First Amendment to Loan Agreement

EX-10.(V) 3 c18181exv10wxvy.htm FIRST AMENDMENT TO LOAN AGREEMENT exv10wxvy

Exhibit V

AMENDMENT NO. 1

AMENDED AND RESTATED CREDIT AGREEMENT

THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (“Amendment”) is entered into as of May 30 2007, in connection with the Amended and Restated Credit Agreement dated as of August 31, 2005 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”) by and among G&K Services, Inc. (the “Domestic Borrower”), G&K Services Canada Inc. (the “Canadian Borrower”, and together with the Domestic Borrower, the “Borrowers”), the financial institutions party thereto, as lenders (the “Lenders”), and JPMorgan Chase Bank, National Association, as Administrative Agent (the “Administrative Agent”). Each capitalized term used herein and not defined herein shall have the meaning ascribed thereto in the Credit Agreement.

WITNESSETH

WHEREAS, the Borrowers wish to amend the Credit Agreement in certain respects and the Lenders and the Administrative Agent are willing to amend the Credit Agreement pursuant to the terms of this Amendment;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrowers, the Lenders and the Administrative Agent agree as follows.

1. Amendments to Credit Agreement. Subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Borrowers, the Lenders and the Administrative Agent agree that the Credit Agreement is hereby amended as follows:

1.1 Section 10.3 of the Credit Agreement is hereby amended in its entirety as follows:

Section 10.3 Net Worth. At any time, permit Net Worth to be less than the sum of (a) $278,057,000 plus (b) thirty-five percent (35%) of Net Income (if positive) for each fiscal year ending on or after June 29, 2007.

1.2 Section 11.6(c) of the Credit Agreement is hereby amended in its entirety as follows:

(c) the Domestic Borrower may pay cash dividends on its capital stock or repurchase its capital stock at any time so long as no Default or Event of Default is then outstanding or would result therefrom.

2. Conditions to Effectiveness. This Amendment shall not become effective unless:

2.1 the Administrative Agent shall have received counterparts of this Amendment executed by each Borrower, the Administrative Agent and the Required Lenders;

2.2 the Administrative Agent shall have received an Affirmation of Guarantees in substantially the form attached hereto as Exhibit A.

3. Representations and Warranties of Each Borrower. Each Borrower represents and warrants as follows:

3.1 Such Borrower has the legal power and authority to execute and deliver this Amendment and the officers of such Borrower executing this Amendment have been duly authorized to execute and deliver the same and bind such Borrower with respect to the provisions hereof.

3.2 This Amendment and the Credit Agreement as previously executed and as amended hereby constitute legal, valid and binding obligations of such Borrower, enforceable against it in accordance with their terms (except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditor’s rights generally).

3.3 Such Borrower hereby reaffirms all covenants, representations and warranties made in the Credit Agreement and the other Loan Documents and agrees and confirms that all such representations and warranties are true and correct in all material respects as of the date of this Amendment except for changes thereto reflecting events, conditions or transactions permitted or not prohibited by the Credit Agreement or the other Loan Documents; provided, that the words “in all material respects” in this Section 3.3 shall, as to any representation or warranty that contains a materiality standard, operate without duplication of such standard.

3.4 Such Borrower has caused to be conducted a thorough review of the terms of the Credit Agreement and the other Loan Documents and such Borrower’s and its Subsidiaries’ operations since the Closing Date and, as of the date hereof, there are no Defaults or Events of Default thereunder.

4. Reference to the Effect on the Credit Agreement.

4.1 Upon the effectiveness of this Amendment pursuant to Section 2 above, on and after the date hereof, each reference in the Credit Agreement to “this Credit Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Credit Agreement as modified hereby.

4.2 Except as specifically waived or modified above, the Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.

4.3 The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power of remedy of the Administrative Agent or the Lenders, nor constitute a waiver of any provision of the Credit Agreement or any other documents, instruments and agreements executed and/or delivered in connection therewith.

5. Costs and Expenses. The Borrowers jointly and severally agree to pay all reasonable costs, fees and out-of-pocket expenses (including reasonable attorneys’ fees and expenses charged to the Administrative Agent) incurred by the Administrative Agent in connection with the preparation, arrangement, execution and enforcement of this Amendment.

6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED IN ACCORDANCE WITH THE INTERNAL LAWS, AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS, OF THE STATE OF NEW YORK.

7. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

8. Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Amendment by signing any such counterpart. A facsimile signature page hereto sent to the Administrative Agent or the Administrative Agent’s counsel shall be effective as a counterpart signature provided each party executing such a facsimile counterpart agrees, if requested, to deliver originals thereof to the Administrative Agent.

9. No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Amendment, the Credit Agreement and the other Loan Documents. In the event an ambiguity or question of intent or interpretation arises, this Amendment, the Credit Agreement and the other Loan Documents shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Amendment, the Credit Agreement or any of the other Loan Documents.

The remainder of this page is intentionally blank.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed under seal by their duly authorized officers, all as of the day and year first written above.


DOMESTIC BORROWER:

G&K SERVICES, INC., as Domestic Borrower

By:	/s/ Glenn L. Stolt

	Name:	Glenn L. Stolt
	Title:	Vice President & Treasurer