THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment is made as of the 4th day of January,
1996, 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 (formerly known as NBD Bank, N.A.) ("NBD USA"), NBD BANK,
CANADA ("NBD Canada"), CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION ("Norwest") and HARRIS TRUST AND SAVINGS BANK
("Harris"; NBD USA, NBD Canada, CIBC and Norwest and Harris, as the context
requires, may be hereinafter referred to collectively as the "Banks" and
individually as a "Bank").
RECITALS
The Companies and the Banks have entered into a Credit
Agreement dated as of June 21, 1994, as amended by a First Amendment dated
November 28, 1994, and a Second Amendment dated May 18, 1995 (as amended, the
"Credit Agreement") under which NBD USA, Norwest and Harris 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 and Work Wear have requested that certain covenants in the
Credit Agreement be amended and the Banks have agreed to such request, all
pursuant to the terms and subject to the conditions set forth in this Third
Amendment.
ACCORDINGLY, in consideration of the premises, the Companies
and the Banks hereby agree as follows:
1. Definitions. Except as otherwise expressly set forth
herein, all capitalized terms in this Third 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 to
enter into this Third 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 Third 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 or any other agreement, indenture, evidence
of indebtedness or other obligation of either of the Companies.
3. Reduction in Interest on Eurodollar Loans. Section 4.4.2
of the Credit Agreement is hereby amended by deleting the reference to "one and
one-half percent (1 1/2%)" as it appears in clause (ii) thereof and inserting in
place thereof the clause "one and one-quarter percent (1 1/4%)".
4. Reduction in Acceptance Fee. Section 3.7(c) of the Credit
Agreement is hereby amended by deleting the reference to "one and one-half
percent (1.50%)" as it appears therein and inserting in place thereof the clause
"one and one-quarter percent (1.25%)".
5. Increase in Expenditures for Fixed Assets. Section 11.9 of
the Credit Agreement is hereby amended by deleting the reference to "U.S.
$33,000,000" as it appears therein across from the fiscal year 1996 and
inserting in place thereof the term "U.S. $38,000,000".
6. 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, any Loan Document or the
Guaranties or any actions or inactions hereunder or thereunder which
occurred prior to the date of this Third 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 Third Amendment.
(c) Except as expressly amended hereby, all provisions of the
Loan Documents and the Guaranties shall remain in full force and
effect. After the effective date hereof, each reference in any Loan
Document, the Guaranties 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 or the
Guaranties, respectively, shall be deemed and refer to the Credit
Agreement or the Guaranties, as the case may be, as amended hereby.
(d) This Third 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 Third 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 Third Amendment.
(f) This Third Amendment shall be governed by, and construed
in accordance with, the internal laws of the State of Minnesota.
IN WITNESS WHEREOF, the undersigned have executed this Third
Amendment as of the day and year first above mentioned.
G&K SERVICES, INC.
By (Illegible Signature)
Its Secretary/Treasurer
WORK WEAR CORPORATION
OF CANADA LTD.
By (Illegible Signature)
Its Secretary/Treasurer
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By (Illegible Signature)
Its Vice President
NBD BANK
By (Illegible Signature)
Its Second Vice President
HARRIS TRUST AND SAVINGS BANK
By (Illegible Signature)
Its Vice President
NBD BANK, CANADA
By (Illegible Signature)
Its Assistant Vice President
CANADIAN IMPERIAL BANK
OF COMMERCE
By (Illegible Signature)
Its Credit Designer