November 23, 1994
G&K Services, Inc.
G&K Services, Co.
Waterford Park
505 Highway 169N
Suite 455
Minneapolis, Minnesota 55441-6446
Attention: Stephen LaBelle
Secretary and Treasurer
Re: Loan Agreement dated as of September 28, 1990
Dear Sirs:
We are the holder of the 10.62% Senior Notes (the "Notes") issued by
G&K Services, Inc. (the "Company") in the original aggregate principal amount of
$40,000,000 pursuant to the Loan Agreement dated as of September 28, 1990,
between the Company and us (the "Agreement"). The Notes were amended pursuant to
an amendment agreement dated January 28, 1993 (the "First Amendment") and an
amendment agreement dated June 21, 1994 (the "Second Amendment") and are
entitled to the benefit of a Guaranty dated as of September 28, 1990 issued by
G&K Services, Co. (the "G&K Co. Guaranty").
As the holder of the Notes and as a party to the Agreement, we hereby
agree that the Agreement and the Notes shall be amended by this amendment (the
"Third Amendment") as follows:
1. Subsections A and B of Section 4.01 of the Notes shall be deleted in
their entirety and the following substituted therefor:
"A. Indebtedness evidenced by the Notes and the 8.46%
Notes;
B. Indebtedness of the Company incurred pursuant to
the Credit Agreement not exceeding at any time U.S.
$25,000,000; provided, however, that upon execution and
delivery by the parties to the Credit Agreement of a First
Amendment to Credit Agreement in form and substance
satisfactory to the Holders of the Notes, such amount may be
increased to U.S. $50,000,000;"
2. Subsection A of Section 4.02 of the Notes shall be deleted in its
entirety and the following substituted therefor:
"A. the 8.46% Guaranty and the G&K Co. Guaranty;"
3. The last paragraph of Section 4.03 of the Notes shall be deleted in
its entirety and the following substituted therefor:
"Without limiting the foregoing, the Company agrees that the
Company will not, and will not permit any Restricted Subsidiary to,
agree with any other Person not to grant any Lien in its or such
Restricted Subsidiary's assets except with the Holders of the 8.46%
Notes and the Banks who are parties to the Credit Agreement."
4. Subsections C, D, E, F, and G of Section 4.10 of the Notes shall be
deleted in their entirety and the following substituted therefor:
"C. loans and advances by a Restricted Subsidiary to
the Company or another Restricted Subsidiary, except as
provided in the proviso to Subsection E below;
D. loans and advances by the Company to any
restricted Subsidiary, except as provided in the proviso to
Subsection E below;
E. any existing loans or investments by the Guarantor
or the Company in or to Work Wear; provided, however, that
no further loans or advances and no further investments in
Work Wear shall be permitted, except for those currently in
existence on the date hereof;
F. except as provided in the proviso to Subsection E
above, investments not otherwise permitted by the foregoing
Subsections A through E of this Section 4.10 not at any time
exceeding 5% of Consolidated Tangible Net Worth; and
G. except as provided in the proviso to Subsection E above,
investments not otherwise permitted by the foregoing Subsections A
through F of this Section 4.10 to the extent that the amount of such
investments is deducted in determining Consolidated Tangible Net Worth
for all purposes of the Notes.:
5. (A) The following Definitions set forth in Section 6 of the Notes
shall be deleted in their entirety and the following substituted therefor:
"Agreement" means the Loan Agreement dated September
28, 1990 between the Company and Metropolitan Life Insurance
Company entered into in connection with the issuance of the
Notes, as amended by the First Amendment, the Second Amendment
and the Third Amendment, and as the same may be further
amended from time to time.
"Guarantor" means G&K Services, Co.
"Restricted Subsidiary" means each and every
Subsidiary of the Company and its Subsidiaries, whether now
existing or hereafter created or acquired.
(B) The following definitions shall be added to Section 6 of
the Notes:
"8.46% Guaranty" means the guaranty of the Guarantor,
dated as of November 23, 1994, guaranteeing to the holders of
the 8.46% Notes the obligations of the Company under the 8.46%
Notes and the 8.46% Loan Agreement.
"8.46% Loan Agreement" means the Loan Agreement dated
as of November 23, 1994 by and between the Company,
Metropolitan Life Insurance Company and certain affiliates, as
the same may be amended from time to time with the consent of
the Holders of the Notes.
"8.46% Notes" means the 8.46% Senior Notes due
November 23, 1997 of the Company issued pursuant to the 8.46%
Loan Agreement, as the same may be amended from time to time
with the consent of the Holders of the Notes.
6. (A) Subsection K of Section 7.01 of the Notes shall be amended by
adding the phrase "or the 8.46% Guaranty" after the word "Guaranty" in the
second line thereof.
(B) Subsection L of Section 7.01 of the Notes shall be amended by
adding the phrase "or the 8.46% Guaranty" after the word "Guaranty" in the
second line thereof.
(C) Section 7.01 of the Notes shall be amended by adding a new
Subsection N to read as follows:
"N. The occurrence of an "Event of Default" as
defined under the 8.46% Notes or the 8.46% Loan
Agreement;"
Except as so amended by this Third Amendment, the Second Amendment and
the First Amendment, the Notes and the Agreement are in all respects ratified
and confirmed and all provisions thereof shall be given full force and effect as
if they were set forth herein in their entirety; and all references in the
Agreement to the Notes shall mean the Notes as so amended by this Third
Amendment, the Second Amendment and the First Amendment.
[Remainder of Page Intentionally Left Blank]
This Third Amendment shall be of no force or effect unless and until
you have returned to the undersigned a counterpart hereof executed by you at the
foot hereof.
Very truly yours,
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Michael J. Kroeger
Name: Michael J. Kroeger
Title: Vice-President
AGREED TO AND ACCEPTED:
G&K SERVICES, INC.
By: /s/ Stephen F. LaBelle
Name: Stephen F. LaBelle
Tile: Treasurer
G&K SERVICES, CO.
By: /s/ Stephen F. LaBelle
Name: Stephen F. LaBelle
Tile: Treasurer