" shall mean any international, foreign, federal,
state, regional, county, local or other governmental or quasi-governmental
authority.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
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deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, all obligations incurred through an agreement, contingent
or otherwise, by such Person: (a) to purchase such Indebtedness or obligation
or any property or assets constituting security therefor, (b) to advance or
supply funds (1) for the purchase or payment of such Indebtedness or
obligation, (2) to maintain working capital or any balance sheet or income
statement condition or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation, (c) to lease property
or to purchase Securities or other property or services primarily for the
purpose of assuring the owner of such Indebtedness or obligation of the
ability of the primary obligor to make payment of the Indebtedness or
obligation, or (d) otherwise to assure the owner of the Indebtedness or
obligation of the primary obligor against loss in respect thereof. For the
purposes of all computations made under this Agreement, a Guaranty in respect
of any Indebtedness for borrowed money shall be deemed to be Indebtedness
equal to the principal amount of such Indebtedness for borrowed money which
has been guaranteed, and a Guaranty in respect of any other obligation or
liability or any dividend shall be deemed to be Indebtedness equal to the
maximum aggregate amount of such obligation, liability or dividend.
"Hazardous Substance" shall mean any hazardous or toxic material,
substance or waste, pollutant or contaminant which is regulated under any
statute, law, ordinance, rule or regulation of any local, state, regional or
federal authority having jurisdiction over the property of any of the
Constituent Companies and their Subsidiaries or its use, including but not
limited to any material, substance or waste which is: (a) defined as a
hazardous substance under Section 311 of the Federal Water Pollution Control
Act (33 U.S.C. e1317) as amended; (b) regulated as a hazardous waste under
Section 1004 or Section 3001 of the Federal Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act (42 U.S.C. e6901 et
seq.), as amended; (c) defined as a hazardous substance under Section 101 of
the Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. e9601 et seq.), as amended, or (d) defined or regulated as a hazardous
substance or hazardous waste under any rules or regulations promulgated under
any of the foregoing statutes.
"Honduras Subsidiary" shall mean Unitog De Honduras, S.A., a Honduran
corporation.
"Indebtedness" of any Person shall mean and include all obligations of
such Person which in accordance with Frozen GAAP shall be classified upon a
balance sheet of such Person as liabilities of such Person, and in any event
shall include all (a) obligations of such Person for borrowed money or which
have been incurred in connection with the acquisition of property or assets,
(b) obligations secured by any Lien upon property or assets owned by such
Person, even though such Person has not assumed or become liable for the
payment of such obligations, (c) obligations created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights and remedies
of the seller, lender or lessor under such agreement in the event of default
are limited to repossession or sale of property, (d) Capitalized Rentals, (e)
Specified Preferred Stock, and (f) Guaranties of obligations of others of the
character referred to in this definition.
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"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.
"Institutional Holder" shall mean any of the following Persons: (a) any
bank, savings and loan association, savings institution, trust company or
national banking association, acting for its own account or in a fiduciary
capacity, (b) any charitable foundation, (c) any insurance company, (d) any
fraternal benefit society, (e) any pension, retirement or profit sharing trust
or fund within the meaning of Title I of ERISA or for which any bank, trust
company, national banking association or investment adviser registered under
the Investment Advisers Act of 1940, as amended, is acting as trustee or
agent, (f) any investment company or business development company, as defined
in the Investment Company Act of 1940, as amended, (g) any small business
investment company licensed under the Small Business Investment Act of 1958,
as amended, (h) any broker or dealer registered under the Securities Exchange
Act of 1934, as amended, or any investment adviser registered under the
Investment Adviser Act of 1940, as amended, (i) any government, any public
employees' pension or retirement system, or any other government agency
supervising the investment of public funds, (j) any other entity all of the
equity owners of which are Institutional Holders or (k) any other Person which
may be within the definition of "qualified institutional buyer" as such term
is used in Rule 144A, as from time to time in effect, promulgated under the
Securities Act of 1933, as amended.
"Interest Expense" for any period shall mean all interest and all
amortization of debt discount and expense on any particular Indebtedness
(including, without limitation, payment-in-kind, zero coupon and other like
Securities) for which such calculations are being made and dividends on
Specified Preferred Stock.
"Interest Payment Date" shall mean each January thirty-first, April
thirtieth, July thirty-first and October thirty-first occurring in each year
including the maturity date of the Notes.
"Investments" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by acquisition of
shares of capital stock, Indebtedness or Securities or by loan, advance
(excluding employee related advances), capital contribution or otherwise;
provided that "Investments" shall not mean or include investments in property
to be used or consumed in the ordinary course of business. In no event shall
the purchase or acquisition of any Property (other than shares of stock of any
class or any other Security) of a business engaged in the same general nature
of business engaged in by the Parent and its Subsidiaries taken as a whole
constitute an Investment.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but
not limited to the security interest lien arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encumbrances, easements, rights-of-way, covenants,
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conditions, and restrictions on real property. For the purposes of this
Agreement, a Constituent Company or a Subsidiary shall be deemed to be the
owner of any property which it has acquired or holds subject to a conditional
sale agreement, Capitalized Lease or other arrangement pursuant to which title
to the property has been retained by or vested in some other Person for
security purposes and such retention or vesting shall constitute a Lien.
"Lincoln National Indebtedness" shall mean that certain Indebtedness
issued pursuant to that certain Trust Indenture dated as of December 1, 1988
between the Parent, Unitog Rental Services, Inc. and People's Bank & Trust
Company, as trustee, for the benefit of Lincoln National Life Insurance
Company and outstanding on the Closing Date.
"Lincoln National Liens" shall have the meaning set forth in e5.20.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (a) the aggregate present
value as of the date of such prepayment or acceleration of each dollar of
principal being prepaid (taking into account the application of such
prepayment required by e2.1) or accelerated and the amount of interest
(exclusive of interest accrued to the date of prepayment) that would have been
payable in respect of such dollar if such prepayment or acceleration had not
occurred, determined by discounting such amounts at the Reinvestment Rate from
the respective dates on which they would have been payable, over (b) 100% of
the principal amount of the outstanding Notes being prepaid or accelerated.
If the Reinvestment Rate is equal to or higher than the interest rate borne
by the Notes on the date of any determination hereof, the Make-Whole Amount
shall be zero. For purposes of any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean the sum of 0.50%, plus the yield reported
on the Telerate Information System, page 7677, Bid Side, (or, if not
available, any other nationally recognized trading screen reporting on-line
intraday trading in the United States government Securities as selected by the
holder or holders of greater than 50% of the principal amount of Notes at the
time outstanding) at 11:00 A.M. (New York, New York time) for the United
States government Securities having a maturity (rounded to the nearest month)
corresponding to the remaining Weighted Average Life to Maturity of the
principal being prepaid (taking into account the application of such
prepayment required by e2.1) or accelerated. If no maturity exactly
corresponds to such Weighted Average Life to Maturity, yields for the two
published maturities most closely corresponding to such Weighted Average Life
to Maturity shall be calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated from such yields on a
straight-line basis.
"Weighted Average Life to Maturity" of the principal amount of the Notes
being prepaid or accelerated shall mean, as of the time of any determination
thereof, the number of years obtained by dividing the then Remaining
Dollar-Years of such principal by the aggregate amount of such principal. The
term "Remaining Dollar-Years" of such principal shall mean the amount obtained
by (1) multiplying (i) the remainder of (A) the amount of principal that would
have become due on each scheduled payment date if such prepayment or
acceleration had not occurred, less (B) the amount of principal on the Notes
scheduled to become due on such date after giving effect to such prepayment
(and the application thereof in accordance with the provisions of e2.1) or
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acceleration, by (ii) the number of years which will elapse between the date
of determination and such scheduled payment date, and (2) totalling the
products obtained in (1).
"Multiemployer Plan" shall have the same meaning as in ERISA.
"National Priority List" shall mean that certain list promulgated by the
United States Environmental Protection Agency of uncontrolled or abandoned
hazardous waste sites identified for possible long-term remedial action under
CERCLA.
"Net Earnings Available for Fixed Charges" for any period shall mean (a)
Consolidated Net Earnings during such period plus (b) (to the extent deducted
in determining Consolidated Net Earnings) the sum of (1) all provisions for
any Federal, state or other income taxes made by the Parent and its
Subsidiaries during such period, (2) amortization expense of the Parent and
its Subsidiaries during such period, and (3) Fixed Charges during such period.
"Non-Obligor Subsidiary" shall mean any Subsidiary which is not a
Constituent Company.
"Overdue Rate" shall mean the greater of (a) the interest rate borne by
the Notes on the date of any determination hereof expressed as a percentage
plus 2% per annum and (b) 2% plus the rate which Chase Manhattan Bank, N.A.,
New York, New York announces from time to time as its prime lending rate.
"Parent" shall mean Unitog Company, a Delaware corporation, and any
Person who succeeds to all, or substantially all, of the assets and business
of such Person.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Ace Tex Disposition" shall have the meaning set forth in
5.13(a)(8).
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
"Plan" shall mean a "pension plan," as such term is defined in ERISA,
established or maintained by any of the Constituent Companies or any ERISA
Affiliate or as to which the Constituent Company or any ERISA Affiliate
contributed or is a member or otherwise may have any liability, other than a
Multiemployer Plan.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
Purchase Money Indebtedness" shall mean with respect to any Person
Indebtedness secured by Liens given to secure the payment of the purchase
price of assets acquired by such Person.
"Purchaser" shall have the meaning set forth in e1.1.
"RCRA" shall mean the Solid Waste Disposal Act, as amended by the
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Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. ee6901 et seq., and any future amendments.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing
into the environment, including, without limitation, the abandonment or
discarding of barrels, drums, containers, tanks and other receptacles
containing any Hazardous Substance.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of
the property) payable by a Constituent Company or a Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be exclusive
of any amounts required to be paid by such Constituent Company or Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Reportable Event" shall have, with respect to any Plan, the same meaning
as in Section 4043 of ERISA, except shall not include reportable events with
respect to which the 30-day notice requirement has been waived by the PBGC
(provided that the loss of qualification of a Plan and the failure to meet the
minimum funding standards of Section 412 of the Code or Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any waiver of the
notice requirement by the PBGC).
"Responsible Officer" shall mean the Chairman, President and any Senior
Vice President, of the relevant Constituent Company.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Special Subsidiary" shall mean any corporation of which more than 80%
(by number of votes) of the Voting Stock shall be beneficially owned by the
Constituent Companies and/or Wholly-Owned Subsidiaries, which is organized
under the laws of the United States or any State thereof and which conducts
substantially all of its business and has substantially all of its assets
within the United States.
"Specified Group" shall mean any group of Persons which includes 2/3 of
the Current Management Team.
"Specified Indebtedness" shall mean with respect to any Person, as of the
date of determination thereof, the sum of (a) Funded Debt of such Person plus
(b) all Indebtedness for borrowed money that shall constitute a current
liability of the obligor under Frozen GAAP, including without limitation, all
payments in respect of Funded Debt that are required to be made within one
year from the date of any determination thereof and all payments in respect of
Specified Preferred Stock that are required to be made within one year from
the date of any determination thereof.
"Specified Preferred Stock" shall mean preferred stock of any entity
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which includes mandatory redemption provisions without regard to the date of
any such final redemption whether or not such preferred stock shall be
classified as indebtedness in accordance with Frozen GAAP.
"Stipulated Value" shall mean the remainder of (a) the percentage of the
total stock of the relevant Non-Obligor Subsidiary owned by the Constituent
Companies or Wholly-Owned Subsidiaries immediately prior to the relevant sale,
lease or other disposition of assets (the "Asset Transaction") multiplied by
the net book value of the total assets of such Non-Obligor Subsidiary
determined immediately prior such Asset Transaction less (b) the percentage of
the total stock of the relevant Special Subsidiary owned by the Constituent
Companies or Wholly-Owned Subsidiaries immediately after giving effect to such
Asset Transaction multiplied by the net book value of the total assets of such
Non-Obligor Subsidiary determined immediately prior to such Asset Transaction.
"Stockholders' Equity" shall mean with respect to any Person, as of the
date of any determination thereof, the stockholders' equity as would be shown
on the balance sheet of such Person in accordance with Frozen GAAP, excluding
in any event Specified Preferred Stock.
The term "subsidiary" shall mean as to any particular parent corporation
any corporation of which more than 50% (by number of votes) of the Voting
Stock shall be beneficially owned, directly or indirectly, by such parent
corporation. The term "Subsidiary" shall mean a subsidiary of the Constituent
Companies.
"Total Assets" shall mean all those items which are shown as assets on
the consolidated balance sheet of the Parent and its Subsidiaries on a
consolidated basis determined in accordance with Frozen GAAP.
"Voting Stock" shall mean Securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"Wholly-owned" shall mean (a) when used in connection with any Subsidiary
shall mean a Subsidiary of which all of the issued and outstanding shares of
stock (except shares required as directors' qualifying shares) shall be owned
by the Constituent Companies and/or one or more of their Wholly-owned
Subsidiaries and (b) the Honduras Subsidiary so long as the Parent continues
to own 98% of the stock of the Honduras Subsidiary at all times.
c2.Section 8.2. Accounting Principles;. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in
accordance with Frozen GAAP, to the extent applicable, except where such
principles are inconsistent with the requirements of this Agreement.
c2.Section 8.3. Directly or Indirectly;. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action
in question is taken directly or indirectly by such Person.
Section 9. Miscellaneous;.
c2.Section 9.1. Registered Notes;. The Parent shall cause to be kept at
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its principal office a register for the registration and transfer of the
Notes, and the Parent will register or transfer or cause to be registered or
transferred, as hereinafter provided any Note issued pursuant to this
Agreement.
At any time and from time to time the holder of any Note which has been
duly registered as hereinabove provided may transfer such Note upon surrender
thereof at the principal office of the Parent duly endorsed or accompanied by
a written instrument of transfer duly executed by the holder of such Note or
its attorney duly authorized in writing.
The Person in whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes of this Agreement.
Payment of or on account of the principal, premium, if any, and interest on
any Note shall be made to or upon the written order of such holder.
c2.Section 9.2. Exchange of Notes;. At any time and from time to time,
upon not less than ten days' notice to that effect given by the holder of any
Note initially delivered or of any Note substituted therefor pursuant to e9.1,
this e9.2 or e9.3, and, upon surrender of such Note at the Parent's office,
the Constituent Companies will deliver in exchange therefor, without expense
to such holder, except as set forth below, a Note for the same aggregate
principal amount as the then unpaid principal amount of the Note so
surrendered, or Notes in the denomination of $100,000 (or such lesser amount
as shall constitute 100% of the Notes of such holder) or any amount in excess
thereof as such holder shall specify, dated as of the date to which interest
has been paid on the Note so surrendered or, if such surrender is prior to the
payment of any interest thereon, then dated as of the date of issue,
registered in the name of such Person or Persons as may be designated by such
holder, and otherwise of the same form and tenor as the Notes so surrendered
for exchange. The Constituent Companies may require the payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
c2.Section 9.3. Loss, Theft, Etc. of Notes;. Upon receipt of evidence
satisfactory to the Constituent Companies of the loss, theft, mutilation or
destruction of any Note, and in the case of any such loss, theft or
destruction upon delivery of a bond of indemnity in such form and amount as
shall be reasonably satisfactory to the Constituent Companies, or in the event
of such mutilation upon surrender and cancellation of the Note, the
Constituent Companies will make and deliver without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If the Purchaser or any subsequent Institutional Holder is
the owner of any such lost, stolen or destroyed Note, then the affidavit of an
authorized officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of such Note at the time of such loss, theft
or destruction shall be accepted as satisfactory evidence thereof and no
further indemnity shall be required as a condition to the execution and
delivery of a new Note other than the written agreement of such owner to
indemnify the Constituent Companies.
c2.Section 9.4. Expenses, Stamp Tax Indemnity;. Whether or not the
transactions herein contemplated shall be consummated, the Constituent
Companies agree to pay directly all of your reasonable out-of-pocket expenses
in connection with the preparation, execution and delivery of this Agreement
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and the transactions contemplated hereby, including but not limited to the
reasonable charges and disbursements of Xxxxxxx and Xxxxxx, your special
counsel, duplicating costs and charges for shipping the Notes, adequately
insured to you at your home office or at such other place as you may
designate, and all such expenses relating to any amendment, waivers or
consents pursuant to the provisions hereof (whether or not the same are
actually executed and delivered), including, without limitation, any
amendments, waivers, or consents resulting from any work-out, renegotiation or
restructuring relating to the performance by the Constituent Companies of
their obligations under this Agreement and the Notes. The Constituent
Companies further agree that they will pay and save you harmless against any
and all liability with respect to stamp and other taxes, if any, which may be
payable or which may be determined to be payable in connection with the
execution and delivery of this Agreement or the Notes, whether or not any
Notes are then outstanding. The Constituent Companies agree to protect and
indemnify you against any liability for any and all brokerage fees and
commissions payable or claimed to be payable to any Person in connection with
the transactions contemplated by this Agreement. Without limiting the
foregoing, the Constituent Companies agree to pay the cost of obtaining the
private placement number for the Notes and authorizes the submission of such
information as may be required by Standard & Poor's CUSIP Service Bureau for
the purpose of obtaining such number.
c2.'Section 9.5. Powers and Rights Not Waived; Remedies Cumulative';. No
delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof,
or the exercise of any other power or right, and the rights and remedies of
the holder of any Note are cumulative to, and are not exclusive of, any rights
or remedies any such holder would otherwise have.
c2.Section 9.6. Notices;. All communications provided for hereunder shall
be in writing and, if to you, delivered or mailed prepaid by registered or
certified mail or overnight air courier, or by facsimile communication, in each
case addressed to you at your address appearing on Schedule I to this Agreement
or such other address as you or the subsequent holder of any Note initially
issued to you may designate to the Constituent Companies in writing, and if to
the Constituent Companies, delivered or mailed by registered or certified mail
or overnight air courier, or by facsimile communication, to the Parent at 000
Xxxx 00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, Attention: President, or to
such other address as the Parent may in writing designate to you or to a
subsequent holder of the Note initially issued to you; provided, however, that
a notice to you by overnight air courier shall only be effective if delivered
to you at a street address designated for such purpose in Schedule I, and a
notice to you by facsimile communication shall only be effective if made by
confirmed transmission to you at a telephone number designated for such purpose
in Schedule I, or, in either case, as you or a subsequent holder of any Note
initially issued to you may designate to the Parent in writing.
c2.Section 9.7. Successors and Assigns;. This Agreement shall be binding
upon the Constituent Companies and their successors and assigns and shall
inure to your benefit and to the benefit of your successors and assigns,
including each successive holder or holders of any Notes.
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c2.Section 9.8. Survival of Covenants and Representations;. All covenants,
representations and warranties made by the Constituent Companies herein and in
any certificates delivered pursuant hereto, whether or not in connection with
the Closing Date, shall survive the closing and the delivery of this Agreement
and the Notes.
c2.Section 9.9. Severability;. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision shall not affect
the validity or enforceability of any remaining portion, which remaining
portion shall remain in force and effect as if this Agreement had been
executed with the invalid or unenforceable portion thereof eliminated and it
is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein any
such part, parts or portion which may, for any reason, be hereafter declared
invalid or unenforceable.
c2.Section 9.10. Governing Law;. This Agreement and the Notes issued and
sold hereunder shall be governed by and construed in accordance with Illinois
law.
c2.Section 9.11. Submission to Jurisdiction.; Any legal action or
proceeding with respect to this Agreement or the Notes or any document related
thereto may be brought in the courts of the State of Illinois or of the United
States of America for the Northern District of Illinois, and, by execution and
delivery of this Agreement, each of the Constituent Companies hereby accepts
for itself and in respect of its property generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the Constituent Companies
hereby irrevocably and unconditionally waives any objection, including,
without limitation, any objection to the laying of venue or based on the
grounds of forum non conveniens which it may now or hereafter have to the
bringing of any action or proceeding in such respective jurisdiction.
c2.Section 9.12. Captions;. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
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The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
Unitog Company
By /s/ J. Xxxxx Xxxxxxxx
Its Senior Vice President -
Finance and Administration and
Chief Financial Officer
Unitog Rental Services, Inc.
By /s/ J. Xxxxx Xxxxxxxx
Its Senior Vice President -
Finance and Administration and
Chief Financial Officer
Accepted as of October 31, 1995.
Metropolitan Life Insurance
Company
By /s/ Xxxxxx X. Xxxxxx
Its Assistant Vice-President
By /s/ Xxxxxx X. Xxxxxx
Its Assistant Vice-President
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Unitog Company
and
Unitog Rental Services, Inc.
6.83% Senior Note
Due October 31, 2005
No. ____________, ____
$ PPN 91326@ AD 6
Each of the undersigned (being referred to hereinafter individually
and collectively as a "Constituent Company" or the "Constituent Companies"),
for value received, hereby promises, jointly and severally, to pay to
or registered assigns
on the thirty-first day of October, 2005
the principal amount of
Dollars ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at
the rate of 6.83% per annum from the date hereof until maturity, payable
quarterly on each January thirty-first, April thirtieth, July thirty-first and
October thirty-first in each year (commencing on January 31, 1996) and at
maturity. The Constituent Companies jointly and severally agree to pay
interest on overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest, at the Overdue Rate after
the due date, whether by acceleration or otherwise, until paid. "Overdue Rate"
shall mean the greater of (a) the interest rate borne by the Notes on the date
of any determination hereof expressed as a percentage plus 2% per annum and (b)
2% plus the rate which Chase Manhattan Bank, N.A., New York, New York announces
from time to time as its prime lending rate. The interest rate borne by the
Notes is subject to adjustment pursuant to the terms and provisions of e1.3 of
the Note Agreement hereinafter referred to.
Both the principal hereof and interest hereon are payable at the
principal office of Unitog Company, a Delaware corporation (the "Parent"), in
Kansas City, Missouri in coin or currency of the United States of America which
at the time of payment shall be legal tender for the payment of public and
private debts. If any amount of principal, premium, if any, or interest on or
in respect of this Note becomes due and payable on any date which is not a
Business Day, such amount shall be payable on the immediately succeeding
Business Day. "Business Day" means any day other than a Saturday, Sunday or
other day on which banks in Kansas City, Missouri or New York, New York are
required by law to close or are customarily closed.
This Note is one of the 6.83% Senior Notes due October 31, 2005 (the
"Notes") of the Constituent Companies in the aggregate principal amount of
$40,000,000 issued or to be issued under and pursuant to the terms and
provisions of that certain Note Agreement, dated as of October 15, 1995 (the
"Agreement"), entered into by the Constituent Companies with the original
Purchaser therein referred to and this Note and the holder hereof are entitled
to all the benefits provided for thereby or referred to therein. Reference is
hereby made to the Agreement for a statement of such rights and benefits.
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This Note and the other Notes outstanding under the Agreement may be
declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Constituent Companies prior to their expressed maturity dates except on the
terms and conditions and in the amounts and with the premium, if any, set forth
in the Agreement.
This Note is registered on the books of the Parent and is transferable
only by surrender thereof at the principal office of the Constituent Companies
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, premium, if any, and interest
on this Note shall be made only to or upon the order in writing of the
registered holder.
This Note and said Agreement are governed by and construed in
accordance with the laws of Illinois.
Unitog Company
By
Its
Unitog Rental Services, Inc.
By
Its
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45
[Signature page for additional Constituent Company]
______________________________________
By
Its
46
Representations and Warranties
Each of the Constituent Companies represents and warrants to you as
follows:
1. Subsidiaries. Schedule II attached to the Agreement
states the name of each of the Constituent Companies' Subsidiaries, its
jurisdiction of incorporation and the percentage of its Voting Stock owned by
the Constituent Companies and/or their Subsidiaries. The Constituent Companies
and each Subsidiary has good and marketable title to all of the shares it
purports to own of the stock of each Subsidiary, free and clear in each case of
any Lien. All such shares have been duly issued and are fully paid and
non-assessable.
2. Corporate Organization and Authority. Each of the Constituent
Companies, and each Subsidiary,
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority to own and operate its
properties and to carry on its business as now conducted and as presently
proposed to be conducted;
(c) has all necessary licenses and permits to own and operate
its properties and to carry on its business as now conducted and as presently
proposed to be conducted, except where the failure to have such licenses or
permits will not materially affect adversely the properties, business,
prospects, or financial condition of the Parent and its Subsidiaries, taken as
a whole; and
(d) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the business
transacted by it or the nature of the property owned or leased by it makes such
licensing or qualification necessary, except where the failure to be so
licensed or qualified will not materially affect adversely the properties,
business, prospects, or financial condition of the Parent and its Subsidiaries,
taken as a whole.
As of January 29, 1995, the total assets of the Honduras Subsidiary
represented less than 1% of Total Assets and the amount of Consolidated Net
Earnings contributed by the Honduras Subsidiary was less than 1.3%.
3. Rental has entered into a Stock Purchase Agreement, dated
October 19, 1995, to purchase the stock of Ace-Tex Corporation at a base
purchase price of $42.1 million, subject to certain closing adjustments based
on audited financial data. Ace-Tex has entered into an agreement, dated
October 19, 1995, to sell the assets used in Ace-Tex's wiper business to
certain principals of Ace-Tex for $10 million, subject to certain adjustments
based on audited financial data. Closing of the transactions is scheduled to
occur simultaneously and is expected to occur before December 1, 1995. Based
upon information currently available, the Constituent Companies intend to
allocate the purchase price paid in connection with the Ace-Tex Acquisition
generally in accordance with the letter dated October 31, 1995 from the
Constituent Companies to Metropolitan Life Insurance Company.
4. Financial Statements. (a) The consolidated balance
sheets of the Parent and its consolidated Subsidiaries as of its fiscal year
end in each of the years 1994 to 1995, both inclusive, and the statements of
earnings and retained earnings and cash flows for the fiscal years then ended,
each accompanied by a report thereon containing an opinion unqualified as to
scope limitations imposed by the Parent and otherwise without qualification
except as therein noted, by KPMG Peat Marwick LLP, have been prepared in
accordance with generally accepted accounting principles at the time
consistently applied except as therein noted, and present fairly in all
material respects the financial position of the Parent and its consolidated
Subsidiaries as of such
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dates and the results of its operations and cash flows for such periods. The
unaudited consolidated balance sheets of the Parent and its consolidated
Subsidiaries as of July 30, 1995, and the unaudited statements of earnings and
retained earnings and cash flows for the six-month period ended on said date
prepared by the Parent, have been prepared in accordance with generally
accepted accounting principles at the time consistently applied, and present
fairly in all material respects the financial position of the Parent and its
consolidated Subsidiaries as of said date and the results of its operations and
cash flows for such period.
(b) Since January 29, 1995 there has been no material adverse
change in the condition, financial or otherwise, of the Parent and its
consolidated Subsidiaries as shown on its consolidated balance sheets as of
such date.
5. Indebtedness. Schedule II attached to the Agreement correctly
describes all Specified Indebtedness, Capitalized Leases and Liens securing
Funded Debt of the Constituent Companies and their Subsidiaries securing
Indebtedness outstanding on July 30, 1995.
6. Full Disclosure. Neither the financial statements referred to
in paragraph 3 hereof nor the Agreement or any other written statement
furnished by the Constituent Companies to you in connection with the
negotiation of the sale of the Notes, contains any untrue statement of a
material fact or omits a material fact necessary to make the statements
contained therein or herein not misleading. To the knowledge of the
Constituent Companies, there is no fact peculiar to the Constituent Companies
or their Subsidiaries which the Constituent Companies have not disclosed to you
in writing which materially affects adversely nor, so far as the Constituent
Companies can now foresee, will materially affect adversely the properties,
business, prospects, or financial condition of the Parent and its Subsidiaries,
taken as a whole.
7. Pending Litigation. There are no proceedings pending or, to
the knowledge of the Constituent Companies, threatened against or affecting any
of the Constituent Companies or any Subsidiary in any court or before any
governmental authority or arbitration board or tribunal which are reasonably
likely to materially and adversely affect the properties, business, prospects
or financial condition of the Parent and its Subsidiaries, taken as a whole.
8. Title to Properties. Each of the Constituent Companies and
each Subsidiary has good and indefeasible title in fee simple (or its
equivalent under applicable law) to all material parcels of real property and
has good title to all the other material items of property it purports to own,
including that reflected in the most recent balance sheet referred to in
paragraph 3 hereof, except as sold or otherwise disposed of in the ordinary
course of business and except for Liens permitted by the Agreement.
9. Patents and Trademarks. Each of the Constituent Companies and
each Subsidiary owns or possesses (without any known conflict with the rights
of others) all the patents, trademarks, trade names, service marks, copyrights,
licenses and rights with respect to the foregoing necessary for the present and
planned future conduct of its business, where the failure to possess would be
reasonably likely to have a material adverse effect on the properties,
business, prospects or financial condition of the Parent and its Subsidiaries,
taken as a whole.
10. Sale is Legal and Authorized. The sale of the Notes and
compliance by each of the Constituent Companies with all of the provisions of
the Agreement and the Notes:
(a) are within the corporate powers of each of the Constituent
Companies;
(b) will not violate any provisions of any law or any order of any
court or governmental authority or agency and will not conflict with or result
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in any breach of any of the terms, conditions or provisions of, or constitute
a default under the Articles of Incorporation or By-laws of any Constituent
Company or any indenture or other agreement or instrument to which any
Constituent Company is a party or by which it may be bound or result in the
imposition of any Liens or encumbrances on any property of any Constituent
Company; and
(c) have been duly authorized by proper corporate action on the
part of each Constituent Company (no action by the stockholders of any
Constituent Company being required by law, by the Articles of Incorporation or
By-laws of such Constituent Company or otherwise), executed and delivered by
each Constituent Company and the Agreement and the Notes constitute the legal,
valid and binding obligations, contracts and agreements of each of the
Constituent Companies enforceable in accordance with their respective terms.
11. No Defaults. No Default or Event of Default has occurred and
is continuing. None of the Constituent Companies is in default in the payment
of principal or interest on any Indebtedness for borrowed money and is in
default under any instrument or instruments or agreements under and subject to
which any Indebtedness for borrowed money has been issued and no event has
occurred and is continuing under the provisions of any such instrument
or agreement which with the lapse of time or the giving of notice, or both,
would constitute an event of default thereunder.
12. Governmental Consent. No approval, consent or withholding
of objection on the part of any regulatory body, state, Federal or
local, is necessary in connection with the execution and delivery by the
Constituent Companies of the Agreement or the issuance, sale or delivery of the
Notes or compliance by the Constituent Companies with any of the provisions of
the Agreement or the Notes.
13. Taxes. All Federal income tax returns and, to the knowledge
of the Constituent Companies, all other tax returns required to be
filed by the Constituent Companies or any Subsidiary in any jurisdiction have,
in fact, been filed, and all taxes, assessments, fees and other governmental
charges upon any Constituent Company or any Subsidiary or upon any of their
respective properties, income or franchises, which are shown to be due and
payable in such returns have been paid. For all taxable years ending on or
before January 26, 1992, the Federal income tax liability of the Parent and its
Subsidiaries has been satisfied and all taxable years through January 26, 1992
have been closed to future Federal income tax assessment by either the District
Director of the Internal Revenue Service's acceptance of a Revenue Agent
Report, or by the expiration of the period of limitations on assessment of
additional Federal tax. None of the Constituent Companies knows of any
proposed material additional tax assessment against it for which adequate
provision has not been made on its accounts, and no material controversy in
respect of additional Federal or state income taxes due since said date is
pending or to the knowledge of such Constituent Company threatened. In the
opinion of the Parent, the provisions for taxes on the consolidated books of
the Parent and its Subsidiaries are adequate in all material respects for all
open years, and for its current fiscal period.
14. Use of Proceeds. The net proceeds from the sale of the Notes
will be used to repay indebtedness under the Credit Agreement, to repay
the Lincoln National Indebtedness and in connection with the funding of the
Ace-Tex Acquisition, all as set forth in greater detail on Annex I hereto.
None of the transactions contemplated in the Agreement (including, without
limitation thereof, the use of proceeds from the issuance of the Notes) will
violate or result in a violation of Section 7 of the Securities Exchange Act of
1934, as amended, or any regulation issued pursuant thereto, including, without
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xxxxxxxxxx, Xxxxxxxxxxx X, X and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II. None of the Constituent Companies nor
any Subsidiary owns or intends to carry or purchase any "margin stock" within
the meaning of said Regulation G. None of the proceeds from the sale of the
Notes will be used to purchase, or refinance any borrowing the proceeds of
which were used to purchase, any "security" within the meaning of the
Securities Exchange Act of 1934, as amended, except as set forth on Annex I
hereto.
15. Private Offering. None of the Constituent Companies, directly
or indirectly, nor any agent on its behalf has offered or will offer the
Notes or any similar Security or has solicited or will solicit an offer to
acquire the Notes or any similar Security from or has otherwise approached or
negotiated or will approach or negotiate in respect of the Notes or any similar
Security with any Person other than the Purchaser and not more than 2 other
institutional investors, each of whom was offered a portion of the Notes at
private sale for investment. None of the Constituent Companies, directly or
indirectly, nor any agent on its behalf has offered or will offer the Notes or
any similar Security or has solicited or will solicit an offer to acquire the
Notes or any similar Security from any Person so as to bring the issuance and
sale of the Notes within the provisions of Section 5 of the Securities Act of
1933, as amended.
16. ERISA. The consummation of the transactions provided for in
the Agreement and compliance by the Constituent Companies with the
provisions thereof and the Notes issued thereunder will not involve any
prohibited transaction within the meaning of ERISA or Section 4975 of the
Internal Revenue Code of 1986, as amended. Each Plan complies in all material
respects with all applicable statutes and governmental rules and regulations,
and (a) no Reportable Event has occurred and is continuing with respect to any
Plan, (b) none of the Constituent Companies nor any ERISA Affiliate has any
current withdrawal liability (as described in Part I of Subtitle E of Title IV
of ERISA) with respect to any Multiemployer Plan or has instituted any steps to
withdraw from any Multiemployer Plan which could result in a withdrawal
liability, and (c) no steps have been instituted to terminate any Plan in a
distress termination under Section 4041(c) of ERISA or a termination instituted
by the PBGC under Section 4042 of ERISA. To the knowledge of the Constituent
Companies, no condition exists or event or transaction has occurred in
connection with any Plan which could result in the incurrence by any
Constituent Company or any ERISA Affiliate of any material liability, fine or
penalty. No Plan maintained by any Constituent Company or any ERISA Affiliate,
nor any trust created thereunder, has incurred any "accumulated funding
deficiency" as defined in Section 302 of ERISA in excess of $100,000 nor does
the present value of all benefits vested under all Plans maintained by the
Company or any ERISA Affiliate exceed, as of the last annual valuation date,
the value of the assets of the Plans allocable to such vested benefits by an
amount greater than $100,000 in the aggregate. None of the Constituent
Companies nor any ERISA Affiliate has any contingent liability with respect to
any post-retirement "welfare benefit plan" (as such term is defined in ERISA)
except as has been disclosed to the Purchaser.
17. Compliance with Law. None of the Constituent Companies nor
any Subsidiary (1) is in violation of any law, ordinance, franchise,
governmental rule or regulation to which it is subject; or (2) has failed to
obtain any license, permit, franchise or other governmental authorization
necessary to the ownership of its property or to the conduct of its business,
which violation or failure to obtain is reasonably likely to materially
adversely affect the business, prospects, properties or financial condition of
the
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Parent and its Subsidiaries, taken as a whole, or impair the ability of any
of the Constituent Companies to perform their respective obligations contained
in the Agreement or the Notes; provided, however, the Constituent Companies
make no representation or warranty in this paragraph 16 as to environmental
matters. None of the Constituent Companies nor any Subsidiary is in default
with respect to any order of any court or governmental authority or arbitration
board or tribunal.
18. Investment Company Act. None of the Constituent Companies is,
nor is directly or indirectly controlled by or acting on behalf of any Person
which is, required to register as an "investment company" under the Investment
Company Act of 1940, as amended.
19. Foreign Assets Control Regulations, etc. None of the
Constituent Companies nor any Affiliate of the Constituent Companies is, by
reason of being a "national" of "designated foreign country" or a "specially
designated national" within the meaning of the Regulations of the Office of
Foreign Assets Control, United States Treasury Department (31 C.F.R., Subtitle
B, Chapter V), or for any other reason, subject to any restriction or
prohibition under, or is in violation of, any Federal statute or Presidential
Executive Order, or any rules or regulations of any department, agency or
administrative body promulgated under any such statute or order, concerning
trade or other relations with any foreign country or any citizen or national
thereof or the ownership or operation of any property.
20. Environmental Matters. As of the date hereof:
(i) the Constituent Companies and each of their Subsidiaries have
complied with all Environmental Laws;
(ii) to the Company's knowledge, there is not and has not ever been
a Release or threatened Release of any Hazardous Substances at the Properties
of the Parent and its Subsidiaries that requires remediation under CERCLA or
any Environmental Law;
(iii) the Constituent Companies and their Subsidiaries have obtained
all Governmental Approvals required under Environmental laws for the operations
on their Properties; and
(iv) the Constituent Companies and their Subsidiaries have not
received in writing any claims or orders for environmental response or
corrective action costs or orders; except in each such case where the failure
to comply, or to obtain, or where the expense with respect to which, is not
reasonably likely to materially adversely affect the business, properties,
prospects or financial condition of the Parent and its Subsidiaries taken as a
whole or would impair the ability of any of the Constituent Companies to
perform their respective obligations contained in the Agreement or the Note.
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