<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 27, 1996.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________________ to
____________________________.
Commission file number: 0-6643
UNITOG COMPANY
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 44-0529828
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 W. 11th Street, Kansas City, MO 64105
(Address of principal executive offices) (Zip Code)
(816) 474-7000
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since
last report)
indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
------- --------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As of October 27, 1996, the registrant had 9,642,040 shares of
common stock, par value $.01 per share, outstanding.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page Number
ITEM 1. Financial Statements
<S> <C> <C>
(1) Condensed Consolidated Financial Statements (unaudited):
Condensed Consolidated Balance Sheets as of October 27, 1996
and January 28, 1996. 3
Condensed Consolidated Statements of Earnings for the Three
Months ended October 27, 1996 and October 29, 1995. 4
Condensed Consolidated Statements of Earnings for the Nine
Months ended October 27, 1996 and October 29, 1995. 5
Condensed Consolidated Statements of Cash Flows for the Nine
Months ended October 27, 1996 and October 29, 1995. 6
(2) Notes to Condensed Consolidated Financial Statements. 7
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. 8
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 10
ITEM 6. Exhibits and Reports on Form 8-K 10
</TABLE>
2
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements.
UNITOG COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
OCTOBER 27, 1996 AND JANUARY 28, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS October 27, 1996 January 28, 1996
---------------- ----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 564,376 $ 28,321
Accounts receivable, less allowance for
doubtful receivables of $1,002,000 and
$760,000, respectively 26,898,078 25,012,073
Inventories (note 2) 17,921,959 15,333,981
Rental garments in service, net 38,659,331 36,774,298
Prepaid expenses 1,776,144 1,233,948
------------ ------------
Total current assets 85,819,888 78,382,621
------------ ------------
Property, plant and equipment, at cost 153,083,432 140,834,624
Less accumulated depreciation 65,260,957 58,542,615
------------ ------------
Net property, plant and equipment 87,822,475 82,292,009
------------ ------------
Other assets, net 36,038,147 30,848,817
Excess cost over net assets
of businesses acquired, net 36,741,556 32,045,645
------------ ------------
$246,422,066 $223,569,092
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 634,457 $ 481,087
Accounts payable 12,375,752 15,300,599
Accrued expenses 11,185,086 13,399,851
Income taxes payable 793,461 498,860
Deferred income taxes 11,429,000 10,788,000
------------ ------------
Total current liabilities 36,417,756 40,468,397
------------ ------------
Long-term debt, less current installments 100,289,731 83,731,099
Other liabilities, noncurrent 892,608 1,200,878
Deferred income taxes, noncurrent 12,002,011 12,044,011
Stockholders' equity:
Common stock of $.01 par value. Authorized
30,000,000 shares; issued and outstanding
9,642,040 shares (note 3) 96,420 92,793
Additional paid-in capital 41,153,745 39,200,675
Retained earnings 55,569,795 46,831,239
------------ ------------
Total stockholders' equity 96,819,960 86,124,707
------------ ------------
$246,422,066 $223,569,092
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
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UNITOG COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS ENDED OCTOBER 27, 1996 AND OCTOBER 29, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
October 27, 1996 October 29, 1995
---------------- ----------------
<S> <C> <C>
Revenues:
Rental operations $ 51,479,639 $ 38,769,022
Direct sales 14,600,207 13,682,987
---------------- ---------------
Total revenues 66,079,846 52,452,009
---------------- ---------------
Operating costs and expenses:
Cost of rental operations 40,779,417 30,881,281
Cost of direct sales 12,059,734 11,112,103
Depreciation and amortization 4,008,594 2,702,189
General and administrative 1,903,401 1,848,355
---------------- ---------------
Total costs and expenses 58,751,146 46,543,928
---------------- ---------------
Operating income 7,328,700 5,908,081
Interest expense 1,489,272 710,726
Other expense, net (10,351) (8,280)
---------------- ---------------
Earnings before income taxes 5,849,779 5,205,635
Income taxes 2,223,500 1,888,000
---------------- ---------------
Net earnings $ 3,626,279 $ 3,317,635
================ ===============
Net earnings per common share $ .37 $ .35
================ ===============
Weighted average common and common
equivalent shares outstanding 9,734,740 9,381,681
================ ===============
Dividends per common share (note 3) $ .06 $ .05
================ ===============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
4
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<TABLE>
<CAPTION>
UNITOG COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
NINE MONTHS ENDED OCTOBER 27, 1996 AND OCTOBER 29, 1995
(UNAUDITED)
October 27, 1996 October 29, 1995
---------------- ----------------
<S> <C> <C>
Revenues:
Rental operations $151,144,902 $112,561,972
Direct sales 44,109,627 41,304,242
------------ ------------
Total revenues 195,254,529 153,866,214
------------ ------------
Operating costs and expenses:
Cost of rental operations 122,485,137 90,440,529
Cost of direct sales 35,830,680 33,835,857
Depreciation and amortization 11,527,764 7,885,306
General and administrative 6,111,000 5,934,829
------------ ------------
Total costs and expenses 175,954,581 138,096,521
------------ ------------
Operating income 19,299,948 15,769,693
Interest expense 4,332,348 2,032,895
Other expense, net (59,625) 405
------------ ------------
Earnings before income taxes 15,027,225 13,736,393
Income taxes 5,710,500 5,215,000
------------ ------------
Net earnings $ 9,316,725 $ 8,521,393
============ ============
Net earnings per common share $ .97 $ .91
============ ============
Weighted average common and common
equivalent shares outstanding 9,605,010 9,361,147
============ ============
Dividends per common share (note 3) $ .06 $ .05
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
UNITOG COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED OCTOBER 27, 1996 AND OCTOBER 29, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
October 27, 1996 October 29, 1995
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 9,316,725 $ 8,521,393
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 11,527,764 7,885,306
Provision for deferred income taxes 599,000 1,445,000
Disposal of equipment, net of gains and losses (13,931) 56,253
Changes in assets and liabilities:
Accounts receivable (1,082,347) (1,670,145)
Inventories (2,587,978) (1,621,024)
Rental garments in service 1,077,869 (1,703,956)
Prepaid expenses (542,196) (252,712)
Other noncurrent assets (624,718) (26,345)
Accounts payable (2,924,847) 2,565,184
Accrued expenses (2,777,395) 1,067,524
Income taxes payable 294,601 (42,104)
Other noncurrent liabilities (308,270) 667,468
------------ ------------
Net cash provided by operating activities 11,954,277 16,891,842
------------ ------------
Cash flows from investing activities:
Acquisition of rental operations (17,247,582) (11,331,244)
Purchase of property, plant and equipment (11,151,135) (16,371,581)
------------ ------------
Net cash used by investing activities (28,398,717) (27,702,825)
------------ ------------
Cash flows from financing activities:
Proceeds from exercise of stock options, net 1,956,697 109,676
Dividends paid (578,171) (463,605)
Increase in long(term debt 15,601,967 3,805,844
------------ ------------
Net cash provided by financing activities 16,980,493 3,451,915
------------ ------------
Net increase (decrease) in cash and cash equivalents 536,053 (7,359,068)
Cash and cash equivalents at beginning of period 28,321 7,717,999
------------ ------------
Cash and cash equivalents at end of period $ 564,374 $ 358,931
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 4,607,000 $ 2,182,757
============ ============
Income taxes $ 4,264,000 $ 3,793,155
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
UNITOG COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Nine Months Ended October 27, 1996 and October 29, 1995
Note 1
In the opinion of the Company, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments (consisting of normal recurring
accruals) necessary to present fairly the financial position of the Company as
of October 27, 1996, and the results of its operations and its cash flows for
the nine months ended October 27, 1996 and October 29, 1995 and the results of
its operations for the three months ended October 27, 1996 and October 29, 1995.
The results of operations for the nine months ended October 27, 1996 are not
necessarily indicative of the results to be expected for the full year.
Note 2 Inventories
The following is a summary of inventories at October 27, 1996 and January 28,
1996:
<TABLE>
<CAPTION>
October 27, 1996 January 28, 1996
<S> <C> <C>
Raw materials $ 3,365,536 $ 4,135,131
Work in progress 2,228,313 2,503,558
Finished goods 16,244,093 12,501,732
----------- -----------
21,837,942 19,140,421
Less LIFO allowance (3,915,983) (3,806,440)
----------- -----------
$17,921,959 $15,333,981
=========== ===========
</TABLE>
Note 3 Cash Dividend
At its November 25, 1996 Board of Directors meeting the Board declared a $.06
per share cash dividend payable on December 20, 1996 to stockholders of record
on December 6, 1996. The $.06 per share dividend was a 20% increase over the
prior year.
Note 4 Acquisitions
During the first quarter of fiscal 1997 the Company acquired a portion of the
assets of Central Quality Services Corporation headquartered in Farmington
Hills, Michigan for approximately $17 million in cash. The assets acquired were
primarily industrial uniform routes and production facilities in central and
northern Michigan and eastern Illinois. The acquisition was accounted for as a
purchase.
During the first quarter of fiscal 1997 the Company also acquired American Dust
Control Co., Inc. in Philadelphia, Pennsylvania in exchange for Unitog common
stock. The acquisition was accounted for as a pooling-of-interests. Prior
period financial statements were not restated due to immateriality.
The operating results of these acquisitions have been included in the
consolidated results of the Company since their acquisition with an
insignificant effect on revenues and net earnings.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $564,000 at October 27, 1996 compared to $28,000
at January 28, 1996. At October 27, 1996, the Company had borrowed $29 million
under its bank credit facility. The amount of borrowings available under the
Company's bank credit facility was $21 million at October 27, 1996. On
November 25, 1996 the Company amended its bank credit facility to increase it to
$60 million. The Company's capitalization ratio was 51% at October 27, 1996.
Cash provided by operating activities was $12.0 million for the nine months
ended October 27, 1996. Working capital was $49.4 million at October 27, 1996
compared to $37.9 million at January 28, 1996. The increase in working capital
was created by higher finished goods inventories, by rental acquisitions and by
the reduction of trade payables and accrued expenses. Capital expenditures were
$11.2 million through October 27, 1996. Capital expenditures for fiscal 1997
are expected to approximate $18 million.
During the first quarter of fiscal 1997, Unitog Company issued $4.5 million in
variable rate tax-exempt Industrial Revenue Bonds which mature in 2020. The
bonds bear interest at floating rates based upon market conditions for tax-
exempt issues. The bond proceeds were used to repay bank debt which had been
incurred to finance facility construction.
During the first quarter of fiscal 1997, the Company acquired a portion of the
assets of Central Quality Services Corporation headquartered in Farmington
Hills, Michigan for approximately $17 million in cash. The assets acquired
were primarily industrial uniform routes and production facilities in central
and northern Michigan and eastern Illinois. The acquisition was accounted for
as a purchase and the operating results of this acquisition have been included
in the consolidated results of the Company since its purchase with an
insignificant effect on revenues and net earnings. The acquisition will add
approximately $15 million in annual rental revenues.
During the first quarter of fiscal 1997, the Company acquired American Dust
Control Co., Inc. in Philadelphia, Pennsylvania in exchange for Unitog Company
common stock. The acquisition was accounted for as a pooling-of-interests. The
operating results of this acquisition have been included in the consolidated
results of the Company since its purchase with an insignificant effect on
revenues and net earnings. The acquisition will add approximately $3 million in
annual rental revenues. Prior period financial statements were not restated due
to immateriality.
In November 1996, the Board of Directors declared a $.06 per share cash dividend
payable on December 20, 1996 to stockholders of record on December 6, 1996. The
$.06 per share dividend was 20% greater than the semi-annual dividend paid last
year and follows a $.06 per share cash dividend paid in June 1996.
Management believes that cash generated from operations and its bank credit
facility will be sufficient to meet its cash requirements for acquisitions and
capital expenditures in the foreseeable future.
Results of Operations
Third quarter fiscal 1997 compared to third quarter fiscal 1996
Revenues for the third quarter of fiscal 1997 were $66 million, an increase of
$14 million or 26% over the comparable period last year. Rental revenues for
the quarter were $51 million, an increase of $13 million
8
<PAGE>
or 33% over last year. Revenues from recent acquisitions generated the majority
of this increase. Michigan operations acquired in November 1995 and March 1996
added $11 million in rental revenues during the quarter. Direct sales for the
third quarter of fiscal 1997 were $15 million, an increase of $1 million or 7%
over the comparable period last year. The increase in Direct sales was
principally due to new image programs with new and existing customers.
Operating income for the third quarter of fiscal 1997 was $7.3 million an
increase of $1.4 million or 24% over the comparable period last year. Higher
operating contribution from Rental operations created the improvement over last
year despite acquisition related assimilation costs.
Net earnings for the third quarter of fiscal 1997 were $3.6 million, an increase
of $300,000 or 9% over the comparable period last year. Improved operating
contribution from Rental operations created the increase over last year. Net
earnings per common share for the third quarter of fiscal 1997 were $.37 per
share, an increase of $.02 per share or 6% over the comparable period last year.
Nine months fiscal 1997 compared to nine months fiscal 1996
Revenues for the nine months ended October 27, 1996 were $195 million, an
increase of $41 million or 27% over the comparable period last year. Rental
revenues for the nine months ended October 27, 1996 were $151 million. Acquired
revenues and internal growth created the $38 million or 34% increase in Rental
revenues over last year. Direct sales for the first nine months of fiscal 1997
were $44 million, an increase of $3 million or 7% above last year.
Operating income for the nine months ended October 27, 1996 was $19.3 million,
an increase of $3.5 million or 22% over last year. Improved operating
profitability from both the Rental and Direct sales businesses created the
increase in operating income. Depreciation and amortization for the nine months
ended October 27, 1996 was $11.5 million, an increase of $3.6 million or 46%
over last year. Higher amortization and depreciation related to acquisitions
and capital expenditures created this increase.
Net earnings for the nine months ended October 27, 1996 were $9.3 million, an
increase of $800,000 or 9% higher than the comparable period last year.
Increased profitability from both business segments created the earnings
improvement. Net earnings per share were $.97 for the nine months ended October
27, 1996, an increase of $.06 per share or 7% over the comparable period last
year.
FORWARD LOOKING STATEMENTS
Forward-looking statements appear in this quarterly report, including in
Management's Discussion and Analysis. These statements reflect Management's
current expectations for future revenues from acquired operations. Actual
results may differ materially from those expectations. Factors that could cause
results to differ materially include labor-related events, and particularly
strikes and labor disputes and changes in the general economy, including
unemployment levels.
9
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See the discussion of certain environmental matters in Part I, Item 1 of the
Company's Annual Report on Form 10-K for the fiscal year ended January 28,
1996 and in Part II, Item 1 of the Company's Quarterly Report on Form 10-Q for
the quarter ended July 28, 1996.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
4(a) Amendment No. 4 to Loan and Letter of Credit Reimbursement
Agreement, dated November 25, 1996, among Unitog Company, Unitog
Rental Services, Inc., UMB Bank, N.A., Harris Trust and Savings Bank
and NBD Bank, N.A.
27 Financial Data Schedule for the nine months ended October 27, 1996.
(b) Reports on Form 8-K.
Unitog Company has not filed any reports on Form 8-K during the quarter
ended October 27, 1996.
10
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Unitog Company
Dated: December 9, 1996 By: /S/ J. Craig Peterson
----------------------
J. Craig Peterson
Senior Vice-President of
Finance and Administration,
Chief Financial Officer
(Duly Authorized Officer)
11
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AMENDMENT NO. 4
---------------
TO LOAN AND LETTER OF CREDIT
----------------------------
REIMBURSEMENT AGREEMENT
-----------------------
THIS AMENDMENT NO. 4 ("Amendment") is made effective as of the 25th day of
November, 1996, among UNITOG COMPANY, a Delaware corporation (the "Company"),
UNITOG RENTAL SERVICES, INC., a California corporation ("Rental") (Company and
Rental being sometimes collectively referred to herein as the "Borrowers" or
individually as a "Borrower"), UMB Bank, n.a., Kansas City, Missouri, a national
banking association ("UMB"), HARRIS TRUST AND SAVINGS BANK, Chicago, Illinois,
an Illinois banking corporation ("Harris"), NBD BANK, Detroit, Michigan, a
Michigan banking corporation ("NBD") (UMB, Harris and NBD being sometimes
collectively referred to herein as the "Banks" or individually as a "Bank") and
UMB Bank, n.a., Kansas City, Missouri, a national banking association, as agent
for the Banks herein (in such capacity, the "Agent").
RECITALS
--------
WHEREAS, the Borrowers, the Banks and the Agent entered into a Loan and
Letter of Credit Reimbursement Agreement (the "Agreement") dated September 10,
1993, the terms of which were modified and amended by Amendment No. 1 to Loan
and Letter of Credit Reimbursement Agreement ("Amendment No. 1") dated December
29, 1994, and further modified and amended by Amendment No. 2 to Loan and Letter
of Credit Reimbursement Agreement ("Amendment No. 2") dated November 9, 1995,
and Amendment No. 3 to Loan and Letter of Credit Reimbursement Agreement
("Amendment No. 3") dated effective February 1, 1996, each executed by the
Borrowers, the Banks and the Agent (the Agreement, as modified and amended by
Amendment No. 1, Amendment No. 2, and Amendment No. 3 herein the "Loan
Agreement"); and
WHEREAS, pursuant to the Loan Agreement the Banks agreed to provide
revolving loans to the Borrowers of up to Fifty Four Million Five Hundred Sixty
One Thousand Six Hundred Forty Four Dollars ($54,561,644); and
WHEREAS, the Borrowers have requested an increase in the amount of
revolving loans available under the Loan Agreement to Sixty Four Million Five
Hundred Sixty One Thousand Six Hundred Forty Four Dollars ($64,561,644) and the
Banks have agreed to such request, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, the parties mutually agree as follows:
<PAGE>
1. Amendment to Section 1.2 of the Loan Agreement. Section 1.2 of the
Loan Agreement is amended as follows:
a. The amounts of the revolving credit commitments of the Banks set
forth in the definition of "Revolving Credit Commitments" are deleted and
replaced with the following: (i) Twenty Five Million Eight Hundred Twenty Four
Thousand Six Hundred Fifty Eight Dollars ($25,824,658), in the case of UMB, and
(ii) Nineteen Million Three Hundred Sixty Eight Thousand Four Hundred Ninety
Three Dollars ($19,368,493), in the case of Harris, and (iii) Nineteen Million
Three Hundred Sixty Eight Thousand Four Hundred Ninety Three Dollars
($19,368,493), in the case of NBD.
2. Condition Precedent. For and in consideration of Banks' agreements to
increase the amounts of their respective Revolving Credit Commitments, and as a
condition precedent thereto, Borrowers agree to pay Banks a fee of Thirty Seven
Thousand Five Hundred Dollars ($37,500.00), receipt of which is hereby
acknowledged, such fee to be allocated among the Banks in accordance with their
Pro Rata Share.
3. Restatement of Section 12.8 of the Loan Agreement. Borrowers restate
and affirm the provisions of Section 12.8 of the Loan Agreement.
4. Third Amended and Restated Master Credit Revolving Note. Borrowers
agree to execute and deliver to each of the Banks a Third Amended and Restated
Master Revolving Credit Note ("Third Amended Note") in the form of Exhibit C
attached hereto and incorporated herein by reference payable to each of the
Banks in accordance with the amount of their respective Revolving Credit
Commitments as increased hereunder. Following the execution and delivery of the
Third Amended Note to each Bank, the Third Amended Note shall evidence all the
indebtedness evidenced by Second Amended and Restated Master Revolving Credit
Note executed and delivered to such Bank by Borrower dated February 1, 1996,
which shall then be marked "Modified pursuant to that certain Fourth Amended and
Restated Master Revolving Credit Note, dated [the date hereof]" and returned to
Borrowers. Exhibit C to the Loan Agreement shall be deleted and replaced in its
entirety by Exhibit C hereto.
5. No Other Modifications. Except as hereby modified and amended, all of
the terms, conditions and covenants contained in the Loan Agreement shall remain
in full force and effect.
6. Representations and Warranties. The Borrowers hereby represent and
warrant that:
a. The representations and warranties contained in the Loan Agreement
and in each certificate or document furnished by the Borrowers and delivered
therewith are true and correct in all material respects on and as of the date
hereof as though made on and as of the date hereof;
b. No Event of Default, and to the Borrowers' knowledge no event which
with the passage of time or the giving of notice or both could become an Event
of Default, exists on the
2
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<PAGE>
date hereof, and no offsets or defenses exist against their obligations under
the Loan Agreement or the documents delivered in connection therewith;
c. This Amendment has been duly authorized, executed and delivered so
as to constitute the legal, valid and binding obligation of the Borrowers,
enforceable in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditor's rights generally and general principles of equity;
d. The execution, delivery and performance of this Amendment will not
violate any applicable provision of law or judgment, order or regulation of any
court or of any public or governmental agency or authority nor conflict with or
constitute a breach of or a default under any instrument to which the Borrowers
are a party or by which the Borrowers or the Borrower's properties is bound nor
result in the creation of any lien, charge or encumbrance upon any assets of the
Borrowers.
7. Miscellaneous.
a. The laws of the State of Missouri shall govern this Amendment.
b. This Amendment shall be binding on the parties hereto and their
respective successors and assigns, and shall inure to the benefits of the
parties hereto.
c. This Amendment may be executed in any number of counterparts, all
of which when taken together shall constitute but one agreement and any of the
parties hereto may execute this Amendment by signing any such counterpart.
d. Section captions used in this Amendment are for convenience only
and shall not affect the construction of this Amendment.
e. Capitalized terms used herein and not specifically herein defined
shall have the meanings ascribed in the Loan Agreement.
3
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8. Statutory Statement. (Mo. Rev. Stat. (S) 432.045)
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING PAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND
OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT BORROWERS AND BANKS
FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING AND THE DOCUMENTS
REFERRED TO HEREIN, WHICH ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF
THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO
MODIFY IT.
[THIS SPACE LEFT INTENTIONALLY BLANK]
4
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IN WITNESS WHEREOF, the Borrowers, the Banks and the Agent have caused this
Amendment No. 4 to be executed by their respective officers duly authorized as
of the dates written beside their respective names below.
DATE: 11-25-96 UNITOG COMPANY
By: /s/ J. Craig Peterson
-----------------------------------
Name: J. Craig Peterson
Title: Chief Financial Officer
DATE: 11-25-96 UNITOG RENTAL SERVICES, INC.
By: /s/ J. Craig Peterson
-----------------------------------
Name: J. Craig Peterson
Title: Chief Financial Officer
DATE: 11-27-96 UMB BANK, N.A.
Individually and as Agent
By: /s/ David A. Proffitt
-----------------------------------
Name: David A. Proffitt
Title: Sr. V.P.
DATE: 12-3-96 NBD BANK
By: /s/ Thomas A. Levasseur
-----------------------------------
Name: Thomas A. Levasseur
Title: Vice President
DATE: 12-3-96 HARRIS TRUST AND SAVINGS BANK
By: /s/ Len E. Meyer
-----------------------------------
Name: Len E. Meyer
Title: Vice President
5
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EXHIBIT C
THIRD AMENDED AND RESTATED
MASTER REVOLVING CREDIT NOTE
$__,___,___.00 and Interest _______________, 1996
PAYMENTS, DISBURSEMENTS AND INTEREST
FOR VALUE RECEIVED, the undersigned each (the "undersigned" means each
maker and each jointly and severally agrees to all the provisions hereunder)
promise to pay to the order of
_______________________________________________________ (hereinafter called
"Bank"), at its main office, on September 8, 1999, the principal sum of
_________________________________ and no/100 Dollars ($____________) or such
other lesser amount as shall be noted on the Schedule of Disbursements and
Payments of Principal and Interest included herein or attached hereto pursuant
to the authority set forth herein, together with interest on the unpaid
principal balance hereof from time to time outstanding from date(s) of
disbursement until paid, at the rate or rates as provided in that certain Loan
and Letter of Credit Reimbursement Agreement ("Agreement") between the
undersigned, the Bank and others dated September 10, 1993, as amended and
modified by Amendment No. 1 to Loan and Letter of Credit Reimbursement Agreement
("Amendment No. 1") dated December 29, 1994 between the undersigned, the Bank
and others, by Amendment No. 2 to Loan and Letter of Credit Reimbursement
Agreement ("Amendment No. 2") dated November 9, 1995 between the undersigned,
the Bank and others, by Amendment No. 3 to Loan and Letter of Credit
Reimbursement Agreement ("Amendment No. 3") dated effective February 1, 1996
between the undersigned, the Bank and others, and by Amendement No. 4 to Loan
and Letter of Credit Reimbursement Agreement ("Amendment No.4") (the Agreement,
as modified and amended by Amendment No. 1, Amendment No. 2, Amendment No. 3 and
Amendment No. 4 hereinafter the "Loan Agreement"), the provisions of which are
incorporated herein by reference, and adjusted from time to time as provided in
said Loan Agreement, with all accrued interest payable quarterly or as otherwise
provided in the Loan Agreement. Unless provided in the Loan Agreement to the
contrary, all payments shall be applied first to payment of accrued interest,
and then to reduction of the principal sum due hereunder. This note shall bear
interest after maturity, whether by reason of acceleration or otherwise, at a
rate of interest equal to two percent (2%) in excess of the rate otherwise then
in effect until paid in full or cured and such interest shall be compounded
annually if not paid annually. All or any part of the outstanding principal
balance hereof may be paid prior to maturity and the undersigned may from time
to time until maturity receive, except as limited by said Loan Agreement,
further disbursements hereunder; provided, however, the aggregate amount of all
principal amounts outstanding hereunder shall at no time exceed the face amount
hereof; and provided further, that each and every disbursement made under this
THIRD AMENDED AND RESTATED MASTER REVOLVING CREDIT NOTE shall be made pursuant
to and governed by the terms of the Loan Agreement. The principal amount due
hereunder shall be the last amount stated to be the Unpaid Principal Balance of
Note on the Schedule of Disbursements and Payments of Principal and Interest
from time to time to evidence payments and disbursements hereunder. The
statements on such schedules shall be rebuttably presumed to be correct. The
Bank is hereby directed
<PAGE>
by the undersigned to credit all future advances in the manner provided for in
the Loan Agreement and the undersigned agrees that the Bank or holder hereof may
make advances, at its discretion, upon oral or written instructions of any of
the undersigned, or any other person(s) duly authorized by either of the
undersigned.
ACCELERATION AND EVENTS OF DEFAULT
Upon the occurrence of any of the events of default defined in Section 8 of
the Loan Agreement the provisions of which are hereby incorporated by reference,
then this note and all other obligations of each of the undersigned to the
holder shall, subject to the terms of Section 9 of the Loan Agreement,
immediately become due and payable in accordance with the terms of said Loan
Agreement.
MISSOURI LAW
The interpretation of this instrument and the rights and remedies of the
parties hereto shall be governed by the laws of the State of Missouri.
COLLECTION EXPENSES
To the extent permitted by applicable law, the undersigned agrees to pay
all expenses of the holder in collecting this note and enforcing all rights with
respect hereto including reasonable attorneys' fees.
DEMAND, NOTICE, ENDORSERS, GUARANTORS AND SURETIES
Demand for payment, notice of nonpayment, protest, dishonor, diligence and
suit are hereby waived by all parties liable hereon.
NO WAIVERS
Any failure by the holder hereof to exercise any right hereunder shall not
be construed as a waiver of the right to exercise the same or any other right at
any other time and from time to time thereafter.
HEADINGS
All headings or titles appearing in this note are used as a matter of
convenience only and shall not affect the interpretation of the provisions
hereof.
<PAGE>
UNITOG COMPANY
By:_________________________________
Title:______________________________
UNITOG RENTAL SERVICES, INC.
By:_________________________________
Title:_____________________________
8
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<PAGE>
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<FISCAL-YEAR-END> JAN-26-1997
<PERIOD-END> OCT-27-1996
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<SECURITIES> 0
<RECEIVABLES> 26,898,078
<ALLOWANCES> 1,002,000
<INVENTORY> 17,921,959
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0
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