FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment is made as of the 28th day of November,
1994, by and among G&K SERVICES, INC. ("G&K"), WORK WEAR CORPORATION OF CANADA
LTD. ("Work Wear"; G&K and Work Wear, as the context requires, may be
hereinafter referred to collectively as the "COMPANIES" and individually as a
"COMPANY"), NBD BANK, N.A. ("NBD USA"), NBD BANK, CANADA ("NBD Canada"),
CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC") and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION ("NORWEST"; NBD USA, NBD CANADA, CIBC and NORWEST, as the context
requires, may be hereinafter referred to collectively as the "Banks" and
individually as a "Bank") and HARRIS TRUST AND SAVINGS BANK ("Harris").
RECITALS
The Companies and the Banks have entered into a Credit
Agreement dated as of June 21, 1994 (the "Credit Agreement") under which NBD USA
and Norwest have agreed to make certain revolving credit loans to and issue
letters of credit for the account of G&K (the "Tranche A Facility") and NBD
Canada and CIBC have agreed to make certain revolving credit loans to and issue
banker's acceptances for the account of Work Wear (the "Tranche B Facility").
G&K wishes to increase the size of the Tranche A Facility and
NBD USA and Norwest have agreed to increase their respective Tranche A
Commitments and Harris has agreed to become an additional lender under Tranche A
of the Credit Agreement, all pursuant to the terms and subject to the conditions
set forth in this First Amendment.
ACCORDINGLY, in consideration of the premises, the Companies,
the Banks and Harris hereby agree as follows:
1. Definitions. Except as otherwise expressly set forth
herein, all capitalized terms in this First Amendment which are defined in the
Credit Agreement shall have the same meanings assigned to them in the Credit
Agreement.
2. Representations and Warranties. To induce the Banks and
Harris to enter into this First Amendment, the Companies hereby represent and
warrant as follows:
(a) The Loan Documents constitute the legal, valid
and binding agreements of each Company (to the extent a Company is a
party thereto), are subject to no defenses, counterclaims, rights of
offset or recoupment and are enforceable in accordance with their
respective terms.
(b) The Guaranties of G&K to NBD Canada and CIBC
constitute the legal, valid and binding obligations of G&K, are subject
to no defenses, counterclaims, rights of offset or recoupment and are
enforceable in accordance with their respective terms.
(c) The representations and warranties contained in
Section 9 of the Credit Agreement are true and correct as of the date
hereof as though made on and as of this date, except to the extent that
such representations and warranties relate solely to an earlier date.
(d) No event has occurred and is continuing or would
result from the execution and delivery of this First Amendment and the
ancillary documents contemplated hereby which constitutes or would
constitute a default or an event of default under the Credit Agreement,
the Met Life Loan Agreement (assuming delivery by Met Life of its
consent to this First Amendment, as contemplated hereby) or any other
agreement, indenture, evidence of indebtedness or other obligation of
either of the Companies.
3. Addition of Harris as Bank. The Companies and each Bank
hereby consent to Harris becoming an additional "Bank" under Tranche A of the
Credit Agreement and, from and after the date hereof, Harris shall be accorded
all rights, privileges and benefits of a "Bank" under and pursuant to the Credit
Agreement. Each and every reference in the Credit Agreement to "Bank" or "Banks"
shall hereinafter be deemed a reference to each Bank and to Harris,
collectively.
4. Harris' Tranche A Commitment; Assignment of Tranche A
Advances. Harris' commitments, obligations, rights, benefits and privileges as a
"Bank" under the Credit Agreement are as follows:
(a) Harris' respective Tranche and Commitment are set
forth opposite Harris' name on the signature page hereof under the
captions "Tranche" and "Dollar Amount of Commitment", respectively.
(b) Harris' Percentage of all Tranche A Exposure, all
Tranche A Loans and the Tranche A Commitment Amount shall be equal to
the applicable percentage set forth opposite Harris' name on the
signature page hereof under the caption "Percentage".
(c) Concurrent with the execution and delivery of
this First Amendment, Harris shall be deemed to have assumed its
Percentage of the risk and liability of each Letter of Credit currently
outstanding and Norwest and NBD USA shall each assign and transfer to
Harris an appropriate share of such bank's outstanding Tranche A Loans
so that Norwest, NBD USA and Harris shall have Tranche A Loans
outstanding in an amount equal to each such Bank's and Harris'
respective Percentage of the aggregate of all such Tranche A Loans. All
Tranche A Loans assigned by Norwest and NBD USA to Harris shall be
assigned pro rata so that Harris, Norwest and NBD USA shall have their
respective pro rata shares of each tenor of Tranche A Eurodollar Loans
and of Tranche A Floating Rate Loans.
(d) Norwest shall collect and apply accrued interest,
letter of credit commissions and fees payable under the Credit
Agreement with respect to Tranche A obligations for all periods prior
to the date hereof for the sole benefit of and for the sole account of
Norwest and NBD USA. Harris shall be entitled to receive interest and
fees with respect to Tranche A obligations from and after the date
hereof.
(e) Harris shall hereinafter be deemed a party to the
Credit Agreement and a "Bank" thereunder and (i) shall be entitled to
all rights, benefits and privileges accorded to a Bank under the Credit
Agreement, (ii) shall be subject to all obligations of a Bank
thereunder (including without limitation the obligation to fund its
Percentage of Tranche A Loans to the extent of its Commitment) and
(iii) shall be deemed to have specifically ratified and confirmed, and
by executing this First Amendment, Harris specifically ratifies and
confirms, all of the provisions of the Credit Agreement and each other
Loan Document.
5. Increase in Existing Tranche A Commitments. Norwest and NBD
USA hereby agree that their respective Commitments shall be increased to the
amounts set forth opposite their respective names on the signature hereof under
the caption "Dollar Amount of Commitment". Additionally, the respective
Percentage of Norwest and NBD USA of all Tranche A Exposure, all Tranche A Loans
and the Tranche A Commitment Amount shall be equal to the applicable percentage
set forth opposite each such Banks' name on the signature page hereof under the
caption "Percentage".
6. Issuance of the Replacement Promissory Notes. To evidence
the obligation of G&K to repay all Tranche A Loans to the Tranche A Banks, and
in replacement for (but not in payment of) the Revolving Notes currently held by
Norwest and NBD USA, respectively, and to evidence G&K's obligation to repay all
Tranche A Loans made by Harris, G&K hereby agrees to issue and deliver to the
Tranche A Banks the following Promissory Notes (the "New Notes"):
(a) A Revolving Note of G&K payable to the order of
Norwest in the stated principal amount of $21,250,000, in substantially
the form of Exhibit A attached hereto.
(b) A Revolving Note of G&K payable to the order of
NBD USA in the stated principal amount of $8,750,000, in substantially
the form of Exhibit B attached hereto.
(c) A Revolving Note of G&K payable to the order of
Harris in the stated principal amount of $20,000,000, in substantially
the form of Exhibit C attached hereto.
The New Notes shall be issued to Norwest and NBD USA in replacement for the
Revolving Notes previously held by Norwest and NBD, respectively, and all
references in the Credit Agreement and in each other Loan Document to the
Tranche A Notes, Notes, Revolving Notes or other terms of like import shall be
deemed to include, as appropriate, references to the New Notes issued in
accordance with this First Amendment.
7. Consent to Additional Term Debt from Met Life. Section 11.2
of the Credit Agreement prohibits G&K from incurring additional indebtedness
except as expressly therein permitted. G&K has requested that the Banks and
Harris consent to the incurrence by G&K of an additional $15,000,000 in term
debt from Met Life pursuant to the terms and conditions of a Loan Agreement
(relating to 8.46% Senior Notes due November 23, 1997) dated November 23, 1994.
The Banks and Harris hereby consent to the incurrence of such additional
indebtedness by G & K pursuant to the terms and conditions of the aforesaid Loan
Agreement. In connection therewith, the Credit Agreement is amended as follows:
(a) The definition of "Met Life Loan Agreement"
appearing in Section 1.1 of the Credit Agreement is hereby amended to
read as follows:
"Met Life Loan Agreement" means, collectively (i) the
Loan Agreement dated as of September 28, 1990,
between Met Life and G & K, as amended pursuant to an
Amendment Agreement dated as of January 28, 1993, a
Second Amendment dated June 21, 1994 and a Third
Amendment dated November 23, 1994 and (ii) the Loan
Agreement dated as of November 23, 1994, between Met
Life, certain subsidiaries of Met Life and G & K.
(b) Section 11.2(f) of the Credit Agreement is hereby
amended to read as follows:
(f) Indebtedness of G & K to Met Life not to exceed
U.S. $46,000,000, plus accrued interest, pursuant
to Met Life Loan Agreement.
(c) Section 11.3(a) of the Credit Agreement is hereby
amended to read as follows:
(a) Guaranties by G & K Services, Co. with respect
to the indebtedness owed by G & K to Met Life
pursuant to the Met Life Loan Agreement;
8. Payment of Fees. G&K hereby irrevocably commits and agrees
to pay the following fees and reimburse Norwest for the following outstanding
expenses:
(a) Facility fees will be due and payable to Norwest in the
amount of $3,125, to NBD USA in the amount of $3,125 and to Harris in
the amount of $25,000. An arrangement fee will be due and payable to
Norwest, in addition to the foregoing facility fee, in the amount of
$31,250. Each such fee shall be deemed fully earned upon execution of
this First Amendment.
(b) G&K will pay or reimburse Norwest for all outstanding fees
and disbursements of counsel to Norwest incurred in connection with the
execution and delivery of the Credit Agreement, all additional fees and
disbursements incurred since the date thereof and all fees and
disbursements incurred in connection with the preparation, execution
and delivery of this First Amendment.
9. Conditions Precedent. As a condition to the effectiveness
of this First Amendment, Norwest shall have received each of the following, in
form and substance satisfactory to it:
(a) This First Amendment, duly executed on behalf of
the Companies, each Bank and Harris.
(b) The New Notes, duly executed on behalf of G&K.
(c) Certificates of the secretary or assistant
secretary of each of the Companies setting forth the specimen
signatures of officers of such Companies which have been authorized to
execute and deliver this First Amendment, the New Notes and such other
documents as are contemplated hereby, together with a copy of the
resolutions adopted by the respective boards of directors of the
Companies approving such execution and delivery.
(d) A Third Amendment to the Met Life Loan Agreement,
duly executed on behalf of G & K and Met Life, pursuant to which Met
Life evidences its consent to the increases in the Commitments as
contemplated herein.
(e) An opinion of counsel to the Companies in form
and content acceptable to Norwest.
(f) Payment of all fees and expenses described in
paragraph 8 hereof.
10. Exculpation. Harris hereby acknowledges and confirms that
it has received a copy of the Credit Agreement and all other Loan Documents,
instruments and agreements referred to in the Credit Agreement. Harris further
confirms and agrees that (i) in becoming an additional Bank under the Credit
Agreement and in making its Commitment to make Tranche A Revolving Loans under
the Credit Agreement, such actions have and will be made without recourse to, or
representation or warranty by, any Bank in any capacity, (ii) it has reviewed
the entire Credit Agreement, and in particular, Section 14.3 thereof and agrees
to be bound thereby, and (iii) the address shown below its signature on this
First Amendment shall be its notice address for all purposes of the Credit
Agreement, unless and until it shall designate another address for such purpose.
Harris acknowledges that it has made such inquiries and taken such care on its
own behalf as would have been the case had its Commitment been granted and its
Loans made directly to G&K without the intervention of any other Bank. Harris
acknowledges that neither Norwest nor any other Bank has made any representation
or warranty about the credit worthiness of either Company or any other party to
the Credit Agreement or with respect to the legality, validity, sufficiency or
enforceability of the Credit Agreement, any Loan Document or any other
instrument or document delivered thereunder or in connection therewith.
11. Miscellaneous.
(a) The Companies hereby release and forever
discharge the Banks and each of their respective former and present
directors, officers, employees, agents and representatives of and from
every and all claims, demands, causes of action (at law or in equity)
and liabilities of any kind or nature, whether known or unknown,
liquidated or unliquidated, absolute or contingent, which the Companies
ever had, presently have or claim to have against a Bank or any of its
respective directors, officers, employees, agents or representatives of
or relating to events, occurrences, actions, inactions or other matters
of or relating to the Credit Agreement or any Loan Document or any
actions or inactions hereunder or thereunder which occurred prior to
the date of this First Amendment.
(b) The Companies hereby reaffirm their agreement
under Section 16.6 of the Credit Agreement to pay or reimburse Norwest,
among other costs and expenses, for all expenses incurred by Norwest in
connection with the amendment, performance or enforcement of the Loan
Documents, including without limitation, all reasonable fees and
disbursements of legal counsel to Norwest in connection with the
preparation of this First Amendment.
(c) Except as expressly amended hereby, all
provisions of the Loan Documents shall remain in full force and effect.
After the effective date hereof, each reference in any Loan Document or
any other document executed in connection with the Credit Agreement to
"this Agreement", "hereunder" or "hereof" or words of like import
referring to the Credit Agreement shall be deemed and refer to the
Credit Agreement as amended hereby. In addition, from and after the
effective date hereof, each reference in any Loan Document to the Notes
or the Revolving Notes of Norwest, NBD USA or Harris shall be deemed
references to the New Notes.
(d) This First Amendment may be executed in any
number of counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which counterparts, taken
together, shall constitute but one in the same one and the same
instrument.
(e) The execution of this First Amendment and
acceptance of any documents related hereto shall not be deemed a waiver
of any Default or Event of Default under any Loan Document, whether or
not existing on the date of this First Amendment.
(f) This First Amendment shall be governed by, and
construed in accordance with, the internal laws of the State of
Minnesota.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the undersigned have executed this First
Amendment as of the day and year first above mentioned.
G&K SERVICES, INC.
By /s/ Stephen F. LaBelle
Its Secretary and Treasurer
WORK WEAR CORPORATION
OF CANADA LTD
By /s/ Stephen F. LaBelle
Its Secretary and Treasurer
Dollar Amount
Tranche of Commitment Percentage NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
A US $21,250,000 42.50%
By /s/ John K. Lukaska
Its Vice President
Dollar Amount
Tranche of Commitment Percentage NBD BANK, N.A.
A US $8,750,000 17.50%
By /s/ Patrick P. Skiles
Its Vice President
Dollar Amount
Tranche of Commitment Percentage HARRIS TRUST AND SAVINGS BANK
A US $20,000,000 40.00%
By /s/ Catherine C. Ciolek
Its Vice President
111 West Monroe
P.O. Box 755
Chicago, Illinois 60690
Attn: Vice President,
Midwest Group
Phone: (312) 461-7009
Fax: (312) 461-2591
Dollar Amount
Tranche of Commitment Percentage NBD BANK, CANADA
B C$16,000,000 53.3333%
By /s/ Jeremiah I. Hynes, III
Its Vice President
Dollar Amount
Tranche of Commitment Percentage CANADIAN IMPERIAL BANK
OF COMMERCE
B C$14,000,000 46.6667%
By /s/ David A. Smith
Its General Manager