Exhibit
10.6
UNIFIRST CORPORATION
UNITECH SERVICES GROUP, INC.
UNIFIRST CANADA LTD.
UNIFIRST HOLDINGS, L.P.
UONE CORPORATION
UTWO CORPORATION
RC AIR LLC
UNIFIRST-FIRST AID CORPORATION
$100,000,000 Floating Rate Senior
Notes, Series D, due September 14, 2013
______________
NOTE PURCHASE AGREEMENT
_____________
Dated as of September 14,
2006
(Not a part of the
Agreement)
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SECTION 1.
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Authorization of Notes
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1
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Section 1.1
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Authorization of Notes
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1
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Section 1.2
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Provisions Relating to the
Notes
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1
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SECTION 2.
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Sale and Purchase of
Notes
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2
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SECTION 4.
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Conditions to Closing
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3
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Section 4.1
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Representations and
Warranties
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3
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Section 4.2
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Performance; No
Default
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3
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Section 4.3
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Compliance
Certificates
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3
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Section 4.4
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Opinions of Counsel
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3
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Section 4.5
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Purchase Permitted by Applicable
Law, Etc
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3
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Section 4.6
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Related Transactions
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4
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Section 4.7
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Payment of Special Counsel
Fees
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4
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Section 4.8
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Private Placement
Number
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4
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Section 4.9
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Changes in Corporate
Structure
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4
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Section 4.10
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Funding Instructions
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4
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Section 4.11
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Proceedings and
Documents
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4
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SECTION 5.
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Representations and Warranties of
the Obligors
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4
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Section 5.1
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Organization; Power and
Authority
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4
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Section 5.2
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Authorization, Etc
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5
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Section 5.4
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Organization and Ownership of
Shares of Subsidiaries;
Affiliates
5
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Section 5.5
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Financial Statements
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6
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Section 5.6
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Compliance with Laws, Other
Instruments, Etc
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6
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Section 5.7
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Governmental Authorizations,
Etc
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7
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Section 5.8
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Litigation; Observance of
Agreements, Statutes and
Orders
7
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Section 5.10
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Title to Property;
Leases
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7
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Section 5.11
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Licenses, Permits, Etc
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8
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Section 5.12
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Compliance with ERISA; Pension
Plans
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8
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Section 5.13
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Private Offering by the
Obligors
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9
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Section 5.14
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Use of Proceeds; Margin
Regulations
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9
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Section 5.15
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Existing Debt; Future
Liens
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10
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Section 5.16
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Foreign Assets Control
Regulations, Etc
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10
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Section 5.17
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Status under Certain
Statutes
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10
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Section 5.18
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Environmental Matters
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11
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Section 5.19
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Notes Rank Pari Passu
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12
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Section 5.20
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Solvency of the
Obligors
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12
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Section 5.21
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Consideration
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12
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SECTION 6.
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Representations of the
Purchasers
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13
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Section 6.1
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Purchase for
Investment
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13
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Section 6.2
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Source of Funds
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13
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Section 6.3
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Accredited Investor
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14
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SECTION 7.
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Information as to the
Obligors
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14
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Section 7.1
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Financial and Business
Information
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14
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Section 7.2
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Officer’s
Certificate
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17
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Section 7.3
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Inspection
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17
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SECTION 8.
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Prepayment of the
Notes
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18
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Section 8.1
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Required Prepayments
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18
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Section 8.2
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Optional Prepayments
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18
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Section 8.3
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Allocation of Partial
Prepayments
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18
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Section 8.4
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Maturity; Surrender,
Etc
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18
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Section 8.5
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Purchase of Notes
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19
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Section 8.6
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Payments Free and Clear of
Taxes
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19
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SECTION 9.
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Affirmative Covenants
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21
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Section 9.1
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Compliance with Law
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21
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Section 9.3
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Maintenance of
Properties
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21
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Section 9.4
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Payment of Taxes
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21
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Section 9.5
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Corporate Existence,
Etc
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22
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Section 9.6
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Additional Obligors
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22
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Section 9.7
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Notes to Rank Pari
Passu
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22
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SECTION 10.
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Negative Covenants
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23
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Section 10.1
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Limitation on Consolidated
Debt
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23
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Section 10.2
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Limitation on Priority
Debt
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23
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Section 10.4
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Merger, Consolidation,
Etc
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25
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Section 10.5
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Sale of Assets, Etc
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26
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Section 10.6
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Nature of Business
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26
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Section 10.7
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Transactions with
Affiliates
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27
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Section 10.8
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Redesignation of Restricted and
Unrestricted Subsidiaries
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27
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Section 10.9
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Terrorism Sanctions
Regulations
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27
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SECTION 11.
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Events of Default
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27
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SECTION 12.
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Remedies on Default,
Etc
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29
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Section 12.1
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Acceleration
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29
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Section 12.2
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Other Remedies
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30
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Section 12.3
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Rescission
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30
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Section 12.4
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No Waivers or Election of
Remedies, Expenses, Etc
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31
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SECTION 13.
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REGISTRATION; EXCHANGE;
SUBSTITUTION OF
NOTES
31
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Section 13.1
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Registration of Notes
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31
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Section 13.2
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Transfer and Exchange of
Notes
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31
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Section 13.3
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Replacement of Notes
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31
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SECTION 14.
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Payments on Notes
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32
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Section 14.1
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Place of Payment
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32
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Section 14.2
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Home Office Payment
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32
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SECTION 15.
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Expenses, Etc
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33
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Section 15.1
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Transaction Expenses
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33
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SECTION 16.
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SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; ENTIRE
AGREEMENT
33
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SECTION 17.
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Amendment and Waiver
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33
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Section 17.1
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Requirements
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33
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Section 17.2
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Solicitation of Holders of
Notes
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34
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Section 17.3
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Binding Effect, Etc
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34
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Section 17.4
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Notes Held by Obligors,
Etc
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35
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SECTION 19.
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Reproduction of
Documents
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35
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SECTION 20.
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Confidential
Information
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36
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SECTION 21.
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Substitution of
Purchaser
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37
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SECTION 22.
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Limitation on Interest
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37
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SECTION 23.
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Submission to
Jurisdiction
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38
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SECTION 24.
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Miscellaneous
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39
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Section 24.1
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Successors and Assigns
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39
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Section 24.2
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UniFirst as Agent for the
Obligors
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39
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Section 24.3
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Judgments
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39
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Section 24.5
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Payments Due on Non-Business
Days
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39
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Section 24.6
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Severability
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39
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Section 24.7
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Construction
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40
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Section 24.8
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Counterparts
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40
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Section 24.9
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Governing Law
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40
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ATTACHMENTS TO NOTE PURCHASE AGREEMENT:
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SCHEDULE B
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—
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Defined Terms
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UNIFIRST
CORPORATION
UNITECH
SERVICES
GROUP, INC.
UNIFIRST
CANADA LTD.
UNIFIRST
HOLDINGS,
L.P.
UONE CORPORATION
UTWO CORPORATION
RC AIR LLC
UNIFIRST-FIRST
AID CORPORATION
Floating Rate Senior Notes,
Series D, due September 14, 2013
Dated as of September
14 , 2006
TO THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
UNIFIRST CORPORATION, a
Massachusetts corporation ( “UniFirst” ),
UNITECH SERVICES
GROUP, INC., a California corporation (
“UniTech” ), UNIFIRST CANADA LTD., a Canadian federal corporation (
“UniFirst Canada” ), UNIFIRST
HOLDINGS, L.P., a Texas limited partnership (
“UniFirst Holdings” ), UONE CORPORATION, a Massachusetts corporation (
“UOne” ), UTWO CORPORATION, a Delaware corporation (
“UTwo” ), RC AIR LLC, a
New Hampshire limited liability company ( “RC
Air” ), and UNIFIRST-FIRST AID CORPORATION, a Maryland corporation (“
Unifirst-First Aid” ), (UniFirst, UniTech, UniFirst
Canada, UniFirst Holdings, UOne, UTwo, RC Air, Unifirst-First Aid
and each other Person required to become an obligor hereunder
pursuant to Section 9.6, being sometimes hereinafter referred
to individually as an “Obligor” and collectively
as the “Obligors” ), jointly and severally,
agree with the purchasers listed in the attached Schedule A (the
“Purchasers” ) as follows:
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SECTION 1.
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AUTHORIZATION OF NOTES.
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Section 1.1
Authorization of Notes. The Obligors will authorize the
issue and sale of $100,000,000 aggregate principal amount of their
Floating Rate Senior Notes, Series D, due
September 14 ,
2013 (the “Notes”
). As used herein, the term “Notes” shall mean all
notes originally delivered pursuant to this Agreement and any such
notes issued in substitution therefor pursuant to Section 13
of this Agreement. The Notes shall be substantially in the form set
out in Exhibit 1, with such changes therefrom, if any, as may
be approved by the Purchasers and the Obligors. Certain capitalized
terms used in this Agreement are defined in Schedule B;
references to a “Schedule” or an “Exhibit”
are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement.
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Section 1.2
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Provisions Relating to the Notes.
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(a) The Notes shall bear
interest (computed on the basis of a 360-day year and the actual
number of days elapsed) on the unpaid principal thereof from the
date of issuance
at a floating rate equal to the
Adjusted LIBOR Rate for the Interest Period in effect from time to
time, payable quarterly in arrears on each Interest Payment Date
and, to the extent permitted by applicable law, interest on any
overdue payment of principal, any overdue payment of interest and
any overdue payment of Prepayment Premium and Breakage Amount (as
provided herein) from the due date thereof (whether by acceleration
or otherwise) at the Default Rate until paid.
(b) The Adjusted LIBOR Rate
shall be determined by the Obligors, and notice thereof shall be
given to the holders of the Notes, within three Business Days after
the beginning of each Interest Period, together with a copy of the
relevant screen used for the determination of LIBOR, a calculation
of the Adjusted LIBOR Rate for such Interest Period, the number of
days in such Interest Period, the date on which interest for such
Interest Period will be paid and the amount of interest to be paid
to each holder of Notes on such date. In the event that the
Required Holders do not concur with such determination by the
Obligors, as evidenced by a single written notice to the Obligors
given by the Required Holders within 10 Business Days after receipt
by such holders of the notice delivered by the Obligors pursuant to
the immediately preceding sentence, the determination of the
Adjusted LIBOR Rate shall be made by such the Required Holders, and
any such determination made in accordance with the provisions of
this Agreement, shall be conclusive and binding absent manifest
error.
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SECTION 2.
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SALE AND PURCHASE OF NOTES.
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Subject to the terms and conditions
of this Agreement, the Obligors will issue and sell to each
Purchaser and each Purchaser will purchase from the Obligors, at
the Closing provided for in Section 3, Notes in the principal
amount specified opposite such Purchaser’s name in
Schedule A at the purchase price of 100% of the principal
amount thereof. Each Purchaser’s obligations hereunder are
several and not joint and no Purchaser shall have any obligation or
liability to any Person for the performance or nonperformance by
any other Purchaser hereunder.
The sale and purchase of the Notes
to be purchased by the Purchasers shall occur at the offices of
Schiff Hardin LLP, 623 Fifth Avenue, 28th Floor, New York, New York
10022, at 11:00 a.m., New York, New York time, at a closing (the
“Closing” ) on September 14, 2006 or such
later date as may be agreed upon by the Obligors and the
Purchasers. At the Closing, the Obligors will deliver to each
Purchaser the Notes to be purchased by such Purchaser in the form
of a single Note (or such greater number of Notes in denominations
of at least $100,000 as such Purchaser may request) dated the date
of the Closing and registered in such Purchaser’s name (or in
the name of its nominee), against delivery by such Purchaser to the
Obligors or their order of immediately available funds in the
amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Obligors. If at
the Closing the Obligors shall fail to tender such Notes to any
Purchaser as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been
fulfilled to any Purchaser’s satisfaction, such Purchaser
shall, at its election, be relieved of all further obligations
under this Agreement, without thereby waiving any rights such
Purchaser may have by reason of such failure or such
nonfulfillment.
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SECTION 4.
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CONDITIONS TO CLOSING.
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Each Purchaser’s obligation to
purchase and pay for the Notes to be sold to such Purchaser at the
Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at the Closing, of the following
conditions:
Section 4.1
Representations and Warranties . The representations and
warranties of each Obligor in this Agreement shall be correct when
made and at the time of the Closing.
Section 4.2
Performan ce ; No Default. Each Obligor shall have
performed and complied with all agreements and conditions contained
in this Agreement required to be performed or complied with by it
prior to or at the Closing, and after giving effect to the issue
and sale of the Notes (and the application of the proceeds thereof
as contemplated by Section 5.14), no Default or Event of
Default shall have occurred and be continuing. None of the Obligors
nor any Restricted Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been
prohibited by Section 10 had such Section applied since such
date.
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Section 4.3
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Compliance Certificates .
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(a) Officer’s
Certificate . Each Obligor shall have delivered to such
Purchaser an Officer’s Certificate, dated the date of the
Closing, certifying that the conditions specified in
Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary’s
Certificate . Each Obligor shall have delivered to such
Purchaser a certificate certifying as to the resolutions attached
thereto and other corporate or other proceedings relating to the
authorization, execution and delivery of the Notes and this
Agreement.
Section 4.4
Opinions of Counsel . Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser,
dated the date of the Closing (a) from Goodwin Procter LLP,
special counsel for the Obligors, covering the matters set forth in
Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as such Purchaser or special
counsel to the Purchasers may reasonably request (and each Obligor
hereby instructs its counsel to deliver such opinion to such
Purchaser), (b) from Jenkens & Gilchrist, Texas local counsel
to UniFirst Holdings, covering the matters set forth in Exhibit
4.4(b) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or special counsel to the
Purchasers may reasonably request (and UniFirst Holdings hereby
instructs its counsel to deliver such opinion to such Purchaser),
and (c) from Schiff Hardin LLP, special counsel to the
Purchasers in connection with such transactions, substantially in
the form set forth in Exhibit 4.4(c) and covering such other
matters incident to such transactions as such Purchaser may
reasonably request.
Section 4.5
Purchase Permitted by Applicable Law, Etc . On the date of
the Closing, such Purchaser’s purchase of Notes shall
(a) be permitted by the laws and regulations of each
jurisdiction to which such Purchaser is subject, without recourse
to provisions (such as Section 1405(a)(8) of the New York
Insurance Law) permitting limited investments by insurance
companies without restriction as to the character of the particular
investment, (b) not violate any
applicable law or regulation
(including, without limitation, Regulation T, U or X of the Board
of Governors of the Federal Reserve System) and (c) not
subject such Purchaser to any tax, penalty or liability under or
pursuant to any applicable law or regulation. If requested by any
Purchaser, such Purchaser shall have received an Officer’s
Certificate certifying as to such matters of fact as such Purchaser
may reasonably specify to enable it to determine whether such
purchase is so permitted.
Section 4.6
Related Transactions . The Obligors shall have consummated
the sale of the entire principal amount of the Notes scheduled to
be sold on the date of the Closing pursuant to this
Agreement.
Section 4.7
Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Obligors shall have paid on or
before the Closing the reasonable and documented fees, charges and
disbursements of special counsel to the Purchasers referred to in
Section 4.4 to the extent reflected in a statement of such
counsel rendered to the Obligors at least one Business Day prior to
the Closing.
Section 4.8
Private Placement Number . A Private Placement Number issued
by Standard & Poor’s CUSIP Service Bureau (in cooperation
with the Securities Valuation Office of the National Association of
Insurance Commissioners) shall have been obtained for the
Notes.
Section 4.9
Changes in Corporate Structure . Except as specified in
Schedule 4.9, no Obligor shall have changed its jurisdiction
of organization or been a party to any merger or consolidation nor
shall have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of
the most recent financial statements referred to in
Schedule 5.5.
Section 4.10
Funding
Instructions . At least two Business Days prior to the date of
the Closing, such Purchaser shall have received written
instructions executed by an authorized financial officer of each
Obligor directing the manner of the payment of funds and setting
forth (a) the name of the transferee bank, (b) such transferee
bank’s ABA number, (c) the account name and number into which
the purchase price for the Notes is to be deposited and (d) the
name and telephone number of the account representative responsible
for verifying receipt of such funds.
Section 4.11
Proceedings and Documents . All corporate and other
proceedings in connection with the transactions contemplated by
this Agreement and all documents and instruments incident to such
transactions shall be satisfactory to such Purchaser and special
counsel to the Purchasers, and such Purchaser and special counsel
to the Purchasers shall have received all such counterpart
originals or certified or other copies of such documents as such
Purchaser or special counsel to the Purchasers may reasonably
request.
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SECTION 5.
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REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.
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The Obligors, jointly and severally,
represent and warrant to each Purchaser that:
Section 5.1
Organization; Power and Authority . Each Obligor is a
corporation, limited partnership or limited liability company, as
applicable, duly organized, validly existing
and in good standing under the laws
of its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to be
so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. Each Obligor has the corporate or other organizational
power and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this
Agreement and the Notes and to perform the provisions hereof and
thereof.
Section 5.2
Authorization, Etc . This Agreement and the Notes have been
duly authorized by all necessary corporate or other organizational
action on the part of each Obligor, and this Agreement constitutes,
and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of each Obligor enforceable
against such Obligor in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and
(b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
Section 5.3
Disclosure . The Obligors, through their agent, Banc of
America Securities LLC, have delivered to each Purchaser a copy of
a Private Placement Memorandum, dated August 2006 (the
“Memorandum” ), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal
properties of the Obligors and their Subsidiaries. Except as
disclosed in Schedule 5.3, this Agreement, the Memorandum, the
documents, certificates or other writings delivered to the
Purchasers by or on behalf of the Obligors in connection with the
transactions contemplated hereby and the financial statements
listed in Schedule 5.5, taken as a whole, do not contain any
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in
light of the circumstances under which they were made. Except as
disclosed in the Memorandum or as described in Schedule 5.3,
or in one of the documents, certificates or other writings
identified therein, or in the financial statements listed in
Schedule 5.5, since August 31, 2005, there has been no change
in the financial condition, operations, business or properties of
the Obligors and their Subsidiaries, taken as a whole, except
changes that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. There is
no fact known to any Obligor that could reasonably be expected to
have a Material Adverse Effect that has not been set forth herein
or in the Memorandum or in the other documents, certificates and
other writings delivered to the Purchasers by or on behalf of the
Obligors specifically for use in connection with the transactions
contemplated hereby.
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|
Section 5.4
|
Organization and Ownership of Shares of
Subsidiaries; Affiliates .
|
(a) Schedule 5.4 contains
(except as noted therein) complete and correct lists (1) of
each Obligor’s Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and
the percentage of shares of each class of its capital stock or
similar equity interests outstanding owned by each Obligor and each
other Subsidiary, and if such Subsidiary is, on the date of
Closing, a Restricted
Subsidiary, (2) of each
Obligor’s Affiliates, other than Subsidiaries, and
(3) of each Obligor’s directors and senior
officers.
(b) All of the outstanding
shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 as being owned by any Obligor
or any Subsidiary have been validly issued, are fully paid and
nonassessable and are owned by such Obligor or such Subsidiaries
free and clear of any Lien (except as otherwise disclosed in
Schedule 5.4).
(c) Each Subsidiary identified
in Schedule 5.4 is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of
its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by law
other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to
own or hold under lease and to transact the business it transacts
and proposes to transact.
(d) No Subsidiary is a party
to, or otherwise subject to any legal restriction or any agreement
(other than this Agreement, the agreements listed on
Schedule 5.4 and customary limitations imposed by corporate or
other organizational law statutes) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to any Obligor or any Subsidiary
that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
Section 5.5
Financial Statements . The Obligors have delivered to each
Purchaser copies of the consolidated financial statements of
UniFirst listed on Schedule 5.5. All of said financial
statements (including in each case the related schedules and notes)
fairly present in all material respects the consolidated financial
position of UniFirst and its Subsidiaries as of the respective
dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set
forth in the notes thereto (subject, in the case of any interim
financial statements, to normal year-end adjustments).
Section 5.6
Compliance with Laws, Other Instruments, Etc . The
execution, delivery and performance by each Obligor of this
Agreement and the Notes will not (a) contravene, result in any
breach of, or constitute a default under, or result in the creation
of any Lien in respect of any property of such Obligor or any of
its Subsidiaries under, any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which such Obligor
or any of its Subsidiaries is bound or by which such Obligor or any
of its Subsidiaries or any of their respective properties may be
bound or affected, (b) conflict with or result in a breach of
any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental
Authority applicable to such Obligor or any of its Subsidiaries or
(c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to such Obligor
or any of its Subsidiaries.
Section 5.7
Governmental Authorizations, Etc . No consent, approval or
authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the
execution, delivery or performance by any Obligor of this Agreement
or the Notes.
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Section 5.8
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Litigation; Observance of Agreements, Statutes
and Orders.
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(a) (1) Schedule 5.8
sets forth all significant actions, suits or proceedings pending
or, to the knowledge of any Obligor, threatened against or
affecting any Obligor or any of its Subsidiaries or any property of
any Obligor or any of its Subsidiaries in any court or before any
arbitrator of any kind or before or by any Governmental Authority.
Nothing set forth on Schedule 5.8, individually, after taking into
account amounts accrued on the balance sheet of UniFirst and
amounts covered by insurance, could reasonably be expected to have
a Material Adverse Effect.
(2) The
Obligors believe that the aggregate amount of liabilities, if any,
in excess of amounts accrued or covered by insurance, with respect
to items set forth on Schedule 5.8 will not have a Material Adverse
Effect. It is possible, however, that future financial position or
results of operations for any particular future period could be
materially affected by changes in the Company’s assumptions
or strategies related to these contingencies or changes out of the
Company’s control.
(b) No Obligor and no
Subsidiary is in default under any term of any agreement or
instrument to which it is a party or by which it is bound, or any
order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including, without limitation,
Environmental Laws or the Patriot Act) of any Governmental
Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
Section 5.9
Taxes . The Obligors and their Subsidiaries have filed all
tax returns that are required to have been filed in any
jurisdiction, and have paid all taxes shown to be due and payable
on such returns and all other taxes and assessments levied upon
them or their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and
before they have become delinquent, except for any taxes and
assessments (a) the amount of which is not, individually or in
the aggregate, Material or (b) the amount, applicability or
validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which an Obligor or a
Subsidiary, as the case may be, has established adequate reserves
in accordance with GAAP. No Obligor knows of any basis for any
other tax or assessment that would reasonably be expected to have a
Material Adverse Effect. The federal income tax liabilities of
UniFirst and its Subsidiaries have been determined by the Internal
Revenue Service and paid for all fiscal years up to and including
the fiscal year ended August 29, 1998.
Section 5.10
Title to
Property; Leases . The Obligors and their Subsidiaries have
good and sufficient title to their respective properties that,
individually or in the aggregate, are
Material, including all such
properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired
by any Obligor or any Subsidiary after said date (except as sold or
otherwise disposed of in the ordinary course of business), in each
case free and clear of Liens prohibited by this Agreement. All
leases that, individually or in the aggregate, are Material are
valid and subsisting and are in full force and effect in all
material respects.
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Section 5.11
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Licenses, Permits, Etc . Except as disclosed in
Schedule 5.11,
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(a) the Obligors and their
Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks,
trade names and domain names or rights thereto, that, individually
or in the aggregate, are Material, without known conflict with the
rights of others;
(b) to the best knowledge of
each Obligor, no product of any Obligor or any Subsidiary infringes
in any material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade
name, domain name or other right owned by any other Person;
and
(c) to the best knowledge of
each Obligor, there is no Material violation by any Person of any
right of any Obligor or any of its Subsidiaries with respect to any
patent, copyright, service mark, trademark, trade name, domain name
or other right owned or used by any Obligor or any of its
Subsidiaries.
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Section 5.12
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Compliance with ERISA; Pension Plans
.
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(a) Each Obligor and each ERISA
Affiliate have operated and administered each Plan in compliance
with all applicable laws except for such instances of noncompliance
as have not resulted in and would not reasonably be expected to
result in a Material Adverse Effect. No Obligor and no ERISA
Affiliate has incurred any liability pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating
to employee benefit plans (as defined in Section 3 of ERISA),
and no event, transaction or condition has occurred or exists that
would reasonably be expected to result in the incurrence of any
such liability by any Obligor or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets
of any Obligor or any ERISA Affiliate, in either case pursuant to
Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as could not be, individually or in the
aggregate, Material.
(b) The present value of the
aggregate benefit liabilities under each of the Plans subject to
Title IV of ERISA (other than Multiemployer Plans), determined as
of the end of such Plan’s most recently ended plan year on
the basis of the actuarial assumptions specified for funding
purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities by more than
$1,000,000 in the aggregate for all Plans. The term “benefit
liabilities” has the meaning specified in Section 4001
of ERISA and the terms “current value” and
“present value” have the meanings specified in
Section 3 of ERISA.
(c) The Obligors and their
ERISA Affiliates have not incurred withdrawal liabilities (and, to
the best knowledge of the Obligors, are not subject to contingent
withdrawal liabilities) under Section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that, individually or in the
aggregate, could result in a Material Adverse Effect.
(d) The expected
post-retirement benefit obligation (determined as of the last day
of UniFirst’s most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by Section 4980B of the Code) of the Obligors and
their Subsidiaries is not Material.
(e) The execution and delivery
of this Agreement and the issuance and sale of the Notes hereunder
will not involve any transaction that is subject to the
prohibitions of Section 406 of ERISA or in connection with
which a tax could be imposed pursuant to
Section 4975(c)(1)(A)-(D) of the Code. The representation by
the Obligors to each Purchaser in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the
accuracy of such Purchaser’s representation in
Section 6.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by such
Purchaser.
(f) All Non-US Pension
Plans have been established, operated, administered and maintained
in compliance with all laws, regulations and orders applicable
thereto except for such failures to comply, in the aggregate for
all such failures, that could not reasonably be expected to have a
Material Adverse Effect. All premiums, contributions and any other
amounts required by applicable Non-US Pension Plan documents or
applicable laws have been paid or accrued as required, except for
premiums, contributions and amounts that, in the aggregate for all
such obligations, could not reasonably be expected to have a
Material Adverse Effect.
Section 5.13
Private
Offering by the Obligors . No Obligor nor anyone acting on its
behalf, has, directly or indirectly, offered the Notes or any
similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect
thereof with, any Person other than 20 Institutional Investors
(including the Purchasers) of the type described in clause (c) of
the definition thereof, each of which has been offered the Notes at
a private sale for investment. No Obligor nor anyone acting on its
behalf has taken, or will take, any action that would subject the
issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
Section 5.14
Use of
Proceeds; Margin Regulations . The Obligors will apply the
proceeds of the sale of the Notes for general corporate purposes of
the Obligors and their Subsidiaries including to repay existing
Debt of the Obligors and their Subsidiaries. No part of the
proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the
purpose of buying or carrying or trading in any securities under
such circumstances as to involve any Obligor in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of said Board (12 CFR 220).
Margin stock does not constitute more than 1% of the value of the
consolidated total assets of any Obligor and its Subsidiaries and
no
Obligor has any present intention
that margin stock will constitute more than 1% of the value of its
consolidated total assets. As used in this Section, the terms
“margin stock” and “purpose of buying or
carrying” shall have the meanings assigned to them in said
Regulation U.
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Section 5.15
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Existing Debt; Future Liens
.
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(a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list
of all outstanding Debt of the Obligors and their Subsidiaries as
of July 22, 2006 since which date there has been no Material change
in the amounts, interest rates, sinking funds, installment payments
or maturities of the Debt of the Obligors or their Subsidiaries. No
Obligor and no Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on
any Debt of any Obligor or any Subsidiary and no event or condition
exists with respect to any Debt of any Obligor or any Subsidiary
that would permit (or that with notice or the lapse of time, or
both, would permit) one or more Persons to cause such Debt to
become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in
Schedule 5.15, no Obligor and no Subsidiary has agreed or
consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned or
hereafter acquired, to be subject to a Lien not permitted by
Section 10.3.
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Section 5.16
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Foreign Assets Control Regulations,
Etc .
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(a) Neither the sale of the
Notes by the Obligors hereunder nor their use of the proceeds
thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating
thereto.
(b) No Obligor nor any
Subsidiary (1) is a Person described or designated in the Specially
Designated Nationals and Blocked Persons List of the Office of
Foreign Assets Control or in Section 1 of the Anti-Terrorism Order
or (2) engages in any dealings or transactions with any such
Person. The Obligors and their Subsidiaries are in compliance, in
all material respects, with the Patriot Act.
(c) No part of the proceeds
from the sale of the Notes hereunder will be used, directly or
indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain
any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977, as amended, assuming in all cases
that such Act applies to the Obligors.
Section 5.17
Status
under Certain Statutes . No Obligor and no Subsidiary is
subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 2005, as
amended, the ICC Termination Act of 1995, as amended, or the
Federal Power Act, as amended.
Section 5.18
Environmental Matters . As to each of the real properties
owned or leased by each Obligor and each Restricted Subsidiary and
any operations thereon, and as to the Business, each such property
and operation and the Business is presently in compliance with and
has in full force and effect all permits, licenses, or approvals
required by all applicable building, zoning, anti-pollution,
hazardous substance, hazardous material, oil, radioactive or
nuclear waste, environmental, health, safety or other laws,
ordinances or regulations (collectively, “Environmental
Laws” ), including, without limitation, the Atomic Energy
Act of 1954, as amended, 42 U.S.C. 2011 et seq. , and the
Energy Reorganization Act of 1974, as amended, 42 U.S.C. 5801 et
seq ., and any judgment, decree or order relating thereto, and
no Obligor nor any Restricted Subsidiary has received notification
that any of the foregoing properties or operations or the Business
is in violation or alleged violation of any of the foregoing,
except where the failure to so comply with or have any such permit,
license or approval or where the receipt of such notification would
not reasonably be expected to have a Material Adverse Effect, it
being understood and agreed that any failure to so comply with or
have any such permit, license or approval shall be considered to
have a Material Adverse Effect only if the cost to the Obligors
and/or the Restricted Subsidiaries associated with such failure is
and/or is reasonably expected to be equal to or greater than
$2,000,000, which calculation shall include any and all attorneys
fees incurred or reasonably expected to be incurred by the Obligors
and/or the Restricted Subsidiaries. Except as set forth on Schedule
5.18 attached hereto and except for OHM (as hereinafter defined)
that is used in compliance with all Environmental Laws in amounts
and methods customary for a business such as the Business (
provided such use does not result in a release that requires
reporting pursuant to any Environmental Law), no Obligor nor any
Restricted Subsidiary has ever generated, stored, handled or
disposed of any hazardous substances, hazardous materials, oil, or
radioactive or nuclear waste (collectively,
“OHM” ) on any of such properties or any portion
thereof or in connection with any of such operations or the
Business and no Obligor nor any Restricted Subsidiary is aware of
the presence, generation, storage, handling, or disposal of any OHM
on any of such properties or any portion thereof or in connection
with any of such operations or the Business by any Obligor or any
prior owner or prior occupant or prior user thereof or by anyone
else, nor is any Obligor nor any Restricted Subsidiary aware of any
spill or release or threatened release of OHM or other substance,
into the environment on or from any of such properties or
operations or in connection with the Business. Except as set forth
on Schedule 5.18 attached hereto, no inquiry, notice or threat to
give notice by any Governmental Authority or any other third party
has been received by any Obligor or any Restricted Subsidiary with
respect to the generation, storage, handling, or disposal or
release or threat of release (collectively, a
“Release” ) or alleged Release thereof, or with
respect to any violation or alleged violation of any Environmental
Laws or any judgment, decree or order relating thereto. Except as
set forth on Schedule 5.18 attached hereto, no underground storage
tanks or surface impoundments are on any of the properties owned or
leased or operated by any Obligor or any Restricted Subsidiary or
used in connection with the Business. Without in any way limiting
the foregoing, as to each of the real properties owned or leased by
each Obligor and each Restricted Subsidiary and any operations
thereon, all as described on Schedule 5.18 attached hereto, and as
to the Business, each such property and operation and the Business
is presently in compliance with and has in full force and effect
all permits, licenses, or approvals required in connection with the
licensing of nuclear decontamination facilities, the handling and
disposal of radioactive waste, and record keeping and reporting in
connection therewith, except where the failure to so comply with or
have any such permit, license or
approval would not reasonably be
expected to have a Material Adverse Effect. Notwithstanding
anything to the contrary set forth in any of the immediately
preceding six sentences, the Obligors shall not be required to set
forth on Schedule 5.18 a description of any set of facts or
circumstances or of any inquiry, notice or threat to give notice
described above (each individually, an “Environmental
Matter” ) unless the cost to the Obligors and/or the
Restricted Subsidiaries to respond to, address, or remediate any
individual Environmental Matter shall be and/or shall reasonably be
expected to be equal to or greater than $2,000,000. There shall be
no deduction from any sum calculated and/or estimated pursuant to
the preceding sentence due to any insurance proceeds to which the
Obligors and/or the Restricted Subsidiaries may be entitled or
which the Obligors and/or the Restricted Subsidiaries may receive,
and there shall be included in any such calculation the cost of any
and all attorneys fees incurred and/or reasonably expected to be
incurred by the Obligors and/or the Restricted Subsidiaries. For
the purposes of this Section 5.18, (i) “hazardous
substances” shall mean “hazardous substances” as
defined in the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, 42 U.S.C. §9601 et seq.
, and regulations thereunder or under the provisions of any other
applicable federal, state, county or municipal law, ordinance, rule
or regulation, (ii) “hazardous material” and
“oil” shall mean “hazardous material” and
“oil,” respectively, as defined in the Massachusetts
Oil and Hazardous Material Release Prevention and Response Act, as
amended, M.G.L. Chapter 21E, and regulations thereunder or under
the provisions of any other applicable federal, state, county or
municipal law, ordinance, rule or regulation, (iii)
“release” or “threat of release” shall mean
such terms as they are defined in any of the foregoing laws,
ordinances, rules or regulations, as applicable and
(iv) “Business” shall mean the business of the
Obligors as described in UniFirst’s annual report for the
fiscal year ended August 31, 2005 on Form 10-K.
Section 5.19
Notes
Rank Pari Passu . The obligations of the Obligors under this
Agreement and the Notes rank at least pari passu in right of
payment with all other unsecured senior Debt (actual or contingent)
of the Obligors.
Section 5.20
Solvency
of the Obligors. Each of the Obligors is solvent and has assets
having a value both at fair valuation and at present fair salable
value greater than the amount required to pay its debts as they
become due and greater than the amount that will be required to pay
its probable liability on its existing debts as they become due and
matured. No Obligor intends to incur, or believes or should have
believed that it will incur, debts beyond its ability to pay such
debts as they become due. No Obligor will be rendered insolvent by
the execution, delivery and performance of its obligations under
this Agreement or the Notes. No Obligor intends to or will hinder,
delay or defraud its creditors by or through the execution,
delivery or performance of its obligations under this Agreement or
the Notes.
Section 5.21
Consideration. There will be provided to each Obligor a
substantial economic benefit and adequate consideration for the
issuance and sale of the Notes and the execution and delivery of
this Agreement by reason of, among other reasons, the proceeds of
the Notes being used in the manner set forth in Section 5.14 and
therefore will enhance the financial position of each
Obligor.
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SECTION 6.
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REPRESENTATIONS OF THE PURCHASERS.
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Section 6.1
Purchase for Investment . Each Purchaser represents that it
is purchasing the Notes for its own account or for one or more
separate accounts maintained by such Purchaser or for the account
of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of such
Purchaser’s or such pension or trust fund’s property
shall at all times be within such Purchaser’s or such pension
or trust fund’s control. Each Purchaser understands that the
Notes have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is available,
except under circumstances where neither such registration nor such
an exemption is required by law, and that the Obligors are not
required to register the Notes.
Section 6.2
Source of Funds . Each Purchaser represents that at least
one of the following statements is an accurate representation as to
each source of funds (a “Source” ) to be used by
such Purchaser to pay the purchase price of the Notes to be
purchased by such Purchaser hereunder:
(a) the Source is an
“insurance company general account” (as the term is
defined in the United States Department of Labor’s Prohibited
Transaction Exemption (“ PTE ”) 95-60) in
respect of which the reserves and liabilities (as defined by the
annual statement for life insurance companies approved by the
National Association of Insurance Commissioners (the “
NAIC Annual Statement ”)) for the general account
contract(s) held by or on behalf of any employee benefit plan
together with the amount of the reserves and liabilities for the
general account contract(s) held by or on behalf of any other
employee benefit plans maintained by the same employer (or
affiliate thereof as defined in PTE 95-60) or by the same employee
organization in the general account do not exceed 10% of the total
reserves and liabilities of the general account (exclusive of
separate account liabilities) plus surplus as set forth in the NAIC
Annual Statement filed with such Purchaser’s state of
domicile; or
(b) the Source is a separate
account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the
amounts payable, or credited, to any employee benefit plan (or its
related trust) that has any interest in such separate account (or
to any participant or beneficiary of such plan (including any
annuitant)) are not affected in any manner by the investment
performance of the separate account; or
(c) the Source is either (1) an
insurance company pooled separate account, within the meaning of
PTE 90-1 or (2) a bank collective investment fund, within the
meaning of the PTE 91-38 and, except as disclosed by such Purchaser
to the Company in writing pursuant to this clause (c), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(d) the Source constitutes
assets of an “investment fund” (within the meaning of
Part V of PTE 84-14 (the “ QPAM Exemption ”)
managed by a “qualified professional
asset manager” or
“QPAM” (within the meaning of Part V of the QPAM
Exemption), no employee benefit plan’s assets that are
included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the
same employer or by an affiliate (within the meaning of Section
V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of Part
I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM
nor a Person controlling or controlled by the QPAM (applying the
definition of “control” in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (1) the
identity of such QPAM and (2) the names of all employee benefit
plans whose assets are included in such investment fund have been
disclosed to the Company in writing pursuant to this paragraph (d);
or
(e) the Source constitutes
assets of a “plan(s)” (within the meaning of Section IV
of PTE 96-23 (the “ INHAM Exemption ”)) managed
by an “in-house asset manager” or “INHAM”
(within the meaning of Part IV of the INHAM exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are
satisfied, neither the INHAM nor a person controlling or controlled
by the INHAM (applying the definition of “control” in
Section IV(d) of the INHAM Exemption) owns a 5% or more interest in
the Company and (1) the identity of such INHAM and (2) the name(s)
of the employee benefit plan(s) whose assets constitute the Source
have been disclosed to the Company in writing pursuant to this
clause (e); or
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(f)
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the
Source is a governmental plan; or
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(g) the Source is one or more
employee benefit plans, or a separate account or trust fund
comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this
paragraph (g); or
(h) the Source does not include
assets of any employee benefit plan, other than a plan exempt from
the coverage of ERISA.
As used in this Section 6.2, the
terms “employee benefit plan,” “governmental
plan” and “separate account” shall have the
respective meanings assigned to such terms in Section 3 of
ERISA.
Section 6.3
Accredited Investor. Each Purchaser represents that it is an
“accredited investor” (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities
Act).
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SECTION 7.
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INFORMATION AS TO THE OBLIGORS.
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Section 7.1
Financial and Business Information . The Obligors shall
deliver to each holder of Notes that is an Institutional
Investor:
(a) Quarterly
Statements — within 60 days after the end of each
quarterly fiscal period in each fiscal year of UniFirst (other than
the last quarterly fiscal period of each such fiscal year),
duplicate copies of:
(1) a
consolidated and consolidating balance sheet of UniFirst and its
Subsidiaries as at the end of such quarter; and
(2) consolidated
and consolidating statements of income, retained earnings and cash
flows of UniFirst and its Subsidiaries for such quarter and (in the
case of the second and third quarters) for the portion of the
fiscal year ending with such quarter;
setting forth in each case in
comparative form the figures for the corresponding periods in the
previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to interim financial statements
generally, and certified by a Senior Financial Officer of each
Obligor as fairly presenting, in all material respects, the
consolidated financial position of the companies being reported on
and their consolidated results of operations and cash flows,
subject to changes resulting from normal year-end adjustments,
provided that delivery within the time period specified
above of copies of UniFirst’s Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefor and filed
with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this Section 7.1(a);
(b) Annual Statements
— within 105 days after the end of each fiscal year of
UniFirst, duplicate copies of:
(1) a
consolidated and consolidating balance sheet of UniFirst and its
Subsidiaries, as at the end of such year; and
(2) consolidated
and consolidating statements of income, retained earnings and cash
flows of UniFirst and its Subsidiaries for such year;
setting forth in each case in
comparative form the figures for the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP, and
accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall
state that such financial statements present fairly, in all
material respects, the consolidated financial position of the
companies being reported upon and their consolidated results of
operations and cash flows and have been prepared in conformity with
GAAP, and that the examination of such accountants in connection
with such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides
a reasonable basis for such opinion, provided that the
delivery within the time period specified above of UniFirst’s
Annual Report on Form 10-K for such fiscal year (together with
UniFirst’s annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with the
Securities and Exchange Commission, shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) Unrestricted
Subsidiaries — at such time as either (1) the aggregate
amount of the total assets of all Unrestricted Subsidiaries of
UniFirst exceeds an amount equal to 10% of the consolidated total
assets of UniFirst and its Subsidiaries determined in accordance
with GAAP or (2) one or more Unrestricted Subsidiaries of UniFirst
account
for more than 10% of the
consolidated total revenues of UniFirst and its Subsidiaries
determined in accordance with GAAP, within the respective periods
provided in paragraphs (a) and (b) above, then each set of
financial statements delivered pursuant to paragraphs (a) and (b)
above shall be accompanied by unaudited financial statements of the
character and for the dates and periods as in said paragraphs (a)
and (b) covering the Unrestricted Subsidiaries of UniFirst on a
consolidated basis together with unaudited consolidating statements
reflecting eliminations or adjustments required in order to
reconcile such financial statements to the corresponding
consolidated financial statements of UniFirst and its Subsidiaries
delivered pursuant to paragraphs (a) and (b) above;
(d) SEC and Other
Reports — promptly upon their becoming available, one
copy of (1) each financial statement, report, notice or proxy
statement sent by any Obligor or any Restricted Subsidiary to
public securities holders generally, (2) any regular or
periodic report, any registration statement (without exhibits
except as expressly requested by such holder), and any prospectus
and all amendments thereto filed by any Obligor or any Restricted
Subsidiary with the Securities and Exchange Commission or other
similar Governmental Authority and (3) of all press releases
and other statements made available generally by any Obligor or any
Restricted Subsidiary to the public concerning developments that
are Material;
(e) Notice of Default or
Event of Default — promptly, and in any event within five
Business Days after a Responsible Officer of any Obligor obtaining
actual knowledge of the existence of any Default or Event of
Default or that any Person has given any notice or taken any action
with respect to a claimed default hereunder or that any Person has
given any notice or taken any action with respect to a claimed
default of the type referred to in Section 11(f), a written
notice specifying the nature and period of existence thereof and
what action the Obligors are taking or propose to take with respect
thereto;
(f) ERISA Matters
— promptly, and in any event within five Business Days after
a Responsible Officer of any Obligor becoming aware of any of the
following, a written notice setting forth the nature thereof and
the action, if any, that the Obligors propose to take, or an ERISA
Affiliate proposes to take, with respect thereto:
(1) any
reportable event, as defined in Section 4043(b) of ERISA and
the regulations thereunder, with respect to any Plan for which
notice thereof has not been waived pursuant to such regulations as
in effect on the date hereof; or
(2) the
taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by any Obligor or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan;
or
(3) any
event, transaction or condition that could result in the incurrence
of any liability by any Obligor or any ERISA Affiliate pursuant
to
Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee
benefit plans, or in the imposition of any Lien on any of the
rights, properties or assets of any Obligor or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together with any
other such liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(g) Notices from
Governmental Authority — promptly, and in any event
within 30 days of receipt thereof, copies of any notice to any
Obligor or any Subsidiary from any Governmental Authority relating
to any order, ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect;
and
(h) Requested
Information — with reasonable promptness, such other data
and information relating to the business, operations, affairs,
financial condition, assets or properties of any Obligor or any
Subsidiary or relating to the ability of the Obligors to perform
their obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes or
such information regarding the Obligors required to satisfy the
requirements of 17 C.F.R. § 230.144A, as amended from
time to time, in connection with any contemplated transfer of
Notes.
Section 7.2
Officer’s Certificate . Each set of financial
statements delivered to a holder of Notes pursuant to
Section 7.1(a) or Section 7.1(b) hereof shall be
accompanied by a certificate of a Senior Financial Officer of each
Obligor setting forth:
(a) Covenant Complianc
e — the information (including detailed calculations)
required in order to establish whether the Obligors were in
compliance with the requirements of Section 10.1,
Section 10.2 and Section 10.5 hereof during the quarterly
or annual period covered by the financial statements then being
furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount,
ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default
— a statement that such officer has reviewed the relevant
terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the
Obligors and their Subsidiaries from the beginning of the quarterly
or annual period covered by the financial statements then being
furnished to the date of the certificate and that such review shall
not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition
resulting from the failure of any Obligor or any Subsidiary to
comply with any Environmental Law), specifying the nature and
period of existence thereof and what action the Obligors shall have
taken or propose to take with respect thereto.
Section 7.3
Inspection . Each Obligor shall permit the representatives
of each holder of Notes that is an Institutional
Investor:
(a) No Payment Default or
Event of Default — if no Payment Default or Event of
Default then exists, at the expense of such holder, to visit the
principal executive office of such Obligor, to discuss the affairs,
finances and accounts of such Obligor and its Restricted
Subsidiaries with such Obligor’s officers, and (with the
consent of such Obligor, which consent will not be unreasonably
withheld) to visit the other offices and properties of such Obligor
and its Restricted Subsidiaries, all at such reasonable times, upon
reasonable notice to such Obligor and as reasonably requested in
writing to such Obligor; and
(b) Payment Default or
Event of Default — if a Payment Default or Event of
Default then exists, at the expense of the Obligors to visit and
inspect any of the offices or properties of such Obligor or any of
its Restricted Subsidiaries, to examine all their respective 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 and
independent public accountants (and by this provision such Obligor
authorizes said accountants to discuss the affairs, finances and
accounts of such Obligor and its Restricted Subsidiaries), all at
such reasonable times and upon reasonable notice as requested in
writing to such Obligor.
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SECTION 8.
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PREPAYMENT OF THE NOTES.
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Section 8.1
Required Prepayments . The Notes shall not be subject to any
required prepayment and the entire unpaid principal amount of the
Notes shall be due and payable on the stated maturity
thereof.
Section 8.2
Optional Prepayments . The Obligors may, at their option,
upon notice as provided below, prepay at any time all, or from time
to time any part of, the Notes, in an amount not less than
$2,500,000 in aggregate principal amount of the Notes then
outstanding in the case of a partial prepayment, at 100% of the
principal amount so prepaid, plus accrued and unpaid
interest, plus the Prepayment Premium, if any, determined
for the prepayment date with respect to such principal amount and
if such prepayment occurs on any date other than an Interest
Payment Date, the Breakage Amount, if any. The Obligors will give
each holder of Notes written notice of each optional prepayment of
Notes under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each
such notice shall specify such date, the aggregate principal amount
of the Notes to be prepaid on such date, the principal amount of
each Note held by such holder to be prepaid (determined in
accordance with Section 8.3), the interest to be paid on the
prepayment date with respect to such principal amount being
prepaid, and the Prepayment Premium due, if any, in connection with
such prepayment.
Section 8.3
Allocation of Partial Prepayments . In the case of each
partial prepayment of the Notes pursuant to Section 8.2, the
principal amount of the Notes of to be prepaid shall be allocated
among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts
thereof not theretofore called for prepayment.
Section 8.4
Maturity; Surrender, Etc . In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each
Note to be prepaid shall mature and become due and payable on the
date fixed for such prepayment, together with interest on
such
principal amount accrued to such
date and the Prepayment Premium, if any, and the Breakage Amount,
if any. From and after such date, unless the Obligors shall fail to
pay such principal amount when so due and payable, together with
the interest and Prepayment Premium, if any, and the Breakage
Amount, if any, as aforesaid, interest on such principal amount
shall cease to accrue. Any Note paid or prepaid in full shall be
promptly surrendered to the Obligors and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
Section 8.5
Purchase of Notes . The Obligors will not, and will not
permit any Affiliate to, purchase, redeem, prepay or otherwise
acquire, directly or indirectly, any of the outstanding Notes
except (a) upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes or
(b) pursuant to a written offer to purchase any outstanding
Notes made by one or more Obligors or their Affiliates pro rata to
each holder of Notes at the time outstanding upon the same terms
and conditions. Any such offer shall provide each
